16/05 Adequate branding, marketing needed for developers

Monday,  May 16,2011,23:44 (GMT+7)

By Dinh Dung in HCMC

A motorbike rider passes an apartment project under development in HCMC’s District 2. In a gloomy market like it is now, better brand and marketing would help property developers to sell products - Photo: Dinh Dung

Brand building is not a new issue for many enterprises; however, it seems to be a forgotten factor for many property developers which have not invested adequately in the activity that has a positive effect to the sales of their housing products, especially in the current gloomy market.

The property market booming in the past years triggered a rush in housing project developments around the country as hundreds of companies joined the market for the sake of profits, and the easy market given a huge housing demand made many companies overlook marketing programs to build up their brands.

Brett Ashton, managing director of Savills Vietnam, shared experiences as a property services provider that many property developers have spent tens, even hundreds of millions of dollars to build up a huge residential project, but they have had very little investment in, or even ignored the brand building activity for their projects.

Speaking at a seminar themed Vietnam Real Estate Marketing 2001 organized at the hotel Legend Saigon in downtown HCMC last Thursday by Lean Media Group, Ashton said that branding played a very important role in supporting product sales once it was adequately attended to.

Some property experts have the same ideas, saying that property developers will find it hard to convince buyers and investors to buy housing products if they failed to highlight three elements including their projects’ legal status, implementation progress and prestige and brand. Reality shows that some developers with recognized brand have an advantage in the market, even in the tough time. 

Patti Joslin Ndzana Etoga, operations directors of CB Richard Ellis Vietnam (CBRE), seconded the above idea, saying that brand would help to quickly and easily identify a property or a service. It enhances values and sets expectation levels for quality and standards. However, looking to the top ten brands in Vietnam, one has not seen any property brand in the shortlist.

She said gone were the days when developers built up their condo projects and waited for buyers lining up to buy as seen in 2007. Real estate marketing activity has been limited among many developers, and when the market went down, they would suffer.

The market size, according to CBRE, has increased significantly in recent years as many high rise developers have entered this year with a large amount of stock, especially in the high-end segment. In 2008, the market had some 24 projects with some 6,700 apartments from luxury to affordable ones. However, as of early this year there were some 46,600 housing units launched into the market, causing a stiff competition among developers.

Meanwhile, buyers are maintaining a ‘wait and see’ attitude, hoping prices and interest rates to come down. In addition, poor liquidity in the market has decreased the number of speculators or secondary investors. Many developers have become creative to stoke sales including lucky draws with high-value prizes including cars and motorbikes.

The CBRE’s operations director suggested that to wake up sales, developers should invest more to research the market, select marketing tools and spend more money for marketing programs.

She said developers should bring budgets up to the level that the project deserves, preparing to spend up to 3% of their revenue to support their sales besides selecting smart public relations, press and social media.

She shared experiences that people buy on emotion, thus marketing program should touch the senses including “see, feel, touch, smell and sound.” That means it should be real.

In fact, some property developers are using real apartment to convince buyers, rather than showing model apartment to potential buyers. For example, the project owner of the Xi Riverview Palace in Thao Dien Ward in HCMC’s District 2 has opened real apartments at the project’s site for potential buyers touring for a real feeling, although the Korean developer has built a model housing gallery on a site near the project. Besides the project, some other developers, instead of building model apartments, have used an entire floor to design model apartments to convince potential buyers with real image of their future home.

Ashton of Savills said developers should identify the right target market segment and mainstream to tailor their housing products to potential buyers. Besides having a suitable product, the pricing strategy should be considered in the current market situation where middle income earners are the largest segment of buyers.

He said to boost sales, some developers were offering heavy incentives including implicit discount via promotion, interest rate support, discounting for group buyers and flexible payment schedule. Like other property experts, he said that brand building, increasing marketing program and selecting different tools to promote their products including internet channel were what property developers have to make use to tap the market demand rather than sitting and waiting a miracle happens as seen in the past.

The Saigon Times Daily