MARKETING MANAGEMENT BPMM 6013

UEM Sunrise Berhad Marketing Plan

Executive Summary
UEM Land Holdings Berhad (UEML) was incorporated on 20 th August 2008 and
was a subsidiary of UEM World Berhad (UEMW). Subsequently, the company was listed
on the Main Board of Bursa Malaysia on 18 th November 2008, taking over the listing
status of UEMW. UEML is the flagship company for the real estate investment and
development businesses of UEM Group Berhad (UEMG) which owned 60% of UEMLs
shares while UEMG is a wholly-owned company by Khazanah Nasional Berhad.
In November 2010, UEML proposed a conditional takeover offer to acquire
Sunrise Berhad. The merger combines two synergistic and complementary property
businesses, Sunrises property development business and UEMLs macro township
development business, to create a larger property company which offers a more
comprehensive and diversified product range. In February 2011, UEML completed its
merger exercise with Sunrise Berhad.
Prior to the acquisition of Sunrise, UEML was already the countrys largest listed
property developer with market capitalization of RM8.9 Billion at the end of December
2010. Consequently, as a result of the merger exercise the market capitalization of this
company has gone up to RM10 Billion as at 16th February 2012. However, since then the
value of the market capitalization has gone down to RM8.2 Billion at the end of October
2014.
The name UEM Land Holdings Berhad was changed to UEM Sunrise Berhad
(UEMS) in December 2013 as part of rebranding program to conclude the merger
exercise that has been going on since 2011. As the result of this merger, UEMS now has
expertise to undertake the development of macro townships and high rise residential,
commercial, retail and integrated development. UEMS also has the experience and the
capability to undertake the role as property management and project and construction
services.

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Situational Analysis Current Situation

1) Market Trend
The property investment and development businesses have been undergoing vast
changes. The market is now at a turning point between recession and economic growth.
The construction sector remains one of those most affected by the recession. Building and
construction companies are struggling with a lack of orders for new projects, as well as
growing pressure on prices from investors. Another problem is uncertainty about the
future; this enhances the importance of managing the current and future risks facing the
company. Real estate market players will need to become more skillful in
conceptualizing, locating and analyzing real estate opportunities, and more rigorous in
implementing projects.
2) Competition
In recent years, a number of property developers had entered and commenced property
development and other project investments. These include overseas property developers,
local property developers as well as those from other major cities. Competition among
the property developers has become very intense and this may possibly lead to an
escalation in the cost of acquiring land use rights for development. Furthermore, as
competition increases it should be expected that the demand for the services of
independent contractors who design and build the projects will increase, which could
increase the cost of those services and/ or make it more difficult to schedule those
services when needed thereby delaying the completion of projects and increase carrying
costs. Finally, as more real estate is developed by other developers, purchasers and
lessees will have more products to choose from, which will likely result in downward
pressure on prices and lease rates for our residential and commercial properties. These
competitive pressures will likely affect pricing and operational decisions in the future and
our results of operations.
3) Buyer Behavior
There are few factor influencing buyer behavior in property investment which is one of it
is financial factor. Findings also shows that there are also factors like psychology,
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emotion, intuitional, and evaluation affecting decision making in buying properties.

Investment buyers considered psychology, intuitional, and evaluation factors more
important in their decision making processes.

Opportunities / Issue Analysis SWOT Analysis

Strengths
1) Khazanah Nasional Berhad Support
Khazanah Nasional Berhad holds majority shares, and also extensive access to
land required for developing properties, with less than stringent regulations than
would otherwise be faced in developed economies. In addition, Khazanah
Nasional Berhad has showed the willingness and ability to support businesses in
the face of economic crises, as is evident currently. Khazanah Nasional Berhad
has offered millions of money to Malaysia banks to tide over the present liquidity
crunch. Such help lines can be tapped upon as and when UEMS is in need of support.
This will help the company to stay adequately capitalized and finance operations and
expand markets.
2) Business Model
UEMS has created a successful business model. The company has expertise in
creating master-planned communities to international markets. The company has
focused on creating a lifestyle living and not just offering a property. They have been
able to provide innovative offering of self-contained communities that has been
proven to be a winning combination. Each project has a mix of apartments,
condominiums, and villas. It also offers land plots as an investment option to clients.
The innovative concept is backed by timely deliveries of high quality properties.
UEMS has delivered more than RM 8.9 billion properties till end of 2010 in the
Malaysia. UEMS plans to replicate the same model outside the domestic market
through their vision. It has also attempted to leverage on global management
expertise by creating an international talent pool and a data-bank of best practices.
3) Foreign Expansion & Diversification
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UEMS international projects were launched, in a strategic move to diversify markets

and reduce the risk of depending on a single market. UEMS has entered into various
markets through its subsidiaries to sustain future growth and create alternative
revenues streams. Most of the subsidiaries have partnerships with the local
government or private players to understand the market better.
The company has entered into the developed foreign markets through acquisitions. It
helped the company become a significant real estate developer in residential
homebuilding.
The company has also focused on a diversification strategy. It has taken steps to
diversify its business lines and develop new competencies in hospitality, leisure and
shopping malls. The foreign expansion and diversification strategy has created
synergies and helped the company gain execution capabilities and competencies in
design.
4) Strong Regional Partnerships
UEMS has a strong reputation and established partnerships with local governments
and major local players in every country it has forayed in the real estate development
segment. The main area of initial focus was the southern area of Malaysia, Australia
subcontinent where the company has entered into partnerships with leading players
in these markets. These partnerships could help the company have an integrated
approach to customer service and property development. It also complements the
Vision for UEMS that is a two-pronged strategy of geographical expansion and
business segmentation.

Weaknesses
1) Overexposure to Khazanah Nasional Berhad
UEMS has forayed into international markets, to reduce its dependence on
Khazanah Nasional Berhad. In terms of value, domestic sales have reduced.
But in terms of percentage, domestic revenues accounted increased. As a result,
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despite entering into foreign markets, UEMS has not been able to reduce its exposure
to the Malaysia market.
2) Operations and Funding Strategy
The funding strategy of UEMS focuses on limiting the funding by the parent
company to financing land acquisitions and initial infrastructure related construction.
Additional funds are raised at the project level through pre-sales, project based debt
financing and strategic sales. UEMS could have difficulty to raise cash as a result of
the downgrade. Besides, it will have to pay higher interest rates than previously on
new debt. Besides, higher interest rates on debts due to downgrade could make it
difficult for the company to manage current projects in turn leading to imbalance of
operations. There has been a decline in operating margins, operating costs (% of
sales) return on equity, return on capital employed and return on assets.
The company has a substantial land bank in Malaysia, Canada and Australia and with
the global downturn the value of most of the assets has come down substantially
followed by slowdown in construction. The company has begun to focus on
completing existing projects and putting on hold the new projects. This could have
an impact on returns.
3) Labor problems and Quality issues
UEMS flagship project is a leading mixed use property constructed in the heart of
Johor, Malaysia. With more than billions spent on the project, the company has
attracted a lot of attention on the quality of works and has been plagued by labor
shortage issues. The buildings have been built predominantly with the help of foreign
labors. Issues on qualities will tarnish the image of the company and shortage of labor
has the potential to delay the completion of projects. Residents of one residential
project developed by UEMS have accused the company of using inferior parts and
equipment breakdowns. Some of these have suggested to have been occurred
repeatedly. Instances such as this could lead to question marks over the quality of the
company projects and make potential customers rethink their purchases with UEMS.

Opportunities
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1) Consolidate Position in Domestic Market

The company has enough land bank to increase its presence in Malaysia. It is also
trying to increase its land bank to enable it increase its presence in the domestic
market. It is planning to purchase land bank in Penang and Kota Kinabalu. Its 400
acre development of Serene Height near Bandar Baru Bangi would elevate its
reputation in developing products that suits the requirement of the local market.
2) International Expansion and Diversification of Revenue
UEMS has already completed the design stage of its maiden development in
Melbourne, Australia where UEMS is embarking on the development of
Aurora

Melbourne

Central,

92-storey

residential

tower

in

Melbourne, Australia. The Quintet, its maiden project in Vancouver,

Canada, a mixed residential and commercial development is to be
completed in the middle of 2015. If the company managed to
produce quality products within timely manners, it would be a
stepping stone for the company as it builds its reputation in
Australia and Canada.

Threats
1) Economic Protectionism
Many countries have regulations regarding foreign investments in certain sectors,
property development and land ownership, being two of them. Domestic lobbies in
the Malaysia have succeeded in derailing investments citing real or perceived national
security concerns. Such restrictions could altogether delay or deny UEMS the ability
to successfully execute growth plans.
2) Global Economic Downturn
Malaysia has been the focus of expatriates from the Asian and Middle East, and they
have been the main driving factors behind the rise of Malaysia. During economic
downturn, widespread job losses and the freeze in the credit markets may prevent the
capital flow required in investing in the Malaysia property market, and this may
adversely impact the company sales.

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Objectives

OBJECTIVE: To achieve UEM Sunrise Vision and Mission Statement.

VISION STATEMENT: Building communities of the future with you and for you.
MISSION STATEMENT: UEM Sunrise brings together the talented and skilled, the
imaginative and the courageous. We create sustainable environments loved by home owners,
acclaimed by investors and recognized by industry. We believe in thinking big and acting quickly
to unlock potential; to thrive in a changing world.

Marketing Strategy Marketing Mix (4Ps)

1) Product
Products are the residential and commercial properties that UEMS develop for sale to
certain target market. When developing a product UEMS will consider the level of
quality, design, any required features, customer service and any subsequent after-sales
service. This will be done by collecting market data of the surrounding land that has
been marked for development. The product to be proposed must be competitive with
the surrounding development. Therefore, each development will has its own concept,
target groups, range of products and point of differentiation that is clear and distinct.
2) Price
UEM will maintain their current affordable pricing strategy. Price concerns the
amount of money that customers must pay in order to purchase the residential or
commercial properties. There are a number of considerations in relation to price
including price setting, discounting, availability credit i.e. bank loan and cash
purchases as well as credit collection. UEMS also has to take into consideration to
provide affordable housing in accordance to the development regulation. UEMS had
launched products that vary in term of prices. The developments included high end
bungalows in East Ledang, Nusajaya which is price up to RM1,200 per square feet
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which is almost the same price bracket as high end condominium in MontKiara. For
the middle ranked products with sales price between RM400 RM 1,000 per square
feet, UEMS had developed the apartments namely; Imperia at Puteri Harbour which
was priced at RM750 per square feet, apartments sizes are from 900 square feet for a
studio apartment and up to 5,000 square feet for the penthouses. In term of landed
property i.e. terrace houses at Nusa Idaman, Nusajaya and Serene Height, Bangi are
priced at RM400- RM600 per square feet. These include houses with built up are
between 1,900 square feet 2,300 square feet. Nusa Bayu in Nusajaya is at the low
end of the price range where price for a terrace house start from RM230 per square
feet, this is competitively price for first time home owner taking into consideration
the location of the development. UEMS also provides subsidized legal fees on Sales
and Purchase Agreement as well as for the loan.
3) Place/Distribution
Place is in regards to location of the product to the targeted purchasers. This includes
the location of development, the facilities provided and the infrastructure that connect
to the development. This is also can be done by collecting project data from
surrounding development and understanding the advantage of certain place for certain
type of development. For example, UEM Sunrise can choose place like Nusajaya
which is strategically located in the epicenter of the new economic Asia. It's strategic
location and proximity to Singapore provides immense potential for economic
growth. It is also served by two international airports and five seaports for what is
arguably the best connectivity in Southeast Asia. It is a sustainable city where it is
planned, designed and intended as a new type of city where the social and community
areas plus intrinsic needs such as safety and security, transportation, convenience and
enriched lifestyle are part and parcel of an integrated master plan.
4) Promotion
Promotion refers to the act of communicating the benefits and value of any
development to the consumers. It then involves persuading general consumers to
become purchases of the properties using methods such as advertising, direct
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marketing, personal selling and sales promotion. UEMS have embraced the new
media for promotion of products in its stable. All projects are present on the internet
with individual named website. The website provides information on the description
of the development while showing the artist impression of the development. It also
provides the location on maps for easy referencing by potential purchasers. The
information on facilities provided for each development is also provided for example
whether the development provides swimming pool, gymnasium, sky deck or sky
lounge as public space for dwellers of high rise buildings while enjoying the dramatic
view of the cityscape.

Implementation/Action Programs
1) Product
Prior to developing new products, UEMS should gather information on competitors
from various sources for surrounding properties. Information can be obtained from:
a.Advertisement
newspaper advertisement
magazines advertisement
online advertisement
b. Website
Specific website created for the project
c. Development brochures
Brochures distributed to prospective buyers
In order to obtain detail information on competitors products, UEMS should also
conduct site visit by posing as potential customers to extract more information on the
competitors products. Upon completion of information gathering and market studies, the
UEM should prepare market data report with the following information:
a. Location
b. Product Brief
c. Site Conditions
d. Market trends and observations

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e. Target market
f. Competitors analysis / studies
g. Product recommendation
The report should be submitted to the Senior Manager Marketing for his/ her to review and
comments. If the report is acceptable, propose suitable pricing for the product, based on
competitors pricing and forecast of future market demand should be made.

2) Market Research/Study
The marketing team should work with the development team to produce feasibility study.
The marketing team should provide the following information as input to the study.

Data from Market Study which was conducted by real estate professionals i.e.
identify market requirement, volume and quantity.
Forecast on the take up rate of property sales i.e. how many houses to be sold each
month
Pricing of units that can attract buyers, based on the market trend reports taking into
consideration type of houses, target market.
Number of units and timing of launching of new products to the market.
To advise on the marketing requirement and its cost impact on the project i.e.
recruitment of additional sales personnel, property agents.
Benchmarking with other developers i.e. type of products and timing launches.
Basically to ensure the right product, the right price and at the right time.
3) Advertising Promotion
Below is few advertising promotion which UEM sunrise could pursue to reach to
their target market and attract people to invest in their property.
a.
b.
c.
d.
e.
f.

To do roadshow to attract purchasers from out of town

To join exhibitions such as MAPEX, the Malaysia Property Expo
Mail drop / brochures to attract existing and repeat clients
Banners / Buntings / Billboards
Site Function / Launching
Radio / TV Commercial
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g. Press Advertisements
h. Construction of show unit for prospective purchaser to experience the
ambience of the house
4) Appointment of Advertising Agency
UEM sunrise also can hire few advertising agencies to participate in the pitching
process. The agencies will pitch based on information provided by UEMS such
as:a.
b.
c.
d.

Project details
Selling points
Target market
Requirement of Ministry of Housing and Local Government i.e.

Advertising Permit (AP) and Development License (DL).

e. Marketing and sales materials requirement such as visuals for
advertisement, signboards, brochures, leaflets and other relevant
materials.
The agency with the best possible concept during pitching will be appointed to work with UEMS
in the marketing and promotion activities of project such as preparation of the marketing
collaterals.

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