Sales Image: How Perception Shapes the Real Estate Market and the Economy
???? ????? Haim Etkin
Certified real estate appraiser at Real estate appraisal. A property damage and insurance claims expert, including property damage within third-party liability framework,
Introduction: What is a Sales Image?
A "sales image" is a phenomenon where a marketing narrative creates a positive or negative perception around a product, company, or service, influencing consumer and investor behavior. This phenomenon originated as a marketing tool but has evolved into a strategy that impacts broad and significant market movements. Simply put, it is the creation of an image—real or fabricated—of success, stability, innovation, or financial viability, aimed at driving consumer action.
In the real estate market, a sales image can manifest through branding projects as luxurious or promising, even when their actual value does not justify such claims. This article examines the implications of sales images, the role of media, the relationship between perception and reality, and the ways to identify and critique this phenomenon.
Historical Examples of Sales Images
1. The Dot-com Bubble (Late 1990s)
In the late 1990s, many tech companies created an image of unprecedented innovation. Promises of future growth, combined with inflated marketing narratives, attracted massive investments. The result: a sharp rise in stock values, followed by economic collapse when it became clear that many of these companies lacked stable business models.
2. The U.S. Real Estate Crisis (2008)
Before the 2008 financial crisis, banks and real estate agencies created an image of a stable and promising housing market. Aggressive marketing of cheap mortgages and lack of regulation led to a global crisis. The positive image concealed the reality of over-leveraged properties with low value.
3. Israel’s Real Estate Market (2024)
According to recent reports, new real estate companies like Amram Avraham and Afi Capital have surpassed established companies due to strong sales images. Through impressive sales campaigns and strong branding, they succeeded in attracting customers despite challenging economic conditions.
The Role of Media in Creating Sales Images
The media plays a central role in shaping sales images. Journalists and media outlets can promote or undermine a company's image through supportive or critical coverage. In Israel, for example, there are claims of “favorable coverage” of real estate companies in the media, creating a sense of security among investors and consumers.
Examples from the Media:
Implications of Sales Images
1. Impact on Consumers
A sales image often creates a sense of urgency or FOMO (fear of missing out). Consumers tend to make rushed economic decisions, such as purchasing a property in a luxury project, without thoroughly examining the data. The result can be significant financial losses.
2. Impact on the Market
At the macroeconomic level, a sales image can lead to the inflation of economic bubbles. When false representations are exposed, the market corrects itself, often with severe damage to the economy.
3. Impact on Public Trust
The collapse of companies relying on sales images undermines public trust in the market. Investors become suspicious, making it harder to restore the economy post-crisis.
How to Identify a Sales Image
Conclusions and Recommendations
A sales image is a powerful marketing tool but also a dangerous one. Investors and consumers must understand the phenomenon, recognize manipulations, and rely on real economic data. The media, for its part, must operate transparently and responsibly to prevent deception and protect the public.
We must develop critical awareness to enable informed decision-making, thus protecting ourselves from the risks associated with the phenomenon of sales images.
"Sales Illusion in Real Estate: When Numbers Tell Only Part of the Story"
Chapter 1: What is Sales Illusion?
Sales illusion is a business practice where companies present their sales data in a way that may create a more positive impression than the actual business reality. It's important to distinguish between false reporting, which is clearly illegal, and sales illusion, which typically occurs within legal boundaries but may mislead investors.
Types of Sales Illusion:
Historical Examples:
Chapter 2: Sales Illusion in Israeli Real Estate - 2024 Case Study
Peak Data and Gaps:
Impact of Sales Promotions:
Lack of Transparency:
Chapter 3: Factors Driving Sales Illusion
Stock Market Pressures:
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Industry Challenges:
Internal Organizational Drivers:
Chapter 4: Implications of Sales Illusion
Risks for Investors:
Market Impact:
Operational Risks:
Chapter 5: Coping Methods and Solutions
Improving Transparency:
Role of Regulation:
Tools for Investors:
Summary:
Sales illusion in the real estate industry demonstrates the complexity of evaluating company performance in a challenging business environment. While the practice may be legal, it requires investors and stakeholders to carefully examine reported data and understand their full context. Improving transparency and deep understanding of transaction structures are key to proper evaluation of companies and the industry.
The case of Israeli real estate companies in 2024 illustrates how peak sales reports may hide significant complexities and challenges, such as the impact of special sales promotions, execution risks, and expected delays in apartment delivery. This emphasizes the importance of comprehensive analysis beyond headline numbers.
Sales Image: A Common Manipulation Technique in the Securities Market
Definition: A sales image is one of the most common techniques for market manipulation in the securities market. It involves the simultaneous buying and selling of a significant amount of a specific security to create artificial interest among investors.
Key Characteristics:
Implications and Legality: Sales image manipulation is considered an unfair practice that undermines free trading in securities markets worldwide. This action distorts the natural balance between supply and demand and involves elements of deception and fraud.
Example from the Israeli Market: The most famous instance of sales image manipulation in the Israeli market occurred in February 2012. Businessman Nochi Dankner and his associate Itay Sturm manipulated shares of the IDB Holdings Corporation. They purchased large quantities of the company’s shares on the stock exchange to positively influence the stock price and trading volume.
Regulatory Efforts: Regulatory authorities in financial markets worldwide are combating the phenomenon of sales image manipulation through legislation and enhanced oversight. These efforts stem from the understanding that such actions erode public trust in the capital market and disrupt fair trading practices.
Due Diligence is a thorough and comprehensive investigation conducted before investing in or acquiring a company or asset. Its primary purpose is to verify the information presented and uncover additional details about the potential investment.
Components of the Investigation
The due diligence process includes several aspects:
Importance of the Process
Conducting the Due Diligence
The investigation is carried out by skilled professionals, such as lawyers or business consultants. The process involves gathering documents, analyzing data, and conducting interviews with relevant stakeholders within the company under review.
Upon completion, the investor decides whether to proceed with the deal, modify its terms, or withdraw from it entirely.