Builders – deliver on time!!

The real estate industry has already been suffering with less cash inflow because of large inventories that are waiting for the buyers and now it is even hit harder according to the draft rules unveiled by the government. Though it is a big relief for the home buyers who would be receiving handsome interest for the delay in project but if this rule goes through the builders will be hit hard.

Though the delay is mainly because of the dispute between builder, owner and developers. Builders try to term these as situation which are beyond their control to avoid being held liable for deficiency in service.

Now as per the new ruling, Developers may have to pay as much as 11.2% interest to buyers for delay in handing over apartments and homes. This rule also mandates all builders that all projects without a completion date will have to register with Real Estate Regulatory Authority within 3 months of the rules being notified.

The buyers who are in this category has authority to ask for compensation, they have two options available with them-either they can go for complete refund along with the interest rate or just the interest rate for the period of delay. The draft real estate rules have been formulated by the housing and urban poverty alleviation ministry within two months of some sections of the Real Estate (Development and Regulation) Act, 2016 coming into force on May 1this year.

The interest rate has been kept 2% higher than the prime lending rate (PLR) of the State bank of India.

Most of the developer in our network are saying that if the rules are applied on ongoing projects the sector will be hit severely and there could be further delay.

President of the Confederation of Real Estate Developers’ Associations of India (CREDAI), Getamber Anand, said all unfinished projects, which were launched before 2012, can be termed as defaulters and under the draft rules, if buyers demand their money back, developers will have to return at over 11% rate of interest.

If you have any questions please leave a comment.

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Crossing the Chasm – Basics of marketing new product

Whenever a company plans to launch any new product or service in market the most important thing for them is to study is how the customers or common people going to take the service/product. There are many takes on customer’s behaviour on a new product but the study cannot be completed if you have not read about it in Crossing the Chasm. The concept has been explained quite brilliantly.

Though the idea was given way back in 1990 by Geoffrey Moore, I think it still holds true in today’s time. How can a new product conquer the biggest market shares? How can an ephemeral fad turn into a long-term trend? How can consumers with very different expectations be nevertheless convinced? According to Moore, the market comprises five consumer categories: innovators, early adopters, early majority, late majority and laggards.

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Innovators which comprise of only 2%, they are the people who are going to try everything which are new. They are just attracted to the new services and technology.  Though essential to winning the references that will ultimately lead to the early adopter market, little profit will be generated in this segment itself.

Early adopters (15%) – They are people which can give companies there first big break.  Consumers in the early majority don’t like fads. They wait until a product is really practical before adopting it. So if the product is good enough these group of people will give you your break.

Early Majority, 34%: They are like value added reseller. They like to buy from market leaders, because they know supporting products and peripherals will be developed around the market leader. Selling to them is a continuous planned process involving continuous reinvestment.

Late Majority -The late majority waits for the product to be tested and refined in numerous versions. They also want technical support if need be. These consumers represent 33 percent of the market, which is the largest group.

The laggards are a minority that are not interested in trying anything new.

Now what is the Chasm?

The chasm represents the area between two distinct marketplaces. It falls between an early market dominated by early adopters and insiders who are quick to speculate about the benefits of the new development and also the mainstream market where the financial returns can be delivered. The point to be noted is that product remains the same but convincing argument will vary according to the targeted niche and the chasm will be crossed. Once the chasm has been crossed, it is very important for the company to keep it promises and meet consumer’s expectation.

For more such articles you can follow our blog.

NO Service Tax on buying under construction flats

Lot has been said about this recent judgment by Delhi High court. Everyone is asking whether it will affect the buyers and seller in any way. Here is everything you need to know about the judgment.

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What the judgment say –

High Court held that the service tax is only payable on the value of services and not on the value of land. The mechanism for establishing the value of services involved in such contracts should have been provided either under the Finance Act, 1994, or the Rules issued under the said Act. In absence of any mechanism within the Act or the Rules to exclude the value of land, no service tax can be imposed on consideration of under construction flats wherein the value of land is included in such consideration. The High Court further held that even though an abatement of 75% is given by a notification, it cannot substitute the lack of statutory machinery provisions in the Act or Rules framed in this regard. Considering the above, petitioner was allowed refund of tax already paid along with an interest of 6% from the date of deposit till the date of refund. The judgment of the High Court pertains to a period before July 2012.

Who is going to benefit –

It is too early to say who all are going to benefit from this judgment. Tax experts have divided opinion about this. However, it is yet to ascertain if the Government will challenge the judgment in SC or bring any amendments in the existing Law to escape the returns.

The decision is not final –

Most liking the central government is going to file a petition to Supreme Court. If the Supreme Court stays the order of the High Court, the ruling would not have any operation and the matter would be settled only after the decision of Supreme Court.

So builders need to pay the refund?

As per the current ruling buyers have full rights to ask for the refund at the interest rate of 6%. Buyers can also apply to tax authorities for refund of the service tax paid by them on purchase of under construction flats. Home buyers would not get the refund of service tax from the builders, as the service tax collected by them must have already been deposited with the service tax authorities.

The future –

Given the current scenario, it seems most likely that the builders will continue to charge the Service tax. In case the Supreme Court rules in favors of builders they will not loose on the cost.

Our final say –

The order of Delhi High Court if not challenged in SC by the government would be applicable to all the buyers. Buyers don’t necessarily have to go to Court to get the refund if this petition succeeds. Builders need to wait till Government makes any moves.
It would be too early for the buyers to seek the refund of their already deposited Service Tax. It would be good idea that buyers wait for more clarity from the department on this. However, they should definitely inquire about the service tax receipts from the developer.

Social Entrepreneurship – They are here to make impact!!

It has been almost one year when I last wrote about Startups and entrepreneurship. Lot has changed but one thing has remained constant – the number of individuals coming forward and deciding to change the world.

I would like to start by quoting a line by Rajat Khanna from TVF Pitchers – ‘You guys are creating a revolution and you guys even don’t know it. Mark my words – the face of this nation is not going to be changed not by politicians or film stars, it is going to be changed by entrepreneurs.’

So what is it that drives so many of us to leave 9 to 5 job and take up this challenge. Are we after the money, fame, both or none? There has to be one such reason and strong enough that get us going. We all know that the journey of an entrepreneur is difficult. So a special mention has to go to those who are taking even tougher journey- Social Entrepreneurship. The driving force for them could be – money or fame but the they are here to make an impact.

For an outsider it may seem an easy approach to success but the reality is completely different. Social Entrepreneurship has all that is needed for a profit organisation with an added advantage – the entrepreneurs make an impact in the society where it matters the most. But it comes with its own set of challenges.

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One such challenge is taken by team at Sociocharge. They have come up with a mission ‘People helping people’. We all want to help people around us but we are busy in our own world,  we don’t have time for anything else. We can’t help others financially because we are finding it difficult to manage our own needs.

Hemant Shrivastava and Arjun Sarin, have come up with this unique model which has solution to both the problems – you don’t need extra time and money to help others. The idea originated from various posts on social media sites where most people would show sympathy for various social causes and it gets over with that. They wanted to create a system where people can take action by doing what they have been doing.

They have been successful in creating such a system. Sociocharge is a platform that enables anyone to support a cause and help needy. Useful and need based engagements at Sociocharge can help channelizing support from privileged ones to less privileged ones. Now the challenge lay in front of them. A social enterprise can scale but makes little profit, but a lot of impact. They will surely succeed in doing the latter. The challenge in front of them is to make a model that will generate revenue for them as at the end of the day that is what is needed to keep all of us going.

There is a thing with social entrepreneur – they cannot succeed with their own effort. We as common people have to come forward and join the movement which they have started. Now those who want to do plant a tree or educate a child don’t have to make an excuse. It is in everyone’s reach now to bring about a change and feel proud in doing so.

Lets join the movement.

For more such articles you can follow blog.

Marketing is like Dating!!

Continuing from where I left on previous article.

To understand that we need to change our sales and marketing strategies, we need to understand few things about the present day customers. The most important is to know that all customers have finite amount of attention. They cannot read everything, watch everything or remember everything from all the noise that they receive.

The second point to know is that they have limited amount of money. They cannot buy everything, so they mostly buy things which got their attention. These are not the biggest worries in front of the company. The biggest worry for any company is the number of option for same product that is being offered to the customers.  In real estate, if I want to buy a house in specific area of Pune, can you think of the number of options I have? By the time you will get your answer there would be couple of more builders who would have launched their projects. If a customer is buying Nike shoes, he is not buying Reebok. That is how things work now.

There are two ways of getting married. Approach everyone you possibly can. For this you will need to prepare yourself. You will buy new clothes and shoes and get latest hairstyle and then prepare your proposal script. You then walk to a restaurant and go to first person and propose marriage. If turned down, you go to another person and then another. You repeat this for every person in the restaurant. If at the end of the day you don’t get any results, who are you going to blame? Your clothes, your shoes? What do you think is wrong in this method and are not most of the sales and marketing team doing this. It sounds insane reading this but reality is they are doing it the same. They are approaching people who are least interested in listening to them.

The other way is to use the latest technology and find a date on Tinder. Swipe right for few people and on finding a match go for a date. Do you propose someone on your first date? You don’t. If both people like each other then you go for another date until you are sure that the person is going to say yes to your proposal. This is the approach you should be following in business too. If I am successful in making my point here then you should know what type of marketing I am talking about – Permission marketing. Your job now is to turn strangers into friends and friends into lifetime customers.

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Dating is lot easier now compared to past but finding a right date is not, the reason being the same – lack of attention and more competition. So now the whole point is how are you going to differentiate yourself to get attention? It is two step processes. First, you have to make sure you get the attention of your date by a proposal which is out of the box and person get really excited after listening it. Once you have the person ready for the first date make sure to go on more dates by making sure you are giving them what they are looking for. It should come naturally though and when you know them completely, propose. The former part is for the marketing team and latter part is the sales team job.

Now if I directly ask a girl – ‘Will you be my date?’ The most likely answer will be No. Similarly if a real estate company asks a customer to come and visit their site by throwing ads to them and through big hoarding the possible answer remains same. Now how about if a customer read – ‘Come for a roller coaster ride and see our site when you are having the best ride of your life!’ Is this the proposal which will make you excited? Not to all, but definitely to few. This was actually done by a Dutch company. Here is the proof.

 

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Source: www.huizenpromoter.nl

Now lets plan for a date. Those you want to know about the dating get in touch with us.

http://www.techcorpsystems.com

http://www.happyindiahomes.com/

https://www.linkedin.com/company/techcorp-systems-pvt-ltd

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Marketing – Has changed over past few decades

Hundred years back marketing was different from the current world. It was all about reaching a customer with a good enough product by any medium. Mostly it was word of mouth. You launch a new product if people liked it they will spread the word. Customers did not had many option but they always wanted to try something new, so if you were reaching them by any medium you were sure of your success.

Going forward in time, industries had to expand so they wanted to reach people in mass. Then came the radio, where you could attract masses with a lovely jingle of your product. Industries were doing great with marketing their product over radio. Others entered with the same marketing strategies. Launch a product and market on radio.

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Radios were replacement by television, biggest weapon so far in the history of marketing. Big companies started making ads and promoting their products. Customers were also happy as they were updated with all the latest products. They had so many options to choose from with the majority of the industries expanding and new entering every year.

Time has changed. The glorious days when customers wanted to watch ads to know about the product has gone. Why? The answer is simple – We have bombarded them with so much of information that they are frustrated now. Companies are trying to reach them through all the possible mediums – print, internet, television. The customers have become ignorant. They have stopped listening to you.

This is not the main problem that the companies have in front of them – customer not paying attention. Even bigger thing to worry for them is that they are spending millions on the marketing and the question they need to ask is for what? Everyone who is coming into this field is with same traditional thinking. Don’t you think, something needs to change?

Most people can’t buy your product, either they don’t have the money or they don’t have the time or they don’t want it.

If an audience does not have the money to buy what you are selling at the price you need to sell it for, you don’t have a market.

If an audience does not have the time to listen to and understand your pitch, you are treated as if you were invisible.

And if an audience takes the time to hear your pitch and decide they don’t want it, surely you are not going to get very far.

The real estate people are spending millions on front page ads in all leading newspaper. Is it benefiting them in a way it should. I carried a survey asking people, when you see a front page ad daily – does it make you to know more about the product? The majority was on which side you could guess. I am not saying businesses should stop doing paper ads, but they have to think of the better way to get returns for their money because the customers are no longer paying attention.

In the coming articles, I will continue on how things have changed and what we are suppose to do to get attention of the customers.

Real Estate people can contact me for marketing of their product – not by traditional ways off course.

For more information about us please check –

http://www.techcorpsystems.com

http://www.happyindiahomes.com/

https://www.linkedin.com/company/techcorp-systems-pvt-ltd

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