Modelling antecedents to customers’ satisfaction in a residential development

This doctoral thesis ‘Real Estate Development: a Customer Perspective’, mainly concerns questions that are related to why consumers make a choice and what they are looking for. The first part of this thesis is the result of the research project ‘Models for the Construction Sector’ (MoPo) and the second part is the result of a collaborative project between KTH Royal Institute of Technology, the Construction Sector Innovation Centre (BIC), five private companies[1] and four municipalities in Stockholm County. Since the Latham report (Latham, 1994), there has been considerable debate about the need for an increased focus on the end customer in the construction process. The housing sector in Sweden has a strong tradition in focusing on construction and project management issues and less on customer satisfaction. Similar findings have been reported in ‘Skarpning gubbar’ (Swedish Government Official Report, 2002) and recently, ‘Sega gubbar’ (Byggkommisionen, 2009), which show that attitudes and processes in the housing sector in Sweden have not really changed since the initial report in 2002. From the perspective of consumer-oriented research in residential development, this issue concerns the ability to understand why customers buy (cognition), what they want (the product) and how the message, relating the product to the consumer, should be formulated (marketing). Investment decisions could be improved if developers ask what kind of values have proved to be important for residents and buyers for a specific type of residential development, what the functional and psychological consequences they are looking for are, and then ask what kind of product attributes can be provided, given economic constraints. Paper one shows the main activities in how to provide needed facilities and their relationship to the end users’ core business. Paper two shows how the laddering technique can be used to elicit buyers’ beliefs about the built environment, according to the means-end chain theory. The means-end chain theory postulates that buyers purchase a product because it satisfies personal values and desired consequences, which from their perspective are more important than product attributes. Paper three shows the development of a multi-item attitude scale. This scale identifies five key dimensions that are important for the customer when deciding to purchase an apartment in a residential development. The dimensions are: urban environment, architecture, safety, relaxation and liveliness. Paper four shows structural modelling evidence supporting the theoretical assumption that personal values have an impact upon expectations and perceived performance. The structural sub-models show that if perceived performance is increased, customers’ satisfaction will be positively affected. During our research, we have not found any current knowledge in the construction industry in Sweden on how to investigate and measure customers’ values and their beliefs, or how to model customers’ evaluation of product performance using structural equations. [1] Besqab, JM, NCC, Stockholm municipality, Solna municipality, Sollentuna municipality, Swedbank, Upplands-Vasby municipality, Veidekkke.