“Effectiveness of Marketing Strategic of NBM Developers Ltd” Real Estate Sector in Bangladesh: An Overview Real Estate Sector in Bangladesh: An Overview Dhaka City, born during the Moghul Empire and grown with the British rule, is expanding rapidly. From the beginning of the 20th Century its growth and latter development is marked with sheer lack of proper and far-reaching planning. The impact is now being felt at the end of the century. Dhaka City is undergoing terrific growth phase throughout the last two decades. While there are so many real estate developers in the market, there are also very few of them who have maintained the quality, safety and customer preference. It is customary in the country that the first day quality and impression is lost after a while when people start getting a bit of familiarity. This happens due mainly to lack of professionalism. Sometimes the consumers here are in a fix to choose a particular brand out of many. A good number of real estate companies are working under one umbrella association named 'Real Estate and Housing Association of Bangladesh' (REHAB). Almost 361 Companies are at present affiliated with this association, while more than 400 companies are working independently. BTI took a leading role in the formation of the industry association and is one of the founder members of the REHAB. Real Estate Business: a Positive nation for Bangladesh
Dhaka City, born during the Moghul Empire and grown with the British rule, is expanding rapidly. From the beginning of the 20th Century its growth and latter development is marked with sheer lack of proper and far-reaching planning. The impact is now being felt at the end of the century. Dhaka City is undergoing terrific growth phase throughout the last two decades. While there are so many real estate developers in the market, there are also very few of them who have maintained the quality, safety and customer preference. It is customary in the country that the first day quality and impression is lost after a while when people start getting a bit of familiarity. This happens due mainly to lack of professionalism. Sometimes the consumers here are in a fix to choose a particular brand out of many.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
“Effectiveness of Marketing Strategic of NBM Developers Ltd”
Real Estate Sector in Bangladesh: An OverviewReal Estate Sector in Bangladesh: An OverviewDhaka City, born during the Moghul Empire and grown with the British rule, is expanding
rapidly. From the beginning of the 20th Century its growth and latter development is
marked with sheer lack of proper and far-reaching planning. The impact is now being felt at
the end of the century. Dhaka City is undergoing terrific growth phase throughout the last
two decades. While there are so many real estate developers in the market, there are also
very few of them who have maintained the quality, safety and customer preference. It is
customary in the country that the first day quality and impression is lost after a while when
people start getting a bit of familiarity. This happens due mainly to lack of professionalism.
Sometimes the consumers here are in a fix to choose a particular brand out of many.
A good number of real estate companies are working under one umbrella association
named 'Real Estate and Housing Association of Bangladesh' (REHAB). Almost 361 Companies
are at present affiliated with this association, while more than 400 companies are working
independently. BTI took a leading role in the formation of the industry association and is
one of the founder members of the REHAB.
Real Estate Business: a Positive nation for Bangladesh
Rehab profile and its activities in Real estate Sector
Urbanization is an outcome of both population growth and rural-urban migration. As
urbanization increases, more and more people are becoming city dwellers. Bangladesh is
not any exception to that picture. The ever-increasing urban population is catering an
increasing demand for shelter. The right of shelter is a fundamental right, which is ensured
by both UN declaration and the constitution of Bangladesh. But it is very difficult on the part
of the government of Bangladesh alone to ensure housing for all. Here comes the need of
private sector real estate development.
It is a recognized fact that the health of the Real Estate Development Sector is the
barometer of the National economy. In Bangladesh Real Estate Business started in Dhaka in
late seventies. During 1970s there were fewer than 5 companies engaged in this business. In
1988 there were 42 such developers working in Dhaka and now in 2004 there are about 250
companies engaged in this business.
Formation of REHAB: With the number of companies increasing gradually, various problems
concerning the housing sector cropped up requiring early solution. At this stage it was
necessary to form a trade association of the Real Estate developers to protect the overall
interests of the sector. To strengthen the role of real estate sector Real Estate & Housing
Association of Bangladesh (REHAB) was formed with only 11 members in 1991. The
objective of REHAB was to promote formal private sector Real Estate Development in
Bangladesh.
Present Performance: REHAB is the only trade organization of Real Estate Developers with a
current membership of 260 Developers. All major institutionalized Developers are members
of this organization. REHAB is also the "A Class" member of the Federation of Bangladesh
Chambers of Commerce and Industry (FBCCI). In the recent years REHAB has played a very
significant role in nation building through Real Estate Development by its members. The
members of REHAB contribute a large amount of revenue to the Government exchequer in
terms of Registration Cost, Income Tax and Utility Service Charges.
REHAB organizes its most colorful annual event REHAB Housing Fair each year in Bangladesh
for the member developers, financial institutions and building material providers. It has
already successfully completed three Housing Fairs during 2001, 2002, 2003, 2004 & 2005 at
Dhaka Sheraton Hotel Complex. To foster the growth of Real Estate Sector REHAB plans to
organize Housing Fair abroad for the Bangladeshi individuals who are living different
countries of the World to buy apartment, land and commercial spaces in their home
country. Accordingly, the first - ever Housing Fair abroad organized by REHAB on August
2004 at Quality Hotel Hempstead, 80 Clinton Street, New York, USA.
Accelerating urbanization has become tremendous problem to face for the country. The
present rate of urbanization is 5-6% annually1 which is really alarming. About 25% of
Bangladesh is now living in urban areas and 34% will be living by 20151 & 50% by 20252.
There is acute shortage of housing supply in all urban areas and it’s increasing with current
demand of 600,000 to 800,000 units all over the country. Particularly in Dhaka this demand
is estimated at 60,000 units of real estate apartments combined with 200,000 units of
replacement plus backlogs1. Dhaka is currently growing very fast compared to other.
Name of the Association: Real Estate &Housing Association of Bangladesh
Year of Establishment: 1991
No. of Member in 1991: 11
No. of Member in 2008 (January): 508
Bangladesh Market: some Key Indicators
Growing Scenario:
Real estate sector in Bangladesh is in a growing situation. From 1994-98, over the last 13
years, Bangladesh real estate sector grew at an average of 3.64% reaching the peak at 3.87%
in 1999-00. Though it had a fall in 2000-01, there was recovery in 2001-02. For the last 6
years this sector grew impressively and showed a smooth rising trend again it fall in 2008
The comparative scenario of GDP shows a steady 6% growth for Bangladesh. The real estate
experts have expressed the opinion that as GDP of Bangladesh is still below that of other
South Asian Countries, Bangladesh has more to grow which can be fostered by the
continuous increase in the share and growth of real estate sector in the country. The
contribution of real estate and construction in GDP of Bangladesh was 16.20% in 1994-95,
which became at 16.69% in 2000-01 and attained 17.30% in 2006-0. Compared to India,
Bangladesh real estate sector economy is contributing more to the country’s GDP. But
Real Estate Share of GDP – 2004-08 (%)
India 7.00
Bangladesh 8.90
USA 16.00
Malaysia 15.09
Source: Bangladesh Economic Review 2008 http://www.hdfc.com/23032008.htm, Executive Intelligence Review:” Fannie and Freddie were lenders”: U. S. Real Estate Bubble Nears Its End, by Richard Freeman, June 21, 2002http://rozwat.com/pages/science_fin_re_article002.htm and Department of Statistics, Malaysia
70% of the customers think the promotional activities of NBM are sufficient 20%of the
customers think the promotional activities of NBM are Moderate 10% of the customers
think the promotional activities of NBM are not sufficient.
1. Customers preference to buy NBM flat
for the next timeCategories Percentage
Yes 30%
No 0%
May be 70%
Fig: Customers preference to buy NBM flat for the next time
Figure Discussion
In sense of prefer NBM flat to buy for the next time 30% of the customers said yes and 70%
of the customers said yes.
Remarkable media through which
customers come to know about NBMCategories Percentage
Yes 80%
No 0%
May be 20%
Yes, 30%
No, 0%
May be, 70%
0%
10%
20%
30%
40%
50%
60%
70%
Preference of NBM’s flat consider for the next time
Yes No May be
Series1 30% 0% 70%
Yes No May be
Fig: Remarkable media through which customers come to know about NBM
Figure Discussion
In sense of recommend other to select NBM product 80% of the customers said yes and 20%
of the customers said may be.
Customers satisfaction level regarding
overall performance of NBM including
handover timeCategories Percentage
Extremely satisfied 10%
Satisfied 70%
Moderate 20%
Dissatisfied 0%
Extremely dissatisfied 0%
80%
No, 0%20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Recommence tendency to select NBM product
Yes
No
May be
Series1 80% 0% 20%
Yes No May be
10%
70%
20%0% 0%
0%
20%
40%
60%
80%
Satisfaction Regarding Overall parformance
Extremely satisfied
Satisfied
Moderate
Dissatisfied
Extremely dissatisfied
Series1 10% 70% 20% 0% 0%
Extremely
Satisf ied
Moderate
Dissatisfied
Extremely
Fig: Customers satisfaction level regarding overall performance of NBM including
handover time
Figure Discussion
10% of the customers are extremely satisfied regarding overall performance of NBM
including handover time, 70% of the customers are satisfied regarding overall performance
of NBM including handover time, and 20% of the customers are Moderate satisfied
regarding overall performance of NBM including handover time.\
SWOT Analysis
The following SWOT analysis captures the key strength and weakness within the company,
and describes the opportunities and threats facing by NBM.
Strengths
Strong Brand Image
Strong construction quality maintenance
Strong employee bondage or team work
Well Wastage maintenance
Strong reliability
Proper positioning of work force
Strong communication channel
Availability of instant supply of fittings and feathers.
Weakness
Insufficient employees.
Demarcating
Lack of marketing promotional activities
Opportunities
Availability of external finance from bank and financial institution.
Governments’ initiative to step up real estate business.
Threats
Many market leaders in the market.
Uncertainty or scarcity of utility facilities like- gas, electricity, water
Increasing the price of raw material.
Major Findings
The survey has been done targeting some specific objectives as defined in introduction
chapter. Therefore, after getting the outcome, we are now standing in such point from
where we can conclude some points based on the costume of the survey. The findings can
be summarized as follows:
The customer always prefer on the quality product.
Most of the customers prefer To live in the centre of the city
In respect of quality, the price level of NBM is reasonable.
Most of the customers prefer NBM Flat,
All the customers feel NBM follow better construction reasonable price strategy
Customers think NBM needs to enhance the Marketing system
Customer’s satisfaction level regarding overall performance of NBM including
handover time is satisfactory.
Most of the customers are satisfied on the construction of NBM according to their
expectation construction
Most of the time NBM is using only prints media for promoting its products.
Customer Service
One of NBM’s strongest points is its efficient Customer Service Department. This
department gives personal attention to each client and is known for its prompt, effective
action. A warm, friendly atmosphere is created for the client who can make purchase
decision at his/her pace without feeling pressurized.
After sales services are also very efficient and sensitive to the customer’s needs. At every
stage of construction the customer is informed and his/her decision as regards to the
building of the apartment, is respected as much as possible.
The customer service personnel are always open to new, innovative ideas.
Logistical service include repair maintenance facilities such as plumbing and prompt
troubleshooting. Permanent maintenance personnel ensure that the apartments are in good
condition. NBM is also very conscientious about maintaining the facades of its building and
the landscape, in order to up hold its image of being the creators of aesthetically pleasing
homes.
Satisfaction of customer
Promotional strategy Total hunter Satisfaction
Advertisement 30 60%
Public relations 15 30%
Direct marketing 5 10%
Sales of NMB
The aim of sales promotion of NBM is to increase short term sales and increase inshore of
web traffic. They used discounts, installment, special offers & bank loan facilities for the
customers.
Discounts:
Customers who pay their full payments at a time NBM gives them discount 5-10%.
Installments:
NBM has installment facilities for those customers who are unable to pay full payment at a
time.
Special Offers:
NBM gives some special offers for their customers in a particular season like summer sell
offer, winter sell offer etc.
Bank Loan Facility:
NBM arrange some Bank loan facilities for their potential customers to buy their products.
Price
List price
Average Price of Apartments of varying sizes in different city areas:
PRICE IN DIFFERENT CITY AREAS
Areas
Apartment size (sft)
Rate tk (Per sft)1250 1500 2200 3000
Taka in lacs
Dhanmondi 100 130 110 150 7000-8000
Uttara 75 90 120 150 3500
Mohammadpur 50 60 90 120 3500-4000
Motijheel 60 75 110 1500 4500-5000
Azimpur 50 60 90 120 3500-4000
Shiddershory 60 70 95 140 4500-6000
Shantinagar 60 70 95 140 4500-6000
Rampura 30 50 80 100 2500-3500
Malibag 30 50 80 100 2500-4000
Bashaboo 30 45 70 85 2500-3500
Badda 35 50 65 90 3000-4000
Mirpur 30 45 70 90 2500-3500
Mode of payment:
Payment arranged in the following way:
a. One time
b. Installment
One time: Buyer can pay the price in one time. If he pays the price in one time, he/she
will get 10% discount.
Installment: In case of installment, buyer will get the residual month of project hand
over. After Booking, he will pay the initial deposit within seven days. Then he/she will
bind to pay the residual amount on the EMI (Equal monthly installment) base.
Discount: It is a great opportunity for the client because Genetic provide the discount
based on down payment. The discount amount is generally big enough than bank
interest.
Place
NBM’s products are available at:
LOCATIONS
Shiddershory Mohammadpur Shantinagar
Dhanmondi. Motijheel Rampura
Uttara, Azimpur Malibag
Bashaboo Badda Mirpur
People
Employee: NBM’s has skilled and experienced employees
Management: NBM’s managing board is very much qualified and experienced
Culture: NBM’s background is very much well reputed
Physical environment
Comfort: The employees of NBM’s are very much cordial with the customers and very
much friendly to their coordinates
Facilities: The employees of NBM’s are convinced and launch facilities
Promotion
A study shows that the apartment building companies undertook promotional efforts as a
part of their marketing programs. Newspaper and magazines are the media generally used
by NBM. The advertisement cost is low, compared to the total cost involved in the business.
NBM was found to use different media for advertising, which has shown in Table:
Distribution of the company according to Media used for Advertising
MediaPercentage of
Companies
Newspaper
Television
Magazine
Billboard
94 %
01 %
04 %
01 %
Total 100 %
Sales promotion
NBM provides shot-term discount to encourage sale of our product, mainly at the time of
fair.
Advertising
NBM invests sufficient money for advertising in every year such as TV media, newspaper,
billboard, popular magazine, etc.
Personal selling
NBM sells their product through Personal selling.
Public relation
We are trying to build strong customer relationship with the public.
PROCESS:
NBM creates and delivers product elements based on customer requirement.
NBM designs its process in such a way that lead to fast, dynamic and very effective
service delivery and result in satisfied customers.
As the process of the Real Estate organization is very well designed, it helps a lot to
the marketer to do their jobs well, resulting in high productivity and decrease
likelihood of service failure.
In NBM most of the directions comes from Boards of Directors but there are
different culture in different department based on their jobs requirement so that
everywhere a specific process is highly maintained.
Segment Targeting
It is a natural instinct to want to target as many people and groups as possible. However, by doing this NBM’s promotional strategy never talk specifically to any one group. NBM’s promotional budget is much more cost effective as they promote to one type of customer and speak directly to them. This allows NBM has to create a highly focused campaign that will directly meet the needs and desires of a specific group. Again, this is call market segmentati dentify the following demographic characteristics of the market.
Age: Middle age to senior age
Income: Higher income level
Gender: Both male and female
Profession: Different types of occupation
Education: Most of the people are higher educated
Marital Status: All people are married
Positioning
Positioning is a perceptual location. It is where someone’s product or service fits into the
marketplace. Effective positioning puts one first in line in the minds of customers.
Positioning is a powerful tool that allows creating an image. And image is the outward
representation of being who you want to be, doing what you want to do, and having what
you want to have.
That is why it is so important for entrepreneurs to transform their passion into a market
position. If you do not define your product or service, a competitor will do it for you. Your
position in the market place evolves from the defining characteristics of your product.
The primary elements of positioning are:
Pricing. As NBM’s plots, flats, shops are luxury items, so that they fix the price considering
customers devotion.
Quality. NBM is very much conscious about quality control. They always try to maintain
quality without considering price.
Service. Do you offer the benefit of customer service and support? Is your product
customized and personalized?
Distribution. How do customers obtain your product? The channel or distribution is part of
positioning.
Packaging. Packaging makes a strong statement. Make sure it is delivering the message you
intend.
Decision and payment methods Pricing
Fixed Price Concept:
To avoid all kinds of embarrassing situation between the Company and purchaser NBM
follows the fixed price concept. In addition, it is more ethical in the field of unconfined real
estate business in Bangladesh. For a certain period, the price is fixed. It may change after a
period depending on the cost of construction and land value. As per price schedule, there
are some options of discount based on down payment.
Fixing the price of the property
Fixing the price of the real estate property is very complex compared to any other business.
The real estate firms under the study determine the price in three different methods:
(i) Land price + construction cost + margin is the widely used method of pricing followed
by the real estate firms in Dhaka city. About 75% of the firms are using this pricing
policy. It is to note here that land and construction cost has calculated at cost price.
That is why, the firm charges higher margin under this method and that ranges from
75% to 100%.
(ii) Ascertaining the cost of construction per square feet including the land price is
another method used in fixing the selling price of the apartments. Thus, the price of
apartment varies with its size. At the moment firms using this method, they are selling
the apartments @ Tk. 3500-6000 per square feet. This method is popularity and
followed by about 17% of the real estate firms. Under this method, firms can face the
competitive situation effectively.
(iii) Price escalation with land and construction cost is a method followed by only 8% of
the firms in Dhaka city. In this method, the firm charges relatively low percentage of
profit.
Land price increased tremendously in Dhaka city. The following table 16 exhibits the
increased rate of land price during 1974, 1990 and 1997 in different areas of Dhaka city.
Another study shows that a number of considerations followed by the companies in pricing
apartment houses. 80% of the companies determine the price of apartments based on the
quality of construction while 55% of the companies determine their price based on location
of the apartment building. 40% of the companies originate to consider demand in fixing
price. It has reported that 95% of the companies followed mark up policy in determining
price while 15% of the companies pricing policy based on companies pricing and 10% of the
companies followed a pricing method according to convenience. It has observed that prices
of apartments of similar size in same locality vary due to the variation of quality of
construction.
Recommendation:Though NMB Developers Ltd. is performing well but it has some crucial areas to improve
their promotional activities which are prescribed below:
NBM Developers brochure is too short that is why customers can not get proper
knowledge about the company & company products. NBM should make it’s corporate
brochure in more detail.
The management of NBM should regularly administer promotional research activities in
order to keep a regular track of satisfaction levels. Regular research should also be
conducted to find out customer expectations about various service aspects.
NBM gives the best quality of products & services to their customers for that reason the
cost of their products become automatically very high, which is unbearable for some
customers. So, they should make their product price reasonable & it may help to capture
maximum customers.
NBM is a big & profitable company but the social responsibility or normal activity is very
narrow in country if they emphasize their activity in Bangladesh it is good for there
increasing market growth rate.
NBM should focus more on existing customers in order to build strong & loyal
relationship with them as satisfied customer more aptly or certainly recommends the
hospitals to friends & relative thus the power of relationship will foster positive word of
mouth communication & will attract new customers at a lower cost.
Individual Attention should be given to customers in order to better understand their
needs & better satisfy them.
NBM should pursues on aggressive advertising camping in order to build up a strong
image & reputation among potential customers in this contest.