Branded Reality

Construction is something of a commodity business and as in all commodity businesses, its hard to maintain margins. So how to reality companies increase their pricing power?

Enter Branded Reality.

1)So for reality companies the first  order of things is to create a strong and recognizable brand as it increases customer confidence, influences the buying decision and shapes the ownership experience.

2)Then to increase brand visibility ,a common strategy is to pursue the achievement of firsts :

So they compete to build he world’s tallest residential tower,the first greenfield smart city in the country, bring in designs by Casa Armani, Trump, Philippe Starck, Jade Jagger, Kelly Hoppen, Greg Norman etc to local markets etc. etc. etc.

3)Another strategy is to for reality companies to have a have a portfolio of brands where every brand has a clear positioning and a distinct brand promise so as to provide differentiated project offerings to various categories of customers with different lifestyles and aspirations.

4)Customers have dreams for their homes and work-spaces are  often willing to pay for extras, same as for their vehicles. However, not all of them are avid consumers of architecture and interior design magazines. So they do not necessarily  know about Poggenpohl kitchens, biometric sensors etc. Companies who take the branded approach to reality make it a point to do a bit of customer education about such extras and customizations that customers can opt for.

5)Another venue for earning for reality companies is to take the hospitality approach. So rather than  simply just residences, they  provide customers with a setup of valet services, housekeeping services etc.

6)As luxury is as much about the buying and user experience, rather than just products and price, another strategy is to for aim for customer delight before buying, during construction and after the consumers move into their property. This means going the last mile to do things right. Every  customer is assigned a  relationship manager. Companies put in a dedicated and experienced customer service team which regularly interacts with customers and is responsible for assisting them through the entire sales and after sales process.

These days there are a few press reports that the Lodha Group, one of the big names in branded reality, developing  40+ million sq. ft. real estate globally, has revived its 2009 plans to launch an IPO and will soon approach SEBI again .They wish  to raise Rs 3,000 to Rs 6,000 crore, including by pre-IPO placement of shares.The Lodha Group hopes to take advantage of the currently buoyant stock markets with ample liquidity. It would be interesting to see what premiums the stock of this Branded Reality player commands over others in the reality space.