The property business condition which is in global financial will influence the behaviour of most business agents, however from the bankers, developers and consumers (end uses/investors).
The most influential point is the internal management readiness of property business agents to adjust with the charge of market situation and condition.
For developers who want to exist in the market, there is nothing but doing “total consolidation” before being forced to “resign” or face the problem “bad credit” in 2009.
Repositioning for Developers in 2009
The tight competition because of the market weakness demands marketing and finance department to be careful in projecting the selling rate in the each flow plan.
In this case, the capacity, capability and mentality of the professionals behind the projects are examined. Over optimism beyond the success two years ago must be corrected. On the other hand, pessimism and doubtfulness will deteriorate the company’s Performance. the best thing to do is internal consolidation of the company. It could be Restructing or Reengineering. Obviously, developers should do Repositioning accurately, carefully and proportionally. Devastation, Merger, Equity Sharing, Strategic Alliance and Acquisition are alternative of company’s total consolidation.
• The Strategic of Big-scale Developers (>200 hectares)
If big-scale developers have concentrated on the lower-middle market share want to survive, they have to concentrate in the lower-middle market share with the price of less than Rp 200 million. This should be done to anticipate the possibility of suppressed housing market because of the increase of interest rate of KPR (People Housing Credit) either in Private Banks or in the bank of BTN.
If they want to face the possibility of market suppression in 2009, they should not increase the house selling price except for adjusting with the inflation.
• The Strategic of Middle-scale Developers (100-200 hectares)
Middle scale developers which have succeed in getting end-users should increase the portion of lower-middle houses with the price of less than Rp 140 million if they concentrated on the lower-middle market share with the price of Rp 160 million.
Developers can retain the land selling price if there is selling rate decrease under the selling rate of main competitors, for products of Rp. 200 million. If the selling rate decrease is more than 50% compared with of the previous year, developers must do price restructuring by correcting the land and building price.
• The Strategy of Small-Scale Developers (<50 hectares)
Small-scale developers which focus on lower middle market share should maximally use the market chance. If possible, they must expand the business by proposing new additional loan from banks or by co-operating or building alliance with big developers which are willing to share in terms of fulfilling the duty implementing the concept of balances housing pattern development of 1:3:6.
The Strategy of New Development Area
Besides revising the site plan (increasing the portion houses), new area developers which have financing commitment with the banks should be careful in determining price strategy, methods of payment and transferring schedule before launching the project to the market. Another important thing is the determination timing to launch the product the market. exacerbation of marketing concept and strategy are absolute if they want to break through the market slack. Product launching must be supported by integrated communication in order to break through the market share among the tight competition. Relying on gimmicks such as gifts, promises and big discount by means of product launching advertisement does not guarantee marketing success. Land price determination starting from the lowest price but is until under the “lower limit” of project financing feasibility will make optimal selling rate between 2009-2012.
The Strategy of Exclusive Area Developers
Middle-up per developers with limited area located in the middle of tours or in the popular area may retain by postponing the fixed and price increase.
Fixing product quality (the house design) and increasing service to old residents and involving them to play a role as marketer and public relation officers are quite effective alternatives.
Market Review and Marketing Audit
After doing internal consolidation in all areas, especially finance, management and Human Resource; developers just continue to do the external consolidation, i.e. market and marketing. Before doing basic and strategic adjustment in marketing, total market review should be done. In this case, developers must pay attention to market aspects from macro perspective like final condition and economic trend, influential politic situations such as market width, market share and market absorption.
Besides, marketing Audit is another important thing. Developers must be sharp in observation looking at market dynamics in micro contexts like final condition and market trend which influence local completion and competitors’ strategies.
The market review result of this marketing audit is needed to arrange new Marketing Plan. With Marketing Plan, developers will easily arrange such as Integrated Marketing Strategy which describe Marketing implementation strategies known as Marketing Mix (Product, Price, Place and Promotion) and Promotion Mix (Media Advertising, Sales Promotion, Personal Selling and Publicity) in details.
Understanding to project development becomes the main starting point to do Repositioning in terms of planning total marketing solution.
This integrated done marketing program is the total solution for grabbing the competition in 2009.
If developers want more objective results, they may seek help from independently professional service out of Company.
Professional Marketing Team
Direct Selling through personal selling controlled by a professional marketing team is an effective solution to gain the most potential buyers.
The combination among canvassing, door to door selling in field and sales promotion in an exhibition done by controlled sales force will provide optimal transaction numbers.
Professional Public Relation Service
The function of public relation service becomes the most important part not only to keep and raise the company’s image in front of consumers, but also -more importantly- to save the selling degree which was reached before.
Public relation service must involve from the initial marketing campaign until the post period of building sales. The service is a part of the integrated marketing team.
Consumer Behavior
Understanding consumer’s attitude and behaviour who are most lower-middle end-users becoming more critical and careful is the most important thing to do.
The strategy to increase prices among liquidity problems nowadays is not an appropriate solution since most buyers are now end-users. The behaviour of end-users is totally different from the investors. End-users rely on saving accumulation for years to pay the down-payment and on monthly salary to pay the instalment. While investors see more chances to invest their money.
In other words, end-users are very sensitive with price increases than investors. Therefore, at present developers would better force the selling volume than the profit margin. Selling volume can increase developer’s cash flow which is needed to anticipate the tight monetary condition for the next three months. This step will become a competition among developers to expand at the beginning of 2009.
Price Increase
Last but not least is consumers’ trust. This last factor plays a big role in supporting success to break through marketing slack entirely.
The syndrome of gifts, discounts, gimmicks and promises for the last two years done by almost all developers is considered as a “profit” by consumers. The boom of gifts, KPR interest discounts, big discounts, payment without down-payment and a free house for buying a house has made consumers more careful to decide, not to mention the trauma experienced by deceived consumers from big developers’ false promises to small developers’ “dreaming houses” which has not disappeared. In a sudden developers pronounce price increases because of US dollar depreciation, price increase of raw materials and so on.
The question is: Will the sudden price increase be positively responded by consumers” Or, Will they become much more careful in making a decision? If the latter happens; not only will the market desire at lower middle houses decrease, but also consumers might run away.
The most influential point is the internal management readiness of property business agents to adjust with the charge of market situation and condition.
For developers who want to exist in the market, there is nothing but doing “total consolidation” before being forced to “resign” or face the problem “bad credit” in 2009.
Repositioning for Developers in 2009
The tight competition because of the market weakness demands marketing and finance department to be careful in projecting the selling rate in the each flow plan.
In this case, the capacity, capability and mentality of the professionals behind the projects are examined. Over optimism beyond the success two years ago must be corrected. On the other hand, pessimism and doubtfulness will deteriorate the company’s Performance. the best thing to do is internal consolidation of the company. It could be Restructing or Reengineering. Obviously, developers should do Repositioning accurately, carefully and proportionally. Devastation, Merger, Equity Sharing, Strategic Alliance and Acquisition are alternative of company’s total consolidation.
• The Strategic of Big-scale Developers (>200 hectares)
If big-scale developers have concentrated on the lower-middle market share want to survive, they have to concentrate in the lower-middle market share with the price of less than Rp 200 million. This should be done to anticipate the possibility of suppressed housing market because of the increase of interest rate of KPR (People Housing Credit) either in Private Banks or in the bank of BTN.
If they want to face the possibility of market suppression in 2009, they should not increase the house selling price except for adjusting with the inflation.
• The Strategic of Middle-scale Developers (100-200 hectares)
Middle scale developers which have succeed in getting end-users should increase the portion of lower-middle houses with the price of less than Rp 140 million if they concentrated on the lower-middle market share with the price of Rp 160 million.
Developers can retain the land selling price if there is selling rate decrease under the selling rate of main competitors, for products of Rp. 200 million. If the selling rate decrease is more than 50% compared with of the previous year, developers must do price restructuring by correcting the land and building price.
• The Strategy of Small-Scale Developers (<50 hectares)
Small-scale developers which focus on lower middle market share should maximally use the market chance. If possible, they must expand the business by proposing new additional loan from banks or by co-operating or building alliance with big developers which are willing to share in terms of fulfilling the duty implementing the concept of balances housing pattern development of 1:3:6.
The Strategy of New Development Area
Besides revising the site plan (increasing the portion houses), new area developers which have financing commitment with the banks should be careful in determining price strategy, methods of payment and transferring schedule before launching the project to the market. Another important thing is the determination timing to launch the product the market. exacerbation of marketing concept and strategy are absolute if they want to break through the market slack. Product launching must be supported by integrated communication in order to break through the market share among the tight competition. Relying on gimmicks such as gifts, promises and big discount by means of product launching advertisement does not guarantee marketing success. Land price determination starting from the lowest price but is until under the “lower limit” of project financing feasibility will make optimal selling rate between 2009-2012.
The Strategy of Exclusive Area Developers
Middle-up per developers with limited area located in the middle of tours or in the popular area may retain by postponing the fixed and price increase.
Fixing product quality (the house design) and increasing service to old residents and involving them to play a role as marketer and public relation officers are quite effective alternatives.
Market Review and Marketing Audit
After doing internal consolidation in all areas, especially finance, management and Human Resource; developers just continue to do the external consolidation, i.e. market and marketing. Before doing basic and strategic adjustment in marketing, total market review should be done. In this case, developers must pay attention to market aspects from macro perspective like final condition and economic trend, influential politic situations such as market width, market share and market absorption.
Besides, marketing Audit is another important thing. Developers must be sharp in observation looking at market dynamics in micro contexts like final condition and market trend which influence local completion and competitors’ strategies.
The market review result of this marketing audit is needed to arrange new Marketing Plan. With Marketing Plan, developers will easily arrange such as Integrated Marketing Strategy which describe Marketing implementation strategies known as Marketing Mix (Product, Price, Place and Promotion) and Promotion Mix (Media Advertising, Sales Promotion, Personal Selling and Publicity) in details.
Understanding to project development becomes the main starting point to do Repositioning in terms of planning total marketing solution.
This integrated done marketing program is the total solution for grabbing the competition in 2009.
If developers want more objective results, they may seek help from independently professional service out of Company.
Professional Marketing Team
Direct Selling through personal selling controlled by a professional marketing team is an effective solution to gain the most potential buyers.
The combination among canvassing, door to door selling in field and sales promotion in an exhibition done by controlled sales force will provide optimal transaction numbers.
Professional Public Relation Service
The function of public relation service becomes the most important part not only to keep and raise the company’s image in front of consumers, but also -more importantly- to save the selling degree which was reached before.
Public relation service must involve from the initial marketing campaign until the post period of building sales. The service is a part of the integrated marketing team.
Consumer Behavior
Understanding consumer’s attitude and behaviour who are most lower-middle end-users becoming more critical and careful is the most important thing to do.
The strategy to increase prices among liquidity problems nowadays is not an appropriate solution since most buyers are now end-users. The behaviour of end-users is totally different from the investors. End-users rely on saving accumulation for years to pay the down-payment and on monthly salary to pay the instalment. While investors see more chances to invest their money.
In other words, end-users are very sensitive with price increases than investors. Therefore, at present developers would better force the selling volume than the profit margin. Selling volume can increase developer’s cash flow which is needed to anticipate the tight monetary condition for the next three months. This step will become a competition among developers to expand at the beginning of 2009.
Price Increase
Last but not least is consumers’ trust. This last factor plays a big role in supporting success to break through marketing slack entirely.
The syndrome of gifts, discounts, gimmicks and promises for the last two years done by almost all developers is considered as a “profit” by consumers. The boom of gifts, KPR interest discounts, big discounts, payment without down-payment and a free house for buying a house has made consumers more careful to decide, not to mention the trauma experienced by deceived consumers from big developers’ false promises to small developers’ “dreaming houses” which has not disappeared. In a sudden developers pronounce price increases because of US dollar depreciation, price increase of raw materials and so on.
The question is: Will the sudden price increase be positively responded by consumers” Or, Will they become much more careful in making a decision? If the latter happens; not only will the market desire at lower middle houses decrease, but also consumers might run away.
