Factors affecting Buying Behavior & CRM in Real

Asian Research Consortium Asian Journal of Research in Business Economics and Management Vol. 8, No. 6, June 2018, pp. 32-39. ISSN 2249-7307 A Journal Indexed in Indian Citation Index DOI NUMBER: 10.5958/2249-7307.2018.00050.6 SJIF IMPACT FACTOR :5.444(2017)

Asian Journal of Research in Business Economics and Management www.aijsh.com

Factors affecting Buying Behavior & CRM in Real Estate Sector: A Literature Survey Narendra Singh Yadav*; Dr. Mukul Gupta**; Pushpa Singh*** *Assistant Professor, G.L. Bajaj Institute of Management & Research, Gr. Noida, India. [email protected] **Professor, G.L. Bajaj Institute of Management & Research, Gr. Noida, India. [email protected] ***Assistant Professor, Accurate Institute of Management & Technology, gr. Noida , India. [email protected]

Abstract This research paper focus to discover the major key factors affecting the buying decision of customers to buy residential apartments. In this technology era, Customer Relationship Management (CRM) tools play a potential role in real estate sector. CRM is based on plenty of data and one has to identify key data points related to real estate market. For the successful implementation of CRM, It is necessary to understand the buying behavior of consumer or viceversa. This paper presents a survey, related to factors affecting the buying behavior and integrated it with CRM in real estate market.

Keywords: Buying Behavior, Real Estate, CRM, Factors, Market.

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Yadav et al. (2018). Asian Journal of Research in Business Economics and Management, Vol. 8, No.6, pp. 32-39.

1. Introduction The real estate sector is one of the fastest growing markets in India. The real estate sector is contributing about 11 percent of India’s GDP. Therefore, there is a need to analyze the factors and challenges in real estate investment hindering the economic growth of the urban area. A competition is raising among real estate sectors and in order to be successful, real estate agents need to improve their services. Real estate is not signifying to be an investment, moreover, it is that people buy to live. A developing country like India, buying property is a lifetime investment for the common people. The customer is like a king, who has an option to select or reject service provider. Buying a flat is one of the most significant economic decisions that people make, and hence require collecting information about its features [1]. It is very crucial for a buyer to fulfill his buying aspect of flat due to the result of so many options which are so close in comparison. It is really very hard to decide as many factors is playing a significant role to take customers to the final decision. On the other hand it is also important to fulfill the need of consumer for real estate industry. Therefore, it is very crucial for their marketing team to understand the factors that impact the customers purchasing process and buying decision. [2-4]. Consumer buying behavior has proven its role in each and every business sector. The real estate sector has become a thrust area for analysis the consumer behavior and how its affecting the real estate. Many literatures have been reported to identify the factors that affect the behavior of the investors/buyers in real estate. Researchers have used consumer behavior theories in real estate research [5], especially in the area of home search and selection, much remains are unexplored. Addition of customer relationship management (CRM) is enhancing the customer satisfaction and understanding of overall decision, making in real estate. CRM is supposed one of the risky strategies that can be implemented by organizations to boost competitive advantage. Buying property is not so frequent, hence the real estate industry use CRM solutions provide services or products that customers want, provide better customer service, cross-sell and up sell more effectively, close deals, retain current customers and better understand about customer. CRM represents a new way for the construction industry to manage is getting work and tracking customers [6]. This will definitely increase customer satisfaction and affect the buying behavior. In order to successful implementation of CRM, providers should understand the factors that are greatly affecting the buying behavior. This paper aims to identify consumer preferences as its buying behavior that will greatly affect the real estate sector through literature review. Further, these factors are analyzed and understand, for the customer relationship to acquire the customer from their targeted customer.

2. Literature Review The buying behavior of customers is a plan to know more about customer’s mood and behaviors in order to develop stronger relationships with them and real estate sector is not exceptional in this line of research. Many literatures have been reported to identify the factors that affect the behavior of the investors/buyers in real estate. Misra & et al., analyzed the differences in perceptions of buyers, which was based on certain factors such as business opportunities, law and order situation, medical/educational facilities, etc. for residential apartments in NCR [7]. There are so many different ways to invest in real estate and technology has brought every consumer much closer to opportunities than ever before. Homburg, Muller & Klarmann, stated that there is no ‘optimal level’ for customer service and some customers require more support than others. Real estate agents know 33


that making customers a priority is important for building long-term relationships. For agents, their findings could help evaluate and understand the optimal level of customer service and factors to determine its significance [8]. Kamal & et al., have explored four factors, namely: economic and cultural change, land problems, urbanization and population growth and building the price level acted as a catalyst for changing the perspective of real estate buyer [9]. A study analyzed various factors affecting the customer satisfaction in real estate specifically for residential flats [10].The effect of attitude, subjective norm, perceived behavior control, and finance on the intention to purchase real estate. Evaluation of real estate decisions employs a form of spatial information to introduce the power of state criteria on real estate prices (Suat Tekerl, 2016)[11]. They concluded with key observations on residential real estate development. Their analysis was based on the profile of the city, various facets of residential development, a detailed primary survey of households and real estate stakeholders. A conceptual model of buyer behavior with respect to house purchase and its empirical testing was proposed by Koklic & et al.[12]. Their study contributed to a better understanding of the buying process for a strategic product. The fundamental factors that were affecting the real sector value like demand, supply, property, restriction to use and site characteristics [13]. Seiler & et al. (2012), focused on fundamental concepts and an exploratory understanding of how people search for homes on the Internet [14]. As CRM play an important role in affecting buying behavior of customer in real estate. Companies should focus on higher value customers to increase profits with minimum time expenditure in real estate industry [15]. CRM involved developing ongoing relationships with customers and promoting customer retention and loyalty [16]. CRM can be implemented after examining consumer house-buying behavior from the consumers’ perspective. Now a days financial institutions are focusing much attention on customer satisfaction, loyalty and retention [17]. In terms of real estate, a buyer looking for luxury property may desire/expect more value than a client seeking a low-cost apartment. Lepkova & et al. [18], calculated the customer satisfaction index of the residential real estate market in Lithuania. The quality of housing in new buildings was analyzed in term of economic efficiency, technical quality, and functional quality. Kucharska-Stasiak & et al. [19], provided definitions of selected economic principles of valuation and their interpretation in relation to the real estate market. A survey of the literature suggested that the first, and possibly the most important foundation of customer value, was the idea of personalized, customer satisfaction and loyalty and then customer relationship management. There is need to know what the consumers actually value so as to meet their needs and probably retain them. Social media also play a potential role in the real estate sales process [20]. Further, we would summarize the major findings in buying behavior and CRM.

3. Summarize the Surveyed Research Area This survey paper includes two important categories– buying behavior and CRM in real estate sector. Some columns are not having the value it means that reviewed paper is not having related data. Although few research papers related to Internet based and social media based real estate market, but objective of that paper was also to identify needs and gap of the real estate market and customers. 34


Table 1: Summary of Literature Review Category

Tools

Buying Behavior

Problems of Real Estate Buying Behavior Compariso n of three Builders in three cities Buying behavior

SPSS SPSS

Buying Behavior

Buying Behavior Buying Behavior Buying attitude and buying intention. CRM CRM

Internet Based CRM

CRM

SPSS

AMO S

SPSS

Factor Discussed

Dominant Factor

Year

Country

Maintenance and interior design, Borrowing/affordability, Good area/neighborhood, Legal, greenery … etc. Various dependent & Independent variable

Borrowing/affordabi lity

2009

Australian residential

Location

2009

India

[13]

Vanity,location, price,… affiliated facilities Business opportunities,law & order,transport, medical facilities… etc.

Location

2013

China

[22]

Different for different city

2013

India

[7]

Basic Amenities, Financials,layout,proximity … etc. Demographics , Interest Rates, Economy, Government Policies, Employment rate, Population trend, Housing demand, Rates of inflation, Industry innovation factors. Attitude, Location, Living Space, Public Service, and Reference groups Price,Promotion , Product, Place etc. Cultural changes, land problem, urbanization and population growth and raised price Technical and functional aspects Relationship between housing defect and occupant’s satisfaction Classification Grouping Matrix for the Real Estate industry utilization of social media and its potential role in the real estate sales process. Discusss key factors to implement CRM in real estate

Basic Amenities

2014

India

[23] .

National Economy growth

2014

India

[24]

Focus on Attitude

2015

Jeddah

[25]

Price

2015

Depok

[26]

Land Problem

2016

Bangladesh

[9]

Customer satisfaction Customer satisfaction

2016

Lithuania

[18]

Efficient and effectiveness

2003

Social Media

2011

[20]

Choice of commercial real estate CRM software

2015

[14]

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2012

Ref. No. [21]

[27]

Australia

[28]


Evaluation of real estate decisions employs a form of spatial information to introduce the power of state criteria on real estate prices [11], study was based on fuzzy analytical hierarchical process (FAHP). The Real Estate business is not just about selling or buying; it is about managing longterm relationships with a variety of stakeholders, including buyers, sellers, agents, brokers, developers, and financial institutions. The complexity and long-term duration of the home buying process often throws up some unique business challenges. Key challenges are discussed in reference [30] in Real Estate for customer relationship management to gain customer satisfaction and retention.

4. Findings & Discussion Table 1, represent the factors that can affect buying behavior of customers. Which must be understood thoroughly for the success of real estate industry. A Number of factors are shown above and need further investigation as no single factors are considered as a dominating factor for purchasing property. However location is considered as an important factor based on purpose survey. This factor varies city to city and builder to builder. The buying behavior is very important in the direction of customer relationship management. One cannot deny the impact of CRM on the buying behavior of consumers and real estate as shown in figure 1. Real Estate CRM helps to manage many basic business areas such as task management, Pre-Sales (CRM), sales, post sales and channel management. Before implementation of CRM, It is very necessary to understand the factors that affect buying behavior of customer to retain and attract the customer. Various online mediums such as social media, Internet etc., also play a key role in relationship marketing.

Figure 1 : Relationship between CRM and Buying Behavior in Real Estate

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5. Conclusion The present research is conducted to discover the factor affecting the house/flat buyer customer. After studying some literature, reported in this line, we can conclude that buying behavior is affected with various factor and changes city to city or builder to builder. This finding can be integrated with customer relationship management for real estate sector. Result and finding ensures that there is a significant impact of CRM and buying behavior in real estate.

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