The latest crisis in real estate which had widened to a global financial crisis extremely affected an assumed solid and safe investment vehicle – open end real estate funds. The high share redemption by institutional investors caused a wave of redemptions since the reaction of institutional investors had lead to an uncertainty of private investors. The consequence: many open ended funds suspended the right of the redemption of share certificates by reason of illiquidity. And even today numerous capital investment companies still suspend the share redemption, respectively again. The problem is a high information asymmetry. Many investors are informed in an insufficient way. New investors need to be appealed and activated to achieve the goal of new issuance of shares. A sustainable success of the fund products for investors can only be achieved by new guidelines for liquidity management and the help of a competency based holistic marketing strategy. Mr. Wolfgang Schäuble (CDU) wants to achieve a minimum investment horizon for open ended funds, but this would endanger the main advantage of this asset class – the daily possibility of redemption. Therefore it would be better to implement the law only for institutional investors. However, it is questionable whether this product can further exist in this form. The Term paper deals with open ended funds which are mainly launched for private investors. Aside exists special funds which are launched for the specific needs of institutional investors. The aim of the paper is to figure out which instrumental strategies are applied pursued by open ended funds.
At a glance
- Grade: 1.0 (1.0 is the best grade)
- Cost comparison of five European open-ended real estate funds
- Appendix includes the hausinvest europa statement of assets and liabilities
- 57 sources in the bibliography
- 11 figures
Contents
1. Introduction
2. Managing the Marketing Mix of open ended funds
2.1 Product policy
2.1.1 Design of the fund product program
2.1.2 Product design of open ended funds
2.1.2.1 Strategy of product variation
2.1.2.2 Strategy of product differentiation
2.2 Price policy
2.2.1 Pricing of open ended funds
2.2.2 Discount possibilities
2.2.3 Comparison of selected open ended funds
2.3 Distribution strategies
2.3.1 Distribution objectives
2.3.2 Structure of distribution channels in funds business
2.3.2.1 Indirect distribution
2.3.2.2 Direct distribution
2.3.2.3 Multichannel distribution
2.3.2.4 Channel design
2.4 Communication strategies
2.4.1 Corporate Identity as basis for communication strategy
2.4.2 Elements of the communication strategy
2.4.3 Above-the-Line Advertising
2.4.3.1 Advertising in print media
2.4.3.2 Advertising in electronic media
2.4.3.2.1 Applied forms of electronic advertising in funds business
2.4.3.2.2 Key techniques for a successful advertising design
2.4.3.3 Outdoor Advertising
2.4.4 Further advertising instruments applied by investment companies
3. Summary
Objectives and Topics
This term paper examines which marketing strategies are used by open-ended funds aimed primarily at private investors. Against the background of the financial crisis and investor uncertainty, it considers how product, price, distribution and communication policies contribute to a coordinated marketing strategy for open-ended real estate funds.
- Fund product design, geographic allocation and differentiation
- Share pricing, fees and broker discounts
- Comparison of selected European real estate funds
- Direct, indirect and multichannel distribution
- Corporate identity and advertising across media
Excerpt from the Book
2.3.2.3 Multichannel distribution
Investment companies have found a way to avoid the respective disadvantages of direct and indirect distribution by using multichannel distribution as solution. At this the sales of open ended funds is widened to several parallel distribution channels (indirect as well as direct). Reasons for this trend are mainly the competitive environment and the highly developed information- and communication technology, whereby the customer buying habits have changed – buying via e-commerce gains in importance.
Fund producers implement multichannel distribution as strategy, as they hope to benefit from expanded possibilities of market development and penetration, higher profit due to acquisition of new target groups “which is the basis for a sustainably successful Customer Relationship Management (CRM)”, increase in investor satisfaction achieved by customer focused, easily accessible distribution channels as e-commerce and the protection of resources due to lower service costs since all important information on open ended funds are available online. On the other hand the capital investment company has to deal with diverse risks. Arising risks are an increase in complexity, competency requirements and coordination effort. “Insufficient distribution channel integration” can cause customer confusion and customer dissatisfaction due to a “too high number of contact points” with the fund product. A further problem can occur when the distribution partners see each other as competitors.
To avoid these risks capital investment companies need to involve two perspectives to their strategic action - the perspective of market based view which means primarily the satisfaction of customer needs and the perspective of competence based view which means that all necessary resources and competencies need to be available to manage several distribution channels.
Chapter Summaries
1. Introduction: The introduction places open-ended real estate funds in the context of the financial crisis, redemption suspensions and investor uncertainty. It sets out the aim of identifying the marketing strategies used for funds directed mainly at private investors.
2. Managing the Marketing Mix of open ended funds: This chapter examines product design, pricing, distribution and communication, using fund comparisons and examples of investment-company advertising. It also considers how the elements of the marketing mix relate to corporate identity.
3. Summary: The final chapter brings together the marketing instruments discussed and considers their coordination within a holistic strategy.
Keywords
open-ended real estate funds, marketing mix, product policy, fund pricing, net asset value, total expense ratio, distribution channels, multichannel distribution, corporate identity, communication strategy, advertising, private investors
Frequently Asked Questions
What is this work about?
It examines marketing strategies for open-ended funds, with particular attention to real estate funds aimed at private investors.
What are the central topics?
The discussion covers product design, pricing, distribution and communication, including the role of corporate identity.
What is the main objective?
The author seeks to identify the instrumental marketing strategies used by open-ended funds.
What method does the author use?
The paper draws on marketing literature, fund reports, prospectuses and company examples, and compares the cost structures of selected funds.
What does the main chapter cover?
It moves through the four elements of the marketing mix, from fund product design and fees to sales channels and advertising instruments.
Which keywords characterise the work?
Key terms include open-ended real estate funds, marketing mix, fund pricing, multichannel distribution, corporate identity and advertising.
Which funds are included in the pricing comparison?
The comparison features Deka Immobilien Europa, grundbesitz europa, hausinvest europa, SEB ImmoInvest and UniImmo Europa.
How does the work discuss distribution channels?
It distinguishes indirect distribution through intermediaries from direct distribution and examines the opportunities and coordination challenges of combining channels.
How is a Deka advertisement used in the analysis?
A Deka television spot illustrates elements of a copy strategy, including the target group, positioning, consumer benefit, visual imagery and tone.
- Citation du texte
- Melanie Kotschenreuther (Auteur), 2010, Marketing strategies for open-end real estate funds, Munich, GRIN Verlag, https://www.grin.com/document/194333
