Figure 2. The Nicosia Model: A Structure of Consumer Behaviour (1966)
Source: Chisnall, 1995
The most frequently quoted consumer behaviour model is the Howard-Sheth model of buyer behaviour, which was developed in 1969. (Illustrated in figure 3). The model is useful because it highlights the importance of inputs to the consumer buying process, and suggests ways in which the consumer orders these inputs before making a final decision to purchase (Evans, et al. 1996, Swarebrooke, 1999 and Wilkie 1994).
The Howard-Sheth model has its limitations because it does not explain all buyer behaviour, however it has been developed as a result of empirical research (Horton, 1984). It is possible to link this model to purchasing of property in Spain in the area of inputs (why consumers selected the method they used to purchase), the linking of perceptual concepts with the search for information, the learning concepts of satisfaction levels and the attitudes towards different advice and information sources and the outputs of linking satisfaction to purchase attitudes.
Figure 3. The Howard- Sheth Model of Buyer Behaviour (1969)
Source: Swarebrooke and Horner, 1999
Recent research on consumer behaviour has concentrated on the exchange process and has attempted to look at the marketers’ perspective on the process. One example of this modern approach is proposed by Solomon, et al. (2002) which is shown in table 2. Solomon, et al. (2002) also suggests that:
“....consumer behaviour involves many different factors. The purchaser and the user of a product might not be the same person. People may also act as influencers on the buying process; such people may be sales agents. Organisations can also be involved in the buying process, for example, the organisation may be the purchasers’ family.”
Table 2. Issues that Arise in the Consumption Process
Source: Solomon, et al. 2002
Foxall and Goldsmith (1998) suggested that consumer behaviour models mean little in the absence of a general understanding of how consumers act. They suggest that consumer behaviour is a sequence of problem solving:
- The development and perception of a want or need
- Pre purchase planning and decision making
- The purchase itself
- Post purchase behaviour which may lead to repeat buying
The Consumer Decision Process
Wilkie (1994) explored consumer decision making and also suggested that there are four essential stages that consumers follow (see table 3 and figure 4):
Table 3. Purchase Stages
Source: Wilkie, 1994
Figure 4. The Consumer Decision Making Process
Source: Wilkie, 1994
Problem Recognition
Problem recognition occurs whenever the consumer sees a significant difference between his or her current state of affairs and some desired or ideal state. The consumer perceives there is a problem to be solved, which may be small, large, simple or complex (Evans et al, 1996 and Wilkie, 1994).
Opportunity recognition often occurs when a consumer is exposed to different or better quality products. This shift often occurs because the individuals’ circumstances have changed, a variety of purchases are made to adapt to new environments. For example when people retire, they may feel the need to buy a holiday home, to ensure that they have some where to go to fill their spare time?
Once a problem has been recognised, consumers need adequate information to resolve it. Therefore, consumers should participate in a search for information relating to the problem, or purchase (Evans, 1996 and Solomon, et al. 2002).
Information Search
Information search is the process in which the consumer surveys their own environment for appropriate data to make a reasonable decision.
A consumer may explicitly search the market place for specific information after a need or want has been recognised (called pre purchase activity). Some consumers, especially veteran female shoppers enjoy hunting for information and keeping track on developments, which ultimately results in them having a pleasant purchase experience (Solomon, et al. 2002 and Wilkie, 1994). In contrast, “impulse decisions” are where consumers do not recognise a problem and do not participate in any form of external information search. Instead, the search is internal and brief and then the purchase is made (Wilkie, 1994).
Wilkie, (1994) and Evans, et al. (1996) state that the problem recognition phase activates a goal and motivates the consumer to act. The information search phase enables the consumer to move towards the achievement of the goal. To reach the goal of matching the levels of actual and desired states, consumers need to discover what their options are, process information about them and decide which alternative to choose.
The traditional decision making perspective incorporates the economics of information approach to the search process, it assumes that consumers will gather as much data as is needed to make an informed decision. Consumers looking to purchase property abroad have a large variety of information outlets, such as, magazines, estate agents, and television shows (Hodgkinson, 2003).
Solomon, et al. (2002) state that consumers form expectations of the value of additional information and continue to search so long as they see that the rewards of doing so (i.e. the utility) exceed the costs.
Furthermore, Solomon, et al. (2002) and Brassington and Petitt (2000) point out that people will put themselves out to collect as much information as possible, as long as the process of gathering it is not too onerous or time consuming. It is not clear whether this statement can be applied when consumers are purchasing high involvement goods, such as property.
Several researchers have attempted to classify consumer information search patterns (Claxton, et al. 1974 and Kiel and Layton, 1981). The researchers focused on relatively high-value, high involvement purchases, such as durables or new cars.
Claxton, et al. (1974) developed a classification of information search patterns for the purchase of durable goods. The list of durables used consisted of four furniture items and nine kitchen appliances. The furniture and appliance samples were analysed separately and three measures were found to generate clusters: the number of information sources used, the total visits to stores and the deliberation time. These were: (1) ‘thorough (store intense)’, (2) ‘thorough (balanced)’, (3) ‘non-thorough’. Within these groupings, sub clusters varying in deliberation time were also identified. The findings stressed the importance of describing pre purchase behaviour by a number of variables, in order to capture the precise nature of a buyer’s activities. (Bates and Mitchell, 1995).
Kiel and Layton (1981) investigated information search for the purchase of new cars. Factor analysis uncovered four important factors: retail search, media search, interpersonal search, and the time dimension. Cluster analysis indicated that consumers could be classified into three groups: (1) ‘low information seekers’, (2) ‘high information seekers’ and (3) ‘selective information seekers’. Previous market experience, purchasing self-confidence, educational levels and price were found to be positively related to the intensity of search behaviour.
The sample size used in this study was very small (n=194) so may not be representative of the population at large. The results may not apply to a wider population or to different product categories.
The results from both of these studies have several things in common. They have both identified three different types of consumers: The retail focused searcher, who has heavy involvement of others in the decision making process, spends lots of time searching for information in store, and may visit stores several times before purchasing; the low information searcher, who consults few sources of information (people or media), visits few stores, and spends little time deciding on the purchase; and some form of high information searcher, who spends considerable time deciding, uses available sources extensively, and considers several brands and stores before purchasing.
In addition to the Claxton, et al. (1974) study, Westbrook and Fornall (1970) also investigated patterns of information search for durable goods. The researchers discovered four primary search segments for major household appliances, these are illustrated in table 4.
Table 4. Patterns of Information Search for Durable Goods
Source: Wilkie, 1994 and Cave, 2003.
Do Consumers Always Search Rationally?
The assumption of rational search is not always supported. The amount of external search for most products is surprisingly small, even when additional information would probably benefit the consumer (Solomon, et al. 2002).
For example, a study carried out by Dagnoli in 1990 titled ‘Ads Trumpet Satchmo’s Immortality’, proved that lower income shoppers, who are likely have more to lose by making a bad purchase, actually search less prior to purchase than do more affluent shoppers. Some consumers typically visit only one or two stores and rarely seek out unbiased information source prior to making a purchase decision. This pattern is especially prevalent for decisions regarding durables, even when these products represent significant investments (Solomon, et al. 2002).
Can this theory be linked to buying property abroad? Do individuals who are purchasing a property abroad actually jeopardise a successful purchase by failing to carry out an adequate information search at the pre purchase stage?
Determinants of Information Search
Generally, search activity is greater when the purchase is important, when there is a need to learn more about the purchase, and when the relevant information is easily obtained and utilised. Consumers differ in the level of search they undertake, regardless of the product category in question. (Solomon, et al. 2002).
A study carried out by Walle (1990); titled ‘The Epic Hero, Marketing Insights’, found that younger, better-educated people who enjoy the shopping and the fact-finding process tend to conduct more information searches. This opposes the theories of Solomon, et al. 2002 and Wilkie, 1994 who stated that veteran shoppers enjoy hunting for information and keeping track of developments.
Walle (1990) continued by stating women are more inclined to search than are men, as are those who place greater value on style and the image they present (Belk, 1990).
Type of Search
The type of search undertaken by people with varying levels of expertise on the area in question differs. Because experts have a better sense of what information is relevant to the decision, they tend to engage in selective search, which means that their efforts are more focused and efficient. In contrast, novices are more likely to rely upon ’non-functional’ attributes, such as brand names and price to distinguish among alternatives. They may also process information in a ‘top down’ rather than a ‘bottom up’ manner, focusing less on details than on the bigger picture. For instance, they maybe more impressed with the amount of technical information placed in an advert than by the significance of the claims made (Belk, 1990).
Table 5 illustrates why higher levels of information search should occur in durable purchases. However, table 3 does not take into account the source of the information search and whether consumers’ prior knowledge of products affects the type of or efficiency of information searching.
Table 5. Factors That Affect External Information Search for Durable Goods
Source: Wilkie, 1994
Durable goods are not purchased often, therefore little or no information maybe be available in consumers long term memory (LTM) for internal searches to be performed, it also possible that new product features are available that had not been encountered before. On the subject of property, new laws and legislations may have been introduced that consumers have not been exposed to and with which they are unfamiliar. Since the consumer will have to live with the product for a long time, the benefits from a good purchase is higher and the risk of having a bad purchase is greater.
The promotion of British house purchases abroad has been transformed over the last three years by the emergence of specialist magazines that focus on this property market. Prior to 1989, a year in which the sale of foreign property in Britain soared, apart from general property magazines and daily or Sunday newspaper, few national outlets contained much information for those interested in buying a home abroad. From early 1990s, this situation changed radically as an increasing number of foreign property exhibitions began to be organised and magazines came into production with a sole or major focus on property abroad. Television shows dedicated to the purchase of property abroad began to be broadcasted, their aims were to explore foreign countries to find suitable properties for foreign house hunters or to highlight the ‘horror story’ cases of when things go wrong for foreign property purchases (Mintel, 2000).
The results of a report called ‘La Nouvelle Vogue’: British house purchases in France indicated that exhibitions and magazines are amongst the most important vehicles for attracting serious property purchasers. From the 30 British estate agents that were interviewed, 19 named specialist property publications as significant mechanisms for attracting the interest of customers who eventually bought a property in France (KCL, 2000).
Bates (2003) states there are real dangers when purchasing property in Spain. Consumers have no idea of who they are dealing with, many vendors do not recommend consumers seek independent legal advice and frequently tell people that they do not need legal advice. It seems so obvious, but people really are ignoring the need for a legal advisor to warn them if they are being cheated or mislead when they chose to buy a house in Spain. Lawyers are called in to pick up the pieces of purchase disasters and claim that “when people go shopping for homes in Spain they often leave their common sense back in the UK!” Anyone can set themselves up to sell homes in Spain, no licences or qualifications are required so it is essential that consumers seek the advice of a solicitor well before they set out to buy.
Evaluation of Alternatives
A great deal of the effort that goes into a purchase decision occurs at the stage where a choice must be made from the available alternatives.
It is difficult for consumers to decide what criteria are important when evaluating alternatives. A consumer will decide on a certain product over another depending on the decision process used. A consumer engaged in extended problem solving may carefully evaluate several brands, while someone making a habitual decision may not consider any alternatives (Solomon, et al. 2002 and Horner and Swarebrook 1996).
A consumer engaged in extended problem solving who is deciding on a property purchase abroad may assess several different agents in order to identify the possible alternatives to a particular favoured property. This kind of person would have carried out an in-depth, effective information search, prior to evaluating any properties.
The Decision
Green, et al. (1998) states that:
“….experts have defined a number of basic strategies consumers can use in arriving at their decisions. These are known as a decision heuristics that help consumers make up their minds. ‘I always buy the best’ or ‘I only buy from a sale’ are two common decision heuristics” (Evans, et al. 1996 and Horner and Swarebrook 1996).
Affect Referral Rules
Affect referral is a simple decision rule. No attributes are examined, a simple affective reaction determines which alternative is selected: the alternative a consumer likes the best or a brand they have heard of. Little or no cognitive elaboration takes place (Chisnall, 1997). This rule is not often associated with high involvement and high-risk purchases (Horner and Swarebrook 1996).
Non Compensatory Decision Rules
Simple decision rules are non-compensatory, and a product with a low standing on one attribute cannot make up for this position by being better on another attribute. People simply eliminate all options that do not meet some basic standards. Consumers using this rule will rarely try new brands, even if they were equal to existing ones (Mick, et al. 1990 and Evans, et al. 1996).
The Lexicographic Rule
When the lexicographic rule is used, the brand that is seen to be the best on the most important attribute is selected. If two or more brands are seen as being equally good on that attribute the consumer then compares them on a second attribute. This selection process goes on until the tie is broken (Evans, et al. 1996 and Solomon, et al. 2002).
Compensatory Decision Rules
Unlike non-compensatory decision rules, compensatory rules give a product a chance to make up for its shortcomings. Consumers who employ these rules tend to be more involved in the purchase and thus are willing to exert the effort to consider the entire picture in a more exacting way. The willingness to let good and bad property qualities balance out can result in quite different choices (Evans, et al. 1996 and Solomon, et al. 2002).
Sometimes consumers rely on specific decision strategies they have used many times before and have stored in their memory. More often consumers need to think somewhat about how they will make their choice at the time they are deciding, they need to construct a decision strategy for that purchase (Chisnall, 1997).
Modified Rules for Research
For this type of research it would prove too time consuming to examine a respondents’ entire purchase decision strategy. In order to establish simple decision rules, respondents will be asked to state why they chose the company they used to purchase their property in Spain. From this, the following rules will be adhered to:
Table 6. Research Decision Rules
Methodology
Methodology in Similar Research
The methodology used in similar research (Mintel: Buying Holiday Property Abroad, 2000, Selling France: Advertising French Houses to Attract British Purchasers, 1996, French Estate Agents and House Sales to British Nationals, 1997 and British Home Owners in Rural France: Property Selection and Characteristics, 1997 revealed that the most customary method of research was through the use of structured, closed question, questionnaires producing quantitative data.
Research Approach
The research was approached with a deductive means, where a theory and a hypothesis were developed and then from this a research strategy was designed to test the hypothesis.
The deductive approach involves the development of a theory that is subjected to a rigorous test using representative sample sizes. This method is widely used in quantitative research (Saunders, et al. 2003).
Inductive research involves the development of a theory as a result of the observation of empirical data. This method has been rejected for this study as it is more suited to studies that are particularly interested in understanding why something is happening, rather than being able to describe what is happening. This approach is often used for the analysis of qualitative data.
Research Strategy
Categorical and Ordinal data was collected using a semi structured postal and email questionnaire.
Categorical data comes from questionnaires where the responses to questions are put into groups or categories. As such, the data does not have a numerical value; rather they have a label or value assigned to each category. Hence, some authors refer to this type of data as nominal (Brunt, 1998 and Fink, 1995).
In the questionnaire (appendix III), the respondent indicates which category is relevant to them. In the case of gender, where there are only two alternatives (male or female) the data can be referred to as dichotomous.
Ordinal data is arranged in a specific order. The data is still arranged in categories but either ascends or descends, for example go from best to worst or worst to best. In a similar way to categorical data it is not possible to measure precisely how much better one category is over another, other than that one category is higher in order.
Method
The data for this study was collected using a self-completion survey. There are various other means of data collection, such as observation studies and interviews. Observation data collection was not adopted for this research as it is more concerned with what people do and how often they do it rather than gathering opinions. Interviews were not employed for this study due to timing and financial constraints.
Research can often be enhanced with a multi-method approach. This could be the use of a questionnaire, which is used to discover consumers’ attitudes towards purchasing property abroad, combined with in-depth interviews to explore and to understand these attitudes. Due to research constraints, it was impractical for this study to follow a multi method approach.
The questionnaire was designed with the intention that each question flowed in a logical form, filter questions were used where appropriate to guide respondents to the correct question that was applicable to them. Questions which were deemed complex were placed in the centre of the questionnaire, by this stage most respondents would feel confident about completing the survey and would not be bored of the questioning. Personal questions, such as age and gender were placed at the end of the questionnaire as some respondents may find them too sensitive to answer; by placing them at the end of the questionnaire, if the respondent refuses to answer them, the bulk of the data has already been collected.
The final question in the survey relates to age categories. Table 7 conveys the age parameters that will be applied to this research. It has to be recognised that not all respondents will fall into these categories, therefore the age life stages will only be used as a guide and not as a rule
Table 7. Life Stages of Respondents
Source: Mintel, 2000.
Channels of Distribution
The questionnaires were distributed through:
- A trip to Spain where the surveys were distributed to consumers who had purchased a property in Spain.
- Spanish language classes.
- Advertisement placed on an internet Spanish property forum appealing for Spanish property purchasers to fill out the surveys (see appendix V).
The completed questionnaires were returned by post or through e-mail.
Ethics
Ethical considerations taken into account in the research were forms EC1 and EC2, both of which were approved by an ethics committee (see appendix VI).
The results of this research were confidential and each cover letter and questionnaire stated that the results were for academic use only. No names or personal details were required for the questionnaire and no reward was offered for respondents completing the questionnaires.
Data Collection and Analysis
The data was collected using a postal and electronic (e-mail), self-completion questionnaire (see appendix III) with an attached covering letter to explain the purpose of the research (see appendix IV). Four weeks were allocated for the return of the questionnaires.
On return of the questionnaires, they were checked for completeness and numbered. Forms that were incomplete were not included in the analysis, but the number was recorded as part of the non-response rate. The data was then entered into an Excel spreadsheet where it was analysed using a Chi square test, standard deviation, standard error and pivot tables to test the relationships between various variables (see appendix VII).
Chi- Square Test
A Chi Square test was performed on each result from the questionnaire to prove that answers were achieved through respondent choice rather than through random answering.
The test was used to test the level of association between the expected findings and the observed responses.
As previously stated, the aim of this research was concerned with either accepting or rejecting the null hypothesis by comparing whether particular variables of the research questionnaire had any influence on other variables, e.g. does a certain gender favour one type of information source?
The 5% confidence level was used for the research analysis, due to this being the most used level in social research. The 1% level was rejected as it is deemed to stringent for this type of study (Saunders, et al. 1997).
Other statistical tests were researched, such as Spearmans rank correlation coefficient but were rejected as where found to be unsuitable for this type of study.
Elements of Bias
The following must be recognised as forms of bias present in the research:
- The questionnaires that were distributed in Spanish language classes were all located in Essex, England.
- The questionnaires that were handed out in Spain were distributed in Southern Spain.
It also has to be recognised that the author has a personal interest and experience in purchasing property in Spain. The research was approached in an objective manner, the questionnaire was designed on a neutral foundation and the introduction of personal opinions or leading questions in the survey was negligible.
Sampling
A sample is a group of units selected from a larger group (the population). By studying a sample, it is hoped to draw valid conclusions about the larger group.
The buying of property in Spain is never likely to involve a high proportion of the population, and this presents problems for quantitative consumer research in terms of achieving robust sample sizes for detailed analysis.
According to a survey by Euro tunnel, two million British citizens already own holiday homes abroad (The Sunday Telegraph, 2002). Mintel state that 40% of these are in Spain. This indicates that nine hundred and twenty thousand British citizens own a property in Spain. This population is too large for the scope of this research project, therefore a sample was chosen.
The first step was to establish the means of distributing the questionnaire in order to reach the target sample. These have been stated in the channels of distribution section.
After careful consideration, it was established that a maximum of three hundred questionnaires could be printed, distributed and analysed within the timing constraint of this research. This represents 0.032% of the potential population.
With a predicted response rate of 33%, 300 questionnaires were distributed in order to have a response rate of 90. This represents 0.0098% of the total population.
Pilot Study
After designing the questionnaire, it was essential that it was tested for suitability before it was used.
The questionnaire was piloted on twenty respondents to highlight the following:
- Problems with the questionnaire (wording and layout) that may cause misunderstanding.
- Indication of the likely response rate.
- An indication of the range of responses to the questions that can be suggestive of the likely results.
From the pilot survey, modifications were made to the questionnaire and it was then re- tested on ten respondents before being distributed to the sample.
The results from the pilot study have not been included in the main data collection of this study.
Research Constraints
When analysing the constraints of the research, it was apparent that there were no major limitations. The greatest issue was the cost of printing and postage for the questionnaires. A timing constraint was taken into account when determining the sample.
Response Rate
The actual number of questionnaires returned, on time and complete was 101 out of 300. This means that the response rate was 33.7%; this is 0.7% above the expected return rate of 90 questionnaires.
Variables
In the questionnaire, (see appendix III) respondents were asked to state their age, gender and views of particular aspects of their purchase process. The question posed can be referred to as a variable and the answer given as a value.
In addition, each person (or sampling unit) can be defined as a case. Hence, as Norusis (1990) states, “For each case you have one value for each variable.” This is true for the questionnaire used in this study, apart from the questions that allow the case to answer ‘all that apply’.
Independent variables are factors that maybe influential in predicting or explaining the outcomes being explored. They act independently in the sense that the respondent has little control over the answer. For example, the respondent is 40-50 years old and is female.
Dependent variables are the outcomes which are being explored by the research, in this case they refer to the responses made on the questionnaire.
Null Hypothesis
In order to approach this research with an unbiased and transparent technique it is necessary to state a null hypothesis:
It is anticipated that there will be:
“No significant relationship between the type or amount of information and advice respondents seek, to the overall satisfaction of the purchase experience”.
There will be:
“No relationship between age of respondents and the means of advice sought and the information search methods employed”.
There will be:
“No relationship between age and gender, and other variables present in the research”.
Results
Table 8 shows the response rate of male and females, the results show a good spread of each gender from the sample.
Table 8. Gender Analysis of Response Rate
Chi Square Test
A Chi Square test was performed on each result from the questionnaire to establish if the answers were achieved through respondent choice rather than through chance. The results proved that for every question, the result was significant, this is shown in appendix VII, where the word “reject” in the final column indicates that the null hypothesis can be rejected. This is because in each case the actual responses given differ significantly from those that would be expected if the effect was caused by chance.
Data Interpretation
Figure 5. Age of Respondents against Gender (n=101)
An analysis of the life stages of the respondents revealed that the majority of the sample was aged between 40-50 years old. This age group represents adults who have seen their children reach the age of 16, or did not have any children in the first place. This age group is referred to as the “empty nesters”. Many respondents were in the “post family” category of 51-61 years old.
The make up of the two predominant life stage groups in figure 5 are very similar in the sense that they have time, money and freedom from responsibilities of looking after children to travel abroad regularly. Due to a higher level of PDI both of these groups are important segments for the Spanish property market industry. The age categories at either end of the age scale had few respondents.
Figure 6. The Major Influencers (n=101)
Figure 6 reveals that the “value of the pound” is the prime factor that stimulates consumers to purchase a property abroad.
Magazine articles are also an important influencer. Very few respondents stated that “nothing” influenced them to purchase a property in Spain.
Figure 7. The Respondents Choice of Seeking Information (n=101)
Figure 7 reveals that female respondents preferred to use “friends and family” as their main source of gaining information. “Advertisements” were favoured second, followed by “television shows”. All females conducted some form of information search.
Male respondents followed in the same pattern as females, by predominantly choosing to use “friends and family” to gain information. Male respondents chose to use “professional advice” and “books” as the second most popular means of gaining information. Several males conducted no information search, this supports the original hypothesis that “females will be the greatest information seekers”.
The “internet” was used more by females and was ranked fourth in order of preference. It ranked lower for males in fifth place, along with “newspaper articles”. Very few respondents sought information from “magazines” or through “radio broadcasts”.
Figure 8. The Use of the Internet by Different Age Categories (n=11)
As media, such as the internet and digital television have proliferated, it was expected that a significant number of individuals, especially ‘pre family’ respondents would have utilised the internet as a means of gaining information.
Figure 8 demonstrates surprising results. It was stated in the hypothesis “that the younger age groups would favour using the internet as a means of gathering information”. The results do not support the hypothesis. The younger age groups actually used the internet the least, this maybe due to them feeling more comfortable consulting other media sources (see appendix IX). The internet was favoured most by the age group of 51-61 year olds (post family life stage).
Two respondents from the 29-39 year old category stated that they used no information search at all, both of which were male. These respondents were generally unsatisfied with their purchase (see figure 7 and appendix XI).
Figure 9. The Degree of Risk Respondents Experienced (n=101)
Figure 9 illustrates that more males than females felt the risks were ‘high’ when purchasing a property in Spain, this could be as a results of several male respondents failing to perform a search for information, therefore unaware of laws, regulations and procedures. The greatest amount of respondents stated they felt a “moderate risk”.
Figure 10. Method of Property Purchase (n=101)
Figure 10 reveals that most respondents purchased their property from an “estate agent based in the UK”. Few people purchased their property “privately” or from a “developer who was selling properties off plan” (a property that has not yet been built, so it is sold from a plan).
The use of Spanish estate agents provided surprising results. With the number of ‘Spanish owned and based’ property exhibitions escalating (Mintel, 2000), it was expected that their services would have been utilised by a larger number of respondents.
.
Figure 11. The Reason for Choosing the Company Respondents Used (n=101)
When respondents were asked, “why did you use the company you employed to purchase your property in Spain?” the results revealed that most respondents, both male and females employed the company they used as they were “aware of the organisation”.
The second favoured reason for males was “the company offered the best deal” (e.g. properties were cheaper, company discounts offered and extras were included). 0nly four females out of fifty choose this option.
Male and females ranked evenly with twelve from each gender stating they choose the company they used because it was “recommended” to them.
Table 9. Reason for Company Use and Purchase Satisfaction
Table 9 demonstrates that overall, most respondents were “quite satisfied” with their purchase.
The respondents who chose the company because they “were aware of it” ranked the highest in the “quite satisfied” group, followed by the option of the company was “recommended”. Few respondents were “quite satisfied” because the company “offered the best deal”, this category proved to have the most “unsatisfied” respondents.
The majority of respondents employed the company they used because they were “aware of it”. Most of these respondents were “quite satisfied”, although this reason for company choice also had the most respondents stating they were “very unsatisfied”. Many respondents were “not satisfied” when they used a company because it offered the “best deal” and few of them were “satisfied”.
Figure 12. Respondents Purchase Experience Using Different Sources of Advice (n=101)
Figure 12 represents that the majority of people who sought advice from an “estate agent” had a “good” experience. The second ranked experience level when using an “estate agent” was “moderate”. A small sample of respondents stated they had a “very good” experience using this means, no respondents stated they had a “very poor” experience using an “estate agent” .
Few people used a “solicitor” to gain advice. The respondents that did use this means had a “good” or “moderate” experience. Three people had a “very poor” experience when using this means.
Respondents generally had a “good” experience when using “friends or family” for advice. Respondents who stated that they sought “no advice” mainly had a “poor” experience; one person had a “very poor” experience and none of them had a “good experience”.
Figure 13. Gender of Respondents and Efficiency of Information Gathered (n=101)
Figure 13 shows that 22 males and 22 females “partially agreed” that the information they gathered helped them to make a better purchase. Seventeen females and fourteen males “totally agreed” that the information the gathered helped them.
Eight of each gender were “undecided” as to whether they thought the information they gathered helped them to make a better purchase decision. 5.9% of males and 3.9% of females “partially disagreed”. No respondents "totally disagreed”.
Figure 14. Source of Advice and the Reason for Purchase (n=101)
In order to establish the major underlying reason for the purchase of property in Spain, respondents were asked “why did you purchase a property abroad?” Figure 14 demonstrates that most people purchased their property as a “holiday home”. When purchasing for this means most sought advice from “estate agents”. An estate agent was also used to seek advice by those respondents who were purchasing as an “investment” or because they wanted to “relocate” to Spain.
The greatest amount of people used a solicitor when purchasing their property for an “investment”. Surprisingly few people chose this professional means of advice when purchasing their property to rent out. These respondents chose to use an unprofessional means of “family”
Friends and family were used the most by people purchasing their property as a “holiday home”. Seven respondents sought no advice, four of these were respondents who were purchasing for a “holiday home”, two were “investments”, and one was to “rent out”.
Figure 15. “Did the Information You Gathered Help You Make a Better Purchase Decision?” (n=101)
From figure 15 it may be seen that the majority of respondents stated that they “totally agreed” that the information “friends and family” provided them with enabled them to make a better purchase decision.
Many respondents stated that they “partially agreed” that the information “television shows” provided them with benefited their purchase process. “Professional advice” had the greatest amount of respondents stating that they “partially disagreed” that the information they provided them with helped them.
No respondents “totally disagreed” that their information search was helpful. This result is surprising as several respondents stated that they conducted no form of external information search.
Increasingly consumers have easy access to information from new technologies such as digital television and the internet, surprisingly only twelve respondents accessed the internet, five of these “totally agreed” that the information they gained from it helped them to make a “better purchase” decision. The remainder “partially agreed” or were “neutral”.
Figure 16. Amount of Information Provided by the Company Used and Purchase Satisfaction (n=101)
Figure 16 illustrates that very few respondents were “very satisfied”. People were “quite satisfied” when provided with a good level of information. Several respondents were “quite satisfied” when provided with a moderate level information. Overall, very few companies provided a very good level of information.
When companies provided moderate information, respondents were generally “satisfied”. When a poor level of information was supplied, respondents were mainly “not satisfied” and several were “very unsatisfied”. This reveals that when companies offer a good level of information consumers are satisfied, when no information or information with little value is offered consumers have an unsatisfactory purchase experience.
Table 10. Would Respondents Change the Purchase Process they Followed?
When respondents were asked “if you could go back in time would you change anything about the purchase process you followed”, over half the sample stated they would. This is shown in table 10. When asked what they would change 95.6% of respondents said that they would not use a Spanish organisation again, but would change to an English based one, mainly due to communication problems (see appendix XII).
What is meant by a ‘Spanish Organisation’ here is founded upon its location, and not the nationality of its staff or owners.
When respondents were asked to state why their purchase experience was anything less than good, there were a wealth of “horror stories”, examples of these are:
“In selecting a property off plan I was advised to give ‘Powers of Attorney’ to my solicitor to carry out all money transactions, in doing so I passed over £150,000 to him in order to pay the developers. The money disappeared and 9 months later I still have no property, no money and no trust what so ever in the Spanish legal system”
“I employed a Spanish estate agent to purchase a villa in Southern Spain. The whole purchase process took 3 years, there was constant need for me to telephone the builders and developers, as the employed agent was happy to sit back and do nothing, he had my money, in full for 3 years before a brick was even laid for my villa. There was no effort from them to push the process and their communication with me was non-existent. If I was to purchase again I would definitely not use a Spanish estate agent”
“I feel cheated by the estate agent I used in Eastern Spain, I paid them good money to find me a suitable property. They failed, I was pushed into purchasing a property that had £56,000 worth on debt left on it from its previous owner. I requested a search be done on the property, which I was informed came back clear. I am responsible for the debt now, which has cost me almost all of my retirement funds. The property is now back on the market”
“Spanish agents very tactful with truth. The land at the bottom of my garden was grazed by sheep. I was terrorised by the Shepherd who insisted that my garden was his land. I am still in legal battles with him 18 months later to prove who owns the land. Spanish agents were unhelpful as soon as they had the full payment for the property”
“Process took so long, no communication attempts were made from estate agent which I used as a result of a property exhibition in the UK. As soon as I had paid my deposit and chose a property to purchase their help and support through the exchange process disappeared”
Overall, 81% of respondents stated that they were “very satisfied, quite satisfied or satisfied” with their purchase experience even though 54% stated that they would change something with the process they followed.
Figure 17. Satisfaction Levels and Purchase Experience (n=101)
When analysing question 17 from the survey of purchase satisfaction and question 18 of overall purchase experience it is possible to see a clear relationship between the two areas.
When consumers are satisfied they have a good purchase experience and in contrast, when a low level of satisfaction is felt an unsatisfactory purchase experience is apparent.
Summary of Key Findings
- Most people stated the value of the pound was their major influence into purchasing a property in Spain.
- The majority of respondents purchased their property from a UK based estate agent.
- The underlying reason for the purchase of Spanish property was as a holiday home.
- The major source of information was friends and family.
- The main source of advice was from estate agents.
- “Post family” and “empty nesters” were the main purchasers of properties in Spain.
- Most respondents who were satisfied with their purchase had sought advice and conducted an information search. When no searches were performed, which was rare, the consumer was unsatisfied with the purchase.
Discussion
From the sample surveyed (n=101), the major factor influencing respondents into purchasing a property in Spain was the value of the pound. This is referred to as an influencer (Wilkie 1994). Only three respondents stated that nothing influenced them into buying a property in Spain.
According to Foxall and Goldsmith (1998) this is the point at which the development and perception of a want or need occurs, Wilkie (1994) refers to this stage as the recognition of a problem (see section 2.3). The results of this question represent the start of a decision process, consumers are now moving forward to a purchase decision.
Consumer behaviour theorists state that the next phase in the pre purchase process is the planning and the decision-making (Foxall and Goldsmith, 1998) or the search for information and evaluation of alternatives (Wilkie, 1994).
Pre Purchase Process
The question relating to “seeking advice” was used to gain an insight in to pre purchase activity, the question provided some interesting responses. There was a clear relationship between satisfaction with the whole purchase process and the method in which advice was sought. This would begin to support the original hypothesis that “when consumers participate in searching for information and gain advice they will have a satisfactory purchase process”.
Objective four of the research was to ascertain from whom consumers sought advice. The results revealed that the majority of respondents used estates agents. Generally, these consumers had a good purchase experience. For the purpose of this study estate agents were classified as ‘professionals’, along with solicitors. Respondents who used a solicitor to gain advice followed the same pattern as those using estate agents in stating that they had a good purchase experience. Claxton, Fry and Portis (1974) refer to these respondents as “store intense shoppers”, who rely on store or service provider consultations (these being estate agents or solicitors) to learn about the purchasing of property abroad.
Of the respondents who used ‘non-professional’ advice (friends and family), the majority stated they had a good purchase experience. It is, however, impossible to ascertain from the research questionnaire whether the friends or family who gave advice had themselves sought advice previously from professionals and then passed this knowledge on. It also has to be recognised that the friends or family who were used to gain advice from, may or may not have had personal experience in purchasing property abroad. Claxton, Fry and Portis (1974) refer to these types of consumers as personal advice seekers, who rely heavily on the advice and opinion of friends and family members.
Seven respondents stated that they sought no advice from any source, these respondents generally had a poor purchase experience. These consumers may not have sought advice because they already had knowledge of purchasing properties abroad. Due to timing constraints, it was not within the scope of this research to explore respondents’ prior knowledge of property purchase.
Consumers were asked their underlying reasons for purchasing a property in Spain, with the aim of linking this to the type of information source they used. 46% of the sample purchased their property as a holiday home, followed by 22% who purchased as an investment. The majority of people purchasing for a holiday home used an estate agent to gain advice, those who purchased as an investment mainly used solicitors, which shows that respondents who purchased a property as a holiday home classified the purchase as “buying a house”, therefore employed the service of an estate agent, those who purchased it as an investment classified the purchase as a "legal venture”, therefore sought legal advice. Surprisingly, of the respondents who purchased a property to rent out, the majority sought advice from family members, rather than seeking legal advice.
Information Search
Consumers were asked to consider how they gained information on the purchase of property abroad. This question is similar to the one about seeking advice, but its intention was to go one-step further, to establish whether consumers actually searched for their own information, rather than relying on what they were told when seeking advice. Consumers were asked if they deliberately used an information source (e.g. intentionally purchased a book to acquire information) and if they used any information source subconsciously (e.g. unintentionally watched a TV programme that contained information relating to the purchase of property abroad).
Almost all of the respondents participated in some form of an information search. Respondents gather information to evaluate mentally the options that are available to them (Wilkie, 1994). The majority of respondents deliberately used friends or family to acquire information, these consumers can be categorised as “personal advice seekers”. Many respondents also used advertisements, these can be typed as “objective shoppers” these are people who do not use any personal sources of gathering information but make use of objective sources, such as books, magazines and newspaper articles and advertisements (Claxton, Fry and Portis, 1974).
When this question was further analysed in respect of male and female participants, it was found that in general males appeared more reluctant to gather information, Wilkie (1994) refers to these respondents as “impulse purchasers” where no deliberate external information search is undertaken. Instead, the search is internal and brief. In contrast, all females participated in some form of external information search. This finding is largely supported by Horner and Swarebrooke (1999) who stated that females (of a retiring age), generally participate more than males in active searches for information and seek advice relating to items they are purchasing. This frequently results in females having a satisfactory purchase experience and one that would be repeated.
Appendix XIII shows consumers’ subconscious means of gaining information. TV shows were ranked the highest followed by radio broadcasts. This proves that consumers mainly gain advice subconsciously through broadcast type of outlets, rather than through objective sources such as magazines. This is a concept that could be utilised by marketers to subliminally pass their message and information on to consumers.
Consumers were asked to evaluate the efficiency of the information that companies provided them with. When organisations supplied “good” information consumers were satisfied with the purchase. When a “poor” level of information was provided, consumers were not satisfied. This result adds supplementary support for the hypothesis of effective information searches.
The age category of 29-39 year olds participated the least in information searches. 51-61 and 62-72 year olds (who were mainly female) participated the most, which supports the hypothesis that “females of retiring age will partake in an information search more than any other type of respondent”. The results of this question also support the theories of Solomon, et al. (2002) and Wilkie, (1994) who stated that a consumer might explicitly search the market place for specific information after a need or want has been recognised. “Some consumers, especially veteran female shoppers, enjoy hunting for information and keeping track of developments, which ultimately results in them having a pleasant purchase experience” (Solomon, et al. 2002 and Wilkie, 1994).
It can be broadly stated, that the respondents who sought advice (93% of the sample) and those that deliberately gathered information (97%) are high information searchers, who use available information and advice sources, probably consider several alternatives before purchasing (although this can not be substantiated from this research) and feel that the information they gain helps them in their purchase decision. On the contrary, the respondents that sought no advice (7%) and those that deliberately gathered no information (3%) are low information searchers, who consult few, or no sources of information (people or media), seek no advice, and probably spend little time deciding on the purchase therefore have a poor purchase experience.
The results reveal that the higher information searchers felt more satisfied with their purchase and the majority rated the experience as good. Since the respondent will have to live with the result of the property purchase for a long time, the benefits of a good purchase are high, and risks of a bad purchase are also high (Belk, 1990). Table 5, which was proposed by Wilkie (1994) illustrates the factors likely to affect external information search, the “high search levels” column strongly reflects the results of this study that consumers participate in information searches because of the high perceived benefits from search, the results of this study support this as, generally those who participated in an information search had a good purchase experience.
The findings of the pre purchase process largely support elements of the models proposed by Andreasan, of complex customer decisions illustrated in figure 1, the Nicosia model of consumer behaviour, shown in figure 2 and the model of buyer behaviour by Howard-Sheth in figure 3. All of which stated that consumers participate in information searches when purchasing products, which ultimately result in purchase attitudes and satisfaction levels.
Of the sample that was surveyed 58% stated that they felt a moderate risk when buying their property abroad. Only one respondent from the sample felt no risk at all. Males felt more risk than females, possibly due to the lower degree of information search. The results of this question were surprising. Table 5 stated that when a product has a high price, consumers feel a high level of risk.
Purchase Process
Foxall and Goldsmith (1998) stated that the “subsequent stage to the information search is the purchase process”.
It is important to establish what purchase strategy, or rules consumers followed when purchasing their property in Spain. Half of the sample stated they choose the company they used because they were “aware of the organisation”. This follows the “brand awareness” rule. The vast majority of these respondents were female and felt quite satisfied with their purchase. The second most adhered to rule was the “recommendation” rule, with 24% of respondents following this, most of these being “quite satisfied”. The next ranked rule was the “best value” rule with 21% of the sample following it, consumers that followed this rule were in general not satisfied. Wilkie (1994) states that “you get what you pay for!”. Therefore, best value does not denote best quality.
The price of a property can be viewed as an “extrinsic” or “external cue” that helps consumers to judge the quality of the property itself. The results of this study reveal that low price or “value deals” being offered on foreign property point in the direction of low quality. In many cases, consumers are not entirely confident about what prices to expect and thus should participate in external information searches and seek advice for an indication of satisfactory pricing and quality. Of the respondents that used the “best value” rule, 81% were male.
The fourth most favoured rule was the “attribute rule”. The results of this question show that consumers would rather use a company they feel they can trust, either through recommendation or because they are aware of the company, rather than using a company that offers properties at a reduced rate or as part of a deal. These results are probably due to the level of risk and high investment that is involved in the purchasing of property abroad. Consumers feel more confident using a name they trust when participating in high investment purchases.
Post Purchase Process
The post purchase process involves an evaluation of the purchase and development of future decision processes. If a consumer were unsatisfied with the purchase, they would be inclined to follow a different purchase process the next time they purchase a similar product (Solomon, et al. 2002 and Evans, 1996).
Overall, most respondents were “quite satisfied” with the purchase of their property and rated the experience as good. This signifies that these consumers would probably follow the a similar decision strategy and pre purchase process again, should they endeavour to purchase another property in abroad, although appendix XII reveals that almost all of the consumers who stated they would change their purchase process stated they would not use a Spanish agent again due to communication problems.
Very few people were very satisfied or rated the experience as very good, this is likely to be because of the stress that is involved in a high risk purchase, it would also be hard for a consumer to say they found it very satisfying parting with a large sum of money. 19% of the sample were either, not satisfied or very unsatisfied, this represents a bad purchase experience, and one that would not be repeated using the same methods.
Consumer Behaviour Models
The model proposed by Andreason (1965), illustrated in figure 1, recognised the importance of information in the consumer decision-making process and emphasised the importance of consumer attitude, this was reflected in this study by the consumers willingness to partake in an external search for information and to seek advice. This research has added supplementary information to Andreasons’ model in the fact that the stages proposed in figure 1 result in purchase experiences and satisfaction levels.
Nicosia proposed a model that concentrated on the buying decision for a new product (illustrated in figure 2). The first stage of the model concentrated on the marketers’ attempts to communicate with the consumer and the consumer’s predisposition to act in a certain way. The scope of this research did not allow for the exploration of marketers’ communication methods. However, the second stage of the model involved the consumer in a search evaluation process, which is influenced by attitudes. This follows a similar process to the Andreason model but it allowsed the consumer to evaluate the process. This study enabled consumers to appraise the methods in the way they gathered information, by asking them if they felt the information helped to make a “better purchase decision”. The majority of respondents partially agreed that the information they gathered help them in their purchase decision.
Consumer Profile
The life stage of 51-61 years old was predominantly the major Spanish property purchaser. This category is referred to as the “post family” group whose spending priorities have possibly changed from the purchasing of durable appliances and goods to leisure and retirement products. Hence, this group will not only have the time, but the financial means to purchase a holiday home abroad. They have lower commitments coupled with a higher PDI.
Conclusion
The whole process of foreign property purchase is little researched. By focusing on certain areas of consumer behaviour this report has sought to elucidate several aspects of the consumer decision-making process when purchasing properties in Spain, namely information search, reason for property purchase, method of purchase and satisfaction levels.
The study undertaken has been a success in achieving its objectives and in terms of showing support for the stated hypothesis that, “consumers that participate in active searches for information and seek advice feel more satisfied with the whole purchase experience of buying a property in Spain”.
Estate agents were trusted by consumers and generally, when used presented positive outcomes. However, there is evidence from the sample that Spanish estate agents must improve their sale strategies in order to remain successful and competitive. British estate agents have the opportunity to exploit the weakness of the Spanish counterparts through using efficient communication channels.
The study has also revealed that consumers are purchasing property in Spain principally as holiday homes. This indicates that economic growth (which British citizens have been experiencing) produces higher standards of living, increased consumer confidence, and increased levels of PDI that could be spent on holidays and holiday homes (Mintel, 2000).
The sustained strength of the pound has been the dominant factor in influencing consumers to purchase a property in Spain. Between January 1999 and April 2000, the value of the pound rose by 20% against the Euro (Mintel, 2000).
When consumers seek advice from estate agents, friends or family, use TV shows and friends or family as a means of an external information search and demand a high level of information from the company in which they are purchasing from the overall purchase experience should be a satisfactory one.
It is concluded that females are generally more satisfied than males of the purchase process (see appendix XI), therefore, male property purchasers must endeavour to conduct more efficient information searches and seek advice that is more reliable in order to have a better purchase experience.
Consumers need to be aware of who and what they are dealing with. Using a reputable company, with an excellent company profile will go some way to ensure a satisfactory purchase experience.
Recommendations and Further Research
In order to satisfy consumer needs it is recommended that British estate agents team up with Spanish experts to match clients with the ideal properties. British agents should deal with companies that are meticulously familiar with Spanish law and who are able to match the client with a selection of suitable properties.
Once a client has recognised their “want” for a Spanish property and has expressed their interest to the British company, they will contact their Spanish counter parts and will then monitor the whole process to ensure the client is satisfied with the treatment they are receiving from the pre purchase process through to the post purchase phase. It is a difficult area for estate agents to ensure that consumers will be happy with their purchase, with effective communication, monitoring, and the reduction in ‘hard and quick sale’ strategies the situation should be made easier, for both purchaser and vendor. Consumers need a company that will advice them properly and tell them they must conduct their own external information searches in order to be conversant with the subject area.
This study has revealed that a vast number of consumers are attending and purchasing properties from foreign exhibitions (see appendix XIV). This area provides scope for further marketing research in order to match company image with consumer profiles and typologies.
It may also prove useful to conduct similar research across different countries to provide a basis for comparative analysis of foreign property purchase.
References
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Appendices
Appendix I Economic Factors
Figure 17.
Source: Solomon, et al. 2002
Appendix II Purchase ‘Horror Stories’
Question posed by Rupert Bates of BBC Radio 4.
“How much of a risk do you think people are taking when purchasing in Spain?”
Answer given by Clive Dawson of
“People go over there on holiday, they see a potential bargain and they can get their fingers burnt. They need to go over there with their eyes open, if they follow normal procedures and seek advice it can be as straight foreword as buying in the UK.”
When Things Go Wrong
Land Ownership
“We hadn’t actually bought what we thought we bought. A fair chunk of the bottom of our garden was sitting on land that did not belong to us at all, in-fact it belonged to the town hall. To add salt to the wound half of our swimming pool was essentially not on our land at all.
To sort it out has been expensive. The cost has added 10% to the purchase price.
The disaster happened because our legal advisor failed to carry out a proper land search. We have thought about suing the advisor for negligence but have been warned off. It is virtually unheard of for anyone to be successful in such actions in Spain.
Debts Deserve a Warning of Their Own
If the person selling the property has missed any mortgage payment, council rates or even parking fines then those debts pass on to the new owner. In Spain, debt does not move with the person, they stay with the property.
Exchange
A consumer from London purchased a previously owned town house in Spain. The house had not been occupied for ten years. The purchaser agreed to pay over £300,000 for it, but then, at the last minute the seller demanded they pay £85,000 of it in cash. Like many others who buy previously owned homes in Spain, the purchaser was being drawn into making a ‘black money payment’. This is where the person selling the house demands cash in part payment to avoid declaring its true value to the Spanish authorities and to evade paying capital gains tax. The purchaser felt uncomfortable about doing this but also felt that he could not back out. He had paid out £3000 in lawyer’s costs plus the flights back and forth. He was left with no choice, either pay the money or lose the property. Not even a bankers draft would do, it had to be notes and coins.
‘The hand over was actually quiet a scary moment. You do hear stories of people taking the ‘black money’ out of the bank and then walking out with the briefcase and someone will snatch it away from you, and of course, you have no recalls’.
The purchaser did not know it at the time, but purchasing a house like this was breaking the law. Spanish law state ‘when those involved in buying and selling a house undeclared its value by more than £65,000 will be fined and can be sent to prison for up to four years.
Land Snatch
A couple purchased a house in the hills of Northern Spain. All was fine until one year after they moved in they noticed people measuring parts of their property, they went along to the town hall and saw that there were plans already prepared to build thousands of houses on the mountainside and they would have to pay thousands of euros towards the project. This happened because there is a Spanish law that is being used by unscrupulous developers to get their hands on huge amounts of land, irrespective of the fact that there are people already living there legitimately. It is the existing homeowners who are being asked to pay thousands of euros towards building new roads, drainage and lighting for a huge new development of homes. If they do not pay, they must give up some of their land for a rock bottom price and if that does not raise enough to cover the bill then they will have to face giving up all their land and even their home for auction. Those caught up in the abuse feel it is so unjust they are lobbying the Spanish government and the EU to have the law changed or revoked.
Source: Bates, 2003
Radio 4 ‘Spanish Property Debate’. July 2003
Appendix III Spanish Property Questionnaire
Appendix IV Questionnaire Cover Letter
Appendix V Forum Advertisement
Attention Spanish Property Owners
I am a student studying for a degree in Marketing. As part of a research thesis, I am investigating the purchase of property in Spain by British citizens.
The aim of the research is to link current theories on Consumer Behaviour to the purchase of foreign property.
If you can be of any assistance to this project, please contact me before the 1st February 2004 by email on:
Many thanks.
Appendix VI Approved Ethics Forms
Appendix VII Data Analysis
Appendix VIII Data Analysis Formulae
Appendix IX Cross Tabulated Data
Appendix X Cross Tabulated Data with Formulae
Appendix XI Satisfaction Levels
Figure 18. The Satisfaction Levels of Each Gender (n=101)
Appendix XII Repeat Purchase
Figure 19. An open-ended question asking “If Consumers Could Repeat Their Purchase Process What Would They Change?” (n=101)
Appendix XIII Subconscious Information Search
Figure 20. Results of Consumers Subconscious Information Search (n=101)
Appendix XIV Property Exhibition Attendance
Figure 21. Attendance to Foreign Property Exhibitions (n=101)
Glossary
Categorical Data – Data whose values cannot be measured numerically but can either be classified into sets or placed in rank order.
Chi Square Test – Statistical test to determine the likelihood that two categorical data variables are associated.
Consumer – the person who actually uses or consumes a product or service
Consumer Behaviour – The study of which products people buy, why they buy these products and how they make their purchasing decisions.
Consumer Confidence – The state of mind of consumers relative to their optimism or pessimism about economic decisions.
Consumer Satisfaction – A positive emotional response to an evaluation of a product or service consumption experience.
Decision Rules – Strategies that consumers use to provide guidance while making decisions.
Deductive Approach – Research approach involving the testing of a theoretical proposition by the employment of a research strategy specifically designed for the purpose of testing it.
Growth Market – A market where demand is growing significantly.
Heuristics – The mental rules of thumb that lead to a decision.
High Involvement – Requires that high levels of energy are aroused within the consumer and that this energy is directed toward a particular consumer activity, such as thinking about a purchase more strongly.
Impulse Buying – A process that occurs when the consumer experiences a sudden urge to purchase an item.
Information Search – The process whereby a consumer searches for appropriate information to make a reasonable decision.
Long Term Memory – The system that allows us to retain information for a long period of time.
Model – A representation that seeks to illustrate or explain a phenomenon.
Personal Disposable Income – The money in which remains once all expenditure has been subtracted from the income of an individual.
Purchase Decision – The process by which an individual decides whether or not to buy a particular type of product or service and then which specific brand to purchase.
Qualitative Research – Research concerned with customer’s attitudes and opinions which cannot be quantified.
Quantitative Research – Research concerned with statistical data which can be measured and expressed numerically.
Research Ethics – The appropriateness of the researchers behaviour in relation to the rights of those who become the subject of a research project.
Sample – Subgroup or part of a larger population.
Spearman’s Rank Correlation Coefficient – Statistical test that assesses the strength of the relationship between two ranked data variables.
Want – The particular form of consumption chosen to satisfy a need.