Dominique C. Pfrang
Real Estate Branding Effects–
A Neo-Behavioristic Analysis focusing on Sustainability Certificates
ERES Conference 2009
Doctoral Session 2.4 / Chair: Mats Wilhelmsson
Content
1. Problem Set
2. Research Questions and Objectives
3. Theoretical Framework & Research Methodology
4. Preliminary Results
5. Expected Contribution to Real Estate Research and Practice
6. Back-Up: Time Frame / fMRI-Study / Literature References
1. Problem Set
Intensification of CompetitionIntensification of Competition Increasing StandardisationIncreasing Standardisation
Property BrandingProperty Branding
Sustainability CertificatesSustainability Certificates
Deficient Brand Management
Deficient Brand Management
Deficient Use and Positioning of
Sustainability Certificates
Deficient Use and Positioning of
Sustainability Certificates
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2. Research Questions and Objectives
Investigation of the reasons underlying the effectiveness of property brands and sustainability certificates based on a neo-behavioristic approach
Deduction of key success factors for property brands and sustainability certificates
Development of a property branding model and deduction of practical recommendations for real estate practitioners (developers, owners, certification institutions)
1.1.
2.2.
3.3.
How do property brands / sustainability certificates affect the behavior (attitude, desire, willingness-to-pay) of real estate professionals?
Which are the underlying cognitive and affective processes leading to the
behavioral outcome?
Which are the particularities of real estate brands in comparison with consumer brands?
How do sustainability certificates support existing property brands?
What characterizes strong / successful property brands and sustainability
certificates?
How can real estate professionals build up strong property brands?
How can certification organisations improve the communication power and effectiveness of their certificates and accelerate their spread in the market?
3. Theoretical Framework & Research Methodology
Stimulus Response
Brand Knowledge as the core of all branding
effects:
Brand / Certificate Recognition
Brand / Certificate Image
Attitude towards branded property / certificate
Appreciation of branded property / certificate
Trust in performance
Willingness-to-pay
Organism
Brain Activity
Reactiveness
Investigation using…
Traditional Approaches:
- Recall / Recognition Test
- Association Network Test
- Attitude / Appreciation Test
Neo-Behavioristic Approaches:
- Brain Scan
- Response Time
Influ
en
ces
Influ
en
ces
Influ
en
ces
Influ
en
ces
1.1. 2.2. Key Success Factors 3.3. Property Branding Model
Neo-Behavioristic Approach
Effectiveness
Analysis of associations regarding uniqueness, accessability,
cognition/affect
Experts: 2 Real Estate Researchers / 2 Brand Managers / 2
Psychologists
Expert Round Table
Online Survey targeting real estate professionals from the office real
estate sector
Step 1: Recall and recognition test covering 50 international property
brands and all sustainability certificates
Step 2: Association network test for known property brands /
sustainability certificates
Target: 150 – 200 responses
fMRI-Study (brain scan)
3. Theoretical Framework & Research Methodology
Survey
Tra
dit
ion
al
Ap
pro
ac
he
s
Functional Magnetic Resonance Imaging (fMRI) study with 10-15 real
estate professionals
Cooperation: Chair for Experimental Psychology
(Prof. Dr. Greenlee), University of Regensburg
Measurement of the brain activity associated with the processing
of property brands and sustainability certificates
Test 1: n-back Task (memory focus)
Test 2: Rating Task (attractiveness/desirability focus)
Additional measurement of response time (reactiveness)
Ne
o-B
eh
av
ioris
tic A
pp
roa
ch
Combination through Statistical Methods (Regression Analysis etc.)
4. Preliminary Results
Activation of areas related to (visual) memory
Emotional valuation of memorized aspects (positive)
Emotionalization of cognitive processing
Processing Property Brands
Higher cognitive efforts (in certain areas of lateral and
parietal cortex)
[Strong real estate brands lead to a cognitive relief]
No / Negative emotional activation (Insula)
Confrontation with Unknown (Fictive) Property Brands
Simple recognition vs. Memorization of property brands Memorization of unknown vs. Known property brands
Pre-Test for the fMRI-Study with Real Estate Professional
4. Preliminary Results
High exposure of memory (verbal aspects); additional
effort in cognitive processing
Slightly positive emotional activation
Processing Sustainability Certificates
Tendency (preliminary!):
Effectiveness of strong property brands is based
on an emotionalization of the property
(even in the eyes of ‚rational‘ real estate
professionals)
Sustainability certificates in the real estate industry
do not yet evolve conventional brand effects
Sustainability certificates cannot compensate weak
property brands
But: Sustainability certificates possess potential to
become strong emotional components of
property brands
Memorization of certified vs. Uncertified properties
5. Expected Contribution to Real Estate Research and Practice
Further professionalization of property brand management in the real estate industry
Providers of sustainability certificates:
Improvement of the brand management for green building certificates
Enhancement of the communication power of sustainability certificates
Acceleration of the spread of green building certificates in the market and the overall success of sustainable buildings
Contribution to the overall economic success of certificate providers
Property developers and owners:
Improvement of property brand management (brand building; communication strategies etc.)
Strengthening of property brands‘ effectiveness (differenciation potential; behavioral impact on tenants and investors)
Support of an efficient incorporation of sustainability certificates in property brands
Contribution to the overall economic success of developers and owners in times of the economic crisis
Pra
ctic
eR
esea
rch
Closing the knowledge gap regarding the effectiveness and mode of action of property brands and
sustainability certificates
Development of a neo-behavioristic model covering the particularities of property brands
First test of the applicability of neuro-scientific methods in real estate research
Contact DetailsContact Details
Thank You
very much
for
Your Attention!
Email: [email protected]
Tel.: 0611/236809-5
Fax.: 0611/236809-0
IRE│BS Institut für Immobilienwirtschaft
Wilhelmstraße 12
65185 Wiesbaden
Markus Raabe (Dipl.-Psych. M.A.)
Email: [email protected]
Tel.: 0941/943-3869
Chair for Experimental Psychology
Prof. Dr. Mark Greenlee
University of Regensburg
Back-Up: Time Frame
Pre-Test for fMRI-StudyPre-Test for fMRI-Study
Development of Experimental Design
Development of Experimental Design
fMRI-StudyfMRI-Study
Literature ResearchLiterature Research
Analysis of the Results
&
Finalization
Analysis of the Results
&
Finalization
Fin
alized
Work
in P
rogre
ss
(70%
finaliz
ed)
Finalized
To Do
To Do
September 2008
April 2009
June 2009
July 2009
September 2009
January 2010
SurveySurvey
Back-Up: fMRI
Functional Magnet Resonance Imaging (fMRI)
Allows to differenciate brain regions according to the degree of their activity
Based on the BOLD effect
Necessary to build „contrasts“ between different states of brain activation in
order to determine the relative brain activity (subtraction principle)
Identification of underlying mental processes
AdvantagesAdvantages DrawbacksDrawbacks
Insight into the „Black Box“
Socially acceptable/wanted answers impossible
Non-invasive
Small study population
Ethical Issues
Discomfort through magnetic field
Costs
Complex data analysis
Back-Up: Stimulus Material (n-back task)
Hearst Tower
1.
2.
LAIM290
3.
4.
Hearst Tower
5.
6.
…
Back-Up: Building Contrasts
fMRI-Study: Stimuli & Contrast Analysis
Strong Brand / Certified
(e.g. DB Towers, FFM)
Weak Brand / Certified
(e.g. Regionshaus Hanover)
Strong Brand / Not Certified
(e.g.Westhafen Tower, FFM)
Weak Brand / Not Certified
(e.g.Leopoldstraße 7, München)
Strong Brand / Certified
(e.g. DB Towers, FFM)
Weak Brand / Certified
(e.g. Regionshaus Hanover)
Strong Brand / Not Certified
(e.g.Westhafen Tower, FFM)
Weak Brand / Not Certified
(e.g.Leopoldstraße 7, München)
Branding Effect
fMRI-Study: Stimuli & Contrast Analysis
Back-Up: Building Contrasts
fMRI-Study: Stimuli & Contrast Analysis
Strong Brand / Certified
(e.g. DB Towers, FFM)
Weak Brand / Certified
(e.g. Regionshaus Hanover)
Strong Brand / Not Certified
(e.g.Westhafen Tower, FFM)
Weak Brand / Not Certified
(e.g.Leopoldstraße 7, München)
Back-Up: Building Contrasts
Relative Strength:Branding/Certification
Consistency Control
fMRI-Study: Stimuli & Contrast Analysis
Strong Brand / Certified
(e.g. DB Towers, FFM)
Weak Brand / Certified
(e.g. Regionshaus Hanover)
Strong Brand / Not Certified
(e.g.Westhafen Tower, FFM)
Weak Brand / Not Certified
(e.g.Leopoldstraße 7, München)
Back-Up: Building Contrasts
Neo-Behaviorism / Neuro-Economics
Back-Up: Theoretical Framework
Interdisciplinary Approach
Real Estate Marketing (Property Branding)
Development of a comprehensive real estate brand model requires an in-depth understanding of
the characteristics of strong property brands
Brand Knowledge (brand recognition & brand image) in real estate professionals‘ minds is the core
of branding effectiveness
Current body of knowledge in consumer research suggests to combine traditional and neo-
behavioristic methods to investigate branding effects
Back-Up: Theoretical Framework
Interdisciplinary Approach / Real Estate Marketing / Neo-Behaviorism
Particularities of Real Estate as a ProductParticularities of Real Estate as a Product
Branding EffectsBranding Effects
Brand Knowledge Consumer Behaviour
Stimulus (Independent Variables)
Stimulus (Independent Variables)
Response (Dependent Variables)
Response (Dependent Variables)
Organism (Dependent Variables)
Organism (Dependent Variables)
Brand / Certificate Knowledge a) Brand / Certificate Image
Type of Associations (emotional/cognitive)
Strength of Associations
Representation of Associations (verbal/non-verbal)
Amount of Associations
Uniqueness of Associations
Direction of Associations (positive/negative)
Accessability of Associations
b) Brand / Certificate Awareness
Brand / Certificate Knowledge a) Brand / Certificate Image
Type of Associations (emotional/cognitive)
Strength of Associations
Representation of Associations (verbal/non-verbal)
Amount of Associations
Uniqueness of Associations
Direction of Associations (positive/negative)
Accessability of Associations
b) Brand / Certificate Awareness
Bio-Signals• Brain Activity
• Response Time
• [ Eye Activity ]
Bio-Signals• Brain Activity
• Response Time
• [ Eye Activity ]
Behaviour• Attitude towards Property
• Property Desirousness
• Willingness-to-Pay
Behaviour• Attitude towards Property
• Property Desirousness
• Willingness-to-Pay
Operationalization on the basis of Neo-Behavioristic ApproachOperationalization on the basis of Neo-Behavioristic Approach
1. Problem Set
Intensification
of
Competition
Intensification
of
Competition
Increasing
Standardisation
Increasing
Standardisation
Tightening of space and transaction markets
Differenciation of properties from competing offers is of utmost impor-tance for developers and owners to ensure economic success
Ongoing standardisation of office buildings (functionality, flexibility, equipment, etc.) conflicts the need for uniqueness
„Location“ is still a necessary but not a sufficient condition to reach
sustainable success
Property BrandingProperty Branding
Sustainability CertificatesSustainability Certificates
Some developers and owners try to develop property brands (The Gherkin; Kista Science Tower; Turning Torso; etc.) to break through the clutter
Increase in tenants‘ perceived utility loyalty and trust
Reduction of perceived risk in leasing and purchase situations
„Green Building Trend“ as new possibility to differenciate from competitors
Sustainability Certificates as visible cue for sustainability as a brand component
Deficient Brand
Management
Deficient Brand
Management
Deficient Use and
Positioning of Sustainability Certificates
Deficient Use and
Positioning of Sustainability Certificates
Developers and owners often fail to develop strong brands (deal-oriented marketing; „creative names“ as brand building)
Positioning, differenciation and economic success not at optimum
Insufficient communication of advantages (mostly technical)
Incertitude concerning the marketing effects of sustainability certificates
Deceleration of the spread of sustainability certificates in the market
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Back-Up: Literature References (Excerpt)
AGUIRRE, GEOFFREY K. (2006): Experimental Design and Data Analysis for fMRI, in: Faro, Scott H./Mohammed, Feroze B.: Functional MRI – Basic Principles and Clinical Applications, New York.
BREITER, HANS C./AHARON, ITZHAK/KAHNEMANN, DANIEL/DALE, ANDREAS/SHIZGAL, PETER (2001): Functional Imaging of neuronal Responses to Expectancy and Experience of Monetary Gains and Losses, in: Neuron, Volume 30, Cell Press, pp. 619-639.
CAMERER, COLIN F. (2007): Neuroeconomics: Using Neuroscience to make Economic Predictions, in: The Economic Journal, Volume 117, Number 519, pp. 26-42.
CAMERER, COLIN/LOEWENSTEIN, GEORGE/PRELEC, DRAZEN (2004): Neuroeconomics: Why Economics Needs Brains, in: Scandinavian Journal of Economics, Volume 106, Issue 3, pp. 555-579.
COSTAR GROUP – REAL ESTATE INFORMATION (2008): Study on Green Buildings, URL: www.costar.com.
DAVIS LANGDON & SEAH INTERNATIONAL (2007): Cost of Green Revisited – Reexamining the Feasibility and Cost Impact of Sustainable Design in the Light of Increased Market Adoption, URL: www.davislangdon.com.
FUERST, FRANZ/MCALLISTER, PATRICK (2008): Doest it Pay to Be Green? – Connecting Economic and Environmental Performance in Commercial Real Estate Markets, Paper presented at the 2008 IREBS Conference on Real Estate Economics and Finance.
KIM, YEONSHIN/CHOI, SEJUNG M. (2005): Antecedents of Green Purchase Behaviour: An Examination of Collectivism, Environmental Concern, and PCE, in: Advances in Consumer Research, Volume 32, pp. 592-599.
MAINIERI, TINA et al. (1997): Green Buying: The Influence of Environmental Concern on Consumer Behavior, in: Journal of Social Psychology, Volume 132, Issue 2, pp. 189-204.
XIAO, CHENYANG/DUNLAP, RILEY E. (2007): Validating a Comprehensive Model of Environmental Concern Cross-Nationally: A U.S. – Canadian Comparison, in: Social Science Quarterly, Volume 88, Issue 2, pp. 471-493.