Exploring market segmentation to sell million dollar homes.
Through our work with a real estate client, we found that to sell luxury villas, identifying the market segmentation during the initial design stage is prudent. That way, the product can be customized to suit the target audience.
Defining the Perfect Customer
A subsection of the identified target audience will be the early adopters of the offering. It is around the lifestyles of these precious few that all marketing communication should be designed.
Our research found that, broadly speaking, elite customers who can afford high-end villas fall into three categories:
1. The Banyan Trees
The Banyan Tree elite is unshakably rooted in their milieu. Found in areas like Sadashivnagar in Bangalore or Banjara Hills in Hyderabad, they have achieved remarkable success as a first generation businessperson. They might have moved to a more posh address, but the neighborhood of their childhood remains within easy reach, as do their family and friends.
The Banyan Tree elite revels in being in the centre of action. From their business interests to their club memberships, their professional and personal lives are firmly embedded in the heart of the city.
Happy in the hustle and bustle of an ever-expanding city, their farmhouse on the outskirts is more an investment than a home. To them, privacy is loneliness and the quiet semi-urban spaces seem like the edge of the universe – a million miles away from all that matters.
2. The Roots
The Root elite is the second or third generation businessperson, very often in the family business. They might not be self-made but have found their calling as expanders of the family wealth. They willingly follow their parent’s beloved orthodox rituals, but are as comfortable in Dolce&Gabbana as in a dhoti. In fact, they like the idea of having their own nest, where the husband can pound a few drinks over the weekend and the wife can talk Western fashion with peers. Both are certain that their children deserve the Western way of life that they themselves crave.
The Root elite are like the branches of a Banyan – swaying to the winds of change, yet connected to the base. They are in the process of figuring out how to get the best from the two worlds they occupy.
3. The Migratory Birds
The Migratory Bird is nouveau rich, which also means that they typically hail from the middle class, are self-made and have exhibited sufficient professional excellence to have attained rarefied success.
They have been everywhere and done everything. As they enter middle age, they are still wary of laying down roots, although they are open to the prospect of finding Utopia. Quality of life is paramount for them and they would change any and all aspects of their life to maintain it.
They’ve returned to India out of choice, perhaps to give their growing children cultural moorings. But given their unambiguously Western outlook, they refuse to tolerate cultural shackles.
One of the unpleasant side effects of their relocation back to India has been the inferior quality of life. The commute, the grime and the blare of the city aren’t things they bargained for. If a better living option comes along, they’ll leap at it.
Having discovered this market segmentation through primary research, we were not only able to zero in on the right audience for the project, but were also able to craft an apt brand message to appeal to this target audience.
We reasoned that since high-end villa projects are usually located on the outskirts of the city, Migratory Birds – who view privacy as a luxury – are likely to be the early adopters (although in the final reckoning, a smattering of Root elite would also be likely to buy into the project).
With this sharp understanding of the market segment, we could suggest relevant marketing techniques. For instance, given that most Migratory Birds are NRIs looking to move back home, marketing efforts to attract them could include road shows in the US.
On the other hand, a project in the heart of the city would be the perfect fit for the Banyan Trees and all marketing efforts would have to be tailored accordingly.
Read another case study on market segmentation here.