These days in newspaper, for those who has been following the property scene, you would notice some same names keep popping up. Their advertisements come up every week or every 2 weeks. Some are even on radio and I hear them daily! The message is the same, ‘investment potential’, ‘next to something amazing like universities, hospitals etc’ or even ‘this property is hot and you must quickly grab it’. Just wanted to share two stories of marketing effectively versus insufficient marketing. Please note that marketing costs are categorised under expenses and typically are between 2% – 4% of the total GDV. So, if you are selling a RM500,000 / unit condo and there are 500 units, your GDV is RM250 Million. Thus, typically your advertisement budgets are between RM5 million to RM10 million. Is this a lot? YES.
Many developers however chose not to advertise heavily at first, believing the good times for the past many years would still last, that their properties would be fully sold out within 6 months. Let me tell you a truth, there are now hundreds of developers all over Malaysia, each with their own special projects somewhere in KL, Penang, Iskandar or KK. For investors, if they happen to know that your project is still not even 50% sold after 6 months, do you think they would buy from you? For people who do not know, they have SO MANY choices, do you think they would buy your property? Thinking objectively, you already have the marketing / advertising expenses, why are you saving the money? For bonuses? I think if you can sell all your units, the bonuses would be larger.
There is one project in Ipoh, called The Haven. Hundreds of units of luxury condo and it was the very first luxury condo in an area which a lot of Ipohans do not really think about property. The CEO put all his efforts and the budgeted expenses into marketing the property. At the same time, ensuring the best materials are used. It is true, I think not a lot of Ipohans bought the property. Those who bought may not even tell others for fear of being laughed at, buying a luxury condo in Ipoh? Where the semi-detached houses are even more cheaper? However, with his efforts of going anywhere and everywhere relevant, he has buyers from all over the world not to mention KL, Penang, Singapore. Thus, all these different places, each contributing few buyers meant that his project was sold out and the owners were handed the keys this year. Currently, the prices has more than doubled from the first block that he started selling. I love this project tremendously but I have no funds to buy it then. Sigh….
Think carefully. When the markets slow down, your marketing should slowdown or change to higher gear and Do It Fast?
written on 13th dec.
Next suggested article: Gloom and Doom property market?
