Marketing Mix: Hitting the Mark

In practical terms, the marketing budget of a development company must comprise 2% of a project’s overall budget. However, this figure has very seldom exceeded 0.5% in Russia, as conditions on the commercial real estate market have allowed for the successful promotion of projects without the services of marketing specialists. Nevertheless, the situation is quickly changing as competition thickens among quality projects. As a result, new projects increasingly require a professional marketing strategy in order to successfully reach worldwide standards.

The Tools of the Trade

A marketing campaign must be developed to promote a facility on the market based on an analysis of the facility and the major factors influencing its promotion, including the project’s class, concept, location, competitive environment and advantages, shortcomings and the target audience. Furthermore, the marketing of commercial real estate has its own specifics as determined by the features of the market. Determining factors for marketing include: (1) the company’s buyers; (2) the average deal price; and (3) the decision on project selection and the terms and conditions of a deal set by the top managers.

Once the specifics are determined, the correct marketing tool can be applied. There are nine fundamental marketing tools: Corporate Style; Presentation Materials; Advertising; The Internet; PR; Marketing Office; Presentation Events; Direct Marketing; Sales Promotions.

Let’s look at each point in more detail:

Corporate Style Corporate style is created with the goal of developing a project’s identity and familiarity and differentiating it from the competition. The elements of corporate style are a project’s name, logotype, corporate colors, font, symbols and slogans. Moreover, for large projects, it is worth developing a brand book, including business cards, envelopes, folders, site maps for navigating the complex, corporate clothing style for the service personnel, etc.

Presentation Materials – Buyers associate the quality of the presentation materials with the actual quality of the product,. In terms of presentation materials, the following are included: scale models, brochures, booklets, fliers, pamphlets, and all literature and items shown to or handed out to a potential buyer to become familiar with the project. It is worth noting the increase in popularity of computer presentation materials, as modern IT presents the draft design in very detailed 3D, showing the future facade and interior of the building.

Advertising – Advertising on the commercial real estate market can come in two forms – image and information. The goal of image advertising is to present a project’s proper side to the target audience, while information advertising is geared toward presenting the maximum amount of information on a project. Internet, which deserves to be placed in its own category, is also a key medium.

The Internet According to experts, the Internet has an audience of 1015 million users in Russia and is the most active and solvent segment among the population. Moreover, the Internet is virtually the only means of information during the working hours. It is also the most advantageous resource for posting information on real estate facilities, whose very target audience corresponds to that of the Internet. As such, creating websites for real estate facilities has become a widespread practice. Furthermore, the Internet can be used to post information on a project or advertising about it on relevant sites, thereby generating the most hits from the target audience.

Image – The PR of a real estate facility entails special events created to support the facility’s image. One must not underestimate the role this plays in the overall marketing program, especially when dealing with complicated facilities that present new concepts to the market.

Marketing Office – One of the most complicated stages in an advertising campaign is early marketing, done when a facility is at the preliminary construction stage. At this stage, special effort is needed to convince a client that the building is of high quality and that it has competitive advantages. The success of a marketing campaign at the early stages depends on how well and professionally information on the project is presented. A marketing office can handle this task at the construction site, especially when a facility is located at a distance from the city center or it is being completed in stages. The marketing office must be supplied with the necessary presentation materials (scale models, projectors or LCD monitors, stands, etc) and be able to make a detailed presentation right on site.

Presentation Events – These events are conducted to introduce a project to the target audience, with specific emphasis placed on meeting and establishing business contacts with the representatives of the target audience. Such networking events can be independently organized for a specific facility or can be part of a specialized exhibition or conferences (for example, participating in professional award ceremonies is an opportunity to announce a project as a market leader).

Direct Marketing Events are held according the following scenario: At the first stage, a client database is compiled, and, at the second stage, the target audience is sent the information on the project. Thirdly, clients on the list are cold called to ascertain their interest and to invite them to a presentation, while, at the fourth and final stage, a direct presentation is delivered to those clients interested in the project. Direct marketing is effective when the target audience is small in number, wellknown and accessible.

Sales Promotions Sales promotions are usually held when a project is experiencing difficulties and most often have special conditions (discounts, bonuses, etc) for a short period of time. Since the commercial real estate market is characterized by a lack of commonly known parameters for offers, sales promotions allow a developer to set individual conditions for each client depending on his demands.

Marketing Mix

Let’s now take a look at an example of marketing mix in operation at Hermitage Plaza, completed by Forum Properties in 2006. Firstly, let’s set the facility’s features: this is a class A complex located in Moscow’s prestigious center, thus placing it in the market’s premium segment. Moreover, the facility’s target audience is large international and Russian companies, and its competition is relatively low due to its location as well as design and technical solutions. Accordingly, the marketing mix for the facility includes the complex’s name, Hermitage Plaza, which refers to its location next to the Hermitage Garden and illustrates its central concept: even though the complex is located on a large transportation artery, it was planned in such a way as to afford the tenants solitude in the internal court yard. This idea is reflected in the logotype (a closed circle resembling leaves) and the slogan, “Your World in the Center of Moscow.” The marketing campaign also used scale models, brochures, a website and image advertising in the core literature, as well as presentation events and sale promotions. In the end, as a result of the marketing campaign, one could say the Hermitage Plaza brand was created, which is a highend, class A+ office complex.