Tag Archives: Realty Branding

Brand realty takes a beating in slowdown

Posted on by Track2Realty

Realty Branding, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyA few may have succeeded but most of the developers have failed to position themselves right during the slowdown. In the process Track2Realty finds that the brand realty has taken a severe beating, losing the trust of both the end-users and the investors. The brand positioning that differentiates between the two different realty companies is today negligible with developers’ focus to sell. That, unfortunately, is not working for them and commanding premium over the brand reputation today is a far cry. Our team speaks to a cross section of developers, analysts and brand experts who may differ with each other but nearly all agree that sector has to come out of the Catch 22 situation. 

A Mumbai-based developer launches a skyscraper super luxury apartment with obvious sky high ambitions. After much fanfare and bombardment of advertising campaign followed by road shows in foreign countries and inviting the NRIs, HNIs and other big ticket investors suddenly the company goes into a silent mode. Repetitive attempt by the media to reach to the developer does not meet with any success, thus lending credence to the speculation and conspiracy theory of project not taking off as expected.

Some critics even call it the company’s ploy to raise capital through high pitch campaign and then go silent once the objective of generating the interest level of investors is achieved.

However, this is not the only case study that is symptomatic of the emerging market reality of the Indian real estate during the slowdown. Another developer in the Delhi-NCR launches a number of sky high super luxury apartment one after the other, making too much media noise with big ticket ad spend. On ground none of the projects promises to take off the way it is being projected in the media space. Critics even question the rationale behind creating destination address with luxury apartments with more than one offering in the same micro market.

It seems the desperation level of the developers in the Indian property market is an all time high. Since some of the leading companies have weathered the slowdown challenges with shift of focus on the recession proof buyers in the luxury segment, the rest of the lot with no experience and expertise are also trying to replicate the same format. However, most of these companies fail to differentiate between successful companies in the luxury segment and their novice attempts to emerge one-the brand value that the large players with a proven track record of delivering on the luxury front.

Facts speak for themselves. What is selling more in the slowdown, luxury, is also over-supplied, over-used and abused segment with an inventory that is way beyond their capacity to hold when exposed to slow moving market. In this process of trial and error, the brand real estate has taken a severe beating in the last over a year’s time. A sector with a baggage of perception issues has of late invite poor projection as well, thanks to the collective failure within the built environment in terms of its strategic shift.

The larger players in the sector may not have been dented the way the mid size players with less brand recall value have suffered, but the sector in the collective consciousness has definitely taken a severe beating. Though the sector seems to be unanimous in dismissing any such setback, the denial mode of the developers have not helped in changing the crisis of confidence towards the business of real estate in this part of the world. Not only the investors are apprehensive towards the Indian market, even the buyers are not impressed. And hence, this confusion is rather eroding the brand competitiveness of the sector and to make the matters even worse the developers are too focussed in positioning their advertising campaign to sell the inventory than improve the brand quotient.

Requesting anonymity a Mumbai-based developer agrees that the strategic mistake and the wrong brand positioning have brought the sector to a level where the developers are being forced to repeat their past mistakes. According to him, with inventory rising and liquidity squeezing in the sector there is hardly any room for experiment and innovation but to focus on the sells figure. And when all efforts to dispose off the inventory fails, the developer gets confused whether to rebrand/reposition the project or simply wait for the tide to be over.

“This fiscal has been really challenging but the focus of the developers is still not in the right direction. I do understand that in such a slow moving market there is hardly any room for spending on the brand, nor do all the developers carry a legacy, but what I find objectionable within our community is the desperation of the developers to be seen different through fluff and not substance. If the companies who enjoy a legacy of successful delivery are still having a decent business, so can new comers if the developers focus on delivery and meeting commitment to the buyers than spending on new innovations to get noticed,” says this developer.

There is a school of analysts who believe the developers’ rigidity to hold on the prices is doing them no favour and actually eroding the brand competitiveness as well as the future projects. However, most of the developers disagree with this. Though on the face value they maintain that the prices have bottomed out and there is hardly any scope to cut the price, fact of the matter is that many of these developers have been discounting heavily through the sells channel.

Some of them have increased the brokerage up to 6-15 per cent, depending on the market and the project, there are others who are giving a free run to the under writers, often the full page advertisement being shared equally with the marketing agency, and in some cases even restructuring the market offer as per the directions of the under writer. This is a suicidal trend for the brand value of the developer as it often is translated as developer hiking the price for no rhyme or reason while the under writer sells it on the lesser price that is on offer by the developer. An analyst keeping a track on the sells channel of projects maintain that while all the marketing tricks are being played to sell, the developer does not want to straightaway offer a price cut to the market as it would be seen as the distress sell affecting his future projects as well.

The realty major DLF does not agree with the premise that the brand realty has taken a beating in the slowdown. DLF spokesperson maintains that like any other business weathering a market slowdown the real estate too is showing the similar pattern of negative growth for some while others are having a better sales figure. According to him, replicating the successful model of leading companies with years of proven trust, credibility and reputation can not be the way forward for new comers who have to build the brand in challenging times.

“Real estate is a micro market business with each market having its own pockets of influential players. Many of them a doing a decent business even during the slowdown as they have created a niche in their own pockets of influence. Then there are national players who have years of successful, timely and quality delivery in multiple cities who command a broader trust and goodwill of their brand. The slow moving market may affect their bottom lines a bit due to buyers’ negative sentiments but it definitely does not affect their brand competitiveness,” says the spokesperson.

Does it mean the new comers in the ring have to wait and watch for the market conditions to improve? More importantly, have they weathered a setback beyond repairable hurt? The analysts maintain that some of the companies with better finance, cash management, delivery and years of brand legacy may not have been hurt like the rest of the developers, but by and large there is a serious crisis of credibility as far as brand realty is concerned.

With economy not picking up, investors losing confidence & patience, policy makers suspecting the sector, financial institutions having burnt the fingers and buyers expecting a crash, things can not go even worse for the brand real estate in India.

It is not that the brand realty going for a toss necessarily means the developers with less brand recall value resigning to their fate. As a matter of fact, and many analysts tracking the sector agree to it, slowdown has also given an opportunity for some of the late movers in the business to learn from the mistake of others and do something differently to lay the foundation as a developer with a different mindset and approach to the business of real estate.

Brys Group has launched a super luxury project Brys Buzz in the Noida market, know more for affordable segment of housing vis-à-vis its rich peer in Gurgaon which has been the land of luxury and ultra luxury projects. The company believes in the philosophy of creating a destination address is possible only when the developer has the extra courage and thorough research in hand to develop a destination than merely replication same kind of luxury projects in the same market.

Navneet Gaur, Director of Brys Group says the perception of the real estate sector losing its competitive edge and brand realty taking a beating has its genesis in the way the projects are being conceptualised. According to her, in a bullish market projects sell on its own as housing is a demand driven asset class but in slowdown the developer must do his due diligence in terms of thorough research on the market, the product and the buyer if one does not want to damage his project’s prospect and brand reputation.

“Slowdown is also the time when the right buyers are looking for right projects in the right market where appreciation is on the cards ahead, instead of getting into the saturated markets. For us slowdown proved to be a good launching pad since we customised a unique loyalty programme for the buyers. We are also conscious of the fact that advertising alone does not work in a market where deals are few and far between, and it has to be supplemented with PR, word-of-mouth publicity and overall creating an experience centre than pushing for the sells. More importantly, good brand management is not possible without good project and equally good financial management of the company,” says Gaur.

There are other developers who assert that slowdown affects the economy in general and all the industries feel the pinch, and hence the real estate alone should not be blamed for not weathering the slowdown blues successfully. Rohit Gera, MD, Gera Developments asserts that during times when sales are slow, it is essential to deliver projects even more aggressively with adequate cash flows in place to ensure that construction speed is maintained so that customers confidence is built and maintained. Also, faster construction with adequate funds being available leads to better purchasing power and better deals for the developers. Ultimately, it is the product that builds the brand.  During the difficult times, customers look more closely at the product.

“Strong financials are essential to a company’s brand equity.  Having funds to tide over periods of slow sales, to ensure that one does not have to resort to cutting corners to complete the projects, to deliver the project as promised to the customer are key to brand reputation. Ultimately, the customer is the strongest source of building a brand.  Ensuring that funds are available for the developer to complete the project as promised is always critical.  In fact this is the best way for customers today to assess the capability of a developer–check the progress on the site, progressing of the work each month, checking project’s timelines whether ahead of schedule or behind,” says Gera.

There are others who convince that there are already a number of very well established brands in the real estate space.  One of the big challenges in creating a super brand is the nature of the product.  Real estate is not in the consumer goods space.  Repeat purchases are very low amongst our customer and even if they do happen, the gap between the purchases is very large. Real estate is also a more localized business and as such, synergies of advertising on national television etc are not available.  All these things make it difficult for real estate to produce super brands.

However, this school of developers who vehemently defend the sector with the nature of localised business often fail to convince when reminded of the global brands in the real estate spaces. What is even more important is that many of them are looking forward to have a global partner like say Donald Trump to tie-up. The question is whether there is any learning for better brand positioning in times of crisis.

Arvind Jain, Managing Director, Pride Group says in most Indian cities, reputed developers have maintained consistency in these aspects and are even raising the bar on best practices in construction design, quality and business transparency. According to him, it is often assumed that Indian property buyers are more focused on budget than brand value. This is a glaring miscomprehension of the ground realities.  In fact, few consumer classes are as attuned to the value of a brand than Indian homebuyers. Moreover, developers have been responding to this trend by making best practices in their offerings as well as business operations as an integral part of their manifesto.

“This focus is a natural consequence of the need to remain relevant in a highly competitive market. This explains why certain brands command a greater degree of trust among consumers than others. The fact is that real estate as a business, from construction to marketing of the end product, is one of the strongest contributors to the country’s GDP. Brand loyalty is certainly not missing in Indian realty. This is amply evidenced by the fact that certain brands command instant attention while others do not even register on buyers’ radars unless questionable marketing ploys such as marked-down rates in exchange for inferior quality and location come into play. In India, home buyers are very aware of the fact that some developers can be expected to deliver on their promises, while others represent a potentially costly gamble,” says Jain. 

Many within the built environment maintain that it is all due to the image makeover of the sector why the more reputed developers have no problems with obtaining domestic as well as international institutional financing for their projects. They crib that the image that has been created about the real estate sector in general is a media business to portray the entire real estate domain in a negative and mercenary light. This is at a time when the Indian real estate is becoming a force that even global players are beginning to take very seriously.

A section of the analysts maintain that the sector is already witness to a process of consolidation wherein smaller players are merging with or selling their stakes to bigger brands, since these banners of repute are able to sustain their businesses as a result of their larger market share, higher credibility quotients and their superior funding options.

However, not many would agree with this at a time when despite of being a better pay master the Indian real estate fails to attract the best of talent and the sector suffers from a perception issue when it comes to the youngsters making a career choice out of it. Moreover, realty market continues to get worse in the slowdown not just in terms of pessimistic mood but generally in terms of overall realty sentiment index. All parameters including economy, residential launches, sales, price appreciation, new office supply, leasing volume, office rental appreciation and funding indicate pessimism for the brand realty.

Unique challenges of brand positioning at the bottom of pyramid-II

Posted on by Track2Realty

Realty Branding, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: Brand managers of the companies who have been into strategising at the bottom of the pyramid wish it is high time credible bodies initiate measures on this front in the public domain. On the other hand, private equity funds in their due diligence reports (privately) do accord importance to this aspect.

Failing this, they say, it is a thankless job and those who do not need much brainstorming into the top of the pyramid branding of super luxury projects still stand out as glorified peer group.

Devang Varma, Director, Omkar Realtors & Developers believes that catering to a mass demand is a challenge and not a taboo. According to him, while branding at the bottom of the pyramid may take on the unconventional role, the challenge is to create/gain the “Trust” factor.  The so-called branding aspect tends to focus more on direct relationship management exercise at all touch points. The branding strategy gets to be more human-centric with the visibility being restricted to specific communes which form the target audience. This could relate to local religious, sports, education, health awareness events.

“For us it was never a taboo as the company managed to earn the market goodwill with its qualitative and timely deliveries.  With the city expected to grow vertically, branded or organized developers in any case, would have to tap into redevelopment sphere which has tremendous scope. Developers handling redevelopment projects are coming up with luxury residential offerings as the market holds good potential for this category and Mumbai has hardly any open land parcels. Also, the developers have invested substantial time and money in redevelopment projects whereby free sale portion is the only route to generate profits,” says Varma.

Anshuman Magazine, CMD of CBRE South Asia wonders why it should be a brand taboo when the ROI is actually higher in many cases of redevelopment.

“Redevelopment is the only way forward and internationally also experience suggests that ROI (Return on Investment) could be higher than the new launches due to the locational advantage. And since the values are high, developers tend to take risk. I feel in redevelopment projects values are high, ROI is higher and demand is more, but still in the Indian context Mumbai is the only success story in redevelopment,” observes Magazine.

If the brand taboo has been removed, does it mean branding in this segment is as process driven as in any other segment of realty business? Experts believe since addressing to a few people is much easier than addressing to the masses which make the bottom of the pyramid, the dynamics of brand communication also changes.

The branding methodology in this segment is largely conventional but extremely strategic in nature. Though every company has devised its own innovative technique, some of the branding methodologies that has worked at the bottom of pyramid are a mix of advertising, OOH, Radio, product literature, aggressive PR, digital media, events, direct marketing…..it may sound like an endless list but then challenge is always higher at the lower end of project portfolio in the business of real estate.

Realty learning to poke fun & innovation in branding-I

Posted on by Track2Realty

Realty Branding, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: Call it stale or repetitive but real estate advertising has always been too sales-centric with no thrust on building the iconic brand. Though the sector has matured on several other parameters of corporate quotient, and charging for the brand premium seems to be on top priority; still the advertising has been by and large project driven.

However, Track2Realty Brand X Report delves deeper into the strategic dilemma of marketing communication to find that brand driven innovation has been applied by some of the smart movers, though such case studies are few and far between.

‘Sea View-A View for which rich pay a fortune, but is free for the love birds on beach-fronts.’ Does this ad remind something? ‘Footpaths-A place where everything happens except pedestrians are walking.’

Doesn’t it remind of the iconic Amul girl, wearing a polka-dot frock, famous for poking fun at national events and personalities that first made an appearance in 1967 and even after 46 years is as relevant, interesting and innovative?

But wait, these are not Amul ads but a campaign called Mumbaipaedia by a Mumbai-based real estate company. It is true that the Amul ads have often been described as one of the best Indian Advertising concepts because of their humour, with puns being its forte, and their penchant of picking up on current events to bring home a point. But the question that was often asked in the realty sector was whether something of that sort is feasible in the business of real estate?

Real estate advertising in the Indian context is at best what the management guru Peter Drucker once famously said, “Efficiency is doing things right; effectiveness is doing the right things.”

The question whether Amul ad can be replicated in the realty has been actually answered by a Mumbai-based developer, though the medium (OOH) and the message (poking fun with intended pun) is very much Amulasque.

The initiative, Mumbaipedia by Omkar Realtors & Developers offers some interesting trivia that is aimed at getting attention of the Mumbaikars for whom driving is more often like a punishment due to traffic snarls. Mumbaipedia gives a little dose of humour and at the same time gives away some interesting information about the city engaging the audience and bringing smile on their faces.

The initiative decodes or rephrases the common current terminologies to which the local population can easily connect with. Mumbaipedia gives new connotations to the common words and phrases. For instance, ‘Monsoon: An excuse for a rain dance sequence in a Bollywood film. More commonly a cause of traffic snarls.’

The short message clicks immediately with the inherent meaning which Mumbaikars can associate with quickly. Another example, ‘Flamingo: A tall pink bird that owns mudflats in Sewri, which it comes to visit annually.’

…to be continued

Realty brand positioning not connecting with home buyers-V

Posted on by Track2Realty

Realty Branding, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Survey: What has been a surprise finding of the survey is the fact that radio, a medium of the past that has reinvented itself in recent years, is a very powerful tool to capture the home buyers’ attention. 62 per cent of the home buyers’ even recall the radio jingle of the projects and that is too high a dividend for the top-of-the-mind recall value of the brand. However, the rate of this interest translating into buying decision depends on a number of other factors.

Newspaper advertisements come next as the medium of home buyers’ contact point.  Nearly six out of ten, 58 per cent to be precise, keep an eye on the newspaper advertisements for the new home launches though less than half of the home buyers’ purchasing decision, only 48 per cent, has been influenced by the newspaper advertisements, in the sense that they first got to know the new launch through this medium.

Billboards, a preferred medium for the developers, have been able to inform only the one third, 32 per cent, prospective home buyers as first point of information. What actually is a surprise finding of the pan-India survey is the fact that television commercials have even less takers with the medium being the first point of information only to the 18 per cent home buyers.

A majority of the respondents in the survey are otherwise very brand conscious and their purchasing decision are by and large guided by the brand perception of the product, right from watches to clothes and FMCG products. More than six out of ten, 66 per cent, of the respondents say brand matters not only in the consumer goods that they consume within the homes, but what matters more is the show piece stuff like dress and watches that they flaunt in the peer group.

But it is surprising that when it comes to the biggest purchase of their lifetime, it is not brand that matters as much as with other products that they buy repeatedly, unlike a home which most of the Indians buy only once in the lifetime. It is probably a wakeup call for the Indian real estate which has gone overdrive on advertising, but the impact suggests it is by and large directionless.

One significant finding of the study is that developers’ over reliance on project branding over company branding has actually backfired. Other than the fact that it has been a deterrent in terms of getting investors’ confidence for low or moderate brand recall value, the companies have not gained any significant mileage of the ad spend beyond selling the project.

While seven out of ten can who can recall a company’s project in the given city that they wish to buy, not even four out of ten, 38 per cent are just influenced by the project ads to inquire. This in itself suggests that while the objective of sales is hardly met, brand of the company also suffers in the process.

The brand consciousness is highest in North India, where nearly eight out of ten, 78 per cent, prefer their home to be bought from a reputed developer, followed by Western India where more than six out of ten, 64 per cent home buyers are conscious of the brand and reputation of the developer.

In South India, which is most price sensitive market this brand loyalty is relatively low at 56 per cent. However, when it comes to Eastern India it seems no one is bothered about the brand of the developer and not even one-third of the home buyers, only 28 per cent, understand and value the brand of the house that they have to live in.

However, in terms of the top-of-the-mind-recall value there is a very thin marginal difference among the many real estate brands and the size of the company does not add to its brand competitiveness. As a matter of fact, barely one third of the respondents, 34 per cent, could instantly recall top five realty companies outside their region.

In terms of the ad campaign, not even those many, only 22 per cent could recall a few advertisements of the developers. DLF-IPL has been the only real estate sponsored event that nearly half of the respondents, 46 per cent could recall. One third of the respondents, 30 per cent could recall Jaypee Group’s Formula 1.

Across the country the home buyers are more concerned about the lack of research in real estate, something that has been a problem area for the developers all through. Nearly eight out of ten, 76 per cent don’t find the property listing sites reliable as they find it manipulative with price of the same project quoted different on different sites. Nearly two third, 62 per cent expect the property listing sites to be a two-way communication.

The moot point remains as to what precisely can improve the brand image of Indian real estate. 90 per cent of the respondents demand timely delivery of the project by the developer, wish list of 88 per cent is that promises made by the company are fulfilled, whereas 82 per cent want a listing mechanism where they can monitor project execution at every stage virtually.

Realty brand positioning not connecting with home buyers-I

Posted on by Track2Realty

Realty Branding, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Survey: 70 per cent of the Indians who have either bought a house or are planning to buy believe brand reputation only amounts to the developers’ past projects. More than that, 78 per cent maintain the track record of timely delivery of the project is the best way to judge the developers’ brand.

Their idea of judging a brand seems to be juxtaposed to the real estate companies’ perception of brand positioning. For the average Indians newspaper advertisements, cover jackets etc are kept aside, billboards overlooked & ignored and television commercials are the time to take a break from the favourite soap.

Nearly nine out of ten, as many as 86 per cent can’t recall any specific newspaper advertisement of real estate, more than that, 90 per cent never take notice of the hoardings and 70 per cent rather question whether real estate companies actually advertise on the TV channels the way FMCG products do.

These are the findings of Track2Realty for India’s first ever Brand Perception Audit Report, Track2Realty Brand X Report 2012-13 on realty sector. Track2Realty conducted this survey in twenty cities—Delhi, Noida, Gurgaon, Mumbai, Kolkata, Bangalore, Hyderabad, Kochi, Ahmedabad, Chennai, Jaipur, Lucknow, Surat, Bhopal, Indore, Patna, Bhuvneshwar, Vijayawad, Pune and Chandigarh between March 1 and April 14.

A structured questionnaire that was based on the choices & concerns, brand exposure & lifestyle choice, house buying preference and their satisfaction index was given to respondents who belonged to a mix of mid segment and luxury project buyers. The survey was an attempt to understand the choice of qualitative and quantitative socio-economic groups.

The survey demography belonged predominantly to the middle and upper middle class of society, being educated professionals and a significant number of respondents were buyers of mid segment houses. The buyers had a mix of first time and second time home buyers. Most of the respondents, 60 per cent, were double-income families. While 70 per cent of the buyers were exposed to the idea of brands in metro cities, brands’ aspiration level was equally high among the tier II and III cities’ respondents, 54 per cent and 46 per cent respectively.

A large sample size of 10,000 respondents (500 samples in each city) was targeted. Out of these 8672 samples were finally zeroed down and considered for analysis. Rest 1328 respondents were not considered for evaluation since they either gave incomplete answers or were rejected for non-seriousness of their choices & concerns. The total sample size had 36 per cent females and 64 per cent males as a representative set.

The surveying method was one-on-one interviews, in which the researchers explained the theme and purpose of the survey and then handed over the questionnaire to the respondents to be filled and returned the next day. All the researchers being the local residents of the city, they managed to assure the respondents complete anonymity.

The results were based on a set of 27 questions and the answers were grouped into seven key factors of brand exposure within and beyond the given city from where the respondents belonged. Real estate companies with better brand recall value outside their geographical markets were given the highest weightage in ranking and rating.

Next most important factor has been recall value of realtors’ projects beyond the category that the buyers wished to or had bought. Similarly, ad campaign were analysed in terms of how it has made an impact on the TG in terms of recall value, understanding and sales drive.

It is a bad news for the second largest advertiser to the Indian media where the real estate companies are spending crores (nearly 2.5-5% budget of the total project cost) on the project’s brand positioning along with corporate branding through multiple use of media vehicles.

While the most prominent national and even regional real estate companies often tout the importance and impact of their advertising presence in creating “brand recognition,” Track2Realty survey finds that awareness of the company’s brand is actually not a factor customers take into consideration when selecting their dream home.

…to be continued