Marketing for Construction: The Kotler - Case Study Example

Essay Compare Kotler’s Four P “4Ps” marketing elements to at least three (3) different publicly traded UK builders, explaining how those differences relate to those companies’ strategic marketing positioning relative to competitors and customers. Address each “P” separately, referring to and comparing multiple company examples for each of the four (4) “Ps”. Introduction The Kotler’s four Ps “4Ps” are the basic marketing element for any marketing organisation irrespective of the type of products. The offerings of different sectors are different. A fast moving consumer goods company offers the products which require different kind of marketing mix whereas the high involvement products like house, automobiles etc requires different market mix. The three companies chosen for the study in this paper are three publicly traded UK builders offering different types of property solutions to their prospective clients. The marketing mix used by these companies varies according to their target consumers and market. Two of these companies The Bellway Group and The Redrow are in direct competition with each other in the residential properties. They offer products of the same price segment and almost at the similar locations. The third company The British Land is into the commercial properties dealings. Company 1 The Bellway Group This group is the fourth largest house builder of UK which has been listed on London Stock Exchange. It is also a FTSE 250 listed company. It started its operations more than five decades ago in the year 1946. The organisation has built more than 100 thousand houses. The company operated in the United Kingdom and employees more than 2000 employees. It has specialised in developing various types of infrastructure, buildings and houses. The company is involved in various kinds of activities of the property market. These activities include land acquisition activities, financing activities for property and development, planning activities, architecture and designing activities and build management activities. The final activity is the marketing and customer service activities for the property and building products. Product: The product of the organisation is the house building services. The organisation designs, builds and sells the houses. This built up houses are customised according to the local tastes and needs. The designers and the consultants working on the designs make sure that the regional identities and the features are part of the design and meet the local tastes, level of quality and characters. The national housing demands are matched with providing products of local and regional vernacular. By the year 2008 the company had enjoyed various kinds of growth. In the year 2009 it sold 4380 homes. The company operates through out the nation successfully as a national company focusing on the local needs and demands of the clients. It majorly operates in the areas of high population and is a well known brand name of the building industry of UK. The company develops various types of house that can be detached, semi-detached, apartment, town house, terraced and bungalow.   Place: The company covers almost all part of United Kingdom. The company has operations in the East Midlands, East Scotland, Essex, Manchester, North East, Northern Home Counties, North London, South East, South Midlands, South West, Thames Gateway North, Thames Gateway South, Wales, Wessex, West Lancashire, West Midlands, West Scotland and Yorkshire. All these places are full of variations and difference of local taste and preferences. The housing products are different from the other products as these are developed and delivered at the location where consumers will utilise it. In order to meet the domestic needs, preferences and taste, the company hires local designers, experts and consultants. The local agents and staffs facilitate the selling process. Promotion The company uses various platforms for the promotion of its products. The most common form of advertisement is the print advertisement. The company also utilises the billboard and other promotional modes. The brochure of the plans is also available to the prospective buyers upon request which can be placed online as well as through telephone. Figure: Print Advertisement Bellway Figure: Print Advertisement 2 Bellway Price: The price of the product ranges from location to location and different attributes of the products. The price range starts from ₤ 100,000 and below to ₤ 500,001 and above. The pricing depends on various factors such as house type, number of rooms and location. The earnings and dividends of the company have gone down significantly in last one year. However the results of the year 2009 so far have been optimistic and the earnings of the company have been increasing. Company 2 Redrow Redrow Customer Charter includes the list of commitment regarding the delivery of quality services through out the home buying process and afterwards if required. It ensures commitment to the customers and provides the details of services covered in the “Homebuyer Guide”. Customer is provided this guide when they reserve a new Redrow home. The company ensures full and transparent information to the customers for their chosen home. The staff and people working with the customers are well trained, qualified and knowledgeable to understand the need of customer and provide the best suitable solution for their needs. They ensure full assistance throughout the buying process. Organisation ensures the availability of the contact details of the concerned person for responding to the queries of customers. The assistance and support from the staff and people working for the company and with the customers ensures that customer gets full support during the research and selection processes. The health and safety advices are provided for the buildings undergoing constructions and to use various facilities of the house. Product The product offerings range from the location of the project, number of rooms and the project. The product offered ranges from the one bedroom housing options to 5 bedrooms or more. The housing options are available to all kind of consumers. The variety of price range and financing options allows the customer to choose their choice of product based on their affordability. The company is primarily involved in the development of residential properties. The organisation has three main product portfolios. These portfolios are Signature, In the City and Debut. Each portfolio has different varieties of product offerings. The portfolio Signature includes the one to five bedroom luxury houses. The living specification and offering accommodation is the main feature of the In the City. It offers contemporary lifestyle to the people. The Debut products start with the one bedroom apartments and it has two storey homes. The mixed used and regeneration are for residential and commercial development. The homes, office, retail, industrial and leisure schemes are the main properties developed by the Redrow. Price The price of the product depends on the location of the housing option and type of the product. The pricing starts with ₤ 50,000 and can be more than ₤ 500,000. Place Redrow is operating through out United Kingdom. It has offices at various locations. The project information is easily available on the website as well for the prospective customers. Promotions The organisation is involved in the communication with the prospective clients as well as the existing clients. The various modes of communication have been adopted according to the location, target audience and promotional objectives. The organisation ensures timely communication and availability of information on the development of various construction processes. The functions and facilities of the home are demonstrated by the representatives of the organisation. The after sales services are provided for the routine and emergency matters. The details of the contact person are provided in order to deal with any kind of customer grievances. The Redrow also has a promotional program by the name of ‘Redrow Customer Rewards”. This is a referral program where the customers are rewarded for referring Redrow to their friends, family and colleague. They would be given cash reward with each purchase by his referral group. The amount of the cash reward depends on the amount of purchase made by the referred person. Figure: Redrow Giant Hot air balloon The earnings and dividends of the company have gone down significantly in last one year. The downfall of the earnings during the end of 2008 has been significantly high. However the results of the year 2009 so far have been optimistic and the earnings of the company have been increasing. Company 3 This organisation is one of the largest builders of UK. The company primarily operates in the field property investments. It invests in the warehouses, superstore, meadow hall, town retail, broad gate and Regents place. The company is also active in the fund management activities. There are various development programme of the company going on currently. The various projects are altogether total of 483,200 square metres. These includes projects like The Broad gate Tower, 201 Bishops gate, Rope maker, Ludgate West, Osnaburgh Street and the Leadenhall Building. The organisation has one of the UK’s largest real estate investment trust and total assets valued £12.3 billion. The company ensures the enhancement of the property returns through various asset management practices like buying, managing or selling. It works towards maximising the returns and minimising the risk. The earnings and dividends of the company have gone down significantly in last one year. The starting of the year 2007 has been good whereas the end of the year 2007 had experienced sharp fall in the earnings and it continued till 2009. However the results of the year 2009 so far have been optimistic and the earnings of the company have been increasing. Product The product offered by the company ranges to different types of commercial properties like Retail properties, offices and other developmental infrastructures. The architectural infrastructure developed for by the company meets high health and safety standards. The timely completion of the quality infrastructures are the prime deliverable of the company. There are various developmental programs like Pureto Venecia Zaragoza, Spain, 201 Bishopsgate & the Broadgate Tower, The Leadenhall Building, Ropemaker and Regent’s Place and various other development prospects. The developmental prospects include various developments of different types of commercial premises. The property portfolio of the organisation provides the division of business into 56% of the retail business and 42% of the office business. The 82% of the retail businesses are out of London whereas all the business location is in London. Rest are various developmental projects like superstores, Meadow Hall, In-Town Retail and others. The tenants of this include ASDA, Next, Tesco, Sainsbury’s, Virgin, Marks and Spencer and various others. The out-town retail includes more than 100 retail warehouse properties. The 77 of these are retail parks and 23 are solus units. The total floor area is 13.2 million sq ft. The in-town retail includes British Land’s share of £ 0.9 billion and total value of £ 1.2 billion. There are 6 shopping centres with 2.5 million sq ft, 29 department stores with 4.6 million sq ft and 3 high street shops. The tenants for the organisation include the major brand names such as ASDA, Marks and Spencer, Sainsbury’s and various others. Figure: The Prime Property Portfolio. Price The average rent of the out-of town retail is £22.20 per sq ft with average lease term of 11.6 years. The top average rent is £47.5 per sq ft. The rent of the premise varies according to the location of the property. The rent for the in town property is with the lease term of 21 years in average and expiry in 22.5 years and rent passing is £69million pa. The rent for London offices are £160 million pa with average office passing rent £47.5 per sq ft with the average lease term of 9 years. The office occupiers are various financial institutions like Baring Investment Services, Close Brothers, Deutsche Bank, and Framlington Group, Henderson Global Investors. Place Most of the renting premises are in the London and major cities. Some of the properties are out town properties as mentioned in the Figure above. Promotions Bellway P.L.C Redrow British Land Company Product Housing Mainly housing and some commercial Commercial Property Price Selling price depending on the location and type of the property. Selling price depending on the location and type of the property. Commercial property on lease. Place United Kingdom United Kingdom London and some out town properties. Promotions Bellway is using the promotional materials on the print media, billboards and hoardings at the prime locations. Redrow has extensive promotional strategies and has been using the traditional modes like print media and electronic media to the innovative ways of promotions like Hot Air Balloon carrying the brand name and punch line of Redrow. British Land Company sponsors various sports events like National Ski Championships and other sponsored events that can be interest of the target customers. Conclusion The challenges of the building companies are different from the usual offers of the marketers where products are manufactured and packaged at one place and sold to other place through the distribution channels using various sales and distribution strategies. The product in the case of the builders is fixed at a location which customer buys. These products are the high involvement products. Many a time’s people buy one house in their lifetime. The availability of funds and loans, returning capacity and affordability are some of the factors of changing the decisions of the customers. The housing industry can be broadly divided into commercial and residential properties. The British Land Company deals with the commercial properties. It provides the properties on the lease of the pre-defined and pre-agreed terms. There are various types of commercial properties and the rent depends on the type and location of the property. The Bellway PLC offers housing solutions for the prospective clients. The price of the property varies with the location of the property. This is clear from the information and analysis above that the 4 P’s are the different in each of the company. The product, price, place and promotion strategies varied from Bellway to Redrow to The British Land Company. The Bellway Company is a housing company and has utilising the channels like print media for the advertising and promotions. The Redrow has the mixed constructions that are commercial and housing properties. Redrow has been innovative to use Hot Air Balloon for the advertising purpose. The Hot Air Balloon has been designed as event in various locations across the UK. Reference: Bellway p.l.c. retrieved on 25 October 2009 from http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C826AS650 British Land Company Plc (The) retrieved on 25 October 2009 from http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=110828100 Buck, Jonathan, (2009) British property companies seek to raise $1.9 billion, Article from The Wall Street Journal, September 24 available on http://www.theaustralian.news.com.au/business/story/0,28124,26118161-36375,00.html Cavaness, J. and Manoochehri, G. (1993). ‘Building quality into services’. S.A.M. Advanced Management Journal, 58(Winter), pp.4-15. Redrow Customer Reward retrieve on 25 October 2009 from http://www.redrow.co.uk/cms/buying/customer-rewards Hot Air Balloon of Redrow received on 24 Oct 2009 from http://thetraffordcentre.wordpress.com/2009/09/10/birthday-balloon-for-the-trafford-centre/ Kotler, P. (1973). ‘Atmospherics as a marketing tool’. Journal of Marketing Research, 49(4), pp.48-64. Print Advertisement Bellway retrieved on 25 October 2009 from http://www.cq2.co.uk/images/bellway-print.jpg Parasuraman, A., Zeithaml, V.A., and Berry, L.L. (1985). ‘A conceptual model of service quality and its implications for future research’. Journal of Marketing, 49(Fall), pp.41-50. Paul, M., Hennig-Thurau, T., Gremler, D., Gwinner, K., and Wiertz, C. (2009). ‘Toward a theory of repeat purchase drivers for consumer services’. Academy of Marketing Science, 37(2), pp.215-237. Szwarc, P. (2005). Researching customer satisfaction & loyalty. London: Kogan Page Limited Redrow PLC, retrieved on 25 October 2009 from http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C826B2310 The British Land, Portfolio Description retrieved on 24 October 2009 from http://www.britishlandreports.com/financialreports/2009annualreport/portfolio-description/index.html http://www.worldarchitecturenews.com/ accessed on 24 October 2009 http://www.cim.co.uk/home.aspx accessed on 24 October 2009 Read More