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The Warsaw Voice » Other » February 4, 2009
Commercial Real Estate
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February 4, 2009   
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As the economic downturn bites, developers are trying to save on marketing costs, while prospective tenants are demanding more details about planned projects before committing themselves. In these conditions, a carefully thought-out marketing policy is vital.

"A marketing policy without solid preparation is money thrown out of the window," says Mariusz Filip, general director of the FAMA advertising agency. "This is why I always ask my clients when offering them advice: what is your strategy, what do you want to achieve, and where do you want to be in five or 10 years? Independently of trying to sell a certain project, it is also important to build up the brand of the whole company. This may take years, but is well worth it. Because customers want their partner to be an important, credible and well-known company."

The process of creating strong, distinct brands on the Polish real estate market has only begun. But marketing specialists say the role of brands will continue to grow together with an overall increase in the professionalism of developers.

Marketing strategy

A marketing strategy depends on several factors-first of all the product, then the desired effect, and finally the audience that the developer intends to reach.

"The core criterion for a marketing strategy is delivering proper information to the target audience," says Marta Tęsiorowska, marketing and communications manager at ProLogis, a leading global provider of distribution facilities. "In our work we focus on the customers of course, but also on business partners: real estate brokers, consultants, subcontractors, and on effective work with the media."

In the case of shopping centers, developers try to reach three different target groups: tenants, business partners, and end users, or the customers who will actually make purchases in the stores. For the first two groups, the developer's brand is highly important.

Agnieszka Drucis, director of marketing and public relations at Parkridge Retail, says, "We reach tenants and business partners. The whole background of the company is important to them: our market experience, previous projects successfully completed in Poland and abroad, and our relationship with partner companies. Thanks to constant efforts to strengthen the Parkridge Retail brand, we are perceived on the market as a serious business partner."

The developer's brand is less important to consumers visiting a shopping center. "When advertising our Focus Park and Focus Mall, we primarily target customers visiting them in each city," says Drucis. "We focus on getting them accustomed to the name itself rather than to the identity of the investor behind the project. We concentrate on creating brand awareness, which in turn has an effect on sales. Of course, the fact that we follow a uniform policy in this respect in each location and that our centers have the same name helps increase the overall effectiveness of the process and enables us to build up the Focus Mall and Focus Park brands on a national scale."

Developers online

An ad campaign should be consistent visually and in terms of the information it tries to convey, says FAMA's Filip.

"For a long time in the past there was a lack of consistency in this respect in Poland," Filip says. "A few years ago we created the first such profile for one of our customers in the office space sector. We introduced new standards whereby informational brochures for different projects by the same developer shared the same graphic design and content layout; the only difference was the colors used, for example."

This consistency in promotional materials and standardized information content is designed to help the customer. Such attention to detail also shows that we are dealing with a serious partner who cares about the relationship with a potential buyer. The same goes for websites. Once we have become used to a layout, changes can be troublesome. Experts agree that a website is one of the main tools in today's communication. This might sound like a truism, but there still are developers who don't have a Polish-language website even though they have been on the Polish market for years.

The creation of a website is but the first step. If the internet is to deliver the desired results, the content must be attractive and constantly updated, and this means extra work and money.

The internet can also provide multimedia tools such as 3D virtual guided tours, which can increase the exposure of a project.

"This works a bit like a computer game," says Filip. "We can visit the property virtually, making our own decision on where we want to go first. We can choose the floor, the furnishings, the possible room layouts, or just view it as an open space. This type of application could be very useful for shopping centers. The potential tenant could, through this virtual tour, choose the best spot and neighborhood for the store."

According to Filip, 3D virtual spaces are the marketing tool of the future. Developers are also increasingly tempted by animations, which can be reused on different media: large plasma displays at trade shows, smaller formats for the internet and promotional CDs.

"Such animations can be very realistic," says Filip. "Using photographs taken from helicopters, we can create a visualization or animation that shows the real view a tenant would have from the 15th floor of a building."

Ideas count

Marketing real estate is often linked with delivering a lot of detailed and complex information about a project. The target audience is often quite small and well-defined. Taking these two factors into account, investors rarely use television and radio advertising.

"We usually place ads in business and trade publications, preferably next to reports on the state of the real estate market," says Wojciech Gepner, public relations consultant at Echo Investment SA.

ProLogis' Tęsiorowska says her company follows a similar strategy. "An advertising campaign covers most trade periodicals and active public relations activities pursued together with trade, business, marketing and general media outlets."

Real estate ads are often accused of being bland and boring, which explains why consumers often ignore them. But this does not have to be the case, says FAMA's Filip.

"An ad for an office building, logistics center or apartment complex needn't be boring," Filip says. "Still, one should remember that originality at any price doesn't always pay. Sometimes an original concept is needed to attract buyers, and then it is worth being creative. At other times, a more traditional approach with concrete facts will work better and produce the desired results."

One thing is certain, Filip says: the advertisement must be visible. "We usually open the paper where we plan to run our ad and try to determine where the information should be featured to be visible. Just a few years ago, clients would insist on cramming the smallest format advertisements with all sorts of details: visualization, map, project information, contact data, and so on. This in fact goes totally against the desired effect, as the abundance of information in fine print tends to put off readers instead of enticing them. Fortunately, this approach is changing."

Experts agree that an advertising slogan should be effective, have the right ring to it, and be different from those of the competition.

"At Christmas time two very similar slogans in Polish by two different shopping centers, Blue City and Promenada, appeared in the media," says Małgosia Bednarek of the Migomedia Interactive Agency. "Both relied on the same play on words: 'PRESENT yourself for Christmas.' This is bad for both centers because the potential customer could either confuse them or more likely remember the slogan of a third one, which stands out more. It's good when a slogan tells the customer about the advantages of a given product and not just its characteristic features. Instead of saying 'Here you can find 56 shops, 14 restaurants and so on,' a shopping center should say 'Save time. Choose from among 56 stores under the same roof' or 'Save time. Buy everything in one place.'"

It is difficult to define a single set of rules on how big the advertisement should be and how often it should be run, experts say. Generally, they note, the best tactic is a "strong first strike" followed by a reduction in the size of the ads later not to bore the audience. The graphic design should be changed every few months.

My name is...

A building's name is also important for marketing purposes and the future success of the project.

"The name should be easy to say and remember. Good examples are Arkadia, Złote Tarasy, the Metropolitan, and Galeria Mokotów," says Migomedia's Bednarek. "It's good if the name has positive connotations, like Arkadia or Złote Tarasy. Names such as Blue City, Klif and Stolica Business Center don't really have such connotations."

According to Bednarek, one good way is to put the name of the developer at the beginning of the project's name-as in Panattoni Park or ProLogis Park, for example. "Thanks to this, you can build brand recognition and immediately suggest to customers that the center is of the already proven Panattoni or Prologis quality," she says. "This is partly how hotel and restaurant chains have achieved their success."

The location of many projects is included in their name-for example, ProLogis Park Poznań III, Panattoni Wrocław, Żerań Park Warszawa II, Wola Park, and Galeria Mokotów, Bednarek says. "This has certain advantages because in the case of warehouse space we immediately offer the customer valuable information," Bednarek adds. "On the minus side, most of our competitors will be using the same strategy. In such a case we should try to stand out through unconventional advertisements, original graphic design and effective slogans."

Building trust

Public relations is another important tool that can be used to support a marketing campaign. One of the main goals is to maintain a company's positive and consistent image.

"Today's market is unforgiving towards mistakes in communication, or communication that is chaotic and detached from reality," says Hubert Archiciński, a partner at media consultancy TBT i Wspólnicy. "During a crisis the key issue is to strengthen trust. Every investment decision is thoroughly analyzed now that clients have become much more prudent. Only those developers who consistently and convincingly strengthen their image as reliable partners will have a chance of surviving on the market."

Information for the press must be well prepared, Archiciński says. "No basic dates or figures concerning the project should be missing. It is also worth being attentive to the quality of the visualization or photograph, thereby increasing the chances of the project's image being published next to a report or article."

The two most important aspects of public relations are time and planning, according to Archiciński. The shorter the delivery time of requested information to the press the better.

"In order to be effective, each public relations campaign must be planned precisely," Archiciński says. "Determining the company's initial situation, analyzing the market and the potential risks and rewards, defining the medium and long-term strategic goals, are all elements that will define the final success and effectiveness of a public relations campaign."

A well thought-out public relations campaign offers an opportunity to deliver the maximum amount of information to the customer. This is extremely important in the case of commercial real estate. The media presentation of a new building increases its prestige. A press article usually underlines those qualities that make the project stand out. It draws attention to the building's functionality. And since the reader of the daily, weekly or monthly publication is the potential tenant, the more details the better.

"Renting an office-a place that will be your company's headquarters, where a large part of our lives will be spent daily-takes as much thought as buying a private apartment," says Echo Investment's Gepner. "Tenants analyze not only the type, location of a building or running costs, but also a whole series of other details from the design to the arrangement options to the materials used, construction technology, and quality of furnishings."

Being where the customer is

Trade shows and various conferences are also an avenue towards widespread promotion. Trade fairs make it possible to use additional presentation materials, such as scale models, which are seldom used on a day-to-day basis. Customers also value the possibility of a private talk and being able to ask about all the details they want. But this is only possible if the stands are manned by well-prepared and knowledgeable staff, not just a few hostesses, experts say.

According to Parkridge Retail's Drucis, the MAPIC and MIPIM trade shows in Cannes are the most important and prestigious events in the commercial real estate market.

ProLogis is also a regular participant in such trade shows and conferences, according to Tęsiorowska. "We work together with the Higher School of Logistics and the Institute of Logistics and Warehousing in Poznań, creating a platform for the exchange of knowledge and expertise by organizing courses with ProLogis experts and running competitions for students," says Tęsiorowska. "ProLogis is involved in the life of the local communities where it is active. For example, in Chorzów we organize the ProLogis Basketball Tournament for the Mayor's Cup, together with the municipal authorities."

Another large company building modern logistics centers, Panattoni Europe, has involved the press, students and its business partners in its "Panattoni Europe Internship" program. The developer has organized a competition for construction and logistics students based on the preparation of two case studies for build-to-suit technology. The main prize is an internship with the Czech subsidiary of Panattoni Europe.

Developers are in every place their clients and partners are-wherever there are discussions about the prospects and possibilities of their industry.

"From the point of view of the investor, conferences are a good place to present a new project," says Echo Investment's Gepner. "In times of crisis people become more attentive, listen, and acquire information. From the point of view of office building developers, being at conferences and seminars attended by executives making decisions on their company's location is very useful."

According to Gepner, too few trade shows are aimed at the office sector. "We do go to shows like MIPIM in Cannes or Expo Real in Munich, but office buildings are a very small part of the target audience of such events and we rarely meet any future tenants there," he says. "In Cannes and Munich we mostly speak with municipal officials about investment possibilities and available land."

Contact with the towns where a developer plans to invest is one of the first stages of marketing from the investor's point of view, Gepner says. A new office building, shopping center or logistic center is an important project from the point of view of local authorities and especially appreciated in regional information centers, where the authorities readily add information about the project to their brochures, directories and other promotional materials.

Keeping a lower profile

The ongoing financial and economic crisis is unlikely to lead to marketing activities being stopped, developers say, because it is well known that he who doesn't advertise, doesn't exist. It is highly likely, however, that advertising campaigns will be scaled down and more attention will be paid to costs.

"Of course we will scrutinize the costs of individual deals and choose the most effective ones, but we have decided to keep all our current activities," says Parkridge Retail's Drucis, adding that her company does not plan to reduce its marketing agenda for the coming year as all its projects are proceeding to schedule. "The work is proceeding on our building sites in Piotrków Trybunalski, Gliwice and Jelenia Góra, and is accompanied by information for our tenants and the local communities."

ProLogis' Tęsiorowska says her company plans to "keep on building its customer relations." ProLogis will concentrate on direct marketing and on strengthening its position as an industry expert, "fulfilling its role as market educators, especially in the domain of sustainable development," Tęsiorowska says. "Due to a reduction in our marketing budget, we plan to reduce the scope of our advertising campaigns," she adds.

Echo Investment's Gepner notes that companies have redefined their location policies as a result of the financial crisis, a fact that developers will have to take into account in the development of their marketing strategies.

"During a crisis, tenants tend to choose more economical projects," says Gepner. "Business parks are very much in demand, especially those located outside city centers because companies do not want to appear frivolous. The technical details of buildings as well as projected running costs are something that our customers are interested in. Pomp and ostentation have begun to lose ground."

Magdalena Fabijańczuk
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