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Customers' perspectives on a residential development using the laddering method
KTH, School of Architecture and the Built Environment (ABE), Real Estate and Construction Management, Building and Real Estate Economics.
2010 (English)In: Journal of Housing and the Built Environment, ISSN 1566-4910, E-ISSN 1573-7772, ISSN 1566-4910, Vol. 25, no 1, 37-52 p.Article in journal (Refereed) Published
Abstract [en]

Residential development is closely related to the question why some people buy in certain residential developments and others do not. The reason is obvious: if the product is not appreciated by consumers they will search for another alternative which will decrease the estimated market share for a specific residential project. The main idea in this study is to increase our understanding of how to design and build more attractive residential developments by evaluating buyers' needs and preferences. Research concerning the means-end chain theory and the laddering technique has been quite extensive in the food industry but examples in residential development are rare. Laddering interviews were made with respondents who visited open house sales of a tenant-owned apartment on sale. We hypothesize that there exists a difference between bidders and non-bidders regarding their beliefs of functional and psychological consequences and abstract personal values. In our study we did not find any major difference in terminal values, but instrumental values do differ. This is true also for abstract product attributes and functional and psychological consequences. Professional developers and planners were able to use the beliefs of bidders and non-bidders to decide on a re-design of specific locations in the residential development of Frosunda, north of Stockholm, Sweden.

Place, publisher, year, edition, pages
2010. Vol. 25, no 1, 37-52 p.
Keyword [en]
Residential development, Conceptual design, Means-end chains theory, Laddering
National Category
Environmental Analysis and Construction Information Technology Economics and Business
URN: urn:nbn:se:kth:diva-14260DOI: 10.1007/s10901-009-9170-0ISI: 000283312800003ScopusID: 2-s2.0-77949307507OAI: diva2:331966

QC 20100729

Available from: 2010-07-29 Created: 2010-07-29 Last updated: 2014-04-11Bibliographically approved
In thesis
1. Real Estate Development: A Customer Perspective
Open this publication in new window or tab >>Real Estate Development: A Customer Perspective
2009 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This doctoral thesis ‘Real Estate Development: a Customer Perspective’, mainly concerns questions that are related to why consumers make a choice and what they are looking for. The first part of this thesis is the result of the research project ‘Models for the Construction Sector’ (MoPo) and the second part is the result of a collaborative project between KTH Royal Institute of Technology, the Construction Sector Innovation Centre (BIC), five private companies[1] and four municipalities in Stockholm County.

Since the Latham report (Latham, 1994), there has been considerable debate about the need for an increased focus on the end customer in the construction process. The housing sector in Sweden has a strong tradition in focusing on construction and project management issues and less on customer satisfaction. Similar findings have been reported in ‘Skärpning gubbar’ (Swedish Government Official Report, 2002) and recently, ‘Sega gubbar’ (Byggkommisionen, 2009), which show that attitudes and processes in the housing sector in Sweden have not really changed since the initial report in 2002. From the perspective of consumer-oriented research in residential development, this issue concerns the ability to understand why customers buy (cognition), what they want (the product) and how the message, relating the product to the consumer, should be formulated (marketing). Investment decisions could be improved if developers ask what kind of values have proved to be important for residents and buyers for a specific type of residential development, what the functional and psychological consequences they are looking for are, and then ask what kind of product attributes can be provided, given economic constraints.

Paper one shows the main activities in how to provide needed facilities and their relationship to the end users’ core business. Paper two shows how the laddering technique can be used to elicit buyers’ beliefs about the built environment, according to the means-end chain theory. The means-end chain theory postulates that buyers purchase a product because it satisfies personal values and desired consequences, which from their perspective are more important than product attributes. Paper three shows the development of a multi-item attitude scale. This scale identifies five key dimensions that are important for the customer when deciding to purchase an apartment in a residential development. The dimensions are: urban environment, architecture, safety, relaxation and liveliness. Paper four shows structural modelling evidence supporting the theoretical assumption that personal values have an impact upon expectations and perceived performance. The structural sub-models show that if perceived performance is increased, customers’ satisfaction will be positively affected. During our research, we have not found any current knowledge in the construction industry in Sweden on how to investigate and measure customers’ values and their beliefs, or how to model customers’ evaluation of product performance using structural equations.

[1] Besqab, JM, NCC, Stockholm municipality, Solna municipality, Sollentuna municipality, Swedbank, Upplands-Väsby municipality, Veidekkke.

Place, publisher, year, edition, pages
Stockholm: KTH, 2009. 232 p.
Trita-BFE, 2009: 89
Residential development, customer satisfaction, means end chain theory, laddering, structural equation models
National Category
Economics and Business
urn:nbn:se:kth:diva-12158 (URN)978-91-977302-6-6 (ISBN)
Public defence
2009-12-15, L1, Drottning Kristnas väg 30, Stockholm, 10:00 (English)
Formas 244-2004-183
QC 20100729Available from: 2010-03-22 Created: 2010-03-17 Last updated: 2010-07-29Bibliographically approved

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