Bezanilla & Bezanilla (B&B) faces a competitive environment in the Fifth Region. Sales of dwellings experienced a 10.8% growth on average in the year 2004. Low interest rates and lower inflation supported the growth of the market. Municipal policies gave more flexibility to the construction conditions in the downtown eastern area of the city. B&B faces a dilemma: to enter or not into the real estate business by focusing on the middle and middle-lower socio economical status. Currently, their target market is the upper and upper-middle customers. B&B differentiation is the innovation design. Their pricing strategy is cost-plus margin and they are above. Location of buildings is close to the ocean or near tourist centers. When it comes to promotion at the point of sales, there was no prior planning of activities; however, the personnel at the sales room were well qualified. B&B enjoys positive word-of mouth due to prior success of construction projects. They pioneered post-sales service.
A next issue examined by the case is the introducing a new brand to enter the middle and middle-lower socio economic segment; how to improve current B&B marketing strategies; whether or not the perception of the ratio price-product should be maintained in the target market, notwithstanding the entry of new competitors from the capital of Chile, Santiago.
The case is meant to four, senior level regarding difficulty level. This case has been designed to be taught in 1.5 class hours and it is expected to require 4 to 5 hours of outside preparation by students.
Bezanilla & Bezanilla is a family company having two strategic business units. On the one hand, it has the Real Estate Company, and on the other it has the Construction Business. It is a company that has been active for many years in the local market of Vina del Mar as well as a leader in the development of buildings targeted at the upper and middle-upper socioeconomic segment.
At the beginning of 2005, executives were appraising the introduction of marketing tools in the management of different activities carried out by the company. An important dilemma was how to maintain growth given the great competition in the real estate market of Vina del Mar, as well as add to the boom that the real estate market was experiencing. To this end, the executives were analyzing the possibility of creating a new real estate brand to manage the projects aimed towards a lower socioeconomic level.
Recommendations for Teaching Approaches An effective analysis of the Bezanilla & Bezanilla case date must be placed within the frame of a type of proactive thinking. A way to open the session is to ask the students a question as to Which aspects had led B&B to occupy the position that it holds nowadays?, and vote on the decision of the dilemmas whether Should B&B introduce a new brand to embrace another segment of clients for apartments? Which marketing tools should B&B develop in order to manage the business? There will arise, on the side of the students, problems related to the two types of dilemmas (enter a new segment of clients in the center-eastern area of the city and establish a long-term marketing strategy). The analysis of current marketing operations resorted to by the company could lead to a more general discussion on the role played by these elements in the business success of a real estate company. As regards to the possibility of introducing a new brand with a view to embrace another segment of the market, there will be positions both in favor and against. At this stage, the instructor should ask the students to evaluate both options.
QUESTIONS AND ANALYSES
1. What situations in the environment have led the real estate industry, and concurrently B&B, to their current situation? …