A Strategic Household Purchase: Consumer House Buying Behavior Mateja Kos Koklic Irena Vida The aim of this study is to examine consumer house-buying behavior from the consumers' perspective. In view of the existing literature ex- ploring consumer decision making, the purpose of this research was threefold: (a) to propose a conceptual model of consumer decision making within the frame of consumer behavior; (b) to gain knowl- edge of factors impacting this process from the empirical standpoint with the focus on prefabricated house purchases; and (c) to offer im- plications for beneficial purchases of prefabricated houses. The results of our in-depth interviews with recent owners and potential buyers of a custom-made prefabricated house suggest that cognitive and ratio- nal factors do not offer sufficient explanation of consumer behavior in the case of a high-involvement product such as a house. In addition to the idiosyncratic characteristics of the customer, his/her personal situ- ation and environmental factors, the role of feelings, experience, sub- conscious factors, needs and goals should to be taken into account to better understand this kind of decision making. Key Words: consumer decision-making, strategic purchase, prefabricated house, qualitative research jEL Classification: M30, M31 Introduction The field of consumer research is mostly focused on two major ques- tions: how consumers go about making decisions (descriptive theories), and how decisions should be made (normative theories) (Edwards and Fasolo 2001). Research directives, aimed at researching how consumers should decide, have been emerging lately. Several critiques have ap- peared against the existing literature which focuses almost exclusively on the marketing perspective and neglects consumers and their difficulties in decision making (Bazerman 2001; Gronhaug, Kleppe, and Haukedal Mateja Kos KokliC is an Assistant at the Faculty of Economics, University of Ljubljana, Slovenia. Irena Vida is a Professor at the Faculty of Economics, University ofLjubljana, Slovenia. Managing Global Transitions 7 (1): 75-96 1987). Brief and Bazerman (2003,187) developed the idea that 'creating true value for the consumer and, thus, adding value to society is one of the most obvious ways business organizations make the world a better place'. This notion of a consumer-focused approach is also supported by Bargh (2002), who believes consumer research should balance studies of how to influence consumers with studies of how consumers could defend themselves against and control such influences. One of the most influential areas within consumer behavior is con- sumer decision - making (Bargh 2002; Simonson et al. 2001; Bettman, Luce, and Payne 1998). At the conceptual level, various consumer deci- sion-making models have been proposed in the literature in recent decades. However, many researchers believe that a specific, situation- and product-oriented model is needed in studying purchasing (Eras- musm, Boshoff, and Rousseau 2001). Apart from this, investigating deci- sions, that can change lives of consumers, such as car or house purchase, can make an essential contribution to consumer behavior knowledge (Wells 1993). According to Erasmus, Boshoff, and Rousseau (2001), an exploratory approach with the intention to unfold the truth may pro- vide opportunities for an understanding of the complexity of specific decision-making circumstances, such as first-time house buying. In view of the existing literature exploring consumer decision mak- ing when purchasing high-involvement and emotionally charged prod- ucts, the purpose of this research was threefold: (a) to develop a con- ceptual model of decision - making for a prefabricated house purchase; (b) to gain knowledge of factors impacting this process from the em- pirical standpoint; and (c) to offer implications for beneficial strategic household purchases. Strategic decision making refers to the process of decision making with long-term commitments of resources and affect- ing the budget available for other goods and services (Gronhaug, Kleppe, and Haukedal 1987,242). Based on the existing literature, we assume that this process involves a certain amount of perceived risk, especially since it represents large financial obligations (Gibler and Nelson 2003; Mitchell 1999; Gronhaug, Kleppe, and Haukedal 1987; Beatty and Smith 1987). Our goal is also to offer implications for consumers, real estate marketers and consumer researchers. The specific product selected in this study was a prefabricated house. The house is the most important durable good in the household and requires high involvement as well as complex deci- sion making. Some similarities can be drawn with other durable prod- ucts, particularly cars. Hence, the empirical literature in this area and the real estate literature serve as a basis for conceptual and empirical work in this study. Theoretical Background Consumer behavior has been an important research topic for decades. A review of existing theoretical efforts indicates a clear shift from rational to psychological and social decision factors. However, even the recent models have not managed to embrace all the knowledge in the field of consumer behavior: subconscious processes, the role of needs, goals and emotions (Bargh 2002). Apart from leaving out these important find- ings the existing literature also lacks studies of decisions that consumers are most concerned about, termed 'big' or 'strategic decisions' (Bazer- man 2001,500; Gronhaug, Kleppe, and Haukedal 1987, 242). Specifically, Bazerman (2001) urges researchers to further explore the most impor- tant and challenging consumer decisions, which include house and car purchases, dealing with a building contractor etc. As mentioned in the introduction, strategic decision making refers to the process of decision making when buying strategically important goods. The following characteristics define the strategic importance of a purchase: high involvement in the process; long-term commitment of resources; truncated budget available for other goods and services. Strategic purchases imply several important categories of decisions, in- cluding: • decisions with regard to allocation of the household budget, namely, how the household's economic resources are influenced, e. g. for travelling, visits to restaurants etc.; • categorization of alternatives means choosing either from various product groups (e. g. apartments or houses) or defining a more nar- row product category (e. g. houses of a given size); • decision making within the defined product category takes place once the product group is specified. The purchase of a house may be considered as a good example of such a purchase decision. Strategic decisions are being made in a range of fields, including when consumers decide about health issues (Henry 2001) or financial investments (Henry 2005). Considering the focus of this study on consumer behavior with re- spect to a very specific product, i. e., a prefabricated house, empirical research in the area of durable goods needs to be examined to support existing theoretical knowledge. Empirical research conducted in the field of durable goods purchase behavior can be useful for at least two rea- sons: (a) the house is the most important durable good in the household (Hempel and Punj 1999); and (b) many studies of consumer decision making for a car or household appliances indicate that there are sim- ilarities among the buying processes related to different durable goods (Punj 1987). The majority of literature researching individual and orga- nizational customers is dealing with buying processes of durables (e. g. Bayus 1991; Cripps and Meyer 1994; Grewal, Mehta and Kardes 2004; Hauser and Urban 1986; McQuinston 1989; Punj and Brookes 2002). Compared to buying convenience products, consumers perceive these kinds of 'large ticket' purchases as riskier, sometimes even 'traumatic' (Bauer 1960; Chaudhuri 2001; Mitchell 1999). Outcomes of such pur- chases are unknown in advance and some of them are likely to be un- pleasant. A common attribute of durables is that the buying decision is complex, especially when the price is perceived as high. The strongest parallel can be made with a car purchase, particularly as the car is the second most important durable acquisition in the house- hold. Buying a house or a car highly involves the consumer, as this decision binds their economic resources in the long run (Arndt 1976; Gronhaug, Kleppe, and Haukedal 1987; Grewal, Mehta and Kardes 2004; Rosenthal 1997). Both product categories offer a rich variety of price and quality, are complex and relatively well known to consumers (Brucks, Zeinthaml, and Naylor 2000; Bayus and Carlstrom 1990). Similarly, the buying decision for real estate as a subgroup of durables is also com- plex and demands high involvement (Gibler and Nelson 2003). In most cases, consumers consider several possibilities, compare them and ulti- mately make a selection (Bayus and Carlstrom 1990). In comparison to frequently purchased items, learning on a basis of trial-error is uncom- mon when buying expensive, complex products (Bazerman 2001). Prior to model building efforts, however, characteristics of the prod- uct in question need to be identified. A prefabricated house differs from other fixed property (i. e., a traditional built house) in one major char- acteristic - it is movable up to the point when it is set up in a selected location. Other attributes of this product are that its components are prepared in advance in specialized companies, and put together on the construction site at a later time. Manufacturers offer a variety of pre- fabricated houses. The house typically consists of standardized prefab- ricated components which are later adapted to customer specification. With the support of an architect, customers can custom design their house by changing the layout of the house, selecting the materials, size of the house, etc. (bdf 2004). Development of a Conceptual Model In this study, a conceptual model of consumer behavior and the buying process was developed for the means of conducting exploratory research in the later stages. Our aim is to propose a model that can enhance our understanding of consumers from their point of view. Recent findings in consumer behavior research conducted by psychol- ogists and sociologists suggest that the following perspectives be ac- knowledged in the development of new conceptual consumer buying behavior models (Hansen 2005; Erasmus, Boshoff, and Rousseau 2001; Loewenstein 2001; Peter and Olson 2002): • the role of subconscious factors should be taken into consideration; • the context and the product should define the decision-making re- search; • alternative decision-making strategies should be allowed; • types of heuristics used by consumers should be explained; • the role of feelings affecting the decision-making process should be considered, and • the interplay of consumer's cognitive and affective skills should be included. Based on these recommendations, Peter and Olson's (2002) cognitive processing model appears to be the most appropriate theoretical basis for consumer decision making and behavior with respect to the prod- uct investigated in this research. These authors suggest that the 'con- sumer decision-making process is a goal-directed, problem-solving pro- cess' (Peter and Olson 2002,168). The major advantage of this model is that it accounts for the weaknesses of previous models by considering cognitive, affective as well as environmental factors. Nevertheless, this model is of a general nature, accounting for neither the specific char- acteristics of the product in question nor the context of the purchase situation. Against these theoretical and empirical backgrounds, a conceptual model of the buying process is proposed in figure 1. Its components consist of the cognitive processing model by Peter and Olson (2002) set within the general consumer behavior model (Hawkins, Best, and Coney Environmental stimulus External factors • Culture • Subculture —* • Reference groups • Family • Social class • Demography Lifestyle Needs self-concept \ Prefer- (extended ences self) Desires Internal factors • Involvement • Feelings —* • Experience • Knowledge • Motivation • Personality figure 1 A conceptual model of the buying process 2003). The latter can be described as external and internal factors con- tributing to the formulation of self-concept and lifestyle, which affect the consumer decision process. During this process, experiences and ac- quisitions update the original external and internal influences. The con- ceptual model is discussed in the next paragraphs. While the buyer believes that the characteristics of a certain product should fulfill his/her goals and needs, the choice of a product will also reflect a person's self-concept and his/her lifestyle. In figure 1, it can be seen that lifestyle and self-concept influence goals through needs, desires and preferences, and the goals define the decision making. As indicated in figure 1, the antecedents of the purchasing process in- clude two groups of determinants which influence a buyer's lifestyle and his/her self-concept, which through his/her needs, desires, preferences, and goals determine buying behavior pictured in the right box of the model in figure 1. The group of internal factors includes the level of an individual's motivation, involvement, his/her personality, feelings, atti- tudes, perception, knowledge, learning and memory. The external fac- tors indirectly impacting the buying process account for social factors such as characteristics of the culture of the buyer, an individual's social class and subculture, household characteristics of the buyer, his/her ref- erence groups and demographic factors. The model suggests that an individual's lifestyle and the meaning a person wants to acquire by owning a product influence his/her needs and desires concerning this product. In the case of buying a prefabri- cated house, the choice of the materials and layout directly reflects the lifestyle of a household unit or a family. It is believed that in the early stage of the buying process, decision makers usually do not have suffi- cient information. Therefore, they continuously gather new information and adapt their desires and goals accordingly. The ultimate goal is to own the product. Since the buyer's involvement is high, the ultimate goal is di- vided into a hierarchy of sub goals which lead the consumer to the end goal. According to Belk (1988), a house presents a strong source of per- sonal identity. The extended self as part of the self-concept plays a major role. Hence, we posit that a custom-made house will reflect its owners' individuality and their personal style The source of information related to the product purchase can be internal (memory) or external (environment); in both cases, informa- tion can be acquired by coincidental find and/or intentional search. The search is influenced by several factors divided into three categories: situ- ational determinants, product determinants and consumer characteris- tics. Also, an interesting question to be explored empirically is how con- sumer knowledge about available alternatives in the market and about product criteria is created. For a complicated product such as a house, the information stemming solely from a buyer's memory is generally in- adequate (Gibler and Nelson 2003). Factors such as experience, market- ing communication, distribution and individual goals all influence the evoked set formation. The choice of criteria for evaluation evolves in a similar fashion. Factors such as a buyer's specific goals, his/her mo- tivation, involvement, product knowledge and similarities among alter- natives may play a role. Context specific criteria (for a prefabricated custom-made house) include objective physical properties specified by a manufacturer, e. g., quality, warranty, isolation, price per square meter. Other features such as the house size, its ground plan and location are not decisive criteria for a custom-made prefabricated house as they are defined by the buyer. As indicated in the right box in figure 1, the stages of the buying pro- cess are as follows: attention, comprehension, evaluation, decision mak- ing, behavior and usage. The goal 'to own a product' leads the consumer to a conscious interpretation of information linked to this goal. New in- formation is interpreted and linked to existing knowledge. As a result, new attitudes towards the alternatives are formed. The buyer usually does not get to know all the alternatives simultaneously; rather, new alterna- tives are gradually added. Therefore, the customer experiences the pro- cess of interpretation and integration over and over again. The evalua- tion takes place for both the new and the known alternatives. As far as the specific product in the study is concerned, we dealt with prefabricated house purchase, since this presents a good example of strategic purchase or decision making. There is a higher level of com- plexity in this process. This is usually associated with high involvement on the buyer's side, and high perceived risk, therefore the decision pro- cess is more deliberative and the external information search is more ex- tensive (Beatty and Smith 1987). A custom-made prefabricated house is a product not bound to any specific location. Hence, the location itself is not a consequence of the purchase, although it may notably influence the choice of criteria in the buying process. The decision making process will also depend upon the situation, available alternatives in the market, a buyer's motivation, his/her involvement and prior knowledge with the product (Hawkins, Best, and Coney 2003). In addition, product specifi- cation offered by the producer may be of major importance to the po- tential buyer. Along with the objective physical properties of the prod- uct, the level of service offered by the company as well as adaptability of the basic house design offered may play a role in consumer decision making. Methodology and Data The second stage of this research involved exploratory research of the conceptual model of the buying behavior with respect to a custom made prefabricated house. A number of factors prompted us to uti- lize qualitative research methods, i. e., in-depth personal interviews with consumers. First, the qualitative approach enables researchers to gain a deeper understanding of consumer behavior in the context of complex table 1 Demographic data for the selected sample Owners Potential buyers (1) su1 su2 su3 su4 su5 su6 (2) - - 6 years 1 month; 2.5 years 5 years 14 years (3) 840-1260 840-1260 above 1670 1260-1670 840-1260 above 1670 (4) F 66 21 35 30 36 43 M 70 28 43 35 37 43 (5) f Graduate Highschool Graduate Graduate Highschool Graduate m Graduate Highschool Graduate Graduate Highschool Graduate (6) Bled Krško Brezovica Ljubljana Ljubljana Celje notes Row headings are as follows: (1) sample unit, (2) age of children, (3) monthly household income (in eur), (4) age, (5) education, (6) settlement. and empirically unexplored product purchase. Second, due to the nature of the product, the buying process is rather complicated and requires high involvement on the part of a consumer. Third, results of a quali- tative study can yield useful directions for further quantitative research (Kumar et al 1999; McDaniel and Gates 1998; Miles and Huberman 1994). As our conceptual model suggests, a variety of different factors influence the process, which gives the selected methodology additional relevance. In this research, six semi-structured in-depth interviews were carried out; three interviews with recent owners of a custom-made prefabricated house and another three interviews with potential buyers of the same product. Consequently, we avoided biasing toward house-ownership on the one hand, and on the other hand we collected data from highly in- volved potential buyers. Given the limited population of informants rela- tive to the specific objectives of this research, our sample was selected on a non-random basis. More specifically, we used a referral method, start- ing with a couple who were opinion leaders for prefabricated houses. First, an appointment was made with potential respondents by tele- phone. Subsequently, interviews were carried out in the participants' households. One or two decision makers in the household participated in the interview. Topics of discussion followed the established interview- ing protocol. The interviews lasted from 45 to 90 minutes and they were audio- taped. The sample was composed of households with 2 to 4 mem- bers from different areas of Slovenia. The basic characteristics of the re- spondents are presented in table 1. Data Analyses and Findings In the analytic stage of our research, we followed the procedure for ana- lyzing qualitative data by Miles and Huberman (1994). These guidelines enable investigators to produce compelling analytic conclusions and en- hance the internal validity of the study. The analyses involved three types of activities: data reduction, data display and conclusion drawing. The data reduction process began with compiling the literature review, de- veloping the conceptual framework for the study and setting up the pro- cedures for data collection (e. g., respondent selection, interview guide- lines). Audio tapes with interviews were transcribed and reviewed sev- eral times by the researchers. According to Berg (2007), content analysis is the most appropriate technique for analyzing interviews. The conclu- sion drawing was based on the cross-case (i. e., household) comparisons, reference to previously reviewed empirical studies and to the theoretical framework developed in this study. Examination ofpatterns, themes and regularities provided the basis for drawing conclusions. The results of our analyses confirm the notion that the house is a prod- uct closely related to the human self-concept. While the product has dif- ferent meanings to different people, a custom-made house carries a sub- jective message of its residents and presents a strong source of personal identity. This is consistent with the literature in the field (i. e., Belk 1988; Downs 1989). With the exception of a single sample unit, all respondents view the house as a part of their personality or the extended self. The house ownership enables them to express their personality and lifestyle. Relative to the house owners of the house, the sample group of poten- tial buyers of the house expressed a stronger desire for homeliness and warmth. In general, women and men perceived a house differently. While women 'feel' the house and relate to it on the emotional level, men tend to evaluate the house more on the rational and functional level. How- ever, both women and men believe that 'the feeling of wellness' in the house is an important choice criterion. Conceptually, we posited (figure 1) that lifestyle exerts a certain in- fluence upon buyers' needs and desires as well as upon indirect exter- nal and internal determinants of the buying process. The households included in this research proved to lead quite different lifestyles, and most of them wanted the custom-made house to reflect their lifestyles. Reasons behind the respondents' decision to buy/search for a custom- made house are similar across the sample units. Namely, the household members are intimately familiar with their desires and lifestyles which lead to their house design preferences. On the other hand, the manufac- turers/producers have little knowledge of this aspect of their individual customers' lives. In contrast to the owners, potential buyers emphasized the existence of a continuous tradeoff between their desires and needs in their decision making for the house. Table 2 provides an overview of the main common themes and quotes, reflecting each theme in a more detailed manner. Based on the empirical findings of this study, it is our contention that people want to have a house designed according to their ideal self- concept while taking into account realistic limitations. This result is con- sistent with Gibler and Nelson's (2003) position that people want a house to reflect their actual or ideal self-concept. We found that the ground plan and the choice of materials in the house directly indicate the ten- ant's lifestyle, either actual or ideal. Respondents mentioned various cir- cumstances as reasons for their home purchase; however, they all related this purchase to a higher quality of living. Our findings confirm that the buying process in the case of a custom- made prefabricated house is influenced by both internal and external factors. Along with previously discussed general determinants, factors frequently mentioned by our respondents were: marketing communica- tions in the housing market, other people's opinions, time pressure, and the seller's (manufacturers') behavior. By analyzing qualitative data gath- ered in this study, it appeared that most respondents form their attitudes toward the manufacturer/company at the moment when they contact the seller. Our interviews reveal that recommendations provided by friends or other house owners with experiences and information about the custom-made prefabricated house were very important. It seems that word-of-mouth recommendations might be even more important in a house buyer's information gathering and evaluation stages than the seller/company's behavior. Moreover, we found that the owners of the sample house played a major role in making potential buyers enthu- siastic. That is, they honestly shared their experience about living in a wooden prefabricated house, and the potential buyers see for themselves what it is like to live in such a house. Along with making a favorable first impression, the seller/company also needs to follow its customers after the purchase. Consistent with the literature suggesting that the external factors exert an important in- table 2 Common themes and quotes from the in-depth interviews Lifestyle, needs and desires, self-concept m5: 'Brand of prefabricated house and wood show your thinking, your attitude toward nature, environment. It depends on what type of person you are. With the house you want to show your personality, how you think, how you live.' m5: 'You slowly build the whole picture and when it is done, you know what you are looking for and what you want. If you decide too quickly, your "dream house" falls down like a castle in the air, because you find out that your needs are different, that the optimal house is different.' f6: 'I'm drawing the plan for our house by myself. I hope it's ideal. I've done my best and have tried to take into consideration as many factors as possible to make the plan ideal.' Attitude formation f1: 'We visited one company and a lady received us. I believe she had a terrible headache that day and completely ignored us. Her behavior was intolerable, there- fore we said to ourselves, let's go, they even don't want to sell houses here. One visit was enough.' External factors (word-of-mouth) f1: 'Our friend architect recommended us this house saying it has the best isolation and that we will be most satisfied with this one. And this is the reason we chose it.' m2: 'We have gathered most information from people who have already purchased house. Such people share information in the best way.' f3: 'A coworker recommended this house to my husband, and after we collected some information about the producer, we saw they are really good. I trusted this company because of the recommendation.' m4: 'What other people told us about their experience was the most valuable infor- mation for us. People who tell us their honest opinions, although they are not our close friends.' Internal factors (emotions) f1: 'A house is very emotional. People build a house with lots of emotions. It's not just about money and reason.' f3: 'Because the house is wooden, for us at the time an unknown material, we felt quite some fear. You get into this with some fear. But after we had visited several houses, we got the feeling that a wooden house is very pleasant.' m4: 'There is a lot of emotion involved in buying a house. Reason starts later. First there is emotion, and then you start with reason. But all the time the two parameters interact.' f4: 'I try to consider my emotions, I don't want to forget about them.' fluence, particularly for less experienced customers (Gibler and Nelson 2003), we also probed into the role of social factors in the respondents' buying process for the house. The influence of culture can be identified in the buyers' desire to own a custom-made house, i. e., based on their table 3 The main external factors, which influence sample units su1 SU2 su3 su4 su5 su6 • Reference • Family • Reference • Reference • Marketing • Reference groups • Marketing groups groups communi- groups •Time communi- • Time • Income cation • Family pressure cation pressure • Company's • Reference • Income • Company's • Reference • Company's behavior groups behavior groups behavior • Income • Income • Company's • Company's behavior behavior individualistic preferences. In their study, Gibler and Nelson (2003) sug- gested that the value placed on individualism as a part of culture is re- flected in the demand for customized homes. Table 3 summarizes the main external factors for each sample unit interviewed. As suggested by our conceptual model for the study (figure 1), the group of internal factors which mostly influences the decision/making process, includes an individual's motivation, involvement, personality, self-confidence, knowledge, affect, and prior experience. Findings of our empirical work seem to corroborate the notion that a custom-made house requires high involvement and strong motivation. This was re- flected in an intensive search for information about various produc- ers/sellers in the housing market. Our respondents actively engaged in information gathering, mostly because they found their existing knowl- edge insufficient. This stage was followed by comparing and evaluating identified alternatives of the product. In the buying process for a house, an individual's affect played an important role. This was reflected in the feelings aroused when imagining the house, meeting with company representatives, and when inspecting a sample house. This conclusion is consistent with Bargh's (2002) suggestion that researchers should fo- cus more attention on subconscious processes, needs, goals and affect. In comparison to existing house-owners, potential buyers much more strongly expressed their feelings with respect to their future house. Also, women emphasized their feelings more than men. Table 4 provides the main internal factors, which could be identified during the interviews. However, considering a house purchase is financially demanding for most buyers, cognition also plays an important role, particularly with respect to evaluation of its price and its functionality. High involvement is reflected in an intensive information search about different house pro- table 4 The main internal factors, which influence sample units sui su2 su3 su4 su5 su6 •Emotion -Emotion -Emotion -Emotion -Emotion -Emotion •Self- -Self- -Self- -Self- -Self- -Self- confidence confidence confidence confidence confidence confidence - Experience - Experience - Involvement - Experience - Experience - Experience - Involvement - Involvement - Involvement - Involvement - Prior knowledge - Involvement ducers. While most of our respondents had no previous experience or knowledge related to house purchase, they gradually gained sufficient self-confidence in making decisions on their own. Our conceptual model (figure 1) suggests that the consumer decision- making process is composed of several stages, strongly intertwined with each other. As our sample consisted of two groups, i. e., the potential buyers and the owners, the two groups experienced different stages. While the group of potential buyers only reached the stage of evalua- tion of the alternatives, the group of house owners was in the stage of having bought and using the house. Our findings suggest that the purchase criteria used by individual households include product characteristics or specific consequences of buying a certain alternative. Five respondents went through a cyclic pro- cess of improving already established criteria with additional new knowl- edge, gained from producers, building experts, and prefabricated house owners. The criteria used for choosing a house among the respondents in this study can be ranked as demonstrated in table 5 featuring the es- sential criteria for each individual sample unit and ranked based on their importance. The most commonly used criterion was that the house is custom-made. The second most often used selective criterion is com- pany's behavior, namely, how the representatives of the house producer communicated with the potential buyers. Two significant choice criteria with respect to a house as a product were also quality of the product and its price. What respondents mentioned several times was feeling confi- dent about the company. This means that potential buyers need to have trust in the company's process of production and delivery of their house. Taking into consideration the fact that different house producers offer different architectural solutions, four respondents also mentioned the importance of this characteristic. table 5 The most important criteria of individual sample units (su) for choosing a producer of a prefabricated house (ranked according to their importance) su1 su2 su3 su4 su5 su6 • Wooden • (3) Quality • Fast con- • (3) Price • Fast con- • Custom- house • Isolation struction • Quality struction made house • Prefabri- • Natural • Custom - • Warranty • Architec- • Quality of cated house materials made house • Architec- tural solu- materials • Isolation • (1) Custom- • Quality tural solu- tions • Technical • Construc- made house • Architec- tions • Quality suggestions tion • (4) Confi- tural solu- • Confidence • Isolation • (5) Archi- dence in the tions in the com- • Warranty tectural company • Biohouse pany • Company's solutions behavior • (2) Com- pany's be- havior notes Numbers in front of criteria present ranking: (1) as the most often used crite- rion, (2) as the second most often used criterion, etc. Decision making in the case of house buying is a complex process, composed of several minor processes. While respondents used different criteria for evaluating alternatives, no more than ten alternatives com- posed the consideration set of an individual household. Moreover, less than five alternatives were included in the final stages of respondents' decision making. Our results indicate that consumers use two approaches or principles when evaluating the alternatives, (a) gradual concentration and evalu- ation of separate alternatives, and (b) simultaneous evaluation of sev- eral alternatives. The first principle is much simpler to use as it only fo- cuses on one alternative at a time. This result is consistent with Loewen- stein's (2001) research, indicating that people have limited capabilities and knowledge, which in turn prompts them to simplify their informa- tion processing. The choice criteria mentioned earlier carry different meanings to dif- ferent decision makers. If a producer/company and its offering meet the most important criterion, it is considered in further stages - this is the evaluation principle called 'elimination by aspects'. Peter and Olson (2002) describe this mode of integration as a non-compensatory pro- cess whereby salient beliefs about positive and negative consequences do not balance or compensate for each other. This principle has been doc- umented in other empirical studies as well, e. g., choice of ground coffee (Fader and McAlister 1990), choice of road and rail freight (Young et al. 1982), choice of fictitious cars (Isen and Means 1983), career decisions (Gati 1986), and choice of washing machine (Lee and Geistfeld 1998). Af- ter forming a positive attitude toward a certain company (its offering) on the basis of previously formed criteria, the buyer forms a behavioral intention which leads either to a purchase or to a search for additional information/ideas. Finally, our analysis suggests that a house buyer's consideration of a specific manufacturer/company depends on two major factors, (a) infor- mation kept in memory, and (b) the word-of-mouth recommendations. Once the potential buyer actually buys the house, he/she experiences ei- ther satisfaction or dissatisfaction. This, in turn, creates grounds for rec- ommendations to other people. The results of this exploratory research with in-depth interviews can be graphically depicted by exposing those factors in the conceptual model, that could be explored more in detail in future studies (figure 2). Discussion and Implications In the previous sections of this paper, consumer house purchasing be- havior was analyzed from theoretical and empirical perspectives. Both of these provide a sound basis for a deeper understanding of the factors un- derlying the consumer buying process for a custom-made prefabricated house. The conceptual model of the buying process for a custom-made pre- fabricated house developed in this study consists of three main groups of variables: the buying process itself, the external and the internal factors indirectly impacting the buying process (through a buyer lifestyle and self concept constructs). The results of our empirical research confirm the notion that cognitive and rational factors alone do not offer a suffi- cient explanation of consumer behavior in the case of high-involvement products being purchased only a few times in a person's lifetime. In ad- dition to the idiosyncratic characteristics of the customer, his/her per- sonal situation and environmental factors, the role of feelings, experi- ence, subconscious factors, needs and goals should to be taken into ac- count when analyzing the buying process. Our empirical work suggests that the following evaluative criteria should be exposed as decisive in the evaluation stage of the buying process: that the house is custom-made, professionalism and reputation of the seller/company, quality, price, and architectural solutions. Along with the emotionally charged internal fac- Environmental stimulus External factors • Culture • Subculture • Reference groups • Family • Social class • Demography • Marketing communications • Time pressure • Company's behavior Internal factors • Involvement • Feelings • Experience • Knowledge • Motivation • Personality (Dis)satisfaction good/bad reference figure 2 Main factors in the conceptual model of the buying process tors, which carry heavy weight in initiating the purchase, other factors identified in our qualitative analysis include his/her experience (with the product and the seller) and his/her prior knowledge. Significant external factors impacting the buying process in our qualitative study included recommendations from from people's buyer trust, the seller/company's behavior and marketing communication in the housing market. The findings of this study offer implications for consumers who are making a strategic purchase, such as buying a house. Gronhaug, Kleppe, and Haukedal (1987) have warned that households may have serious problems in making wise strategic purchase decisions. Buying a house is a long-term decision from at least two aspects: it is financially bind- ing, and it is the sort of product 'consumed' in the long run. We suggest that the first significant step for consumers is to define the needs and goals they want to achieve by purchasing the house. The next step is to gain as much information about different available alternatives and cri- teria as possible. Importantly, external information search is a way to in- crease knowledge, and reduce perceptions of risk and uncertainty (Dowl- ing and Staelin 1994; McColl-Kennedy and Fetter 2001; Mitra, Reiss, and Capella 1999). This was also confirmed in our empirical study. Several studies have shown that consumers exhibit limited prepurchase infor- mation search, even for expensive durable goods (e. g. Beatty and Smith 1987; Ozanne, Brucks, and Grewal). Furthermore, our empirical research suggests that consumers have a very limited knowledge about houses and the buying process. We emphasize that gaining additional knowledge is of critical importance. Namely, knowledge should include both dimen- sions, knowledge by acquaintance (emotion) and by description (rea- son) (Chaudhuri 2000). Sources should vary from producers to exist- ing owners, sample house-owners, and independent expert evaluations (sample house owners and independent expert evaluations are the most valid sources). We suggest that consumers experience the house inde- pendently of its producer. The findings of this study indicate that experi- ence with company's representatives immensely contributes to consider- ation set formation and decision making. Nevertheless, potential buyers should give less emphasis to this factor, as quality of the house does not depend on the skills and behavior of the seller. Our observation is that a long-term view is required: the consumers will be living in the house far longer than the duration of their contact with the seller. Decisions should be made based on direct comparison of evaluated alternatives regarding previously discussed goals and needs in order to find the best match. Implications for real estate marketers can also be drawn from the stated findings. Understanding individual decision making can greatly contribute to improved explanations and predictions in the real estate context (Gibler and Nelson 2003). This knowledge enables the real es- tate companies to be able to better match their customers' desires with their offer. Consumers' needs for information have to be satisfied in the pre-purchase process. Given the high level of buyer involvement, hous- ing and real-estate companies should focus on building confidence and satisfaction in their potential and existing house owners. Our results also suggest that offering a pre-purchase experience with the house is desired as well. In this way intangibility, which is one of the antecedents of per- ceived risk, can be diminished (Laroche, Bergeron, and Goutaland 2003). Attitudes based on direct experience with the product are much firmer than those based on indirect experience (Berger 1992). An additional step companies could take is to provide information about 'product usage' in a brochure form for the buyers. In conclusion, awareness is required that consumers are not buying just a house, but a home. In view of the fact that the conceptual model developed in this study includes the role of external environmental factors, including the culture and market factors, it can be applied to cross-cultural markets. When the product-buyer relationship characteristics are similar, (i. e., high involve- ment in the process, motivation to search for information, and experi- ence), the model may be applied to any geographical area. It is believed that cross-cultural differences may lie primarily in the weights that buy- ers assign to individual factors impacting their buying process. Also, fur- ther qualitative and quantitative empirical efforts are required in order to gain knowledge of the interactive effects of various factors impacting the buying process in the case of a custom-made house, and to determine how buyers assign weights to various evaluative criteria in their decision- making process. 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