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Product Differentiation for Multifamily Developments - IGNITIONIGNITION Residential

Product Differentiation for Multifamily Developments

What is it?  Why and when is it important in multi-family marketing?

Product Differenciation in multifamily development marketingTo quote no less a source than Investopedia, Product Differentiation can be defined as:

A marketing process that showcases the differences between products. Product differentiation looks to make a product more attractive by contrasting its unique qualities with other competing products. Successful Product differentiation creates a competitive advantage for the seller, as customers view these products as unique or superior.

Product differentiation can be achieved in many ways. It may be as simple as packaging the goods in a creative way, or as elaborate as incorporating new functional features. Sometimes differentiation does not involve changing the product at all, but creating a new advertising campaign or other sales promotions instead.

In terms of our multi-family marketing work here at IGNITION Residential, we typically spend a lot of time and effort on Product Differentiation — especially in a real estate environment where buyers have a lot of choices — in order to both brand our developments in a way that distinguishes them from the competition and to enhance their value to our clients.  One example of this would be The Trust, a subdivision that we marketed on Heath Street in Brookline where we topped the previous record for land by at least $150K per acre by giving a relatively mundane address (325 Heath Street) a new and somewhat “toney” name and further elevating its prestige by working with the internationally-acclaimed architect, Graham Gund, and the Arnold Arboretum to create design and conservation guidelines and restrictions.  At The Waterworks at Chestnut Hill, which came on the market with ambitious pricing in a very robust real estate market, we added “at Chestnut Hill” to the project’s appellation in order to subordinate its Brighton location in favor of an area that is known to be more pricey and, given our target market of relatively wealthy “empty-nesters,” significantly more prestigious.  We also used unusual display advertising themed around an iconic image which we dubbed “Our Lady of The Reservoir” in order to elevate the prestige to a point where we could achieve an average price of $900K per unit — unheard of in Brighton prior to that project.

Because much of our marketing work has been rooted in the adaptive re-use and historic preservation of “white elephant” properties (e.g. The Grand, which was a former smallpox hospital on top of Summit Hill in Brookline; Kendall Crescent, which was the former Town Garage site in Brookline; or Stoneleigh, the former Norfolk County Jail in Dedham), we have had the blessing and curse of intrinsic “Product Differentiation,” but that was always buoyed by the use of sophisticated branding techniques to make these properties more desirable to the market…and, in the process, to elevate their value to our clients in order to cover the typically high construction costs for adaptive re-use and historic preservation projects.

Product Differentiation can also take a far simpler form in terms of a “value sell” in which the developer attempts to undercut the market and, in doing so, provides another important point of differentiation from the competition.

In the spring of 2012, IGNITION Residential will be marketing a project that is currently moving through the BRA permitting pipeline; Charing Cross is a 55 units condominium development at 1501 Commonwealth Avenue with extraordinary skyline views of downtown Boston and forever views across Brookline. To some extent, along with the branding of the project as an Anglo-centric expression of English Jacobean architecture, our “product differentiation” is likely to be further supplemented by the likelihood that we will have little or no competition for new multi-family condominium product when we hit the market in the spring of 2012.  The hope is that the developer and IGNITION Residential will be proven to be “crazy like a fox,” instead of just plain crazy.  Nothing new there…but we’re confident that the former prospective outcome will prevail.

In the final analysis, there is a very thin gray line between “product differentiation” and “branding,” both contemporary buzzwords that mean approximately the same thing: Producing a product that appeals to a segment or segments of the buying public and then capitalizing on and enhancing that product by either creating or touting the differences (or both) to ensure that the desired message is delivered, either overtly or more subtlety, to a marketplace replete with more choices than buyers or renters.

At the risk of being totally self-serving, we believe that IGNITION Residential will remain the proverbial gold standard for Product Differentiation in the greater Boston Metropolitan area.

 

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About Merrill Diamond

Merrill H. Diamond is a trained architect and a founding principal of IGNITION Residential, an interdisciplinary multi-family marketing firm. He is also a founding partner of Diamond/Sinacori, a Boston-based real estate development company founded in 1978. Mr. Diamond has been the recipient of numerous local and national awards for both development and marketing. He has served as both a gubernatorial appointee to the Massachusetts Historical Commission and to the Senate Special Commission on Historic Preservation. In addition, Mr. Diamond has been named “Entrepreneur of the Year” by Arthur Young / “Venture Magazine;” “Merchant Builder of the Year” by the National Association of Homebuilders (NAHB), and one of “America’s Most Valuable People” by “USA Today".

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