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ERES Conference 2009
Doctoral Session 2.4 / Chair: Mats Wilhelmsson
Real Estate Branding Effects
–
A Neo-Behavioristic Analysis focusing on Sustainability Certificates
Dominique C. Pfrang
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
Deficient
Implementation
Possible Solutions
Market
Environment
1. Problem Set
Intensification of Competition
Increasing Standardisation
Property Branding
Sustainability Certificates
Deficient
Brand Management
Deficient
Use and Positioning of
Sustainability Certificates
2. Research Questions and Objectives
1.
Investigation of the reasons underlying the
effectiveness of property brands and
sustainability certificates based on a neobehavioristic approach
2.
Deduction of key success factors for property
brands and sustainability certificates
3.
Development of a property branding model
and deduction of practical recommendations
for real estate practitioners (developers,
owners, certification institutions)

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
Neo-Behavioristic Approach
Stimulus
Organism
 Brand / Certificate Recognition
 Brain Activity
 Reactiveness
Influences
effects:
Influences
 Brand Knowledge as the core of all branding
Response
 Brand / Certificate Image
 Attitude towards branded property / certificate
 Appreciation of branded property / certificate
 Trust in performance
 Willingness-to-pay
Investigation using…
 Traditional Approaches:
- Recall / Recognition Test
- Association Network Test

- Attitude / Appreciation Test
 Neo-Behavioristic Approaches:
- Brain Scan
- Response Time
1.
Effectiveness
2.
Key Success Factors
3.
Property Branding Model
3. Theoretical Framework & Research Methodology
Survey
 Online Survey targeting real estate professionals from the office real
fMRI-Study (brain scan)
 Functional Magnetic Resonance Imaging (fMRI) study with 10-15 real
estate sector
estate professionals
 Step 1: Recall and recognition test covering 50 international property
 Cooperation: Chair for Experimental Psychology
Traditional Approaches
 Step 2: Association network test for known property brands /
(Prof. Dr. Greenlee), University of Regensburg
 Measurement of the brain activity associated with the processing
sustainability certificates
of property brands and sustainability certificates
 Target: 150 – 200 responses
Expert Round Table

Test 1:
n-back Task (memory focus)

Test 2:
Rating Task (attractiveness/desirability focus)
 Additional measurement of response time (reactiveness)
 Analysis of associations regarding uniqueness, accessability,
cognition/affect
 Experts: 2 Real Estate Researchers / 2 Brand Managers / 2
Psychologists
Combination through Statistical Methods (Regression Analysis etc.)
Neo-Behavioristic Approach
brands and all sustainability certificates
4. Preliminary Results
Pre-Test for the fMRI-Study with Real Estate Professional
Processing Property Brands
 Activation of areas related to (visual) memory
 Emotional valuation of memorized aspects (positive)
 Emotionalization of cognitive processing
Confrontation with Unknown (Fictive) 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)
Simple recognition vs. Memorization of property brands
Memorization of unknown vs. Known property brands
4. Preliminary Results
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
 High exposure of memory (verbal aspects); additional
effort in cognitive processing
 But: Sustainability certificates possess potential to
become strong emotional components of
 Slightly positive emotional activation
Memorization of certified vs. Uncertified properties
property brands
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
Practice
 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
Research
 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 Details
Thank You
very much
Email:
[email protected]
Tel.:
0611/236809-5
Fax.:
0611/236809-0
IRE│BS Institut für Immobilienwirtschaft
Wilhelmstraße 12
65185 Wiesbaden
for
Your Attention!
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
September 2008
Literature Research
April 2009
Development of
Experimental Design
June 2009
Pre-Test for fMRI-Study
Finalized
July 2009
fMRIStudy
Survey
To Do
September 2009
Analysis of the Results
&
Finalization
January 2010
To Do
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
Drawbacks
Advantages
 Insight into the „Black Box“
 Ethical Issues
 Socially acceptable/wanted answers impossible
 Discomfort through magnetic field
 Non-invasive
 Costs
 Small study population
 Complex data analysis
Back-Up: Stimulus Material (n-back task)
1.
3.
Hearst Tower
5.
LAIM290
Hearst Tower
2.
4.
6.
…
Back-Up: Building Contrasts
fMRI-Study: Stimuli & Contrast Analysis
Strong Brand / Certified
Strong Brand / Not Certified
(e.g. DB Towers, FFM)
(e.g.Westhafen Tower, FFM)
Weak Brand / Certified
Weak Brand / Not Certified
(e.g. Regionshaus Hanover)
(e.g.Leopoldstraße 7, München)
Back-Up: Building Contrasts
fMRI-Study: Stimuli & Contrast Analysis
Strong Brand / Certified
Strong Brand / Not Certified
(e.g. DB Towers, FFM)
(e.g.Westhafen Tower, FFM)
Weak Brand / Certified
Weak Brand / Not Certified
(e.g. Regionshaus Hanover)
(e.g.Leopoldstraße 7, München)
Branding Effect
Back-Up: Building Contrasts
Strong Brand / Certified
Strong Brand / Not Certified
(e.g. DB Towers, FFM)
(e.g.Westhafen Tower, FFM)
Weak Brand / Certified
Weak Brand / Not Certified
(e.g. Regionshaus Hanover)
(e.g.Leopoldstraße 7, München)
Certification Effect
fMRI-Study: Stimuli & Contrast Analysis
Back-Up: Building Contrasts
fMRI-Study: Stimuli & Contrast Analysis
Relative Strength:
Branding/Certification
Strong Brand / Certified
Strong Brand / Not Certified
(e.g. DB Towers, FFM)
(e.g.Westhafen Tower, FFM)
Weak Brand / Certified
Weak Brand / Not Certified
(e.g. Regionshaus Hanover)
(e.g.Leopoldstraße 7, München)
Consistency Control
Back-Up: Theoretical Framework

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 neobehavioristic methods to investigate branding effects
Interdisciplinary Approach
Real Estate Marketing (Property Branding)
Neo-Behaviorism / Neuro-Economics
Back-Up: Theoretical Framework
Interdisciplinary Approach / Real Estate Marketing / Neo-Behaviorism
Branding Effects
Brand Knowledge
Consumer Behaviour
Particularities of Real Estate as a Product
Operationalization on the basis of Neo-Behavioristic Approach
Stimulus
(Independent 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
Organism
(Dependent Variables)
Response
(Dependent Variables)
Bio-Signals
Behaviour
• Brain Activity
• Attitude towards Property
• Response Time
• Property Desirousness
• [ Eye Activity ]
• Willingness-to-Pay
Deficient
Implementation
Possible Solutions
Market
Environment
1. Problem Set

Tightening of space and
transaction markets

Differenciation of properties from
competing offers is of utmost importance for developers and owners to
ensure economic success


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

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

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

„Green Building Trend“ as new
possibility to differenciate from
competitors

Sustainability Certificates as visible
cue for sustainability as a brand
component

Insufficient communication of
advantages (mostly technical)

Incertitude concerning the marketing
effects of sustainability certificates

Deceleration of the spread of
sustainability certificates in the market
Intensification
Increasing
of
Standardisation
Competition
Property Branding
Sustainability Certificates
Deficient
Brand
Management
Deficient
Use and
Positioning of
Sustainability
Certificates
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.