Case Study: How to Get Your Product In A Million-Dollar Home

When you think about million dollar custom homes, you typically think of gourmet kitchens, fabulous bathrooms and luxurious swimming pools.  But when homeowners finally get to build the home of their dreams, they face a number of other decisions about the products used to build their home.

Should the interior doors be solid oak or wood composite?  Should the foundation be 18’ deep, or is 4’ ok?  What color themes should be used throughout?  Should the exterior be brick, stone or siding?

Pondering the latter question is one of the many things our case team did when advising a fiber cement siding manufacturer on how to enter the premium tier of the residential market: million dollar homes.  Our client was interested in designing a new product for this market. 

Fiber cement siding is a substitute for traditional wood siding.  It has the same aesthetic appeal as wood, but it’s much more durable – it doesn’t rot, it’s resistant to bugs, it holds paint much better, and it’s resistant to fires.  These attributes have helped fiber cement become one of the leading wood-substitute products in the U.S., and our client was the leading manufacturer in this category…by far.

Our case team was challenged with the following questions:
• Which regions of the U.S. would be the most attractive to enter?
• What product attributes should be considered in the design?

As we do in most cases, we went to the marketplace to learn more about the markets, but you need to know who the key influencers are.  In this case, the architect and the home builder are the most influential people in the selection of exterior products.  If the architect doesn’t specify the building material, then the home builder gets to decide.  We found that getting these key decision makers on board with this new product was critical for success.

To quantify the opportunity in each region, we issued a survey to identify the percentage of homes that were in our target market and determine the price elasticity of the customer base.  Through this, we were able to advise the client to set specific prices for each market.

But to truly understand how the product should be designed for each market, you need to see the markets yourself.  Not surprisingly, architectural styles vary significantly throughout the United States.  So yes, our case team spent a majority of six weeks driving up and down the streets of affluent neighborhoods taking pictures of million dollar homes and interviewing custom home builders and architects.  Pretty sweet, eh?

This is just one of the many varying case opportunities that awaits you at L.E.K.

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