Consumer decision-making in sombre times
DETERMINING THE process of consumers’ purchasing decisions is always a challenge to every business.
Consumers in each age range differ in their decision-making processes, and there are also different decision-making patterns in the purchase of different products. This is especially true with real estate, which is a high-involvement product where decision-making is more complicated than for buying consumer goods in general. Because of the public’s familiarity with these goods, it is often not necessary to do comparative research to evaluate one’s options.
The question today is how decision-making towards real-estate purchases has changed with the current sombre mood due to the |passing of His Majesty King Bhumibol Adulyadej on October 13. How should business operators |prepare for the change?
One month on, the public is understandably inconsolable. If you ask me if the real-estate market now is in bad shape, I’m really not 100 per cent sure because industry operators still cannot do much to change the situation. Even advertising media are still not being fully used. This is particularly the case with outdoor media like billboards that, in the past, had quite an impact on the buying decisions for real-estate products.
In fact, we have had to adjust to the situation and slow down events for our projects. As of now, we still cannot anticipate how long this period of sadness will continue to affect purchasing decisions.
We have to admit that television has a considerable impact on consumer behaviour. I believe that people’s emotions and feelings will be back to normal when regular TV returns to normal. For now, all I can say is that most consumers are not in the mood to buy. This is obvious from the lighter traffic at department stores and community malls.
Recently, I had an opportunity to talk with securities analysts. Many asked me what would indicate that everything has returned to normal. It was a tough question to answer because no one knows for sure. But what we, and many other operators, are facing now has less impact on consumer-buying decision for low-rise products – townhouses and detached homes – than for condominiums.
This is despite the fact that marketing activities have not been back in full force. We can still see one indicator that is evidence of real demand. Business can move on, though it may not be like during normal times.
For example, sales of AP’s low-rise projects between October 14 and November 20 were worth Bt1.980 billion, of which townhouses accounted for Bt1.565 billion and detached homes for Bt415 million. For the condominium market, we have to admit that it has been quiet to some extent because there are two groups of condominium buyers – investors and people buying a place in which to live.
In this situation, investors are not so keen. But those wanting a place to live in continue to check out the residences they purchased and have ownership transferred.
So if we look at the demand that is still there – low-rise projects continue to sell and buyers continue to transfer condo ownership – the fundamentals of the real-estate industry are not so bad. What we can do is monitor the pattern of purchase decision-making before the end of the year to see if the market has returned to normal.
We need to keep an eye on the number of visits to our projects, online registration for news and information and, last, sales numbers, while keeping ourselves prepared for when consumer-buying decision patterns return to normal. We can then be ready to go full speed ahead.