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1. FACTORS INFLUENCING POTENTIAL HOMEBUYERS
PURCHASE INTENTION ON SUPER LUXURY HOUSING
PROJECTS: A STUDY ON HOUSING PROJECT MARKET IN
CALICUT AND MALAPPURAM
SHIDIN K DIVAKARAN
MONTI INTERNATIONAL INSTITUTE OF MANAGEMENT STUDIES
PERINTHALMANNA
PREPARED AND PRESENTED BY
REPORT SUBMITTED TO SOBHA LIMITED,CALICUT

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CHAPTER 1
INTRODUCTION

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1.1 INTRODUCTION
A house is valued as the basic need for every individual. It is not considered as just a place
keeping people safe from dangers, it is also considered as a shelter that humans can find
themselves .It is defined as a place where most of the events happen in which community
relations are created and developed .In addition, a house presents cultural and social principles
where the thoughts of people and culture are created and improved. A house has vital
importance for people; therefore, it is significant for a household to discover an appropriate
and comfortable house for living. This study is on factors influencing potential home buyers
purchase decision regarding super luxury housing products in Calicut with specific reference
to Sobha ltd. To develop a housing unit that accommodates the requirements of customers, it
is necessary to recognize the house buyers’ characteristics.
1.2 INTRODUCTION TO REAL ESTATE INDUSTRY
The term ‘real estate’ is defined as land, including the air above it and the ground below it, and
any buildings or structures on it. It is also referred to as realty. It covers residential housing,
commercial offices, trading spaces such as theatres, hotels and restaurants, retail outlets,
industrial buildings such as factories and government buildings. Real estate involves the
purchase, sale, and development of land, residential and non-residential buildings. The main
players in the real estate market are the landlords, developers, builders, real estate agents,
tenants, buyers etc. The activities of the real estate sector encompass the housing and
construction sectors also.
The real estate sector in India has come a long way by becoming one of the fastest growing
markets in the world. It is not only successfully attracting domestic real estate developers, but
also the foreign investors. The growth of the industry is attributed mainly to a large population
base, favourable demographics, easy availability of finance, rising income level, and rapid
urbanization. The real estate sector in India assumed greater prominence with the liberalization
of the economy, as the consequent increase in business opportunities and labour migration led
to rising demand for commercial and housing space.
Traditionally, the real estate sector has been fragmented with large number of developers. But
now the industry is witnessing a changing profile with shift in consumer preferences and rising

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investor interest. Real estate developers are becoming more organised and transparent to
leverage opportunities in the market.
The real estate companies are coming up with various projects including residential and non-
residential to meet increased demand. This is largely driven by availability of land at affordable
prices backed by demand for office space, primarily from services sectors such as IT/BPO,
retail and BFSI. According to CREDAI, Real estate plays a crucial role in the Indian economy.
It is the second largest employer after agriculture and is slated to grow at 30% over the next
decade. The Indian real estate market size is expected to touch $180 billion by 2020.
Source: Ministry of Tourism, KPMG, World Bank, Census 2011, TechSci Research
1.2.1 Segments in the Indian real estate sector
The real estate sector comprises of five sub-sectors. They are Residential space, Commercial
space, Retail space, Hospitality space, and SEZs.
1.2.1.1 Residential Real Estate
Residential real estate industry has witnessed amazing growth in the past few years owing to
the following reasons: continuous growth in population, migration towards urban areas, ample
job opportunities in service sectors, growing income levels, rise in nuclear families and easy
availability of finance. Demand for houses increased considerably whilst supply of houses

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could not keep pace with
demand thereby leading to a
steep rise in residential capital
values especially in urban areas.
About 91 million people shifted
to cities over the last decade
resulting in development of
about 2,774 new cities.
The number of cities with
population of more than 1
million increased from 35 to 53,
of which eight cities have a
population of more than 5
million.
Source: Cushman & Wakefield, TechSci Research
1.2.1.2 Commercial real estate
The commercial office space in India has evolved significantly in the past 10 years due to
change in business environment. The growth of commercial real estate has been driven largely
by service sectors, especially IT-ITeS. Earlier commercial properties were concentrated in
CBD (Central Business District) areas in large cities. However, with the emergence of IT-ITeS,
which had huge office space requirement, commercial development started moving towards
city suburbs.
Demand for office space is directly linked to addition in number of employees, which in turn
is dependent on economic growth. When economy slows down, companies hold their
expansion plans leading to lower demand for office space. The demand for commercial real
estate was on an upswing between 2005 and early 2008, driven by exceptionally high employee
additions in the IT/ITeS sector. The strong demand from domestic IT/ITeS companies and
captives of large global players was a result of increased business, primarily from the US and
European markets. A healthy domestic economy and aggressive corporate expansion plans
resulted in strong demand from various sectors. These include Banking Financial Services and

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Insurance (BFSI), media and entertainment etc. Limited supply of quality office space led to a
sharp increase in lease rentals for commercial office space in most micro-markets, with an
average increase of 108 per cent between 2005 and early 2008.
According to CRISIL Research, it was estimated that 37 per cent of the total planned supply
materialized by 2015. Around 167 million sq. ft. of office space come up during 2013- 2015.
The growth in Information Technology (IT) and Information Technology enabled Services
(ITeS), Banking Financial Services and Insurance (BFSI) and Manufacturing sector resulted in
significant demand for office space. Together, these three sectors occupy 75 per cent of the 375
million square feet of total office space in India.
1.2.1.3 Retail Real Estate
In the past few years, India’s organized retail industry has posted high growth rates due to
improvement in key driving factors. This includes changed lifestyles, high disposable incomes
and a propensity to spend. India’s retail market was mainly unorganized until early 2000.
Rising consumer interest in organized retail is being driven by higher disposable income and
changing retail-buying behavior such as ‘one-stop’ shopping; preference of variety and quality
products; and convergence of entertainment and shopping. While the retail industry is still
dominated by unorganized formats, the organized sector is rapidly growing. Numerous
supermarkets and malls are coming up in India, which are expected to have a greater share of
the retail pie.
According to CRISIL Research, the total planned supply of retail space across the 10 major
cities is estimated at about 67 million sqft. In number terms, CRISIL Research estimates that
about 80 malls out of the total planned 141 malls come up by 2016.
The pan India retail real estate stock in India is about 100 million square feet. About 70 per
cent of this is in seven cities, which are Bengaluru, Chennai, Delhi, Kolkata, Hyderabad,
Mumbai and Pune. Most of this space was added over the last decade between 2006 and 2011.
3,500 supermarkets, 260 hypermarkets, 20,000 specialty stores and 28 cash and carry stores
have come up in India.
1.2.1.4. Hospitality Sector Real Estate
The hospitality industry in India has emerged as one of the key industries driving the country’s
economic growth. India has emerged as one of the major tourists destinations. India’s

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hospitality industry has enjoyed robust growth over the past few years. Increase in domestic,
business and leisure travel has benefited hotels in India. Rising incomes, higher weekend trips
and increased access to travel-related information over the Internet have propelled growth in
hospitality. Premium segment hotels are more prominent in major business destinations in India
and are dominant in popular tourist destinations like Kochi, Goa etc. which attracts a lot of
foreign clientele. CRISIL Research expects 4,750 new Hotel rooms to be added to the existing
46,200 rooms across 12 Indian destinations. These destinations collectively account for 80 per
cent of the country’s premium hotel rooms.
1.2.1.5 Special Economic Zones
A Special Economic Zone (SEZ) is a specifically defined area, which has special economic
laws targeted towards promotion of economic activity, within the given geographical region.
The aim of these special economic zones is to promote trade, manufacturing and other
business activities.
Source: KPMG Cushman & Wakefield, Knight Frank, CRISIL, www.sezindia.com, TechSci Research
1.2.2 INDIAN REAL ESTATE SECTOR
India has huge potential to attract large foreign investments into real estate. With real estate
reaching a point of saturation in developed countries and the demand and prices falling, global
real estate players are looking at emerging economies such as India for tapping opportunities
in real estate. Indian real estate will stay attractive due to its strong economic fundamentals and

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demographic factors. Moreover, there is a high level of global uncertainty looming over the
developed and developing nations of the world. While developed economies are still struggling
to regain their growth momentum, developing countries including India and China are expected
to grow at a reasonably high rate. Investments in Indian real estate will fetch higher returns for
investors as compared to other global markets. In the coming years, the opportunities in the
real estate sector will attract more global players to India and hence will help the industry to
mature, become more transparent, improve management and adopt advanced construction
techniques.
Source: KPMG, Report on Real Estate Sector in India – Corporate Catalyst India Pvt Ltd,
CBRE, TechSci Research Notes: CAGR - Compounded Annual Growth Rate; E-Estimates
Real estate contribution to India’s GDP is estimated to increase to about 13 per cent by
2028.The market size of real estate in India is expected to increase at a CAGR of 15.2 per cent
during FY2008 –2028E and is estimated to be worth USD853 billion by 2028.Increasing share
of real estate in the GDP would be supported by increasing industrial activity, improving
income level & urbanization.

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Source: KPMG, Report on Real Estate Sector in India – Corporate Catalyst India Pvt Ltd,
Notes: 2028E - Estimates for 2028; Figures mentioned are as per latest data available
The government also launched 10 key policies for real estate sector in 2016, namely:
 Real Estate Regulatory Act
 Benami Transactions Act
 Boost to affordable housing construction
 Interest subsidy to home buyers
 Change in arbitration norms
 Service tax exemption
 Dividend Distribution Tax (DDT) exemption
 Goods and Services Tax
 Demonetization
 PR for foreign investors

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1.2.2.1 Demonetisation impact
Real Estate sector has always been one of the most watched and most sensitive sectors of
Economy reflecting the changes that have been inscribed by the economic policy changes. Be
it the tax reforms or demonetization or interest rate cuts or Shrinking stock markets real estate
sector always reflects without a doubt. Indeed it is concerned with both common man of this
country or rich upper class who see real estate as a parking centre for excess funds (including
Cash).
The growing flow of FDI into Indian real estate has been encouraging increased transparency.
While the demonetization initiative by the Central government means further delays in ongoing
real estate projects due to the massive cash crunch, it also paves the way for a cleaner and more
transparent real estate industry in the times to come. Developers would be looking for
alternative funding arrangements while end-users or investors would be waiting for more
certainty before making any move. Owing to its uniqueness as an economic event,
demonetization brought a lot of confusion, uncertainty – and, most of all, rumour-mongering -
especially when it came to the realty sector. No doubt, everyone was affected by this radical
measure, and initially all possible economic activities slowed down to a large extent. However,
the dust soon settled and economic activity resumed.
(a) IMPACT FELT BOTH IN PRIMARY AND SECONDARY SECTORS OF REAL
ESTATE
The construction industry alone accounts for about 8 – 10% of the GDP and offers employment
both direct and indirect to about 40 million people.
The demonetization has caused abrupt stoppage of work in many projects. The payments,
especially to workers, were only by liquid cash. The sudden restriction on withdrawals led the
contractor unable to cope with the labour pressure.
(b) IMPACT ON THE LABOURS AND THE CONSTRUCTION COMPANIES
The first and foremost issue after the currency demonetisation was the fleeing of labour force
from the sites. They were not paid money for the days they worked. They could not prolong in
a new place without liquid cash. The local people were also reluctant to extend credit facility

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to migrant workers, as they themselves were badly hit by poor cash sales. Consequently, the
labourers were returning to their villages. Many of the ongoing projects came to a standstill.
ulation
seeking job, it is literally impossible for them to open bank accounts from place to place.
the restrictions on the amount and number of transactions per week. They were only silent
spectators to the fleeing of workers from the site.
The new bookings were virtually nil. The Builders who made a massive investment are in
troubled waters. India’s decade long construction boom created one in three new jobs as tens
of millions of people made journey from rural areas to towns seeking livelihood, came to a
grinding halt.
The real estate sector is expected to get cleansed of its ailments in the due course of time owing
to the elimination of black money clubbed with multiple regulatory changes such as the Goods
and Services Tax Act, Real Estate (Regulation and Development) Act, amendment of the
Benami Transactions (Prohibition) Act and the schemes to boost up the housing sector put
forward in the union budget 2017-18. Subsequently, project approvals will be quicker, resulting
in a substantial reduction in the total cost of construction, thereby, the per unit cost. Fair pricing
would mean a revived demand for new projects in the market.
The real estate sector could witness a major revolution with cash transactions getting eliminated
and a major share of trades going online with the penetration of alternative forms of payment
such as E-wallets, apps and plastic money. To sum it up, the demonetisation of old currency
has ushered a new era for the real estate industry in India that would be transparent, corruption
free, organised and veracious.
1.2.3 Housing Sector in Kerala
As per census 2011 the population of Kerala is 3,33,87, 677 , the rural and urban population
split up being 1,74,55,506 and 1,59,32171 respectively. The rural population constitutes
52.28%, and urban 47.72% of the entire population. The decadal percentage of urban
population has increased from 29.96% in 2001 to 47.72% in 2011. This shows the high rate of
urbanization taking place in Kerala which is the third among the States in India having the
highest share of urban population.

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1.2.3.1 Settlement Pattern and Housing Typology
The settlement pattern of the State is of rural and urban continuum and different varieties of
housing typologies. Indigenous tribal settlements and the traditional fishermen settlements
have peculiar housing patterns. High rise buildings, IT habitats, Technology Parks and
Electronic hubs are booming in the State. Most of these types of settlements are seen to have
developed without adequate, balanced and integrated planning.
Kerala is known for its unique settlement pattern with independent houses on individual plots
scattered across the habitable areas. Due to its distinctive social, geographic and climatic
conditions, the trend has been to build houses in small garden lands creating tremendous
pressure on lands. An integrated habitat approach to housing is needed taking into account
issues of spatial planning, including water supply, sanitation and waste disposal. It is required
to integrate these aspects into planning of a housing scheme. This is needed to avoid the
growing ecological crisis and manmade disasters. This approach is compatible with
involvement of people in planning and constructing houses.
1.2.4 Real estate market in Kozhikode
Kozhikode has become the second largest city of Kerala, Southern India. The Real estate in
Kozhikode has been a prime focus of attraction especially for NRI’s working abroad .The
largest population of Malabar region comprises of Non-Residential Indians, abbreviated as
NRI. They largely contribute to the wealth of Kerala economy. They are willing to invest
more money for real estate in Kozhikode now than ever before. Some years back, quite a
number of Keralites left the city to look for better opportunities in UK, US, Canada and well
established Indian cities such as Mumbai, New Delhi and Chennai. But today, things have
changed, making Kozhikode a city worth investing in. It has become a commercial hub with
real estate business doing exceptionally well. For this reason, many Keralites who left the state
for better work prospects are being wooed to come back and invest in Kozhikode. The trend is
anyway going to rise, this will give wide range of possibilities for anyone wishing to invest in
Calicut real estate sector.
The Real Estate market is booming in this beautiful city. Both builders and buyers’ market is
good. Now visiting Kozhikode, one could see skyscrapers and lots of other buildings now. The
living condition has greatly improved now with better amenities and job opportunities now.

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This is something that has really caught the attention of Keralites who left it for to look for
better business opportunities in other places. The city has totally transformed in terms of
building and infrastructure and gained the second place for the top real estate market in Kerala
after Kochi.On top of that, the number of social amenities has greatly increased. Many schools
and colleges have been set up to provide education to state residents as well as people from the
rest of India and other parts of the world.
More banking institutions have been set up to provide loans to real estate developers in
Kozhikode. This is another reason why the city has witnessed rapid growth and expansion. The
hospitality industry is doing well. Many hotels have been set up to provide food and
accommodation to both locals and visitors. 4 and 5 star hotels are available. The security is
good with many police stations distributed in different parts of Calicut. The above factors have
greatly contributed to success of real estate in Kozhikode.
Despite its rapid growth, land rates in Kozhikode is relatively low when compared to other
cities like Mumbai. This has encouraged many real estate investors to buy land and construct
buildings at affordable prices. That’s why Keralites who had left the state are slowly coming
back to take advantage of this opportunity before the price shoots up. Builder’s market is good.
The same applies to buyer’s market.
To add on, Kozhikode has many prime properties to credit its real estate market. Most of them
are located in areas that are well served with excellent infrastructure and ample social amenities
like schools and hospitals. This has really encouraged buying of properties because many
people prefer to stay in such areas. Home buyers are ready to spend a fortune in order to own
property in this area.
There are many properties in industrial areas where we have many companies. This helps to
provide accommodation to workers. The Real estate builders have also built houses around
schools and colleges to cater for accommodation needs of students.

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Quite a good number of Keralites are involved in retail business. This has led to high demand
for rental properties located along the road. Many people want to get a place where they can
do their business.
According to Kerala Sustainable Development Report, the state’s population growth rate stands
at 10%. Increased population has led to demand for houses. Not every person can manage to
buy land and construct a house in the city. Real estate developers have taken advantage of this
opportunity and put up many buildings to provide accommodation to city residents. Perhaps
the part that is not doing well is office rentals. The most impressive thing about Real Estate in
Kozhikode is that the purchasing power of buyers is high. This is in spite of the financial
challenges that many Keralites are going through. For this reason, many prime properties do
not take long before they are bought. Buyers are ready and willing to spend money.
Top Five Builders in Calicut:
Source: proptiger.com

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1.2.5. Importance of Villas and Apartments
Residential apartments and Villas are a part of housing, which has encouraging scope for
development. House is a very complex term. The definition of the same has varied from country
to country and time to time. Housing being one of the three basic needs of life always remains
in the top priorities of any person, society and economy. As a human being, an individual needs
his own space and privacy, which can be provided by ownership of house. Thus housing
deserves significant attention in the context of developing policies and strategies for human
development. A developing nation like India has to focus more on housing sector to cater to
the housing needs of burgeoning population and to accelerate the economic growth. The
housing sector has been globally used as an engine to propel the economic growth as it
generates employment and demand in the market.
Housing sector in Kerala is the fastest moving real estate segment. Kerala housing sector has
registered tremendous growth on the basis of rising income, growing urbanization and
migration of the population towards urban region in search of employment. Kerala housing
sector is now shifting towards the upper class and upper middle class people, and also
concentrating on medium and luxury housing. This shift from economy to luxury housing will
boost the growth in the housing sector.
A luxurious home is the ultimate status symbol in a space starved state like Kerala. In earlier
days the concept of living as far as an average Keralite was only an accommodation within the
joint family structure already existing. Now the family concept has been transformed to nuclear
family and their desire for separate living necessitated the construction of individual house.
Earlier, Keralite took pride in living in independent houses, but factors such as security made
them look at alternatives. A gated villa lets the consumers live in an individual house, at the
same time provide them with the amenities and benefits of apartment living.
Majority of the houses in Kerala are constructed by the people themselves with their own
resources. Till recently Keralite considered Villas and Apartments as a symbol of luxury for
the upper class people. But now it has been totally changed. Buyers for Villas and Apartments
are increasing day by day. To own a Villa or Apartment is the only option for living in town or
nearby. Dual income families prefer to reside in urban or semi urban areas, taking into
consideration factors such as education of their children, shopping, and other entertainment
facilities. Further to this, factors such as conveyance facility, health care facility and security

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are also motivating them to reside in urban or semi urban areas. Even high income groups find
it difficult to purchase of plot and construction of a house in urban areas. Scarcity of adequate
land and unaffordable price are the main issues behind this.
The density of population in India as per 2011 census is 382 persons per sq.km, while in Kerala
it is 859 persons per sq.km. The density of population in most of the urban areas in Kerala is
around 3000. Kerala, one of the smaller states has to accommodate about 3000 persons per
square kilometer in urban areas. Thus an independent house in four or five cents became a
dream for an ordinary citizen. In this context, residential apartments have importance since the
area of land is utilized to the maximum extent for housing.
The demand for individual homes in metros and surrounding townships especially major towns
in Kerala like Kochi, Thiruvananthapuram, Calicut etc. has increased rapidly due to job
migration which is the result of globalization and development of more IT based business. The
buyer scrutinizes the capability of the property to meet the long-term requirements. It is crucial
that the home is architecturally designed to include new trends and modifications along with
time. Built-in kitchen cabinets, appliances, counter tops and other such installations are some
of the new real estate trends. The popularity of readymade home furniture has increased
significantly and people always ask for these items as add on facilities before they finalize the
deal with the builder of Apartment/Villa. Now the concept about homes is slowly changing in
this direction. The main reason is that, property buyers don’t want to spend more time on
searching, selecting and buying of these items, if these readymade furniture or interiors come
along with the original deal, this way they can avoid engaging an interior decoration consultant
or spending time and extra money to complete these works. Real estate builders now also offer
interior decoration of the Apartment/ Villa on demand. Most of the builders now have their
own interior designing team. The professional and expert interior designing team ensures that
homes are delightful places to live in. Another important trend is that now many buyers are
keen on investing in environment friendly homes and are demanding for the same. Designs
incorporating energy saving options and ecofriendly building supplies and materials are finding
better investors. Energy efficient lighting systems and structures for rain water harvesting and
preserving water are also included in the structural designs of homes to make them more
appealing to the buyers. The major shift in the nature of jobs has also influenced the real estate
industry. Today, buying a home is easy with the current ready loan facilities provided by the

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banks. As part of the latest trends in the industry, religious tourism has been a motivating factor
in the realty boom seen in the famous holy centres of Kerala such as Guruvayoor Township.
Kerala’s strategically advantageous geographical location and its multi-cultural ambience have
helped in attracting people from outside Kerala and the country. The real estate clientele has
been building up in the last decade, with numerous clients both domestic and multi-national,
making investments in the state. With the State Government also implementing new ways to
attract more FDIs in the form of real estate investments, the realtors of Kerala are playing a
pivotal role in mobilizing the movement of potential clients across Kerala. The facilitation of
such a move has encouraged a lot of other realtors outside Kerala to take a keen interest in
unleashing the State’s potential in terms of real estate.
The real estate companies are driven by a common motive of providing excellent and affordable
residential, commercial and industrial properties to the public. They are found to be taking
effective measures so as to retain their existing clientele as well as to increase the number of
customers.
The real estate firms and developers have understood the importance of offering exclusive,
valuable services in this field, as the competition is getting tougher. With the spreading of a
global culture due to the arrival of joint venture companies and multi- national firms bringing
with them their high technology standards in construction and infrastructure, Keralites have
become more aware of quality and cost effectiveness.

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1.3 ORGANISATIONAL PROFILE
SOBHA LIMITED
With three decades of glorious experience in creating interiors
of palaces and masterpieces in the Middle-East, Mr. P.N.C.
Menon founded SOBHA Limited in 1995 with a clear vision
to transform the way people perceive quality. Today, SOBHA,
a Rs. 28 billion company, is the most trusted brand and only
backward integrated real estate player in the country.
Since inception, the Company has always strived for
benchmark quality, customer centric approach, robust
engineering, in-house research, uncompromising business
ethics, timeless values and transparency in all spheres of
business conduct, which have contributed in making it a
preferred real estate brand in India. In 2006, SOBHA went
public through its initial public offering, an event that created
history when the issue got oversubscribed a record 126 times.
Headquartered in Bangalore, SOBHA is primarily focused on residential and contractual
projects. The Company’s residential projects include presidential apartments, villas, row
houses, luxury and super luxury apartments, plotted development and aspirational homes
replete with world-class amenities. In all its residential projects, the company lays a strong
emphasis on environmental management, water harvesting and high safety standards. On the
contracts side, the Company has constructed a wide variety of structures for corporates
including corporate offices, convention centres, software development blocks, multiplex
theatres, hostel facilities, guest houses, food courts, restaurants, research centres and club
houses. Some of SOBHA’s prestigious corporate clients include Infosys, Taj Group, Dell, HP,
Timken, Biocon, Institute of Public Enterprises (IPE), Bosch, Hotel Leela Ventures and others.
One of the well-respected brands in the real estate sector, SOBHA has many distinctions to its
credit, mainly its impeccable execution and on-time delivery track record. As of March 31st,
2018, SOBHA has completed about 92.53 million square feet of area. The Company currently
has ongoing real estate projects aggregating to 41.90 million square feet of developable area

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and 28.13 million square feet of saleable area, and ongoing contractual projects aggregating to
6.35 million square feet under various stages of construction. The Company has a real estate
presence in 9 cities, viz. Bengaluru, Gurugram, Chennai, Pune, Coimbatore, Thrissur, Calicut,
Cochin, and Mysore. Overall, SOBHA has footprint in 27 cities and 13 states across India. .
The backward integration model is one of the key competitive strengths of SOBHA. This
ensures that the Company has control not only over the supply but more importantly over the
quality of the materials it uses in construction activities. SOBHA has all the competencies and
in-house resources to deliver a project from conceptualisation to completion. Backward
integration includes an interiors division, a metal works and glazing factory and a concrete
products factory. SOBHA has also diversified into retail business with spring mattresses under
the brand name ‘SOBHA Restoplus’. More than 27 variants of mattresses are produced by the
mattress division using cutting-edge machinery of international quality. SOBHA is renowned
for its world-class products. The Company conforms to the ISO 9001, ISO 14001 and OHSAS
18001 certifications for its quality, safety and environment management systems.
SOBHA employs around 2,800 people directly. It places a lot of emphasis on human resource
development of which skill enhancement and advancement are given paramount importance.
At SOBHA, training is an on-going process for all employees which ensures that they are
abreast of the latest and newest developments in their domain of expertise.
Source: Company manual

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As a responsible corporate citizen, SOBHA’s CSR activities encompass the areas of education
and training, providing healthcare facilities and helping the aged, single mothers, children and
others in need of financial and other assistance. The CSR activities are primarily undertaken
through a public charitable trust, the Sri Kurumba Educational and Charitable Trust.
SOBHA has been honoured with over 170 prestigious awards by various institutions of repute.
Recently, SOBHA was recognised as 'The Most Trusted Real Estate Brand' in South Zone by
CNBC Awaaz. Additionally, SOBHA bagged the 'Best Professionally Managed Company'
(turnover > INR 1000 crores), Achievement Award for Social Development & Impact and the
'Best Construction Projects’ for SOBHA Sapphire (Thrissur) award at the 10th Construction
Industry Development Council (CIDC) VISWAKARMA Awards. This is the second
consecutive year and the third time when SOBHA was recognised by CIDC. Earlier this year,
SOBHA was voted as the Number 1 choice of homebuyers nationally in Track2Realty’s
Consumer Confidence Report 20:20 - one-of-its-kind comprehensive study on consumer
psychology about the Indian real estate market. This is the 4th consecutive year that the
Company has won top rank in consumer confidence survey, making it an exceptional and a
rare feat achieved by any real estate brand in the country. The Company was once again
awarded the CARE AWARDS 2017 in the category of 'Best CSR activity' by CREDAI
Karnataka. Additionally, SOBHA was declared as the TOP BRAND of Indian real estate sector
for the 3rd consecutive year by Track2Realty Report 2017.
Mr. Ravi Menon, Chairman, was honoured with the 'Young Entrepreneur of the Year' by
Construction Week, 'EY Entrepreneur of the Year-Real Estate, Energy & Infrastructure' by EY
in 2014 and 'Pathfinders Award for Most Enterprising CXO' by Realty Plus in 2013.The
Company's Chairman, Mr. Ravi Menon was conferred with the 'Young Entrepreneur of the
Year' by Construction Week during this FY 2014-15 & Mr. J.C. Sharma, Vice Chairman and
Managing Director was awarded the 'Best CEO in Real Estate' at the NDTV Property Awards.
SOBHA as an organisation is highly focused on delivering international quality products in a
timely manner with utmost perfection.

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1.3.1 Portfolio of Business
Source: Company website
1.3.2 Projects in Kerala
1) SOBHA CITY (Thrissur)
SOBHA City, was Kerala's first integrated township in the making. Spread over 55 acres,
SOBHA City is a world class integrated township, designed with painstakingly meticulous
attention to the smallest of details. SOBHA City is conveniently located: close to the city, and
Thrissur's famed educational institutions, hospitals and shopping centers.
Nature and technology converge in this green and eco-friendly township. The 6.5 acre lake -
one of the biggest rainwater harvesting facilities in the country - effectively addresses SOBHA
City's potable water needs. Minimum wastage of water is ensured by using the recycled water
from the sewage treatment plant for flushing and gardening.

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It have vast extent of land exclusively for recreational purposes. In addition to this, we have a
long jogging track all around the lake and a walk way extending from the entrance all through
the township. More than that, 'SOBHA City Mall', which is also located on the bank of the
Lake, offers best-in-class retail and entertainment experience for the customers. SOBHA City,
where international luxury is redefined at very doorstep.
2) SOBHA SILVER ESTATE
SOBHA SILVER ESTATE is the new endeavour of Sobha Limited in Thrissur after the iconic
Sobha City which is considered the defining benchmark project in Kerala in terms of scale,
architectural design, and international standards of construction and premium class amenities.
It set a number of precedents in the real estate industry and surpassed all records in its capital
asset value, becoming an invaluable asset for the investors.
Sobha Silver Estate is an exclusive gated villa community with all the advantages like world
class infrastructure, meticulous design and detailing together with vast open spaces. It is located
in a pristine environment and is only a short driving distance away from the heart of the city.
This will be yet another landmark project of Sobha in Thrissur.
3) MARINA-ONE
SOBHA Ltd with its long-standing reputation for quality and excellence in execution of real
estate projects, join hands with Puravankara to launch its first Super Luxury Waterfront
Homes in Cochin - Marina One.
Marina One offers diversity of design that it sure is to be a home that is a perfect fit of luxury
and contemporary. 12 towers housing 1141 residences complete this private 16.7 acre self-
contained residential community. Marina One homes are individual in style and arrangement.
Every home is a waterfront property and is designed to meet the demand from discerning
buyers and investors opting for premium waterfront homes. Units ranging from 2482.65 sqft -
3710.67 sqft - 3 and 4 bedroom Super Luxury Apartments are tastefully designed to entice the
connoisseurs of elite lifestyle. Marina One is set on an ideal location strategically located
ensuring easy access to prestigious educational institutions, super specialty hospitals, malls &
markets, and places of worship.
Marina one also boasts of a 590 meter water frontage with a 5 plus acre landscaped central
podium that houses 2 levels of car park and loads of amenities

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1.3.2.1 Projects in Kozhikode
1) SOBHA BELA ENCOSTA
SOBHA Bela Encosta is an
amazing architectural marvel
inspired by genuine
Portuguese –Architecture and
Landscape design. As the
very Portuguese name ‘Bela
Encosta’ suggests, these
villas nestle peacefully in the
nature-endowed landscape of Velliparamba.Sobha Bela Encosta is the second largest
development of Sobha in Kerala,afer Sobha city at Puzhakkal,Thrissur. The fusion design of
the villas entices even connoisseurs of exotic lifestyles. With easy access to the city, yet ticked
away from its disturbances, this haven of tranquility extends the setting for a great villa life.
Bela Encosta ensures easy access to prestigious educational institutions, super specialty
hospitals, IT hubs and shopping malls along the NH Bypass, pilgrim centers and the Airport.
The Club House is replete with world class amenities which will vouch taste for refined living.
The exciting features include the spectacular entrance plaza, 12 meter wide internal roads,
Tennis Court, Indoor Badminton Court, Swimming Pool, Health Club and Walkways. The
limited number of exquisite homes, just 41 in numbers are being crafted in an expanse of 10
acres of contouring land. One can’t miss the breathtaking hill view from any of the mansions
in this well terraced layout.
Location of the Project: Kuttikkattor village, Kozhikode, Kerala, India.
Type of Project: Residential Villas (Super-Luxury - 4/5BHK)
No. of Villas: 41nos.
Plot sizes; 16X27.4M (11 Cents Approx.) on an average.
Club House / Amenities
 Multipurpose hall

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 Gymnasium
 Badminton court
 Table Tennis
 Billiards
 Association Room & Provision store
 Swimming pool
 Children’s play area
 Half Basketball court
 Tennis Court
2) SOBHA RIO VISTA
SOBHA Rio Vista is the first Apartment project of Sobha in Kozhikode.Rio Vista celebrates
the charm of super luxury living on a beautiful river side. The astonishing view from every
home infuses a never ending tryst with nature by clubbing the golden optimism of the sparkling
waters and the inspiration of glorious sunsets. SOBHA Rio Vista is located by the side of river
'Chaliyar' at Feroke further down the Raviz Resorts. The apartments offer an unobstructed
outlook of the flowing waters and the rich landscape surrounding it. Enjoy a life lived amidst
the lush green surroundings, the legendary river and the infinite horizon that descends into the
sea. SOBHA Rio Vista extends easy connectivity to all city landmarks and urban comforts. In
essence Rio Vista offers a perfect ambiance for a peaceful residential life.

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The extra spacious apartments in the lone tower is nestled in a 3.66 acres of elevated land
overlooking the river with acres of greenery and open space. Complete with world-class
amenities and an aesthetically designed entrance lobby, SOBHA Rio Vista promises a global
lifestyle that compliments your love for refined living. One have the option to choose either 3
or 4 BHK apartments with area ranging from 2018 sqft to 3148 sqft. Come and be blessed with
the best eyeshot of nature from own SOBHA home.
Type of Project: RESIDENTIAL APARTMENTS (Super-Luxury)
Location: Feroke, Kozhikode, Kerala, India.
Building Configuration: 3Basements+Ground+27 Upper Floors
Total Plot area: 3.66 Acres
Total No. of Units: 216 Nos.
Typology & Preliminary SBA of Units
Type A: 3148.51 Sqft (54 nos.)
Type B: 2300.87 Sqft (54 nos.)
Type C: 2038.04 Sqft (54 nos.)
Type D: 2046.70 Sqft (54 nos.)
Club House / Amenities
 Multipurpose hall
 Gymnasium
 Table Tennis
 Pool table
 Association room
 Swimming pool
 Children's play area

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1.4. RESEARCH BACKGROUND
House making is one of the world’s oldest as well as richest cultures. India is known for its
architectural varieties. White-marble TajMahal, the famously ornate temples in the south,
Buddhist temples, the colonial architecture of Delhi and Calcutta, the forts of Rajasthan are
examples. India’s geographical variety is unsurprisingly enormous, given its size. While the
north is made up of the foothills to the Himalayas, the south has jungles, deserts, beaches, and
the vast Deccan Plateau in the south is physically monotonous, a relatively unvarying landscape
stretching out over hundreds of kilometers.
India is the second most populous country after China. India is emerging as an important
business location, particularly in the services sector. Its favorable demographics and strong
economic growth make the country an attractive place for property investors. Historically, the
real estate sector in India was unorganized and characterized by various factors that impeded
organized dealing, such as the absence of a centralized title registry providing title guarantee,
lack of uniformity in local laws and their application, non – availability of bank financing, high
interest rates and transfer taxes, and the lack of transparency in transaction values. In recent
years however, the real estate sector in India has exhibited a trend towards greater organization
and transparency.
Increase in the number of organized builders and transparency have contributed to the
development of reliable indicators of value and the organized investment in the real estate
sector by domestic and international financial institutions. This has also resulted in the greater
availability of financing for real estate developers. Regulatory changes permitting foreign
investment are expected to further increase investment in the Indian real estate sector. The
nature of demand is also changing, with heightened consumer expectation that are influenced
by higher disposal incomes, increased globalization and the introduction of new real estate
products and services. These trends have benefited from the substantial growth in the Indian
economy, which has stimulated demand for land and developed real estate industry across the
country. Demand for residential, commercial and retail real estate is rising throughout India,
accompanied by increased demand for hotel accommodation and improved infrastructure.
Now a days housing sector in Kerala is the fastest moving real estate segment. Kerala housing
sector has registered tremendous growth on the basis of rising income, growing urbanization,
migration of the population towards urban region in search of employment. Kerala housing

27. P a g e | 26
sector is now shifting towards the upper class and upper middle class people, it is also
concentrating on medium and luxury housing. This shift from economy to luxury housing will
boost the growth in the housing sector. The luxury housing segment offers lots of growth
opportunities for Indian and foreign players.
A big luxurious home is the ultimate status symbol in a space starved state like Kerala.
Adequate housing is so much an integral part of the needs of every society at large is hardly
questioned. In earlier days the concept of living as far as an average Keralite was only an
accommodation within the joint family structure already existing. Now the family concept has
been transformed to nuclear family and their desire for separate living necessitated the
construction of individual house. Earlier, Keralites took pride in living in independent houses,
but factors such as security made them look at alternatives. A gated villa lets the consumers
live in an individual house, at the same time provide them with the amenities and benefits of
apartment living.
Against a backdrop of recent strong growth of urban population has lead to increasing problem
of housing in Kerala. Majority of the houses in Kerala are constructed by the people themselves
with their own resources. Till recently Keralites considered Villas and Apartments as a symbol
of luxury for the upper class people. But now it has been totally changed. Buyers for Villas and
Apartments are increasing day by day. To own a villa or apartment is the only option for living
in town or nearby. As far as employed husband and wife are concerned their family life is
concentrated in the city. As such education of their children, shopping, and other entertainment
facilities are related with the city. Further to this conveyance facility, hospital and security
problems are also motivating them to reside in cities. Even the high income group can’t imagine
purchase of plot and construction of a house in city since it is unaffordable. Scarcity of adequate
land and unaffordable price are the main issues behind this. In this situation the importance of
Villas and Apartment comes up.
Consumer behavior is one of the topics that marketer uses to better understanding of consumer
on how their behavior react when comes to buying decisions. Perception is how one view under
the influence of past experience, personal opinion. In today’s globalizing economy competition
is getting more and more fierce. That means it becomes more difficult for products and services
such as Villas and Apartments to differentiate themselves from other services than ever before.
Since product difference are closed at an increasing speed and many builders try to win the
battle for customers by price reduction and service tend to become commodities. On the other

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hand, customer behavior becomes more hybrids. On one hand, customers are increasingly price
sensitive. On the other hand they enjoy branded and luxury Villas and Apartments. In this
situation the development of a strong relationship between customers and builders could likely
prove to be a significant opportunity for competitive advantage. This relationship is no longer
based on features like price and quality alone. Today it is more the perceived experience a
customer makes in his various interactions with a company that can make or break the
relationship. The important point here is the involvement of feelings, emotion and perception.
In today’s competitive market place, these perceptions are becoming much more important
than gaining sustainable competitive advantage.
In order to develop appropriate marketing strategies, builders need to know factors influencing
the buying of Villas and Apartments. This study will provide further insights about the buying
behavior and how these can be used to devise marketing strategies of builders. Consumer
behaviour can be defined as “those activities directly involved in obtaining, consuming, and
disposing of products and service, including the decision processes that precede and follow
these actions”. Moreover, Schiffman and Kanuk mentioned that consumer behaviour is “the
behaviour that consumers display in searching for purchasing, using, evaluating and disposing
of product, service and idea which they expect will satisfy their needs”. Therefore, knowing
the factors which influence the buying behaviour could increase the sales volume.
The consumer behaviour is an important factor to indicate the decision making process in
buying a house. Moreover, the buying behaviour is influenced by both internal and external
factors. The internal factors comprised of motivation, perception, consumer resources,
knowledge, attitudes, personality, values and lifestyle. Cultural background, social class,
personal influence, reference group and situation also influence the decision-process
behaviour. Reference group could be assembled into three components that is family, friends
and colleagues. Kotler cited that buyer decision process passing through five stages that is: (1)
need recognition, (2) information search, (3) evaluation of alternatives, (4) purchase decision
and (5) post purchase behaviour.
This process starts with the buyer recognizing a need which can be inspired by internal or
external stimuli. In this case the need for buying a house. The next stage is searching housing
information from several sources. Kotler mentioned four groups of information sources, such
as personal, commercial, public and experiential sources. The developer from the brochure,

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advertisement or the salespeople could supply the commercial and public information. On the
other hand, information from personal sources such as friends and family could be more
convincing than the formal information from the developer. This study purposes to evaluate
the consideration factors in buying a house which was done after the information searching.
The head of the family or others which could be influenced by other parties might do the
purchase decision.
To develop an appropriate marketing plan, Builders need to know the factors influencing
buying decisions with regard to Villas and Apartments. In this backdrop, a study was conducted
to understand the buyers’ expectations about Villas and Apartments, factors influencing buying
behavior, the findings of the study would help builders in Calicut to get a better insight about
buyers’ expectations and fine-tune their projects accordingly.
1.5 RESEARCH PROBLEM
Density of population in Kerala is comparatively high. Availability of residential plots is
limited. So Real Estate and Construction sector in Kerala is showing high growth in recent
times. The background of this study is to identify the factors influencing home buyers’ purchase
decision: A study of residential property in Kozhikode and Malappuram. Basically, there are a
lot of factors people taking into consideration when making decisions to buy property as it
involve a huge amount of money and long term commitments. There are many housing
developers in the market such as Landmark, Malabar, Sobha, and Asset homes, due to that the
supply of the residential houses increased drastically. Developers were competing with each
other’s in terms of sales, branding, marketing and market shares .Hence, the developers need
to find some solutions and answer what is the purchaser will look into when they intended to
buy a residential houses.
In Kozhikode, there are many developers offering a wide range of products, namely from
residential, offices and commercial property. Due to many developers in the market, consumers
have a variety of choices to choose because developers may find it difficult to sell their products
due to high competition. Part of it is the location, amenities, reputation of the developers and
price .Saying that, there will be more and more supply in the market and the market will be
more competitive and intense. When there are a lot of choices in the market, buyer will have
more criteria’s to look into it such as price of the house, design of the house, location, rebates
and promotions and free goodies.

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Developers in Kozhikode are mushrooming and varieties of property are being offered. Saying
that, people tend to make a crucial decision on which one to consider first whether the location
of the property, price of the property, monthly repayment involved and monthly commitment
for long term. The property price in Calicut keep on rising and doesn’t show signs of
depreciation especially in prime location city centers and beach sides. As the time goes, more
and more reputable developers competing each other in building more and more residential
properties particularly. As such there will be more residential properties offered in the market
as the supply will increase and the demand will decrease thus because there is also more and
more small developer begin to venture into the market. This research tends to look into criteria
such as Buyers psychological factors has an impact when buying a residential property in
Calicut.
When the rivalry intense is high in the market, it is good for the buyers as they will have more
demands and it may fulfill their needs in buying a residential property. However, from the
perspective of developers, when there are more developers, it may affect their sales, profit,
market shares and eventually will affects the company performance overall. Therefore, the
developers will come out with a huge amount of discounts or packages to attract the buyers.
This including, do more advertisement and marketing to promote the products and increase
market awareness about the company.
Consumer behavior is an area of study which gives insight to marketers regarding how
consumers behave, while making buying decisions. In today’s globalized economy,
competition is getting intensified. Due to this, it becomes more difficult for products and
services such as Villas and Apartments to differentiate themselves from other services than
ever before. Builders do not differ significantly in terms of architectural style, design, and basic
amenities being offered. On one hand, customers prefer to buy Villas and Apartments. On the
other hand, they are becoming more price sensitive. In this situation the development of a
strong relationship between customers and builders could likely to provide a significant
opportunity for competitive advantage.
As aware that there are plenty of developers out there, a top developer like Sobha has
reputations as the Best developer in Kerala as well as in India. The portfolio of Sobha expended
in many Gulf countries and locally. Without doubt, Sobha has gone internationally in their
business profiles. Sobha also has won numerous of awards locally and internationally. Sobha

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city in Trissur is one of Sobha’s biggest township developments. Therefore, we would like to
do a research whether the psychological factors of the potential homebuyers have an impact
when buying a residential property in Calicut. Hence the problem of the study can be stated as
“What are the expectations of buyers about Villas and Apartments in Calicut, What are the
factors that influence their buying behaviour in purchase of Villas and Apartments?”
1.6 RESEARCH OBJECTIVES
1) To understand the factors that influence the buying behavior with respect to Villas
and Apartment projects of Sobha Ltd. at Calicut and Malappuram.
2) To understand the potential Buyers’ expectations on buying of Villas and
Apartments.
3) To suggest measures to devise better marketing strategies for the Villas and
Apartment projects to the company.
1.7 HYPOTHESIS
H0a:
The factor extent of involvement has no significant relationship with the purchase intention of
the potential buyers on super luxury housing projects of Sobha Ltd., Calicut.
H0a:
The factor feelings has no significant relationship with the purchase intention of the potential
buyers on super luxury housing projects of Sobha Ltd., Calicut.
H0a:
The factor knowledge has no significant relationship with the purchase intention of the
potential buyers on super luxury housing projects of Sobha Ltd., Calicut.
H0a:
The factor motivation has no significant relationship with the purchase intention of the
potential buyers on super luxury housing projects of Sobha Ltd., Calicut.
H0a:

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The factor personality has no significant relationship with the purchase intention of the
potential buyers on super luxury housing projects of Sobha Ltd., Calicut.
H0a:
The factor attitude has no significant relationship with the purchase intention of the potential
buyers on super luxury housing projects of Sobha Ltd., Calicut.
H0a:
The factor values has no significant relationship with the purchase intention of the potential
buyers on super luxury housing projects of Sobha Ltd., Calicut.
H0a:
The factor learning has no significant relationship with the purchase intention of the potential
buyers on super luxury housing projects of Sobha Ltd., Calicut.
H0a:
The factor time pressure has no significant relationship with the purchase intention of the
potential buyers on super luxury housing projects of Sobha Ltd., Calicut.
1.8. Scope of study
Kerala is a state with higher level of population density which resulted in the problem of not
having adequate accommodation for many people. Due to high price, insufficiency of land,
high cost of land registration, and high price of building materials, people are now less
interested to construct house on their own. That’s why they turn to real estate companies who
are providing Villas or Apartments. As a result, real estate business has thrived over the years.
The study of consumer buying behavior involves trying to understand complex human beings
and the reasons they act the way they do in the market place. It recognizes that consumer
decisions take place inside a person who has a distinctive personality and attitudes. Builders
should embrace the study of consumer behavior to better understand the reasons behind market
choices. The incorporation of buying behavior concepts into decision making process of Villas
and Apartments will improve the understanding of individual decision-making process. This
understanding will lead to better explanations and predictions in markets and, as a result,
greater success in the market place.

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This study covers various aspects related to buying of Villas and Apartments in Calicut.
Internal factors affecting the buying of Villas and Apartments, Buyers expectation about Villas
and Apartments, Other factors such as pricing, investment, Vasthu, Buying decision were
included in this study. This study was done by collecting data from the potential consumers of
Villas and Apartments. For the purpose of the study, the two districts of Kerala – Kozhikode
and Malappuram were considered.
1.9. Significance of the Study
Now a days, the practice of buying Villas and Apartments in Kerala is on the rise. National and
International builders are competing each other, with appealing projects with the backing of
advanced technologies and world class architectural style. From the data available from various
sources regarding the number of completed Villas and Apartments in earlier years, it can be
seen that there is growth in the number of projects completed over the years. This is testimonial
to the fact that there is an increase in demand for Villas and Apartments in Kozhikode and there
exists a great potential for this sector. But not many systematic studies to understand the factors
influencing the buying of Villas and Apartments. Hence there exists a gap in the body of
knowledge regarding these aspects related to the buying of Villas and Apartments. This study
is an attempt to fill the above mentioned gap. This study aims at knowing the expectations of
buyers of Villas and Apartments, factors that influence the buying behavior.
The findings of this study have certain implications. One is that a new set of knowledge is
being produced with regard to the various dimensions of buying Villas and Apartments in
Calicut. Another is that the findings can be used by Researchers to set directions for further
studies on this topic. Yet another implication is for the industry. The inferences made in this
study will help the builders to have better insights about the perceptions of consumers, factors
that would influence their buying process and behaviour etc. The builders can consider this
information while planning and designing new projects in the future period of time. Moreover
they can use this for devising appropriate marketing strategies to entice buyers. Hence the study
is significant in ways more than one.
1.10. Operational definitions
• Apartment:-Apartment' means a part of a building intended for any type of independent use
including one or more rooms or enclosed spaces located on one or more floors or parts thereof

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in a building, intended to be used for residential purposes and with a direct exit to a public
street, road or highway or to a common area, leading to such street, road or highway. This word
is synonymous with residential flat (Kerala municipality building rules 1999)
• Villa: - Villas are self-supporting estate at the heart of which is a large house, set around
courtyards and gardens.
• Consumer Behaviour: - The mental emotional and physical activities that people engage in
when selecting, purchasing and using Villas/ Apartments so as to satisfy needs and desires.
• Investment: - Purchase of Villa/Apartment is an investment with the idea that the asset will
provide income in the future or appreciate and be sold at a higher price.
• Price: - The amount of money expected, required, or given in purchasing of Villa/ Apartment.
• Vasthu: - Vasthu is an ancient Indian science of architecture and buildings which helps in
making a congenial setting or a place to live and work in a most scientific way taking advantage
of the benefits bestowed by nature, its elements and energy fields for enhanced wealth, health,
prosperity and happiness. According to Vasthu, there are five basic elements in the whole
world. They are the Earth; Water; Air; Fire, Heat & Light; and Sky Cosmic.
• Involvement: - Involvement is the act of participating in the purchase of Villa/ Apartment.
• Feelings: - An emotional state of customer when purchasing of Villa/ Apartment.
• Experience: - Practical contact with and observation of facts or events.
• Knowledge: - Facts and information acquired through experience or education
• Perception: - It is a process by which individuals organise and interpret their sensory
impressions in order to give meaning to their environment.
• Motivation: - Motivation is the desire within an individual that stimulates him or her to action
• Personality: - Personality can be defined as those inner psychological characteristics that
both determine and reflect how a person responds to his or her environment
• Attitude: - An attitude is a learned predisposition to behave in a consistently favourable or
unfavorable way with respect to a given object

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• Values: - Ideas shared by the member of a culture about what is good or bad and desirable or
undesirable.
• Taste: - Taste can be defined as the person’s ability to choose quality goods or goods suitable
to him or her
• Preference: - Consumer preference refers to choose something better than previous goods.
• Learning: - Consumer learning as the process by which individuals acquire the purchase and
consumption knowledge and experience that they apply to future related behaviour.
• Time pressure: - Time pressure refers to the psychological stress resulting from having to
get things done in less time than is required or desired.
1.11. Limitations of the study
The first limitation is: Kozhikode’s current residential housing market is highly complex and
competitive. Many factors may stimulate home buyers’ purchase behaviour. This study only
focuses on buyer’s psychological factors influencing the purchase decision.
The second limitation is that this study collects and analyses data from the Calicut residential
market. Based on past literature, housing purchase behaviour varies across different social and
cultural backgrounds. The outcomes of this research are also different to the results of past
studies. Therefore, outcomes from this research might not apply to other population groups, or
to other cities in Kerala.
Lastly, the consumer purchase decision model consists of five stages: problem recognition,
searching for information, evaluation of alternatives, purchase decision, and post-purchase
behaviour (Blackwell et al., 2006). This research model only emphasizes the first four stages
of this CDM model. These four stages of the consumer purchase decision process are: problem
recognition, searching for information, evaluation of alternatives and purchase decision.
1.12 Research Methodology
This chapter explained whole research study with the research design. Next, it followed by
method used for the data collection. It focuses on sampling design and operational definitions
of constructs. Besides, it emphasized on the measurement scales and methods of data analysis

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that been used to answer the hypothesis and problem statement that were developed in previous
chapter.
1.12.1 Research Design
Research design was basically a plan for a study that provide the specifications of procedures
to be followed by researchers in order to accomplish their research question or test the
hypothesis formulated for their studies (Kumar, Abdul Talib and Ramayah, 2013). This study
has adopted the quantitative research and seeks to quantify the data and conclude the evidence
to identify the factors that influence buyer decisions to purchase a residential property in
Calicut. Quantitative research is a logical and data base approach which providing a measure
of what people think from a statistical and numerical point of view. Quantitative research can
gather a large amount of data that can be easily organized and manipulated into reports for
analysis.
Descriptive research design has been adopted in this study as it was the most suitable research
design to be used. Descriptive research “describes” something which could be a phenomenon,
a current situation or characteristics of a group of organization, people, etc. The objective of
descriptive research is to describe things such as market potential, acceptance of new business
concept or the demographics and attitudes of customers (Kumar et al, 2013). The reason to use
descriptive research design is it best describes the characters of specific relevant groups such
as customers and market areas. It also useful to answer the question of who, what, where, when
and how of a particular issue or situation. This type of data was very useful in this study as it
provided the prior knowledge and to identify the factors that influence buyer decisions to
purchase a residential property in Calicut.
1.12.2 Data Collection Methods
This research divided into two types of data collection methods which are primary data and
second data that been collected for conducting the research.
1.12.2.1 Primary Data
Primary data represent ‘first-hand’ raw data structures that have not had any type of meaningful
interpretation (Hair, Bush and Ortinaug, 2006). According to Burns and Bush (2006), primary
data is developed or collected by researchers especially for the research problem on hand.

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Primary data does not actually exist until it is generated through the research process as part of
the consultancy or dissertation or project, Hair et al., (2006)
Primary data are more accurate and relevant than secondary data because it is more simple,
reliable and the used of fixed response questions that can reduced the variability in the result
that might cause by varies among the interviewers. Primary data is closely related to and has
implication for the methods and techniques of data collection. For example, primary data will
often be collected through various techniques such as interviewing, observation and survey
questionnaire, Hair et al., (2007).
In this research study, survey questionnaire is the most suitable method to be used to collect
primary data that are relevant to residential property. Researcher used online survey
questionnaire which generated in Google Doc and hand-in-hand survey questionnaire. The
underlying reason of using online survey questionnaire to collect primary data is to take
advantage of the increased used on internet in various segment of audience which possibly not
reachable through other channels (Caroline and Barry, 2002). Online survey questionnaire is
relatively quick in collecting data as compare to other approaches such as interview and
observation. This method is being used as it helps the survey to be completed in an easy and
cost efficient way. Moreover, the data obtained is original as it was obtained directly from the
target samples. The samples need to fill in the questionnaire and return it immediately after
they have answered. The questionnaires were distributed to respondents through mailing and
sharing through whatsapp messages. This method of distribution is an effective way to collect
data from a large sample of working people within a short period of time.
1.12.2.2 Secondary Data
Secondary data is data that are gathered and recorded by someone else prior to (and for the
purposes other than) the current project. Secondary data usually are historical and already
assembled (Zikmund, Babin, Carr and Griffin, 2010). The primary advantage of secondary data
is their availability. This type of data required very little time to obtain, easy to find and less
expensive than acquiring primary data.
For this research study, most of the secondary data was obtained using books and internet.
Website such as UTAR LIBRARY OPAC contains lot of e-journals from different online
databases. Online databases such as Jstor, Science Direct, Google scholar, Shodhganga, SAGE
Publications and Emerald-Sight do helped for better understanding on this research topic. Some

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example of e-journals that used to support this research study was International Journal of
Marketing Studies, Social Science, Journal of International Business and Management.
1.12.3 Sampling Design
Sample size is the total number of respondents or targets to be studied in this research (Malhotra
and Peterson, 2006). In this research, 86 sets of questionnaire were distributed to the high net
income groups in Calicut and Malappuram. Based on Sekaran (2011) research, too large or too
small of sample size is not appropriate to generate good result. Therefore, the sample size of
86 respondents was used and was considered medium.
1.12.3.1 Target Population
Target population is the whole group that researchers were interested in desire to draw a
conclusion (Hitzig, 2009). In this research, the target population will focus on the potential
buyers and owners that are of in the category of high net income groups. The reason to choose
high net income people is due to they were the existing resident or future resident in Calicut
and have the capacity to buy Apartments and villas worth above one crore and the purchase
decisions will determined the reason to purchase a residential property in Calicut.
A List of 110 HNI (High Net Income) persons from Calicut and Malappuram, provided by the
company is taken as the Population size of the study. The questionnaire was distributed to the
samples in the selected areas. The respondents need to fill up the questionnaire immediately
and submit the questionnaire without missing any questions. The questionnaires were
distributed to the sample in Calicut and Malappuram from 22nd May till 4th
June. Once all the
86 sets of questionnaire were fully answer by the respondents, the process of gathering data
stops for data key in.
1.12.3.2 Sampling Frame and Sampling Location
According to Zikmund (2010), a sampling frame is the list of elements where sample may be
collected. However, sampling frame was not relevant in this research because non probability
sampling have been applied in this research. The sampling location is focused in the selected
locations of Calicut and Malappuram. The reason to choose the selected cities is because it is
easy to distribute survey questionnaire to the selected HNI samples and it is very time
consuming to target on other places. Besides that, it is very convenient locations for conducting
this research.

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1.12.3.3 Sampling Elements
In sampling elements, the target respondents are High Net Income persons which fall in the
ages range from fewer 21 years old to more than 50 years old and above. The sampling elements
of this subject are the demographic information’s such as gender, age, and place and
employment status.
1.12.3.4 Sampling Technique
Sampling technique is a method used to select a sample from population (Saunder, Lewis and
Thornhill, 2009). It can be divided into two main sampling techniques which are probability
sampling and non-probability sampling. In this research, non-probability sampling is being
used because there is no sampling frame. Non-probability sampling is any process in which
elements do not have equal chances of being selected in a sample. In non-probability sampling,
sample selected based on the basis of convenience and personal judgment.
In this research, convenience sampling and snowball sampling method were used. The
convenience sampling is samples that are collected to the convenience of researcher because it
is fast to collect large number of respondents (Shiu et al, 2009, p. 480, p. 726) and it is a great
chance to approach large number of potential respondents successfully. Questionnaire will be
distributed in survey paper or via internet to the samples. The reason of using convenience
sampling is because it is cost efficient and save time.
Besides that, snowball sampling is being used in this research because the initial respondents
identify additional respondents (Orcher, 2005).
1.12.3.5 Sample Size
Sample size is the total number of respondents or target to be studied on the research (Malhotra
and Peterson, 2006). The larger the sample size, the lower the sampling errors to generalize the
population of study (Saunders, Lewis and Thornbill, 2009). Sample size embodies the amount
of respondents need to get statistically substantial results for a specific population.it can be
identified through applying following formula:

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Sample Size =
Population Size = N | Margin of error = e | z-score = z
e is percentage, put into decimal form (for example, 3% = 0.03).
The z-score is the number of standard deviations a given proportion is away from the mean.
Population: 110 | Margin of error: 5% | Confidence Level: 95%
So, Required Minimum Sample = 86 samples.
For this research, 86 sample were selected for study.
1.12.4 Research Instrument
Questionnaire is a method of data collection that respondents were requested to answer the
same set of questions in a predetermined order (Devaus, 2002). In this research, questionnaires
were distributed to get primary data from respondents on attributes influencing home buyer’s
purchase decision to purchase a residential property in Calicut. Self – administered
questionnaire have been used in this research which is the respondent takes the liability to read
and answer the questions, either on the questionnaire papers or via internet (Zikmund and
Babin, 2010).
1.12.4.1 Design of the Questionnaire
In this research, English language has been adopted in the design of questionnaire as it is an
appropriate to communicate with the respondent. Closed – ended questions are used in the
questionnaire because it is easier for the respondents to answer and complete the questionnaire
as it save time (Zikmund et al, 2010).
A self-administrated survey questionnaire has been developed for the purpose of this research.
The items in the questionnaire have been adopted from previous research studies by various
authors and minor adjustments have been made according to the local context. In the layout of
the questionnaire, a brief introduction and main objective of conducting this research are

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attached at cover page. The questionnaire consists of three parts, Section A, Section B, and
Section C.
Section A
Respondents are asked to evaluate all the independent variables by using 5- points Likert Scales
from 1 which indicates “strongly disagree” and 5 which indicates “strongly agree”. All the
scale items are coded so that the higher score reflects higher levels of the measured construct.
In this section, respondents are requested to provide their demographic information including:
name, gender, age range, and their employment status.
Section B
This section examines the variables which are factors that will influence residential home buyer
when buying a residential property in Calicut.
Section C
This section will examine the general questions regarding buyers purchase preference, location
preference, brand preference and media preference.
For this research, there were 86 sets of questionnaire has been distributed to the samples in
Calicut and Malappuram. During this process, all the questionnaire were collected back
immediately after the respondents completed the questionnaire. The respondents were brief
about the purpose and objective of this research and the respondents has been assured that all
the information’s for this research will be kept private and confidential.
1.12.5 Construct Measurement
1.12.5.1 Construct Measurement
Measurement is foundation of any scientific investigation which commonly researchers begin
to measure the variables that required in particular studies. Measurement defines as a
systematic and replicable process where the objects being quantified and classified with a
particular dimension (Jonathan, 2007). Scale of measurements comes in four levels which are
ordinal, nominal, interval ratio and scales which used to measure things numerically. Nominal
scale commonly used on natural categories such as gender (male or female) which often called
categorical scales or dichotomous scales where there are only two provided categories (Brown,

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2011). In the questionnaire provided, Section A consists of questionnaire that used nominal
scale such as gender, age, and place and employment status.
. In section B of the research questionnaire, the interval scale is used to measure the respondents
view towards the variables (Involvement, Learning, Knowledge, Attitude, and Personality,
Values, Motivation, Feeling and Time pressure and purchase influence). In Section C of the
questionnaire, various questions were asked regarding buyers preference which include open
ended question also. In this questionnaire, 7 point Likert scale were used for collecting opinions
regarding statements on various factors. The Likert scales are ranged from Strongly Disagree
(1) to Strongly Agree (5) as shown in the Table 1.1.
Table 1.1: (5 – point Likert Scale of Measurement)
Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
1 2 3 4 5
1.12.5.2 Operational definition
Table 1.2 shows list of question in nine different variables (Involvement, Learning,
Knowledge, Attitude, and Personality, Values, Motivation, Feeling, Time pressure and
purchase influence).
Table 1.2 Operational Definitions
VARIABLES LIST OF QUESTIONS
INVOLVMENT Q1. I make purchase after detailed market study.
Q2. I make a decision only after seeing the project location or show home
Q3. It is husband who decides to purchase an Apartment/villa
Q4. Husband and wife jointly take decision in the
purchase of an apartment/villa

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FEELING Q5. I believe that the status of my family should be
reflected in my purchase decision
Q6. I don’t simply follow my heart while making purchase decision
KNOWLEDGE Q7. I mainly depend on advertisements for information regarding
available housing projects
Q8. Only After conducting comparative analysis with available
projects, I finally take decision in the case of purchase of an
Apartment/Villa
MOTIVATION Q9. Social status is an important motivator of my decision on
Selecting the builder.
Q10. Freedom from the traditional joint family
atmosphere is a motivating factor behind the
Purchase of an Apartment /Villa.
Q11. Availability of all modern amenities will encourage me
to buy an apartment /villa
PERSONALITY Q12. My self-image should be reflected on the purchase decision
Q13.It is important to me that my individuality should
Reflect in my selection of the builder.
ATTITUDE Q14. An Apartment/Villa make life more comfortable/ Convenient
than an independent bungalow.
Q15. I buy an apartment for satisfying my personal needs
without any attempt to make an impression on other people
Q16. Before purchasing an apartment/Villa it is important to know from
which builder to buy to make good impression on others
Q17. I tend to pay attention to what others of my equal social
Status are buying.

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VALUES Q18.Purchase of an apartment/villa materialize my dream house
Q19.The concept of community living is an important factor for
Purchase an apartment/villa
Q20.Vasthu aspects of the building construction and
Surroundings influences me to purchase Apartment/villa.
LEARNING Q21. While making purchase of a house, I am mostly influenced by
design that are attractive and match with my expectation
Q22. Frequent promotional activities offered by the Builders will enlight
awareness, familiarity, and credibility of the product.
TIME PRESSURE Q23. Busy life style and job pressure prevents me to concentrate
In the construction of a house. Hence I prefer to purchase an
Apartment/villa.
Q24. Practical difficulty to construct a house in international
architectural standards within a short period compelled me to
Purchase an apartment/Villa.
Q25. Schedule of payment is a factor more important than delivery period in
my decision making for purchasing house.
Source: Developed for the research
1.12.6 Data Processing
Data processing involves closely related operations which are performed provided with the
purpose of summarizing the collected data and organize it in the manner that the respondents
answer their research questions. The sample was fully checked to ensure no missing data as it
proceeds to next step which data is to be edited (Dawson and Catherine, 2002). According to
Wong et al (2012), data processing involved data editing, data coding, data checking, data
transcribing and data cleaning.
1.12.6.1 Data Checking
Data checking is crucial part of data processing as it is important to check the data to ensure it
is accurate. Data checking was used to minimize the error occurs as minimal as possible to get
a high accuracy data. Due to entering data process into Statistical Package for Social Sciences
(SPSS) is lengthy, it often lead to error thus it is advisable to have a second person or
researchers to recheck the data entered (Dawson and Catherine, 2002).

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1.12.6.2 Data Editing
As proceed to next step from data checking, data editing is performed to identify the omission,
ambiguities and errors in responses which often conducted by researchers. Problem that often
identified in data editing is the interviewer error, lack of cooperation between respondents and
interviewers and the ineligible respondent (Aaker, Kumar and Day, 2007).
1.12.6.3 Data Coding
After complete editing the data, a data coding process need to be conducted because the data
collected are not formed in proper manner which not in sequence. The data from the closed-
ended questions are coded to specify how the responses are to be entered in the SPSS.
According to Aaker, Kumar and Day, (2007), open-ended questions are more difficult to be
coded as compare to closed-ended questions. The reason open-ended questions are difficult to
be code because the lengthy list of possible response is being generated in open-ended
questions.
1.12.6.4 Data Transcribing
Data transcribe process where the data coded previously are being transferred into the SPSS
software to process the data collected from the distributed questionnaire.
1.12.6.5 Data Cleaning
According to Chapman (2005), data cleaning is a process used to identify and remove the
detected error which found in the collected data to improve the quality of data. The errors can
be due to inaccurate data, incomplete data or omission of data. The process including the format
checks, completeness checks, omission checks and assessment of the data.
1.12.7 Data Analysis
Data analysis is the process of generating useful and important information for decision making
through evaluation and interpretation of data. Before data can be analyzed, Statistical Package
for Social Science (SPSS) software will be used for analysis data. SPSS software is a common
and widely analysis tool. SPSS provides a powerful statistical-analysis and data-management
systems to generate information into tables and graphs.
1.12.7.1 Descriptive Analysis

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Descriptive analysis refers to the information of raw data that has been transformed into a form
that are easy to understand and explanation where the data is collected through observation,
survey questionnaire and personal interview and others which is the first step of the data
analysis (Aaker, Kumar and Day, 2007). For the nominal and ordinal data, frequency and
percentage are used to present the respondent’s demographic data which in Section A of the
survey questionnaire. Moreover, central tendency such as mean, median, mode and standard
deviation is used to measure the amount of scatter or spread on the answer. Hence, the mean
and standard deviation are the most useful descriptive statistics for researchers to use when
interpreting data.
1.12.7.2 Pearson Correlation Coefficient Analysis
Correlation is a technique to investigate the relationship between the two variables whereby
Pearson’s correlation coefficient (r) is a measure of the strength of the association between the
two variables. The coefficient ranges from -1 to +1, where -1 means perfect negative
relationship, +1 mean perfect positive relationship and 0 means no linear relationship. In
general, the closer the value is to -1 or +1, the stronger the linear correlation (Zikmund, Babin,
Carr and Grifjfin, 2010).
1.13. Presentation of the Research
Chapter I: Introduction - The first chapter provides an overview of the research topic, statement
of problem, scope of the study, significance of the study, objectives of the study, Research
Model, hypotheses, operational definitions of concepts, limitation of the study, Research
methodology and scheme of presentation of the report.

47. P a g e | 46
Figure 1.1 Outline of the thesis
Source: Developed for this research
Chapter II: Review of Literature & Theoretical Framework – This chapter presents a review of
related literature in the two disciplines of consumer behaviour and purchase decision-making
processes in the purchase of residential housing. It explain the Conceptual/ theoretical
framework and Evolution theories used for the study.
Chapter III: - Data Analysis - analyses the collected data from the questionnaires using
statistical methods
Chapter IV: Findings, Conclusion and Implications –This chapter concludes the Research with
findings, a statement of the contributions made by the research.
Chapter 4 Conclusion and Implications
Chapter 3 Analysis of data
Chapter 2 Literature review
Chapter 1 Introduction of the research

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CHAPTER 2
THEORATICAL BACKGROUND
& REVIEW OF LITERATURE

49. P a g e | 48
2.1INTRODUCTION
The purposes of this chapter are to clarify the research problem through a literature review, to
broaden the knowledge base of this research area and understanding the theoretical background
of this research.
2.2 Parent theory: Consumer behaviour and the
purchase decision-making process
This section explains consumer behaviour and the purchase decision-making
process in general. Since residential house purchase choices are influenced by
consumer behaviour, the definition of consumer behaviour is discussed, followed
by a review of models of consumer behaviour. Then, the purchase decision-making
process is presented. The section ends by detailing the major factors influencing
consumer purchase decisions. The structure of this parent theory is presented in
Figure 2.2.
Figure 2.1 Outline of parent theory: consumer
behaviour and purchase decision-making
Source: Developed for this research
2.2.1 Definition of consumer behaviour
The ability of a marketing manager to implement successful marketing strategies, both
domestically and globally, is always based on a thorough understanding of how and why
2.2.1 Definition of
Consumer behaviour
2.2.2 Models of
Consumer behaviour
2.2.3 Purchase
Decision-making
2.2.4 Major factors
influencing consumer
purchase behaviour
2.2 Parent Theory:
Consumer behaviour and
purchase decision-making

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consumers decide whether to select and purchase particular products and services, and what
factors determine whether they are satisfied with those products and services (Quester et al.,
2011). This applies to all types of enterprises, non-profit organizations and government
agencies involved in regulating marketing activities.
The study of consumer behaviour is an unusually diverse discipline, and it has been defined in
a variety of ways in the marketing literature. Simply put, consumer behaviours are “activities
people undertake when obtaining, consuming and disposing of products and services”
(Blackwell, Miniard, & Engel, 2006, p. 4). Consumer behaviour has also been defined as the
study of how individuals, groups and organizations select, buy, use and dispose of goods,
services, ideas or experiences to satisfy their needs and wants (Kotler & Keller, 2009, p. 150;
Solomon, 2009, p. 7). An alternative definition is: “consumer behaviour in seeking, purchasing,
using, evaluating and disposing of products and services that they expect to satisfy their
personal needs” (Schiffman, Hansen, & Kanuk, 2012, p. 5). A more broad and complete
definition is: consumer behaviour is “the totality of consumers’ decisions with respect to the
acquisition, consumption, and disposal of goods, services, activities, experiences, people, and
ideas by human decision-making units over time” (Hoyer & Macinnis, 2010, p. 3). Table 2.1
(see next page) presents a summary of previous researchers’ consumer behaviour definitions.
In this research, consumer behaviour is defined as the study of how individuals, groups, and
organisations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy
their needs and desires. A full understanding of decision-making processes helps marketers to
identify consumers’ wants and needs and helps them to develop successful market strategies.
Table 2.1 Definitions of consumer behaviour
DEFINITIONS
SOURCES
1. Activities people undertake when obtaining,
consuming and disposing of products and services Blackwell, Miniard & Engel
(2006, p. 4)

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2. The study of how individuals groups, and
organisations select, buy, use, and dispose of
goods, services, ideas, or experiences to satisfy
their needs and want.
Kotler & Kelle (2008, p. 150); Solomon
(2008, p.7)
3. Consumers’ behaviour in seeking, purchasing, using,
evaluating and disposing of products and services that
they expect to satisfy their personal needs.
Schiffman & Hansen (2012, p.5)
4. Consumer behaviour reflects the totally of
consumers’ decisions with respect to the acquisition,
consumption, and disposal of goods, services,
activities, experiences, people, and ideas by human
decision-making units over time.
Hoyer & Macinnis (2010, p. 3)
Source: Developed for this research
Some past studies have discussed home buyers’ purchase choices and have identified that home
buyers should be referred to as consumers in several consumption activities such as choosing,
buying and using housing products (Fierro et al., 2009; Huang & Yi, 2010; Opoku & Abdul-
Muhmin, 2010). This study investigates purchase decision-making and post-purchase
satisfaction, and the researcher also identifies home buyers as consumers.
Behaviour always occurs for the individual, in the context of groups and organisations.
Consumer behaviour involves the use and disposal of products as well as their purchase; it
involves services and ideas as well as tangible products (Schiffman et al., 2012). Successful
marketing managers are fully aware that consumer behaviour should be the primary focus of
every aspect of the company’s marketing program. Marketing researchers’ efforts always focus
on consumers’ consumption of goods, services, time and ideas (Hoyer & Macinnis, 2010). The
findings of research into consumers’ purchasing decisions always respond to questions
regarding what consumers buy, where, when, why and how they buy, and how much they buy
(Kotler & Armstrong, 2009).

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2.2.2 Model of consumer behaviour
Models of consumer behaviour are used to expound on the reasons a consumer decides to buy
a particular good or service (Quester et al., 2011). In general, a consumer behaviour model is
a view of how and why consumers have specific behaviour patterns. A universally recognised
consumer behaviour model is the stimulus–response model shown in Figure 2.2 (see next
page). Marketing and other stimuli enter the consumer’s consciousness, and through a series
of psychological processes they combine with certain consumer characteristics, resulting in
decision-making processes and purchase decisions (Kotler & Keller, 2009). The stimulus–
response model has become a universal consumer behaviour model for marketing managers.
This model helps marketers to understand what happens in the consumer’s consciousness
between the arrival of the outside marketing stimuli and their final purchase decision. The four
key consumer psychological processes (motivation, perception, learning, and memory) and
consumers’ three types of characteristics (cultural characteristics, social characteristics and
personal characteristics) fundamentally influence consumer response (Kotler & Keller, 2009).
Figure 2.2 The model of consumer behaviour
Source: Adapted from Kotler and Keller 2009, p. 162
Product choice
Brand choice
Dealer choice
Purchase amount
Purchase timing
Payment method
Purchase
Decision
Marketing
Stimuli
Other Stimuli
Products & services Economic
Price Technological
Distribution Political
Communications Cultural
Consumer
Psychology
Motivation
Perception
Learning
Memory
Consumer
Characteristics
Cultural
Social
personal
Buying Decision
Process
Problem recognition
Information Search
Evaluation of
alternatives
Purchase decision
Post-purchase
behaviour

53. P a g e | 52
The five stages of the Buying Decision Process Model are: problem recognition, searching for
information, evaluating of alternatives, purchase decision, and post-purchase behaviour
(Blackwell, Souza, Taghian, Miniard, & Engel, 2006; Quester et al., 2011; Schiffman et al.,
2012; Solomon, 2009). In some theories, this decision-making process is divided into two
sections: the pre-purchase process and the post-purchase decision-making process. The pre-
purchase process comprises the stages before consumers purchase products or services. It
includes the following three stages: problem recognition, searching for information, and
evaluation of alternatives. Post-purchase behaviour involves all the consumer’s activities and
the experiences that follow the purchase. These activities include post-purchase actions, post-
purchase satisfaction, post-purchase use and disposal of the products or services (Kotler &
Keller, 2009). The following sections explain each of the five stages of the purchase decision-
making process in detail.
2.2.3 Purchase decision-making process
Traditionally, consumer researchers have approached decision-making processes from a
rational perspective. The consumer decision-making process is defined as a series of
interrelated activities that lead to a choice between alternatives. Smart marketing managers
seek to fully understand the consumers’ decision-making process which involves consumers’
experiences in studying, selecting, using, and even disposing of products or services (Kotler &
Keller, 2009). In the literature, marketing scholars developed a ‘five stage model’ for the
consumer purchase decision-making process as shown in Figure 2.3. In theory, all of the
following five stages will be experienced by consumers in a purchase decision-making process:
problem recognition, searching for information, evaluation of alternatives, purchase decision,
and post-purchase behaviour. However, in some actual buying processes, consumers often do
not pass through all of these five stages. Consumer may skip or reverse some stages (Blackwell,
Miniard, & Engel, 2006; Kotler & Armstrong, 2009; Quester et al., 2011).
Figure 2.3 Five-stage purchase decision-making process
Source: Adapted from Hawkins, et al. 2011; Kotler & Keller 2009
Problem
recognition
Information
search
Evaluation of
alternatives
Purchase
decision
Post-
purchase
behaviou
r

54. P a g e | 53
Details of each stage are discussed below.
2.2.3.1 Problem recognition stage
In this five-stage purchase process model, the consumer process begins when the buyer
recognises a problem or need in response to internal or external stimuli. In this stage, an
individual recognises the existence of a difference between their desired state and their actual
state. When an individual recognises his or her real wants and needs are beyond his or her
perceived current feelings or situation level, the difference may arouse a consumption desire,
and activate the individual’s purchase decision-making process (Bruner; Hawkins,
Mothersbaugh, & Mookerjee, 2011). In the problem recognition stage, the consumer decision-
making process can be stimulated if the desired state exceeds the actual state, and this can lead
to products or service acquisition and consumption. Alternatively, the consumer may not be
motivated to move to the next two pre-purchasing stages if problem recognition is not
stimulated in the problem recognition stage (Hoyer & Macinnis, 2010). Figure 2.4 presents the
process of consumer problem recognition.
Figure 2.4 Problem recognition process
Source: Adapted from Quester, Pettigrew, Hawkins 2011
Desired state
exceeds actual state
NATURE OF DISCREPANCY
Difference between the consumer’s desired and perceived
conditions
PROBLEM RECOGINSED
Search decision initiated
SATISFACTION
No action
No difference Actual state exceeds
desired state