I was having breakfast this morning at my favorite Bangkok cafe– they do a delicious American breakfast with eggs, bacon, toast, orange juice, and fresh fruit for under $3… and it’s delicious. For another $3 I could get a backrub while I eat.
As I was reading the local paper, something caught my eye in the business section– a full page ad for a real estate development about 2 hours outside of Bangkok. The development looked generic enough– another condo tower with a pretty view of the ocean, nothing special.
The catch? They are giving away a gold bar with each sale.
Particularly in tough times, sales managers come up with all sorts of gimmicks to improve their numbers. If the sales gimmick speaks to a specific need or concern in the marketplace, chances are it will probably succeed.
In Missouri, for example, many people report concerns that President Obama will modify their 2nd Amendment right to bear arms. In fact, there has been a massive wave of gun sales across the US since Obama won the election last year. To capitalize on this fear, a Missouri car dealer decided to start giving away a free handgun with each new car sold.
His sales volume quadrupled.
In China, uneven demographics have young males substantially outnumbering by young females, and it’s becoming harder and harder for men to find available women. Capitalizing on young men’s concerns, Chinese development company Jin Tai Cheng that promised a $9,000 to anyone who would buy a home and marry one of their pretty sales agents, most of whom were single and good looking.
Naturally, the promotion was of great interest to male buyers seeking a wife.
These cases indicate that the market responds quickly when promoters address a specific need or fear. In Thailand, at least one developer seems to have hit a chief concern squarely on the head.
According to local agents, sales activity has jumped since the developer started running the ‘gold bar giveaway’ promotion, though I was not given precise figures as they are a private company.
Asians in general have a deeper gold tradition than western cultures; Thailand, for example, has been issuing gold coins for centuries. I saw seeds of gold mania in China when I was there most of the last two months, and I have seen it here in Thailand this month.
Gold is quoted in the daily papers in both US dollars and Thai baht, and there seem to be gold shops on just about every block.
The majority of gold shop inventory is jewelry, but the local Thais (similar to the Chinese) have been buying it up as an investment, not because it looks pretty. Gold bars also tend to be bought up very quickly, the most popular of which is the ’10 baht’ variety, roughly 4.9 ounces of 965 purity.
To me, the most interesting part of the story is that the advertisement is specifically catered to Westerners… although the condo price points are within reach of well-to-do Thais, the ad was printed in English and being marketed in a foreigner newspaper.
The pickup in sales activity suggests that foreigners are attracted to the sales promotion because it speaks to one of their major concerns– perhaps inflationary expectations, perhaps economic misgivings, or perhaps the fear of being left behind the gold boom.
Either way, the increased interest at the consumer level translates into increased retail bullion sales activity, and this should have a positive price affect for both gold and silver. I wouldn’t be surprised to see more of these types of promotions, and I’ll be on the lookout for similar signs when I arrive to Europe next week.
