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Introduction

A house is a building for human habitation, especially one that is lived by a family or small

group of people. Of all the purchases made by human beings, perhaps purchasing a house is the

most expensive purchase people will ever make. The reason behind it is that for most of them

buying a house is a long-term affair, since in most cases it is financed by taking a loan, the

repayment of which usually spans for a major part of the working life.

With the ever increasing population, the dream to build and own an independent house in India is

turning out to be next to impossible, especially so in the urban areas. This has led to the

exponential growth of builders, who assure to deliver an apartment, complete with all the

amenities and luxuries, a common man can ever think of. An apartment is a self-contained

residential unit or section that occupies a part of a building. Apartments have become the latest

craze in residential property in India. The Indian metros, their suburbs are currently witnessing

frenzied development. The latest trend is self-contained townships wherein residential,

commercial and retail zones are all located within the same development area. Their allure lies in

the convenience that they offer in terms of safety and security and maintenance of utilities like

electricity and water. However, the real estate market in India is still evolving, and the market

poses a variety of challenges. One of the main challenges posed is the buying behaviour of the

customers who plan to own an apartment. Unlike other products, the buying behaviour of an

individual who plans to buy an apartment is entirely different and is complex since it involves

purchasing a high-involvement and emotionally charged product, a perfect home. In addition,

there are a variety of internal factors that govern his decision of buying a home which includes

motivation, perception, knowledge and learning, attitudes, self-concept, personality and lifestyle

and also external factors like reference groups, culture, sub-culture, social class, and family.

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While it is evident that the Indian real estate market is booming, there is very little research being

conducted in this area. A peek into the literature reinforces this fact. Most of the studies

conducted in the consumer behaviour area relating to residential apartments have been done in

other countries, whereas only a handful of research work can be found in the Indian context.

Thus, the researcher aims to explore this gap in the literature by conducting research work titled

Consumer behaviour towards purchase of residential apartments: A study in select cities of

Karnataka. The proposed study attempts to evaluate the factors influencing residential apartment

buyers in forming their purchase decision. It also focuses on the buying behaviour and their

effects on the purchase decision of buyers of residential apartments in the Indian context.

2. Review of Literature

A thorough review of literature is undertaken to identify the gap that exists in the Consumer

Behavior literature.

Internal Influences of Consumer behaviour

Perception: Perception is the process of selecting, organizing, and interpreting sensations (Hanna

& Wozniak, 2001) into information. After recognizing a need or want to buy something, the

consumers perception situation would affect the way he or she behaves (Asch and Wolfe, 2001).

Different people have different perceptions even for the same object or situation since people

have their own subjective way to form their perceptions.

Attitude: Attitude plays a critical role in consumer behavior, and they are especially important

because it motivates people to behave in relatively consistent ways (Babin & Harris, 2009).

Learning: Consumer learning refers to any process that changes a consumers memory and

behavior as a result of information processing (Arnould et al. 2001).

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Lifestyle frequently provides the basic motivation and guidelines for purchases, although it

generally does so in an indirect, subtle manner (Hawkins, Mothersbaugh, & Best 2007). The

value of various properties attributes change due to the lifestyle change.

External Influences of Consumer behaviour

Culture is the complex whole that includes morals, customs, and other capabilities and habits

acquired by human as members of society (Hawkins, Mothersbaugh, & Best 2007). Marketers

need to understand the culture meanings of their products and brands, while consumers seek to

acquire certain cultural meanings in products and use them to create a desirable personal identity

(Peter & Olson, 2008).

Peter and Olson, (2005) pinpoints out that from a consumers prospective, price are usually

defined as what the consumer must give up to purchase a product or services.

Prior studies in real estate:

Susilawati et al. (2001) In their research paper for the PRRES Annual conference, the

researchers evaluated the motivation and perception factors in buying a house. They took up a

case study of residential development carried out by PT delta Comoro Permai in west Dilly. They

found out that physical and linkage are not as important as environment and utilities for the

homebuyer. They also found that the results were consistent with developers motto clean,

secure, aesthetic, healthy and prosperity.

Smersh et. al. (2003) conducted a study using a disaggregated data set, county property appraiser

data, to track the number of new single-family housing units built in each section (square mile)

of Alachua County, Florida by the year built over a twenty-year period. It explores the role of

transportation, large-scale development, employment nodes, existing patterns of development

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and regulation on the spatial pattern of development. The results of the model suggest that the

variables tested are important determinants of the growth pattern in Alachua County.

Yiping Fang (2006) conducted a study of residential satisfaction among original residents in the

redeveloped inner-city neighborhoods of Beijing. The study was conducted in four

neighborhoods redeveloped at different time periods in the past 15 years. The results suggested

an overall low level of satisfaction across all four neighborhoods. Only the unit size and length

of stay significantly related to residential satisfaction. It was also found that low residential

satisfaction does not lead to frequent moving behaviours despite high moving intentions. These

findings contradict hypotheses in the Western literature about lower residential satisfaction

associated with higher mobility. In Western studies, residential satisfaction determines housing

adjustment and mobility behaviours, which form the basis for public intervention. By

differentiating between voluntary and involuntary relocation behaviour, the researcher also made

an attempt to understand the interrelationship between residential satisfaction, moving intention

and moving behaviour within the context of Chinas political economy. Results showed a lack of

ability to adjust their changing housing needs although they had strong desires to do so.

Ariyawansa (2007) conducted a study with an aim to provide a scientific insight into the

consumer behavior of the housing market in Sri Lanka. It also tried to identify the determinants

of the consumer behavior, to rate them in terms of importance, and to compare the relative

importance of the determinants among different market segments.

Thamaraiselvi & Rajalakshmi (2008) conducted a study to identify the social factors

influencing the purchase decision of high rise apartments and factors inducing their inclination

towards apartments in Bangalore city, India. The study was conducted by administering a

structured questionnaire to 50 respondents. The researchers found that two bedroom flats were

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preferred by respondents who had more than two earning members, by respondents whose

income level was anywhere in the range of 10,000 to 40,000 rupees per month, by respondents

who purchased apartments for rental and resale value. They also found that the ground floor and

the top most floors were least preferred due to safety factor.

Koklic & Vida (2009) examined the consumer house-buying behaviour from the consumers

perspective by conducting six semi-structures in-depth interviews out of which three were

carried out with recent owners of a custom-made prefabricated house and the other three with

potential buyers of the same product. Their results suggested that cognitive and rational 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 situation and environmental factors, the role of feelings, experience, subconscious

factors, needs and goals should to be taken into account to better understand this kind of decision

making.

Chuan et. al. (2011) their study explored the factors affecting housing purchasing decision from

the perspective of 7 Ps namely product, place, price, promotion, process, physical evidence

and people. They conducted a survey of 323 housing consumers who stayed in the urban area of

Klang Valley, Malaysia. They defined housing consumers as consumers who currently either,

lived with parents, rented, owned a house or apartment, or belonged to many other groups of

housing buyers who had the potential to buy a house in the future. The findings showed that

process and physical evidence, product (exterior and interior features of the house,

neighbourhood living quality and environment of the community) and accessibility are important

factors that cogitate by respondents in house purchasing decisions.

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Haddad et. al. (2011) conducted a study to investigate the main factors that influence the

customers' buying behavior toward apartment, and tried to identify the most influencing factors

that affect buying. The survey was conducted on 120 respondents who already bought an

apartment in different areas in Amman. They found out that the respondents would significantly

adopt the main constructs when buying residential apartments, including aesthetic, economic,

marketing, geographic, and social constructs. They concluded that there were significant

differences in decision making regarding buying residential apartments according to the sample

gender and Age. Also there were significant differences in the respondents answer due to age and

there were no significant differences according to the marital status or educational level.

Luo & James (2013) conducted a study to understand the buying behaviour of purchasing

commercial houses. The four main purpose of the study were firstly, to study the external

influences namely culture, government policies, marketing activities, and reference groups on

consumer behaviour on purchasing commercial houses. Secondly, to study how internal

influences such as perception, attitudes, learning behaviour, motivation, and emotions impact on

home buying behaviours. Thirdly, to study how self-concept and lifestyle influence commercial

house buyers. Finally, to understand the decision making process of buyers of commercial

houses. The results of the study were in accordance to the expectations of the researchers. All the

variables were found to be simultaneously significant to the dependent variable which is the

consumer houses-buying behavior.

3. Statement of the research problem:

Buying an apartment is one of the very important economic decisions that people make, and it

requires gathering a lot of information regarding its features. Thus, it is important to know what

is going on in the minds of the apartment buyers, what they really need and want, and the factors

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that influence their decision. In addition, it is also vital that apartment developers and marketers

provide apartments that would fulfill and satisfy different needs of different groups of people.

It is worth noting that not many studies have been made in India with reference to consumer

behaviour in buying residential apartments. Similar studies exist for other countries like China,

Malaysia, and Jordon but are lacking in the Indian context, especially when it comes to

apartments. Thus the motivation behind the proposed study is to investigate the buying

behaviour of buyers of residential apartments in selected cities of Karnataka.

4. Scope and Objectives of the study

The proposed research work titled Consumer Behaviour towards purchase of Residential

Apartments: A study in select cities of Karnataka is intended to be conducted in select major

cities of Karnataka. The researcher proposes to take into consideration well-established builders

who are in the market for at least ten years and have at least five completed residential

apartments to their credit.

This study is undertaken with the following specific objectives:

1. To know the significance of consumer preference in the purchase of residential apartments

2. To identify the role of internal and external factors of consumer behaviour in the determining

the purchase of residential apartments

3. To identify the impact of Builders promotional activities on the purchasing behaviour of

consumers.
4. To understand the satisfaction level of consumers who hold the apartment of a minimum of

one year.
5. To suggest the Apartment builders the preferences of the consumers in the purchase of

residential apartments

Methodology

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 Population, Sample and research Design

Population:

For the proposed study, the researcher proposes to take into account the residential apartment

owners who own budgeted, deluxe and luxurious apartments in Karnataka state. The study is

based predominantly on primary data. The researcher proposes to focus on the varied dimensions

of consumer behaviour involved in the purchase of residential apartments.

Sample size and Research Design:

In order to define the outline of the study, following aspects are considered in the selection of the

sample size.

a) Residential apartments that fall under the category of being budgeted and luxurious

apartments.

b) Residential apartments that is located in the urban and semi-urban areas in Karnataka

state

c) Flat owners who have owned and held the property for at least one year.

The cities under consideration for the present study are Bangalore, Mysore, Hubli - Dharwad,

Mangalore and Belgaum. The researcher plans to conduct the survey by administering

questionnaires to a minimum of 250 respondents from each of the selected cities. However,

the sample size will be decided proportionately based on the population.

Measuring Tool / Instrument/ Questionnaire

Various books, refereed journals, periodicals and magazines will be studied for the conceptual

and theoretical framework of the subject under study. The relevant primary data and information

will be obtained by personally administering a comprehensive and pre- tested structured

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questionnaire. The researcher proposes to classify the respondents into three categories owners

of budgeted apartments, deluxe apartments and luxurious apartments. Separate set of

questionnaires will be administered to the above said respondent categories.

Statistical Treatment

For the conceptual and theoretical framework of the subject under study, the researcher proposes

to use Statistical Package for Social Scientists (SPSS) for the purpose of processing and

analyzing the survey data. Important statistical tools and techniques like Mean, Median, Standard

Deviation, ANOVA test, Chi- square tests, Binomial Tests, Factor Analysis, Discriminate

Analysis, Correlation and Regression analysis will be used to analyse and interpret the data and

to test the hypothesis. However, the decision to choose a particular statistical tool will ultimately

depend upon the nature of the data that will be collected. To project and highlight the significant

findings, appropriate charts and graphs will be used.

5. Possible Outcomes

Consumer behaviour plays a very important role in the purchase of a residential apartment. Both

internal and external factors of consumer behaviour will have an impact on the purchasing

decisions regarding apartments. The researcher is of the strong opinion that this study would

have a number of clear implications to the builders in formulating marketing strategies and gives

a clear insight into the purchasing behavior of the apartment buyers. The researcher also aims to

understand and report the possibility of whether there is a wide difference in the buying

behaviour of individuals when buying a budgeted, deluxe and luxurious residential apartment.

Furthermore, the study is going to suggest further insights to carry forward the research in the

related area for academicians, researchers as well as practitioners.

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References:

Ariyawansa, R. G. (2007). An empirical study of consumer behavior in housing market in

Colombo. Built-Environment - Sri Lanka, 8(1) 2007.
Arnnould, E.J., Price, L., and Zinkhan, G. (2001). Consumers, McGraw-Hill, New York.
Asch, D. & Wolfe, B. (2001). New economy- New competition, The rise of the consumer?
Palgrave, New York.
Chuan Shyue, Chong, Bik Kai, Sia, Wah Wan, Cheong, & Soo Sung, Hng. (2011).
House Purchasing Decisions: A Case Study of Residents of Klang Valley, Malaysia.
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Fang Yiping (2006). Residential Satisfaction, Moving Intention and Moving Behaviours: A
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