Is this the right time to invest in Indian Real Estate?

This issue, I am answering a question about real estate investment, which has been asked by Ms. Rajni from Jaipur. She wants to know is this the right time to invest in Real Estate? And if so, then where?

Dear Rajni,

Thanks for asking your question. I think quite a few people might be having this same question in mind, but are confused about the answer, more so after reading all kinds of reports in the newspaper. Let me try and help.

Based on my experience in Real Estate industry in India, almost all real estate developers were, so far, earning a ridiculous margin of ~30%. Nowhere in a developed nation, does a developer earn such a huge margin – typically there the margin varies anywhere between 8 – 12%.

Therefore, what the global recession & meltdown has caused is that it has actually brought the Real Estate pricing in India to a more realistic level. However, it is also to be understood here that the Indian developers, who are so used to taking the Indian customers for a ride, for so long, will still find out some very ingenious ways of fooling people.

Therefore, when you are looking at buying a real estate property, please ensure that:

1. You have done enough study about the financial condition of the developers in the market before you have zeroed on a couple of them
2. You need to read the brochure and all documents carefully, more so the fine prints, and show that to a lawyer who deals with real estate. More often than not, a developer only sells a bare shell apartment without even the door frames or switch boards, but the buyers don’t understand that as they are given a very different picture by the developer in the form of brochure and model apartments.
3. And most importantly, do proper due diligence of the project, ownership of land, viability of completion as mentioned, financing structure, etc.

Now, going back to the question - is this the right time to invest? Yes, it is. But not without a proper negotiation. All developers shall give you additional 10-15% discount on price quoted by them if you can negotiate well, without any changes in the payment terms.

But what are the markets that you can invest into? Based on the question I am assuming that you are looking at Real estate as an investment and not for residential purpose. In that case, Bangalore is looking quite good. Sobha developers, and I strongly recommend them, has come up with some new projects that fits perfectly into our bill. Chennai, particularly the OMR side, is again a good option – all major developers here have slashed prices like anything. Gurgaon is also a good option, so is NOIDA. I would suggest that you stay away from Delhi though, since the land price here would be quite high.
Another good option is Kolkata - this is one city which is not much affected by the recession in terms of its real estate, though some segments like Rajarhat, New Town, is quite badly hit. Areas to invest would be South 24 Parganas, or along the Hoogly river.

Among the 2nd tier cities, Bhubaneswar is a good option. Leave Cochin, but can bet on Trichy. Jaipur is avoidable, but Indore is a good option.

360 degree Marketing

360 degree Marketing is all about creating a unique brand philosophy. It’s a way we merge our left brain rationale with our right brain creativity to nurture or establish a story around your brand targeted at all touch points of your consumers. Whether you're a business-to-business player or a clicks-and-mortar partner, or you're just trying to win your strong customer loyalty, the first and, probably, best step for you to take is to dig into your history. May be you have a golden store house somewhere that can be used to create your full 360-degree branding. A story that will keep your customers connected to you.

360 degree marketing is actually the evolution of "cross-channel" marketing - less about media integration and more about a consumer-centric media strategy. It not only includes a heavy online component, but also television, radio, print, events and other offline media.

The Online part of this holistic marketing strategy aims at engaging experiences to both educate and excite consumers through creative utilization of internet and mobile marketing space – interactive website, SMS and On-line Gaming (remember the STORY I mentioned earlier). However, the challenge here being designing a piece of creative that will work within the context of highly divergent media environments and managing these divergent media as well.

In today's market, consumers' self-service access to information means that messages must be consistent and coherent. Great creative is only a small piece of the puzzle. And there are clear signs that marketers are rising to the challenge of managing the complexity of the world and delivering much sought after accountability back to the board in the process.

Without doubt, 360 degree marketing is challenging: it is hard to keep track of creative work, oversee increasing numbers of agencies and ensure messaging is consistent and up-to-date across the board. And it cannot be managed effectively using the poor tools and processes still endemic across marketing departments.

Nonetheless, turning away from 360 degree marketing is no more an option.

For more information, please visit www.thesmartideas.in or send me an email at susmita@thesmartideas.in

Pichku!

This is from the bakery near my office where I frequent sometimes for a bite. I went there for tea today and I see that Maggie has packaged their rich tomato sauce in a new manner - in a plastic squeeze pouch with a toothpaste tube like thing on top through which you can squirt it out. The thing has a photo of Javed Jaffery on its cover, with a manic grin on his face and holding on to a huge tube of sauce, squirting it out merrily. The product is apparently called "Pichku" - have you seen it?

There's this story by Saki in which a particularly tasteless breakfast supplement is given the absurd name "Filiboid Studge" and a wonderful marketing campaign started around it till it quite becomes the rage, and the owner makes a killing. Because it is so tasteless, housewives take particular demented pleasure in pressing it upon their husbands in the morning. If they would lose their appetite at the sight of that, in the evening they would be served a warmed up mess with the words "Your filiboid studge that you did not eat this morning." Ads were created where sinners were shown roasting in hell, with the ominous line:"THEY cannot have their filiboid studge anymore". You ought to read it.

Talking of advertising, another book to read is Dorothy Sayer's "Death must advertise" - it IS a crime thriller but since Peter Wimsey has to masquerade as an advertising professional in it the book has its moments.

Anyway I am getting beside the point. To think up a name like "Pichku" for a sauce squeeze tube is something ... the implications are legion.

It can be used as a readymade graffiti tool.

It can have a ready market in bloody films - anyway they use ketchup for bloody scenes, this is such a convenient way of achieving the bloody effect with not a drop of ketchup wasted - I am not sure applying it out of bottles is as economic.

The name would also appeal to kids who have a penchant for making a mess of sofas and car seats and walls - something like an amateur effort at graffiti.

Nestle is quite a reputed company - to convince them to name a product Pichku must have taken some doing.

Wonder how long the board of directors laughed when the name was first uttered and when they started taking it seriously and came round to the view that it could be a name for this product.

Or was there a pin drop silence of which an advantage was taken to hasten the decision?
Was it referred to the Swiss parent company, or was the decision taken about the name at the regional level?

- Contributed by Atrijit Dasgupta, Bangalore