Positioning

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The official numbers on the residential construction industry and the stories builders tell one another over late-night beers or early-morning coffee often can be quite different.

May 01, 2003

 

Heather McCune, Editor in Chief

 

The official numbers on the residential construction industry and the stories builders tell one another over late-night beers or early-morning coffee often can be quite different. The monthly numbers reported in the general media - sales, permits - suggest a softening market for new homes this year. Builders tell a different story or at least are used to taking a market view slightly longer than 30 days. Looking beyond month-to-month numbers, they recognize that housing's drivers - demographics, immigration, interest rates - favor a continuation of the housing boom of the past decade.

For the last few months, however, builder stories share some similar qualities with the ups and downs of the numbers. For example, statistics on the sales of new single-family homes drop one month, and we're treated to a spate of headlines and lots of talking heads, all debating whether the housing bubble is about to burst. Has the run-up in home values reached its peak? Will buyers today realize the same rate of appreciation for their homes?

The builder equivalent of this economic tale is of deep discounting to keep sales momentum. In certain segments of the housing market in cities such as Denver and Houston, this is an all-too-familiar story today. Sales have slowed among first move-up buyers and nearly stalled at higher price points.

Consumers who pay any attention to the news understand that housing is the economy's bright spot, the one sector defying the recession. News of a softening in the economy's biggest engine breeds an uncertainty that can influence buyer behavior. While no study draws a direct line between a steady diet of dismal economic news and consumer spending, intuitively we all know the connection exists.

This month's cover feature, "How to Monopolize Your Market," is about success strategies for an uncertain economy. Builders share actionable ideas that can help you boost image, increase awareness and grow sales with little investment. It's about the strategies to spark sales in any market. Consider:

 

 

 

  • In Indianapolis' competitive entry-level housing market, builder C.P. Morgan sought a cost-effective way to increase market awareness of the company's brand. Transforming the company's 15 Nissan X-Terra SUVs that sales representatives, customer service reps and others use into roving billboards did the trick. Morgan wrapped the SUVs in its signature color scheme and painted its slogan on the side: More Square Feet. Less Money.
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  • Barbara Stowers, vice president of sales and marketing for Taylor Woodrow in Irvine, Calif., created a new community advertising campaign for the financial section of the newspaper rather than the densely populated new home section. The goal is to create in buyers' minds a very different image - to align the purchase of a Taylor Woodrow home with other smart investments of discretionary income.

    These and many more are creative solutions to specific market conditions and company objectives. While each of these solutions proved successful in growing sales and improving profitability, none would have accomplished either of these goals had not the builders done the first - and most important - part of the process: Define the objective and develop the strategy and means to meet it. This means identifying the target buyer and understanding what he or she values; developing a plan to market that value in compelling terms; improving relationships with those in the marketplace who influence would-be customers (Realtors, existing homeowners, etc.); and evaluating the outcome of these efforts.

    What this activity creates is a staggering strategic advantage - the knowledge to create a value proposition through your product and service for customers who want to buy - and the creative means to capture their attention and inspire action.

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    December 2014

    This Month in Professional Builder

    Products

    Skyline Windows released an ADA-compliant crank operated tilt and turn window with incremental control. 

    Features

    Builders are more optimistic about the industry as the overall economy becomes less of a concern, even as the rising cost of materials and labor commands more attention.

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