Monday, January 21, 2008
Korea, Apartment Branding, and Status
Status is a key theme of the Blog. With powerful roots reaching back into the Choson Dynasty, Korean society has strong status consciousness. Coffee, apparel. education, cars, and housing are status indicators. This Korea Times article does a great job describing housing and status.
Apartments and Branding
Now, it's about wearing Prada, driving a BMW and living in a Raemian or any other classy name...
Dongbu Ichon-dong resident Kim Ji-na says her apartment value edged up about 20 million won (approximately $21,000) two summers ago at a time when the central Seoul, riverside area's overall real estate prices were at a standstill. What was the magic factor?
``The only recognizable change was that my apartment had gotten a brand facelift,'' she said. From plain ``Daewoo Apartment'' to ``Prugio,'' the Daewoo Engineering and Construction apartment buildings were slapped with fresh paint and a newly designed logo.
Area realtor Kim Min-ja of Hangaram Realty said the Daewoo-turned-Prugio did enjoy a premium after its image revamp, and that it represents just one of many similar examples.
``Branding is so important nowadays because it directly impacts price value,'' she said, explaining that the 10-year-old Daewoo apartment, after its branding in 2005, suddenly dropped a few years from its image.
Aside from Daewoo, many other builders are well aware of the power of branding, says Kim Eun-kyung, an analyst at Speed Bank, one of the largest local real estate consultancies, adding that the trend began right after the Asian financial crisis in 1997.
``After the country's major construction companies acquired the smaller firms, the giants decided that they need a better way to commercialize these living units,'' she said.
Samsung E&C, the first builder to front its apartment brand ``Raemian'' in 1998, enjoyed a significant boost in its properties' value, which triggered others, including Hyundai, Daewoo, POSCO and GS, to follow the same strategy.
And those efforts gave birth to GS' ``Xi,'' Hyundai's ``I-Park'' and ``Hillstate,'' POSCO's ``The # (Sharp) and Samsung's ``The Tower Palace,'' all of which boast a luxurious image, posh living and unconventional design.
``Most of the time, these apartments pretty much boil down to having the same features, but that `something special' lies in the unseen, underlying brand image,'' said Chung Ji-won, a branding expert at Brand Major, a local brand naming company.
Responsible for naming about 40 out of some 80 high-rise names in Korea, Chung said an ideal name and logo would encompass all of the characteristics that a builder wants to pack in.
``Nowadays, our solution translates directly into monetary amount, so we're burdened with that much more pressure,'' she said.
While the trend is currently going strong, Kim of Speed Bank says similar patterns will continue, as local consumers emphasize so much on the name value.
``Now, it's about wearing Prada, driving a BMW and living in a Raemian or any other classy name,'' she said. ``These brands speak for themselves.''