Diamond island Getting through the difficult time of real estate market in Vietnam

Nguyen Thanh Thuy – Marketing Manager of Diamond Island in providing us many valuable information that help us fulfill this project with real statistic value and information.. They have

ACKNOWLEDGEMENT

It is a pleasure to thank all of those who gave us the possibility to complete this project First, we owe our deeply gratitude to all the professors who gave us invaluable encouragement and knowledge during two years at Solvay Brussels School and HCMC Open University

Then, we would like to express our best gratitude to our tutor, Mr Serge Bywalski and Prof Alain Van Den Eynde for all their support; inspiration and encouragement as well as discerning advices, during the months it took us to complete this project

We are really appreciate the great support of Ms Nguyen Thanh Thuy – Marketing Manager of Diamond Island in providing us many valuable information that help us fulfill this project with real statistic value and information

We would like to express our best gratitude to our family for all the love, encouragement and sacrifices they made for us

Lastly, we offer our regards and blessings to all of those who supported us in any respect during the completion of the project

CONTENT PART 1: DESCRIPTION OF THE DIAMOND ISLAND AND THE MARKETING

& ADVERTISING STRATEGIES 6

I ABOUT DIAMOND ISLAND PROJECT & THE INVESTOR 6

1 Diamond Island Project 6

2 B

TA 8

II MARKETING & ADVERTISING STRATEGIES IN THE PAST 9

1 Pre-launch Period : 2008 – early 2009 9 a Th

e Objectives 9

b P

R Strategy 9 c P

R Campaign 9

2 Launching: June 2009 – 2010 9 a Th

e Objectives: 9

b Target Audience – Demographic: 10 c Message to Deliver 10

d P

R & Marketing Strategy 11 e Marketing Campaign 11

3 After Launch: 2011 -2012 14 a Th

e Objectives 14

b Message to Deliver 14 c Marketing Campaign 14

III DIAMOND ISLAND PROJECT – THE PUBLIC RELATIONS CRISIS 21

PART 2: ANALYSIS OF THE CURRENT POSITION AND SITUATION 22

I INDUSTRY ANALYSIS 22

Cu

V DIAMOND ISLAND PROJECT ANALYSIS – SWOT 39

1 Strength 39

2 Weakness 39

3 Opportunities 39

4 Threats 39

PART 3: NEW MARKETING AND ADVERTISING PLAN FOR YEAR

2013 – 2015 41

I Problem summary 41

II N

ew marketing and advertising plan for year 2013-2015 41

1 Objective: 2013-2015 42

2 Marketing Campaign 42

a C

RM system developing 42

b Distribution system developing 43

c Crisis management 44

d Advertising 45

e Digital marketing 50

f Marketing Schedule 53

g Conclusion 54

TABLE

Table 1: The rates of USPs of each project: 30 Table 2: Diamond Island – SWOT Analysis: 40 Table 3: Marketing schedule: 53

144 hotel rooms Diamond Island was developed and excuted by Binh Thien An Property Joint Stock Company The company was established under business license issued by Ho Chi Minh City Department of Planning and Investment on December 12, 2005

Diamond Island’s mission is to bring every of its resident to the most amazing experiences with a top living style in an ideal living environment, where outstanding architecture and top luxurious facilities are blended with romantic landscape, prosperous fengshui, and humane resident community It was launched in June 2009 and become an impression point of urban architecture with the international stature within Ho Chi Minh City particularly and in Vietnam

Diamond Island generally has a good marketing strategy and campaign They have created

a strong and recognizable brand identity with Diamond Island as the project with luxury apartments and sky villas and BTA as the Reputable developer and manager They’ve also built up awareness and adorability of a high-class community at Diamond Island in near future With luxury events, the message to deliver is that Diamond Island is a thriving place for living with the ideal community for intellectual and successful people It also has the privilege to have an elite community of being successful and top notch in society

However, from 2011 to 2012, after PR crisis happened and the real estate value started the downward trend, Diamond Island had to face to a lot of difficulties and challenges to get through and reach proposed target business

Recommended marketing strategy in 2013 will focus on great location with fresh air and green environment as well as increase Diamond Island brand value by environment responsibilities and activities In 2014, strategy will focus on ideal and unique fengshui location of Diamond Island to attract effectively target customers Improving crisis management process and developing CRM and distribution systems may increase opportunities to explore the huge potential market, and then enrich target customer data and support sale team and brokers could reach successfully to prospect

With this recommended marketing campaign using suitable marketing strategy and effective marketing tools such as events, social media, E-news…would help Diamond Island overcome through the difficult time of real estate market in Vietnam

PART 1: DESCRIPTION OF THE DIAMOND ISLAND AND THE MARKETING

& ADVERTISING STRATEGIES

I ABOUT DIAMOND ISLAND PROJECT & THE INVESTOR

1 Diamond Island Project

Diamond Islands is a high quality residential apartment development with river access and view The projects will include approximately 1076 apartments, 24 sky villas ad 144 hotel rooms Total build space is approximately 300,000 sqm (Construction Floor Area CFA) Diamond Islands also consists of high class commercial and service center (including restaurant, supermarkets, retail stores, cinemas, swimming pools, marina, etc.) and a kindergarten, which is targeted to provide the best facilities for residents of Diamond Islands

It comprises of 5 zones name Zone A, Zone B, Zone C, Zone D and Zone E Each zone will be built once after another, starting with Zone B in 2008 Total construction floor area

of this Zone B is 67038 sqm

Some development data of Diamond Islands:

• Site Area: 79944 m2

• Area within setback lines: 48032 m2

• Allowable Gross Floor Area: 215600 m2 (does not include car parks, etc)

• Maximum number of floor per tower: 29 floors

• Car park requirements: 1.1 covered car parks/dwelling units (minimum 1094 lots)

Diamond Islands is bounded by Thanh My Loi quarter in the East, the Giong Ong To River and Thu Thiem quarter in the West, the Sai Gon River and Tan Thuan Export Processing Zone in the South and An Phu Quarter in the North With this unique location, Diamond Islands can be easily accessed via water traffic such as water taxies and river ferries to and from the city

It is located of a 8 hectare island with a beautiful landscape setting, the island provides a natural exclusivity and yet is still very close to the center of Ho Chi Minh City Being surrounded by Sai Gon and Giong Ong To Rivers in district 2, the green forest and clean water here make the location highly desirable with regards to Feng Shui The island is just like a diamond inside a dragon due to Saigon River shape is just like the Dragon outline Geomancer appreciate such location is the most unique and rare to find, and supposed to provide wealth and growth for people living in This hence gives the Feng Shui to the whole project in particular, unlike the competitors' when buyers can only create Feng Shui inside their apartments

Additionally, the island is located among important traffic systems such as Thu Thiem Tunnel and the

The architect approach for this project is based on the following concepts:

• Porosity: Creating a porous atmosphere in all scales of the project, and open facade for natural ventilation and taking advantage of the river breeze With voids, double height living rooms, terraces and louvers the concept of porosity is achieved Each residential cluster is made of 6 towers which are pulled apart, creating open corridors and maximizing the exterior views and privacy

• Elevated Green Mound: A two stories high structure with sloped edges creates the appearance of a green mound and at the same time hides all parking, MEP and infrastructure areas

• Urban concept of an archipelago: The entire island is treated as an urban island within the context of a larger development of additional islands

• Mountain shaped skyline: With the tallest towers at the south side the towers' height descents towards the north side on a two - to four floor modules

• Sky villas: Because of the lack of ground area, the villas are located at the top of the towers with one villa at each individual tower Each villa is to have maximum river views and a private swimming pool

• Green belt: At the perimeter of the island with the aim of preserving the natural vegetation

Riverside leisure facilities: Small yacht harbor along the west side of the island on the Giong Ong To River

Diamond Island also aims to create a luxury living condition for its inhabitants Before the zoning of the project, the wind was studied with NASA equipment for a year to segment the wind before allocating buildings Careful studies have also been done from the style studies and product concept test to make sure Diamond Island is a luxury resident project

in term of iconic architecture and interior design, and with exclusive community for top notch Vietnamese people who value the new luxury living style concept Customers have the choice and the opportunity to actively participate in the design, look and feel of their home They desire their home to be personal, unique and tasteful as well as communicate a message about what is important to them

The project has all facilities and services from the finishing of the home for customers to daily living needs such as free secretarial service, highest security, community style development programs such as regular meetings, training for adult and children as classy behaviors, etc This enables customers to benefit from living in a community of both wealthy and classy people, and daily networking for both life and work

The project combines a range of finest quality apartments in the guise of a city resort, and provides excellent living conditions to enrich the life essence of its most fortunate residents Combined with the calming riverside environment and relaxing lush landscaping, that underlines the natural beauty of the island, the Diamond Island development is positioned as the safest of investments readied to appreciate in value through time

The exquisite living conditions have been carefully considered to ensure all needs are satisfied for the privilege residents The premium facilities include those to support leisure activities such as the unique Princess Marina Yacht Club, a professional standard gymnasium, and the 5 star Health and Beauty Spa Support facilities include the international standard kindergarten, general and specialist shopping, dental and healthcare clinics, secretarial services, and international property management to ensure the seamless integration of state of the art back of house activities, and highest security assurance

The external environments are as equally inviting as the luxurious apartments themselves The landscapes have been carefully crafted as a living green belt that envelops and welcome all to visit in peace and relax For the business and social minds there are intimate spaces within the landscape for entertaining and to create special community activities and networking opportunities The lucky children will enjoy the excellent living conditions, with ample space for play inside and out within the gardens and fresh air, plus benefit from growing and developing among this privilege and elite community

2 BTA

Binh Thien An Property Joint Stock Company is the investor of Diamond Island Project The company was established under business license issued by Ho Chi Minh City Department of Planning and Investment on December 12, 2005 To develop and execute the project, the company has set up a new legal entity which is Diamond Island Development one member limited company on March 25, 2008

It is planned that once BTA obtains Land use Rights it will contribute it into charter capital

of Diamond Island Development The cost related to the project will accordingly be transferred to DID BTA Investment Management Vietnam Co Ltd, a professional project management company shall provide general management services, administrative support and sales & marketing services for the project

The number of employees of BTA Property at December 31, 2006 and 2007 and August

31, 2008 was 3, and 11 respectively

The number of employees of BTA Investment Management at December 31, 2006 and

2007 and August 31, 2008 was 1, 11 and 37 respectively

II MARKETING & ADVERTISING STRATEGIES IN THE PAST

1 Pre-launch Period : 2008 – early 2009

HO CHI MINH CITY WILL HAVE DIAMOND ISLAND

Diamond Island - a luxury housing project - will be built on an 8 hectare island near the Sai Gon River This project is invested and managed by Binh Thien An Co with the capital of 300 million USD

ARCHITECTURE COMPETITION FOR DIAMOND ISLAND

(Source: vnexpress - Excitement grows about Diamond Island project in Sai Gon)

To find the most efficient solution for Diamond Project, BTA invested 1 million USD

in the International Architect Contest with contestants come from famous architecture firms around the world including Arata Isozaki, Wood Head, AS&P and PTW The winner finally awarded to a German architecture, Arata Isozaki only came second place however he was chosen for the project because BTA thought his style is fit for this particular project (Asian style with Fengshui)

2 Launching: June 2009 – 2010

a The Objectives:

 Create a strong and recognizable brand identity: The objective is creating a

strong and recognizable brand identity with Diamond Island as the project with luxury apartments and sky villas and BTA as the reputable developer and manager The goal of this stage is to reach minimum 80% of target customer's awareness in

the time of 3 month after this communications stage was launched

 Build credibility: Show off all superiorities of Diamond Island compared to

competitions such as the Lancaster, Southern Palace, Raffles Residence, Sailing

Tower

 Drive brand preference: Give the impression that Diamond Island is the dream

home of fortunate residents They will have benefits of living in a wealthy and classy community, having chance of networking, living in a healthy environment with good Fengshui and the ability to customize their home to make it unique and

fit their personalities

 Stimulate interest and desire: Drive inquiry and generate sales leads with the

target of successfully sell 95 units by the end of the complete sales of Zone B in

2010

b Target Audience – Demographic:

The key target market is high-net income individuals who have liquid assets of USD 1,000,000 or net income over US$200,000 - US$500,000 per year who are

purchasing Diamond Island units as an end user rather than an investment

The secondary market are real estate business, investors, they are local or expatriate who wants to invest in Diamond Island for mid & long term to resell, serviced apartment or the boutique hotel

(Source: Ms Nguyen Thanh Thuy – Marketing Manager of Diamond Island)

c Message to Deliver:

Diamond Island Sky Resort is the supreme residential project with luxury and exclusive settings for premium class only

Superior Living Condition:

 A planned and designated project for top class people only This plan strategy and clear segmentation also satisfy the needs of wealthy people when they desire a better environment with clearer brand mark that embodies their social status and esteem

well-Superior Interior Design:

 With the interior design in Minimalist style with efficient space usage, less partitions and give an open-up feel for relaxation, the buyer can participate in the

finishing of the apartment with stylish decoration through the available options and personal consultancy, and expressing their lifestyle and status, and minimizing the cost to compare with the self-decoration status

Superior Customer Design Facilities & Services:

 The project has all facilities and services from the finishing of the home for the customer to the daily living needs such as free secretarial service, highest security, community style development programs such as regular meetings, training for adults and children as classy behaviour, etc This enables customers to benefit from living in a community of both wealthy and classy people, and daily networking for both life and work

 Being unique in location and the resort-comfort designated lifestyle, DI provides the tenants with not only the best living conditions but also a firm assurance of investment return!

d PR & Marketing Strategy:

The PR& Marketing Strategy has three main core implementations:

 Outside-in: to use international media as the source of information and

platform to attract attention, and localize the content for local media to add more credibility and word-of-mouth

 Co-Branding: to capture opportunities with the world famous Brands (both

commercial, and people Brand such as Celebrities) to quickly create the association with Diamond Island Brand

 Quantified messages: because Diamond Island has so many superior facts,

figures, and features than the competitors, we need to use them as indicators for direct comparison and immediately classifying Diamond Island as the top-class project

e Marketing Campaign:

 Advertising: via Communications materials, print ads, TV programs:

The project has great location with the island is just like a diamond inside the Dragon due to Saigon River shape Geomancer appreciate such location as the most unique and rare to find, and supposed to provide wealth and growth to people living in This hence gives the Feng Shui to the whole project in particular, unlike the competitors’ when the buyers can only create Feng Shui inside their

apartments

It also great as a long term investment as well as offer residents a unique luxurious

architecture & lifestyles

THE DIAMOND STORIES - PRINT ADS - on lifestyle magazines such as Heritage,

Doanh Nhân Cu i Tu n(Weekly Entrepreneur)

(Source: Ms Nguyen Thanh Thuy – Marketing Manager of Diamond Island)

 Public Relations: Editorial about the projects/ corporate & Advertorials / media releases weekly

‘Interview the main contractor’ (Coteccons), primarily Mr Duong - CEO of

Cotteccons in terms of reasons why he and his company join DI construction, and Coteccons' preperations of equipments and techniques to finish phase 1 within 20 months

‘Interview Turner International’ (US) - DI management relating to manage and

keep the construction site clean and effective via the most advanced management technique

‘The Big Names guarantee the quality of the project’

‘Arata Isozaki - his typical works over the world, especially AIA masterpiece

in VN - Diamond Island’: His design concept thanks to deep study of water and

wind flows, the island is covered by rivers and protective forest which is an ideal natural environment rights at the heart of the city Arata Isozaki has a very strict vision about this project including 14% construction density which helps more breathing spaces between structures

‘Portrait building the new citizens of Diamond Island Sky Resort’

+ With endorsement of some famous, intellectual couple (like My Linh & Anh Quan - Singer and composer)

+ Portrait of some successful businessmen/women

'Top-notch community’: the unique, exclusive community for DISR citizens only

'Luxury Apartment – from 1 million USD on the Island in Saigon’: the unique,

exclusive community for Real estate dealer in Ho Chi Minh City are shocked with million-dollar apartments in Diamond Island, only 10 minutes river way from district 1 Moreover, these apartments are limited sales only and only celebrities are

chosen to have a unique opportunity to become Diamond Island's resident

 Event: Launch gala event, special event of Diamond Club

CREATING EXCELENCE TOGETHER – DECEMBER 26 TH , 2009

Evening of 26/12/2009 at Diamond Island Construction site, the Dong Tam Tao Ky Tich festival with the attendance of BTA's employees and partners in this project Images and

information of this event was also published in some online newspapers

(Source: Website Diamond Island www.daokimcuong.com.vn)

DIAMOND CREATION’S NIGHT- OCTOBER 18 TH , 2010

This is the 5th year Anniversary of BTA Company This event were organized with large scale and created strong impression of the luxury and unique community

Mr Thomas Kobbegger, Vice CEO of BTA said: "This is not only a birthday party but also a colorful art festival with international scale Artists brought here performances which out of our expectation When the Diamond Island project finished, it's residents will have more chances to participate in events like this because our goal is to create a living

environment mixed between nature and culture."

(Source: Website Diamond Island www.daokimcuong.com.vn)

Diamond Island Luxury is your community

PR & Marketing Strategy:

 Positioning: Diamond Island Luxury Residence

 360 Degree High Engagement Platform

 Conviction Approach

 High Engagement Platform

 Online Hub for the community – Living Next

c Marketing Campaign:

 Advertising: via Communications materials, print ads, TV programs

In 2011 and 2012, the concept of a humane community at Diamond Island is built and all Advertising plan follows this direction strictly All of the advertorials (The Citizen, The World of a Few, etc.) were to trigger the need of being a part of the humane community of luxury and high class people

THE CITIZENSHIP – PRINTADS SERIES

(Source: Robb Report Magazine)

THE WORLD OF A FEW – PRINT ADS SERIES

(Source: Robb Report Magazine)

PROUD TO BE THE SELECTED RESIDENTS

(Source: Robb Report Magazine)

THE PROSPEROUS FENG SHUI, THE HUMANE COMMUNITY

(Source: Robb Report Magazine)

THE BEST IN CLASS SERVICE FOR SELECTED RESIDENTS

(Source: Robb Report Magazine)

 Public Relations: Editorial about the projects/ corporate & Advertorials /

media releases

Diamond Island only published the Editorial in Robb Report magazine because of the following reasons First of all, this is the channel to reach the high class and luxury prospects This magazine not only well known in Vietnam but also the Asia area – Hong Kong, Singapore, etc so Diamond Island can create an international look and attract more foreign investors Other than that, all of the editorials on Robb Report are well written, therefore the content can be used in other sources (newsletter, brochure, sponsorship statements, etc.)

The main angle that was emphasized in this 2012 year was the specialty of The Diamond Island community - Diamond Island is not selling the property but the community

 Event & Co – Branding Event:

Co-branding Event is one of the best ways for Diamond Island to go with other famous and luxury brand (Robb Report, Bvlgari, Lua La, etc.) to position the Diamond Island as a high end property

MIDDLE OF EARTH & HEAVEN’S SONATA- May 14th, 2011

Diamond Island created an event of symphony and concert at the venue of the Diamond Island construction site

(Source: Website Diamond Island www.daokimcuong.com.vn)

LUALA CONCERT AUTUMN – WINTER 2011

Diamond Island sponsored for the Lua La Concert in 2011 – a string instrument orchestra conducted by Xuan Huy This event is the first anniversary of the fashion stores chain Lua

(Source: Robb Report Magazine)

 Sponsorship / Co – promotion

Major Successful Cooperation:

THE ASCOTT & INTERNATIONAL SOS –November 3 rd , 2011

In order to create the credibility of the Diamond Island brand, the developer decided to sign contract with the two best services management and concierge lifestyle corporation:

• Signing the contract with the Ascott Limited to manage furnished apartments in Diamond Island

• Signing the contract with International SOS to provide Concierge & Lifestyle Service for Diamond Island Citizens

(Source: Website Diamond Island www.daokimcuong.com.vn)

BALLET – THE NUTCRACKER

This is a sponsorship event of Diamond Island for the Ballet Nutcracker in November

2012 This event was organized as a community activity of Diamond Island and to show the appreciation of the value of art and culture

Original Launch Version 2011

New Version 2012

LIVING NEXT APPLICATION

This is an application running on the iOS (for Ipad and Iphone) which is a platform to connect the community and improve the service values of Diamond Island community This application is consider the online social network for the selected community of Diamond Island:

(Source: Website Diamond Island www.daokimcuong.com.vn)

III DIAMOND ISLAND PROJECT – THE PUBLIC RELATIONS CRISIS:

On Monday March 5th, 2012, Diamond Island encountered the greatest Public Relations Crisis when Tuoi Tre newspaper published news that Diamond Island has one or two stories exceeding what had been approved by the local Department Due to the violation, the construction of six apartment blocks at Diamond Island site had been suspended

This also quoted that during a site inspection on February 21st, 2012 – inspectors from the municipal Department of Construction had asked Diamond Island Investor to stop work on the entire project but the construction continued until February 28th Besides, Leaders of Binh Trung Tay Ward’s People’s Committee had said that their inspectors had conducted regular visits to the site, but due to the insufficient manpower, they had not been able to spot the violation in time

(Source: Tuoi Tre Newspaper)

This crisis has created a very bad impression on all investors, current customers and prospects This lead to all of the marketing activities in year 2012 was not implemented as

in the old plan Budgeting for the plan was constrained and dedicated to get over the crisis such as lobbying the reporters and PR crisis management plan

Another indirect crisis is that the “BTA” name of the investor was named after a Kazakhstan bank which was also bankrupted in 2012 Therefore, in order to reduce the crisis and avoiding another bad impression about an untrustworthy organization, the investor decided to change the name to Kusto Kusto is the name of the original corporation in Kazakhstan – the investor/owner/developer of Diamond Island

PART 2: ANALYSIS OF THE CURRENT POSITION AND SITUATION

I INDUSTRY ANALYSIS

1 Real Estate Market in Vietnam:

The Vietnamese real estate market has been going through cycles of up and down in the past decade Its most recently peaked period was between 2006 and 2010 During that time, many positive indicators encouraged both buyers and sellers jump into the market According the data from the Ministry of Construction, there were more than

1000 real estate’s projects in Hanoi alone in that period, Ho Chi Minh City also reached the record of 1400 projects almost every major city in Vietnam including Da Nang, Nha Trang, Hai Phong, etc helped to inflate the bubble in the market

With all that positive signals, real estate in the period of 2006-2010 was considered by many investors as the fastest way to make profits It results in hundreds of real estate companies were established Even existing companies from different industries also invested heavily to the real estate’s gold mine A lot of these new companies - especially smaller ones- did not have enough experiences in the new market They just went in for short term profits and could not anticipation all the complexity of the market

One notable example for this trend is HANIC Even though HANIC's main business is exporting steel, it decided to invest in real estate with 324 billion VND (VEF) After a couple of failed projects including buying the CT1 building from The Pride project, HANIC is having the debt of 401 billion VND in 2011 and on the edge of bankruptcy With a lot of capital pouring into the market, the housing value was increasing rapidly The price was pump up based only on some vague predictions and rumors and it soon surpassed the actual value of a piece of land or a house The real estate bubble was ready to bust

From 2010, the real estate value started the downward trend Housing values gradually decreased, investors withdrew money from real estate projects, and when 2011 arrives, the market completely freezes up There has been a kind of "stand-off" between sellers and buyers Real estate companies refused to reduce the price anymore as it already hit bottom and they were suffering with great loss; however buyers also believe that the housing price can still drop further and they decided to wait

One reason that leads to the real estate market's bubble bust is the over-dependent in capital borrowed from banks Therefore as soon as banks adjust their interest rate, it affected greatly to real estate projects and made a lot of them could not finish Another reason is most of the projects targeted the middle-high level of customers, therefore the price is out of reach of most of Vietnamese customers These high prices are alright when the market is new and there were a lot of demands (during the 2006-2010 periods) However as soon as the financial depression hit Vietnam, the demand drop

According to Compareal, there are more than 4800 luxury apartments in Ho Chi Minh City still cannot find customers They estimate that it needs about 3-5 years to sell these remained apartments Mr Le Quoc Duy (CEO of Hoa Binh House) also commented that investors are losing interest in luxury apartment as they require high cost to build but target only a small fragment of customers

The Vietnamese economy is slowing down in the first six months of 2012 does not help the real estate market The economy growth rate is only reach 4.38% in the first 6 months, the lowest rate in many years Loan interest rates also rising creates difficulties for both investors and buyers in real estate transactions (the loan rating rates of real estate is currently 16% of the total loaned capital) The increasing interest rate made real estate’s company cannot find enough money to operate and the debt become unpaid-able debt In the peak of the real estate balloon, only 20% money of real estate comes from banks, 80% remains come from advanced money of buyers Since 2010, the percentage has been reversed; companies now need 80% money from banks to survive

Reuters also reported that Hoang Anh Gia Lai, one of the biggest co-operations in Vietnam, was hit so badly by the real estate bubble burst that it had to abort 3 real estate projects If in 2010, 90% income of the company came from real estate, right now it only remains 20%

With the economy depression, the distrust of real estate buyers and bad debt from major Vietnamese banks; it seems that the real estate market needs times to recover Right now a lot of companies is experiencing with restructuring to solve short term problems One of the solution is to increasing the percentage of budget apartments and decrease the number of luxury ones The problem with luxury housing in Vietnam is it does not have an open standard Each investor decided the price themselves and does not look at the market This trend confused buyers and make them do not want to take risk at buying houses or wait for the price to decrease more

This solution however is only for short term in the crisis To have a stable real estate market, we need a balanced percentage between budget, middle and luxury housing for customers However to the economy need to be better with lower interest rate to make that happen

2 Forecast of the Economy and Real Estate Market in 2013:

Despite the previous forecast due to the economy depression, the Vietnam Political Picture is improving since Jan 2013 with more positive moves on banking restructuring and bad debt solving A state owned debt solving company will be established in the second quarter of year 2012 in order to deal with bad debt from state-owned companies and property companies Other than that, many new policies are proposed such as allowing for pilot casino or foreigners buying house with no conditions those can be advantage for Real Estate industry

Secondly, due to the recent conflict between China and Japan, Vietnamese, Philippines, there is news that the ODA, FDI and FII funds would be committed to other countries such as India, Vietnam, etc

As a result, the amount of capital in Vietnam will be raised A more positive sign is that the VN index increase 50% from the bottom and people who takes on many stock trade accounts from broad to be opened as the government probably allows foreigners

to buy more than 51% of a Vietnamese company

Although there is a tendency that the economy could improve after the crisis, the property market is still stagnant because of the inventories and the pricing competition from the developers Mr Huynh Phuoc Nghia (Director of Market Research of GIBC) said that with the economy depression, this is the time of budget housing Luxury houses and apartments need to wait until 2015 or 2016 to rise again

CONCLUSION

Diamond Island belongs to the segment of luxury apartments Therefore, the project will still encounter many challenges in the upcoming year 2013 However, the solutions and signs of getting over with the economy crisis are great chances for Diamond Island to promote the brand position in the market and re-confirm its values

to gain trust from the prospects and target customers after the PR crisis in 2012

II CUSTOMER ANALYSIS

1 Who are the customers?

Decider & Purchaser: Diamond Island is currently having 110 customers (as 110

apartments have been sold in the period from 2009 – end of 2012) Most of them are intellectual and successful business owners in Ho Chi Minh City and Hanoi, several of those are Vietnamese living abroad such as USA or Russia These customers has strong financial support that they decide to buy quickly when they are convinced and they do not care much of the price

Influencer: The customers are often getting opinions from every member in their

family when purchasing the apartment The key influencers are usually their spouse or their children depending on the purpose of the purchasing For example, they buy to live; the key influencer is their spouse Another important influencer could be friends

in their network who has bought an apartment at Diamond Island and refer them to buy These friends are also rich and well-known that they gain the trust in the Purchaser

2 What do customers do with the product?

70% of Diamond Island former customers bought the apartment to live with their family Diamond Island also has an agreement in the contract that customers cannot sell their apartment to other customers in 2 years from the time the contract signed This helps prevent the fast real estate speculators who buys and sells deal immediately and create the wrong value or image of Diamond Island in the market

Besides, some customers who do not want to move in Diamond Island Apartment when theirs is handed over to them They can sign a guaranteed leasing contract with the Ascott for three years This is also a way to invest and create income for those who have idle money

3 Where do they buy the product?

Diamond Island has a direct sale team of 10 sale persons and 70% of the deals were from direct sale team Around 10% of the Diamond Island resident is from internal staffs of the Kusto Corporation The sales agents were not planned and managed correctly so there are only 20% of the sales from the agent and most of them are from Hanoi and other provinces Overall, the most effective distribution channel for Diamond Island is direct sale

4 Why do/don’t they buy?

Reasons to buy

Although targeting in the luxury apartment segment, the demand for Diamond Island in

2009 is still high because they were “impressed” with the sophisticated and quality differences of Diamond Island and the sustainable investment value compare to the other project:

Location: They are convinced of the Fengshui location (the dragon – Saigon River with the pearl – Diamond Island) and the prosperity that the land will bring them when they live in this island

Environment: the density of building is at 14% together with the location in the corner of the river provide a fresh and green environment for all Diamond Island Residents Moreover, the view from their apartment overlook the river is the only one among other property projects

Services: Outstanding services such as mini golf club, the only yacht marina of Ho Chi Minh City, etc

Diamond Island not only sells the property but the status in the humane Diamond Island community The customers buy when they believe that “the limited supply for only selected demand”, only a few customers were chosen to approached and they are qualified to join in this luxury community with great chance to networking with other neighbors they live with This is a high-ranking living community and creates ego status for any resident

40% of cases, the husband buys in with the vision, community values and services of the project While the wife is less affected by the overall value but by the "wow“ of small details such as nice functional design of the kitchen and cooking area, the "wow"

of the master bedroom and bathroom

Besides those values, some customers care on the liquidity on leasing of the property and the value increase roadmap of Diamond Island and this is a great chance for investment

Reasons not to buy

The first impression for those prospects who did not want to buy is the price The current price of Diamond Island in 2012 is $4200/1sqm which is the highest rates compares to other projects Some projects has that rate such as Vincom, The Sailing Towers, etc are all located in District 1 whereas Diamond Island located in District 2 –

20 minutes from the city center In contrast, as being rich and have good cash flow, some prospects only buy finished property and they do not care to buy early for cheap price so they hold the deal until the project in finished with all other services as planned

Another important reason is that the prospects are not easy to be convinced in the vision of the project since the following facts happened:

The PR crisis: Diamond Island Project has been closed for 3 months in order to be investigated about different constructing to the original registered architectural design and layout Also, the product delivery performance, especially in public facilities, infrastructure and landscape has not improved in long time

The delay of the hand-over date from November 30th, 2011 and Mar 30th, 2012 and finally the hand-over date has not been firm yet This lead to the trust from 110 existing customers had been deteriorated and some customers started to reclaim the lawsuit citing Diamond Island handover commitment

There are changes in the site plan and overall operation strategies compare to the original launching design and 3D illustration makes other target customers doubt at the ability Diamond Island can deliver the vision and mission as proposed

CONCLUSION

The overall Marketing and Advertising Plan of Diamond Island were implemented and applied effectively in the launching and after launching period that the vision of Diamond Island has been created too perfect, too luxury to the real condition and schedule of construction to deliver This lead to the 2 negative behaviors in the target customers:

For those who is resident of Diamond Island: they feel disappointed with the project and reflect negative feedback to other prospects

For prospects of Diamond Island: they do not believe in the values of Diamond Island and release bad rumors about the project

Secondly, the distribution network to generate appropriate prospects is not yet ready that Diamond Island has not approached the whole sale customers as planned in the launching period The demographic target market only concentrates in Ho Chi Minh City and Hanoi whereas other provinces such as the Mekong Delta, the Highland area, etc have not been reached Last but not least, the sales agent network were not established and well managed

to attract right buyers such as cash-holding entrepreneurs, rich yet not very exposure persons, etc

At the current status, Diamond Island’s marketing and advertising strategies for the launching period were very effective and brings numerous positive results However, to deal with the difficulties in the upcoming development and accomplishment of the project, Diamond Island need a new well - planned Marketing and branding strategies with PR management to maintain the strong image and trust among its target market