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RE 2106

d’Leedon

REAL ESTATE

Marketing & Negotiation

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Table of Contents

1. DESCRIPTION OF THE DEVELOPMENT 1

1.1 Location 1

1.2 Distribution of Units 2

1.3 Facilities 3

2. MARKETING PROCESS AND DIFFICULTIES 3

2.1 Market Research 4

2.1.1 External Environment 4

2.1.2 Internal Environment 4

2.2 Marketing Strategy 5

2.2.1 Market Segmentation 5

2.2.2 Market Targeting 5

2.2.3 Market Positioning 5

2.2.4 Marketing Mix 5

2.2.4.1 Product Management 5

2.2.4.2 Pricing Strategies 6

2.2.4.3 Place or Distribution Channel 6

2.2.4.4 Promotional Strategies 7

2.3 After-marketing 8

3. FACTORS AFFECTING CONSIDERATION ON TIMING AND PRICING OF PROPERTY

UNITS

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3.1 Economic Environment 8

3.2 Government Regulations 9

3.3 Competitive Environment 10

3.4 Location 10

3.4.1 Prime District 10

3.4.2 Accessibility 11

3.4.3 Proximity to Amenities 11

3.5 Physical Aspects of Units 11

3.5.1 Shape 12

3.5.2 Size 12

3.5.3 View 13

4. PROMOTIONAL EFFORTS AND PERSONNELS INVOLVED 14

4.1 Promotional Mix 14

4.1.1 Advertising 15

4.1.2 Personal Selling 16

4.1.3 Public Relation 16

4.1.4 Sales Promotion 17

4.1.5 Direct Marketing Tactics 18

5. ASSESSMENT 18

5.1 Success of the Marketing Efforts 18

5.1.1 Relationship Marketing 18

5.1.1.1 Illuminate @ d’Leedon 18

5.1.1.2 Loyalty Scheme 18

5.1.2 18

5.2 Lesson Learnt 19

5.2.1 Risk of Large-scale Project 19

5.2.2 Effects of Market Positioning on Consumer Behavior 20

5.2.3 Effects of Pricing on Consumers’ Confidence 20

REFFERENCE 21

APPENDIX 23

Online and Offline Marketing

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1. Description of the Development d’Leedon is a large-scale 99-years leasehold residential development, which was officially completed in 21 October 2014. The development lies along Farrer Road in the prime Tanglin District, surrounded by low-rise developments giving unobstructed views of Singapore’s skylines, Botanic Gardens, Bukit Timah Nature Reserve and Macritchie Reservoir. It is designed by a world-renowned architect Zaha Hadid to be a landmark project. The development is classified into 5 landscape bands representing the components of a mountain ecosystem - rock, forest, water, foothills and meadow. Each band offers unique characteristics and ambience which elicit a memorable visual and spatial experience. d’Leedon comprises of 7 residential towers of 36 storeys, occupying only 22% of the total site area. The remaining 78% is organised into terraced plateaus, dedicated for communal facilities and landscaping. The figure below shows the various attributes of d’Leedon.

Figure 1: Description of d’Leedon

1.1 Location d’Leedon is strategically located in the prime area of District 10, along Farrer Road. It provides seamless connectivity to the rest of Singapore region such as Orchard Road and the CBD due to its vicinity with Farrer Road MRT. Furthermore, it only requires an approximately 12 minutes-drive to Orchard Road and approximately 20 minutes’ drive to the CBD area. Refer to Appendix A for the map of d’Leedon.

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The figure below shows the various amenities in proximity with d’Leedon.

Figure 2: Amenities Located Nearby d’Leedon

1.2 Distribution of Units d’Leedon consists of 7 residential towers with 1,703 condominium units of diverse types to cater towards different target market. The figure below shows the units distribution offered by d’Leedon.

Figure 3: Units Distribution Offered by d’Leedon

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In addition to condominium units, d’Leedon comprises of 12 semi-detached garden villas of approximately 5,500 to 7,400 sq ft along its western boundary. These villas create opportunities for residents to experience living in a landed property while indulging in the array of facilities provided by the condominium at the same time. 1.3 Facilities With 78% of its site area dedicated to facilities, d’Leedon is able to offer the following comprehensive range of recreational activities catered to residents of different age groups.

Figure 4: Facilities Available in d’Leedon

2. Marketing Process and Difficulties This section will explain the various stages involved in the marketing of d’Leedon and provide an insight into the difficulties faced by the marketing manager. The timeline below displays the full marketing process involved in d’Leedon, showing the starting and end points of various strategies used throughout the marketing process.

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Figure 5: Timeline of the Marketing Process

2.1 Market Research The first step in the marketing process is to conduct market research in order to understand the market environment. The external and internal environment should be analysed to support the marketing strategies of d’Leedon. 2.1.1 External Environment Analysis should be done on the external environmental factors such as gross domestic product (GDP), inflation rate, interest rates and unemployment rate to determine if the economic conditions are favourable as these factors would affect the sales and marketing of d’Leedon. Besides economic conditions, the marketing manager has to analyse the demographic, technological environment and social cultural environment in order to determine the changing consumer preferences in the market. It is also necessary to assess the political environment, legal environment and competitive environment in order to uncover the hidden risk and identify opportunities in the property market. Assessing the legal environment when the government was actively implementing new cooling measures proved to be a challenging task for d’Leedon. The marketing manager has to consider if there would be more upcoming cooling measures, determine the type of cooling measures and their possible impacts in the real estate market. 2.1.2 Internal Environment Internal environment refers to the underlying strengths and weaknesses of the development site such as location - proximities to schools, transportation, and shopping centres. Research on the internal environmental factors that affect d’Leedon is crucial as it allows the marketing manager to understand the strengths and weakness relating to the development.

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2.2 Marketing Strategy The next step in the marketing process involves the formation of a marketing strategy that establishes market segmentation, market targeting, market positioning and marketing mix. 2.2.1 Market Segmentation The process of segmenting the market involves dividing the market based on various factors such as geography, income and demographics. d’Leedon is marketed as a luxury project, hence it will be useful to segment the market based on household incomes. The information collected will allow CapitaLand to identify the suitability and feasibility of each market. 2.2.2 Market Targeting Market targeting relates to selection of the market segments the developer seeks to enter. In the case of d’Leedon, selective specialisation was most probably used to target both the middle upper and high income segments. This allowed CapitaLand to spread the risk of selling 1,715 residential units over a larger market population. 2.2.3 Market Positioning The main objective in market positioning is to present the products according to the developer’s aspiration and to establish an enduring competitive advantage in the target market. Starchitect Zaha Hadid was engaged by CapitaLand to helm the architectural design process as she is renowned for her distinctive neo futuristic architecture design. This has enabled d’Leedon to distinguish itself from other luxury condominiums, positioning as a uniquely-designed luxury condominium. This attracted affluent consumers who has discerning taste and appreciation for quality architecture. The difficulty faced in positioning d’Leedon is in its presentation to the consumer as a luxurious project. This is because d’Leedon has 1,715 residential units and a land tenure of 99 years. This is unlike its luxury competitors which are generally developed on freehold land with limited number of units available for sale. The marketing manager had to ensure that d’Leedon was still regarded as a luxury development despite of its inherent characteristics. In addition, consumers often have different perceptions with respect to various competing developments in the property market. As such, it is challenging for a marketing manager to position the development as one that appeals to the desires and perceptions of all target consumers. In the case of d’Leedon, some consumers may not necessarily be impressed by the uniqueness of the development despite the marketing efforts. Thus, they do not perceive d’Leedon as an ideal choice for purchase. 2.2.4 Marketing Mix The next step in the marketing process is to create strategies in the marketing mix and utilise them to reach the selected target markets. 2.2.4.1 Product Management At the product development stage, the marketing manager will collaborate with the architect to design a product. Both parties have to consider the demands of the target market and design according to the market positioning established earlier on. The

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marketing manager also has to profile the image of the development and accentuate d’Leedon’s unique features. One difficulty that arose in d’Leedon was a result of the architecture. Due to the nature of design language used by Zaha Hadid, the resulting development mainly comprised of curves and angles. As such, the marketing manager had to devise solutions that maximise the floor space in each unit to convince buyers that the units are still highly functional. Furthermore, the marketing manager had to ensure the product positioning is well-maintained without increasing selling price excessively. In d’Leedon’s effort to distinguish itself from other luxury condominium competitors, large proportion of financing went to hiring a starchitect for the design of the development. As a result, using luxurious finishes such as marble flooring and premium appliances would have caused the selling price to increase considerably. Therefore, the marketing manager had to brainstorm and select the most appropriate solution to deal with these conflicting desires. The marketing manager is also required to work closely in hand with the architect to ensure that ideas and concepts are well-communicated. However, in the case of d’Leedon, reaching a consensus among the two parties was complex. Zaha Hadid, being a starchitect, would naturally has her own directions and strong ideas on how she wanted to conceive the design. Thus, the marketing manager still has to ensure that the final design adheres to the design brief set by CapitaLand, aligned with its market positioning. 2.2.4.2 Pricing Strategies During this stage, the marketing manager will determine the pricing approach to use. This includes demand-oriented, cost-oriented, profit-oriented and competition-oriented. Among the four approaches, d’Leedon adopted the demand-oriented pricing approach. This approach focuses on the customer tastes and preferences rather than considerations such as cost, profit or competition. There are four pricing strategies which fall under demand-oriented pricing approach, including skimming pricing, perceived value pricing, penetration pricing and target pricing. In d’Leedon, a perceived value pricing strategy was used to emphasise on the value that is created through the collaboration of Zaha Hadid and the CapitaLand consortium. However, as d’Leedon suffered from lacklustre sales due to the numerous cooling measures, it can be observed that their pricing strategy has failed to present a strong value proposition to consumers. It was unsuccessful in convincing potential buyers that there is a value in buying the residential units. Therefore, the difficulty lies in the establishment of an appropriate pricing strategy that responds well to the consumers. Furthermore, pricing is different for each unit in d’Leedon. This posed an onerous task of assigning premiums and discounts on each unit. Determining the suitable premiums is important to maximise profit for the developer. 2.2.4.3 Place or Distribution Channel As part of the marketing activity, the development has to be brought to the ultimate customer. Hence, certain distribution functions must be performed. It is crucial to identify the most effective distribution channel that is best suited for the type of

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property. This process involves selecting the right agency to carry out sales on behalf of the developer. In the case of d’Leedon, the engagement of a marketing agency that sources for targeted buyers with the financial ability to purchase units, will result in more effective sales and marketing.

Selecting the right marketing agency to represent the developer can be a challenging task for the marketing manager. The marketing manager will need to verify the various agency profiles find out if the agency have prior experiences and knowledge with regards to selling luxury properties. The agency should also have a substantial amount of customer base in order for them to be achieve the targeted sales set by the developers. Furthermore, the marketing manager would need to ensure that the agency that they have engaged is not be representing another developer in a nearby project as this may result in a conflict of interest. Another difficulty is the management of the various agencies appointed to market d’Leedon. Since these agencies were appointed to be the official sales agencies, it is essential that the marketing manager from CapitaLand ensures that the agents are continually motivated to source for prospects, especially after the initial launch when sales are harder to close. 2.2.4.4 Promotional Strategies Promotional packages focus on generating different promotional strategies to communicate an idea or message to the consumers, as well as persuading and influencing them to make their purchase decisions. Public relations campaign, media advertisements, sales promotion, direct marketing and personal selling are the 5 main strategies used in d’Leedon. One difficulty when organising the public relations campaign was developing a strategy that would paint CapitaLand and d’Leedon in a good light. There were numerous articles that harped on the fact that CapitaLand invested a large sum of capital into the en-bloc purchase of Farrer Court. Thus, the marketing manager and public relations professional had to come up with a campaign that draws the attention of the public to d’Leedon instead of them focusing on CapitaLand’s investment decision. Furthermore, the marketing manager had to ensure that questions were answered tactfully when interviewed by media reporters. Another difficulty is in securing an alternative showflat site near the actual site, as this allows the full construction of the whole development without having the need to tear down the showflat. This is especially important as d’Leedon consists of 1715 residential units and it is highly unlikely that all the units will be sold out quickly. Hence, it is important that the showflat is located off site within close proximity so that prospective buyers can still view the showflat and yet construction of d’Leedon can proceed concurrently. Unfortunately, the marketing manager was unable to secure a temporary occupation licence on a site nearby to construct the show flat. A difficulty faced by the marketing manager was with regards to how earlier buyers felt when discounts were given to buyers who purchased later. The earlier buyers may feel that it is not fair to the consumer for the developer to reduce prices so drastically. The marketing manager has to placate these unhappy customers and ensure that they continue to support the developer’s future products.

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Additionally, word-of-mouth communication could pose as a difficulty for the marketing manager as it is a double edged sword. In d’Leedon, there were prospective buyers who wrote and shared harsh reviews about the development to their contacts. However, it is impossible to control all the individuals that propagate information through word-of-mouth communication. Hence, the marketing manager is faced with the challenge of mitigating such negative responses by addressing misguided prospects to ensure that they spread favourable and accurate information.

2.3 After-Marketing After-marketing refers to the after sales efforts that are performed intentionally, to build strong customer loyalty. These efforts also help to forge mutually beneficial relationships with existing customers and this may lead to future sales referrals. In actual fact, the closing of a sale is not the end of the relationship, instead it is the beginning. After-marketing activities are marked by continuous follow-up by the sales department. However, one difficulty that the marketing manager faced was in handling unjustifiable complaints from their customers. These complaints may not be dealt with well and may tarnish the reputation of the developer as well as worsen the relationship with the customers. This was illustrated when d’Leedon implemented discount promotions in an attempt to increase sales. Complaints from previous customers who did not enjoy these promotions were not handled well (Propersquare, n.d). This has made customers lose confidence in the developer since they felt that the developer did not take into account their concerns.

3. Factors Affecting Consideration on Timing and Pricing of Property Units While different strategies might be adopted in pricing real estate, the marketers would also need to consider the economic environment, general property market conditions, location, environment, accessibility and physical aspect of property, government regulations and competitive environment. 3.1 Economic Environment Essentially, a developer should launch its units during the time it is able to generate the highest price possible from the sales. The economic condition of the region in which a property is sold affects the timing and pricing of units sold. Current and expected conditions of the economy will influence consumer demand and willingness to buy. Property is a derived demand, hence positive economic condition will trigger developers to launch their units. Unemployment rates, income levels, inflation rate and lending interest rates are economic indicators used to assess current economic condition and forecast expected economic conditions.

When d’Leedon initially launched its units in Q4 2010, Singapore’s economy had just recovered from the economic downturn that lasted until 2009. CapitaLand had already acquired Farrer Court since 2007 and spent a considerable amount of time waiting. They wanted to launch their project after market sentiment improved in order to generate higher profits. According to Liew Mun Long, CEO and president of CapitaLand Group, the reason behind the time spent on delaying d’Leedon’s launch was partly due to the economic recession experienced in Singapore during the time.

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3.2 Government Regulations

Figure 6: Units Launched and Sold at Various Launch Phases

Various cooling measures and regulations implemented by the local government affects the way a developer times his launches and prices his units. Cooling measures reduce the demand for residential units. In the case of d’Leedon, the Singapore government had implemented 5 rounds of cooling measures by 6 October 2012. In anticipation of further cooling measures, the developer decided to launch large volumes of residential units in Q4 2012 and Q1 2013, as shown in the chart above. This was also coupled with pricing discounts that reduce the average price by 5.5% to entice consumers in purchasing the units. This was done in a bid to mitigate the impact of the multiple cooling measures on buying sentiment. The result of this pricing strategy in attracting consumers is evident on the graph shown above where the numbers of units sold are highest during Q4 2012 and Q1 2013.

Aside from cooling measures, foreign housing developers with one or more non-Singaporean stakeholders are encouraged to adhere to the limited duration given in the Qualifying Certificate (QC) (Ministry of National Development, 2009). Given this government regulation, developers will be faced with penalties if they fail to sell all their units within 2 years after attaining Temporary Occupation Permit (TOP). A penalty of 8%, 16%, or 24% will be imposed on the developer based on whether it is a 1st year, 2nd year or 3rd year extension respectively. This penalty has pressurised developers to move the remaining units before the QC expired. QC is a vital factor in d’Leedon’s pricing strategy as it is a large-scale development consisting of 1,715 units. d’Leedon’s strategy to launch its units at a discounted price in Q4 2012 may also be partly due to the 68% of unsold units remaining on October 2012.

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3.3 Competitive Environment

Figure 7: Various Launch Phases of d’Leedon compared to Leedon Residence

It is crucial for developers to comprehend the strategies practiced by competitors within the vicinity of the projects. Developers can acquire useful information regarding their competitors by analysing competitors’ strengths and weaknesses as well as keeping track of their movements. This will reduce the probability of competing against competitor’s project that might harm the developers’ projects. As seen from the figure above, there are periods whereby only either project was launched. CapitaLand has avoided launching units during Leedon Residence launch periods because of the close proximity. By refraining from aggressive competition, CapitaLand was able to market d’Leedon’s units at higher prices since cannibalism in sales was minimised. 3.4 Location Property’s location serves a major role in affecting marketers’ decisions on pricing their property. Most of the potential buyers deemed location as an integral key to future capital growth and high return on investment. A property in a good location will have a higher market liquidity which enables the proprietor to sell off the property quickly.

3.4.1 Prime District Land in Singapore is defined by 28 districts, with each district bearing its own characteristics. Which in turn affects the prices of real estate. d’Leedon is strategically located in District 10, a prime and premium neighbourhood that is highly coveted in Singapore. District 10 comprises of numerous Good Class Bungalows (GCB), landed houses and luxurious condominiums occupied by high net worth individuals. As such, real estate in District 10 is highly sought after by the elite for its prestigious address and thus a significant premium is placed on the pricing of units in d’Leedon on the basis of its location.

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3.4.2 Accessibility Property price is directly proportional to accessibility. The higher the accessibility, the higher the developer can price its property. Accessibility evokes demand from potential consumers as it allows people to travel to other parts of the region with ease. Property users also benefit from the close proximity to public transport as it increases their accessibility to employment, retail, and recreational activities. In Singapore where driving is restricted and expensive, the proximity to public transport is deemed as the most popular mode of transport (Your Singapore, n.d). d’Leedon is strategically surrounded by 2 MRT stations, Farrer Park MRT and Holland Village MRT. Moreover, there are various bus services as listed in Figure 2. With this high level of accessibility inherent in d’Leedon, the developer is able to obtain a price premium.

3.4.3 Proximity to Amenities Close proximity to various amenities is deemed to be beneficial to the residents and it substantiates the increase in property value. d’Leedon is located near to invaluable amenities such as prestigious primary schools as well as lush gardens and open spaces.

In Singapore, where education quality is highly emphasised, parents are often concerned with enrolling their child into a good primary school. Furthermore, the balloting system prioritises students living near a school (Ministry of Education, n.d.). d’Leedon is situated in the vicinity of reputable and prestigious schools such as Nanyang Primary School and Raffles Girls Primary School. As a result, the developer can place a price premium on units in d’Leedon. Furthermore, open spaces such as parks and recreational areas will also have a positive effect on the value of the property. According to Frederick Law Olmsted’s study, buyers are more willing to pay a higher price for property located close to an open space. d’Leedon is located in close proximity to Singapore Botanic Gardens and the National Orchid Garden. Therefore, this allows developers to mark up the prices for d’Leedon. 3.5 Physical Aspects of Units The physical aspects of a property which include size, shape and view contribute to the market value of the property and have an influence on the marketers’ decision on the property pricing. In general, potential buyers will deem the physical aspects of units as the important determinants of the value and salability of the property.

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3.5.1 Shape

Figure 8: Floor Plan of d’Leedon

In general, buyers prefer purchasing homes with a regular shape. Properties with irregular floor plates will usually command a lower price. This is because these units are less flexible and efficient in terms of furnishing rearrangements. d’Leedon consists of irregular floor plates which negatively affects the price of its units.

3.5.2 Size

Figure 9: Average Unit Price for the Various Types of Units

Generally, the price per square foot of a property falls with the increase in size. Larger size units result in higher quantum price of the property and reduces affordability as well as demand of potential buyers. As seen in the figure above, larger units comprising of 4 bedrooms in d’Leedon realised a lower price per square foot compared to smaller units comprising of 1 bedroom.

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3.5.3 View The difference of view provided in each unit accounts for the variation in unit prices. In determining the view of a unit, height and block number should be taken into consideration.

Figure 10: Average Unit Price for Different Blocks

Each residential block within a development project experience variation in its average unit price. This is because some blocks in the development may provide for a better view which in turn translates to a higher price due to their orientations. As seen in the figure above, block 13 commands the highest average unit price while block 5 offers the lowest average unit price. This difference in unit prices can be explained by analysing the site plan of d’Leedon. Block 13 faces unblocked views of Good Class Bungalows to the north and fronts the main lap pool to the south. On the other hand, block 5 faces a road to the south.

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Figure 11: Average Unit Price for Different Floor Levels

As seen in figure 11, while keeping area and block number constant, units that are located at a higher floor generally fetch a higher premium. Refer to Appendix B for the average unit price of units located in different floors and blocks of d’Leedon. This is because these units are able to capture panoramic view that better suits consumer preference and demand.

4. Promotional Efforts and Personnel Involved This section will highlight the promotional efforts carried out by d’Leedon. CapitaLand has adopted a diverse promotional mix during the launch period to achieve its goals and objectives. This section will also cover the personnel involved and their primary roles in the various promotional methods.

4.1 Promotional Mix

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Figure 12: The Promotional Mix and Personnel Involved in d’Leedon

Promotional mix is a term describing tools that are usually used by an organisation to communicate the benefits of their products to potential customers. The tools include advertising, personal selling, public relation, sales promotion and direct marketing tactics. By implementing promotional mix, developers can expand its consumer demand, create brand awareness and establish product differentiation. These tools enable developers to attain higher sales volume and strengthen their market positioning.

4.1.1 Advertising

Figure 13: Development Model of d’Leedon

An advertisement develops public awareness and provides target audience with relevant information of the property. Benefits and distinct features of the property are conveyed to potential buyers, inducing them to purchase it. In order to establish effective advertising and marketing campaigns, it is important to conduct market research on the factors that captures the attention of the target audience. As a result, the marketing manager of a development will usually engage an advertising firm to provide consultations and execute the advertising and marketing campaigns.

Research has shown that an advertisement can capture the attention of potential customers and leave an impact only after customers are exposed to it for an average of 7 times (The Chartered Institute of Marketing, 2009). Therefore, advertisements must be placed regularly and consistently to reinforce the existence of the marketed property effectively. d’Leedon established its advertisements via various media platforms such as television, radio, newspaper, magazines, internet and social media sites. They also attempted to reach a broad group of audience by broadcasting bilingual television commercials, featuring local celebrities at prime airing times. In addition, show flats were set up in Leedon Heights to give potential buyers visual representations of completed units with classy interior designs. Furthermore, there are development models to provide customers with a scaled down perspective of the whole development. These approaches are used to increase the attractiveness of d’Leedon and aid the decision-making process of potential customers regarding purchase of units.

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4.1.2 Personal Selling Personal selling is the most effective form of promotion and is particularly useful for real estate which involves huge amount of capital and is technically complex. Personal selling enables the salesperson to provide detailed information and explanation about the real estate when marketing to potential buyers. This mitigates potential buyers’ perceived risks and facilitates property purchase. However, for personal selling to be effective there needs to be an exchange of constructive dialogues with potential buyers. Thus, the marketing manager of a development will generally hire a team of professional real estate agents to conduct personal selling.

The agent’s role is to identify the needs, wants and interests of the potential buyer so that he can tailor the most effective sales pitch. Various attributes of the real estate marketed are matched to the needs of the potential buyer on an individual basis. These attractive features are then highlighted and communicated by the agent to the potential buyer. In addition, further persuasion and negotiation will be done to entice potential buyers in purchasing the property.

With a total of 1,715 units in d’Leedon, potential buyers might assume that it is catered to the mass-market and hence, expect a lower price. Thus, it is necessary for the professionals to clarify these misconceptions and explain the fundamental factors behind d’Leedon’s high price. In addition, d’Leedon has many positive attributes that could be utilized in its marketing process such as prime location, high accessibility and the comprehensive facilities available in the development. These attributes are useful for real estate agents in neutralising potential buyer’s objections and queries.

4.1.3 Public Relations Public relations is concerned with building good relationships between the organisation and the public that is involved with or affected by the organisation. It helps to establish the developer’s reputation through different forms of media.

In a development project, public relations professionals are recruited by the developers to safeguard their reputation and convey relevant messages to potential customers, investors and general public. Therefore, intercommunication between the public relations professionals and marketing manager of CapitaLand are essential to establish common grounds on the image projection. Public relations professionals also provide assistance to oversee and draft out press releases for the developer.

Additionally, public relations professionals also capitalise on the use of professional media platform to create public awareness for the project and show the public a positive side of every situation. Such platforms can be instrumental in helping to modify and correct the attitudes and behaviour of the consumers. A successful public relations campaign can help d’Leedon to garner more support from the public and further improve its brand position as well as uniqueness in the eyes of the potential buyers.

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4.1.4 Sales Promotion

Figure 14: d’Leedon’s Developer 10% Discount Scheme

Sales promotion is an initiative undertaken to stimulate the sales of a product. To develop a successful sales promotion, it is important to create a framework in which appropriate discounts, rebates, vouchers can be dispensed to promote the sales of d’Leedon. However, before the implementation of a sales promotion, the research analyst and marketing consultant from the appointed real estate consultancy have to first examine the current market situation to identify the changes in market dynamics as well as the competition faced by d’Leedon. The information gathered from the consultants will then be passed on to CapitaLand’s marketing manager to decide the discount rates, adjust sales budgets and prepare a comprehensive discount scheme.

In November 2012, the marketing manager in CapitaLand, had come up with a list of various discounts as shown in Figure 1. Not only is a total of 10% discount attractive to new potential buyers, it also encourages bulk purchases of the project thus meeting the objective of moving the sales. According to STproperty (2013), CapitaLand again offered significant discounts for their projects in response to the new cooling measures that was unveiled earlier. There are three discounts offered by the developer - 10%, 12% and 15%. The 10% discounts are for one-bedroom-plus-study units, two-bedroom units, penthouses, garden houses and garden villas. The 12% discounts are for four-bedroom units, whereas the 15 % discounts are for three-bedders and three-bedroom-plus-study units. By having these discount schemes, the unit prices are now more affordable to the masses.

Furthermore, CapitaLand has come up with a Designer Series for d’Leedon. d’Leedon has established 30 fully fitted designer units conceptualised by international interior designers. This exclusive collection comprises of 3 neo-futuristic themes, namely Urbanites Series, Cosmopolite Series and Elite Series. The main objective of having such a concept is to reach out to buyers who prefer fully furnished and designed units that are worth the value, allowing them to move in immediately after purchasing. The marketing manager could take advantage of this unique feature of d’Leedon as one of their main selling points. This will thus create awareness amongst the public and indirectly increase the sales of the development.

Another sales promotion strategy that CapitaLand used to entice buyers was by releasing 200 d’Leedon units to the ex-owners of Farrer Court in an exclusive preview. This strategy allows the ex-owners to have the privilege over buying their preferred units before the general public while simultaneously allowing CapitaLand to move the units even before the official launch (Kan, 2015).

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4.1.5aDirectaMarketingaTactics

Direct marketing is about making direct contact with existing and potential customers to promote the products or services. This method allows the organisation to target directly the identified groups by crafting personalised messages to them. Through this, it will enable d’Leedon to boost their sales by capturing both the old and new customers. The different forms of direct marketing includes direct mail, email, telemarketing and other forms of direct and integrated communication methods that are growing in popularity. Similar to the other private condominium projects, the advertising agency engaged by d’Leedon also mailed out flyers to various private properties’ residents as a form of direct marketing. Furthermore, CapitaLand has adopted the telemarketing method by engaging agents to stay in touch with existing potential customers via phone. Agents can then use this opportunity to introduce and promote newly launched project like d’Leedon to these customers to make additional sales.

5.iAssessment Identifying the successes and failures of d’Leedon’s marketing efforts is crucial for future project developments. The assessment of d’Leedon will enable the developer to better conceptualise marketing strategies for future projects.

5.1 Success of the Marketing Efforts This section highlights the successes of d’Leedon’s marketing efforts and their attempts to establish relationships with their buyers.

5.1.1 Relationship Marketing Relationship marketing is a strategy often used to foster customer loyalty, interaction and long-term engagement. Through building strong connections with customers, it allows developers to retain a competitive advantage as it provides them with a platform to easily identify clients’ future needs and interests. 5.1.1.1 Illuminate @ d’Leedon The event was held on 25 October 2014 for d’Leedon TOP celebration (ST Property, 2014). Over 4,000 residents as well as their family and friends attended the celebration. Through this event, the developer created an unforgettable memory for their residents and benefited from this rare opportunity to interact with their residents. This has allowed them to establish and forge long-term relationships with buyers, building on their customer base for future project developments. 5.1.1.2 Loyalty Scheme The loyalty scheme implemented in d’Leedon offer 1% discounts to potential buyers who currently own residential properties developed by CapitaLand Residential Singapore, Pidemco Land and DBS Land. This way, CapitaLand has effectively capitalised on its client database. This promotion strategy provides dual advantages for CapitaLand. One advantage is the enhancement of d’Leedon’s marketability due to a larger network of potential buyers. Another advantage includes the reinforcement of reputation and consumers loyalty, resulting from CapitaLand’s extensive effort to provide an exclusive service for its network of clients.

5.1.2 Online and Offline Marketing The Internet is a platform frequently used by marketers to reach out to a large target audience as it provides cost-savings and is less time-consuming. On the other hand,

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traditional offline marketing techniques allows the buyers to gain first-hand experiences of the product. The marketing techniques that d’Leedon used is inclusive of both online and offline marketing. These include a website, Facebook page, physical and virtual show flats as well as personal selling. By implementing an appropriate balance of online and offline marketing, d’Leedon created an opportunity to achieve maximum potential buyers while simultaneously providing quality transaction services for their customers.

5.2 Lessons Learnt The following highlights the lessons derived from assessing d’Leedon that we should take into account for the success of a development project. 5.2.1 Risk of Large-Scale Project

Figure 15: Unsold Developments in 2010 Q4

The size of the project can affect the marketing strategies used for the development. Large-scale projects often requires strategies that are comprehensive and elaborate due to its longer launch period. Government regulations and economic conditions are unforeseeable. As a result, large-scale projects would be subjected to more uncertainties and risks, impeding the effectiveness of the marketing efforts. As shown in Figure 7, d’Leedon had a long launch period due to its sizeable project. This has resulted in 13.3% of unsold units observed in Figure 15, highest among smaller projects which were launched in the similar time period. This renders the marketing efforts implemented by d’Leedon insufficient in reacting to the various unpredictable circumstances. In addition, d’Leedon should be mindful of the general tendency to oversupply in large-scale projects, hence the need to increase marketing efforts. However, overexposure can be detrimental to the marketability of d’Leedon due to the loss of appeal by consumers. Therefore, it is critical to ensure the optimum level of exposure for d’Leedon.

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5.2.2 Effects of Market Positioning on Consumer Behaviour d'Leedon is positioned as a luxurious project targeted at middle-high income buyers. Generally, luxury clienteles prioritise exclusivity of a property, hence the importance to limit the number of units in the development. CapitaLand spent approximately 1.34 billion in the collective sale of former Farrer Court during the peak of the property boom. The relatively high price incurred has imposed a challenging task on the developer to attain breakeven and achieve the desired profitability level. This might be a main factor that prompted CapitaLand to maximise development potential by providing a large number of units. As such, there exists an incongruence between the marketing positioning and attributes of d’Leedon. Consequently, greater marketing efforts that change clienteles’ perception were required to increase sales and avoid a high proportion of unsold units.

5.2.3 Effects of Pricing on Consumers’ Confidence Pricing strategy is a vital factor in determining the success of a project. It influences consumer behaviour and satisfaction. Consumers are generally resistant towards numerous downward revisions in price once it is determined as property involves an immense amount of capital. d’Leedon experienced frequent drops in price in response to various rounds of cooling measures implemented over the years. Price discounts given to subsequent buyers of d’Leedon caused dissatisfactions among previous buyers due to the unit’s capital depreciation. This has detrimental effect on potential buyers’ confidence regarding d’Leedon’s growth prospect. As a result, there may be a stigma attached on the project and potential buyers became hesitant to purchase the units.

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APPENDIX

APPENDIX A: MAP OF D’LEEDON

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APPENDIX B: AVERAGE UNIT PRICE FOR DIFFERENT LEVELS IN VARIOUS BLOCKS

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