Marketing and Business Models

TOOLS FOR ARCHITECTS – A WALK ABOUT PROJECT

FOR AIM EMBA

PRESENTED BY:

EUGENE T. MANGUBAT, ARCHITECT

Objectives:

• Give an overview of marketing and business

models to show how it creates value, attracts

clients, aids in understanding our business

and perhaps how we can improve on it.

Marketing

Marketing:Can Architects Do Marketing?

1-d The Architect shall not use paid advertisement nor use self laudatory, exaggerated or misleading, publicity. However, the presentation of factual materials, verbal or visual, of the aims, standards and progress of the profession through literature or by industrious application of his work and services which tend to dignify the professional or advance public knowledge of the Architect’s function in society may be presented through any public communication media.

1-e The Architect shall not solicit nor permit to solicit in his name, advertisements or other support towards the cost of any publication presenting his work. He or She should refrain from taking part in paid advertisement endorsing any materials of construction or building equipment.

1-f The Architect shall not mislead the public through advertisements, signs or printed matter citing his professional specializations unless such qualifications are well known facts or sanctioned by professional consensus and years of experience.

Architect’s National Code Documents Series 200 Code of Ethical Conduct (Philippines: UAP 1979)

Marketing:

Arch. Edwin Uy: • Networking – sources of leads• Current and recent clients• Other Professionals• Organizations• Contractors• Trade and Industry Events

Marketing:

Arch. Jason Buensalido:• Work on you Brand Identity• Communicate with Clarity• Engage Engagements• Do Good Work• Use your website and social media

to get leads• Get yourself published• Maintain relationships• Be Consistent and committed• Create a Marketing Plan

Marketing:

Arch Wilson Alba:• Define your Brand Idea• Decide on your Company Name• Design your Identity

Marketing Activities by Architects:• Joining professional networks

like realtors, contractors and

anyone in the building

pipeline

• Tapping personal networks

• Subscribing to directory

listings

• Pro bono work

• Writing in journals, magazines

• Uploading to YouTube or

Vimeo

• Joining exhibits and

competitions

• Speaking at forums and

discussions

• Going to formal and

informal groupings

• Social media putting up a

blog, webpage, Facebook

page, LinkedIn account

• Cold calls and presentations

for open projects

Marketing

• What is Marketing?

• Marketing is the process by which companies create

value for customers and build strong relationships

in order to capture value from customers in return.

At its core the goal of marketing is to let people

(your target market) know what you do (your

unique selling proposition, or USP) and how you do

it (your narrative).Philip Kotler, Gary Armstrong, Principles of Marketing 12th Ed. (Singapore: Pearson 2008), 5.

Eric Reinholdt, Architect and Entrepreneur: A Field Guide Vol 1(Maine: 30x40 Design Workshop 2015), 51.

Marketing:

• What is Value?

• Value in marketing, also known as customer-

perceived value, is the difference between a

prospective customer's evaluation of the benefits

and costs of one product when compared with

others“Value (Marketing)”, https://en.wikipedia.org/wiki/Value_(marketing)

Marketing

• What is Marketing?

• Marketing is the process by which companies create

value for customers and build strong relationships

in order to capture value from customers in return.

At its core the goal of marketing is to let people

(your target market) know what you do (your

unique selling proposition, or USP) and how you do

it (your narrative).Philip Kotler, Gary Armstrong, Principles of Marketing 12th Ed. (Singapore: Pearson 2008), 5.

Eric Reinholdt, Architect and Entrepreneur: A Field Guide Vol 1(Maine: 30x40 Design Workshop 2015), 51.

Marketing

• What is Relationship in

Marketing?

• The Customer Decision Journey

is a model of the relationship.

This model shows how a

consumer comes from:

Consideration, Evaluation,

Moment of Purchase, Post

Purchase Experience, Trigger,

Loyalty. • McKinsey 2009

Consideration

Evaluation

Moment of Purchase

Post Purchase Experience

Loyalty

Marketing: Strategic Marketing Framework

Marketing

• Market Analysis

• Customer needs?

• What are your capabilities?

• What is current competition & market dynamics

• Who are your collaborators and complimentors

Marketing

• Market Selection and Segmentation

• Basis for Segmentation:

• Geographic

• Demographic

• Psychographic

• What is Segment Targeting:

• Involves evaluating each market segment’s attractiveness & selecting one to enter. The objective is to select segments in such a way that the company maximizes its profit.

Marketing

• Product Positioning

• It is done by arranging a product to occupy a clear distinctive

and attractive position relative to competing products in the

minds of target consumers. One way to do it would be to make

a positioning statement which would answer, who are the

customers, what set of needs do the product fulfill, why is the

product the best option to satisfy those needs?

• Our (Product/Service/Brand) is (single most important claim)

among all (competitive frame) because (single most

important support).

Marketing• Positioning Statement & Tag Lines

• Target:

• Style on a budget.

• Expect more. Pay less.

• Volvo:

• For upscale American families, Volvo is the family automobile that offers maximum safety.

• For life.

• Home Depot:

• The hardware department store for do-it-yourselfers.

• You can do it. We can help.http://ervinandsmith.com/blog/branding/brand-positioning-statements-and-taglines/

Marketing• Examples Tag lines:

• Mercedes-Benz: Engineered like no other car in the world

• BMW: The ultimate driving machine

• Avis: We are only Number 2, but we try harder

• Metrobank: You’re in Good Hands with Metrobank (positions as safest bank)

• Jollibee: Sa Jollibee Bida and Saya (positions as a happiest fastfood in the country)

• Boysen: The Quality You Can Trust

https://prezi.com/fdmpjopu6tox/positioning/

Marketing• Customer Acquisition

• Awareness-Knowledge of Existence

• Interest-Interest is generated by appealing to things relevant to your client

• Desire-Appealing to a client’s personal needs and wants

• Action-Provide an option for them to take action, call now for free estimate.

“AIDA: Awareness, Interest, Desire, Action” https://www.mindtools.com/pages/article/AIDA.htm

Marketing

• Customer Loyalty and Retention

• Cost of Changing Brands

• Availability of Substitutes

• Social Ties

• Perceived Risk

• Satisfaction gained in the Past

• Need for repeated patronage to obtain optimum

satisfaction

Marketing• Marketing Mix – 7 P’s

• Product –Architectural Design with emphasis on

personalized service delivery

• Place/Distribution –Greater Metro Manila & surrounding

provinces

• Promotion & Advertising-Word of Mouth, Blog:

www.etmassociates.wordpress.com, Facebook

• Price- Initial basis of fee: Percentage of Cost

• People-Principal Architect (Me), Consultants, Clients,

Apprentices & Staff

• Process of Design-Form Finding, Programming, SD-CD-

DD-Contract Doc

• Physical Evidence-Blog, Portfolio, Recommendations,

Project & Site Visits

Marketing: Strategic Marketing Framework

Marketing Activities by Architects:• Joining professional networks

like realtors, contractors and

anyone in the building

pipeline

• Tapping personal networks

• Subscribing to directory

listings

• Pro bono work

• Writing in journals, magazines

• Uploading to YouTube or

Vimeo

• Joining exhibits and

competitions

• Speaking at forums and

discussions

• Going to formal and

informal groupings

• Social media putting up a

blog, webpage, Facebook

page, LinkedIn account

• Cold calls and presentations

for open projects

Marketing:Can Architects Do Marketing?

1-d The Architect shall not use paid advertisement nor use self laudatory, exaggerated or misleading, publicity. However, the presentation of factual materials, verbal or visual, of the aims, standards and progress of the profession through literature or by industrious application of his work and services which tend to dignify the professional or advance public knowledge of the Architect’s function in society may be presented through any public communication media.

1-e The Architect shall not solicit nor permit to solicit in his name, advertisements or other support towards the cost of any publication presenting his work. He or She should refrain from taking part in paid advertisement endorsing any materials of construction or building equipment.

1-f The Architect shall not mislead the public through advertisements, signs or printed matter citing his professional specializations unless such qualifications are well known facts or sanctioned by professional consensus and years of experience.

Architect’s National Code Documents Series 200 Code of Ethical Conduct (Philippines: UAP 1979)

Yes

Business Model

Business Model

• They are at heart stories, stories that explain how

enterprises work. A good business model answers the

questions, who are the customers, what does the

customer value, how do we make money in this

business what is the underlying economic logic that

explains how we can deliver value to customers at an

appropriate cost.

Joan Magretta, “Why Business Models Matter” in Rebuilding Your Business Model (Boston: Harvard

Business School Publishing) p68.

Business Model

Mass market, Niche market, Segment,

Diversified, Multi-Sided Platforms

Business Model

Quantitative or qualitative. It’s the reason customers

choose one company over another. It’s the

bundle of benefits a company provides

Business Model

How the company

communicates and reaches its

customer segments to

deliver its value proposition

Business Model

Personal assistance, Dedicated Personal

assistance, Automated, Self

Service

Business Model

Cash a company generates from each customer segment. They are generated through commission, fees, asset sale, subscription, lending/renting/leasing, licensing, advertising.

Business Model

They can be physical, financial, intellectual or

human

Business Model

These are the actions that a company must to tooperate successfully.

Business Model

Key Partners create alliances optimize between their business

model, reduce risk or acquire resources.

Business Model

Cost Driven and Value Driven

Business Model

Business Model

Business Model

Business Model

Business Model

Preferred clients are big and established developers such as Megaworld, Filinvest, SM, Vistaland, Sureste, Alphaland, etc. most projects are high end.

Our motto is "always say yes to the client" which I think the client values. we make sure that the client is as much a part of the design process as we are.

architectural design, interior design, master planning, urban planning, and materials and other pre and post design services.

for older contracts we used percent of cost but for newer contracts we use manhourswhich give us more competitive prices

CEO's relationship with clients is as a friend and consultant. he plays golf with them and is available to take calls 24/7 about business

semi-annual town hall meetings to keep everyone in the loop, regular inventory of manpower to ensure efficiency

our firm acknowledges that our most important asset is manpower

our most important allies are developers and contractors, for some projects it’s the foreign architects who partner with us for local projects

60% of revenue goes to compensation. biggest overhead expense is rent

130 staff Makati Firm

Business Model

The company caters to developers and corporations for its large projects, but also makes houses as special projects from the same individuals as these are projects that are usually favors and from repeat or loyal clients

The clients prefer the firm because of extensive experience and dependability. Past owners refer to past projects anecdotally ‘nakatayo pa ginawa natingbahay’, “Our house is still standing”.

Architectural Design, Interior Design, Master Planning, Sustainability, Feasibility Studies, Site Development Consultation, Space Analysis, Building Rehabilitation

Fees are computed usually on a fixed fee per square meter for large projects, and percentage of cost on smaller projects.

It is combined professional and close personal. Because during the course of the project the client becomes our friend.

Aside from desiging, marketing. How to get work to keep the office running. Important to learn accounting in running a business

The assets and facilities personnel use are the most important physical assets. The personnel are the most valuable .

The consultant engineers are important allies in a project. Fellow architect friends who are ethical whom we could exchange notes with and find mutual support

The firm spends a lot on equipment and software, and also office consumables such as ink, paper and other materials.

100 staff Makati Firm

Business Model

caters to the middle to high income individuals; business and corporations

The value proposition is the offering of intelligence in design, nothing by whim nor caprice.

offers design services from built environments to social systems. Drawings are hardly the offering of the firm., environment and system design information

The basis for billing is by percent of cost

It is all, depending on the stage of the projects.

Design and social innovation.

The most important asset is its people

Contractors, suppliers and allied consultants, in that order.

Direct expenses in the maintenance and development of human capital.

Medium Mandaluyong Firm

Business Model

middle and high income individuals, business owners, corporations and institutions.

personal delivery of design and attention to detail in the project deliverables such as drawings, meetings and consultations

Standard Architect’s Services, Service Delivery, meetings, drawings, communications

fee is arrived as a percentage of cost

client and architect relationship is professional and personal towards the end

As a teaching practice the training. Marketing through selected digital and traditional. Education

man power and the culture

The clients, consulants, contractors & builders, suppliers

primarily on manpower, office supplies and travel expenses

Single Proprietor – Paranaque Practice

Conclusions

• The objective of this Marketing and Business Models

tools talk, is to help promote vision and value. With

these tools Architects can be leaders promoting

changes in their activities towards a more enjoyable,

profitable and fulfilling practice.

References

References:• Architect’s National Code Documents Series 200 Code of Ethical Conduct (Philippines: UAP 1979)

• “Value (Marketing)”, https://en.wikipedia.org/wiki/Value_(marketing)

• Philip Kotler, Gary Armstrong, Principles of Marketing 12th Ed. (Singapore: Pearson 2008), 5.

• Eric Reinholdt, Architect and Entrepreneur: A Field Guide Vol 1(Maine: 30x40 Design Workshop 2015), 51.

• McKinsey 2009

• David Edelman and Marc Singer, “The New Customer Decision Journey” http://www.mckinsey.com/business-

functions/marketing-and-sales/our-insights/the-new-consumer-decision-journey (October 2015)

• “AIDA: Awareness, Interest, Desire, Action” https://www.mindtools.com/pages/article/AIDA.htm

• Valerie A. Zeithaml, Mary Jo Bitner, Dwayne D. Gremler, Service Marketing 4th Ed (Philippines: McGraw Hill

2006) p68-69.

• Joan Magretta, “Why Business Models Matter” in Rebuilding Your Business Model (Boston: Harvard Business School

Publishing) p68.

• Alexander Osterwalder & Yves Pigneur, Business Model Generation (New Jersey: John Wiley & Sons, 2010), 20-44

• Marketing Class Notes and Images from class of Prof Richard Cruz

• Marketing Class Notes and Images from class of Prof Catherine Tantoco-Daniels

The End

Thank you very much!