Evaluating consumer behaviour in real state Assignment Answer

Evaluating consumer behaviour in real state: A case study ofRichardson & Wrench

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Introduction

Consumer behaviour is characterised by customers’ attitude towards selecting, buying, using, and disposing goods and services. In real estate industry, consumers make decisions based on their needs, utility, preferences, and disposable savings. The following report will analyse and evaluate the consumer behaviour in real estate industry. For the study purpose, Richardson & Wrench is chosen which a 160 years old Australian real estate company and currently holds the top position. The report will highlight the project objectives and scope along with the research hypothesis. In addition to this, the research gap will also be identified based on the literature review on the following topic. In later part of the research, the research design, methodology will be discussed. The report will also provide the research limitation and time schedule.

Project Objective

• To study the buying behaviour of customers of Richardson & Wrench
• To analyse and evaluate the factors affecting the willingness of customers to buy real estate.
• To analyse the determinants that attracts the buyers to buy houses only from a particular real estate company.
• To study the effects of consumer’s purchasing behaviour on strategic planning of the organisation.
• To provide the recommendations for Richardson & Wrench to increase its current customer base.

Project Scope

From the title, it is very much clear that the study will be solely aiming at studying the consumer behaviour and factors affecting it in context of the Richardson & Wrench, a real estate company. In addition to this, the research will also try to figure out the effects of the consumer decision making on the strategies of the company in order to sustain its location. The research will start with the basic understanding of consumer buying behaviour. Later on, it goes on reviewing the literature that aims at studying the marketing process in the real estate. The research is aimed at determining the ways that can improvise the business of Richardson & Wrench in the real estate industry. The research will make use of the survey and questionnaire for information gathering and building deep understanding. This will help in gaining an insight of degree of significance and correlation of the factors that might affect the buying behaviour of the customers (Theurillat, et.al, 2015). Both qualitative and quantitative method will be used in order to develop the great understanding of the research work

Literature Review

According to Mian, et.al, (2015),consumer behaviour study is focused on individual or group buyers in making a purchase of a goods and services that can satisfy their personal needs and desires. Consumer behaviour study is not only limited to the consumer behaviour but it also study the factors that affect it. On the macro level, the organisations are more interested in factors, such as society’s values, demographic values, practices, and beliefs. On the other hand, at the micro level, consumer behaviour study targets human behaviour (Mian, et.al, 2015).

Consumer Decision-Making

Sawyer, et.al, (2014) has presented his views on consumer decision and consumer choice. According to him, consumer behaviour emphasises consumer choice. The paper highlights that consumers make purchase of those goods and services only that are beneficial for them. Most of the real estate purchases require a complex decision-making. In this type of decision-making, the consumers make decision based on the psychological state and their behaviour. For that purpose, they seek information, evaluate alternatives, price, and final analyses of the possible consequences. Consumers only make purchases when the buying act precedes a process of mental information assessment. All that is required from the consumers is use of cognitive functions (Sawyer, et.al, 2014).

Factors affecting the consumer decision-making

There are numerous factors that can affect the buying behaviour of customers in the real estate market. These comprise amenities, location, price, promotional strategy, and many more. According to Chia, et.al, (2016), two major factors that affect the perception of the customer are location and price. Consumers before making a purchase look for the locational characteristics of the property. These characteristics are characterised by many sub-factors like where is the property located, where is the nearby airport or bus station, what are the climatic features, what are other amenities provided in the vicinity of the property, and much more. Talking about the price, every customer wants a property that best suits to his needs and is available at reasonable price (Chia, et.al, 2016). In addition to this, the ease of availability of the loans from banks also plays a significant role in the real estate market.

Decision Rules

According to Dettling and Kearney, (2014), while evaluating the available options, the consumer seeks information about whether or not a project would be able to satisfy the needs. The main criteria used by the customer to choose among a number of options available to him are attributes of a product that a customer is planning to purchase in order to satisfy his personal needs. The final decision may be based on non-compensatory or compensatory decision rules. By employing the latter rules, customers determine the important attributes, provide rating to the alternatives, and select a particular product that has highest rating (Dettling and Kearney, 2014). In the former rule, the selection of a product is not based on the rating system, rather on the basis of whether or not a product meet a particular standard. This will help the customers in reducing the choices for other evaluation criteria. In case, a customer does not find a particular product suitable, he will change his buying decision. Either he will compromise on the standards or search for more apt options. Decisions that are associated with the disparate alternatives requires customers to make use of abstract analysis criteria in order to evaluate the options available. The more identical the alternatives, the more customer can rely on the pricing criteria to compare the product. The consumer’s attitude for making a purchase directly affects the basis of evaluating two or more options.

Baker, et.al, (2016) highlighted in his work that if customers are making decisions based on the non-compensatory rules, then the real estate developers should determine what characteristics of a property are being used to present a property. If this does not happen, then there are many chances of analyst overestimating the contribution of particular features to value. The marketers should understand that consumers make decisions based on certain cut offs. For instance, if a customer is seeking a house with two bathrooms, then he will not consider any option with one bathroom. In case, if he is making use of lexicographic rules, then the house must have a higher level of most sought-after attributes in order to get selected (Hartmann, 2015).

Information Search

Barkham, et.al, (2018) outline that customers seek more and more information regarding a property as it can be available in order to zeroing down on a particular alternative. In the beginning, consumers look for information that can be gathered internally. Consumer’s reliance on the available data is dependent on the factors, such as length of time, experience, and satisfaction with the last purchase. In the real estate business, most of the purchase are infrequent and majority of them are done based on the past knowledge. Apart from that, there are many situational determinants that can also constrain the search for information. These include availability of information and its quantity in the market and time pressure (Barkham, et.al, 2018). Apart from this, there are other factors also, namely consumer determinants and product determinants that can directly or indirectly affect the search behaviour.

Consumer Behaviour’s Effect on Marketing Strategy of Real Estate Business

According to Al Nahdi, et.al, (2015), the real estate marketers require to make use of a mix of practical and emotional marketing so as to grab the maximum attentions of the potential customers. Purchasing a home is not only a financial investment for most customers but it is also an emotional one. Those customers that are seeking a healthy-friendly environment have to be approached through some emotional appeal that make them feel nostalgic and happy (Al Nahdi, et.al, 2015). Many consumers seek much more sensible features while purchasing a house. They want to live in high-quality neighbourhood that is available near to the workplace so that they can save the money and time in commuting. Therefore, marketers promote their services by highlighting efficiency and minimalism.

Research Questions

Primary Question

• How is the consumer behaviour affecting the real estate market?

Secondary Questions

• What are the factorsaffecting the willingness of customers to buy real estate?
• What are determinants that attracts the buyers to buy houses only from a particular real estate company?
• What could be the effects of consumer’s purchasing behaviour on strategic planning of the organisation?

Research Design and Methodology

The research will be divided into two sections. The first part will discuss the conceptual part and the second part will discuss the data collection and analysis techniques, wherein different tools will be used. The entire research work will be submitted in the form of a research report having many chapters. Each of them will be discussing a different aspect of the research. The research starts with a basic introduction of the consumer behaviour and then discusses the research objectives and scope. The next part is the literature review from the assessment 1. Here, the gaps in the research studies will be identified. Based on that gap, the research questions and hypothesis will be prepared. The data collection will be done by making use of both quantitative and qualitative approach. The former method employs the surveys and other data from secondary sources (Piketty, 2015). This type of data will be presented by making use of diagrams, graphs, tables, etc. Apart from this, the research will also make use of non-numeric data. For that purpose, the qualitative method will be used and the interviews will be taken. Various methods, such as regression methods, co-relation methods, MS Excel, and R-commander will be used for data analysis (Wang, and Xie, 2015).

Research Limitations

This work is very much a deductive research type. The first limitation of this work is that it only consider the factors and determinants that are affecting the consumer behaviour. Out of numerous aspects, the research emphasises on pricing, available information, and locational aspects. However, there are many other aspects also like culture and social differences. The research only rely on the secondary data. Therefore, it does not cover the ground reality. The research work is basically done on the real estate of the Australia-based business. Therefore, the results and recommendations can only be used for the similar type of research. Consumer behaviour of real estate is quite different from that of other field (Theurillat, et.al, 2015).

Time Schedule

Conclusion

Here, in this research proposal, the concept of consumer behaviour was elaborated thoroughly. It was identified that in real estate industry, consumers make decisions based on their needs, utility, preferences, and disposable savings. In this report, an analysis and evaluation of the consumer behaviour in real estate industry was documented. For the study purpose, Richardson & Wrenchhad been taken. The company is 160 years old Australian real estate Company and currently holds the top position. The report highlighted the project objectives and scope along with the research hypothesis. In addition to this, the research gap was also identified based on the literature review on the following topic. In later part of the research, the research design, methodology were discussed. The report also outlined the research limitation and time schedule of the research project.

References

Al Nahdi, T.S., Ghazzawi, O.H. and Bakar, A.H.A., (2015). Behavioural factors are affecting real estate purchasing. International Journal of Business and Social Science,  6(8), 147-150.

Baker, S.R., Bloom, N. and Davis, S.J., (2016). Measuring economic policy uncertainty.  The Quarterly Journal of Economics,  131(4), 1593-1636.

Barkham, R., Bokhari, S. and Saiz, A., (2018). Urban Big Data: City Management and Real Estate Markets.  GovLab Digest: New York, NY, USA.

Chia, J., Harun, A., Kassim, A.W.M., Martin, D. and Kepal, N., (2016). Understanding factors that influence house purchase intention among consumers in kotakinabalu: an application of buyer behaviour model theory.  Journal of Technology Management and Business,  3(2).

Dettling, L.J. and Kearney, M.S., (2014). House prices and birth rates: The impact of the real estate market on the decision to have a baby.  Journal of Public Economics,  110, 82-100.

Hartmann, P., (2015). Real estate markets and macroprudential policy in Europe.  Journal of Money, Credit and Banking,  47(S1), 69-80.

Ling, D.C. and Naranjo, A., (2015). Returns and information transmission dynamics in public and private real estate markets.  Real Estate Economics,  43(1), 163-208.

Mian, A., Sufi, A. and Trebbi, F., (2015). Foreclosures, house prices, and the real economy.  The Journal of Finance,  70(6), 2587-2634.

Piketty, T., (2015). About capital in the twenty-first century.  American Economic Review,  105(5), 48-53.

Sawyer, S., Crowston, K. and Wigand, R.T., (2014). Digital assemblages: evidence and theorising from the computerisation of the US residential real estate industry.  New Technology, Work and Employment,  29(1), 40-56.

Theurillat, T., Rérat, P. and Crevoisier, O., (2015). The real estate markets: Players, institutions and territories.  Urban Studies,  52(8), 1414-1433.

Wang, G.J. and Xie, C., (2015). Correlation structure and dynamics of international real estate securities markets: A network perspective.  Physica A: Statistical Mechanics and its Applications,  424, 176-193.