Sanjay Bajaj, Manging Director ' Pune, Jones Lang LaSalle India
In the hyper-driven world of advertising, literally nothing has escaped the phenomenon of 'branding.' This extends from products to services, and on to manufacturers and service providers. The real estate development line is no exception. In fact, the whole question of how important builders' brand names are on the property market should be examined in greater detail.
THE INGREDIENTS OF A REAL ESTATE BRAND
- For practical purposes, a branded builder is one whose projects are selling well on the basis of reliable construction, imaginative designs, and provision of desirable amenities, good project locations and honesty in dealings. The creation of a credible brand image requires positive feedback from existing customers and a good market reputation as far as delivering consistent quality and value is concerned.
- A branded builder will have invested some time, effort and money in building up his brand image, having employed a professional advertising and promotion company for this purpose. Additionally, a branded development company would be affiliated with all relevant industry associations, thereby establishing credibility and a record of accountability.
- A builder derives numerous advantages from his brand name and brand image. He is automatically clubbed among reputable professionals in the field, wields greater clout with financiers and can attach higher rates to his projects. He commands the trust of both his clients and employees.
WHY SOME BUILDERS DO NOT BRAND
- A builder in the process of establishing a brand name will make his presence felt at major real estate events such as property exhibitions, and will regularly offer new projects to buyers at such events. He thus puts his company into the limelight.
- Such projects will be prominently advertised in leading property-related publications and other periodicals, and also by means of attractive hoardings at strategic and eye-catching locations. With repetitive exposure by such media, a brand name gets firmly imprinted in the minds of property buyers.
- A branded developer is aware of having a reputation to protect and live up to. This is evident in conscientious choice of location, superior amenities and quality of construction
- A branded builder is a trend-setter on the property market ' in other words, the rates he charges in his projects will often decide the rates that other projects of similar configurations in the same locality will charge.
It seems evident that a concern operating without a branded name and image stands at a distinct commercial disadvantage on the property market. Nevertheless, quite a few builders do decide against establishing a brand name to highlight themselves and their projects. This can have a number of reasons:
THE POTENTIAL DOWNSIDE OF BRANDING
- Real estate development may not be the concern's primary business concern. Many companies are engaged in real estate only as a supplementary activity.
- The builder may lack the expertise or financial resources necessary to establish, build up and maintain a brand name successfully.
- The builder may be engaged in the business for a short period of time only, hoping to make a quick buck before turning to other commercial interests.
- The builder may be under the archaic illusion that if a project is good enough, it will sell itself. This may be true in an ideal world, but the reality of modern business strategy sings a different song.
Generally speaking, brand-building is a valid and beneficial exercise that profits both the builder and his clients. However, it should be noted that fame and prestige carry with them a large burden of responsibility towards the interests of numerous stakeholders. It is easy for a builder whose name commands respect to grow complacent and eventually allow his company's standards to sink. The annals of real estate history abound with instances in which builders rely too heavily on their brand image, finally falling into disrepute because their projects have become substandard.
A respected brand image is a developer's most valuable asset. The business of building and selling real estate can be a constant, never-ending struggle against incredible market odds. In the final analysis, it is a builder's name that inspires confidence and sells his projects. He also establishes his reputation by a long-standing presence on the property market. This matters a lot, because there is a high dropout rate among builders who cannot deliver consistently or are not equal to the fierce competitiveness of the market.