ii

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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iv

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

vi

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.

vii

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 DECLARATION DEDICATION ACKNOWLEDEGEMENTS ABSTRACT ABSTRAK TABLE OF CONTENT LIST OF TABLES LIST OF FIGURES LIST OF APPENDICES

TITLE

PAGE ii iii iv v vi vii viii xiii xv xvii

INTRODUCTION 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Introduction General Background Problem Statement Aim and Objective Scope of Study Brief Methodology Report Outline Significance of Study 1 1 2 3 4 4 5 6

HOUISNG DEVELOPMENT PROCESS 2.1 Introduction 7

ix 2.2 Housing Development 2.2.1 Project Initiation 2.2.1.1 2.2.1.2 2.3 2.4 Funding The Product 2.4.1 2.4.2 Product Development The Designer Feasibility Study Project Brief 7 8 8 9 9 10 13 14 15 16 17 19 20 20 22

2.4.3 Designer Process 2.5 Development Statutory Approval 2.5.1 2.5.2 2.6 2.7 2.8 Development Order Stage Building and Services Plan Stage

Procurement Stage Project Implementation Stage Hand Over Stage

HOUSING FEATURES AND MARKETING STRATEGY 3.1 3.2 3.3 3.4 Introduction Property Market and Its Outlook Population and Demand of Houses The Influential Factors toward the Property Sales 3.4.1 Property Location 3.4.2 House Design Concept 3.4.3 Layout Plan and Finishes 23 23 24 28 28 30 31 31 32 33 33 34 34 35

3.4.4 Pricing 3.4.5 3.4.6 3.4.7 3.4.8 3.4.9 Land Status Nearby Facilities Size of Development Facility within Development Area Numbering

3.4.10 Security of the Development Area

x 3.4.11 Anti-termite Treatment 3.4.12 Feng Shui 3.5 Developer Strategy 3.5.1 Sales and Marketing 35 36 36 37 38 39 42 43 43 44 45 46 46 47 48 48 49 49 50 51 51 52 53 54 55 56 57 58 58 58 59

3.5.2 Roles of Marketing Manager 3.5.3 3.5.4 3.5.5 Marketing Strategy Marketing Plan Competitor Analysis

3.5.6 Scale Model 3.5.7 3.5.8 3.5.9 Customer Services Skill of Presentation/ Closing the Sales House Delivery Time

3.5.10 Reputation of the Developer 3.5.11 Value-added Services 3.5.12 Gift Campaign 3.5.13 Brochure Design 3.5.14 Advertising 3.5.14.1 Advertising Tools Brochures Distribution Outdoor Advertising Banner Bunting Billboard

3.5.14.1.1 3.5.14.1.2

3.5.14.1.2.1 3.5.14.1.2.2 3.5.14.1.2.3 3.5.14.1.3 3.5.14.1.4 3.5.14.1.5 3.5.14.1.6 3.5.14.1.7 3.5.14.1.8 3.5.14.1.9 3.5.14.1.10

Newspapers Magazines Radio Broadcast Television Broadcast Telemarketing Roadshow By Word of Mouth Web Site

xi 3.5.14.2 3.5.14.3 3.5.14.4 3.6 Business to Business Corporate Sales Sales Agent 61 62 62 62 63 64

Typical Complaints from the Buyers 3.6.1 Late Delivery of Houses 3.6.2 3.6.3 Poor Quality of the Houses Been Delivered Houses been Delivered without Certificate of Fitness for Occupation 3.6.4 Houses Been Delivered without Water and Electricity Supply 3.6.5 Misleading Advertisement

64

65 65

METHODOLOGY 4.1 4.2 4.3 Introduction Literature Review Questionnaire Survey 4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 Preparation of Questionnaire Response to Questionnaire Survey Frequency Analysis Relative Importance Index (RII) Limitation of Survey 66 67 67 68 69 70 70 71

DATA COLLECTION AND ANALYSIS 5.1 5.2 Introduction Respondents 5.2.1 5.2.2 End-users Background Developer Background 5.2.2.1 Number of Years of Working Experience 5.2.2.2 Developers Profile 5.3 5.4 Targeted Group of Buyers Advertising Tools 72 72 72 83 85 86 88 88

xii 6 DISCUSSION OF THE FINDINGS 6.1 6.2 Introduction Results and Discussion 6.2.1 6.2.2 Preference of Type of Houses Housing Features 6.2.2.1 Preference of Housing Features among Malay 6.2.2.2 Preference of Housing Features among Chinese 6.2.2.3 Preference of Housing Features among Indian and others 6.2.3 Developer Strategy 6.2.3.1 Advertising Tools 7 CONCLUSION AND RECOMMENDATION 7.1 7.2 Introduction Conclusions 7.2.1 The popular type of houses preferred by the potential house buyers 7.2.2 The basic quality and features of the house preferred by different ethnic groups of house buyers 7.2.3 The common strategies adopted by developers to market residential houses in current market 7.3 Recommendation for Future Research 101 101 98 97 97 97 94 95 96 90 90 91 93 93 93

REFERENCES

103

APPENDICES

105

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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 25 25 26 27

3.1 3.2 3.3 3.4 3.5

Density of population at selected areas Population in the selected district of Selangor, 2005-2020 Forecast new houses required in Selangor, 2000-2020 Forecast of new houses required for year 2000 2020 Forecast of houses required in selected district of Selangor, 2000-2020

27 29 60

3.6 3.7 5.1

Top 5 popular housing areas/schemes in Selangor Profile of major media types Number of the first set of questionnaire survey forms Received (end-user)

73 74 75 76 77 77 78 80 82 84

5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10

Age of respondents participated in the survey (end-user) Household income group participated in the survey (end-user) Preference of type of houses Preference of building built-up area Preference of house prices Preference of housing features among Malay Preference of housing features among Chinese Preference of housing features among Indian and others Respondent position (developer)

xiv TABLE NO. TITLE PAGE

5.11 5.12 5.13 5.14 5.15 5.16

Years of experience of respondents (developer) Years of company in business Developer strategy Targeted group of house buyer for each type of house Respond of the house buyer toward advertising tools Effectiveness of the advertising tools toward developers

85 86 87 88 89 89

xv

LIST OF FIGURES

FIGURE NO.

TITLE

PAGE

1.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13

Study flow chart Classification of construction industry Single storey houses Double storey houses 2 storey houses Semi-detached houses Bungalow Apartments Condominiums Principal components of a marketing strategy The strategy process Designing and managing a marketing strategy Scale Models Brochures Banner-type 1 Banner-type 2 Banner-type 3 Bunting Billboard- type 1 Billboard- type 2 Billboard- type 3 Newspapers advertisements

5 11 12 12 12 12 12 12 13 40 41 42 44 51 52 52 52 53 53 53 54 55

xvi FIGURE NO. TITLE PAGE

3.14 5.1 5.2 5.3 5.4 5.5 5.6

Magazines Percentage breakdown of respondents (end-user) in survey

56 73

Percentage breakdown of age of respondents (end-user) in survey 74 Percentage breakdown of household income (end-user) in survey 75 Respondents Demographic Years of experience of respondents Company in business 84 85 86

xvii

LIST OF APPENDICES

APPENDIX

TITLE

PAGE

Summary of Development Approval Processes Guidelines in Peninsular Malaysia (Except the Federation of Kuala Lumpur and Putrajaya) Market Research Questionnaire Survey No.1 & 2

17 47 68

2 3

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 scopes 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

2 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 singlestorey link house; double-storey link house; 2 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:

Step 1) Define the aim, objectives and scope of the study

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 6) Discussion of the findings

Step 7) Conclusion

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 sectors 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 developers 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

Construction Industry

Infrastructure Development

Housing Development

Landed Property

Non-landed Property

Commercial Buildings

Residential Houses

Industrial Building

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; doublestorey terrace houses; 2 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

12 the study. They were single-storey terrace houses; double-storey terrace houses; 2 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: 2 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 projects 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 builtup, net built-up, circulation areas and services, in a sketchy manner. At this stage, the projects broad design ideas and concept emerged. From the preliminary design and site layout plans, the quantity surveyor (could come from within the developers 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 developers 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 precomputation 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 Developers 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 Developers 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 tenders 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 developers 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

Malaysias property sector hopefully would continue to register growth, especially fuelled by the growing popularity of the low mortgage rate, the continuing of the governments Malaysia, My Second Home program in promoting home ownership by the foreigners and the governments success in managing the performance of the overall economy have contributed to the industrys 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 industrys 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 20052020 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 household 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 countrys 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 firsttime house buying candidates.

Table 3.1: Density of population at selected areas State 1980 W.P. Kuala Lumpur Selangor Total 977,102 1,515,537 2,492,639 Size of Population 1991 1,226,708 2,413,567 3,640,275 2000 1,370,300 4,188,876 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 Population Distributed (000) 2005 Gombak Petaling Klang Hulu Langat 654.2 1,450.1 768.1 1,054.5 Total 3,926.9 2010 736.0 1,637.5 855.1 1,183.1 4,411.7 2015 814.9 1,802.2 942.2 1,297.8 4,857.1 2020 893.6 1,944.9 1,027.2 1,405.3 5,271.0

District

Source: Kajian Rancangan Struktur Negeri Selangor, 2002

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 Category 2000 Stock Backlog Immediate Replacement (1%) New House Usual Replacement (1%) Total No. of Unit (for 5 years) Average per year 976,732 -46,861* 9,676 2005 939,638 237,919 47,391 Year 2010 1,224,948 249,661 45,069 2015 2020

1,519,678 1,814,230 251,693 42,859 188,229 40,758

-37,094 -

285,310 57,062

294,730 58,946

294,552 58,910

228,987 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 State 2000 Population 4,188,876 2005 5,097,430 Year 2010 5,968,350 2015 6,854,030 2020 7,369,030

Family size No. of houses New houses required

4.5

4.4

4.2

4.1

4.0

929,871

1,167,790

1,417,451

1,669,144

1,857,373

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 2005 Gombak Petaling Klang Hulu Langat 128,512 280,756 149,557 208,897 Total 767,722 2010 170,298 362,399 201,140 247,728 981,565 2015 192,787 434,948 263,839 293,375 2020 216,317 496,747 344,457 326,448

District

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 buyers 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 developers 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 1 2 3 4 5 HOUSING AREAS Bandar Utama Mutiara Damansara Subang Jaya/USJ RANKING 1 2 3 4 5 HOUSING SCHEMES Bandar Utama Mutiara Damansara Bukit Jelutong, Damansara Heights Gita Bayu, Sierramas, Kota Kemuning

Petaling Jaya Bandar Sri Damansara

* Source: The Edge Malaysia, Dec. 29, 2003

30 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 designers whim and fantasies. More often than not, the most excruciatingly bewitching creations are a fusion of various elementsgeometry, 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 companys 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 companys 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 selfcontained 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 28etc. or ending with nine such as 9, 19 29etc 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 ones 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 / airconditioner / 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 Architects 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 companys 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.

CREATING VALUE

DELIVERING VALUE

Product Unit Cost

PRODUCT OFFER - Design - Quality - Price - Message

Marketing Cost
MARKETING SUPPORT - Awareness - Availability

Required Co-ordination

Customers Usage Patterns and Purchase Motives

Competitive Products

Competitive Environment

Customer Characteristics

Preference Among Available Products

Products Presence Among Alternatives

Figure 3.1: Principal components of a marketing strategy

41

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

Figure 3.2: The strategy process

42 Marketing Situation Analysis

Implementing and Managing Marketing Strategy

Designing Marketing Strategy

Marketing Program Development

Figure 3.3: Designing and managing a 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 rivals 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 competitors 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 companys 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 companys reputation; service is the means of making a customers 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 personnels performance. Ryan (1981) has stated that closing the sale includes understanding and overcoming a buyers objections. Recognizing excuses versus objections, spotting buying signals and being able to deftly get the customers 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 representatives 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 developers reputation and is likely to have a knock-on effect and disrupt the companys 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 developers 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.

48 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 developers 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 developers 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 clients 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.

49 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 consumers 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 companys 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 developers control.

51

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.

52

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.

53

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

54

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: Newspapers 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 publishers 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.

58 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

60

Table 3.7: Profile of major media types

Item 1

Major Media Types Newspapers

Advantage -Flexibility -Timeliness -Good local market coverage -Broad acceptance -High believability

Disadvantage -Short life -Poor reproduction quality -Small pass-along audience -Long ad-purchase lead time -Waste circulations -No guarantee of advertisement position

Magazines

-High geographic and demographic selectivity -Credibility/prestige -High quality reproduction -Long life -Good pass-along readership

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 -High cost -High clutter -Fleeting exposure -Less audience selectivity

Television

-Good mass-market coverage -Combining sight, sound and motion -Appealing to the senses -High attention -High reach

Direct Mail

-Audience selectivity -Flexibility -No advertisement competition -Personalization

-Relatively high cost -A junk-mail image

Outdoor advertising

-Flexibility -High repeat exposure

-No audience selectivity -Creative limitation

To be contd

contd
Outdoor advertising (contd) -Low cost -Low competition -Good positional selectivity 7 Road show -Provide chance to exhibit the products in term of scale models -Organize by specialist 8 E-mail -Large domestic and International Market -High cost -Space rental -Exhibit design -Competitors around -High cost -Expose to virus attack/hacker -Audience control exposure -Limited time to read

61

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 developers 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.

64 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 architects 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 supplys connection, it could still be the developers 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 Malay Chinese Indian Other Total Number of form received 40 35 16 3 94 Percentage 43% 37% 17% 3% 100%

Percentage Breakdown of Respondents

Others 3% Malay 43%

Indian 17%

Chinese 37%

Malay
Chinese
Indian
Others

Table 5.2 and Figure 5.2 shown that the age of (end-user) in survey Figure 5.1: Percentage breakdown of respondents the participants in

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 < 31 years 31 40 years > 40 years Total Number of form received 32 39 23 94 Percentage 34% 42% 24% 100%

Percentage Breakdown of Age of Respondents

>40 Years 24%

<31Years 34%

31-40 Years 42%

<31Years 31-40 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 < RM3,000 RM3,000 RM5,000 >RM5,000 Total Number of participants 9 54 31 94 Percentage 10% 57% 33% 100%

Percentage Breakdown of Household Income of Respondents

>RM5,000 33%

<RM3,000 10%

RM3,000 - RM5,000 57%

<RM3,000 RM3,000 - 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 Type of Houses 1 2 3 4 5 No. of Respondents 0 17 11 5 20 33 7 18 20 27 31 25 22 18 29 36 23 19 30 35 20 21 17 17 17 9 13 7 8 9 Frequency Analysis <3 >3 % % 7 37 33 34 54 62 69 44 36 28 21 18

RI

Rank

Double Storey Link House Condominium/Apartment Single Storey Link House 2 Storey Link House Semi-detached House Bungalow

0.798 0.621 0.619 0.596 0.506 0.462

1 2 3 4 5 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 Built-up of the Building 1,001 ft2 2,000 ft2 2,001 ft 3,000 ft 3,001 ft 4,000 ft Less than 1,000 ft2 More than 4,000 ft2
2 2 2 2

Likert Scale 1 2 3 4 5 No. of Respondents 6 4 10 13 31 34 11 28 27 24 5 7 7

Frequency Analysis <3 >3 % % 17 16 55 54 65 69 54 19 18 15

RI

Rank

0.764 0.719 0.483 0.479 0.426

1 2 3 4 5

26 26 24 13 30 21 26 10 42 19 19 7

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 Price of the House 1 2 3 4 5 No. of Respondents Frequency Analysis <3 >3 % % 23 16 36 78 83 61 65 30 12 6

RI

Rank

< RM200,000 9 13 15 16 41 RM200,000 - RM300,000 3 12 18 38 23 RM301,000 - RM400,000 13 21 32 20 8 RM401,000 - RM500,000 40 33 10 6 5 > RM500,000 63 15 10 3 3

0.743 0.740 0.577 0.394 0.319

1 2 3 4 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 authors 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

Housing features 1 0 0 0 1 0 0 2 0 1 0 0 1 1 3 2 3 4 2 4 2 4 8 3 10 10 9 13 5 30 33 26 27 26 24 No. of Respondents House Build on Cut Ground House with Anti-Termite Treatment Land Status: -Freehold Schools within Development Area Weather Shield Paint for External Wall Easy Access to the Development Area Nearby Facilities such as commercial centre/ supermarket within 10 km radius Low Density of Houses within the Area Healthcare Facility within Development Area Security in the Area (gated / guarded) Unit Location :-near mosque Ceiling Height (> 8 ft) Design Concept of House (innovation/ contemporary) Commercial Centre within Development Area Unit Location :-near playing field Frequency Analysis <3 >3 % 0 3 0 3 3 3 % 95 90 90 93 88 93 0.940 0.940 0.910 0.910 0.900 0.900 1 2 3 4 5 6

RI

Rank

0 2 1 1 0 0 2 2 4

1 0 0 1 0 0 0 4 1

2 6 4 4 8 8 8 10 10

14 3 12 11 10 14 11 10 12

23 29 23 23 22 18 19 14 13

3 5 3 5 0 0 5 15 13

93 80 88 85 80 80 75 60 63

0.895 0.885 0.880 0.870 0.870 0.850 0.825 0.750 0.745

7 8 9 10 11 12 13 14 15

To be contd

79 contd Likert Scale

Housing feature 1 3 2 5 1 4 4 6 7 7 8 8 9 17 13 2 3 4 5 8 4 9 10 9 9 11 10 9 6 11 3 14 11 12 22 23 20 14 15 17 14 15 17 6 9 4 9 16 11 7 6 7 8 9 5 6 7 4 9 5 5 11 7 7 2 3 0 2 0 2 1 0 1 2 2 No. of Respondents House Facing East (sunrise) Shape/Layout of Unit: - rectangular Unit Location :-facing pool House Facing South House Facing North Ceiling Height (at 8 ft) House Numbering such as 13 or end digit 4 Land Status: -Leasehold House Facing West (sunset) Unit Location :-back by pool Shape/Layout of Unit: - circular Shape/Layout of Unit: - triangular Unit Location :-facing hill Unit Location :-back by hill House with Full Furnishes ( light fittings; air-conditioners; kitchen cabinet; wardrobes and etc. included) House with High Quality Finishes such as anti-scratch tiles, heat & sound proof glasses, solar system, auto gate, security system, and etc. Unit Location :-facing highway House Partly Finish (floor finishes or door leaves to be installed by house owner) Unit Location :-back by water tank Unit Location :-near refuse chamber House Build on Slope Unit Location :-facing T-junction Unit Location :-facing water tank Unit Location :-near TNB sub-station/ H.T. transmission line House Build on Ex-mining Pool Frequency Analysis <3 >3 % 15 15 25 23 20 33 40 40 40 48 45 45 58 60 % 50 58 45 23 23 18 25 23 18 18 18 13 28 18 0.710 0.710 0.650 0.605 0.600 0.550 0.550 0.530 0.530 0.505 0.505 0.495 0.465 0.460 16 17 18 19 20 21 22 23 24 25 26 27 28 29

RI

Rank

14

10

10

60

15

0.455

30

15 16

13 9

5 12

5 2

2 1

70 63

18 8

0.430 0.415

31 32

17 20 20 19 22 23 23 24

11 9 10 15 11 13 11 10

7 6 8 5 6 2 5 6

3 3 2 1 1 1 1 0

2 2 0 0 0 1 0 0

70 73 75 85 83 90 85 85

13 13 5 3 3 5 3 0

0.410 0.390 0.360 0.340 0.330 0.320 0.320 0.310

33 34 35 36 37 38 39 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

Housing features 1 0 0 0 0 0 0 2 0 0 1 0 1 2 3 4 5 5 6 5 7 4 2 4 9 11 11 9 5 29 26 20 18 18 17 No. of Respondents Land Status: -Freehold House Build on Cut Ground Easy Access to the Development Area House with Anti-Termite Treatment Weather Shield Paint for External Wall Security in the Area (gated / guarded) Nearby Facilities such as commercial centre/ supermarket within10 km radius House Facing South Low Density of Houses within the Area Unit Location :-near playing field Shape/Layout of Unit: - rectangular Design Concept of House (innovation/ contemporary) Schools within Development Area House Facing North Ceiling Height (at 8 ft) Commercial Centre within Development Area Healthcare Facility within Development Area Unit Location :-back by hill House Facing East (sunrise) Unit Location :-facing pool House with Full Furnishes ( light fittings; air-conditioners; kitchen cabinet; wardrobes and etc. included) Ceiling Height (> 8 ft) House with High Quality Finishes such as anti-scratch tiles, heat & sound proof glasses, solar system, auto gate, security system, and etc. Frequency Analysis <3 >3 % 0 0 3 0 3 6 % 89 86 83 83 83 74 0.943 0.920 0.874 0.869 0.863 0.834 1 2 3 4 5 6

RI

Rank

1 1 0 1 1 0 0 1 3 0 1 4 5 7

1 0 2 2 2 2 3 1 2 2 3 7 4 6

7 9 9 7 9 8 8 10 3 18 14 5 11 12

9 9 8 8 6 13 11 10 14 10 11 6 4 2

17 16 16 17 17 12 13 13 13 5 6 13 11 8

6 3 6 9 9 6 9 6 14 6 11 31 26 37

74 71 69 71 66 71 69 66 77 43 49 54 43 29

0.829 0.823 0.817 0.817 0.806 0.800 0.794 0.789 0.783 0.703 0.703 0.697 0.669 0.589

7 8 9 10 11 12 13 14 15 16 17 18 19 20

5 4

4 4

18 21

5 4

3 2

26 23

23 17

0.583 0.577

21 22

18

31

17

0.571

23

To be contd

81 contd Likert Scale

Housing features House Partly Finish (floor finishes or door leaves to be installed by house owner) Shape/Layout of Unit: - circular Unit Location :-facing highway Unit Location :-back by pool House Numbering such as 13 or end digit 4 House Build on Slope Shape/Layout of Unit: - triangular Land Status: -Leasehold House Facing West (sunset) Unit Location :-back by water tank House Build on Ex-mining Pool Unit Location :-facing water tank Unit Location :-near mosque Unit Location :-facing hill Unit Location :-near refuse chamber Unit Location :-near TNB sub-station/ H.T. transmission line Unit Location :-facing T-junction 1 2 3 4 5 No. of Respondents Frequency Analysis <3 >3 % %

RI

Rank

6 5 11 9 10 11 14 10 12 19 17 19 20 20 25 25 28

10 13 8 13 11 11 7 12 15 8 11 10 8 11 3 7 2

14 12 10 7 10 8 9 13 7 6 6 5 6 3 7 2 4

3 4 5 4 3 4 4 0 1 1 1 0 1 1 0 1 1

2 1 1 2 1 1 1 0 0 1 0 1 0 0 0 0 0

46 51 54 63 60 63 60 63 77 77 80 83 80 89 80 91 86

14 14 17 17 11 14 14 0 3 6 3 3 3 3 0 3 3

0.514 0.503 0.469 0.469 0.451 0.446 0.434 0.417 0.383 0.354 0.349 0.337 0.331 0.314 0.297 0.280 0.274

24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 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
Housing features 1 0 0 0 0 0 0 1 1 2 0 0 3 1 1 1 2 2 0 1 0 1 1 0 1 3 1 1 3 1 4 2 4 2 3 3 3 5 4 3 6 4 2 4 7 6 4 2 6 6 7 4 3 2 3 6 8 6 5 4 3 6 3 3 6 6 2 2 5 13 13 11 8 7 7 8 9 9 5 7 8 6 4 6 6 No. of Respondents Land Status: -Freehold House with Anti-Termite Treatment House Build on Cut Ground Nearby Facilities such as commercial centre/ supermarket within 5 km radius Schools within Development Area Easy Access to the Development Area Ceiling Height (> 8 ft) Shape/Layout of Unit: - rectangular Unit Location :-near playing field Weather Shield Paint for External Wall House Facing South House Facing East (sunrise) Security in the Area (gated / guarded) House Facing North Design Concept of House (innovation/ contemporary) Low Density of Houses within the Area House with High Quality Finishes such as anti-scratch tiles, heat & sound proof glasses, solar system, auto gate, security system, and etc. Healthcare Facility within Development Area Unit Location :-facing pool Commercial Centre within Development Area Ceiling Height (at 8 ft) Unit Location :-back by hill House with Full Furnishes ( light fittings; air-conditioners; kitchen cabinet; wardrobes and etc. included) Unit Location :-back by pool Frequency Analysis <3 >3 % 0 5 0 5 5 0 11 21 16 5 16 21 26 16 26 21 % 84 79 74 74 79 68 68 68 63 58 53 58 63 53 42 42 0.905 0.884 0.863 0.821 0.821 0.811 0.789 0.779 0.768 0.758 0.747 0.726 0.726 0.705 0.684 0.684 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

RI

Rank

1 0 3 2 4 6

3 4 1 5 4 3

7 7 9 7 7 6

5 6 2 3 2 1

3 2 4 2 2 3

21 21 21 37 42 47

42 42 32 26 21 21

0.663 0.663 0.632 0.579 0.537 0.516

17 18 19 20 21 22

4 6

6 4

6 5

2 3

1 1

53 53

16 21

0.495 0.484

23 24

To be contd

contd Likert Scale

Housing features 1 8 7 5 2 1 3 7 3 6 5 4 4 2 3 2 5 2 1 1 No. of Respondents Unit Location :-facing hill Shape/Layout of Unit: - triangular Shape/Layout of Unit: - circular House Partly Finish (floor finishes or door leaves to be installed by house owner) House Facing West (sunset) House Numbering such as 13 or end digit 4 Unit Location :-back by water tank Land Status: -Leasehold House Build on Slope Unit Location :-facing highway Unit Location :-near mosque Unit Location :-near TNB sub-station/ H.T. transmission line Unit Location :-facing water tank Unit Location :-facing T-junction House Build on Ex-mining Pool Unit Location :-near refuse chamber Frequency Analysis <3 >3 % 47 53 63 % 21 21 16 0.484 0.474 0.463

83

RI

Rank

25 26 27

6 6 7 9 8 8 10 10 10 11 12 11 12

5 6 3 4 3 6 4 3 5 3 2 2 3

5 4 7 4 8 2 3 6 3 4 3 6 4

2 2 2 1 0 3 2 0 1 1 2 0 0

1 1 0 1 0 0 0 0 0 0 0 0 0

58 63 53 68 58 74 74 68 79 74 74 68 79

16 16 11 11 0 16 11 0 5 5 11 0 0

0.463 0.453 0.442 0.400 0.400 0.400 0.368 0.358 0.347 0.347 0.347 0.347 0.316

28 29 30 31 32 33 34 35 36 37 38 39 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 Sales & Marketing Executive Sales & Marketing Manager Account Manager Senior Sales & Marketing Manager Quantity Surveyor Manager No. of Respondents 1 1 1 1 1 Percentage 20% 20% 20% 20% 20%

Note: Total number of developers participated in the survey is 5

Percentage Breakdown of Respondents

Quantity Surveyoy Manager 20% Senior Sales & Marketing Manager 20%

Sales & Marketing Executive 20% Sales & Marketing Manager 20%

Sales & Marketing Executive Sales & Marketing Manager Account Manager Senior Sales & Marketing Manager Quantity Surveyoy Manager

Account Manager 20%

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 < 5 years 5 -10 years 11 -15 years > 15 years No. of Respondents 0 2 0 3 Percentage 0% 40% 0% 60%

Note: Total number of developers participated in the survey is 5

Years of Experience of Respondents

< 5 years 0%

5 -10 years 40%

< 5 years 5 -10 years 11 -15 years > 15 years

> 15 years 60%

11 -15 years 0%

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 < 5 years 5 -10 years > 10years No. of company 1 1 3 Percentage 20% 20% 60%

Note: Total number of developers participated in the survey is 5

Company in Business

, < 5 years, 20%

< 5 years
5 -10 years
> 10years

, > 10years, 60%

, 5 -10 years, 20%

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

Frequency Analysis <3 >3 % 0 0 0 0 0 0 0 0 0 0 % 100 100 100 100 100 80 80 80 80 80 1.000 1.000 0.960 0.920 0.880 0.880 0.840 0.840 0.840 0.840 1 2 3 4 5 6 7 8 9 10

Likert Scale
Strategy 1 0 0 0 0 0 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 3 0 0 0 0 0 1 1 1 1 1 4 0 0 1 2 3 1 2 2 2 2 5 5 5 4 3 2 3 2 2 2 2 No. of Respondents House Pricing Strategy Show House Advertising Tools Provide Higher Loan Margin Construction of Houses before Launching Scale Model(s) of Houses Campaigns (carnival/party/lucky draw etc) No. of Unit of House for Each Launch Allow Low Down Payment for Booking Provide Training to Sales Staff Provide Freebies in Addition to the Sale of the Property such as built-in cabinet / TV / airconditioner / security alarm system / auto gate / early bird discount and etc. Referral Programme Poor Quality of the House been Delivered Market Research / Survey Reduce in Maintenance Fee (if applicable) Investment Plan / Guarantee Rental Return / Time Sharing Plan Press Release / Conference Employ Sales Agents Loyalty Programme Emphasize on House Design

RI

Rank

80

0.800

11

0 0 0 0 0 0 0 1 0

0 0 0 2 1 0 1 0 2

1 2 2 0 2 3 1 2 2

3 2 2 2 1 2 3 2 1

1 1 1 1 1 0 0 0 0

0 0 0 40 20 0 20 20 40

80 60 60 60 40 40 60 40 20

0.800 0.760 0.760 0.680 0.680 0.680 0.680 0.600 0.560

12 13 14 15 16 17 18 19 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 Double Storey Link House Condominium/Apartment Single Storey Link House 2 Storey Link House Semi-detached House Bungalow
Note: Total number of developers participated in the survey is 5

Targeted Group (Age) 30 - 45 20 - 40 25 - 45 40 - 50 40 - 50 40 - 50

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 Newspaper Brochure Roadshow Television Radio Telemarket Word of Mouth (Friend/Relative) Web Site Outdoor Advertisement (Banner/Bunting/Billboard) No. of Respondents 74 51 14 18 12 3 27 11 50 % 79 54 15 19 13 3 29 12 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 Newspaper Brochure Roadshow Television Radio Telemarket Word of Mouth (Friend/Relative) Web Site Outdoor Advertisement (Banner/Bunting/Billboard) Magazine No. of Company 5 5 4 0 2 2 5 3 5 0 % of Sales Generated 20% - 70% 1% - 20% 5% - 10% N/A 4% - 5% 1% - 5% 2% - 10% 1% - 5% 10% - 30% 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 doublestorey 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 8 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 Tjunction; 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 8 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 REFERENCES

1. Abdul Rahman, M.T. (2005). WTW Property Market 2004. Kuala Lumpur: C H Williams Talhar & Wong Sdn. Bhd. 2. Abdul Rashid, K. (2002). Construction Procurement in Malaysia: Processes and Systems Constraints and Strategies. Malaysia: International Islamic University. 3. Boyd, and Harper, W. (1998). Marketing Management - A Strategic Approach with A Global Orientation. United State of America: Irwin/McGraw-Hill. 4. Cravens, D.W. (1999). Strategic Marketing Management Cases. United State of America: Irwin/McGraw-Hill. 5. Hendon, D.W. (2001). Classic Failures In Product Marketing. Malaysia: Hardknocks Factory Sdn Bhd. 6. Jabatan Perancangan Bandar dan Desa Negeri Selangor (2002). Laporan Pemeriksaan Rancangan Struktur Negeri Selangor (2002-2020). Negeri Selangor: Jabatan Perancangan Bandar dan Desa. 7. Kaufman, L.C. (1987). Essentials of Advertising. Second Edition. United State of America: Harcourt Brace Jovanovich. 8. Khoo and Munro-Smith (2003). Reader-Friendly Strategic Management. Malaysia: Pelanduk Publication Sdn. Bhd. 9. Kotler, P. and Armstrong, G. (1999). Principles of Marketing. New Jersey: Prentice-Hall, Inc.

104 10. Levinson, W.A. (1994). The Way of Strategy. USA: ASQC Quality Press. 11. Malaysian Institute of Management (1992). Marketing Management. Malaysia: Pelanduk Publication Sdn Bhd. 12. Misner, I. R. (1994). The Worlds Best Known Marketing Secret- Building Your Business with Word-of-Mouth Marketing. United of America: Bard & Stephen. 13. Pederson, C.A., Wright, M.D., and Weitz, B.A. (1981). Selling Principles and Methods. Seventh Edition. United of America: Richard D. Irwin, Inc. 14. Rea, P., and Kerzner, H. (1997). Strategic Planning: A Practical Guide. Canada: John Wiley & Sons, Inc. 15. Robert Dwyer, F. (1999). Business Marketing: Connecting Strategy, Relationships, and Learning. United States: McGraw-Hill Companies, Inc. 16. Roman, K., and Maas, J. (2003). How to Advertise. Third Edition. United Kingdom: Kogan Page Limited. 17. Ruud, J. (1987). Strategic Marketing Plan. Malaysia: Pelanduk Publication Sdn Bhd. 18. Ryan, W. T. (1981). A Guide to Marketing. United of America: Learning Systems Company. 19. Tow, K.K. (2004). Marketing for Success. Malaysia: Leeds Publications. 20. Young, T. (2000). Planning Project. Malaysia: SAM Publication Sdn Bhd.

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 SubDivision of Land Approach 1 1A.Application for Approval of Land Development Plan 1B. Final Approval for Conversion and Sub-Division of Land Approach II Application for Conversion and SubDivision of Land 2. Planning Approval

District Land Office, State Land and Mineral Office (PTG) (should there be a Regional Processing Unit) Procedure / Process of securing the approval for Conversion and SubDivision 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. PTD / PTG

PTD / PTG

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 JPP JAS -24 days -30 days -90 days (EIA) -21 days (others) JKR -30 days

To be contd

Cont
Comments / Approval of Application Processed By Approved By / Duration Documents To Be Submitted Declarations By Technical Agencies 6. Layout Plan and LCP acknowledged by JPBD / Planning Officer at PBT 2. Planning Approval (contd) JPBD / PBPT 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 TNB STM -30 days -30 days -30 days

Others (if applicable)

3. Housing Developers License (for housing development exceeding 4 units for purpose of sale)

Local Authorities

Housing Department gives approval. (Section 5(4)Housing Developers Act (Monitoring and Licensing) 1966Act 188) Period: 4 weeks

-Borang Jadual A -Land Grant, Land Title, Title Deed Approval of Conversion and SubDivision 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 JBP JKR JPS -30 days -14 days -30 days -21 days

To be contd

Cont
Comments / Approval of Application Processed By Approved By / Duration Documents To Be Submitted Declarations By Technical Agencies 4. Building Plan (contd) 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 STM PBAN PBI (internal)-21days others (if needed) -Jabatan Penerbangan Awan -LLM -KTM -30 days -30 days -42 days

5. Advertising and Sales Permit

Ministry of Housing and Local Authorities (Licensing and Advisory Section)

Housing Department gives approval (Ar.5 Housing Developers 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 Developers Regulations (Monitoring & Licensing) 1989

- Completed Borang E received by PBT - Architect Certification of Completion (ACC) -

To be contd

Cont
Comments / Approval of Application Processed By Approved By / Duration Documents To Be Submitted 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 JBP JKR JPS TNB STM PBAN PBI (internal)-14days others (if needed) -Jabatan Penerbangan Awan -LLM -KTM -14 days -14 days -14 days -14 days -14 days -14 days -21days

* 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 Property Type Developer Telephone No. Tenure of Land Date Launched Expected Completion Built-up & Price Anggun P.u.r.i Condominium Homestead Development Sdn Bhd 03-62573859/79547696 Freehold December 2003 December 2006 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 (as above) 246 units (22 Storey) 70% sold as at 23/02/2005 3.6 acres 68 units per acre 23 cents psf Included in the maintenance charges - Swimming Pool - 24 hours security - Tennis Courts - Playground - Reading Room - Childrens nursery - Convenient Shop - Ample covered parking lots 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

Built-up Area No. of Units Sales Status Acreage Density Maintenance Fee Sinking Fund Facilities

USP Development Advantage

USP

6 types of layout to choose from

Product

Disadvantage Special Packages Strategy Down Payment Survey By : Jayanthi

12 units per floor serviced by 3 lifts Option to up grade finishes at a reasonable price - Although the area looks quite & peaceful, but rapid development going on nearby - High density area with only one access - Free legal fee for SPA Claiming to be beside high profile neighbours 10% upon confirmation

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 projects 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 Chinese Indian > 40 years Others

2. Race Malay

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 1Not preferable; 2- Less preferable; 3- Moderate; 4- Preferable and 5- Most preferable. Not Preferable 1. Type of House a. Single Storey Link House b. Double Storey Link House c. 2 Storey Link House d. Semi-detached House e. Bungalow f. Condominium/Apartment 2. Built-up a. Less than 1,000 ft2 b. 1,001 ft2 2,000 ft2 c. 2,001 ft2 3,000 ft2 d. 3,001 ft2 4,000 ft2 e. More than 4,000 ft2 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 1 1 1 1 1 1 2 2 2 2 2 2 3 3 3 3 3 3 4 4 4 4 4 4 5 5 5 5 5 5 Most Preferable

Not Preferable 3. Price/Budget a. Less than RM200,000 b. RM201,000 - RM300,000 c. RM301,000 - RM400,000 d. RM401,000 - RM500,000 e. More than RM500,000 4. 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3

Most Preferable

4 4 4 4 4

5 5 5 5 5

Which of the following sources that give you the information about the property for sale? (Please tick the appropriate choice(s)). Newspaper Television Brochure Radio Roadshow Telemarket Web Site

Word of Mouth (Friend/Relative)

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; 3Moderate; 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 1. Land Status: -Freehold 2. Land Status: -Leasehold 3. House Facing East (sunrise) 1 1 1 2 2 2 3 3 3
Most Preferable

4 4 4

5 5 5

Not Preferable 4. House Facing West (sunset) 5. House Facing North 6. House Facing South 7. Unit Location :-near playing field 8. Unit Location :-near TNB sub-station 9. Unit Location :-near mosque 10. Unit Location :-near refuse chamber 11. Unit Location :-facing T-junction 12. Unit Location :-facing hill 13. Unit Location :-back by hill 14. Unit Location :-facing water tank 15. Unit Location :-back by water tank 16. Unit Location :-facing pool 17. Unit Location :-back by pool 18. House Build on Cut Ground 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

Most Preferable

4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4

5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5

19. House Build on Ex-mining Pool 1 20. House Build on Slope 1 21. House Numbering such as 13 or end digit 4 1 22. Design Concept of House (innovation/ contemporary) 23. Shape/Layout of Unit: - triangular 24. Shape/Layout of Unit: - rectangular 25. Shape/Layout of Unit: - circular 26. Ceiling Height (at 8 ft) 27. Ceiling Height (> 8 ft) 28. House with High Quality Finishes such as anti-scratch tiles, heat & sound proof glasses, solar system, auto gate, security system, and etc. 29. House Come with Full Furnishes 30. Weather Shield Paint for External Wall 31. House with Anti-Termite Treatment 32. House been Delivered Earlier or on Time 33. Security in the Area (gated / guarded) 1 1 1 1 1 1

1 1 1 1 1 1

2 2 2 2 2 2

3 3 3 3 3 3

4 4 4 4 4 4

5 5 5 5 5 5

Not Preferable 34. Easy Access to the Development Area 35. Low Density of Houses within the Area 36. Unit Location :-facing highway 37. Nearby Facilities such as commercial centre/ supermarket within 5 km radius 38. Schools within Development Area 39. Hospital within Development Area 40. Commercial Centre within Development Area Others (Please specify) 1 1 1 2 2 2 3 3 3

Most Preferable

4 4 4

5 5 5

1 1 1 1

2 2 2 2

3 3 3 3

4 4 4 4

5 5 5 5

...

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 projects 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 years 3. Company in the Business < 5 years 6- 10 years 4. Information Required No. 1 2 3 4 5 6 Type of House Single Storey Double Storey 2 Storey Semi-Detached Bungalow Condo/Apartment Targeted Group (Age) 11- 15 years >15

>10 years

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; 3Moderately significant; 4- Very significant and 5- Most significant. Not Significant 2 2 2 3 3 3 4 4 4 Most Significant 5 5 5

I. Strategies Implemented

1. House Pricing Strategy 1 2. Provide Free Legal fee(s) 1 3. Reduce in Maintenance Fee (if applicable) 1
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 5. Campaigns (carnival/party/lucky draw etc) 1 6. Market Research / Survey 1

2 2 2

3 3 3

4 4 4

5 5 5

Not Significant 7. Investment Plan / Guarantee Rental Return / Time Sharing Plan 1 8. Press Release / Conference 1 9. Loyalty Programme 1 10. Referral Programme 11. No. of Unit of House for Each Launch 12. Show House 13. Scale Model(s) of Houses 14. Construction of Houses before Launching 15. Advertising Tools 16. Provide Higher Loan Margin 17. Allow Low Down Payment for Booking 18. Provide Training to Sales Staff 19. Employ Sales Agents 20. Emphasize on House Design Others (Please specify) 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3

Most Significant 4 4 4 4 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5

II. Types of Advertising Tools Used (*Select the relevant only) No. 1 2 3 4 5 6 7 8 9 10 DESCRIPTION Brochures Distribution Outdoor Advertising(Banner / Bunting /Billboard) Newspaper Advertisement Magazines Television Broadcast Radio Broadcast Telemarketing Roadshow Web Site By Word of Mouth (Friend / Relative) THANK YOU PLEASE () % of Sales Generated