Houses designed in part by Martha Stewart are a rare source of good news for KB Home--the nation's seventh-largest builder by market value--which two weeks ago reported an unexpectedly large
quarterly loss amid deteriorating markets.
The Martha homes represent less than 5% of KB's overall home-building production. But with the Martha developments outselling most of KB's
other subdivisions, the company is expanding the Martha brand to as many as 36 new markets, as soon as it can obtain the necessary permits and land, a KB spokeswoman says.
The
Martha-KB partnership is a closely watched experiment in brand marketing. The conventional wisdom among homebuilders is that home-buying decisions are based on two primary considerations: price and
location. While those factors are still extremely important for homebuyers, the success of the Martha homes shows that branding also matters in some cases. The Martha homes target a broad market, with
prices ranging from $148,990 to about $500,000.
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