Who wants to be the Mercedes of house building? Stephen Byfield in Housebuilder

Who wants to be the Mercedes of house building? Stephen Byfield in Housebuilder magazine

Published on by Stephen Byfield

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Taken from the October 2014 issue of Housebuilder magazine.

Brands are crucial in many sectors, but they are not a feature of housebuilding. Stephen Byfield, managing director of communications consultancy PPS, wonders why.

I had an interesting conversation about brands with some senior house builders this week; a conversation brought into focus by the fact that I want to buy a new car.   It’s a choice between a Merc, a Jag or a Range Rover.   I know that my choice will say something about me – the Merc says middle-aged salary man; the Jag, raffish traditionalist and the Range says wannabe gangsta.

To my mind there are no strong residential brands – at least none strong enough to influence customer behaviour.    People looking for a new home rarely say “I’m tempted by the Crest and the Redrow, but the one I really want is the Linden”.   You buy a Coke, an IPad or a Dyson, but you always, always, always, buy a house.

Why should this be?    Logically, house builders should want to build brands because they are enormously valuable.   Coca Cola, for instance, is worth $79.2 billion, according to Interbrand.

My conversation with the house builders concluded that our industry does not invest in brands because the vast majority of UK consumers move only a few miles and their spending decisions are based on location, accessibility and price rather than the brand values of whoever built the home.     

Cars, unlike homes, are portable and essentially the same.   Coke doesn’t differ much from other cola drinks.   In those circumstances, a brand is a marketing short-cut that allows customers to differentiate between products.    But while some builders construct similar houses, their position, outlook and setting makes each house unique, so spending decisions are unlikely to be based around brand alone.

In fact, there is a huge debate about the effect of brands on spending.   According to The Economist, Harley Davidson, which is renowned for having a fanatical fan base, derives only ten percent of its sales from these devotees.  

In any event, the value of a brand is so hard to measure that it rarely appears on a balance sheet.   Coca Cola values its brands at just $6.7 billion in its accounts, less than a tenth of the Interbrand calculation.   The true value of a brand is only crystallised when the company is sold.

My guess is that against this background, most housebuilders won’t devote the significant sums required to build their brands. And while it galls me to say it, they are probably right.

Read more from this month's issue here 

Stephen Byfield

Stephen Byfield about the author…

Stephen has over 25 years experience of complicated communications issues and loves to work on the trickiest and knottiest of client accounts. Stephen founded PPS Group and ran the firm for 26 years before it was acquired by Newgate in 2015.

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