Marketing Planning and Strategy/ Marketing of Services

Service Product – Real Estate

Company - Omaxe Ltd.

Group Number –9
Group Members -
Chandni Narang (22)
Mohd. Madni (41)
Mohd. Danish (42)
Neha Chopra (49)
Priyanka Malhotra (55)
Yashowardhan Singh(87)

Submitted to – Mr. Anil Vashisht

Mrs. Sujata Khandai
Date of submission -9th April, 2010

Contents
● Acknowledgement

● Executive Summary

● Introduction
1. Vision
2. Mission

●
 Internal Analysis

● External Environment
1. PEST Analysis
2. Competitors
3. Five Forces Model
● SWOT Analysis
● 7 Ps’
● BCG Matrix
● Ansoff Matrix
● Servqual dimensions
● GAP Theory
● Conclusion

Executive Summary

The Government of India has deregulated and liberalized the Real Estate Sector after liberalization
of a number of other sectors of the economy. Since then, it has been attracting foreign funds. Now
the Real Estate sector has become an attractive destination for Overseas Investor. In fact, Real
Estate has been instrumental in India emerging as the top destination in Asia (excluding Japan) in
attracting private equity investments.

The Indian real estate sector has witnessed a revolution, driven by the booming economy,
favourable demographics and liberalised Foreign Direct Investment (FDI) regime. Growing at a
rapid rate, it has emerged as one of the most appealing investment areas for domestic as well as
foreign investors.

According to ‘Housing Skyline of India 2007-08’, a study by research firm, Indices Analytics, there
will be demand for over 24.3 million new dwellings for self-living in urban India alone by 2015.
In fact, an estimated US$ 25 billion investment will be required over the next five years in urban
housing.

Real estate industry in India is currently estimated to be around US$ 16 billion and this sector is
growing at a compounded annual growth rate (CAGR) of 30% in recent years.
Growth in this sector is driven by booming IT and ITES (Information Technology Enabled
Services) sectors, growing presence of foreign businesses in India, globalization of Indian corporate
and rapidly increasing consumer class in the country which provides a huge market for businesses.

This sector consists of four major segments: Residential (Housing), Commercial (Office Space),
Retail and Hospitality asset classes. Demand-supply gaps are present across all segments of the
industry.

Introduction

Established in 1987 as Omaxe Builders to undertake civil construction and contracting business,
the company was renamed as Omaxe Limited, to reflect the subsequent change in ownership
pattern and diversification of business into real estate development. After making its foray into real
estate in 2001, Omaxe Limited has emerged as one of the prominent Indian real estate companies,
piggybacking on the demand for world-class housing and business complexes. In a short span of
five years, Omaxe Group has carved a niche for itself for providing high-quality residential and
commercial real estate solutions across NCR of Delhi that offer value for money to customers.

Omaxe's ventures in the real estate business include developing integrated townships, group
housing, shopping malls, multiplexes, hotels, resorts, IT parks, biotech parks and SEZs. Some of
Omaxe Group's major commercial ventures include Omaxe Plaza, wedding mall and House 2 Home
(Gurgaon), wedding mall (Patiala), Omaxe Plaza (Ludhiana), Omaxe Arcade and NRI City Centre
(Greater Noida), Park Plaza (Indirapuram), wedding mall (Agra), and Citadel and Pearls Omaxe
(Delhi).

Omaxe Limited has so far completed and delivered 10 projects, consisting of 8 residential
and 2 commercial, covering approximately 4.2 million square feet of area, valued at Rs.360
Crore, with all on time deliveries. At present, the company has over 100 million square feet
of area under development, with projects spreading across 30 towns in nine states of India.
Omaxe, an ISO 9001:2000 company, has pioneered many innovations in the real estate industry.

The company ‘Omaxe Ltd.’ has over the years consistently reinvented to meet the aspirations of
its customer and stakeholders. As the aspirations of the country and its citizens grew, the company
scaled up its projects and its delivery capability.

Vision
Create a progressive organisation matching international standards maintaining integrity, high
ethical standards and transparency; and to provide an environment of professionalism, competence,
teamwork, and service excellence.

Mission
Bring quality Residential & Commercial real estate of international standards, comparable with
global developers within the reach of all. We are committed to achieving excellence in Real Estate
Development, for the benefit of the nation and our beloved countrymen.
Environmental Analysis
Environmental analysis is a major tool which helps a company to identify itself in the industry.
It takes into account study of two environments viz., internal and external. Internal environment
consists of micro factors that are also known as controllable factors. On the other hand, external
environment consists of macro factors that are beyond the reach of an organization, i.e., they are
uncontrollable factors.

Internal Environment
For the physical resources, the company believes that an extensive land reserve represents the
prospective growth and therefore it possesses approx. 3600 acres of land reserve as on March 31,
2008.

The Company practices Quality Management System for Design, Planning, Construction and
Marketing, and delivers high quality construction projects on time. They are one of the first
construction companies in North India to be certified for the ISO 9001:2000. It also pioneered the
concept of a 24x7 customer helpline called Omaxe Care in the real estate industry.

The Company is continuously endeavouring to put in line Employees’ objectives with that of
Business objectives of the organization through its HR policies, process and other development
initiatives to achieve its organizational goals.

It possesses rich intellectual capital, reflected by over 1300 dedicated employees comprising of
civil engineers, architects,MBAs, chartered accountants & company secretaries; and it manages
its human resource through a spirit of continuous learning, trust, relationships, opportunities and
empowerment.

The company’s core competence lies in its operational excellence.

External Environment

PEST Analysis

● Political
1. Government promoting low-cost housing, developers may also start investing in the budget
sub-segment.
2 . Growing tourism through campaigns such as; ‘Incredible India’.
3 . Special Economic Zone (SEZ) concept.
4 . Government initiatives such as extension of benefits under section 80 (I) to mass housing
projects, scrapping of the Urban Land ceiling act and implementation of the Securitization
Act.

● Economical
1. Growing economy is leading to more demand for office space and commercial complexes.
2. Middle income group is increasing and also the nuclear families. Over the past few years
there has been tremendous increase in the purchasing power.
3 . Easy access to finance.
4 . Foreign Direct Investment in Real Estate sector.

● Socio-Cultural
1. New trends of lifestyle is leading for customized demands, such as vastushastra, interior
designing etc.
2 . Growing young population is demanding for more shopping complexes, multiplexes and
leisure space.
3 . Owned property is preferred more over rented property.

● Technological
1. Foreign players have brought in new technology.
2. Due to rise in technology in other sectors the demand for real estate has risen and for better
standards.
3 . Joint Ventures, alliances and tie-ups in the sector have resulted into transfer of technology,
skills and practices.

Competitors
NAME Service Profile Presence

ANSAL PROPERTIES Residential and Commercial. Pan-India footprint with

& INFRASTRUCTURE Developing integrated major presence in 16
LIMITED townships alongwith malls North-Indian cities across
and hotels IT parks and SEZs 4 northern states
 Integrated presence across
all the asset class including
Residential, Commercial and
DLF Retail. Further, has plans to venture
into Hotels, Infrastructure and
SEZs. Accredited to be largest
real estate developer in India
DLF City is a township spread
over 3,000 acres in Gurgaon,
Haryana, and Asia’s largest private
township 574 million sq. ft. of
BUA under planned projects.
K RAHEJA CORP. Commercial, IT office, SEZ,
Hospitality, Retail and Residential
Developing 15 self-contained
townships and 10 hotels.
PARSVNATH Residential, Retail, IT Parks and
DEVELOPERS Commercial. Plans to develop
12 SEZs across the country
UNITECH Residential, Commercial,
SEZ development, Retail and
Hospitality. Integrated townships
at a number of cities such as
Hyderabad, Agra, Varanasi and
Lucknow.
PORTERS FIVE FORCE MODEL
Pan-India footprint
Operating in 29
cities, across 16
states. Majority of the
projects in Gurgaon.
Kolkata, Hyderabad
and Chandigarh are also
major cities of activity
Major presence
in Mumbai. Other
locations are Bengaluru,
Ahmedabad, Goa, Pune
and Hyderabad.
Pan-India footprint with a
focus on National Capital
Region. Active in over
46 cities across 17 states.
Plan to increase to 20
states and 250 cities by
2010.
Pan-India footprint
with major presence in
National Capital Region,
Kolkata, Chennai and
Hyderabad.
1. The threat of substitute products
● Owned residential and commercial spaces can have a threat from rented residential or
commercial spaces.
● There is no threat of substitutes that the real estate industry faces as there is no alternative
to a house that a consumer can opt for.

2. The threat of the entry of new competitors

● Government’s investment in real estate makes it an attractive and a safe industry for new
entrants.
● Demand for office space as well as for retail space has drastically increased due to demographic
shifts in the population.
● Attractive option for foreign investors to invest in real estate in India, hence good capital.
● Indian population is growing at a very fast rate thus leading to growing demand of residential
construction.
● Entry of professional players equipped with expertise in real estate development .
● Development of SEZ.
● These factors make the threat of the entry of new players quite high.

3. The intensity of competitive rivalry

● CREDAI (Confederation of Real Estate Developer's Associations of India) which is the

apex body of the organized real estate developers/builders across India across 20 state/city
level associations and maintains a code of conduct and communication between real estate
 developers.
● Foreign investors have a lot of capital and have started to invest in India due to its huge growing
demand because of a large population and development. 100 per cent FDI Relaxation. E.g.
EMAAR MGF
● Private companies have started taking land from the government to develop new projects such
as IT parks, shopping complexes etc.
● High rivalry between builders in the outskirts of the city and builders in the core city. Rivalry
can be seen by falling prices and high advertisements.
● The intensity of competitive rivalry is high in real estate sector as the economy is recovering.
Companies are selling at competitive prices.

4. The bargaining power of customers

● Middle income group population, nuclear families and spending power of customers has
increased.
● Customers have become more aware and demand personalized products with vastushastra and
interior designing.
● Buyers are keeping away because they expect prices to fall further and discounts are not enough
to take the plunge.
● Rapid urbanization leading to demand for newer avenues for entertainment, leisure & Shopping
● The bargaining power of customers is higher as they are dominating the price front of the real
estate market. Customershave become more risk averse and less keen for making any new
investments in the times of slowdown

5. The bargaining power of suppliers

● Demand for better and more secure infrastructure is increasing leading to more
dependability of other sectors such as hospitality, health etc. on the construction companies.
● Property prices are still low in the aftermath of the financial slowdown.
● Buyers are increasing but are still shy.
● Supply is more than demand leading to reduced bargaining power of the suppliers.
● Improved quality of real estate assets development of new urban.
Market slowdown and losses has reduced the bargaining power of suppliers as they are forced to
keep the prices low to attract more buyers.

SWOT Analysis

Strengths
1. Quality Residential & Commercial real estate of international standards. Its quality
management system has been awarded the Certification of ISO 9001:2000.
2. The Company is committed to the adoption of best corporate governance practices which
ensure accountability of management and maximisation of stakeholders value.
3. Its core strength is “customer service” at the forefront of its operations.
4. The company has special services to cover renting, reselling etc.
5. Omaxe and has earned some of top of the notch business awards for its state-of-art design
and quality.
 6. Making small housing units to meet the requirement of million housing units in the country.

Weakness
1. Despite of several efforts, advertising and promotion is not too effective.
2. The sale of property requires a long time to find a suitable purchaser and comply with the
legal requirements.

Opportunity
1. Real estate has emerged as a safe and high yielding investment opportunity.
2. India is emerging as a force to reckon in the world of high end real estate solutions.
3. On the interest rate front, market signals are positive. Most public sector banks have cut
their benchmark prime lending rates by 0.75% to 12.5% effective January 1, 2009.
4 . There is a great demand for office and industrial space of 100 million square feet to
accommodate an estimated 2 million new graduated passing out from various Indian
universities recently.
5 . There is a huge demand for corporate space of a large number of Fortune 500 and other
multinational companies who are willing to set up offices in India

6. India is witnessing growth in other sectors like auto ancillary, chemical, healthcare,
pharmaceutical, jewellery that lead to huge demand in this space as well.
7 . According to the Tenth Five Year Plan, there is a shortage of about 22.4 million dwelling
units. Thus, over the next 10 to 15 years, 80 to 90 million houses will have to be
constructed, and easier availability of finance will facilitate the process

Threats
1. High interest rates, which rose to 12% from 7%.
2. There is still an uncertainty over the real estate prices. Builders are doling out freebies such
as free registration, stamp duty waiver, free parking area or even a flat in another locality.
But the rack rates have not come down. These practices have become moderate now because
of the bounce back of the economy.
3 . Lenders are now demanding that home buyers come up with a higher margin if they want a
loan.
4.
 Tax is an annual commitment which is being increased every year by self-assessment or
capital based assessment
5 . Several buyers and investors, angered by the developers’ inability to start work on projects,
have stopped payment of installments on their purchases, adding to the companies’ cash
problems.
6 . Property prices have been overpriced in the recent times.
7 . Unavailability of skilled manpower and rise of material costs.
8. Plan approval and clearances delay are considered to be one of the biggest regulatory
challenge.

7 P’s
● Product:
As the competition is high in real estate sector, each company is trying to differentiate its product
by adding some value to the existing one. In case of Omaxe, the schedule below shows how it
differentiates by addressing customer Value hierarchy Five Product Levels:

Product
Element

Residential Commercial

Housing Construction
Core Business

Apartments Commercial complexes and

Basic Product malls

Gymnasium, Sports club, Multi level parking, food court

Expected Product swimming pool

24 X 7 customer helpline
called Omaxe Care
Thematic malls like:
Thai Privilege Spas Wedding malls
Augmented Product House to home
Thematic residential lifestyle Omaxe Connaught Place
like ‘The Nile’ (Gurgaon),
incorporating Egyptian
architectural designs.

A section in the malls where

parents can leave their children
to play, where babysitters are
Customized rooms especially
Potential Product there to take care and ensure
for children
that the children are safe with
them and the parents can freely
go for shopping.
 ● Price:

Pricing strategy during their introductory stage: During their introductory stage their objective
was customer satisfaction. They fulfilled all their promises; they showed sample flats to people
at the time of pre-launching. Allotment of flats was done at less booking amount, to make their
presence felt in the market.

Pricing strategy during their growth stage (current stage): During their growth stage their
objective was to capture the relative share of the market. Till the time they reached their growth
stage they had enough funds and brand image which led them to price their product according to
competitor’s price. They went for competitive pricing, by pricing their product at a market rate
aiming at customer satisfaction as well.

● Place:
A company has the following channel alternatives to distribute its products:
Omaxe does not follow any one distribution channels. It employs a mix of 3 distribution channels
viz., Direct, indirect and e-channel.
Direct Distribution - The Company has its own office at every site. One can directly visit their site
office and enquire.
Indirect Distribution - The Company has various options for indirect distribution. It has various
representatives who maintain contact with the property dealers. These property dealers work on
commission basis for the company. Sometimes the company takes help of any of its subsidiaries to
act as an intermediary between the company and the customers.
E- Channel Distribution – It is the most unique but the most powerful instrument to distribute
a real estate product and Omaxe exactly knows how to use it. The company, on its website, lists
all the specifications regarding their properties and also facilitates the customers with an online
booking form.

● Promotion:
Omaxe made use of each and every promotional tool that it could to promote its residential and
commercial complexes. It employed all 4 tools at some time or the other in the following manner:
1. Advertising
To make people aware of the company’s latest offerings, Omaxe does a lot of
advertising in every way possible. It gives fascinating ads in various newspapers,
magazines, trade directories and journals. One can also find hoardings at numerous
places displaying the upcoming projects of the company.

2. Direct Marketing
Being a real estate company, it becomes essential for Omaxe to do direct marketing
as well. Thus the company goes for online promos and catalogue marketing. It also
does niche marketing for some its premium apartments like ‘NRI City’, The Nile’,
etc.
3. Sales Promotion
It is a tool which needs to be used with utmost care. It can make or break the
image of the company. Omaxe hasn’t taken help of this tool in its history but
after the economic crisis, it has become a need of the hour. So, to sell off the
unsold apartments, the company has lowered the prices of some its properties.

4. Publicity
Publicity is something that automatically happens to a company. It can be good
or bad. In case of Omaxe, it has been good so far. The company’s punch line –
‘Turning Dreams into Reality’, shows the powerful ambition of the company.
 It shows the commitment of the company to the public. So, the customers
perceive it as a good company. The company enjoys trust and goodwill.

● Physical Evidence
● The possession on the house, the legal documents which legalize the possession of the
property by the customer.
● Documents/receipts of payments/instalments.
● Well furnished and equipped corporate office at Kalkaji,Delhi
● User friendly website which has information about all the projects of the company and about
the company.
● Canopies at all the sites for booking of houses/apartments on site locations

● Process

Go to delear/broker

Choose the flat/house

Selecting the apt payment plan

Pay the requisite fees for the possession of the property

Feedback of the services provided

● People
Omaxe Ltd. today, is backed by a professional and competent Team. Omaxe is a constantly
growing workforce of currently over twelve hundred professionals, including four hundred highly-
qualified engineers, architects, Chartered Accountants, MBA’s, etc.
OMAXE enjoys a reputation of being one of India's leading real estate developers with focus on
customer satisfaction while assuring timely completion helping to give clients “value for money”.
Boston Consultancy Group’s (BCG) Growth Share matrix
According to a government official report of India's real estate sector is witnessing a growing rate of
30% annually over the next decade. India’s real estate is one of the fastest growing sectors in the
country and touching new heights.

MARKET GROWTH RATE=30%

To calculate the relative market share let us look at the profits (Rs. in million) of some of the
market leaders of real estate sector in India.

Name of the Company Profit (Rs. In million)

 OMAXE 4,948.76

UNITECH 10300
DLF 2,574.59
ANSAL PROPERTIES & 1615.7
INFRASTRUCTURE LIMITED

Unitech

The business of Real Estate for Omaxe lays

in the upper-right quadrant, i.e. the
Question Mark. The market for the real
estate industry is growing at a fast pace
i.e. 30% but the market share of
Omaxe as compared to the market leader, i.e. Unitech is very low. While Unitech made a profit of
Rs.10300 million, Omaxe made a profit of Rs.4948.76. millions. It is due to this reason that the
relative market share of Omaxe is low. Practically, in such a situation Omaxe should invest more to
survive in the fast growing market of real estate and to BUILD market share.

Ansoff Matrix

Market Product
Penetration Development

Market Diversification
Development
Omaxe had always been doing ‘Market Development’ and ‘Product Development’
simultaneously. By the end of 2007, the company has completed and delivered eleven projects
consisting of eight residential, one integrated township and two commercial, covering 5.6 million
sq. ft of area.
The Forest, The Nile, NRI City, Omaxe Connaught Place, Wedding Mall, House 2 Home, Omaxe
Plaza, Omaxe Arcade, Park Plaza, Pearls Omaxe, Omaxe Jasola, Omaxe Novelty Mall, Omaxe
Terminal Mall and Omaxe Mall - Ludhiana are some of the milestone projects of the company.
The company currently has fifty four projects under development, including hotels: twenty three
group housing projects, sixteen integrated townships, fourteen shopping malls and commercial
complexes. It used to develop its products in the markets it was already there, by doing product
revision and modification; and at the same time, it used to explore new geographical markets with
its existing products. Basically, as a strong market challenger, it was doing frontal attack.

Then, last year it changed its focus to ‘Diversification’. Omaxe's ventures in the real estate
business include developing integrated townships, group housing, shopping malls, multiplexes,
hotels, resorts, IT parks, biotech parks and SEZs.Omaxe Limited has collaborated with Thai
Privileged Spas to build high-end luxury spas in some cities of India. The Forest Spa in Noida,
Royal Residency in Ludhiana and Omaxe Spa Village in Faridabad are some of the projects of the
joint venture. The company thought of entering into new markets with new products to compete
with different set of competitors. This decision was not taken to beat the existing competitors in
the real estate sector. It was purely because the company wanted to open new sources of revenue
generation for itself. It wanted to strengthen itself so that it did not get beaten up by its competitors.
This strategy also works and saves you when you sometimes fail to perform in your core business
then, you can still manage to survive in the market because of the revenue generated from your
other businesses.

Servqual Dimensions

1. RELIABILITY
Omaxe has adopted quality system standards that integrate technological and design innovations
with a strong technical base to provide state-of-the-art real estate options
Omaxe was the first Construction Company of northern India to receive an ISO 9001:2000
Certification.
Omaxe stands up to the promise of delivering the same quality of service as being mentioned of
their respective project prospectuses. It has received a number of awards from the industry as
recognition of its continued commitment and efforts towards achieving

2. ASSURANCE
Omaxe form the very beginning stage makes it sure that its customers have a very good first
impression of their organisation, which is being supported with a very courteous front desk staff.
The best assurance provided by them is of a safety in terms of an ownership of a property which
will act as a saviour for them in all times. (The most prominent of Indian mind tendencies of any
income group).
Omaxe was the first Construction Company of northern India to receive an ISO 9001:2000
Certification. As it is an assurance of safety and quality and also adds to its credibility. It has
also ensured that all their buildings and sites are well equipped with all safety equipments and
measures. It assures timely completion of the projects, helping give clients “value for money”.
Omaxe has received a number of awards from the industry as recognition of its continued
commitment and efforts towards achieving excellence in concept and construction
quality. ‘Svedala’, ‘Udyog Ratna', ‘Pride of the Country', ‘Arya Vaidya Sala' & ‘Industrial Award'
are some of the many prestigious awards that have honored Omaxe in the past years.

3. TANGIBLES
Firstly, the company’s prospectuses of the respective projects are very user ready, with all the basic
required information.
Then secondly the most important of them is the handing over of the house’s key,documents and
possession papers to the owners.
Then when we talk about the fittings and flooring of the house, which are of high quality and well
finished. All this is done according to world class standards.

4. EMPATHY
As we all know that a house in today’s time is of prime importance as it’s also considered as
one of three basic necessities of life. (Roti, Kapda aur Makaan).Every Human being Dreams of
having its own home some day. Understanding the basic concept of how important is a self owned
home for any individual would be the key for Omaxe ltd, in which they were pretty successful.

Making personalized products with vastushastra and interior designing.

Introduced Sample Flats concept, offers ready-to-move-in homes.

Concept of Theme Malls, like the Wedding Mall, House 2 Home Mall, etc.

5. RESPONSIVENESS
It pioneered the concept of a 24x7 customer helpline called Omaxe Care in the real estate industry.
Making small housing units to meet the requirement of million housing units in the countryAnd to
keep its precious customer , updated about our endeavours of offering you unparalleled services ,
we present our dedicated customer relation centre to handle your queries on anything related to your
Omaxe property.The company is entering into the affordable housing segment, under which, the
company has the objective to build one million homes in the sub Rs. 20 lakh range along with 1040
schools and 410 hospitals over the next five years.

Gap Theory
It is the difference between consumer expectations and perceptions. There are four types of Gap :

Provider gap 1 (the knowledge gap)

not knowing what customer expects

Provider gap 2 (the service design & standards gap)

not having the right service design and standards

Provider gap 3 (the service performance gap)

not delivering to service standards

Provider gap 4 (the communication gap)

not matching performance to promises
According to the report there exists provider gap 4 which suggests that the communication strategy
was not appropriate. They never undertook any mass communication and whatever communication
they undertook as mentioned in their weakness they weren’t successful in advertising and
promotion. The idea to promote the brand was not effective as it didn’t reach out to the target
market and the information presented by Omaxe was not perceived by the customer in a right
manner.
Also, the customers perceive that the company is overpromising as they have been launching
a lot of new projects lately which they aren’t being able to deliver on time because of clashes
between developers and investors/builders which is affecting the image of the company.

Conclusion
Although, according to the experts, Indian market still has a huge potential in the real estate sector
but keeping the state of the economy, which is still limping back to normalcy after the recession,
Omaxe should start investing gradually as at the moment it took a bad hit in during the slump in
the markets. The purchasing power of the buyers had gone down, the general mood of the market
was that full of pessimism but all that has changed, the markets are looking upwards and there is a
strong sense of optimism in the markets.
The interest rates are as high as 12%, the buyers have lost trust in the builders, there is an
unavailability of bank loans as the banks are wary of giving credit easily. Due to such reasons the
market of the real estate sector is expected to witness a slow growth in the coming months but this
situation will not continue for long. The real estate sector still has a huge potential and will revive
to its full boom soon. A huge demand of housing units is expected soon due to the shortage of
million housing units, there is a huge demand for corporate space of a large number of Fortune 500
companies etc.
Thus we can say that the real estate sector is reviving from a bad sate due to the hit which was
caused by the recession. And so, Omaxe should invest more money to build a strong hold on the
market but gradually and at a slow pace.