I was part of a group discussion last week, and while the facilitator (read developer) was going ga-ga about the location of his product, he kind of dodged questions about the product USPs. He kept bringing it back to the fact that they have a fantastic location & their brand name which is enough to make it a success. And then he mentioned, don’t you know, the 3 basic principles of real estate are Location, Location & Location. Pity him & his product.
In fact, not a long ago, a prominent developer came up with an advertisement, mentioning “Location, Location, Location” as the USP of its product. Yes, they definitely had fantastic location, however, had they focused equally on “Product” & “Value Proposition”, the product would have found its audience.
Actually, it is not just about that builder. I have been part of the real estate brokerage industry for a little over 9 years, and all through my initial years, I also was always made to believe that its the “Location, Location & Location” which define the success (or failure) of a project. Each builder used to peg the pricing of its project based on the other projects in the vicinity, without highlighting the product USPs or its very own credibility.
The mantra for success was simple, buy land in a developed area, create an average product, and ride on the success of others. How many times (maybe I used it as well initially) were you told to invest in a project just because there is another project in the vicinity which is ready and has already established a rate higher than the product offered?
So, while the market absorbed this idiom initially (frankly there were too less data points to prove it wrong at that time), just like any other matured markets, it has started to lose its meaning & impact.
What has changed now? Or has it really changed? My belief is as credible or as good as your guess. However, today, when we look at various options available in any micro-location, be it Sohna Road or New Gurgaon or Dwarka Expressway or for that matter even the Golf Course Road Extn., the “Product” and the “Value Proposition” has become the integral part of the parameters which define a buyer’s decision.
That is primarily the reason that there is a project selling at Rs.11000 per sq ft on Sohna Road, while there is another which fails to sell at even Rs.6500 per sq ft. And the fact that both these properties are Ready to Move, its the product itself which has scored much over the Location in this case. The same is also true for a couple of very average products on Golf Course Road Extn., which even though are ready to move or closer to completion, but finds it really tough to attract new buyers, even at prices which are lower than competition around by more than 20%-25%.
So, next time before you make your next purchase, put as much thought about the “Product” and “Value Proposition” as much you would do it for the “Location” & “Builder Credibility”.
Remember, its a combination of all these which make a good product, and in isolation, none of these parameters would be enough.
Happy Home Buying!!!
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