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HOME BUYERS REQUIREMENTS FOR HOUSING DEVELOPMENT
WITHIN DISTRICTS IN SELANGOR
YONG HONG LEE
A project report submitted in partial fulfillment of the
requirements for the award of the degree of
Master of Science (Construction Management)
Faculty of Civil Engineering
Universiti Teknologi Malaysia
April 2006
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ACKNOWLEDGEMENTS
Firstly, I would like to take this opportunity to express my sincere thanks and
gratitude to all people who assisted me in the presentation of this thesis, especially to:
Associate Professor Dr. Mohamad Ibrahim Bin Mohamad, my project
supervisor, for his kind and invaluable advice, comments and motivation throughout
the course of preparing this thesis.
Beside, I would like to thanks all the lecturers for their effort towards my study
and the happy moment with them.
Finally yet importantly, I wish to thanks my family who was trying their best
to support and encourage me all the way to complete this course.
YONG HONG LEE
April, 2006
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ABSTRACT
Despite its resilience, the residential property sector is getting increasingly
competitive and the developers are looking at the slower take-up rates and flattish
earnings performance. Property developers have to confront challenges in maintaining
market share and profit margin. Many developers have to relaunch the sales of the
houses due to the poor sales of the houses. The developers have to keep themselves
updated with the current market situation and hence, to develop the strategy that can
enable them to boost the sales of the houses. Therefore, this study has been developed
with the aim to identify the popular types of houses that are preferred by the buyers,
the basic quality and features of the house preferred by different ethnic groups and to
identify the various strategies adopted by developers to market the residential houses.
The study was conducted through interviews, which was carried out extensively with
the successful developers, and also through questionnaires. The data were analyzed
using relative index and other non-parametric statistical technique. It was found that
the most popular type of house preferred by the buyers is double storey link house.
Each ethnic group of buyers has their own preference of the basic quality and features
which encourage them to purchase the house. The strategies that the developers have
to undertake in order to market their houses are the pricing, using more channels to
advertise their products and to provide higher loan margin facilities to the potential
buyers.
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ABSTRAK
Walaupun kenyal, sektor hartanah kediaman semakin kompetitif dan pemaju
memandang kepada kadar ambilan yang rendah dan prestasi pendapatan yang rata.
Pemaju hartanah terpaksa berdepan dengan cabaran dalam menggekalkan pegangan
pasaran dan keuntungan. Ramai pemaju yang trepaksa melancarkan semula penjualan
rumah akibat dari sambutan yang tidak memberangsangkan. Pemaju harus peka
kepada perkembangan terkini pasaran dan seterusnya menggubal strategi bagi
membolehkan mereka melonjakkan penjualan rumah. Oleh yang demikian, kajian ini
telah digubalkan dengan tujuan untuk mengenalpastikan jenis rumah yang popular dan
diminati oleh para pembeli; kualiti asas dan pelbagai jenis ciri-ciri perumahan yang
diutamakan oleh kumpulan etnik yang berlainan, dan pelbagai strategi yang digunakan
oleh pihak pemaju untuk memasarkan rumah kediaman. Cara-cara yang digunakan
dalam kajian ini adalah melalui temuduga dengan segolongan pemaju yang telah
berjaya dengan secara meluas dan soalselidik. Data yang diperolehi telah dianalisakan
dengan menggunakan indek relatif dan teknik statistik bukan parametrik. Hasil kajian
ini menunjukkan bahawa jenis rumah yang paling popular ialah rumah teres dua
tingkat. Setaip kumpulan etnik masing-masing mengutamakan kualiti asas dan ciri-ciri
perumahan sendiri yang akan menggalakkan mereka membeli rumah. Strategi yang
perlu dilaksanakan oleh pihak pemaju untuk memasarkan rumah adalah teknik
menetapkan harga rumah, penggunaan pelbagai saluran untuk mengiklankan produk
dan memujukkan pihak peminjam supaya memberi kemudahan margin pinjaman yang
tinggi kepada bakal pembeli rumah.
viii
CONTENTS
CHAPTER TITLE PAGE
TITLE ii
DECLARATION iii
DEDICATION iv
ACKNOWLEDEGEMENTS v
ABSTRACT vi
ABSTRAK vii
TABLE OF CONTENT viii
LIST OF TABLES xiii
LIST OF FIGURES xv
LIST OF APPENDICES xvii
1 INTRODUCTION
1.1 Introduction 1
1.2 General Background 1
1.3 Problem Statement 2
1.4 Aim and Objective 3
1.5 Scope of Study 4
1.6 Brief Methodology 4
1.7 Report Outline 5
1.8 Significance of Study 6
2 HOUISNG DEVELOPMENT PROCESS
2.1 Introduction 7
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2.2 Housing Development 7
2.2.1 Project Initiation 8
2.2.1.1 Feasibility Study 8
2.2.1.2 Project Brief 9
2.3 Funding 9
2.4 The Product 10
2.4.1 Product Development 13
2.4.2 The Designer 14
2.4.3 Designer Process 15
2.5 Development Statutory Approval 16
2.5.1 Development Order Stage 17
2.5.2 Building and Services Plan Stage 19
2.6 Procurement Stage 20
2.7 Project Implementation Stage 20
2.8 Hand Over Stage 22
3 HOUSING FEATURES AND MARKETING STRATEGY
3.1 Introduction 23
3.2 Property Market and Its Outlook 23
3.3 Population and Demand of Houses 24
3.4 The Influential Factors toward the Property Sales 28
3.4.1 Property Location 28
3.4.2 House Design Concept 30
3.4.3 Layout Plan and Finishes 31
3.4.4 Pricing 31
3.4.5 Land Status 32
3.4.6 Nearby Facilities 33
3.4.7 Size of Development 33
3.4.8 Facility within Development Area 34
3.4.9 Numbering 34
3.4.10 Security of the Development Area 35
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3.4.11 Anti-termite Treatment 35
3.4.12 Feng Shui 36
3.5 Developer Strategy 36
3.5.1 Sales and Marketing 37
3.5.2 Roles of Marketing Manager 38
3.5.3 Marketing Strategy 39
3.5.4 Marketing Plan 42
3.5.5 Competitor Analysis 43
3.5.6 Scale Model 43
3.5.7 Customer Services 44
3.5.8 Skill of Presentation/ Closing the Sales 45
3.5.9 House Delivery Time 46
3.5.10 Reputation of the Developer 46
3.5.11 Value-added Services 47
3.5.12 Gift Campaign 48
3.5.13 Brochure Design 48
3.5.14 Advertising 49
3.5.14.1 Advertising Tools 49
3.5.14.1.1 Brochures Distribution 50
3.5.14.1.2 Outdoor Advertising 51
3.5.14.1.2.1 Banner 51
3.5.14.1.2.2 Bunting 52
3.5.14.1.2.3 Billboard 53
3.5.14.1.3 Newspapers 54
3.5.14.1.4 Magazines 55
3.5.14.1.5 Radio Broadcast 56
3.5.14.1.6 Television Broadcast 57
3.5.14.1.7 Telemarketing 58
3.5.14.1.8 Roadshow 58
3.5.14.1.9 By Word of Mouth 58
3.5.14.1.10 Web Site 59
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3.5.14.2 Business to Business 61
3.5.14.3 Corporate Sales 62
3.5.14.4 Sales Agent 62
3.6 Typical Complaints from the Buyers 62
3.6.1 Late Delivery of Houses 63
3.6.2 Poor Quality of the Houses Been Delivered 64
3.6.3 Houses been Delivered without Certificate
of Fitness for Occupation 64
3.6.4 Houses Been Delivered without Water and
Electricity Supply 65
3.6.5 Misleading Advertisement 65
4 METHODOLOGY
4.1 Introduction 66
4.2 Literature Review 67
4.3 Questionnaire Survey 67
4.3.1 Preparation of Questionnaire 68
4.3.2 Response to Questionnaire Survey 69
4.3.3 Frequency Analysis 70
4.3.4 Relative Importance Index (RII) 70
4.3.5 Limitation of Survey 71
5 DATA COLLECTION AND ANALYSIS
5.1 Introduction 72
5.2 Respondents 72
5.2.1 End-users Background 72
5.2.2 Developer Background 83
5.2.2.1 Number of Years of Working Experience 85
5.2.2.2 Developers Profile 86
5.3 Targeted Group of Buyers 88
5.4 Advertising Tools 88
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6 DISCUSSION OF THE FINDINGS
6.1 Introduction 90
6.2 Results and Discussion 90
6.2.1 Preference of Type of Houses 91
6.2.2 Housing Features 93
6.2.2.1 Preference of Housing Features among Malay 93
6.2.2.2 Preference of Housing Features among Chinese 93
6.2.2.3 Preference of Housing Features among Indian
and others 94
6.2.3 Developer Strategy 95
6.2.3.1 Advertising Tools 96
7 CONCLUSION AND RECOMMENDATION
7.1 Introduction 97
7.2 Conclusions 97
7.2.1 The popular type of houses preferred by the potential
house buyers 97
7.2.2 The basic quality and features of the house preferred
by different ethnic groups of house buyers 98
7.2.3 The common strategies adopted by developers
to market residential houses in current market 101
7.3 Recommendation for Future Research 101
REFERENCES 103
APPENDICES 105
xiii
LIST OF TABLES
TABLE NO. TITLE PAGE
2.1 Summary of Development Approval Processes
Guidelines in Peninsular Malaysia (Except the
Federation of Kuala Lumpur and Putrajaya) 18
3.1 Density of population at selected areas 25
3.2 Population in the selected district of Selangor, 2005-2020 25
3.3 Forecast new houses required in Selangor, 2000-2020 26
3.4 Forecast of new houses required for year 2000 – 2020 27
3.5 Forecast of houses required in selected district of
Selangor, 2000-2020 27
3.6 Top 5 popular housing areas/schemes in Selangor 29
3.7 Profile of major media types 60
5.1 Number of the first set of questionnaire survey forms
Received (end-user) 73
5.2 Age of respondents participated in the survey (end-user) 74
5.3 Household income group participated in the survey (end-user) 75
5.4 Preference of type of houses 76
5.5 Preference of building built-up area 77
5.6 Preference of house prices 77
5.7 Preference of housing features among Malay 78
5.8 Preference of housing features among Chinese 80
5.9 Preference of housing features among Indian and others 82
5.10 Respondent position (developer) 84
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TABLE NO. TITLE PAGE
5.11 Years of experience of respondents (developer) 85
5.12 Years of company in business 86
5.13 Developer strategy 87
5.14 Targeted group of house buyer for each type of house 88
5.15 Respond of the house buyer toward advertising tools 89
5.16 Effectiveness of the advertising tools toward developers 89
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LIST OF FIGURES
FIGURE NO. TITLE PAGE
1.1 Study flow chart 5
2.1 Classification of construction industry 11
2.2 Single storey houses 12
2.3 Double storey houses 12
2.4 2½ storey houses 12
2.5 Semi-detached houses 12
2.6 Bungalow 12
2.7 Apartments 12
2.8 Condominiums 13
3.1 Principal components of a marketing strategy 40
3.2 The strategy process 41
3.3 Designing and managing a marketing strategy 42
3.4 Scale Models 44
3.5 Brochures 51
3.6 Banner-type 1 52
3.7 Banner-type 2 52
3.8 Banner-type 3 52
3.9 Bunting 53
3.10 Billboard- type 1 53
3.11 Billboard- type 2 53
3.12 Billboard- type 3 54
3.13 Newspaper’s advertisements 55
xvi
FIGURE NO. TITLE PAGE
3.14 Magazines 56
5.1 Percentage breakdown of respondents (end-user) in survey 73
5.2 Percentage breakdown of age of respondents (end-user) in survey 74
5.3 Percentage breakdown of household income (end-user) in survey 75
5.4 Respondents Demographic 84
5.5 Years of experience of respondents 85
5.6 Company in business 86
xvii
LIST OF APPENDICES
APPENDIX TITLE PAGE
1 Summary of Development Approval Processes Guidelines in Peninsular Malaysia (Except the Federation of Kuala Lumpur and Putrajaya) 17
2 Market Research 47
3 Questionnaire Survey No.1 & 2 68
CHAPTER 1
INTRODUCTION
1.1 Introduction
This chapter is an introduction to the study. It presents an overview of the study
briefly appending the background; specifying the aims; expressing the problem
statement; formulating the study process; devising a methodology; setting the report
outline and qualifying the scope’s limitation.
1.2 General Background
The building industry had always played a very important role and had
contributed a significant percentage of growth in our national economy. As reported in
the newspaper, there were about 4,500 housing developers registered with the Ministry
of Housing and Local Government. (The Star, 13 Oct 2005)
Overall property performance in the market was generally well in 2005 in
Selangor with continuing low interest rates and favourable economic climate. That was
due to the factors that the power of earning had increased recently. The demand and
prices for residential properties, that continue to flourish along the new arterial
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highways leading to the city and its regional centres, was expected to increase. That
would have caused the developers actively launched their products within the areas.
However, global economic in 2006 was not looking very rosy as oil price
continue to soar and the steroid-pumped economic started to slow down (The Star, 29
Dec, 2005). Property generally would be one of the first industries to feel the pinch of
inflation, and it had certainly made itself felt recently. A looming oversupply appeared
to have slowed sales across the board. However, that did not mean that people were not
buying the properties. On contrary, checks showed that conditions was still favourable
for home ownership despite the possibility of higher rate, weak stock market sentiment
and some uncertainty in the global economy. No doubt, there were simply too many
products available in the market. Many of the unsold units would be brought forward to
2006 and worse still when there were fresh supply of the property stocks, developers
could only blame themselves when the market further consolidated.
A successful property developer usually sees market leading and market driven
products. The current as well as anticipated market conditions and the competition, it is
clear that a developer has to have the correct marketing efforts. The decision on the
product is most critical.
1.3 Problem Statement
The residential property sector, despite its resilience, is getting increasingly
competitive and developers are looking at slower take-up rates and flattish earnings
performance this year (The Star, 20 March 2006). Maintaining market share and profit
margin are the big challenges confronting all property developers during these times.
Many of them have quietly admitted that sales have been slowed especially in the last
quarter of 2005. This was evident from the repeated re-launch of their products. It has
turned to undeniably buyers’ market at the moment. The effect on the market sentiment
3
have resulted in the downfall of some developers which tend to be followers, not
undertaking the necessary research to ascertain the size, types of demand (including the
housing features), and the applicability of effective strategy in promoting houses to the
new markets. This was also a setback for the national economy growth.
Therefore, the developers would have to determine what the market actually
needs and develop an effective strategy to enhance their property sales in order to stay
competitive in the building industry such as the market needs, the type of houses to be
built and sorts of housing features that would have impacts on the demand of houses in
the market, and how to overcome the market sentiment.
1.4 Aim and Objective
The aim of this study is to identify the preference of type of houses of the
potential house buyers, their requirements of the housing quality and housing features
and lastly the common market strategy implemented by the developers.
To achieve the above aim, the following objectives have been deliberated for
this study:
1. To identify the popular type of houses preferred by the potential house
buyers.
2. To identify the basic quality and features of the house preferred by
different ethnic group of house buyers.
3. To identify the various common strategies adopted by developers to
market residential houses in current market.
4
1.5 Scope of Study
The scope of this study was been focused on the development of residential
houses in Petaling; Klang; Gombak and Hulu Langat in Selangor, which formed part of
Klang Valley but excluding low cost houses and area in Kuala Lumpur due to the fact
of huge different in building and land costs and it is belongs to government control
item. After interview with a panel of successful developers, it has concluded that the
types of houses would be classified into six (6) categories in this study as they are the
most common types of house built by the developers in Malaysia. They are single-
storey link house; double-storey link house; 2½ storey link house; semi-detached house;
bungalow and condominium/apartment. The data obtained for the report were collected
mainly from sources in the areas and the attention was paid to the specific references,
developers and end-users due to time constraint.
1.6 Brief Methodology
The study was conducted mainly through 2 (two) methods, namely:
i) A literature review was conducted encompassing all the various means to the
obtainment of the widest range of the relevant information from books, articles,
Journals, magazines, newspapers, reports conference papers related to housing
development projects, type of houses been built, home features and the marketing
strategy implemented by property developers.
ii) Structured interview was been carried out with property experts and a survey
viz. questionnaires to obtain data from the end-users and property developers.
Therefore, the respondents were typically the end-users and the developers with
particular emphasis given in feedbacks based on their respective experiences and needs.
The study process might be best summarized by the flow chart in Figure 1.1:
5
Step 2) Literature Review
Step 3) Structured interview with the experience developers and case study on the previous successful projects.
Step 4) Questionnaire Survey
Step 5) Data collection through questionnaire survey and analyze
Step 1) Define the aim, objectives and scope of the study
Step 7) Conclusion
Step 6) Discussion of the findings
Figure 1.1: Study flow chart
1.7 Report Outline
The report was laid out in seven main chapters. This chapter, the first,
introduced the report outlining aims and objectives, and presenting a general overview
of the paper.
Subsequently, the second chapter described the work flow of the housing
development processes start from the project inception stage which involved land
matters; feasibility study; planning and product development.
6
Chapter Three, discussed the outlook and demand of type of residential houses;
house features; the implementation of developers’ strategies to enhance the demand of
their houses in the market.
Chapter Four described the selection and the procedures of the methodology
used in the study together with the discussion of preparation of the questionnaire survey
and its limitations.
In Chapter Five, it showed the collection of data through questionnaire survey;
tables and figures and the analysis.
Followed by Chapter Six, was the discussion of the results or research findings.
And lastly, Chapter Seven was the conclusion, which outlined various steps and
safeguard to either enhance or ensure the success of the properties develop by the
developers.
1.8 Significance of Study
The report should briefly summarize the demand of type of houses in Gombak;
Petaling; Klang and Hulu Langat, districts within Selangor; the housing features which
influence the demand of houses in the market; the various developer strategies and the
effectiveness communication tool in promoting houses, due to the importance and the
key roles played by the industry in the overall Malaysian economy and the contribution
to the growth of the same.
It was envisaged that the study would be beneficial to all relevant parties
involved in the construction industry ranging from those involved in academic research;
students; end users; developers as well as the various practitioners in the industry.
CHAPTER 2
HOUISNG DEVELOPMENT PROCESS
2.1 Introduction
The chapter briefly discussed the work flow start from project initiation;
planning; product development; project completion and hand over of the houses upon
completion.
2.2 Housing Development
Housing development in the private sector has been defined as the developing
and provision of money for the development of more than four units of housing
accommodation for sale. This status is not applicable to the existing completed houses
which are opted for sale or to the development project which consisted of four or less
units of houses to be constructed and for sales.
Procedures for housing development in Malaysia can be quite complex and time
consuming. Prior to housing project is approved and implemented, there are a number
of processes need to go through.
8
2.2.1 Project Initiation
The owner is the person who owned the land and has the authority to develop
the land. In the context of private sector’s property development, the owner is also
refers to as the developer. When he has the intention to go for housing development, he
would initiate the project. Prior to the implementation of the project, he is required to
identify the need and the type of houses to be constructed by carrying out feasibility
study and project brief; and would only promoted sales in the market after considering
all these factors. This would enable the developer to recognize the demand of the
houses and the prospect of sales in the market.
Normally, an architect and/or an engineer would be engaged to advise the client
on design aspects throughout the initiation or promotion process. A quantity surveyor
might also be employed for the advice on construction cost planning, cost control and
selection and appointment of a contractor for the project.
2.2.1.1 Feasibility Study
Feasibility is the first process to be carried out by the developer to determine
whether the proposed project is viable or feasible from both the business, technical and
social point of view.
In according to Abdul Rashid (2002), the study might include:
1. Identifying and assessing the suitability of site for development.
2. The economic and market research that may include the type of facility likely to
be suitable, its potential demand and competitors analysis, interest rates, capital
injection, user fees and /or selling price.
3. Estimates of the time required for the project and likely the total development
cost to be incurred.
9
4. Authorities’ policies in relation to proposed development.
5. Lastly, the profit.
2.2.1.2 Project Brief
The customers’ of the initiator or promoter are those who will ultimately be the
persons to use the completed facility. Therefore the requirements would form the basic
on which the developer expresses his needs to the designer that eventually becomes the
project brief. The project brief also plays a very important part to determine the success
of project. It is essentially a statement of the needs of the developer and therefore
should define the developer’s requirements in terms of concept, time cost and design.
The project brief might include the following elements:
1. The requirements of the project as to the end-product in terms of are of floor
space, type, size of the development and number of units to be developed.
2. Development concept.
3. Design feature.
4. Target date of launching of the houses in the market.
5. The targeted completion date of the project.
6. The budgeted cost for the project.
2.3 Funding
There are two type of funding during project implementation stage in the private
sector. One of them is the project funding to the developer. It can either come from the
internally generated funds or through external borrowings such as obtained from the
banks or other financial institutions. There are also other ways of obtaining funding for
10
the project such as developer inviting outsider for partnership to provide debt or equity
financing. The purpose of project funding is for the implementation of the project until
hand over of the completed properties to the purchasers.
The second type of funding is for the potential house-buyers, the developer
normally would arrange with banks and/or other financial institutions such as insurance
companies for the loan facilities to be provided for the potential house buyers. There
would be a list consisted of all the end-financers that are able to provide housing loan
facilities to the potential purchasers. The purpose is to assist the purchasers and let them
have choices to consider the loan facilities which are available to them with best
package that the financers can offer e.g. with low interest rate or higher loan margin.
2.4 The Product
In the construction industry, there are basically two types of development that
are construction of buildings and infrastructure as shown in Figure 2.1. The type of
building product again can be subdivided into three groups. They are residential house,
commercial building and industrial building. In this study, only type of residential
housing development (excluding the low cost houses) will be discussed.
11
Figure 2.1: Classification of construction industry
The residential house has formed the biggest group among the building
development because everyone needs a house to live and some others may also buy it
for investment purposes. This group again can be subdivided into landed or non-landed
properties. For landed property, they are such as: single-storey terrace houses; double-
storey terrace houses; 2½ storey terrace houses; semi-detached houses; bungalow and
other type of houses that are build directly on a piece of land without sharing with other
of its right. Whereas non-landed property refer to mostly high rise buildings such as
flats, apartment and condominium in which every owners within the community will be
issued a strata title and shares the piece of land-use. This can also apply to the type of
townhouse which sometime consists of two storeys or more but still share the same
piece of land with other. Only six common types of residential houses were selected in
Housing Development Infrastructure Development
Construction Industry
Landed Property Non-landed Property
Commercial Buildings
Residential Houses
Industrial Building
12
the study. They were single-storey terrace houses; double-storey terrace houses; 2½
storey houses; semi-detached houses and lastly the bungalow. Figure 2.2 – 2.8 showed
the various types of residential houses.
Figure 2.2: Single storey houses Figure 2.3: Double storey houses
Figure 2.4: 2½ storey houses Figure 2.5: Semi-detached houses
Figure 2.6: Bungalow Figure 2.7: Apartments
13
Figure 2.8: Condominiums
2.4.1 Product Development
When competing against the similar competitors, most of the products need
different message and design to suit the different customers need. Therefore it is a very
important process during product planning and development, in which the company
adds new products, drops old ones or makes present products more competitive. The
process involves of developing products which must be of quality type that matched
with customer needs, desires and usage pattern. This is help to increase customer
acceptance, overcoming innovation by competitors and helping increase company
market share. Product features and quality must meet the needs, wants, and expectations
of the customers. Levinson (1994) has stated that customers can also provide best ideas
for the design of houses. Ryan (1981) has pointed out that the product failure in
marketing were due to failure to test the product and the market; the use of unreliable
test; ineffective marketing support; unexpected high cost; poor timing and most
importantly, the speed with which news can be copied and made obsolete. In fact, Tow
(2004) had pointed out that successful new product strategy implementation depends
not only on the production of high quality, but also ensure that the product design is
translatable into a product that can be produced to meet the design specifications.
14
2.4.2 The Designer
The designers may include the architect; civil and structural engineer;
mechanical and electrical engineer; quantity surveyor; the technology specialists and
many others.
For the architects, their responsibilities are to provide services in architectural
design and in general pre-contract and post contract administration. He also has to make
sure that the aesthetic design is always practical and durable. According to standard
building by-law, the architect are given the authorities to supervise the project and
normally act as a superintending officer and ensuring that the project is run smoothly in
an efficient and expedient manner.
As engineers for civil or structural, mechanical and electrical engineers, their
duties and responsibilities are to provide professional engineering services based on the
objectives of the project. Civil and structural engineers are responsible for designing the
structural aspects of the facility. They are also responsible for the design; supervision
and construction of roads; drains; sewerage, and other civil works. Mechanical and
electrical engineers are responsible for the design , supervision and construction of
services including air-conditioning, ventilation, lifts, electrical services, fire fighting,
building automation system, plumbing and sanitary services, as well as the external
infrastructure services associated with public utilities to the development. They are
requested to have a very close contact with site to ensure that everything is under
control.
For quantity surveyor, his duties and responsibilities are taking off building
quantities and preparing the contract documents; to carry out work progress valuation
progressively; submit financial report to client when requested and acts as a financial
controller throughout the duration of the project. Other functions also include calling
tender; evaluate and to award tenders to successful contractors and to finalize contract
after project completion.
15
According to Kubal (1994), generally, the designers' main responsibilities are to
provide services to the owner and respond adequately to schedule and budget
parameters. Other responsibilities include encourage open communications, participate
as a member of the engineered quality committee and become a team player through the
project. He is also responsible to accept innovation that improves the quality of the final
product, allow through constructability, compatibility and coordination design reviews.
Other than monitoring overall project schedule, budget, quality and performance to
contract, he is also responsible for investigations; producing design alternatives;
computations drawings and specifications; statutory planning approvals and taking off
project quantities that meets the need of the owner. They may also need to advise the
owner or client on the development of the project and its organization.
2.4.3 Designer Process
The product development stage is also very much tight with the design. The
process may be divided into three stages;
1. Schematic design is the initial stage of design process. It involves activities
including surveying the site and conducting site and soil investigations.
Subsequently, the designers prepare the project’s preliminary design and site
layout plans. The schematic design comprises drawings such as layout plan,
elevations, typical cross-sections and relevant data including on gross built-
up, net built-up, circulation areas and services, in a sketchy manner. At this
stage, the project’s broad design ideas and concept emerged. From the
preliminary design and site layout plans, the quantity surveyor (could come
from within the developer’s own organization or from consultant firm)
produces a preliminary estimate for development cost. Together with the
preliminary design and site layout plans and preliminary estimate are
submitted to the developer for approval. The process of translating the
16
requirements of the initiator or promoter into a basic design form, indicating
the general design in term of shape, size and function of the building.
2. Detailed design is the production of detailed drawings and specifications
which generate from the concept or schematic designs. It consists of
detailing and describing each element of the building so that it may be
constructed. Once the budget for the project, the preliminary design and site
layout plans been approved, the designers will proceed into detail design
stage. The requirements of the authorities are also been incorporated into the
designs and are subjected to the approval of various authorities. All this
stage co-ordination of the works of various designers is vital. Along with
development of the detailed design, cost checks are carried out by the
quantity surveyor to ensure that the cost is within the approved budget. Any
additional of budget if required would subject to the developer’s approval.
3. Specialist design develops the detailed drawings and specifications for a
specific component or element within the structure, which requires specialist
technical knowledge to design and construct, such as mechanical and
electrical; air-conditioning and ventilating systems, fire-fighting,
communications, plumbing and sanitary services, among other. In civil
engineering works, specialist design works may include geotechnical
engineering, environmental engineering, traffic flow systems, road/highway
furniture and fittings, etc.
2.5 Development Statutory Approval
At this stage, the developer will appoint a consultant team comprised of Town
Planner, Architect and/or Engineers for full compliance of the laws, by-laws and
regulations. There are two systems of development approval processes on construction
17
in Malaysia as there are some slight different processes involved between two bodies.
One is development within Kuala Lumpur city and the other one is development outside
Kuala Lumpur area. Abdul Rashid (2002) has stated the development statutory approval
as the processes to obtaining the permissions from the relevant authorities to initiate and
to construct a facility and upon its completion to occupy and use the completed facility.
Generally, the system on statutory control and approval for construction can be divided
into four key stages:
1. Development Order.
2. Building and Services Plans.
3. Construction.
4. Certificate of Fitness for Occupation.
The summary of development approval processes guidelines in Peninsular
Malaysia except the Federation of Kuala Lumpur and Putrajaya is shown in Appendix
1.
2.5.1 Development Order Stage
According to Abdul Rasid (2002), during the Development order stage, the first
process is pertaining to the land matters. In accordance with the provision of the
National Land Code Act 1965, a developer needed to apply for approval before
developing the land. All application of the transfer of original title deed should be made
to the authorities concerned. Under building category, the State Government may
impose details information on: the area or proportion of the land to be built upon; the
type, design, height and structure of any building to be erected on the proposed land;
and the type and quality of the materials used in its construction; the dates on or before
which the building is to be commenced or completed and the use of the proposed
building.
18
Development would inevitably involve the conversion of the land-use and the
sub-division of the title and could sometimes necessitate the combination of adjoining
lots into one lot to be held under a single title.
A team of consultants comprising the Town Planner, Architect, mechanical and
electrical consultant, infrastructural consultant and quantity surveyor consultant will be
engaged by the developer during project inception stage. Their duties are to propose,
brainstorm and comment on the concept; ideas; quality; innovative design; pro and con
of the proposed products (houses in this case) and etc., during conceptual design stage.
There would be a periodical meeting between the developer and the teams of consultant
to overcome and improve the house design during product development stage. The
proposed types of houses would be commented and asked to improve further before it is
finally been accepted by the developer. The processes of obtaining approval for land
development; conversion, sub-division and issuance of titles might start after the
development concept has been developed and accepted by the developer.
Then, instruction would be given to the planning consultant to submit the layout
plan of the proposed development for the approval. The planner would prepare the pre-
computation layout plans in details for submission to the local authority to seek the
development order. Details requires in the submission include the proposed buildings;
open spaces; schools and community reserves where required; all utility services’
reserves such as electricity, water, sewerage disposal, existing contour lines and
proposed formation levels and existing natural courses and drainage proposals. As
required under the National Land Code Act 1965, after the layout plan is been
approved, the planner would only submit the application for conversion of land use and
sub-division of the title.
Finally, the planner would submit an application to the Town Planning
Department for Development Order approval. Documents required in the submission
fees and copies of title deeds. The site and sketch plans must show details including
19
number and types of proposed buildings, proposed roads, footpaths and drains, utilities’
reserves, open spaces and school and community reserves. Once the Town Planning
Committee approved the application, the Development Order would only then be
issued. The Development Order usually spells out several conditions of approval to
which the developer must comply in the subsequent stages of the work.
2.5.2 Building and Services Plan Stage
After planning permission is obtained and the layout plan been approved,
application for approval of the building and services plans must be made to the Building
Control Division of the Local Government. The basic for building regulations within
the Local government is governed by the Building by-laws and the Uniform Building
by-laws and Street, Drainage & Building Act No.133, 1974. All the consultants will
carry out their duties to prepare the design drawings in detailed. Form E would be
submitted together with all the detailed plans or drawings (must be endorsed) by the
consultants respectively to the authorities concerned for approval. The submission to the
authorities also included the Pihak Berkuasa Tempatan(JPT); Jabatan Pengairan dan
Saliran(JPS); Jabatan Perkhidmatan Pembetungan(JPP); Pihak Berkuasa Air
Neger(PBAN); Jabatan Kerja Raya(JKR); Jabatan Bombadan Penyelamat,
Malaysia(JBP); Syarikat Telecom Malysia(STM) and Tenaga Nasional Berhad (TNB).
The authorities would check whether all the specifications proposed are in accordance
with the by-law requirements
Upon approval of the building and services plans, the developer may only allow
to commence work on site. The developer would start to apply for Developer’s License
and Advertising and Sales Permit from the Ministry of Housing and Local Governments
(MOH) as required under the Housing (Control and Licensing) Act 1982 for the
proposed housing development project comprising more than four units of houses. Only
after the Developer’s license and Advertising and Sales Permit obtained, then the
20
developer could start to advertise and /or sales of houses. At the same time, tendering of
the construction works would also be carried out.
2.6 Procurement Stage
The procurement such as preparation of contract and calling for tender can start
as soon as after all the detailed drawings and specifications have been completed. At
this stage, the selection of the contractor is very crucial. The committee members would
screen through all the contractors’ submission of tenders who bid for the job. Selection
of the contractor would be based on the criteria such as the tender’s price; their jobs in
hand; experience of the contractor; their past track records; their financial stability; and
other resources availability and so on. Once the contractor has been selected by the
developer and the contract awarded to the contractor, then construction of works would
begin.
2.7 Project Implementation Stage
The main function in this stage is to monitor the progress of works so that it
would achieve the project objectives such as project not behind time, cost within budget
and to supervise and ensure that the quality of works are been performance
satisfactorily. Therefore during the project implementation stage, every party involved
plays a very important role to ensure these objectives. This is especially true for the
contractor. As contractors are the persons who execute most of the construction works,
they are the backbone of the construction industry. He must prepare an estimate cost of
the project, develop a realistic construction schedule and establish an effective project
control system for cost, schedule and quality. Generally, his assignment is to deliver the
finished facilities ready for acceptance by the owner.
21
During the execution stage, the contractor is also responsible to execute the
construction works at project site in according to the approved master work program
and observing the various laws, by-laws and regulations concerning construction
activities such as Local Government, Health and Safety, Factories and Machinery Acts
(Building Operation and Works of Engineering Construction) so that the progress of
works would not be interrupted such as stop-work order from the authorities.
Beside developer, the Architect and engineers would also carry out the functions
of supervising of building and engineering works respectively. Periodical meetings
would also be held among parties such as developer; consultants; contractor; Nominate
Sub-contractor and sometime even include supplier to monitor the quality and progress
of works and ensure that any discrepancy or dispute of work would be highlighted and
solved promptly.
Once the project completed, the consultants would assist developer to submit
and request all the authorities or departments concerned such as Pihak Berkuasa
Tempatan(JPT); Jabatan Pengairan dan Saliran(JPS); Jabatan Perkhidmatan
Pembetungan(JPP); Pihak Berkuasa Air Neger(PBAN); Jabatan Kerja Raya(JKR);
Jabatan Bombadan Penyelamat, Malaysia(JBP); Syarikat Telecom Malysia(STM) and
Tenaga Nasional Berhad (TNB) whom they have involved in approving the building
plans earlier for inspection. Certificate of fitness for Occupation (CF) will only be
issued upon all the departments concerned have inspected the completed works
satisfactorily. Without the CF, the house is still deeming not fit for occupying. For those
who have occupied the houses would be prosecuted under the Road, Drainage and
Building Acts (KPKT 2000).
22
2.8 Hand Over Stage
Hand over stage is where the houses have completed and ready for main water
and electric power supplies connection as in accordance to the Sales and Purchase
Agreement or housing regulations, all the authorities’ inspections done, and then the
houses would be handed over to the developer by the contractor. On the developer’s
side, the maintenance persons would once again inspect all the houses to ensure that
they were satisfactory be constructed. Then only the developer would send out notice of
vacant possession to the buyers regarding hand over of the houses. At this stage, the
purchasers are again required to collect the house keys within fourteen (14) days from
the date of notice issued and settled all outstanding payment due to developer. Within
this period or until the collection of keys by the buyers (whichever come first), the
developer is responsible for any loss due to theft or vandalism or otherwise the buyers
would be held for their own responsibility. As the owner of the residential house, the
Defect Liability Period would be eighteen (18) months. Within the period, whatever
defect occurred and once been made known to the developer, the developer would have
to attend it. The rectification work must be completed and handed back to the owner
within thirty (30) days from the date of notice made or else the buyers have the right to
engage third party to carry out rectification works and the cost would be borne by the
developer. After the expiry of the Defect Liability Period, the responsibility of taking
good care of the houses would fall back to the buyers of the house.
CHAPTER 3
HOUSING FEATURES AND MARKETING STRATEGY
3.1 Introduction
In this chapter, first, the author took a closer look at the property market outlook
and housing development surrounding Kuala Lumpur or part of Selangor consisting of
the districts of Petaling; Klang; Gombak and Hulu Langat; followed by the discussion
of the housing features which may affect the demand of residential houses in the area
(low cost houses was not included in this study); the developers’ marketing strategy and
its tools in the current market trend.
3.2 Property Market and Its Outlook
Malaysia’s property sector hopefully would continue to register growth,
especially fuelled by the growing popularity of the low mortgage rate, the continuing of
the government’s Malaysia, My Second Home program in promoting home ownership
by the foreigners and the government’s success in managing the performance of the
overall economy have contributed to the industry’s encouraging performance so far.
These factors have contributed to propel the property purchase activity, resulting in
good performance of new sales in choice locations especially within the Klang Valley
24
areas. Moreover, Malaysia high savings rate coupled with young demographic profile,
declining average household size and urban migration would provide a consistent and
sustainable stream of house buyers.
Most of the property developers were generally still positive of the industry’s
performance in the year of 2006 although concern over escalating of oil prices, the
performance of the stock market and potential interest rate hikes are viewed with some
degree of apprehension. They also agreed that the present situation was a buyers’
market where supply exceeds demand and buyers had the luxury choices and time to
decide on a property they intend to purchase.
With competition building up, industry players are now more proactive and
resort to more coordinated planning, including research and feasibility studies, before
embarking on any new projects, follow by effective marketing strategies to promote
sales.
3.3 Population and Demand of Houses
The populations in Klang Valley and Selangor have increased tremendously
every year due to the facts that people use to migrate to the area as it provides a lot of
job opportunities. Table 3.1 showed the population for year 1980-2000. Breakdown of
total population for each of the four districts that surrounding Kuala Lumpur for 2005-
2020 as depicted in Table 3.2. As reported in the Kajian Rancangan Struktur Negeri
Selangor (2002), the average population growth rate was 4%, while the average house-
hold size is 4.5 persons per house. Based on the growth rate of 4% per annum, the
demand of the houses would quite substantialable. Rapid urbanization and the country’s
demographic profile with its sizeable population of young people offer tremendous
opportunities for developers of medium-priced houses. 60% of the Malaysian
25
population was below 30 years old. In addition, 17% of this category was potential first-
time house buying candidates.
Table 3.1: Density of population at selected areas
Size of Population State
1980 1991 2000
W.P. Kuala Lumpur 977,102 1,226,708 1,370,300
Selangor 1,515,537 2,413,567 4,188,876
Total 2,492,639 3,640,275 5,559,176
Sources: 1) Population Census, 1980 and 1991, Jabatan Perangkaan Malaysia
2) Malaysia Eighth Plan- Selangor
Table 3.2: Population in the selected district of Selangor, 2005-2020
Source: Kajian Rancangan Struktur Negeri Selangor, 2002
Population Distributed (‘000) District
2005 2010 2015 2020
Gombak 654.2 736.0 814.9 893.6
Petaling 1,450.1 1,637.5 1,802.2 1,944.9
Klang 768.1 855.1 942.2 1,027.2
Hulu Langat 1,054.5 1,183.1 1,297.8 1,405.3
Total 3,926.9 4,411.7 4,857.1 5,271.0
Also reported in the Kajian Rancangan Struktur Negeri Selangor (2002), during
year 1995-1999, average monthly income in Malaysia was RM2,020 in 1995 and had
increased to RM2,472 in 1999 with the average growth rate of 5.2% per annum. In
26
Selangor, average monthly income had increased from RM3,162 (1995) to RM3702
(1999) with yearly average growth rate of 4.0%. The report also stated that in 1999,
Klang Valley has contributed 7.3% of the national economy and increased to 9.0% in
2000.
According to the report by the National Property Information Cerntre (Napic), it
had stated that in 2000, housing property stocks for the first quarter started with the
construction of 3,757 condos and apartments in Selangor but the second quarter saw a
drop to 3,526 units. The requirement of total number of houses in selangor for 2000 –
2020 is shown in Table 3.3 and Table 3.4. However, according to Kajian Rancangan
Struktur Negeri Selangor (2002), the forecast for the total houses required in the
selected districts (Petaling; Klang; Gombak and Hulu Langat) in Selangor is 981,565
units for year 2005 – 2010; 1,184,949 units (2010 – 2015) and 1,383,969units for 2015
– 2020 as shown in Table 3.5.
Table 3.3: Forecast new houses required in Selangor, 2000-2020
Year Category
2000 2005 2010 2015 2020
Stock 976,732 939,638 1,224,948 1,519,678 1,814,230
Backlog -46,861* - - - -
Immediate
Replacement (1%) 9,676 - - - -
New House - 237,919 249,661 251,693 188,229
Usual
Replacement (1%) - 47,391 45,069 42,859 40,758
Total No. of Unit
(for 5 years) -37,094 285,310 294,730 294,552 228,987
Average per year - 57,062 58,946 58,910 45,797
*Excess stock in year, 2000.
Source: Kajian Rancangan Struktur Negeri Selangor, 2002
27
Table 3.4: Forecast of new houses required for year 2000 - 2020
Year State
2000 2005 2010 2015 2020
Population 4,188,876 5,097,430 5,968,350 6,854,030 7,369,030
Family
size
4.5 4.4 4.2 4.1 4.0
No. of
houses 929,871 1,167,790 1,417,451 1,669,144 1,857,373
New
houses
required
- 237,919 249,661 251,639 188,229
Source: Kajian Rancangan Struktur Negeri Selangor, 2002
Table 3.5: Forecast of houses required in selected district of Selangor, 2000-2020
Year District
2005 2010 2015 2020
Gombak 128,512 170,298 192,787 216,317
Petaling 280,756 362,399 434,948 496,747
Klang 149,557 201,140 263,839 344,457
Hulu Langat 208,897 247,728 293,375 326,448
Total 767,722 981,565 1,184,949 1,383,969
Source: Kajian Rancangan Struktur Negeri Selangor, 2002
28
3.4 The Influential Factors Toward the Demand of the Houses
Deciding on the right product is definitely challenging and essential. With this in
mind, it is always good to back product decisions with ample information, a structured
decision-making process and reliable advice. The purchaser, who has become quite
astute, can choose the location and the developer that he wishes to invest in. This
creates a new breed of affluent end users. Their need is for a quality lifestyle design
concept, infrastructure, facilities, pricing and location are key consideration that will
determine buyer’s preference. End users may also like to acquire a second or third home
in order to upgrade themselves or invest to earn rental income and the continuing
demand in and near city areas owning to urbanization.
However, a leading property developer usually is able to create a lot of
influential factors to attract targeted potential buyers such as emphasize on quality,
unique designs, top-class finishing, gated and guarded development for his project in
order to secure greater demand. This could be gauged during their new launch of
property sales. Lots of potential buyers would gather at the developer’s sales office
before sales date. The response was so good that the sales just like hot cake. Properties
been snatched up within hours once been opened up for sales.
Some of the prominent influential factors were been discussed as follow:
3.4.1 Property Location
Location of the property also refer to where it would be been situated. For an
example, whether the houses are built on hill, flat land or sea to name a few. Subjects
like whether the whole development area itself a well established and mature townships;
proximity to work place; degree of traffic congestion; healthcare facilities; availability
of public transport; quality of neighborhood; image; security and flood incidents would
also been considered by the buyers.
29
In any housing development project, location of the property is always been one
of the most important factors been considered. The houses whether strategically located
or not would definitely influent the overall sales of the property. When the proposed
housing development is well connected to road system such as highways and other
secondary link roads and other alternate roads, this provides convenience and easy
accessibility for the occupiers. The development area would have more advantages if
been surrounded by nearby facilities such as shopping or commercial centres.
As for prime residential areas, one should look for landed properties in
Damanasara; Petaling Jaya; and certain upcoming developments surrounding Kuala
Lumpur. Some top popular housing areas in Selangor are shown in table 3.6.
Table 3.6: Top 5 popular housing areas/schemes in Selangor
Top 5 Popular Housing Areas/Schemes*
RANKING HOUSING AREAS RANKING HOUSING
SCHEMES
1 Bandar Utama 1 Bandar Utama
2 Mutiara Damansara 2 Mutiara Damansara
3 Subang Jaya/USJ
3 Bukit Jelutong,
Damansara Heights
4 Petaling Jaya 4 Gita Bayu,
5 Bandar Sri Damansara
5 Sierramas,
Kota Kemuning
* Source: The Edge Malaysia, Dec. 29, 2003
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3.4.2 House Design and Concept
This is the type of house design concept provides by the developer. It referred to
whether the design is trendy; rustic; contemporary; modern; exclusive; stylish; or Baba
and Nonya design concept. Some design concepts include the entire development
features emphasis on green parks and landscaping with minimum environmental
disruption to preserve the existing natural physical attributes of houses. Others include
innovative design concept such as High Fix home: Designing Your Home for Health
and Fitness - Harper Design (MacDonald, 2005). These designs take home fitness to
another level – sometimes literally. The high-end concept featured including a house
interior and exterior climbing walls; a stair master house designed to promote lots of
climbing; a house whose tennis court flows nearly seamlessly out of a sitting space.
Contemporary design are never a product of designer’s whim and fantasies. More often
than not, the most excruciatingly bewitching creations are a fusion of various elements-
geometry, colour, texture, style and most importantly, a beautiful imagination.
The selection of design concept depends on the targeted potential buyers. Giving
an example, for young executives buyers, the design concept selected may be of
contemporary and modern lifestyle living. Some included features such as high ceilings
for living rooms, perimeter fencing with security system, CCTV for internal roads,
internal security system in the house, emergency/panic button for all floors and others
might provide resort-style living. When one thinks of a vacation, green space, water
features and landscaped gardens with lots of trees and greens. Lately, the new concept
was the SOHO (Small Office, Home Office) concept which was quite popular in the
city area.
Exclusive design meant that units are immaculately designed to provide a
distinction setting befitting the needs of the most discerning house owners. The interiors
showcase stylish layout, ebullient colour scheme, high quality fitting and fine finishing.
31
The relative low density and tranquil surrounds offer for homes meant for quiet
respite and plenty of space for total relaxation and outdoor sport activities.
3.4.3 Layout Plan and Finishes
The layout for the houses preferably to be of more squareness in shape. This
type of layout would attract mainly Chinese buyers. This is because most of the Chinese
believe in Feng Shui. They prefer not to buy the houses that are of triangular or some
other funny shape which would definitely affect the speed of the sales later.
Traditionally, parent likes their children to stay with them or during the some specific
vacations such as school holidays or New Year festival. Therefore, bigger built-up
would make the houses look more spacious and provide comfort to the occupiers. The
size or built-up of the houses preferably consists of 1000 square feet and above. The
finishes proposed might be of high quality and less maintenance types to provide
quality lifestyle living.
3.4.4 Pricing
As for the previous years have been good for developers, there appeared to be
plenty of new launches. Because of this abundance of supply, developers have to be
cautious with pricing. Right pricing for houses is important, as it will ultimately
influence the sales of the houses. However, the decision on pricing usually depends on
the company’s situation and requirements such as:
1. Maximum Sales Growth
That is setting the lowest price on assumption that the market is price sensitive,
in order to maximize units sales, that is a higher sales volume will lower unit cost and
32
enhance long-term profit. A company may use price to attain some specific objectives.
This is extremely important for the beginners or those developers who need to
repositioning and rebranding themselves. Low prices can be used as a weapon to build
market share. By setting low prices is one of the easiest ways to penetrate the market. It
also prevents competition from entering the market or set prices at competitors’ level to
stabilize the market. Therefore, lower price will be the key competitive advantage over
the rivals and maintain the current market share. However, low prices squeeze margins
and often reduce net profits.
2. Product-quality Leadership
This is where a company, in seeking to be seen as a market leader in terms of
product quality, would sell its houses at higher prices than those competitors. For those
developers who are already been established, well-known and enjoy good reputation in
the market such as IOI Berhad developing the township in Puchong area, pricing may
not be a problem for them. As the property leader in the sector, they always price their
properties higher before selling in the market.
3. Survival
This normally happen and refers to cut prices in order to stay in business. This
often applies to unsold units which have been left for long time and the developer need
money urgently. Some developers do give early bird discount in order to encourage
more customers to buy their properties. By doing so, not only would create awareness
among the customers, it also help to build the company’s reputation if the properties are
sold out fast.
3.4.5 Land Status
In land matter, the houses are either been erected on a Freehold land or a lease
hold type. For normal circumstance, the buyers usually tend to buy the property built on
33
Freehold land than on lease hold. It could be due to the reason that psychologically, the
purchaser who bought the houses would feel more secure and comfort if they are
situated on a piece of Freehold land. For those who buy for investment purposes, they
could easily dispose the property purchased faster as no requirements to obtain the
consent from the state government body.
3.4.6 Nearby Facilities
Nearby facilities are referred to facilities such as offices, shopping and
commercial areas, primary and secondary schools and higher learning centres (if the
within the development area do not have schools), medical centre and others. These
facilities found near the development area not only creating job opportunities for
people, it would also provide many conveniences such shopping or other commercial
activities to the purchasers later, when they move in their new houses.
3.4.7 Size of Development
The size of the particular development project should try to be within 200 units
houses. Whenever possible, it should be of low density whenever possible. This would
create a rush in the sales when the houses are been put up for sales in the market. Lesser
units make sales much easier and given less burden in turn of overall development cost
incurred by the developer.
34
3.4.8 Facility within Development Area
The overall development area should be well planed of by providing facilities
such as the recreation park, club, banking facilities, foodcourt, market, schools, medical
centre, shops and commercial centres, among others. This is to makeup the self-
contained township so that the owner will enjoy the convenience and luxury of living
within the township and freedom from traffic hassle. They should also provide outdoor
facilities such as swimming pool, landscaped garden, children playground, gazebo etc.
3.4.9 Numbering
This is regarding the magic of numbering in promoting sales of houses. The way
to select the numbers related to houses in term of pricing and house numbering is quite
important for marketing purposes. Certain numbers are very sensitive and particular by
certain group of buyers. Such as numbers ending with four such as 4, 14, 24….etc.
should be avoided whenever possible. Other number such as 13 is also quite sensitive to
certain group of potential customers. All these numbers are dislike by most of the
buyers especially from the Chinese origin which in turn may dampen the sales of
houses.
On the other hand, numbers such as ending with eight such as 8, 18 28…etc. or
ending with nine such as 9, 19 29…etc would be preferred and encouraged in pricing
and house numbering. As to certain buyers, these numbers not only look-alike reducing
the selling price but mean prosperity and bring good luck to them. Therefore selection
of numbers must also be considered as it may affect the sales.
35
3.4.10 Security of the Development Area
Vandalism or theft always becomes problems especially in a new housing
scheme. It often been highlighted during handing over of the houses to purchaser. Such
incidents certainly reflect badly on the security systems adopted by the developer to
safeguard the customers’ properties. The excuse of that bit is not always possible to nab
the culprits. In some cases, it had even found out that the acts were committed by the
insiders. This affects the future products launch or sales. Therefore, developers should
plays a bigger roles to ensure that the customers’ properties not been vandalized or
stolen in order to give them more confident on security matter in the development area.
The gated community which is protected by security personnel, who man the guard
checkpoint, and conduct regular patrols is one of the example introduce by the
developers. When stringent measures are employed and the security systems updated
from time to time, it is certainly possible to overcome the weakness and end such
disgraceful acts committed by irresponsible persons. The only se back is that the
residents may require paying monthly charges to the management office for the comfort
of the security.
3.4.11 Anti-termite Treatment
Anti-termite treatment is to ensure that termites are eating into the various
wood/cellulose materials in the house. These materials could be wooden door frames,
wood skirting, kitchen cabinets, roof trusses and even things like carton boxes, books,
old newspaper and furniture. Being cryptic in nature, it is normally found out too late
when the damage is done. As prevention is always better than cure, to protect the house
with a treated zone is always advocated especially when the house is being built or at
pre-construction stage. The built-up area would be sprayed with termiticide at different
at different stages of the construction. However, due to new technology and
36
development of scientist, today the treatment could be done at the post-construction
stage. The termiticide would be injected through the concrete and into the soil.
3.4.12 Feng Shui
There are people who see Feng Shui as a cult practice, as it seems to involve
being part of a following and having to “believe” or have faith in order for it to work.
For many people, this concept of Feng Shui suggests the need to change one’s faith or
accept another faith. Thus, Feng Shui and their personal faith are not reconcilable.
People tend to believe that Feng Shui could be benefiting them and helping them.
Design such as the main door, the kitchen and the bedroom and the location could be
important parts of the matter to look at in the Feng Shui. The main door is given
significant priority because that is the entrance to the house, for residents of the
property and for the Qi. The main door is considered the Qi Mouth of a home. The main
door is considered the primary reference point in any system of Classical Feng Shui.
The kitchen is where food is prepared and so is also extremely important. Food
nourishes and gives energy and strength to go about the endeavours. The bedroom is
where residents send time resting and sleeping. Out of 24 hours a day, most people
spend between six to eight hours in their bedroom. As such, it is important that the
bedroom is located in a place that is conducive for rest, recovery and sleep with stable
and rejuvenating Qi.
3.5 Developer Strategy
Developers usually have their own strategy of implementation for promoting of
their houses. The purpose is to enhance their property sales. They usually resorted to
various techniques, including aggressive marketing and customer loyalty programmes
to promote their products. Some other common strategies are such as house pricing
37
strategy; provide free legal fee(s); reduce in maintenance fee (if applicable); provide
freebies in addition to the sale of the property such as built-in cabinet / TV / air-
conditioner / security alarm system /auto gate / early bird discount and etc.; campaigns
(carnival/party/lucky draw etc); market research / survey; investment plan / guarantee
rental return /time sharing plan; press release / conference; loyalty programme; referral
programme; number of unit of house for each launch; show house; scale model(s) of
houses; construction of houses before launching; advertising tools.
3.5.1 Sales and Marketing
Marketing is one of the most powerful tools employed by organizations in their
never-ending struggle for survival and growth. It came from Greek word ‘strategia’
which means the art of the general. Kaufman (1987) has defined the marketing as the
process that facilitates the exchange of goods and services between producers and users
to the satisfaction of all parties. Some consider marketing simply as pricing gimmicks,
advertising, and hard-sell. Dalrymple et al (1995) has defined marketing as the process
of planning and executing the conception, pricing, promotion, and distribution of ideas,
goods, and services to create exchange that satisfy individuals, organizations, and
society. Boyd et al (1998) has indicated that marketing is a social process involving the
activities necessary to enable individuals and organizations to obtain what they need
and want through exchange with others and to develop ongoing exchange relationship.
Kotler and Armstrong (1999) have defined marketing as the delivery of customer
satisfaction at a profit and a social and managerial process by which individuals and
groups obtain what they need and want through creating and exchanging products and
value with others.
Marketing strategy is becoming increasingly important for developers. Large
sum of money, therefore, are being budgeted for in their marketing plans. Malaysian
Institute of Management (1992) has stated the important of marketing which is also the
38
combination effort for discovering, creating, arousing and satisfying customer needs
and of course no less than a profit to be generated.
Sales of the houses would only start after all application pertaining to land
matters and building plans have been approved together with the Developer License
plus Sales and Advertising Permit been obtained. From here on, the Sales and
Marketing Department would hold most of the responsibilities to promote sales of
houses. When the buyer has decided and chosen his/her unit, he or she is required to
sign the Sales and Purchase Agreement (SPA) within certain period of time allowed by
the developer. In normal circumstances, the period allowed for the purchaser to the
Sales and Purchase Agreement is within thirty (30) days from the date of purchased of
the property. Upon signing of the agreement, the purchaser is required to pay ten
percent (10%) of the purchased price. Then only the sale is considered done or closed.
Progressive billing, which is for the remaining of 90% of unit price, would be
only started when the notice of completion for each stage of work as stated in the SPA
which has been certified by the project architect and sent to the purchasers by the
developer (refer to Appendix 3). Upon received of the notice of completion together
with Architect’s Certification on stage completion attached, the purchaser is duty bond
to ensure that the amount of payment request should be settled with the developer
within fourteen (14) days from date of notice issued. Penalty of interest ten percent
(10%) will be enforced after the expiry of the grace period.
3.5.2 Roles of Marketing Manager
Bryan (1981) has defined the role of the manager within any organization which
is basically made up of three fundamental functions: planning, implementation and
control. Marketing a service for profit requires the same professional approach if the
probability of success is to be maximized. Just trying out a new marketing idea without
39
adequate planning or control can seriously affects a company’s reputation if it goes
wrong. It is recognized that a service organization has to continually re-invent its
reputation with every transaction with every customer and therefore cannot afford to
risk leaving any bad memories in the minds of its customers.
The marketing managers are constantly faced with the necessity of defining the
problems areas. They must make decisions concerning target markets and about the
marketing mixes best adapted to these markets. They have to make assumptions
concerning competitors’ actions and about the uncontrollable and ever-changing
environmental factors. It is the task of marketing research to help the marketing manger
make better decisions and to choose wisely among alternative marketing strategies. It
should aid the manager not only in planning but also, through the feedback it provides,
in controlling.
3.5.3 Marketing Strategy
Marketing strategy is concerned with finding sustainable ways organizations to
compete in a continuously changing world. According to Moore (1993), the principal
component of a marketing strategy was consisted of two parts. One is to crate value and
another was to deliver value as shown in Figure 3.1. Cravens et al (1999) has stated that
marketing strategy is an on going process of making decisions, implementing them, and
gauging their effectiveness over time. In order to win in the marketplace, one of the key
factors is setting the correct strategic direction. It is also important for guiding the
developer to achieve its objectives whether in the short, medium or for long term. Focus
should be on customer needs and markets requirements, and designs an effective
strategy to meet market requirements and achieve customer satisfaction, by using the
best available resources. Aaker (1992) explained that the strategy process should
include of external and internal analysis as depicted in Figure 3.2. The strategies would
include the type of houses to be introduced in the market, the competitors analysis, the
40
targeted customers, and the strategies that going to be employed during product
development and sales promoting. Cravens had suggested ways to design and manage a
marketing strategy as shown in Figure 3.3.
Figure 3.1: Principal components of a marketing strategy
CREATING VALUE
DELIVERING VALUE
Marketing Cost Product Unit Cost
PRODUCT OFFER - Design - Quality - Price - Message
Required Co-ordination
Competitive Products
Competitive Environment
MARKETING SUPPORT - Awareness - Availability
Customers’ Usage Patterns and Purchase Motives
Customer Characteristics
Product’s Presence Among Alternatives Preference Among Available Products
41
Figure 3.2: The strategy process
EXTRENAL ANALYSIS -Customer analysis Segments, motivations, unmet needs. -Competitive Analysis identify, strategic groups, performance, objectives, strategies, culture, cost structure, strengths, weakness -Market analysis Size, projected growth, profitability, entry barrier, cost structure, distribution system, trends, key success factors. -Environmental Analysis Technological, governmental, economic, cultural, demographic, scenarios, information need areas.
SELF-ANALYSIS -Performance Analysis Profitability, sales, shareholder value, value analysis, customer satisfaction, product quality, brand associations, relative cost, new products, employee attitude and performance, product portfolio analysis -Determinants of strategic options Past and current strategies, strategic problems, organizational capabilities and constraints, finance resources and constraints, strengths and weakness.
Opportunities, threats and strategic questions
Strategic strengths, weakness, problems, constraints and questions
Strategy identification and selection -Review mission alternatives -Identify strategic alternatives -Product market investment strategies -Functional area strategies -Assets, skills, and synergies -Select strategy -Implementation-the operation plan -Review of strategies
42
Figure 3.3: Designing and managing a marketing strategy
Marketing Situation Analysis
Marketing Program
Development
Implementing and Managing
Marketing Strategy
Designing Marketing Strategy
3.5.4 Marketing Plan
Other than that, marketing plans such as actions guidelines for activities to be
implemented, who does what; timing and location of launching new product and how
implementation can be accomplished are also very important. It may not be advisable to
do the launching in the month that coincide with the seventh month of the Chinese
Calendar if the targeted group of buyers is mainly come from Chinese, as most the
group are quite reluctant to purchase any property especially houses during the month
of Ghost. Therefore, in referring to consumers and market change, do not stand still if
things are changing and always keep the strategy up to date and workable.
43
3.5.5 Competitor Analysis
Boyd et al (1998) has defined that marketing research is a technique used to
identify and define marketing opportunities and problems; generate, refine, and evaluate
marketing actions; monitor marketing performance; and improve understanding of
marketing process. The market need to be defined so that the buyers and competition
can be analyzed. Competitor analysis is part of the market research. Therefore, a market
survey or research on those competitors who are also marketing the similar products or
properties are often been carried out to determine their strategies; plans; strengths and
weaknesses. It is usually been carried out primarily (that is within or near the
development surrounding), and secondarily on those who are far away from the
development area. The purposes of performing the competitors analysis are to
determine the rival’s strength in turn of similar products offered by them, the location,
pricing, their selling points, size of the products been offered and their marketing
strategies employed in the market. This will allow the developer to have chances to look
into the competitor’s products and strategies used so that the developer can reposition
and improve himself if necessary on the product quality, marketing and timing
strategies. Lastly, do not forget to continue keep track and monitor on the competitors’
movements such as on their coming new products, advertisement attitudes and others.
Method of market survey is shown in Appendix 2.
3.5.6 Scale Model
Scale models houses are been constructed in accordance with the actual design
of the houses and mostly by hardcover paper except that they are in a smaller scale as
been shown in Figure 3.4. The aim is to show to the potential buyers about the type and
design of the houses offer for sales by the developer in a more convenient manner. With
the model, the developer might not need to construct the actual houses at the project in
order to start sales. The potential buyers could also have the chance to view houses
44
together with the interior design or layout of the houses without going to the actual site
or wait until the actual houses re completed. Even the interior of the house could be
shown to the potential buyers.
Figure 3.4: Scale Models
3.5.7 Customer Services
Customer service is one of the most important factors of marketing
management. Advertising of good quality of houses would not buy real rewards unless
enquiry handling is sharpened nor the growth be achieved without adequate attention
being given to the major areas of customer service. More and more developers have
realized that growth potential exist through the development of a first-class service. It is
also another way to build the company’s reputation. A good sale staff trained to
understand the products (houses) and people problems would attempt to sell the merits
of the product and pride in showing the customers all the beneficiaries when purchased.
It should be customers oriented. Ruud (1987) had included some rules adopted by the
service-oriented companies such as after-sales service is a sales promotional function,
product to be fully and satisfactorily operational when the product is sold; while
maintenance is the safeguarding the company’s reputation; service is the means of
making a customer’s investment pay and come again.
45
Levinson (1994) has stated that happy customers provide a steady revenue
stream. They also provide word-of-mouth advertising. Each happy, satisfied customer
provides free, unbiased publicity to several friends and associates. Unhappy customers
do the opposite. It costs a lot less to keep a customer happy than to find a new one. It is
vital to maintain good relationships with customers. Repeat business from existing
customers does not require extensive advertising and promotion.
3.5.8 Skill of Presentation/ Closing the Sales
A large part of the job selling is built upon skill in the use of techniques and
methods. This is true particularly in demonstrating, delivering the sales presentation,
answering objections and closing the sale. The skill of the sales personnel is also one of
the vital factors to promote sale. It is important to note that when the potential buyers
come to the sale office or show unit, the only thing left in the marketing is to close the
sale. This in turn depends on the sale personnel’s performance. Ryan (1981) has stated
that closing the sale includes understanding and overcoming a buyer’s objections.
Recognizing excuses versus objections, spotting buying signals and being able to deftly
get the customer’s viewpoint, then probing for difficulty, counterattacking and making
the sale are the heart of personal selling. Skill can be developed only through much hard
work and intelligent practice. Practice perfects the skill to the point where it is effective
and it then becomes a natural part of the sale representative’s equipment. A list of all
possible questions or objections is necessary to be developed as this would help in
answering them during presentation. Right tone, right voice inflection and right
emphasis for answer to objections is also important for salespeople. Therefore more
trainings is essential for the sale personnel to upgrade or sharpen their skill and
confident.
46
“Do not forget that follow-up should be carried out as it is the building of
goodwill after the initial sale or contact. Often even a phone call when the salesperson is
in the area will maintain the sales contact and promote future sales.”
3.5.9 House Delivery Time
In order to ensure that houses would be delivered puntualy to the buyers, the
actual progress has to match or beat planned progress. All significant stages of the
project must take place no later than their specified dates, to result in total completion
on or before the planned finish date. This time scale objective is extremely important.
Late completion or delivery of houses, is unlikely to please the house purchaser. Failing
to keep delivery promises would surely afect the developer’s reputation and is likely to
have a knock-on effect and disrupt the company’s following launches.
In their search for tools to maximize profits or services at a reasonable cost,
developers want reliability, efficiency, safety and good on-stream time. On-time
completion allows developers to meet production quotas and schedules, while avoiding
high cost of added interest and start-up costs. It also results in the added bonus of a
smooth start-up and rapid acceptance of the facility. Finishing within budget avoids
nasty surprises and upsetting the developer’s financial plan. Project overrun lead to
slower payout, and negate the chance for early return on the investment.
3.5.10 Reputation of the Developer
Responsible developer who always hand over houses to the buyers on time or
earlier, and have taken good care to ensure that quality of the houses are of very high
standard and all specifications as stated in whatever advertisement have been fulfilled.
47
They would continue to serve the buyers well and keep on maintaining good rapport
with them. This would earn and help to keep the company as a trusted and responsible
developer.
3.5.11 Value-added Services
The demand for residential projects with value-added services among young
adults was very high. However, for the older buyers who bought property as an
investment, it would very much depend on the base lending rate (BLR). Developers
were building houses and providing options such as housekeeping, laundry and
coverage services for buyers as they were deemed to be part and parcel of a house
nowadays. Developers were also offering top-notch security features as security was
also one of the prime concerns for buyers. Some developers offered 24-hour security
surveillance, home automation system, smart home features, broadband access and
CCTV to guarantee residents complete peace of mind.
Although the developers’ main concerns are escalating costs of building
materials, which would leave them with no choice but to increase prices of their
properties. The effect on the market sentiment of an increase in interest rates and rising
competition had resulted in developers offering a host of freebies – from free
maintenance charges, discounts, home furnishing packages, guaranteed rental returns to
free golf memberships. To survive, developers were trying to woo potential buyers with
better and more distinct products than their rivals.
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3.5.12 Gift Campaign
The campaign allows qualified buyers the opportunity to choose house
furnishings such as furniture, awning, built-in wardrobes, built-in-cabinet and; home
appliances such as air-conditioners, television, water heater, light fittings, foot massage;
travel packages; discount vouchers; water purification system and etc.
3.5.13 Brochure Design
During the brochure design state, product briefing is been conducted with a
number of the advertising agents whom been invited. After the briefing, they are
supposed to present or suggest ideas on their creative design of the brochures to the
developer’s needs at a definite time. The design of the brochures presented later would
be commented and the respective agent is expected to improve his design to
accommodate more developer’s requirements. There may be another one or two rounds
of presentations before final decision to select the design. The design contract would be
awarded to the advertising agent once his design been selected. The selected agent again
is required to fine-tune the design until client’s satisfactory for brochures, banners,
buntings, billboards and newspaper advertising plus together quotations of the overall
cost including the design concept which would be used as advertising tools. It is
important to note that final design selected should be of creative, innovative, much
bigger colour pictures than smaller one with too many words (let the picture tell the
story) and impressive type to create attention, influence and can easily be absorbed by
receivers or buyers.
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3.5.14 Advertising
Advertising is the communication of a message to the receivers or customers
through selected media such as magazines; newspapers; web site, radio; television;
brochures and others. It could change people perceptions, command loyalty and build
brands. Mandell (1974) had distinguished advertising from personal selling due to its
non-personal presentation. Ruud (1987) had stated that the purpose of the advertising
was with the intention to influence people to purchase a product or service or otherwise
react in a desire manner. Roman and Maas (2003) had defined that the advertising as the
art of delivering a sales proposition in an attention-getting, involving vehicle and
positioning the product uniquely in the consumer’s mind. Gray et al. (2003) described
that the primary function of advertising was to provide information, reinforcement, or
assurance. In order to relay the right message to the right people, the developer much br
It is one important method of stimulating demand and finding buyers is through
advertising. Ideally, it can create awareness and encourage immediate buying action and
generate traffic for developer by attracting new customers. The end result is hoping that
a greater sale can be achieved with the combination of advertising and sales personnel.
3.5.14.1 Advertising Tools
An advertising strategy is the course of action, expressed in a plan to accomplish
the company’s advertising objectives. The Rudd (1987) emphasized that the advertising
message should able to address itself about the product or service. He also stated the
important of selecting a proper media as it represents the largest single expenditure in
the advertising budget. The aspect in the advertising strategy should cover the timing
and frequency of advertising. Boyd et al (1998) has highlighted that advertising
decision making is concerned with setting objectives, deciding what the message should
be and how to present it, choosing which media types and vehicles to use with what
50
frequency, and analyzing the effectiveness of the advertising program. Kotler et al
(1999) has emphasized that a campaign might begin with a good media opportunity and
followed by advertisements designed to take advantage of that opportunity. Message
and media should blend harmoniously to create an effective overall advertising
campaign.
Advertising in the type of media depend the advertisers’ financial budget
allocated and the size or amount of the product need to be disposed in the market as it is
normally quite expensive. Therefore, other than the creative in the advertising, there
should have a proper and effective strategy to ensure that the amount spend in the
advertising will not be drained away. As the advertising fee is also formed quite a huge
amount of the money to be spent, therefore, the developer should plan properly on
matters such as what to advertise; which design should use for adverting; who is the
targeted group to receive the message; where to advertise; when to advertise, how
regular or frequent to advertise and so on. But again, the selection of type of advertising
would usually depend on the budget allowed for and the need to advertise.
3.5.14.1.1 Brochures Distribution
Brochure distribution is also a form of the direct mail method. It is advertising
literature with or without the picture message and is been sent through the postal system
or distributed directly to the potential customers. Through this medium, it allows the
developer to select where the brochures are distributed. The developer can develop their
own mailing lists or buy suitable ones from other organizations. It can personalize to the
needs of that particular group or addressed to a specific individual. The message may
restricted by space limitations but are advised not to have too much details to create
curiousness to the potential buyers and avoid been treated as a junk mail. The timing of
the advertising is completely under the developer’s control.
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Figure 3.5: Brochures
3.5.13.1.2 Outdoor Advertising
According to Boyd (1998), unlike most other mass communications media,
these serve no other purpose than carrying advertising and create awareness among
people. Outdoor advertising usually included of using the banner, bunting and billboard.
3.5.13.1.2.1Banner
Banner is one form of outdoor advertising medium by sending the message to
the people using picture message or literature message. The messages are printed on a
piece of cloth. It can be of various sizes and be located at a strategic place and expose to
the audience on the move. Various typest or sizes of the bnner are shwn in Figure 3.6 –
3.8.
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Figure 3.6: Banner-type 1 Figure 3.7: Banner-type 2
Figure 3.8: Banner-type 3
3.5.13.1.2.2Bunting
Bunting has quite similar function but in turn of size, it is much smaller and
usually been hung on the poles along the road as shown in the Figure 3.9. It helps to
create awareness among the people and sometimes acts as the indicators of direction by
putting up more along the route to the designated area.
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Figure 3.9: Bunting
3.5.13.1.2.3Billboard
Billboard and banner almost have the similar way of passing the message to the
potential buyers. They come in variety of shapes and sizes as well as location
opportunities as shown in Figure 3.10 – 3.12. The only difference is the material used is
usually of the better quality, promoter preferable to have bigger size and it is more
lasting than the banner and it is more costly. It is usually been installed at certain
strategic location along motorways. As it has only a few seconds to deliver message to
the people on the move, therefore the message should be clear, simple, with big picture,
few but bold lettering and primary colour to be more effective.
Figure 3.10: Billboard- Type 1 Figure 3.11: Billboard- Type 2
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Figure 3.12: Billboard- Type 3
3.5.13.1.3 Newspapers
This type of advertising is good for special promotions, grand openings, and for
communicating some thing that must be known immediately. It is an immediate,
practical, important, and to a great extent and authoritative. Almost everyone reads
newspaper everyday. Gray et al. (2003) had expressed the efficiencies of the
newspapers that could reach people with above-average incomes and education. With
the flexibility of the newspaper, everyone can run an advertisement of any size at any
time of the week in any section of the paper. The advantage is that the type of audience
can be selected by advertising in specific sections such as the sports page, business
section, or entertainment section.
Most metropolitan newspapers have special geographic editions allowing
circulation in the desired market area or at a regional level which will be at a much
cheaper rate of fee compare to nation wide distribution. Therefore, developers can also
select the newspaper which has the widest coverage or most readers but at different rate
of fee. Most newspapers do allow or provide free write-up column and publication in
the paper when the developer has chosen to advertise his products. The short closing
date of newspaper is another advantage that allows advertisers to make last-minute
changes or to cancel on a few days’ notice.
55
Before the insertion orders can be issued, a schedule must be drawn up stating
when the advertisements are to appear. This schedule is not determines haphazardly, but
is designed to assure that advertisements are timed for maximum effectiveness which
can generate sales. Some of the advertisements of houses for sales to the potential
buyers as appeared in the newspaper as shown in Figure 3.13.
Figure 3.13: Newspaper’s advertisements
3.5.13.1.4 Magazines
Roman (2003) has commented that this medium was more suitable for regional
and national advertising programmes than for strictly local coverage. Magazine has the
capability of sending message to audience that has a special interest in publication and
is likely to be paying close attention. Readers expect information in print – they accept
and even seek out ads as part of the medium, as retailers and publishers of fashion
magazines know. But they are less flexible than newspapers because most magazines
require advertising copy to be in the publisher’s hands several weeks before the
publication date. This requirement prevents any extensive use of current events in copy
and makes it difficult for the developer to make last-minute copy changes. Therefore
selection of the type of magazine to be advertised would depend on the circulation and
type of readership. Various magazines used for the advertisement is shown in Figure
3.14.
56
Figure 3.14: Magazines
3.5.13.1.5 Radio Broadcast
Roman (1998) had surveyed and found that most of the people own car or use
car travel to and from work. Almost every car has a radio nowadays. Therefore, it is
another type of useful advertising tool available for the developers. It is less involving
than television but offers economy and the opportunity to target specific audience. It
specializes in their programs, newscasters, and music by tailoring their programming to
selective audience segments. As it is without the picture, therefore listeners are easily
distracted. In order to bring one focus on the advertising purposes, the message should
be creative, direct and clear. Perhaps the weaknesses can also be replaced by creative
voices, sound and music. Scripts read by the programme host, can capitalize the
audience on his or her credibility and personality. It can also be delivered effectively
through an elaborately produced prerecorded spot, on-air plug read by experience DJ or
programme host.
In most cases, they can be flexible, open to new ideas and easily accessible. It
has more influence at the local or regional level. The audience is related to the type of
program. For example, rock music would attract more teenagers and country or western
music generally appeals to blue-collar sector. The developers can buy air time any time
57
of the day and select the audience. It can reach people while they are driving or doing
works. It also allows listeners to use their imaginations and have a one to one
relationship with the announcer. It is dynamic but sometime the message can be harder
for listeners to recall when there are too many commercials air in sequence. It is often
used to reinforce television advertising.
3.5.13.1.6 Television Broadcast
Television is best at communicating images and symbols because it can shown
real life product image; colour presentation; sound; animation (its pictures move) and is
transmitted directly into homes. By using television, the advertising message can reach
a large audience either locally, regionally or nationally. It is most dynamic medium
because it appeals to the senses of sight and hearing and therefore can dramatize spoken
words to make it more effective and unique.
It is so common and has become a necessity to people that almost everyone has
at least a set in his home. Most people start watching television programs after 6.00pm
that is, after working hours during working days. This means that more audience can
reach at any time after that hour.
The only set-back nowadays is that it getting harder all the time to viewers to
pay attention to the commercial. Most advertising messages are been ignored. In order
to attract more viewers to the advertising, it is better to do it in more creative way, and
more frequently. To create awareness among viewers it is good to tie up with some
interesting programs such as the property talk program, famous movies or events which
are been enjoyed and watch by most of the people.
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3.5.13.1.7 Telemarketing
This is by using the telecommunication way of sending the desired message to
the selected potential buyers. It use phone to offer and sell products or services.
Levinson (1994) had described that telemarketing as invasive and offensive to many
people; however, it sometimes works. To be more efficiency, the promoters must be
well-trained, some self-restraint and have good communication skills.
3.5.13.1.8 Roadshow
It is a form of exhibition or campaign that provides developer chance to exhibit
and sell their products by display in a scale model houses to the public which normally
been held at big commercial centres during a specific trade show. Rental space for
exhibition and therefore it can be expensive. It is quite effective in creating the
awareness among the people rather than sales objectives as there will be a lot of
competitors around whom also doing the same promotion of sale at the same time and
place. At the exhibition, it also provides the opportunity for the promoters to learn from
other similar competitors and also to gauge the reaction to the products and services.
3.5.13.1.9 By Word of Mouth
Business owners should also learn the importance of word of mouth publicity as
buyers very often would tell their friends and family regarding the house or product that
he has learnt or bought. Roman and Mass (2003) had reported that by word of mouth, it
would be one of the most cheapest but powerful and successful technique of marketing
tools. Bad or good, people tend to get influent easily through the contact of another
59
person. Therefore, if the product is been defined properly and suit the need of the
buyers, the products are very fast been taken up.
Misner (1994) had highlighted that people tended to talk about the company
when they are unhappy than when they are happy or satisfied. Therefore, good customer
service generally does more to reduce negative word of mouth than it does to
substantially increase positive word of mouth. In essence, good customer service can
reduce negative word of mouth, but to significantly increase the business volume, it
needs to do more than increase the quality of the customer service. It can also greatly
enhance the word of mouth based business by rewarding the people who has acted as a
referral as people like to be recognized for their efforts.
3.5.13.1.10Web Site
Thanks to the advancement of the information Technology, now the developer is
able to develop a very advance technical marketing tool such as promoting sales
through internet or its web site. Internet is not just another new place to advertise, it is
also another way to identify and engage buyers. With more people now researching
major categories of purchase such as travel and air fare online, creating an electronic
brochure on the internet has improved dramatically.
The web site can now be designed by using the advance information reality
technology that provide a very real, convenience and comfortability of viewing the
products for buyers through internet with latest technology which can be in 3-D form.
No doubt, at present the cost of producing this type of advertisement through internet by
using the visual realization technology is still quite expensive but it does help to safe the
overall spending cost. Said, instead of spending RM50,000 – RM80,000 on the
production of the visual realization web site advertisement, there would be a cost saving
of RM180,000 – RM200,000 for a unit of show house to be constructed on site
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Table 3.7: Profile of major media types
Item Major Media Types Advantage Disadvantage
1 Newspapers -Flexibility
-Timeliness
-Good local market coverage
-Broad acceptance
-High believability
-Short life
-Poor reproduction
quality
-Small pass-along
audience
2
Magazines -High geographic and
demographic selectivity
-Credibility/prestige
-High quality reproduction
-Long life
-Good pass-along readership
-Long ad-purchase lead
time
-Waste circulations
-No guarantee of
advertisement position
3 Radio -Mass use
-High geographic and
demographic selectivity
-Low cost
-Quick to produce
-Only audio presentation
-Relatively low audience
attention compare to
television
-Fleeting exposure
4 Television -Good mass-market
coverage
-Combining sight, sound and
motion
-Appealing to the senses
-High attention
-High reach
-High cost
-High clutter
-Fleeting exposure
-Less audience
selectivity
5 Direct Mail -Audience selectivity
-Flexibility
-No advertisement
competition
-Personalization
-Relatively high cost
-A junk-mail image
6 Outdoor advertising
-Flexibility
-High repeat exposure
-No audience selectivity
-Creative limitation
…
To be cont’d
61…cont’d
Outdoor advertising
(cont’d)
-Low cost
-Low competition
-Good positional selectivity
-Limited time to read
7 Road show -Provide chance to exhibit
the products in term of scale
models
-Organize by specialist
-High cost
-Space rental
-Exhibit design
-Competitors around
8 E-mail -Large domestic and
International Market
-High cost
-Expose to virus
attack/hacker
-Audience control
exposure
Source: Kotler et al (1999)
3.5.13.2 Business to Business
This is a way of working together through partnering with the well-known
company such as public listed banks or insurance companies who may have the same
objectives to promote sales but of different products. For example, the developer could
tie up with the insurance agency to promote sales of houses by giving a form of
investment return guarantee to the buyer, such as guaranteed return of full capital
invested after 30 years of investment in the scheme. This extra feature could be
incorporated in the product itself or acts as an option to the house buyers during the
promotion period. By doing so, it provides benefit to both of the parties and without
spending any additional Ringgit. It is a win-win situation.
62
3.5.13.3 Corporate Sales
This is quite similar to the trade show at the commercial centres except it is held
at the selected big corporate company to create awareness and promote sales to them.
Scale model houses would be displayed and any enquiry regarding the houses would be
entertained during the promotion period.
3.5.13.4 Sales Agent
This would act as the last resource for the developer after all other advertising
strategies have failed or during business downturn. It is far better to get the right agency
from the start, learn to be a better client and work on the relationship. Selection of agent
should base on the size of networks the agent has. It should consist large network and
has strong connection with others plus the skills and experience. No doubt, they are
more professional and committed in doing sales than the developer’s promoters, but it is
quite costly. To engage the sales agent, all the advertising expenses will be bear by the
developer. Other than that, the sales agents will also charge 2% of the house price to the
developer as their commission for each sale been done. To be more effective, people
from both parties must have confidence, trust and cooperation between each other to
work through the low points.
3.6 Typical Complaints from the Buyers
The Star (2001) had rerported that most common complaints received from the
buyers are: late delivery of the houses; houses deliverde withput Certificate of Fitness
for Occupying; Poor workmanship ; misleading Advertisements and houses hand over
without the water or electric power supply. The complaints would surely affect the
63
reputation of the developer and its property sales. Therfore it is another important aspect
require attetion by the developer. Less or no complaint from the customers reflects good
quality of houses have been delivered to the buyer. This would has direct or indirect
effect in boosting the future launch or sales of properties by developers.
3.6.1 Late Delivery of Houses
This is where the houses are not be able to deliver to the purchasers within the
timeframe stipulated in the Sales and Purchase Agreement. In accordance to the clause
as stated in the Sales and Purchase Agreement, the purchases are entitle to claim for late
delivery of the houses at the rate of 10% per annum o the purchased price from the
developer. But very often, most of the purchasers are not able to recover the full sum or
in some cases, not any at all as the developer claimed that they are in financial
difficulty. Hence, even when the purchasers take legal action against the developer and
has a favourable judgment, they may still facing difficulty to realize their full amount of
claim as the developer had no money. Sometime, the purchasers are faced with more
legal problems and cost incurred during the legal process. However, with the
understanding of the government, the Ministry of Housing has set up Tribunal in 2002.
The aim is to assist the purchasers to make claim from the developer with the conditions
such as:
1. The claim should be filed with the Tribunal not later than 12 month from
i) The date o Certificate of Fitness for Occupation issued or
ii) The expiry of the Defect Liability Period as stated in Sale and Purchase
Agreement.
2. Sale and Purchase Agreement is concerned the house is been built on the
land only means for housing accommodation.
3. Each claim amount should not exceed than RM25,000.
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3.6.2 Poor Quality of the Houses Been Delivered
There are many complaints from the house buyers that their houses delivered are
of poor quality or with a lot of defects. Some of the more common defects have been
highlighted were such as roof leak, wall crack, bathroom leak and the material used are
of the poor quality type. Even though there is a clause in the Sales and Purchase
Agreement spelt out that the developer would have to rectify the defects at his own cost
and expense, but again, most of the developers would delay it and only rectify the
defect at a very late stage or after received many complaints. Worse still, when the
defect rectified has reoccurred at the same place. Other problems are such as about the
recovery of costs from the developer if the buyers themselves rectify the defects or the
defect showing up after the expiry of the defect liability Period.
Fighting the case in court would definitely involve a very long drawn legal
battle which is also financial taxing. However, for those cases that pass all the
conditions set by the Ministry of Housing, the buyer could bring the cases to the
Tribunal set by the ministry for assisting in the claim against the developer. The only set
back was that most of the buyers are not very familiar or aware of the term and
conditions of the claim or worst still the available of the assistance.
3.6.3 Houses been Delivered without Certificate of Fitness for Occupation
This is where architect or engineers work hand in glove with the developer in
issuing the certificate of completion even before the actual completion of the houses.
The developer has the intention to hand over vacant possession of the houses to the
purchasers without applying for Certificate of Fitness for Occupying. More often than
not, this goes unnoticed because most of the financial institutions only depend on the
architect’s certificate when releasing money from the purchasers’ loan. In this case, the
purchasers would surely suffer, sometimes to the extend of the purchaser been
65
summoned by the financial institutions because they are not able to service their loan
regularly due to other commitments.
3.6.4 Houses Been Delivered without Water and Electricity Supply
The houses have been constructed and handed over to the buyers but without the
water or electricity supply been connected. No doubt, the responsibility of the developer
end with the term that all internal works has been constructed and ready for the external
supply’s connection, it could still be the developer’s fault due to developer failed to
contribute the amount of money required by the authority concerned.
3.6.5 Misleading Advertisement
This is where the developer has mislead the customers by not providing the
same quality or specifications as promised or advertised in the brochure, newspaper or
the actual specifications, design or building materials used were differed from the show
unit.
CHAPTER 4
METHODOLOGY
4.1 Introduction
Choosing the correct methodology process for searching the information on
literature review is an important aspect in the study. It helps to understand, widen or
enhance the knowledge related the subject matters discussed in the project. The correct
design of methodology used not only ensuring the project study process been carried
smoothly and effectively, it also help to obtain and achieve its objectives.
In this chapter, discussion would be focused on the study methodology and
procedures utilized. Explanation would be given on how data were been collected and
analyzed in order to achieve the objectives of the study. Data collection should be able
to help or assist in the achievement of this study aim. In this study, relevant literature
information was collected and the other data collection was through structured
interview and questionnaire surveys.
67
4.2 Literature Review
In order to carry out literature review, various means have used to obtain the
relevant information in the forms of books; articles; building journals; newspaper;
reports and others. Most of the information searched was regarding the housing projects
development; the processes of housing development involving developer, consultants
and various government bodies; the influential or pulling factors toward the demand of
houses; marketing strategies and its tools which were useful in the study. A schedule of
time to study and survey was prepared so that it can be completed within the given
timeframe. An on going literature review was also be carried out throughout the whole
process of the study.
4.3 Interview and Survey
It might not be sufficient to study theoretically only. Therefore, finding through
literature review from books; articles; e-journals; newspaper and reports would not be
adequate to fulfill the needs of this research. However, it did played an important role
and helped in designing of questionnaires used for interview and survey. It was also
believed that through interviews of professional people and distributing questionnaire
would be most effective methods for this research. A structured interview and
questionnaire were designed and conducted to solicit information about the demand of
houses and types; home features; strategies and tools implemented by developers to
enhance the promotion of their houses.
68
4.3.1 Preparation of Questionnaire
Process of preparing the questionnaire forms did take sometime. First the
questions in questionnaire survey were been prepared, and referred to the supervisor for
his comments and discussion so that the respondents would give their best and accurate
answers when the forms were been returned. This was to ensure that the objectives in
the study would be achieved later. Please refer to Appendix 3 for sample of the
questionnaire used for the study.
From the existing literature on the construction industry and based on the
preliminary investigation conducted at the outset of this study, it was possible to list
down and categorized them into the current popular demand of types of houses; the
housing features (be it positive or negative related to the end-users’ expectation);
strategies and the effectiveness of the tools used by developers (to enhance their sales of
houses during promotion period and stay in the competitive market). A structured
interview was been conducted and two sets of questionnaire survey was then drawn up.
First set of questions were regarding the respondents (end-users) information;
types of houses available in the market and been demand; all the possible housing
features that could influent the demand of houses were also been listed and lastly, the
sources of information of houses for sales. The respondents were asked to indicate how
significant each item of a list of the related factors was according to their own
judgment. To facilitate the analysis of the responses, the author adopted the Likert Scale
of 1 – 5 of the significant in ascending order for the ranking exercise. A total of 100
first set questionnaire forms were sent out directly and personally to all the participants
(end-users) involved. Of the total number, 40 sets were sent to Malay and Chinese
majority respectively and the remaining 20 sets were sent to Indian and others races.
The second set of questionnaire survey was targeting at the developers regarding
the current strategies which were been used by them during the promotion of houses
and tools used to enhance the demand of their product in the market. The respondents
69
were asked to state their marketing strategy and the effectiveness of the tools used
during houses promotion. A total of 5 different sets of questionnaire survey forms were
been sent to the developers in the construction industry.
4.3.2 Response to Questionnaire Survey
The feedback of the questionnaire was based on the respondents past experience
or their expectations when purchasing houses. The respondents were asked to rate the
preference (with Likert Scale ranging from 1 to 5 in ascending order where 1- Not
preferable; 2- Less preferable; 3- Moderate; 4- Very Preferable and 5- Most
preferable) for each individual factor that could or could not formed part of their houses
requirements according to their own judgment.
It was expected not all questionnaire survey forms were expected to be answered
and returned as some of the respondents might not be able to answer the questions due
to their busy schedule. However, it was hoping that data collected would be sufficient
for studied and analyzed through two methods suggested, that was by using the
Frequency Analysis and Relative Index (RI).
Lastly, all data collected were studied and analyzed. Tables and pie charts were
created to show the significance. The results were been evaluated and used in the
finding of the objectives in the study. A brief summary was produced in order to
conclude the outcomes of the survey.
70
4.3.3 Frequency Analysis
Frequency analysis, which depends on the percentage of respondents giving the
same answer, always plays an important role in this study. It was also been used to
measure the degree of agreement for certain statement. The formula showed as below:
Percentage (%) = (n/N) X 100%
Where:
n = Number of respondents
N = Total number of respondents received.
4.3.4 Relative Index (RI)
To evaluate the ranking of different factors that influenced the demand of houses
from the point of view of the respondents, rating made against the five-point scale
described previously were combined and converted into relative importance indices for
each factor, adopting the relative index (RI) ranking technique (Kometa et al, 2000).
This determined the relative ranking of the different factors by comparing the individual
value of the relative importance indices for each factor. The highest ranking referred to
the highest RI value. The individual numerical rating of each of the identified factors
(from the Likert Scale) was transformed to relative factors, by using the following
formula:
RI = n1(1) + n2(2) + n3(3) + n4(4) + n5((5) 5N
where:
n1=number of respondents for ‘Not preferable’;
n2=number of respondents for ‘Less preferable;
71
n3=number of respondents for ‘Moderate’;
n4=number of respondents for ‘Very preferable’;
n5=number of respondents for ‘Most preferable’;
and N=Total number of respondents.
4.3.5 Limitation of Survey
There are limitations in this project survey such as:
i) As expected, there were not all survey forms answered and collected back,
and there was the risk of respondents misunderstanding questions put
forward, and the research had no ready opportunity to provide clarification
to any question. Hence, chances of wrong conclusion would be drawn from
wrong answers.
ii) The analysis was based on information gathered from a limited number of
respondents which was insufficient to cover all range of end-users (in turn of
various race, age and income groups) to the questionnaire survey which
could also lead to incorrect conclusions being drawn. On the other hand,
lengthy and too detailed questionnaire could discourage people to respond to
the survey, thus insufficient information would be available to be gathered.
CHAPTER 5
DATA COLLECTION AND ANALYSIS
5.1 Introduction
This chapter consists of data collected from both sets of the questionnaire survey
(part one and part two) where the respondents were the end-users and developers. All
data collected were been analyzed and interpreted according to the sources required
respectively. The data were analyzed by using relative index and other non-parametric
statistical technique to identify and indicate the level of preference or significance of
each structured question.
5.2 Respondents Background
5.2.1 End-users
A total of 100 questionnaire forms, of which 40 sets were allocated for Malay
ethnic, another 40 sets were allocated for Chinese ethnic and the remaining 20 sets were
meant for Indian and other minority group. They were sent out personally and directly
to all the participants. The feedback of the questionnaire was encouraging; even though
some of them failed to return. A total of 94 answered forms were collected back, which
73
was equivalent to 94% received. Table 5.1 and Figure 5.1 showed that the feedback
from the respondents consisted of 40 Malay (43%), 35 Chinese (37%), 16 Indian (17%),
and 3 others (3%).
Table 5.1: Number of the first set of questionnaire survey forms received
Respondents Number of form received Percentage
Malay
Chinese
Indian
Other
40
35
16
3
43%
37%
17%
3%
Total 94 100%
Percentage Breakdown of Respondents
Malay43%
Chinese37%
Indian17%
Others3%
Malay
Chinese
Indian
Others
Table 5.2 and Figure 5.2 shown that the age of the participants in Figure 5.1: Percentage breakdown of respondents (end-user) in survey
74
Table 5.2 and Figure 5.2 showed that the age of the participants in the survey
where 32 of them less than 31 years old (34%); 39 between 31 to 40 years old (42%),
and 23 of them were greater than 40 years old (24%).
Table 5.2: Age of respondents participated in the survey
Age Group Number of form received Percentage
< 31 years
31 – 40 years
> 40 years
32
39
23
34%
42%
24%
Total 94 100%
Percentage Breakdown of Age of Respondents
<31Years34%
31-40 Years42%
>40 Years24%
<31Years31-40 Years>40 Years
Figure 5.2: Percentage breakdown of age of respondents (end-user) in survey
75
Table 5.3 and Figure 5.3 shown that 9 of the respondents (10%) participated in
the survey were with monthly household income earning less than RM3,000 per month;
54 have household income between RM3,000 to RM5,000 per month (57%) and the
remaining 31 have more than RM5,000 income. In the other word, the majority of the
participants in the survey were having a monthly household income of between
RM3,000 to RM5,000 per month (33%).
Table 5.3: Household income group participated in the survey
Household income per month Number of participants Percentage
< RM3,000
RM3,000 – RM5,000
>RM5,000
9
54
31
10%
57%
33%
Total 94 100%
Percentage Breakdown of Household Income of Respondents
<RM3,00010%
RM3,000 - RM5,00057%
>RM5,00033%
<RM3,000RM3,000 - RM5,000>RM5,000
Figure 5.3: Percentage breakdown of household income (end-user) in survey.
76
The data was collected from a total of 94 respondents despite 100 questionnaire
survey forms sent out. As mentioned in the scope of study earlier, the types of houses
have been classified into six (6) categories as they are the most common types of house
built by the developers in Malaysia. Table 5.4 shows the analysis of the type of houses
preferred by house buyers using Relative Index (RI) and been ranked in accordingly
with reference to the index. Frequency analysis was been used as a way of support in
turn of the degree of agreement in the survey.
Table 5.4: Preference of type of houses
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3 Type of Houses
No. of Respondents % %
RI Rank
Double Storey Link House 0 7 22 30 35 7 69 0.798 1 Condominium/Apartment 17 18 18 20 21 37 44 0.621 2 Single Storey Link House 11 20 29 17 17 33 36 0.619 3 2 ½ Storey Link House 5 27 36 17 9 34 28 0.596 4 Semi-detached House 20 31 23 13 7 54 21 0.506 5 Bungalow 33 25 19 8 9 62 18 0.462 6 Notes: 1. Total number of respondents was 94 out of 100 survey forms sent which represented 94% received 2. Scale used: 1-Not preferable; 2-Less preferable; 3-Moderate; 4-Preferable and 5-Most preferable.
The built-up area of the building was intentionally been broken into six (6)
categories which start with the area less than 1,000 square feet and up to more than 4,00
square feet with the purposes of finding which is the most comfortable, affordable and
preferable of built-up area by the house buyers in the market. Table 5.5 shows the
analysis of the built-up area preferred by house buyers using RI and again been ranked
in accordingly with reference to the index.
77
Table 5.5: Preference of building built-up area
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3 Built-up of the
Building No. of Respondents % %
RI Rank
1,001 ft2 – 2,000 ft2 6 10 13 31 34 17 69 0.764 1 2,001 ft2 – 3,000 ft2 4 11 28 27 24 16 54 0.719 2 3,001 ft2 – 4,000 ft2 26 26 24 13 5 55 19 0.483 3 Less than 1,000 ft2 30 21 26 10 7 54 18 0.479 4
More than 4,000 ft2 42 19 19 7 7 65 15 0.426 5 Notes: 1. Total number of respondents was 94 out of 100 survey forms sent which represented 94% received. 2. Scale used: 1-Not preferable; 2-Less preferable; 3-Moderate; 4-Preferable and 5-Most preferable.
The price of house for each unit was intentionally been grouped into five (5)
categories which start with the area less than RM200,000 and up to more than
RM500,000. Again with the purposes of finding which is the most comfortable,
affordable and preferable of house price by the buyers in the market. Table 5.6 shows
the analysis of the price of house preferred by house buyers using Relative Index (RI)
and also been ranked in accordingly with reference to the index.
Table 5.6: Preference of house prices
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3 Price of the House
No. of Respondents % %
RI Rank
< RM200,000 9 13 15 16 41 23 61 0.743 1 RM200,000 - RM300,000 3 12 18 38 23 16 65 0.740 2 RM301,000 - RM400,000 13 21 32 20 8 36 30 0.577 3 RM401,000 - RM500,000 40 33 10 6 5 78 12 0.394 4 > RM500,000 63 15 10 3 3 83 6 0.319 5 Notes: 1. Total number of respondents was 94 out of 100 survey forms sent which represented 94% received 2. Scale used: 1-Not preferable; 2-Less preferable; 3-Moderate; 4-Preferable and 5-Most preferable.
78
The housing features which were used in the survey were actually the products
of the discussion with the experience and well known developers and the author’s own
experience plus the opinions. Basically, most of the house qualities and features have
been listed in the survey form and sent to all the 94 respondents which included all three
major ethnic groups that i.e. Malay, Chinese, Indian and others. Again, all ranking were
done in related to Relative Index in descending order i.e. with the highest RI been
ranked first preference and so on. Frequency analysis was again been used as a way of
support in turn of the degree of agreement in the survey.
Table 5.7 shows the basic house quality and features preferred by Malay ethnic
using Relative Index.
Table 5.7: Preference of housing features among Malay
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3 Housing features
No. of Respondents % %
RI Rank
House Build on Cut Ground 0 0 2 8 30 0 95 0.940 1 House with Anti-Termite Treatment 0 1 3 3 33 3 90 0.940 2 Land Status: -Freehold 0 0 4 10 26 0 90 0.910 3 Schools within Development Area 1 0 2 10 27 3 93 0.910 4 Weather Shield Paint for External Wall 0 1 4 9 26 3 88 0.900 5 Easy Access to the Development Area 0 1 2 13 24 3 93 0.900 6 Nearby Facilities such as commercial centre/ supermarket within 10 km radius 0 1 2 14 23 3 93 0.895 7 Low Density of Houses within the Area 2 0 6 3 29 5 80 0.885 8 Healthcare Facility within Development Area 1 0 4 12 23 3 88 0.880 9 Security in the Area (gated / guarded) 1 1 4 11 23 5 85 0.870 10 Unit Location :-near mosque 0 0 8 10 22 0 80 0.870 11 Ceiling Height (> 8½ ft) 0 0 8 14 18 0 80 0.850 12 Design Concept of House (innovation/ contemporary) 2 0 8 11 19 5 75 0.825 13 Commercial Centre within Development Area 2 4 10 10 14 15 60 0.750 14 Unit Location :-near playing field 4 1 10 12 13 13 63 0.745 15
To be cont’d…
79…cont’d
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3
Housing feature
No. of Respondents % %
RI Rank
House Facing East (sunrise) 3 3 14 9 11 15 50 0.710 16
Shape/Layout of Unit: - rectangular 2 4 11 16 7 15 58 0.710 17
Unit Location :-facing pool 5 5 12 11 7 25 45 0.650 18
House Facing South 1 8 22 7 2 23 23 0.605 19
House Facing North 4 4 23 6 3 20 23 0.600 20
Ceiling Height (at 8½ ft) 4 9 20 7 0 33 18 0.550 21 House Numbering such as 13 or end digit 4 6 10 14 8 2 40
25 0.550 22
Land Status: -Leasehold 7 9 15 9 0 40 23 0.530 23
House Facing West (sunset) 7 9 17 5 2 40 18 0.530 24
Unit Location :-back by pool 8 11 14 6 1 48 18 0.505 25
Shape/Layout of Unit: - circular 8 10 15 7 0 45 18 0.505 26
Shape/Layout of Unit: - triangular 9 9 17 4 1 45 13 0.495 27
Unit Location :-facing hill 17 6 6 9 2 58 28 0.465 28
Unit Location :-back by hill 13 11 9 5 2 60 18 0.460 29 House with Full Furnishes ( light fittings; air-conditioners; kitchen cabinet; wardrobes and etc. included) 14 10 10 3 3 60 15 0.455 30 House with High Quality Finishes such as anti-scratch tiles, heat & sound proof glasses, solar system, auto gate, security system, and etc. 15 13 5 5 2 70 18 0.430 31 Unit Location :-facing highway 16 9 12 2 1 63 8 0.415 32 House Partly Finish (floor finishes or door leaves to be installed by house owner) 17 11 7 3 2 70 13 0.410 33 Unit Location :-back by water tank 20 9 6 3 2 73 13 0.390 34 Unit Location :-near refuse chamber 20 10 8 2 0 75 5 0.360 35 House Build on Slope 19 15 5 1 0 85 3 0.340 36 Unit Location :-facing T-junction 22 11 6 1 0 83 3 0.330 37 Unit Location :-facing water tank 23 13 2 1 1 90 5 0.320 38 Unit Location :-near TNB sub-station/ H.T. transmission line 23 11 5 1 0 85 3 0.320 39 House Build on Ex-mining Pool 24 10 6 0 0 85 0 0.310 40 Notes: 1. Total number of respondents was 40 out of 40 survey forms sent which represented 100% received. 2. Scale used: 1-Not preferable; 2-Less preferable; 3-Moderate; 4-Preferable and 5-Most preferable.
80
Table 5.8 shows the basic house quality and features preferred by Chinese ethnic
using Relative Index.
Table 5.8: Preference of housing features among Chinese
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3 Housing features
No. of Respondents % %
RI Rank
Land Status: -Freehold 0 0 4 2 29 0 89 0.943 1 House Build on Cut Ground 0 0 5 4 26 0 86 0.920 2 Easy Access to the Development Area 0 1 5 9 20 3 83 0.874 3 House with Anti-Termite Treatment 0 0 6 11 18 0 83 0.869 4 Weather Shield Paint for External Wall 0 1 5 11 18 3 83 0.863 5 Security in the Area (gated / guarded) 0 2 7 9 17 6 74 0.834 6 Nearby Facilities such as commercial centre/ supermarket within10 km radius 1 1 7 9 17 6 74 0.829 7 House Facing South 1 0 9 9 16 3 71 0.823 8 Low Density of Houses within the Area 0 2 9 8 16 6 69 0.817 9 Unit Location :-near playing field 1 2 7 8 17 9 71 0.817 10 Shape/Layout of Unit: - rectangular 1 2 9 6 17 9 66 0.806 11 Design Concept of House (innovation/ contemporary) 0 2 8 13 12 6 71 0.800 12 Schools within Development Area 0 3 8 11 13 9 69 0.794 13 House Facing North 1 1 10 10 13 6 66 0.789 14 Ceiling Height (at 8½ ft) 3 2 3 14 13 14 77 0.783 15 Commercial Centre within Development Area 0 2 18 10 5 6 43 0.703 16 Healthcare Facility within Development Area 1 3 14 11 6 11 49 0.703 17 Unit Location :-back by hill 4 7 5 6 13 31 54 0.697 18 House Facing East (sunrise) 5 4 11 4 11 26 43 0.669 19 Unit Location :-facing pool 7 6 12 2 8 37 29 0.589 20 House with Full Furnishes ( light fittings; air-conditioners; kitchen cabinet; wardrobes and etc. included) 5 4 18 5 3 26 23 0.583 21 Ceiling Height (> 8½ ft) 4 4 21 4 2 23 17 0.577 22 House with High Quality Finishes such as anti-scratch tiles, heat & sound proof glasses, solar system, auto gate, security system, and etc. 4 7 18 2 4
31 17 0.571 23
To be cont’d…
81…cont’d
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3
Housing features
No. of Respondents % %
RI Rank
House Partly Finish (floor finishes or door leaves to be installed by house owner) 6 10 14 3 2 46
14 0.514 24 Shape/Layout of Unit: - circular 5 13 12 4 1 51 14 0.503 25 Unit Location :-facing highway 11 8 10 5 1 54 17 0.469 26 Unit Location :-back by pool 9 13 7 4 2 63 17 0.469 27 House Numbering such as 13 or end digit 4 10 11 10 3 1 60 11 0.451 28 House Build on Slope 11 11 8 4 1 63 14 0.446 29 Shape/Layout of Unit: - triangular 14 7 9 4 1 60 14 0.434 30 Land Status: -Leasehold 10 12 13 0 0 63 0 0.417 31 House Facing West (sunset) 12 15 7 1 0 77 3 0.383 32 Unit Location :-back by water tank 19 8 6 1 1 77 6 0.354 33 House Build on Ex-mining Pool 17 11 6 1 0 80 3 0.349 34 Unit Location :-facing water tank 19 10 5 0 1 83 3 0.337 35 Unit Location :-near mosque 20 8 6 1 0 80 3 0.331 36 Unit Location :-facing hill 20 11 3 1 0 89 3 0.314 37 Unit Location :-near refuse chamber 25 3 7 0 0 80 0 0.297 38 Unit Location :-near TNB sub-station/ H.T. transmission line 25 7 2 1 0 91 3 0.280 39 Unit Location :-facing T-junction 28 2 4 1 0 86 3 0.274 40 Notes: 1. Total number of respondents was 35 out of 40 survey forms sent which represented 88% received. 2. Scale used: 1-Not preferable; 2-Less preferable; 3-Moderate; 4-Preferable and 5-Most preferable.
82
Table 5.9 shows the basic house quality and features preferred by Indian and
others ethnic using Relative Index.
Table 5.9: Preference of housing features among Indian and others
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3 Housing features
No. of Respondents % %
RI Rank
Land Status: -Freehold 0 0 3 3 13 0 84 0.905 1 House with Anti-Termite Treatment 0 1 3 2 13 5 79 0.884 2 House Build on Cut Ground 0 0 5 3 11 0 74 0.863 3 Nearby Facilities such as commercial centre/ supermarket within 5 km radius 0 1 4 6 8 5 74 0.821 4 Schools within Development Area 0 1 3 8 7 5 79 0.821 5 Easy Access to the Development Area 0 0 6 6 7 0 68 0.811 6 Ceiling Height (> 8½ ft) 1 1 4 5 8 11 68 0.789 7 Shape/Layout of Unit: - rectangular 1 3 2 4 9 21 68 0.779 8 Unit Location :-near playing field 2 1 4 3 9 16 63 0.768 9 Weather Shield Paint for External Wall 0 1 7 6 5 5 58 0.758 10 House Facing South 0 3 6 3 7 16 53 0.747 11 House Facing East (sunrise) 3 1 4 3 8 21 58 0.726 12 Security in the Area (gated / guarded) 1 4 2 6 6 26 63 0.726 13 House Facing North 1 2 6 6 4 16 53 0.705 14 Design Concept of House (innovation/ contemporary) 1 4 6 2 6 26 42 0.684 15 Low Density of Houses within the Area 2 2 7 2 6 21 42 0.684 16 House with High Quality Finishes such as anti-scratch tiles, heat & sound proof glasses, solar system, auto gate, security system, and etc. 1 3 7 5 3 21 42 0.663 17 Healthcare Facility within Development Area 0 4 7 6 2 21 42 0.663 18 Unit Location :-facing pool 3 1 9 2 4 21 32 0.632 19 Commercial Centre within Development Area 2 5 7 3 2 37 26 0.579 20 Ceiling Height (at 8½ ft) 4 4 7 2 2 42 21 0.537 21 Unit Location :-back by hill 6 3 6 1 3 47 21 0.516 22 House with Full Furnishes ( light fittings; air-conditioners; kitchen cabinet; wardrobes and etc. included) 4 6 6 2 1 53 16 0.495 23 Unit Location :-back by pool 6 4 5 3 1 53 21 0.484 24
To be cont’d…
83…cont’d
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3
Housing features
No. of Respondents % %
RI Rank
Unit Location :-facing hill 8 1 6 2 2 47 21 0.484 25 Shape/Layout of Unit: - triangular 7 3 5 3 1 53 21 0.474 26 Shape/Layout of Unit: - circular 5 7 4 2 1 63 16 0.463 27 House Partly Finish (floor finishes or door leaves to be installed by house owner) 6 5 5 2 1 58 16 0.463 28 House Facing West (sunset) 6 6 4 2 1 63 16 0.453 29 House Numbering such as 13 or end digit 4 7 3 7 2 0 53 11 0.442 30 Unit Location :-back by water tank 9 4 4 1 1 68 11 0.400 31 Land Status: -Leasehold 8 3 8 0 0 58 0 0.400 32 House Build on Slope 8 6 2 3 0 74 16 0.400 33 Unit Location :-facing highway 10 4 3 2 0 74 11 0.368 34 Unit Location :-near mosque 10 3 6 0 0 68 0 0.358 35 Unit Location :-near TNB sub-station/ H.T. transmission line 10 5 3 1 0 79 5 0.347 36 Unit Location :-facing water tank 11 3 4 1 0 74 5 0.347 37 Unit Location :-facing T-junction 12 2 3 2 0 74 11 0.347 38 House Build on Ex-mining Pool 11 2 6 0 0 68 0 0.347 39 Unit Location :-near refuse chamber 12 3 4 0 0 79 0 0.316 40 Notes: 1. Total number of respondents was 19 out of 20 survey forms sent which represented 95% received. 2. Scale used: 1-Not preferable; 2-Less preferable; 3-Moderate; 4-Preferable and 5-Most preferable.
5.2.2 Developer Background
A total of 5 questionnaire forms were sent out directly and personally to the
developers in the construction industry. The feedback of the questionnaire was very
encouraging as all 5 answered forms were collected back, which equivalent to 100%
was been returned. Table 5.10 and Figure 5.4 showed that the composition of the
respondents participated in the survey.
84
Table 5.10: Respondent position (developer)
Position Held No. of Respondents Percentage Sales & Marketing Executive 1 20% Sales & Marketing Manager 1 20% Account Manager 1 20% Senior Sales & Marketing Manager 1 20% Quantity Surveyor Manager 1 20% Note: Total number of developers participated in the survey is 5
Percentage Breakdown of Respondents
Sales & Marketing Executive
20%
Sales & Marketing Manager
20%Account Manager
20%
Senior Sales & Marketing Manager
20%
Quantity Surveyoy Manager
20%
Sales & MarketingExecutiveSales & MarketingManagerAccount Manager
Senior Sales &Marketing ManagerQuantity SurveyoyManager
Figure 5.4: Respondents demographic (developer)
85
5.2.2.1 Years of Working Experience
Table 5.11 and Figure 5.5 showed the number of years of working experience
of the participants in the survey. 2 of the respondents have the experience between 5 to
10 years (40%) whereas 3 (60%) of them have been working for more than 15 years.
Table 5.11: Years of experience of respondent (developer)
No. of Years of Experience No. of Respondents Percentage < 5 years 0 0%
5 -10 years 2 40% 11 -15 years 0 0% > 15 years 3 60%
Note: Total number of developers participated in the survey is 5
Years of Experience of Respondents
< 5 years0%
5 -10 years40%
11 -15 years0%
> 15 years60%
< 5 years5 -10 years11 -15 years> 15 years
Figure 5.5: Years of experience of respondent (developer)
86
5.2.2.2 Developers Profile
Table 5.12 and Figure 5.6 showed the number of years of developers involved in
the business. One each of the respondents had less than 5 years, and between 5 to 10
years experience in the business. The remaining 3 have more than 10 years (60%).
Table 5.12: Years of company in business
Company in the Business No. of company Percentage < 5 years 1 20%
5 -10 years 1 20% > 10years 3 60%
Note: Total number of developers participated in the survey is 5
Company in Business
, < 5 years, 20%
, 5 -10 years, 20%
, > 10years, 60%
< 5 years5 -10 years> 10years
Figure 5.6: Years of company in business
The various common strategies which were used in the survey were actually the
products of the discussion with the five experience and well known developers. Table
5.13 shows the significant of the common strategies implemented by the developers
using Relative Index.
87
Table 5.13: Developer strategy
Likert Scale Frequency Analysis
1 2 3 4 5 <3 >3 Strategy
No. of Respondents % %
RI Rank
House Pricing Strategy 0 0 0 0 5 0 100 1.000 1 Show House 0 0 0 0 5 0 100 1.000 2 Advertising Tools 0 0 0 1 4 0 100 0.960 3 Provide Higher Loan Margin 0 0 0 2 3 0 100 0.920 4 Construction of Houses before Launching 0 0 0 3 2 0 100 0.880 5
Scale Model(s) of Houses 0 0 1 1 3 0 80 0.880 6 Campaigns (carnival/party/lucky draw etc) 0 0 1 2 2 0 80 0.840 7
No. of Unit of House for Each Launch 0 0 1 2 2 0 80 0.840 8
Allow Low Down Payment for Booking 0 0 1 2 2 0 80 0.840 9
Provide Training to Sales Staff 0 0 1 2 2 0 80 0.840 10 Provide Freebies in Addition to the Sale of the Property such as built-in cabinet / TV / air-conditioner / security alarm system / auto gate / early bird discount and etc.
0 0 1 3 1 0 80 0.800 11
Referral Programme 0 0 1 3 1 0 80 0.800 12 Poor Quality of the House been Delivered 0 0 2 2 1 0 60 0.760 13
Market Research / Survey 0 0 2 2 1 0 60 0.760 14 Reduce in Maintenance Fee (if applicable) 0 2 0 2 1 40 60 0.680 15
Investment Plan / Guarantee Rental Return / Time Sharing Plan
0 1 2 1 1 20 40 0.680 16
Press Release / Conference 0 0 3 2 0 0 40 0.680 17 Employ Sales Agents 0 1 1 3 0 20 60 0.680 18 Loyalty Programme 1 0 2 2 0 20 40 0.600 19 Emphasize on House Design 0 2 2 1 0 40 20 0.560 20 Notes: 1. Total number of developers participated in the survey is 5 2. Scale used: 1-Not significant; 2-Slightly significant; 3-Moderately significant;
4-Very significant, and 5-Most significant.
88
5.2.3 Targeted Group of Buyers
Table 5.14 showed the feedback from the developers regarding the targeted
group of potential buyers for each common type of the houses built by them.
Table 5.14: Targeted group of house buyer for each type of house
Type of Houses Targeted Group (Age)
Double Storey Link House 30 - 45 Condominium/Apartment 20 - 40 Single Storey Link House 25 - 45 2 ½ Storey Link House 40 - 50 Semi-detached House 40 - 50 Bungalow 40 - 50 Note: Total number of developers participated in the survey is 5
5.2.4 Advertising Tools
Types of advertising tool used in the survey were the result of feedback of
developers participated in the survey. Table 5.15 shows the rate or percentage of
success for each type of advertising tools used by the developers where the house
buyers got the information on sales whereas Table 5.16 shows the percentage of sales
generated successfully for each type of the advertising tools used.
89
Table 5.15: Respond of the house buyers toward advertising tools
Tool Used by Developer No. of Respondents % Newspaper 74 79 Brochure 51 54 Roadshow 14 15 Television 18 19 Radio 12 13 Telemarket 3 3 Word of Mouth (Friend/Relative) 27 29 Web Site 11 12 Outdoor Advertisement (Banner/Bunting/Billboard) 50 53 Note: Total number of end-users participated in the survey is 94
Table 5.16: Effectiveness of the advertising tools toward developers
Tools Used No. of Company % of Sales Generated
Newspaper 5 20% - 70% Brochure 5 1% - 20% Roadshow 4 5% - 10% Television 0 N/A Radio 2 4% - 5% Telemarket 2 1% - 5% Word of Mouth (Friend/Relative) 5 2% - 10% Web Site 3 1% - 5% Outdoor Advertisement (Banner/Bunting/Billboard) 5 10% - 30% Magazine 0 N/A Note: Total number of developer participated in the survey is 5
CHAPTER 6
DISCUSSION OF THE RESULT
6.1 Introduction
The findings were discussed in term of respondent demographic; respondents’
preference of type of house and housing features, developer strategy implementation
and finally the effectiveness of the tools used.
6.2 Results and Discussion
Due to time constrain, it was able to sent out more survey forms especially to the
Indian ethnic and others minority group. The author felt that at least same number of
forms should be sent to them to show the fairness in this survey. This showed the
limitation of the survey especially for the Indian and others minority group. Again, the
data collected in Table 5.3 and Figure 5.3 might not able to represent the actual correct
income figures as the respondents might not be honest enough to tell their actual
incomes.
91
6.2.1 Preference of Type of Houses
From the analysis (Table 5.4), the outcome of the results shows that double-
storey link house has highest Relative Index (RI) of 0.798 with 69% of the respondents
strong agreed and therefore it is the most preference type of house by the buyers. This
was tallied with Table 5.10 which developers have targeted the group of house buyers
come from the age between 30 to 45 are the potential buyers, which represented most of
them are of middle income group. Buyers felt that this type of house has advantages
because it is a landed property. Most o the owners like to have their own private land
rather than sharing the land ownership with others. Condominium/apartment which has
RI 0.621 is their second preference could be due to the reason that it is difficult to find
landed property nowadays. Whereas the results shown that bungalow has RI equal
to0.462 and it is the least preferred type of houses by the buyers. This could be due to
that fact that most of the respondents participated (67%) in the survey were with the
household income of below RM5,000 per month which belong to the middle income
group. Therefore, their financial situation would not be able and allowed them to own
the types of high end houses such as semi-detached house or bungalow which has been
priced at RM1 million and above in the market nowadays.
Table 5.5 has shown that 69% of the respondents strongly agreed that house
with the built-up area between 1,001 ft2 – 2,000 ft2 and has the highest Relative Index of
0.764 is the most preferred by the buyers. This could be due to the reason that most of
the house owners find that house with a built-up area of 1,000 square feet or less may be
insufficient for them to keep their household items such as a big sofa set, double-bed
cupboard and a storeroom for some other small household items such as pails; brooms;
toys, and etc. Whereas house with built-up of more than 4,000 ft2 (RI 0.319) is their
least preference. As the built-up area of the house is directly proportionate to the cost of
construction, therefore house with bigger built-up would definitely been priced higher.
As most owners usually would like to have good quality of finishes for their houses
when they purchase bigger units of houses, this would increase in price of house. Say
for example, for a house with built-up of 4,000 square feet @ RM250* per square foot
92
(*rate was slightly above average in turn building finishes and been provide by most of
the 5 participated developers) will be equivalent to RM1,000,000 per unit. This
definitely is out of the participants’ financial capability (Table 5.2 - 5.3 and Figure 5.2 -
5.3 show the age group and the monthly household income group of the respondents
respectively).
From Table 5.6, the outcome of the results shows that out of five types of prices,
more than 60% of the respondents strongly agreed that houses with price less than
RM200,000 (has highest RI of 0.743) and price range between RM200,000 to
RM300,000 (with RI 0.740) are their first and second affordable preference
respectively. They feel more comfortable and affordable to purchase house which been
priced at RM300,000 or less due to other commitments such as car installments, life
insurances, financial supports to family and so on. Whereas house with price of more
than RM500,000 of RI 0.319 is their least preference. Again, the result could have due
to that fact that most of the respondents participated (67%) in the survey were with the
household income of below RM5,000 per month which belong to the middle income
group.
In short, most buyers preferred double storey link house with built-up area of
1,000 square – 2,000 square feet and priced at less than RM200,000 is viable in Klang
Valley (area within Selangor) as the land cost has escalating to about RM100 per square
foot, building materials also often fluctuating and stay at high level. These have caused
the development cost to be high and expensive, and together with the profit required by
the developer, all these factors make the type of house preferred by the buyers cannot be
fulfilled. Usually, the developers will only select one or two of the buyers’ preferences
of house in order for them to market the products with profit and saleable in the market.
93
6.2.2 Housing Features
6.2.2.1 Preference of Housing Features among Malay
From the analysis (Table 5.7), the outcome of the results shows that more than
80% of the respondents strongly agreed that the most preferred basic quality and
features of house that would encourage Malay ethnic to own the house are houses build
on cut ground and with anti-termite treatment during construction (both have the highest
RI 0.940); freehold land status and having schools (primary and secondary) within the
development area (both have RI 0.910); weather shield paint for external wall; easy
accessibility to the development area ( all have RI 0.900); nearby facilities such as
commercial centre/supermarket within 10 km radius (RI 0.895); low density of houses
within the area (RI 0.885); having healthcare facility within development area (RI 0.880)
and providing security in the area (RI 0.875). They think that the above quality and
features will bring them comfortability but also could help them to dispose it fast and
sustain better resale value of the house.
Whereas the bottom ten or least preference of house basic quality and features
which would discourage them to own the house are house come with full furnishes;
house with high quality finishes such as anti-scratch tiles, heat & sound proof glasses,
solar system, auto gate, security system, and etc.; unit location such as facing directly to
highway; back by water tank; near refuse chamber; house build on slope; unit location :
facing T-junction; unit location : facing water tank; unit location : near TNB sub-station
or H.T. transmission line; and house build on ex-mining pool (all below RI 0.455).
6.2.2.2 Preference of Housing Features among Chinese
Referring to the Table 5.8, it shown that most of the Chinese respondents (69% -
89%) had agreed the top ten basic quality and features that would encourage them to
94
own the house were such as freehold land status with RII 0.943 (which was the top most
influential factor among the Chinese ethnic); houses built on cut ground with RI value
of 0.920 was the second most influential factor among other requirements; having easy
accessibility to the development area (with RI 0.874) and proving anti-termite treatment
to the area where houses built during construction (RI 0.869) were third and fourth most
influential factor respectively. The respondents were also expecting that the developers
should provide weather shield paint for external wall (RI 0.863) was their fifth most
demanding factors. Then followed by factors such as providing security in the area
whether it was gated/guarded (RI 0.834); nearby facilities such as commercial centre/
supermarket within 10 km radius (RI 0.829); house facing south (RI 0.823); low density
of houses within the area (RI 0.817) and unit location: near playing field formed the
remaining top ten most influential factors among Chinese group. Beside believing in
Feng Shui,, they also think that the above quality and features will not only bring them
comfortability but also could help them to dispose it fast and sustain better resale value
of the house.
The results also showed that the bottom ten or least preference features or would
discourage them to own the house were such as leasehold land status (RI 0.417); house
facing west or sunset (RI 0.383); unit location such as back by water tank(RII 0.354);
house build on ex-mining pool (RI 0.349); unit facing water tank (RI 0.331); unit near
mosque (RI 0.331); facing hill (RI 0.314); near refuse chamber (RI 0.297); near TNB
sub-station or H.T. transmission line (RI 0.280) or facing T-junction (RI 0.274).
6.2.2.3 Preference of Housing Features among Indian and the Rest
The result in Table 5.9, shown that over 60% of the Indian and the rest
respondents agreed that the top ten most influential basic quality and features that
would encourage them to own houses were top with freehold land status (RI valued at
0.905). House with anti-termite treatment (RI 0.884) was ranked as the second most
95
influential factor. They also agreed that house built on cut ground (RI 0.863) should be
the third most influential factor among other features when they deciding to purchase
houses. Then followed by factors such as nearby facilities such as commercial centre/
supermarket within 10 km radius and schools within development area (both with RI
0.821) were been selected as the fourth and fifth most influential factors respectively.
Easy access to the development area (RI 0.811) was been ranked as the sixth most
influential factor, then followed by other factors such as ceiling height of the houses
should be more than 8½ ft (RI 0.789); layout of unit preferred to be of rectangular shape
(RI 0.779); the location preferred to be near playing field (RI 0.768) and unit come
along with weather shield paint for external wall which were the remaining of the top
ten factors.
However, most of the respondents agreed that the bottom ten or least preferred
features and would discourage them to own the house were unit location back by water
tank; leasehold land status; house build on slope; directly facing highway; unit built near
mosque; unit near TNB sub-station or H.T. transmission line; facing water tank or T-
junction; house built on ex-mining pool or near refuse chamber (with RI ranged from
0.316 to RI .0400).
6.2.3 Developer Strategy
From Table 5.14, the results showed that out of five developers, 80% and above
of them strongly agreed that the top ten important factors that make them succeed in
promoting of houses were such as house pricing strategy and construction of show
house ( both with RI 1.000) were their top priority. Then, followed by strategies such as
using advertising tools (RI 0.960); providing higher loan margin (RI 0.920);
construction of houses before launching and scale model(s) of houses (both with RI
0.880); campaigns involved carnival/party/ lucky draw; number of unit of houses for
each launch; allow low down payment for booking and provide training to sales staff
96
(all have RI 0.840) were the remaining five important factors considered by the
developers to promote sales of houses.
To improve the situation, the findings of this study must be addressed by a joint
effort of all participants in the construction industry.
6.2.3.1 Advertising Tools
The results form Table 5.16 and Table 5.17 showed the effectiveness of the
advertising tools during promotion of houses by the developers. Table 5.16 showed
more than 50% of the respondents (end-users) got to know about property sales
information from the newspaper; distribution of brochures and outdoor advertisement
such as banner, bunting and billboard whereas the results in Table 5.17 shown that the
most effective of the advertising tools which generated the most sales of the property
was through the advertisement in the newspaper.
CHAPTER 7
CONCLUSION AND RECOMMENDATION
7.1 Introduction
This chapter summarizes the findings from the previous chapters and draws
together with conclusion and recommendations. It illustrates on the keys findings,
confirmation of the objectives and overall summary for the whole study.
7.2 Conclusions
From the data collection and the analysis plus the discussion in previous
chapters, the results have confirmed and concluded that:
7.2.1 The popular type of houses preferred by the potential house buyers
The most popular type of houses preferred by the house buyers is double storey
link houses, built-up of 1,001 ft2 – 2,000 ft2 and price of less than RM200,000 per unit.
98
7.2.2 The basic quality and features of the house preferred by different ethnic
groups of house buyers
i) The basic quality and features of the house preferred by Malay community are:
House build on cut ground
House with anti-termite treatment
Freehold land status
Having schools (primary and secondary) within the development area
Weather shield paint for external wall of the house
Easy accessibility to the development area
Nearby facilities such as commercial centre/ supermarket within 10 km
radius
Low density of houses within the area
Having healthcare facility within development area
Security in the area (gated/ guarded)
Whereas the least preferred features among Malay community are:
House come with high quality finishes
Unit directly facing highway
House with partly finish i.e. floor finishes or door leaves to be installed by
house owner
Unit location: back by water tank
Unit locate near refuse chamber
House built on slope
Unit location facing T-junction
Unit facing water tank
Unit built near TNB sub-station or H.T. transmission line
House built on ex-mining pool
99
ii) The basic quality and features of the house preferred by Chinese community are:
Freehold land status
Houses built on cut ground
Easy accessibility to the development area
House anti-termite
Weather shield paint for external wall
Security in the area (gated/guarded)
Nearby facilities such as commercial centre/ supermarket within 10 km
radius
House facing south
Low density of houses within the area a
House built near playing field.
Whereas the least preferred features among Chinese community are:
Leasehold land status
House facing west (sunset)
Unit back by water tank
House built on ex-mining pool
Unit facing water tank
Unit near mosque
House facing hill
House built near refuse chamber
Unit locate near TNB sub-station or H.T. transmission line
Unit facing T-junction
100
iii) The basic quality and features of the house preferred by Indian and others
community are:
Freehold land status
House with anti-termite treatment
House built on cut ground
Nearby facilities such as commercial centre/ supermarket within 10 km
radius
Schools (primary and secondary) within development area
Easy access to the development area
Ceiling height of the houses more than 8½ ft
Unit with rectangular shape layout
House locate near playing field
Weather shield paint for external wall
Whereas the least preferred features among Indian and others are:
Unit location back by water tank
Leasehold land status
House build on slope
Unit directly facing highway
Unit built near mosque
Unit near TNB sub-station or H.T. transmission line
Unit facing water tank
Unit facing T-junction
House built on ex-mining pool
Unit built near refuse chamber
101
7.2.3 The common strategies adopted by developers to market residential houses
in current market
The top ten most common strategies that make the developers succeed in
promoting of houses are:
House pricing strategy
Construction of show house
Using advertising tools
Providing higher loan margin to the customers
Construction of houses before launching; s
Scale model(s) of houses
Campaigns involved carnival/party/lucky draw
Limiting number of unit of houses for each launch
Allow low down payment for booking
Provide training to sales staff
Advertising in the newspaper is also found to be the most effective tool and can
generate the most property sales to the developers.
7.3 Recommendation for Future Research
It is believe that this study has provided an insight into the most popular type of
house preferred by the house buyers, the basic quality and features preferred by
different ethnic groups and identified the various strategies adopted by the developers to
market the residential houses. However, there could be other factors that needed to be
identified or evaluated. Hence, it is felt that future research needs to be carried out in the
areas stated below:
To study and evaluate the demand of the residential houses in the market
102
To study method of incorporated all the objectives in this study into their
products in order to improve sales
Finally, it is hope that this study would be beneficial to all relevant parties
involved in the construction industry ranging from those involved in academic research;
students; end-users; developers as well as the various practitioners in the industry.
103
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10. Levinson, W.A. (1994). The Way of Strategy. USA: ASQC Quality Press.
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Appendix 1
Summary of Development Approval Processes Guidelines in Peninsular Malaysia (Except the Federation of Kuala Lumpur and Putrajaya)
Approval of
Application
Processed
By
Approved By /
Duration
Documents To Be
Submitted
Comments /
Declarations By
Technical Agencies
1)Application for
Approval of
Building Plan /
Application for
Approval of
Conversion and Sub-
Division of Land
Approach 1
1A.Application for
Approval of Land
Development Plan
District Land
Office, State
Land and
Mineral
Office
(PTG)
(should there
be a
Regional
Processing
Unit)
1B. Final Approval
for Conversion and
Sub-Division of
Land
PTD / PTG
Approach II
Application for
Conversion and Sub-
Division of Land
PTD / PTG
Procedure / Process of securing the approval for Conversion and Sub-
Division of Land are as stated in the Pekeliling Kemajuan Pengurusan Tanah
Bil. 1/1988 issued by the Chief Director of Land and Mineral, Ministry of
Land and Co-operative to all State Government to be used as guidelines.
2. Planning
Approval
JPBD /
PBPT
JPBD / PBPT
approve LCP,
Planning
Approval and
Layout Plan
according to
Section 21(1),
Act 172.
Period: 12 weeks
1. Borang A, Kaedah 3(1)KKPP
(Am)
2. Power of Attorney
3. Provisions of Development
Planning (Structure Planning
and Local Planning)
4. Quit rent and assessment receipts
5. Planning Approval Processing
Fee
Matters
Regarding PBPT
JPBD -24 days
JPP -30 days
JAS -90 days
(EIA)
-21 days
(others)
JKR -30 days
To be cont’d
…Cont’
Approval of
Application
Processed
By
Approved By /
Duration Documents To Be Submitted
Comments /
Declarations By
Technical
Agencies
2. Planning Approval (cont’d)
JPBD /
PBPT
6. Layout Plan and LCP
acknowledged by JPBD /
Planning Officer at PBT
7. Acknowledgement of Access
Permission
8. Objections under section21(6)
9. Report on Suggested Sewerage
System
10. EIA Report where applicable
PBAN -30 days
JPS -30 days
TNB -30 days
STM -30 days
Others (if
applicable)
3. Housing
Developer’s License
(for housing
development
exceeding 4 units for
purpose of sale)
Local
Authorities
Housing
Department gives
approval.
(Section 5(4)-
Housing
Developer’s Act
(Monitoring and
Licensing) 1966-
Act 188)
Period: 4 weeks
-Borang Jadual A
-Land Grant, Land Title, Title Deed
Approval of Conversion and Sub-
Division of Land, Borang 9A
Borang 5A and Premium Payment
Receipt
-Pre-Computation Plan,
Certification of Layout Plan from
the Board of Surveyors
-Statement of Accounts, Statement
of Cash Flow for Project, Borang
49, Borang 24, Memorandum and
Article of Association, Certificate
of Registration of Company,
Borang L2C, Joint-Venture
Agreement between developer /
land owner
4. Building Plan
Local
Authorities
Full council of
local authorities
gives approval
(section 70 act
133)
-Borang A
-Copy of planning permission
-Official search letter
-Title deed
-Receipts for quit rent, land
assessment
Matters
Regarding PBPT
JPP -30 days
JBP -14 days
JKR -30 days
JPS -21 days
To be cont’d…
Approval of
Application
Processed
By
Approved By /
Duration Documents To Be Submitted
Comments /
Declarations By
Technical
Agencies
4. Building Plan
(cont’d)
Local
Authorities
Duration: 6
weeks
-Plan of earth work
-Infrastructure plan
-Building plan
-Landscaping plan
-Other plans as conditioned by the
PBT
-Summary from technical
departments / agencies
-Receipt for plan processing fee
TNB -30 days
STM -30 days
PBAN -42 days
PBI
(internal)-21days
others (if needed)
-Jabatan
Penerbangan
Awan
-LLM
-KTM
5. Advertising and
Sales Permit
Ministry of
Housing and
Local
Authorities
(Licensing
and
Advisory
Section)
Housing
Department gives
approval (Ar.5
Housing
Developer’s
Monitoring and
Licensing Rules
and Regulations)
1989
Duration : 4
weeks
-Borang Jadual D
-Building plan and letters of
approval
-3 specimen copies of each
-advertisement selling price list
-
Surrender of Vacant
Ownership
Developer
Developer issues
to buyer
Jadual G & H
Housing
Developer’s
Regulations
(Monitoring &
Licensing) 1989
- Completed Borang E received by
PBT
- Architect Certification of
Completion (ACC)
-
…Cont’
To be cont’d…
…Cont’
Approval of
Application
Processed
By
Approved By /
Duration Documents To Be Submitted
Comments /
Declarations By
Technical
Agencies
6. Certificate of
Fitness (excluding
bungalows built
separately)
Local
Authorities
PBT gives
approval for
Certificate of
Fitness for
Occupation
-CFO) (UUK 25
UKBS)
or
Temporary
Certificate of
Fitness for
Occupation
(UUK 26 UKBS)
or
Partial Certificate
of Fitness for
Occupation
issued for
partially
completed
buildings (UUK
27 UKBS)
Duration : 2
weeks
- Borang E
- Certification from all external and
internal technical agencies of PBT
- Contribution fee receipts
- Confirmation of Conversation and
Sub-division
- Other Condition levied by PBT
when approving the building plan
Matters
Regarding PBPT
JPP -14 days
JBP -14 days
JKR -14 days
JPS -14 days
TNB -14 days
STM -14 days
PBAN -21days
PBI
(internal)-14days
others (if needed)
-Jabatan
Penerbangan
Awan
-LLM
-KTM
* 3 and 5 can be submitted concurrently. □ Matters regarding Developer / Buyer NOTE: JPBD -Jabatan Perancangan Bandar dan Desa JBS -Jabatan Pengairan dan Saliran JPP -Jabatan Perkhimatan Pembetungan PBAN -Pihak Berkuasa Air Negeri PBPT -Pihak Berkuasa Perancang Tempatan TNB -Tenaga Nasional Berhad STM -Syarikat Telekom Malaysia
JKR -Jabatan Kerja Raya JAS -Jabatan Alam Sekitar JBPM -Jabatan Bomba dan Penyelamat, Malaysia PBT -Pihak Berkuasa Tempatan LLM -Lembaga Lebuhraya Malaysia KTMB -Keretapi Tanah Melayu Berhad
(All source & reference by Ministry of Housing & Local Government)
Appendix 2 FM-CSD-402a-Rev1
24/02/2005
MARKET RESEARCH ON CONDOMINUM/APARTMENTS Project Anggun P.u.r.i Property Type Condominium Developer Homestead Development Sdn Bhd Telephone No. 03-62573859/79547696 Tenure of Land Freehold Date Launched December 2003 Expected Completion December 2006 Built-up & Price 800 sq ft – RM182,800 – RM222,800
850 sq ft – RM192,800 – RM255,800 950 sq ft – RM192,000 RM270,000 1000, sq ft - RM196,000 – RM293,800
Built-up Area (as above) No. of Units 246 units (22 Storey) Sales Status 70% sold as at 23/02/2005 Acreage 3.6 acres Density 68 units per acre Maintenance Fee 23 cents psf Sinking Fund Included in the maintenance charges Facilities - Swimming Pool
- 24 hours security - Tennis Courts - Playground - Reading Room - Children’s nursery - Convenient Shop - Ample covered parking lots
Advantage
USP Development
- Freehold - Accessible from KL City Centre via Jln
Duta, Jalan Segambut, Jalan Sri Hartamas or Jalan Kuching
- 10 minutes drive to Sri Hartamas, Bukit Kiara and Duta area
- Developer to have an orchad plantation
USP
- 6 types of layout to choose from
Product - 12 units per floor serviced by 3 lifts - Option to up grade finishes at a reasonable
price Disadvantage
- Although the area looks quite & peaceful, but rapid development going on nearby
- High density area with only one access Special Packages - Free legal fee for SPA Strategy Claiming to be beside high profile neighbours Down Payment 10% upon confirmation Survey By : Jayanthi
Appendix 3a
UNIVERSITI TEKNOLOGI MALAYSIA
FAKULTI KEJURUTERAAN AWAM
MSC CONSTRUCTION MANAGEMENT
QUESTIONNAIRE NO.1
HOMEBUYERS’ REQUIREMENTS FOR HOUSING DEVELOPMENT
WITHIN DISTRICTS IN SELANGOR
This questionnaire survey is part of my master project’s study and the aim is to
identify the popular preference of types of houses, basic house quality and features
which meet the end-users’ need and sources of information about the property for sales
in the current market trend within districts in Selangor.
It is sincerely hope that you would spare some time to answer the questions.
The data collected would purely use for statistical analysis and all the information will
be treated as confidential.
Thank you for your participation and kind support.
QUESTIONNAIRE (ONE)- END USER
SECTION A: RESPONDENT INFORMATION
1. Age □ 21- 30 years □ 31- 40 years □ > 40 years
2. Race
□ Malay □ Chinese □ Indian □ Others 3. Household income per month
□ < RM3,000 □ RM3,000 – RM5,000 □ > RM5,000
SECTION B: CHOICE OF HOUSE PREFERRED BY END USER
The following are the types of the house (excluding low cost) that available in
the market in Klang Valley. Based on your experience and need within your current financial capability, please indicate the level of your preference for each category presented by choosing the scale from 1 to 5 in ascending order of preference where 1- Not preferable; 2- Less preferable; 3- Moderate; 4- Preferable and 5- Most preferable. Not Preferable Most Preferable
1. Type of House
a. Single Storey Link House 1 2 3 4 5 b. Double Storey Link House 1 2 3 4 5 c. 2 ½ Storey Link House 1 2 3 4 5 d. Semi-detached House 1 2 3 4 5 e. Bungalow 1 2 3 4 5 f. Condominium/Apartment 1 2 3 4 5
2. Built-up
a. Less than 1,000 ft2 1 2 3 4 5 b. 1,001 ft2 – 2,000 ft2 1 2 3 4 5 c. 2,001 ft2 – 3,000 ft2 1 2 3 4 5 d. 3,001 ft2 – 4,000 ft2 1 2 3 4 5 e. More than 4,000 ft2 1 2 3 4 5
Not Preferable Most Preferable
3. Price/Budget
a. Less than RM200,000 1 2 3 4 5 b. RM201,000 - RM300,000 1 2 3 4 5 c. RM301,000 - RM400,000 1 2 3 4 5 d. RM401,000 - RM500,000 1 2 3 4 5 e. More than RM500,000 1 2 3 4 5
4. Which of the following sources that give you the information about the
property for sale? (Please tick the appropriate choice(s)).
□ Newspaper □ Brochure □ Roadshow
□ Television □ Radio □ Telemarket
□ Word of Mouth (Friend/Relative) □ Web Site
□ Outdoor Advertisement (Banner/Bunting/Billboard)
□ Others (Please specify)…………………………………………………..
.……………………………………………….…...
SECTION C: BASIC QULITY AND FEATURES EXPECTED BY END USER
The following are the basic quality and features (excluding Low Cost House)
that you would like to have. Based on your experience and need, please indicate the level of your preference for each of the factors presented by choosing the scale from 1 to 5 in ascending order of preference where 1- Not preferable; 2- Less preferable; 3- Moderate; 4- Preferable and 5- Most preferable. (Selection of the appropriate choices must be done carefully as they may exceed or beyond your budget).
I. Housing Features
Not Preferable Most Preferable
1. Land Status: -Freehold 1 2 3 4 5 2. Land Status: -Leasehold 1 2 3 4 5 3. House Facing East (sunrise) 1 2 3 4 5
Not Preferable Most Preferable 4. House Facing West (sunset) 1 2 3 4 5 5. House Facing North 1 2 3 4 5 6. House Facing South 1 2 3 4 5 7. Unit Location :-near playing field 1 2 3 4 5 8. Unit Location :-near TNB sub-station 1 2 3 4 5 9. Unit Location :-near mosque 1 2 3 4 5 10. Unit Location :-near refuse chamber 1 2 3 4 5 11. Unit Location :-facing T-junction 1 2 3 4 5 12. Unit Location :-facing hill 1 2 3 4 5 13. Unit Location :-back by hill 1 2 3 4 5 14. Unit Location :-facing water tank 1 2 3 4 5 15. Unit Location :-back by water tank 1 2 3 4 5 16. Unit Location :-facing pool 1 2 3 4 5 17. Unit Location :-back by pool 1 2 3 4 5 18. House Build on Cut Ground 1 2 3 4 5 19. House Build on Ex-mining Pool 1 2 3 4 5 20. House Build on Slope 1 2 3 4 5 21. House Numbering such as 13 or end digit 4 1 2 3 4 5 22. Design Concept of House (innovation/ contemporary) 1 2 3 4 5 23. Shape/Layout of Unit: - triangular 1 2 3 4 5 24. Shape/Layout of Unit: - rectangular 1 2 3 4 5 25. Shape/Layout of Unit: - circular 1 2 3 4 5 26. Ceiling Height (at 8½ ft) 1 2 3 4 5 27. Ceiling Height (> 8½ ft) 1 2 3 4 5
28. House with High Quality Finishes such as anti-scratch tiles, heat & sound proof glasses, solar system, auto gate, security system, and etc. 1 2 3 4 5
29. House Come with Full Furnishes 1 2 3 4 5 30. Weather Shield Paint for External Wall 1 2 3 4 5 31. House with Anti-Termite Treatment 1 2 3 4 5 32. House been Delivered Earlier or on Time 1 2 3 4 5 33. Security in the Area (gated / guarded) 1 2 3 4 5
Not Preferable Most Preferable 34. Easy Access to the Development Area 1 2 3 4 5 35. Low Density of Houses within the Area 1 2 3 4 5 36. Unit Location :-facing highway 1 2 3 4 5
37. Nearby Facilities such as commercial centre/ supermarket within 5 km radius 1 2 3 4 5 38. Schools within Development Area 1 2 3 4 5 39. Hospital within Development Area 1 2 3 4 5 40. Commercial Centre within Development Area 1 2 3 4 5
Others (Please specify)
………………………………………………………………………………………
………………………………………………………………………………...………
………………………………………………………………………………………
………………………………………………………………………………………
☺ THANK YOU ☺
Appendix 3b
UNIVERSITI TEKNOLOGI MALAYSIA
FAKULTI KEJURUTERAAN AWAM
MSC CONSTRUCTION MANAGEMENT
QUESTIONNAIRE NO.2
HOMEBUYERS’ REQUIREMENTS FOR HOUSING DEVELOPMENT
WITHIN DISTRICTS IN SELANGOR
This questionnaire survey is part of my master project’s study and the aim is to
identify the common marketing strategies implemented by the developers within
districts in Selangor.
It is sincerely hope that you will spare some time to answer the questions. The
data collected would purely use for statistical analysis and all the information will be
treated as confidential.
Thank you for your participation and kind support.
QUESTIONNAIRE (TWO)-HOUSING DEVELOPER SECTION A: RESPONDENT INFORMATION
1. Position Held: _________________________________________________
2. No. of Year of Experience □ < 5 years □ 6- 10 years □ 11- 15 years □ >15 years
3. Company in the Business □ < 5 years □ 6- 10 years □ >10 years
4. Information Required
No. Type of House Targeted Group (Age) 1 Single Storey 2 Double Storey 3 2½ Storey 4 Semi-Detached 5 Bungalow 6 Condo/Apartment
SECTION B: COMMON MARKETING STRATEGY USED BY DEVELOPER
The following may be the strategies usually implemented by developer to promote their residential houses. Based on your experience, please indicate the level of significance for each of the factors presented by choosing the scale from 1 to 5 in ascending order of significance where 1- Not significant; 2- Slightly significant; 3- Moderately significant; 4- Very significant and 5- Most significant.
Not Most I. Strategies Implemented Significant Significant 1. House Pricing Strategy 1 2 3 4 5 2. Provide Free Legal fee(s) 1 2 3 4 5 3. Reduce in Maintenance Fee (if applicable) 1 2 3 4 5 4. Provide Freebies in Addition to the Sale of the Property such as built-in cabinet / TV / air-conditioner / security alarm system / auto gate / early bird discount and etc. 1 2 3 4 5 5. Campaigns (carnival/party/lucky draw etc) 1 2 3 4 5 6. Market Research / Survey 1 2 3 4 5
No Most t Significant Significant 7. Investment Plan / Guarantee Rental Return / Time Sharing Plan 1 2 3 4 5 8. Press Release / Conference 1 2 3 4 5 9. Loyalty Programme 1 2 3 4 5 10. Referral Programme 1 2 3 4 5 11. No. of Unit of House for Each Launch 1 2 3 4 5 12. Show House 1 2 3 4 5 13. Scale Model(s) of Houses 1 2 3 4 5 14. Construction of Houses before Launching 1 2 3 4 5 15. Advertising Tools 1 2 3 4 5 16. Provide Higher Loan Margin 1 2 3 4 5 17. Allow Low Down Payment for Booking 1 2 3 4 5 18. Provide Training to Sales Staff 1 2 3 4 5 19. Employ Sales Agents 1 2 3 4 5 20. Emphasize on House Design 1 2 3 4 5 Others (Please specify)
……………………………………………………………………………………………
……………………………………………………………………………………………
II. Types of Advertising Tools Used (*Select the relevant only) No. DESCRIPTION PLEASE
( √ ) % of Sales Generated
1 Brochures Distribution 2 Outdoor Advertising(Banner / Bunting
/Billboard)
3 Newspaper Advertisement 4 Magazines 5 Television Broadcast 6 Radio Broadcast 7 Telemarketing 8 Roadshow 9 Web Site 10 By Word of Mouth (Friend / Relative)
☺ THANK YOU ☺
