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News for Product Manufacturers from Hanley Wood CEO Frank Anton
Are You a Leader or a Laggard?
Just as a rising tide lifts all boats, a housing recovery will boost business for all building product manufacturers. And, according to almost every economist I talk to and every housing forecast I see, housing will recover, albeit very modestly, next year. But neither all boats nor all building product manufacturers are created equal. So, just as a powerboat will get its crew to deep water faster than a rowboat, a building product company with a properly funded, top-notch marketing organization will capture more than its fair share of the bigger market than a company with a resource-starved, undermanned marketing department.
Of course, some of you would expect me to say all of that, given that marketing spending by building product manufacturers is the lifeblood of Hanley Wood's media business. But in this case, I'm really speaking for Booz and Co., an internationally known consulting firm that has just conducted a landmark study of marketing practices among Hanley Wood's customers—that is, you and your peers. Among many other things, the study shows that building product manufacturers, be they good or not-so-good at marketing, share the same three top marketing objectives: one, to build a better brand; two, to drive traffic to their company Web sites; and, three, to build direct relationships with their trade customers. Interestingly, the study also shows that building product manufacturers, be they good or not-so-good at marketing (and survey respondents rated themselves), generally spend 25 percent of their marketing budget on paid advertising (print and electronic) and 75 percent on below-the-line initiatives like developing their own Web sites, direct marketing, collateral material, events and special promotions.
After that, one sees a sharp divergence between the business practices of building product manufacturers who set the standards for marketing leadership and those who lag behind. Leaders have already migrated marketing spending and in-house marketing capabilities to data and lead management, SEO and SEM, and direct marketing with a decidedly digital twist. And in terms of marketing spend as a percentage of sales, leaders outspend laggards by about a 2-to-1 margin—a discrepancy as true among relatively small private companies as it is among multi-billion dollar public companies.
But don't take my word for it. Instead, register for one of two upcoming Webinars with Matt Egol, the Booz and Co. partner in the firm's consumer, media and digital practice, and the main force behind the research. The first Webcast will take place at 11 a.m. EDT on Thursday, Oct. 8, while the second will be held at 2 p.m. EDT on Thursday, Oct. 15. Listen in and you'll not only be able to benchmark your marketing organization, you'll also be able to determine what it takes to be a leader, part of the crew of that fast-moving powerboat.
To register for the Oct. 8 Webinar, click here; to register for the Oct. 15 Webinar, click here.
Send e-mail to Frank Anton |
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News and Trends from Hanley Wood Magazines
Visit the new ARCHITECT Online
The Web site for ARCHITECT magazine is the latest Hanly Wood online offering to be redesigned and relaunched.
Oasis or Mirage?
What kind of business environment can building material dealers expect to find on the other side once they cross this sales desert? Greg Brooks, a former ProSales editor known for his long-range analysis, provides his forecast. (ProSales, July-August 2009)
2009 Gold Nugget Awards: How The West Was Won
The annual competition honoring architecture in the Western U.S. gives top prizes for urban revitalization, green building, affordability, and small-scale luxury. (BUIILDER, September 2009)
Ian's Beazer Plots a Comeback
An interview with Beazer Homes' Ian McCarthy and his brain trust provides an exclusive look at the builder's strategy to emerge from dire financial straits and once again become a trusted name in home building. (BIG BUILDER, September 2009)
2009 Remodeling Design Awards
Out of 271 entries, this year's 16 winning projects stand out for their creativity, originality, and power of presentation. (REMODELING, September 2009)
SIPs Provide Efficient, Fast Building Alternative
Structural insulated panels can help build a strong, energy-efficient structure, but not all panels are created equal. (ECOHOME, Summer 2009)
Three Condo Developers Craft Plans to Get Out of Florida's Condo Swamp
When the music stopped playing in South Florida's condo circus, Wood Partners, The Altman Cos., and The Related Group managed to remain in business—and continue to stand almost three years later. (MULTIFAMILY EXECUTIVE, SEPT. 2009)
After the Recession
The prevailing hypothesis of today’s recession is that, while it is unlikely to be as bad as the Depression, it will have a lasting effect on buying habits. (REMODELING, September 2009) |
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Top Developments Affecting the Nation's Biggest Public Builders
Boomer Home Buyers Want High Tech and Low Maintenance
A new study by the National Association of Home Builders and the Met Life Mature Market Institute suggests that builders looking to attract buyers 55 years and older should think high tech and low maintenance when designing homes and planning communities.
New-Home Sales Up Less Than Expected
Sales of new single-family homes rose 0.7 percent to a seasonally adjusted annual rate of 429,000 in August from July, the Commerce Department reported.
Home Buying Tax Credit Influences Buyers
Zillow survey estimates that extending the $8,000 tax credit would attract 334,000 extra buyers.
84's Hardy Forecasts Slight Gain in Starts in 2010
Number could rise to 700,000, but existing home supply needs to shrink, 84 Lumber founder tells CNBC.
KB Loss Narrows; Orders Climb 62 Percent
Net loss of $66 million (-87 cents per share) was less than half the $144.7 million loss (-$1.87 per share) posted in the 2008 third quarter, which included charges of $82.2 million for inventory and JV impairments.
Home Prices Moved Up in July
The Federal Housing Finance Agency's monthly House Price Index rose 0.3 percent, seasonally adjusted from June to July.
Mutual Funds Sue Beazer Over Past Financials
Lawsuit against Beazer Homes USA and several of its officers accuses the company of violating securities laws by not disclosing the company's true financial conditions.
Existing-Home Sales Stumble in August
First-time buyers, who represent 30 percent of sales, continue to take advantage of tax credit.
Housing, Jobs to Blame for Florida's Population Loss
For the first time since servicemen left after World War II, Florida is losing residents.
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Housing Statistics and Analysis from Hanley Wood Market Intelligence
- Builders are finally seeing some stabilization in sales activity, sparked by higher affordability and the federal government's home buyer tax credit. Many are pushing for the tax credit to be extended past the current November deadline, with fewer eligibility requirements on top of it, but Congress has yet to act on the issue. August home sales data likely reflected an increase in purchase activity as the expiration of the tax credit draws near.
- A number of industry groups support extending the tax credit, noting that it has been successful in reigniting home purchase activity as well as improving buyer confidence. Conversely, others suggest that a broadened and extended tax credit program would become too expensive, and that the artificial demand it creates is not sustainable. From a data perspective, tax credits and other programs designed to boost purchase activity make it difficult to determine how much of the improvement in the housing market is a result of the incentive, and how much is a natural result of rebound from historically poor conditions.
- As we saw with the "Cash for Clunkers" program, incentive programs can indeed generate sales activity, but since that program ended, auto sales have slowed back down to a crawl. Some creative legislation that phases out the home buyer tax credit over time instead of a strict cut-off may assist with such a hangover, but realistically the housing market needs to eventually find a new equilibrium based upon a solid foundation of demand that is not dependent upon government subsidy.
For more from Hanley Wood Market Intelligence, vist our redesigned and relaunched Web site. |
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