Property Investing – Am I Buying for Profit or Prestige?

All of us have emotional preconceptions and assumptions. They are reinforced and fine tuned by our experiences of life, be they traumatic, disciplined or consistent. Our brains are designed so that the emotional patterning centers mature while we are still in utero, whereas our rational centers begin to mature at about 4 years old and finish maturing through adolescence to early adulthood. Non- rational emotional patterning is therefore a design feature!!

Most of us have some common preconceived ideas, historically these were things like the earth was flat, and we couldn’t fly. Now they are more likely to be about how we structure our lives.

Why do over 3 million people in Sydney need to get up and go to work at the same time, every day and cause massive traffic congestion? Why do we think this is normal? Is it normal? Does it work for us? Why do we keep doing it?

As well as commonly held patterns we all have a few family specific ones and, a number of which are unique to our experiences of life. Because they are a design feature, they are supposed to be there. Most people seem to presume not and try to weed them out or ignore them and hope they will go away.
However, a big property purchase looms. Our money is involved. For most people our emotional patterns will be triggered and we will react. The issue isn’t that we have a reaction, the issue is the reaction becomes our focus and we try to fix our upset. In the process we forget to focus on the property transaction!

Property transactions are very complex procedures with finance, legal, vendor and purchaser coordinating to a finite window. Much expertise and sensitive negotiation can be involved. There are few opportunities we participate in with a more immediate effect on our bank balance, cash flow and, for many, sense of self. This is not a good time to be distracted!!

What are the sorts of things that distract us?

We could look at many behaviours, however we get simpler pictures if we examine motive, sometimes conscious, sometimes hidden a little deeper. A client might be worried about how they are perceived. Property becomes a tool to prop up their perception of themselves through others thinking more highly of them. These are often people who love to drop property reports into general conversation. Hoping to snare some self esteem through others’ reactions.

These people buy for prestige rather than wealth creation. They want an address and landmark that their mother-in-law, social set and the boss approves of and almost envies. Glossy prestige marketing lures them to overpriced deals that fail to capitalize to expectations. They may go sour on the concept of gaining wealth through property and find some other way to prop us their image. However, did they ever really look at property with open eyes to examine the business of creating wealth?

Other clients are more concerned about doing it the right way. Hence every detail must be managed. They find professionals who do things their way and then collude with them about the rightness of the way they do things – a very circular way to complement yourself! Because of the level of detail required, due diligence takes on gargantuan proportions. Many deals are missed. Costs rise as professional are paid for their expertise.

In their frustration, they may find a guru, suspend disbelief and follow their advice. Often this is more in line with their perception of the gurus qualities than the particulars of the property acquisition. Did they ever really go to find property or were they looking for the right way and property was just a thing to do to find it?

These two examples sound extreme and yet are very common. Money is one of our great human experiences. It draws out of us unknown or unrealized assumptions about who we think we are in relation to money. Some of this is great and some of it is self limiting. To be in the business of wealth creation, wealth management, asset retention and cash flow management we need to be willing to make our property business the priority and give up a few of our emotionally patterned preconceived ideas. This is not a job for the faint hearted.

Lexmark Prestige Pro805 Printer Review

The Lexmark Prestige Pro805 is a large multifunction printer when you first take it out of the box: measuring 25×46.5×39.2cm and weighing in at 9.27kg it is definitely a huge add-on to just about any office. Together with other oddly-titled machines (which include such gems as the Impact, Prevail and also Intuition), the wireless-enabled Pro805 can print, copy and scan. Priced at around £120, this printer really does cost a lot of money, thus you have to ensure that it’s capable of delivering your needs before you spend your money.

It’s thus clear that the Pro805 has a myriad of calling cards, but the most unusual of these is the 4.3-inch web-enabled touchscreen display that takes the place of the classic colour TFT panel at the front end of the machine. The sleek piano black finish added a touch of refinement to the traditional Lexmark printer design. The Smart Solutions interface lets you download applications to set up on the printer (like RSS feeds, and one-touch printing for commonly used documents assuming a personal computer is coupled to the printer at the time).

Connectivity is taken care of thanks to 802.11b/g/n or the standard Ethernet port at the back of the device. At the front alongside the touchscreen are standard PictBridge connections (though only for SD, Memory Stick, xD and MMC cards). If you don’t feel like freeing yourself from cords, a USB slot is available at the back just beside the Ethernet port. A great addition for business people is the scanner’s ability to read business cards as well as transfer information in to a communications program of choice (like Microsoft Outlook). There is auto duplexing too. There are four included ink cartridges, one black and three colours ( magenta, cyan and yellow) all XL (high yield) Paper consumables are packed from the front of the machine.

The first time we encountered the touchscreen interface is when we set-up the device, and we were really impressed. It is nice and responsive, as well as user-friendly. It additionally gives a nice visual indication (complete with little animated bubbles!) to inform you the existing ink tank levels. This is the place our affection for the unit starts to wane. In our experience, there’s always an element of any printer to be frustrating, and for the Pro805 it wins the tearing hair accolade for having the most fiddly ink tanks. It takes a lot of jotling just to fit the tanks into the printhead as it would not snap into position. This printer isn’t particularly fast – with our standard test document sent via the USB connection it took one minute, 13 seconds for the first page to emerge from the printer, with lengthy delays of 10 seconds or more between pages thereafter.

Fortunately, text quality with standard 12-point font was fairly good, though at larger sizes there was a small amount of smudging and banding across the text. Print speed was somewhat slow at almost double of Lexmark’s claim of 24 seconds for a 10x15cm photo quality print on photo paper. Print quality was decent, but nowhere in the vicinity of lab quality having noticeable droplets and also over-saturated colours.

Among Lexmark’s perennial claims is the low running cost of their printers, in this case – 1p per page on black text. The Pro805 has four ink cartridges, one black and three individual colour. The best buy is the 100XL cartridges in return program format.

The Digital IQ of Prestige Brands in China

An exclusive report from L2 and Labbrand

The massive potential for retail businesses in China is no surprise to anyone-least of all prestige brands. After years of annual double-digit growth, China’s booming economy has left tens of millions of consumers seeking new ways to spend their disposable income. In 2009, China became the world’s second largest luxury market behind Japan, surpassing the United States.

Even though these trends were recognizable at least 20 years ago, many prestige brands are still playing catch-up in this diverse and rapidly changing marketplace. With 384 million internet users-more than the U.S. and Japan combined-much of the competition for customers and brand loyalty will play out online. The investment prestige brands make in their own digital competence could be a deciding factor in their ability to survive and thrive in China, and is likely to become increasingly important as the market matures.

What is Digital IQ and How is it Measured?

In July of 2010, L2, a think tank for prestige brands, partnered with Labbrand to measure and rank the digital competence of one hundred prestige brands in China[1]. The measurement methodology, “Digital IQ,” gives each brand a combined score based on website translation, functionality and content, search engine optimization (SEO), social media performance, and digital marketing efforts

Digital IQ Ranking: China

A Closer Look at the Numbers

These rankings reveal several interesting trends and correlations with other available metrics. For example, the eight fashion brands measured show a strong positive correlation (0.72) between Digital IQ and brand value as reported in BusinessWeek’s annual 100 Best Global Brands report[2]. For the six automotive brands measured in both studies, the correlation is also strongly positive, at 0.61. These correlations do not necessarily mean that increasing Digital IQ guarantees an enhanced brand value. Nevertheless, the strength of these correlations suggests that the relationship between brand value and Digital IQ is not arbitrary. It is possible that valuable brands are more likely to have higher brand awareness, and therefore enjoy higher returns on the same or smaller investments in digital. Alternatively, valuable brands may be more likely to have higher marketing budgets and invest more heavily in digital media.

Prestige brands with the highest Digital IQ scores are breaking away from the pack. In mature markets, measurements of digital competence show prestige brands tightly bunched together-

leaders do not achieve significant separation from brands with average Digital IQ scores. But in China, digital Geniuses are not just in the lead-they’re winning big. For example, the five brands in the Genius category boast a mean Digital IQ more than 25 points higher than that of the next five brands. In comparison, brands ranked six through ten show a mean difference of only 13.2 points compared to those ranked eleven through fifteen. Digital leaders start “breaking away” at an inflection point around Digital IQ 120. Brands at the bottom end of the ranking demonstrate a similar but opposite effect-they lag significantly behind brands with average Digital IQ scores.

Fifty-nine percent of the luxury brands in the study of Digital IQ in China were also measured in a separate study of the Digital IQ of luxury brands in the U.S., dated September 2009. Brands measured in both indices demonstrated a correlation of 0.58 between their Chinese Digital IQ and their U.S. Digital IQ, suggesting that digital competence in one market can be leveraged in another. Beauty brands Lancme, Clarins, and Este Lauder show the greatest positive disparity between Chinese and U.S. Digital IQ. This suggests their recognition of the opportunity to build brands in China through digital media. Meanwhile, champagne brands Veuve Clicquot, Mot & Chandon, and Dom Prignon demonstrate the largest negative disparity-none of them support a Chinese language version of their brand site. Negative disparities may speak to inability or carelessness when translating digital competence from West to East.

Missed Opportunities and Winning Strategies

Most prestige brands earning high Digital IQ scores in China share at least two attributes: local relevance and availability across a broad range of media.

Local relevance stems partly from familiarity with Chinese sites like Baidu, Kaixin, and Youku, which can be loosely compared to Google, Facebook, and YouTube, respectively. But brands doing business in China must recognize that for Western sites and their Chinese counterparts, different strategies are required; simply translating site content is often ineffective.

While homegrown search engine Baidu boasts 62 percent market share in China[3], only 39 percent of measured prestige brands come up first in its organic results when searching by English brand name. Meanwhile, 94 percent of brand sites came up first on Google.cn (prior to its departure from China) when using English names. When searching with Chinese names, approximately 30 percent of brand sites are not among the top three search results on either search engine. This indicates the difficulty of brand name translation for many multinational brands. These numbers suggest that many brands approach search visibility with a Google-centric mentality that fails to recognize the Baidu algorithm and other local nuances.

One way brands can enhance SEO is by creating more opportunities for consumer interaction through a combination of social network sites (SNS), microsites, bulletin-board systems (BBS) and e-commerce and mobile websites.

Although many prestige brands are eliciting thousands of user-generated comments, video uploads, blog posts, and photos on popular SNS like RenRen, Qzone, Kaixin001, and YouKu, very few are interacting directly with consumers on these sites. As consumers are increasingly expecting brand communications to be interactive, rather than one-way broadcasts, digitally savvy brands that are beginning to engage directly with users on SNS platforms stand to gain an edge. Mercedes-Benz, Audi, and BMW host contests on RenRen, while Dior has a page on Qzone. Digital Genius Lancme boasts an official group on Kaixin001 with more than 250,000 members. Johnnie Walker also hosts a group on the platform.

Four of the brands in the study have invested in branded online communities. Digital Genius Lancme launched an online community called Rose Beauty in 2006 and has four million subscribers. Este Lauder and Clarins also host branded beauty communities. BMW has created a community for the estimated 150,000 BMW drivers in China through its MyBMWClub.cn site. Meanwhile, Audi, Mercedes-Benz, and Porsche have created simple-interface BBS to help facilitate discussions with avid fans. Although the appropriateness of microsites as a means of online consumer interaction is debatable, efforts from these brands demonstrate a heightened commitment to the Chinese marketplace.

On average, brands that embrace e-commerce boast Digital IQ scores 50 points higher than brands that do not sell online. The size of the e-commerce market in China may have quadrupled from 2006 to 2009[4], but only ten of the 100 prestige brands in the study offer online transactions. The Beauty & Skincare category leads with six of 13 brands selling online. Many prestige brands opt against e-commerce for fear it will reflect poorly on the brand’s premium status and diminish control over the sales experience. However, as fashion brand and China first-mover Ports 1961 is the only foreign brand outside of the Beauty category to sell online, making e-commerce available would be a clear point of differentiation within many prestige categories.

In addition to website enhancements, SEO, and SNS, it is imperative for luxury brands to develop a mobile strategy. There are an estimated 745 million mobile phone subscribers in China[5], and more than one quarter of mobile users access the internet through their phones[6]. China has considerably lower in-home internet penetration than most developed nations, and many Chinese consumers move directly from no internet to mobile internet. Yet, only 42 percent of the measured brands have mobile-enabled sites. Hong Kong brand Shanghai Tang is one of the first luxury brands to incorporate a Chinese language iPhone application.

Conclusion

While at least rudimentary digital competence is essential for prestige brands operating in China, specific digital strategies should be customized based on a brand’s vision and personality, opportunities and positioning, rather than a “check box” approach. As with other brand communication and media, digital strategy should be informed by comprehensive and up-to-date market research, strengthened by sound analysis and concrete brand positioning, and executed with distinctive and compelling creative work. Ultimately, brands with a deeper understanding of their Chinese customers, local competition, and familiarity with their own reputation and strengths will fare better, both online and off.

[1]”L2 Digital IQ Index: China”. Scott Galloway &, Doug Guthrie, June 16, 2009.

[2]”100 Best Global Brands”, BusinessWeek, September 2009

[3]”China Online”, eMarketer, December 2010

[4]iResearch, February 2009

[5]Ministry of the Information Industry, People’s Republic of China, August 2009

[6]”Global Device Insight Report”, Nielsen, October 2009