Let’s talk a little about good marketing versus bad marketing, lets’s talk about the psychology of marketing or the psychology of consumer behavior. Ok, you buy an item that you really want, you have saved money for a long time in order to purchase that item. You hand over the money and you are now the lucky owner of that item.
Next week there is a sale, and the item you just bought is now available at a price 30% below the market price. You will freak out, you will tell all your friends and the whole world that you got cheated. And the item that you once loved so much will not be so dear to you anymore. It will now be a constant reminder of that you got cheated.
Exactly the same psychology applies when you buy a condominium. If the developer lowers the price just after you have signed the contract you will freak out. You will never forget it. It does not take more than a few unhappy customers to ruin a company’s reputation.
I strongly advise the developers to engage in thorough market research in order to determine the appropriate price level before they launch a project. Do NOT retreat from price levels decided before pre-launch, this is very bad marketing and it will hurt the company brand. It is destructive to the brand building process and must only be considered as the last option. If you want to be taken seriously as a developer you should avoid lowering the prices in the pre-launch process. Each time I see this happening I raise my eyebrows. Doing it is a very serious mistake.
If the project for various reasons is not selling as well as expected it is much wiser to withdraw the project from the market. If you explain the reasons as to why you withdraw the project the customers will understand. Tell the truth, say you will wait for the market conditions to improve. It seldom hurts to tell the truth, actually you might be rewarded for your honesty.
If, in the end of the selling process you still have some units left over you can have an auction, there is nothing wrong with that. But before project launch you will need to do your homework well. Never retreat from price levels decided at pre-launch, this is a big no-no.
Suggested article: A Guide to Successful and Intelligent Marketing
Published 2 January 2013