Marketing strategy: It's more like selling lifestyle

Satyasuryawan, Contributor, Jakarta

Today, many Jakartans have grown fond of living in apartments. They choose to have their homes in the clouds for various reasons, one of which is proximity to their workplaces, places of entertainment and shopping centers.

With traffic congestion becoming worse, the dream of having a conventional house with a spacious garden in the center of the city is now unattainable for most.

"The safety or security factor is another important issue that has boosted apartment sales in Indonesia's major cities. Almost all the comforts and conveniences of living in a conventional house are available in a well planned apartment. First-class facilities and amenities that are quite a distance from most residential areas or estates are also available in apartment complexes," said the general marketing manager of The Pakubuwono Residence, Yunianto Gatot Sedyadi.

Another interesting aspect, he said, is the fact that many residents of Jakarta, and probably many other big cities in the country, are becoming more individualistic. Among other things, they prefer a more private residence that is free from the prying eyes of neighbors and gossips.

In view of this cultural change, salespeople have formulated their marketing strategies to selling modern, well-equipped apartments that fit customers' tastes and requirements. In fact, it is more like selling a lifestyle, some salespeople have remarked.

Given the current mushrooming of apartment complexes around the country, and the ensuing tight competition, it is only natural that salespeople are now being forced to work harder in their efforts to win customers. According to estimates by the Indonesian Property Study Center, there will be about 33 new apartment projects, containing a total of 20,000 apartment units, by 2005.

The price tag of an apartment depends on its location, facilities and the other features it offers. The cheapest units are available for around Rp 50 million (US$5,875), while mid- range units are available for between Rp 200 million and Rp 500 million. As for top-end apartments, these range in price between one billion rupiah and two billion rupiah.

In the case of the lower end of the market, developers have to resort to discount packages and even purchase by installment to facilitate buyers. Even in this segment, though, developers admit that competition is tough.

Moderately priced apartments are located in a number of residential areas, such as Taman Semanan Indah and Kosambi in West Jakarta, and Mutiara Mas in Pulo Gebang, Bekasi regency. Top-end apartments are strategically located near commercial and office areas, like Kelapa Gading, Pluit, Grogol or the Golden Triangle in Central Jakarta. Some deluxe apartments can be found in more tranquil areas of Jakarta, such as South Jakarta or Mega Kuningan.

Generally, apartments with price tags of Rp 500 million or less are quickly bought by property agents and brokers, who usually get the first opportunity to buy them. This way they become the price-setters, and can make good profits, including from the rental or lease of the properties. Even individual buyers can make good profits when they purchase apartments during the initial launch period.

To see how profitable this sector, one only has to look at apartments in Kelapa Gading. Costing Rp 80 million in 1997, these can now be sold for around Rp 250 million. Another apartment complex, this time in Jalan Casablanca, was selling apartments for Rp 700 million in 1998. Today these are worth more than double that figure. Just imagine the profits made by owners who decide to leased their apartments out. Some apartments are currently being offered for US$1,500 per month.

Among the marketing strategies employed to attract customers are the staging of special shows to launch new projects. In Kelapa Gading recently, customers were encouraged to purchase units costing between Rp 100 million and Rp 300 million by a dance show featuring the gyrating Inul. These initial launch programs are attractive as lower prices are offered for first- time buyers. Usually, there is a rush of buyers, who are aware that prices will be much higher in a matter of weeks.

The situation is somewhat different in the case of super deluxe apartments, like The Pakubuwono Residence. Not many property agents or brokers are interested in investing in these expensive units, with, for example, one 177-square-meter apartment (two-bedroom) in The Pakubuwono Residence being priced at Rp 2.5 billion, while a three-bedroom 266-square-meter unit is to be had for Rp 4 billion. Most of these apartments are purchased directly by customers without going through middlemen, who have to think twice about investing for resale or lease at such high prices. Some of the Pakubuwono's units can be purchased by installment, with the monthly payment being Rp 50 million.

For extremely affluent customers with no money worries, the marketing game is entirely different. A personalized, one-on-one approach is preferable, said Gatot. For this type of highly demanding customer, care should be taken not to make promises that cannot be fulfilled or "overclaiming" the product. Simply give them the best, or, if possible, exceed their expectations, say most marketers. Some of the extremely rich are also, surprisingly low profile, meaning they prefer not to show off.

The Pakubuwono's marketing team prepares a different marketing strategy every time they launch their products. It has to be classy and artistic at the same time. Renowned Indonesian singers, including Ebiet G. Ade, and poet Rendra were recently invited to enhance the atmosphere at a marketing presentation. The audience, all prospective buyers, were captivated and selling the apartments proved easy. Currently, 60 percent of The Pakubuwono's apartments have been sold.

Meanwhile, Da Vinci Apartments, located in the heart of Jakarta on Jalan Sudirman, is looking for Rp 22 billion for a fully furnished 350-square-meter unit. Da Vinci has positioned itself as a home for those who are genuinely affluent, have good taste and are respected by the community.

Different units in the same apartment building may be marketed based on separate strategies, mainly because of their location -- do they have less-than-attractive views, like looking down on a muddy river, for example? Though few in number, these apartments have to be sold anyway. One obvious strategy is to give a bigger discount -- more than 12 percent -- or give some sort of "guarantee" to the investor that the unit will be easy to resell due to its lower price.

From the examples given above, it is clear that selling apartments is no longer as simple as it was a few years ago. It is more than selling something concrete. The intangible elements, like lifestyle and the psychology of the customer are just as, if not more, important.