An Investigation into the Potential Application of Relationship Marketing

in the (British) House Building Industry 
(1995).

This was a pioneering report, complete with original research and a pilot survey, on what factors influence the customers' buying decisions (for an MBA Dissertation in 1995). 


There are very few studies in the subject areas of house building/marketing/high-value complex-buying-behaviour, so I have made this report available free-of-charge in the hope that someone may find it of use. 

Let me know if you do!  .pdf download


OVERVIEW:

By associating and juxtaposing (1) the transactional biased house building industry with (2) the relationship marketing concept and (3) complex buyer behaviour theory, all three are tested in an extreme environment.

The result is both an exposť and a way forward.  The report draws fundamental conclusions about the nature of buying behaviour and relationship marketing, while for house builders it presents an outline business strategy that:

and,

The report could have been entitled “What you ever wanted to know about the house building industry but never dared to ask”.

Oh, I ran the report past most of the big players and some major marketing companies at the time and they all treated me like I was some young upstart speaking a foreign language ....!

(But I got a Distinction for this piece of work)


OUTLINE:

The study focuses on the viewpoint of the top 17 (volume) house builders.  It employed inductive & deductive methodologies, supporting theoretical analysis with a quantitative customer viewpoint survey.

This report serves as a guide to management and academics which:-  

Also revealed in this paper are the popular misunderstandings surrounding the concept of relationship marketing and the low level of knowledge that exists on complex purchase buying behaviour.


On the British House Building Industry:

Between 1985 and 1990 the British house building industry went from boom to bust.   During the period large house builders sales changed from thousands of houses per year to a sales collapse.   At its peak demand was so great that it drained the pool of skilled builders and house prices moved almost on a daily basis.  In the cycle, house buyers won and lost small fortunes, many ending up with debts that exceeded their property value ("negative equity"), and some had their houses repossessed, while building companies went bankrupt or pulled out of the house building market for ever.

To some extent both builders and buyers were victims of the wider boom/bust economy, a demographic bulge of wealthy young adults and the ‘greed is good’ culture prevalent at the time.  But much of the damage was self inflicted - caused by the simplistic and primitive thinking of the industry players (and some pretty shoddy products).  Most notable were the absence of industry understanding on how and why people bought houses beyond the cliché “location, location, location”, the lack of perceivable differentiation between the offerings of the players, and the view that house sales were a one-off 'transaction'  - sell and walk away.

In the ‘New World’ house builders struggled to find a marketing strategy to recover their position or one that accommodated the new wariness of buyers.


On Complex Buying Behaviour:

Complex buying behaviour dominates the decision making process that people often engage for purchases that are central to their lives.  To make the most of this the evaluation framework needs to be accommodated within the marketing strategy.   One most notable point is the differences in process between those with experience and those without.  In house building these are the  ‘Former Home Owners’ and ‘First Time Buyers.

On Relationship Marketing:

A fashionable marketing concept of the 1990’s that sought to view customer sales from a "lifetime-value" perspective rather than a one-off "transaction" perspective, and so put in place marketing mechanisms biased toward retaining customers (loyalty) rather than expend the higher cost associated with attracting new customers.

How we ever lost our way from here to ‘call-centre’ thinking beats me!