determinants of consumer behavior on choice of real …
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DETERMINANTS OF CONSUMER BEHAVIOR ON
CHOICE OF REAL ESTATE INDUSTRY IN NAIROBI
COUNTY IN KENYA
BY
AHMED ALI HASSAN
UNITED STATES INTERNATIONAL UNIVERSITY-
AFRICA
SUMMER 2020
DETERMINANTS OF CONSUMER BEHAVIOR ON
CHOICE OF REAL ESTATE INDUSTRY IN NAIROBI
COUNTY IN KENYA
BY
AHMED ALI HASSAN
A Research Project Report Submitted to Chandaria School of Business
in Partial Fulfilment of the Requirement for the Degree of Master of
Business Administration (MBA)
UNITED STATES INTERNATIONAL UNIVERSITY-
AFRICA
SUMMER 2020
ii
STUDENT’S DECLARATION
I, the undersigned, pronounce that this is my own unique work and has not been handed
in to any other institution or university for academic credit other than to the United States
International University-Africa.
Signed: __________________________ Date: _____________________________
Ahmed Ali Hassan (ID: 653933)
This project proposal has been presented for examination with my approval as the
appointed supervisor.
Signed: __________________________ Date: _____________________________
Dr. Caren Ouma (PhD)
Signed: __________________________ Date: _____________________________
Dean, Chandaria School of Business
3rd July 2020
iii
COPYRIGHT
All rights reserved. No part of this work might be delivered or even transmitted in any
form or by any means being mechanical, electronically, recording, photocopying without
earlier authorization from the author.
Ali Hassan Ahmed © (2019)
iv
ABSTRACT
The purpose of this study was to investigate the determinants of consumer behavior on
choice of real estate industry in Nairobi County. This study was guided by the following
research question; What is the effect of economic factors on consumer buying behavior
on choice of real estate in Nairobi County?, What is the effect of socio-cultural factors on
consumer buying behavior on choice of real estate in Nairobi County? and what is the
effect of psychological factors on consumer buying behavior on choice of real estate in
Nairobi County?
This study used descriptive survey design to integrate various elements of the study to
effectively address the research problem. The population of the study consisted of 163
employees working in top real estate firms in Nairobi County, stratified sampling
technique was deployed since the entire population was studied. This study used a
questionnaire in gathering primary data from target respondents. The study used
descriptive statistics to analyze frequencies and percentages. Inferential statistics used to
analyze correlation and regression analysis. A Statistical Package for Social Sciences
(SPSS) software version 24 was used for analysis.
The first research question of this study aimed to determine the effect of economic factors
on consumer buying behavior. The findings of the study revealed a strong and significant
relationship between economic factors (independent variable) and consumer buying
behavior (dependent variable), r (0.758); p-value < 0.01.
The second research question of the study aimed to determine the effect of socio-cultural
factors on consumer buying behavior. The findings of the study revealed a strong and
significant relationship between socio-cultural factors (independent variable) and
consumer buying behavior (dependent variable), r (0.601); p-value < 0.01.
The third research question of the study aimed to determine the effect of psychological
factors on consumer buying behavior. The findings of the study revealed positive
relationship between psychological factors (independent variable) and consumer buying
behavior (dependent variable), r (0.217); p-value < 0.01.
This study concluded that economic factors influence consumer buying behavior in their
choice of real estate properties. When the nation’s economy is strong, customer tend to
have more purchasing power and income pumped into the economy. On the other hand,
when the economy is struggling, the reverse can also be true. This study concluded that
v
interest rates influence consumer spending in a sense that when rates are high customer
are less disposed to obtain cash from commercial banks to purchase commodities. Interest
rates decide a buyer's buying power.
This study concluded that socio-cultural factors are essential in determining consumer
buying behavior. Social standards are principles or desires through which a general public
aides the conduct of its individuals and regularly reflect social qualities. They can be both
prescriptive, controlling what we ought not to do and prescriptive, building up and desire
for what we ought to do. This study concluded that norms influences consumer buying
behavior. Norms are regarded as the most principal determinant of an individual’s need
and conduct.
The study concluded that there was a positive relationship between psychological factors
and consumer buying behavior. A customer’s motivation is an essential level of the
mental drive behind a particular buy. The purchaser’s inspiration is high, that
fundamentally implies that the degree of need, or the customer's impression of that need,
is genuinely solid. It was also concluded that a purchase’s convictions and demeanors
enormously impact the purchasing choices that a consumer makes.
This study recommended that real estate firms should develop real estate properties that
are in line with interest rates in the country. This is crucial because interest rates play a
significant role in purchasing power of real estate. This study recommended that real
estate firms should take inflation rates into consideration when developing properties to
match with consumer purchasing power. This study recommended that real estate firms
should take into consideration socio-cultural factors when developing as well as
marketing real estate properties to clients since they play a critical role in influencing
consumer buying behavior. Socio-cultural factors are essential to customers when it
comes to making purchasing decisions and choices of products and services, therefore,
they should be taken into consideration. This study recommended that real estate firms
should create and develop real estate products that take into account psychological factors
of consumers in order to trigger their purchasing behavior. This study recommended that
real estate firms in Nairobi should create innovative real estate products that are in line
with the perception of customers in regards to housing needs and desires.
vi
ACKNOWLEDGEMENT
I would like to acknowledge Dr. Caren Ouma (PhD) for her supervision.
vii
DEDICATION
I dedicate this project report to my family, friends and colleagues.
viii
TABLE OF CONTENTS
STUDENT’S DECLARATION ....................................................................................... ii
COPYRIGHT ................................................................................................................... iii
ABSTRACT ...................................................................................................................... iv
ACKNOWLEDGEMENT ............................................................................................... iv
DEDICATION................................................................................................................. vii
LIST OF TABLES ........................................................................................................... xi
LIST OF FIGURES ........................................................................................................ xii
CHAPTER ONE ................................................................................................................1
1.0 INTRODUCTION........................................................................................................1
1.1 Background of the Study ...............................................................................................1
1.2 Statement of the Problem ...............................................................................................6
1.3 Purpose of the Study ......................................................................................................7
1.4 Research Questions ........................................................................................................7
1.5 Significance of the Study ...............................................................................................7
1.6 Scope of the Study .........................................................................................................8
1.7 Definition of Terms........................................................................................................8
1.8 Chapter Summary ..........................................................................................................9
CHAPTER TWO .............................................................................................................10
2.0 LITERATURE REVIEW .........................................................................................10
2.1 Introduction ..................................................................................................................10
2.2 The Effect of Economic Factors on Consumer Buying Behavior ...............................10
2.3 The Effect of Socio-Cultural Factors on Consumer Buying Behavior ........................14
2.4 The Effect of Psychological Factors on Consumer Buying Behavior .........................18
2.5 Chapter Summary ........................................................................................................22
ix
CHAPTER THREE .........................................................................................................23
3.0 RESEARCH METHODOLOGY .............................................................................23
3.1 Introduction ..................................................................................................................23
3.2 Research Design...........................................................................................................23
3.3 Population and Sampling Design .................................................................................23
3.4 Data Collection Methods .............................................................................................26
3.5 Research Procedures ....................................................................................................26
3.6 Data Analysis Methods ................................................................................................27
3.7 Chapter Summary ........................................................................................................27
CHAPTER FOUR ............................................................................................................28
4.0 RESULTS AND FINDINGS .....................................................................................28
4.1 Introduction ..................................................................................................................28
4.2 Response Rate and Demographic Information ............................................................28
4.3 The Effect of Economic Factors on Consumer Buying Behavior ...............................31
4.4 The Effect of Socio-cultural Factors on Consumer Buying Behavior .........................38
4.5 The Effect of Psychological Factors on Consumer Buying Behavior .........................44
4.6 Chapter Summary ........................................................................................................50
CHAPTER FIVE .............................................................................................................51
5.0 DISCUSSION, CONCLUSION AND RECOMMEDNDATION ..........................51
5.1 Introduction ..................................................................................................................51
5.2 Summary ......................................................................................................................51
5.3 Discussion ....................................................................................................................52
5.4 Conclusion ...................................................................................................................58
5.5 Recommendations ........................................................................................................59
x
REFERENCES .................................................................................................................61
APPENDICES: .................................................................................................................66
APPENDIX I: LETTER OF CONSENT .......................................................................66
APPENDIX II: QUESTIONNAIRE ..............................................................................67
APPENDIX III: IRB LETTER.......................................................................................71
APPENDIX IV: NACOSTI RESEARCH PERMIT .....................................................72
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LIST OF TABLES
Table 4. 1: Correlation between Economic Factors and Consumer Buying Behavior ......36
Table 4. 2: Regression Test for Economic Factors and Consumer Buying Behavior .......36
Table 4. 3: Analysis of Variance between Economic Factors and Consumer Buying
Behavior .............................................................................................................................37
Table 4. 4: Coefficient Table for Economic Factors and Consumer Buying Behavior .....37
Table 4. 5: Correlation between Socio-cultural Factors and Consumer Buying Behavior 42
Table 4. 6: Regression Test for Socio-cultural Factors and Consumer Buying Behavior .42
Table 4. 7: Analysis of Variance between Socio-cultural Factors and Consumer Buying
Behavior .............................................................................................................................43
Table 4. 8: Coefficient Table for Social-cultural Factors and Consumer Buying Behavior
............................................................................................................................................43
Table 4. 9: Correlation between Psychological Factors and Consumer Buying Behavior 49
Table 4. 10: Regression Test for Psychological Factors and Consumer Buying Behavior49
Table 4. 11: Analysis of Variance between Psychological Factors and Consumer Buying
Decision .............................................................................................................................50
Table 4. 12: Coefficient Table for Psychological Factors and Consumer Buying Behavior
............................................................................................................................................50
xii
LIST OF FIGURES
Figure 4. 1: Response Rate ................................................................................................28
Figure 4. 2: Respondents Gender .......................................................................................29
Figure 4. 3: Respondents Age ............................................................................................29
Figure 4. 4: Respondents Education ..................................................................................30
Figure 4. 5: Years in the Organization ...............................................................................30
Figure 4. 6: Economic Factors and Consumer Buying Choice ..........................................31
Figure 4. 7: Rate of Employment .......................................................................................32
Figure 4. 8: Interest Rates ..................................................................................................32
Figure 4. 9: Unemployment Rates .....................................................................................33
Figure 4. 10: Personal Income ...........................................................................................34
Figure 4. 11: Availability of Consumer Credit ..................................................................34
Figure 4. 12: Consumer Credit and Sales ..........................................................................35
Figure 4. 13: Change in Personal Income ..........................................................................35
Figure 4. 14: Culture and Consumer Buying Behavior .....................................................38
Figure 4. 15: Market Segment ...........................................................................................39
Figure 4. 16: Customer Behavior and Real Estate Trends .................................................39
Figure 4. 17: Purchasing Decision .....................................................................................40
Figure 4. 18: Social Class ..................................................................................................40
Figure 4. 19: Real Estate Trends ........................................................................................41
Figure 4. 20: Culture and Sales ..........................................................................................41
Figure 4. 21: Psychological Factors ...................................................................................44
Figure 4. 22: Purchaser’s Motivation .................................................................................45
Figure 4. 23: Customer Motivation ....................................................................................45
Figure 4. 24: Customer’s Perception .................................................................................46
Figure 4. 25: Developing of Real Estate Properties ...........................................................46
Figure 4. 26: Consumer Attitude .......................................................................................47
Figure 4. 27: Attitudes and Behavior .................................................................................47
Figure 4. 28: Customer Belief ............................................................................................48
1
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
Consumer buying behavior is the purchasing attitude of individuals and households that
purchase goods and services for personal use. The process of buying can be affected by
various factors before the consumer initiates purchase decision (Sunli, 2015). According
to Gunay and Baker (2011), consumer buying behavior has been a subject of interest
throughout the world since it is only by a careful analysis in consumer buying behavior
that investors are able to make informed decisions on whether or not to invest in certain
kind of market by launching a product or a service. With the world now becoming a
global village and consumers from different cultures across the world, it is still a daunting
task for companies to examine key triggers of consumers to have a better understanding
of the global market.
Consumer behavior is the action that an individual makes in obtaining and using goods
and services, including social and psychological processes that come before and after the
process of purchase (MacInnis & Folkes, 2010). Being able to foresee and understand
consumer behavior is one of the biggest challenges that business can confront. The
analysis of consumer buying behavior offers insights about a customer needs and
requests. Consumers may not know their own specific profound internal inspiration or
they may respond to the influencing factors ultimately or alter their opinions (Brinkmann,
2014).
Social cultural factors towards consumer buying behavior are shaped by culture. Every
group or a society has a culture and cultural influence on buying behavior may vary
greatly from one place to another (Al-Nahdi, Ghazzawi, & Bakar, 2015). Failure to adjust
to these differences can also result in ineffective marketing mistakes. The international
and national marketers must understand that the culture in each of their perspective
markets can be aligned to the marketing strategies accordingly. Marketers are always try
to find cultural shifts in order to discover new products that might be needed (Clee &
Wicklund, 2014). For instance, the cultural shift towards greater concern on health and
fitness has created a huge industry for the sports equipment and clothing, health and
fitness service. The shift towards informality on the other hand has resulted in more
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demand for casual clothing and simpler home furnishings. The increased desire time has
also resulted in a more demand for convenience products and services.
Economic factors refers to the factors that concern the levels of sales in the market and
the financial position of the consumer that is how much an individual is able to spend on
the purchase of goods and services in line with the overall sales of the firm (Santos &
Ribeiro, 2012). The success or failure of a country’s economy can greatly affect
consumer behavior based on a variety of economic factors. When the economy is strong,
consumers tend to have more purchasing power and money is pumped into the thriving
economy. On the other hand, when the economy is struggling, the reverse is true. A
struggling economy affects various economic factors that have a strong influence of
consumer buying behavior, these include; interest rates, employment rates and people
may lose consumer confidence(Dabhilkar, Bengtsson , & Lakemond , 2016).
Psychological factors refers to those factors that concern psychology of individuals that
drive their actions in seeking satisfaction (Dörtyol, Coşkun, & Kitapci, 2018).
Psychological factors include the factors that talk about psychology of an individual that
drive his actions in seeking satisfaction. Some of the most significant psychological
factors include; motivation, perception, attitudes and beliefs, and learning. For instance
the level of motivation influences buying behavior of an individual (Singh, Chaudhuri, &
Verma, 2019). This can be explained well based on Maslow which is made up of social
needs, security needs, esteem needs and self-actualization needs. Most of the time, the
basic needs and security needs are more pressing needs as opposed to other needs since
these needs become a motive that directs an individual to seek satisfaction (Shiau &
Chau, 2015).
The economic growth and development of any prospering nation highly depends on its
enterprise development. Any company can flourish only so long it has a capability of
retaining its current profits and creating avenues for additional future profits (Santos &
Ribeiro, 2012). Earning of profits capability is sustainable only for a company that is
adopting an effective marketing strategy in offering appropriate marketing mix taking
into consideration price, promotion, price and physical distribution to the potential
customers for the products and services offered. A sustainable marketing mix endeavor
originate from the launch of products by a company. Therefore, whether the product is
durable or non-durable, it becomes a key component of any marketing campaign and yet
3
it is a challenging for nay marketing professionals to formulate and implement strategy
for marketing products in a highly competitive market (Vojvodic & Matic, 2013). This
proves to be more complex in the potential consumer’s markets in comparison with
industrial markets owing to the size of the potential targets markets and the number of
potential consumers.
In the United States, consumers tend to feel better about their financial situation then they
always do a year ago, but the same consumers are hesitant when it comes to spending too
much on their wants. In comparison with the rest of the world, the Americans seem to
always feel better about their finance while many consumers in other parts of the
continent live from paycheck to paycheck and have the worry of becoming unemployed
(Clee & Wicklund, 2014). The American consumers seem to be unconcerned about their
household’s future financial position. Even when the economy atmosphere is not at its
best in America, consumers still remain loyal to their favorite brands as opposed to
downgrading to affordable options. The global crisis has led to the growing price
consciousness among the American consumers, pushing some consumers to move to less
expensive brands (Ko & Jin , 2017). The American consumers are relatively becoming
environmental awareness when it comes to making purchasing decisions. The country’s
demographic trends are dominated by two key attributes that is the declining birth rates
and the rise of elderly individuals. The improvement of the economy and labor market led
to the increase in consumer confidence and spending while at the same time technology
grow in prominence.
In Canada when it comes to the individual decision making to spend on housing, location
is considered to be one of the key factors affecting their decision to purchase. Location
factors is one of the primary factor of selecting a house for Canadian consumers (Roman,
Kozak, & Popiela-Pleban, 2013). The availability of an access road to the building area is
considered to be one of the consumer’s motivation in choosing a house. When consumers
are searching for a house, them being closer to their workplace and facilities is a
considered factor that need to be factored in. The time that is spent to get to work is a
dominant determinant of the residential location. Attitude on the other hand is regarded as
a person’s favor towards a certain action making a psychological tendency motivating
Canadian consumers as they evaluate a particular entity with some degree of favor or
disfavor (Musyoki, 2012). The way consumers respond to and are disposed towards an
item can also mean attitude. Therefore, an individual who believed in the result from
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engaging in a positive behavior can have a positive attitude towards initiating that
behavior while one who believed in the result from engaging in the negative attitude
towards performing that particular behavior. According to Al-Nahd, Ghazzawi and Bakar
(2015), attitude is one of the factors that determine individual’s behavior and it influences
consumer-intention in purchasing durables.
In the Republic of China, consumers tend to prefer not being close to some facilities
while they prefer being nearer to shopping malls or schools. Location is viewed as the
proximity to the desirable or undesirables facilities that has effect on consumer decision
of residential buyers in the country (Roman, Kozak, & Popiela-Pleban, 2013). With
housing selection, location is one of the attributes of Chinese consumer’s consideration.
As much as consumer’s beliefs and attitudes may influence external search of information
regarding a durable purchase, some consumers enjoy the shopping process more than the
rest before making their final decision. These consumers will want to visit multiple
properties and compare them before making the final purchase decisions. Their
experience could also play a part on the kind of information gathered. Experienced
consumers know the kind of dimensions that were useful in the past and can be used in
making comparison (Gibler & Nelson, 2013).
In India, from a consumer’s perspective, it is regarded that a customer belongs to certain
family in the community. During the process of making decision, their consumer buying
behavior is highly influenced by social factors, cultural factors, psychological factors and
personal factors (Al-Nahdi, Ghazzawi, & Bakar, 2015). However, there exists a
considerable argument on the integration of information regarding consumer attitudes,
perceptions, and preferences into the economic models of housing which calls upon any
reduction of the large margin associated with unexplained variance in the housing
consumption behavior in the Indian market. Various theories have been developed in the
field of psychology that are in line with marketing of real estate. Some concepts cutting
across the consumer behavior like psychology, sociology and marketing (Fandos &
Flavian , 2016).
Consumers in South Africa now seem to have more brands and products to pick from.
These kind of products and brands are sold from different outlets, including the traditional
brick and mortal stores, in house shopping sources like a direct mail and catalogues as
well as the online buying through internet (Swardt & Wagner, 2018). In South Africa, one
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crucial advantage of shoppers is relatively having an easy access to an abundance of free
information. With the use of internet the process of information search is reduced to a few
effortless keystrokes. Consumer buying behavior for South Africans, highly relies on the
internet to search for information before making an actual purchase of a product or a
service from the market. Other benefits of relying on the internet includes the availability
of wealth of information from different sources on product dimensions, quality of
products and the reliability of various suppliers. Prices of goods and services from
different outlets can also be compared in real time at different online price comparison
sites as opposed to physical gathering of information to make purchasing decisions
(Wekeza & Sibanda, 2019).
In Tanzania, consumers have diverse needs as well as characteristics. As each individual
poses unique characteristics which becomes their biggest influence in their buying
behavior. Factors like social groups, family, roles, status with other personal factors such
as age, personality they all play a major role in shaping the consumer’s mind in any given
product or service (Ngulula, 2015). Affordable handsets in Tanzania are readily available
in the market yet individuals opt to buy expensive mobile phones that are offered at a
relatively high price. This becomes an interesting factor in the country from a marketing
perspective since it makes one wonder what drives people to make buying decisions when
it comes to mobile phones, could it be price, quality, and country of origin, brand and
marketing (Mgondah, 2017).
The real estate industry in Kenya is quite diversified in terms of types, geography and
income. The real estate sector caters for various individuals in the country including
middle, high and low income earners. There various kinds of real estate including
industrial, residential, office, retail and special properties which are mainly built in urban
areas in the country (Kigige, 2017). In 2016, the real estate sector grew by 5.6%, then by
6.2% and over 6% in the year 2014, 2015 and 2016 respectively. The country builds
about 50,000 houses annually against the shortfall in housing exceeding 250,000 units.
Kenya has an urban growth of about 4.2% and urbanization is in the excess of 27% of the
entire population. According to Kimani and Memba (2017), the real estate sector, much
like any other industry is constantly evolving. The primary drivers for the real estate
industry range from prospect for profitability to the dynamic face of space complimented
by uncertainty in the surrounding environment. However, as big towns in Kenya continue
to experience rural urban migration which drives in the demand for both commercial and
6
residential property, property developers do not seem to have the capability of satisfying
this need. This is attributed to the absence of proper financing mechanism, non-
availability of loan capital, high interest rates, bottleneck in the supply, increasing cost of
building material and land acquisition issues. Despite the demand for affordable modern
housing in Kenya being insatiable, real estate developers are faced by challenging
consumer needs that they need to be taken into consideration in order to stimulate their
buying decision as well as consuming behavior (Chol, 2017).
1.2 Statement of the Problem
Globally, purchase decision takes into consideration a sequence of choices formed by a
consumer before making a purchase which begins once or she has a willingness to fulfill
a need (Brewer & Venaik, 2011). The consumer should reach a decision with regard to
the place of purchasing the desired brand, model purchase quantity, time to buy, amount
of money to be spent and the method of payment. These decisions can be influenced by
marketers in one way or another by offering information about their products or services
that may inform consumer’s assessment process (Amin, 2017).
In the US, consumers are the pivot of any business and for every business to be able to
survive it highly depends on it potential customers. Businesses in one sector normally
seem to have a common target group of potential customer, hence, as number of business
in one sector increases competition for consumers for certain market share becomes keen
(Sunli, 2015). According to Fandos and Flavian (2016), consumer buying behavior in
regards to the purchase of real estate can be affected by different factors and some of
these can be uncontrolled like economic, cultural and social factors both can create and
make the brand understanding of their impact.
Available and affordable housing for every Kenyan across all age and income groups is
one of the aspects of development in reference to the Kenya Vision 2030. However, with
the recent trend of continuous rural to urban migration, housing still remains a thorning
issue more so in urban and town areas especially in Nairobi (Alago, Kilika , & Oringo ,
2019). The rental consumers in urban town areas of the country, particularly middle to
low income earners vary in their choice of formal housing depending on consumer
behavior set of factors like consumer tastes, preference, search activities and evaluation of
product information on housing decisions (Miregi & Obere , 2014).
7
Locally, many studies have been carried out on consumer buying behavior, for instance
Wambui (2018) carried a study on factors affecting consumer purchasing decision in
Kenya’s motor industry and established a significant relationship between social and
cultural factors in line with consumer purchasing decision. Okumu (2013), carried out an
investigation of factors that influencing consumer behavior in purchase of beauty
products in Nairobi and found out that social factors had a significant relationship with
consumer behavior in purchasing beauty products. Musyoki (2012) also studied the
factors influencing consumer buying behavior and found out that motivation, perception,
beliefs and attitudes affect consumer buying behavior. Based on the above studies, there
is a lack of research covering factors influencing consumer buying behavior in real estate
sector. Therefore, this study fills the gap by investigating the factors that influence
consumer buying behavior in real estate industry in Nairobi County.
1.3 Purpose of the Study
The purpose of this study was to investigate the determinants of consumer behavior on
choice of real estate industry in Nairobi County.
1.4 Research Questions
1.4.1 What is the effect of economic factors on consumer buying behavior on choice of
real estate in Nairobi County?
1.4.2 What is the effect of socio-cultural factors on consumer buying behavior on choice
of real estate in Nairobi County?
1.4.3 What is the effect of psychological factors on consumer buying behavior on choice
of real estate in Nairobi County?
1.5 Significance of the Study
1.5.1 Real Estate Sector
The real estate sector will benefit from the findings of this study by acknowledging the
factors that influence consumer buying behavior in real estate and make informed
decisions in line with the factors to attract consumer purchasing. Both current and future
players in the real estate industry in Kenya will benefit from the findings by getting to
know what consumers look for when it comes to housing, hence, make plans on how they
will deliver that value to their clients.
8
1.5.2 Researchers and Scholars
Researchers and scholars will also benefit from the findings of this study by widening
their knowledge on the subject of factors influencing consumer buying behavior and
particularly in real estate industry. Researchers and academicians can also use the
findings of this study for their literature that is in line with the subject of factors affecting
consumer buying behavior.
1.5.3 Policy Makers
The policy makers are among the key beneficiaries of this study since they will gain
insights on the factors that influence consumer buying behavior in real estate industry in
the country. They will be able to formulate governing frameworks and policies that are in
line with the needs of consumers to facilitate their purchasing needs in real estate while at
the same time regulating the real estate industry.
1.6 Scope of the Study
This study focused on the factors influencing consumer buying behavior in the real estate
industry in Kenya. The population of this study target was 335 real estate registered firms
in Kenya. The study selected 10 biggest real estate firms from the list. These included;
Knight Frank, Hass Consult Ltd, Llyod Masika, Aziz Realtors, Ryden International,
Dinara Developers, Homoscope Properties Ltd, Suraya Property Group, Homes Universal
and Villa Care Limited. The study specifically targeted marketing and sales officials from
these companies. This study was expected to take a period of three months from the stage
of proposal development to its completion. Data collection was expected to take place
between January and March 2020.
1.7 Definition of Terms
1.7.1 Consumer Buying Behavior
According to Sunli (2015), Consumer buying behavior is the action that an individual
makes in obtaining and using goods and services, including social and psychological
processes that come before and after the process of purchase.
1.7.2 Social Factors
Social factors refers to the general factors that are in the level of human society which are
concerned with social structure and social process that impinge on the individual behavior
9
in a certain society (Wambui, 2018).Social cultural factors towards consumer buying
behavior are shaped by culture. Every group or a society has a culture and cultural
influence on buying behavior may vary greatly from one place to another.
1.7.3 Psychological Factors
Psychological factors refers to those factors that concern psychology of individuals that
drive their actions in seeking satisfaction (Dörtyol, Coşkun, & Kitapci, 2018).
Psychological factors include the factors that talk about psychology of an individual that
drive his actions in seeking satisfaction. Some of the most significant psychological
factors include; motivation, perception, attitudes and beliefs, and learning.
1.7.4 Economic Factors
Economic factors refers to the factors that concern the levels of sales in the market and
the financial position of the consumer that is how much an individual is able to spend on
the purchase of goods and services in line with the overall sales of the firm(Santos &
Ribeiro, 2012).
1.7.5 Real Estate
Real estate can be defined as the property made up of land and the buildings on it, along
with its natural resources like crops, water, minerals, immovable property, more generally
buildings or housing in general (Hoesli, 2016).
1.8 Chapter Summary
This chapter has provided the introduction section of the study. The background of the
study has been introduced followed by the statement of the problem which has been
clearly highlighted. The purpose of the study has been stated and the research questions
guiding the study has also been identified. The significance of the study has been
presented. The scope of the study has been presented and definitions of key terms used in
the study have been defined. Chapter two of the study will provide the literature review of
the study in line with the research questions. Chapter three will provide the research
methodology guiding the study. Chapter four will present the results and findings.
Chapter five on the other hand will provide the discussion, conclusion and
recommendations based on the findings obtained from the respondents of this study.
10
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
Chapter two of this study offers a literature review on factors influencing consumer
buying behavior by reviewing various scholars and authors in respect to the subject. The
literature review is presented in line with the study variables including; economic factors,
social factors and psychological factors on how they affect consumer buying behavior.
2.2 The Effect of Economic Factors on Consumer Buying Behavior
The success or failure of a county’s economy can greatly impact consumer behavior
based on various economic factors (Wills, Kennedy, & Cheese, 2013). When the
country’s economy is strong, consumers tend to have more purchasing power and money
is pumped into the thriving economy. When the economy is struggling, the reverse can
also be true. A struggling economy is likely to affect various factors like interest rate,
employment while at the same time people losing consumer confidence (Rehman &
Yusoff, 2017). The law of free market activity exhibits the connection between supply,
request and costs. As interest drives upward, so do the costs. This relationship draws in
more providers, serving to balance out the costs as well as to keep the interest at solid
customer levels. Free market activity influence shopper conduct provided that an item is
excessively costly, purchaser interest for that item will diminish (Urumsah, 2015).
Amin (2017), argues that interest rates vacillations influence consumer spending since
when rates are high, customers are less disposed to obtain cash from the banks to buy
expensive things, for example, a house or a vehicle. Interest rates decide a buyer's buying
power. For example, if an individual obtained cash to buy a home with a movable rate
contract, when that rate goes up, that individual may never again have the option to
manage the cost of that house. According to Fandos and Flavian (2016), an expansion in
inflation implies an increment in costs. This influences whether a buyer can manage the
cost of the more expensive rate. Inflation directly influences the estimation of the dollar
since when inflation goes up, the dollars’ worth goes down, thus does the purchaser's
buying power. Inflation particularly influences customer conduct when wages don't
increase to suit the increase in prices. According to Rehman and Yusoff (2017),
unemployment influences shopper conduct in such a case that an individual is without a
relentless pay, his purchasing power diminishes impressively. As indicated by Trading
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Economics, the unemployment rate in the United States between October 2009 and
December 2009 was the most noteworthy it has been since the record high of 10.80
percent in November 1982. During this time, home sales were additionally down in light
of the fact that less individuals had the option to bear the cost of a home loan.
Buyer economic circumstance has extraordinary impact on his/her purchasing conduct.
The smaller the customer's family size or dependents, the higher the salary and
investment funds of such shopper, this will thusly impact the buyer to support
increasingly costly items. Then again, an individual with low salary and reserve funds
will buy cheap items (Zhang, Xu, & Zhao, 2018). Gilber and Nelson (2013), likewise the
authors supported that for the prescient intensity of monetary factors, for example, salary,
family size and purchaser spending plan over other social factors in clarifying use designs
for low-evaluated merchandise. They presumed that financial components are a
noteworthy determinant of purchasing power and can be utilized to foresee the sort of
products purchaser is probably going to purchase.
Additionally, Kacen and Lee (2013), demonstrate the impact of financial factors on
purchaser conduct, with regards to brand identification. Their investigation uncovered
that young people with high profit and in the privileged had the option to distinguish a
larger number of brands than different teenagers. A thorough and significant research was
led by Robert and Pirog (2014), in the investigation of both use/non-use criteria just as
recurrence of utilization information for a huge assortment of items, where it was inferred
that financial elements are the most significant factors in clarifying the utilization of low
social worth items and administrations that are not identified with class images, he opined
that it is silly and wrong to deny the impact that pay has over purchasing conduct, both on
sort and costs of garments obtained.
There are various procedures engaged with the consumer buying conduct. Numerous
elements, specificities and attributes impact the person in what he is and the purchaser in
his basic decision making process, shopping propensities, buying conduct, the brands he
purchases or the retailers he goes (Lu & Chang, 2015). A buy choice is the aftereffect of
all of these components. At first the buyer attempts to discover what items he might want
to expend, at that point he chooses just those wares that guarantee more prominent utility.
Subsequent to choosing the items, the purchaser makes a gauge of the accessible cash
which he can spend (Gunay & Baker, 2011). In conclusion, the customer breaks down the
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common costs of products and takes the choice about the items he ought to devour. In the
interim, there are different components affecting the buys of shopper, for example, social,
social, financial, individual and mental (Dörtyol, Coşkun, & Kitapci, 2018).
2.2.1 Personal Income
Personal income alludes to all salary on the whole gotten by all people or family units in a
nation (Sultan, Joireman, & Sprott, 2012). Individual salary incorporates pay from
various sources including pay rates, wages and rewards got from work or independent
work; profits and conveyances got from ventures; rental receipts from land speculations
and benefit sharing from organizations (Kigige, 2017). According to Strack (2016),
Individual salary largely affects purchaser utilization. Since shopper spending drives a
significant part of the economy, national measurable associations, financial experts and
examiners track individual salary on a quarterly or yearly premise.
The personal pay of an individual is determinant of his purchasing conduct (Ramya & Ali
, 2016). The gross personal pay of an individual comprises of extra cash and discretionary
income. The expendable individual salary alludes to the real pay (for example cash
balance) staying at the transfer of an individual in the wake of deducting charges and
obligatorily deductible things from the gross salary. An increase in the disposable income
prompts an increment in the use on different things (Dörtyol, Coşkun, & Kitapci, 2018).
A fall in the discretionary cash flow, then again, prompts a fall in the consumption on
different things. The optional individual salary alludes to the parity staying in the wake of
gathering essential necessaries of life. This pay is accessible for the buy of shopping
products, tough merchandise and extravagances. An expansion in the optional pay
prompts an increment in the use on shopping merchandise, extravagances and so on
which improves the way of life of an individual(Musyoki, 2012).
2.2.2 Consumer Credit
Consumer credit alludes to the credit facility accessible to the customers covetous of
buying tough solaces and extravagances. It is made accessible by the venders, either
directly or indirectly through banks and other money related foundations (Ngulula, 2015).
Contract buy, portion buy, direct bank advances and so on are the ways by which credit is
made accessible to the shoppers. Customer credit impacts shopper conduct. In the event
that more customer credit is accessible on liberal terms, use on solaces and extravagances
increments, as it initiates buyers to buy these merchandise, and raise their expectation for
13
everyday comforts(Ramya &Ali , 2016).The credit facility accessible to the purchaser
additionally impacts his purchasing conduct. On the off chance that the credit terms are
liberal, and EMI plan is likewise accessible, at that point the clients are probably going to
spend more on the extravagance things, solid products, and shopping merchandise (Shah,
Kumar, & Chen, 2012).
2.2.3 Savings and Income Expectations
The amount of reserve funds out of the individual salary likewise impacts the purchaser
purchasing conduct. For example, in the event that a customer chooses to spare more for a
specific period, at that point his consumption on different things will be less and on the
off chance that the investment funds are less the use on different things increments
(Ramya & Ali , 2016). According to Gibler and Nelson (2013), Reserve funds of
individuals likewise impact the purchasing conduct of a person. An adjustment in the
measure of reserve funds prompts an adjustment in the consumption of a person. On the
off chance that an individual chooses to spare increasingly out of his present salary, he
will spend less on solaces and extravagances (Guan, Zhang, & Wu, 2016).
Salary desires are one of the significant determinants of the purchasing conduct of a
person. In the event that he anticipates any increase in his pay, he is enticed to spend
more on shopping merchandise, sturdy products and extravagances (Ramya & Ali ,
2016). Then again, on the off chance that he anticipates any fall in his future pay, he will
abridge his consumption on solaces and extravagances and limit his use to minimum
essentials. According to Roberts and Pirog (2014), an Individual's desire as for his salary
level later on impacts his purchasing conduct today. For example, on the off chance that
an individual anticipates that his pay should increment later on, at that point he will spend
more cash on the buy of the extravagance products, durables and shopping merchandise.
Furthermore, despite what might be expected, on the off chance that he anticipates that
his pay should fall later on his consumption on such things likewise diminishes (Wills,
Kennedy, & Cheese, 2013). Salary expectations play a bigger role in shaping a
consumer’s behavior in term of their planning for the merchandise that they have in their
wish list and its increment or decrease will definitely influence this purchasing decision
as well as actions to acquire the items.
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2.3 The Effect of Socio-Cultural Factors on Consumer Buying Behavior
Buying behavior as per Chol (2017), are set of dispositions that describe characteristics of
purchasers' decisions. Aside from the basic inside components, which are perceived as
compelling to purchasing conduct, there are various outer situational settings that
influence buyer decisions. Buyer conduct is a blend of clients' purchasing cognizance and
outer motivating forces which are probably going to bring about conduct redesigning. The
general public's way of life, for example, standards, show, traditions religion, party, class,
way of life and other subculture impact how individual buyers purchase and use items,
and help clarify how gatherings of buyers act (Swardt & Wagner, 2018).
Culture is that complex entire, which incorporates information, conviction, craftsmanship,
law, ethics, traditions and some other capacities and propensities gained by people as
individuals from society (Götze, 2011). Culture impacts the example of living, utilization,
and basic leadership by people. Culture can be obtained from the family, from the locale
or from the sum total of what that has been around us while we were growing up and
learning the methods for the world. Culture shapes a limit inside which an individual
thinks and acts. When one supposes and acts past these limits, he is embracing a
multifaceted conduct and may be considered by his prompt society or gathering as
degenerate (Martins & Brooks, 2010). Culture is a very basic what not inescapable impact
in our life. Social convictions and qualities can in this manner be said to be mental
pictures that influence a wide scope of explicit demeanors, which thusly impact the
manner in which an individual is probably going to carry on in a particular circumstance
for example acquiring another garments; the assessment, picking among choices lastly
paying for a specific kind of garments is generally an element of center social convictions
and qualities (Dörtyol, Coşkun, & Kitapci, 2018).
Each group or society has a culture, and social impacts on purchasing conduct may differ
incredibly all around (Chol, 2017). Inability to conform to these distinctions can bring
about insufficient showcasing or humiliating slip-ups. Worldwide and National
advertisers must comprehend the way of life in every one of their business sectors and
adjust their showcasing techniques in like manner. Advertisers are continually attempting
to discover social moves so as to find new items that may be needed (Gibler & Nelson,
2013). For instance, the social move toward more prominent worry about wellbeing and
wellness has made an immense industry for exercise gear and dress, low-fat and
increasingly regular sustenance, and wellbeing and wellness administrations. The move
15
toward familiarity has brought about more interest for easygoing apparel and easier home
decorations. The expanded want for relaxation time has brought about more interest for
comfort items and administrations, for example, microwaves and cheap food (Lu &
Chang, 2015).
Culture can be gained from the family, from the district or from the sum total of what that
has been around us while we were growing up and learning the methods for the world
(Amin, 2017). Culture frames a limit inside which an individual thinks and acts. When
one supposes and acts past these limits, he is embracing a cross cultural conduct and there
are culturally diverse impacts too. The idea of social impacts is with the end goal that we
are only here and there mindful of them. One feels, carries on, and thinks like different
individuals from the same culture (Lu & Chang, 2015). It is all unavoidable and is
available all over. Standards are the limits that culture sets on the conduct. Standards are
gotten from social qualities, which are generally held convictions that indicate what is
attractive and what isn't. Most people obey standards since it is normal to obey them.
Culture outline numerous business standards, family standards, norms (Strack, 2016).
While trying to clarify how a societal culture impacts shoppers' purchasing conduct
Hofstede thought of a helpful social measurement. He considered culture to be the
intelligent total of common qualities that impact a gathering's reaction to its condition
(Rehman & Yusoff, 2017). His social measurements as indicated by Lawan and Zanna
(2013), fill in as the most compelling society hypothesis among sociology examine. It
included that these social structure has gotten solid exact help Hofstede (1980) isolated
societies based on the accompanying measurements: Masculinity and femininity, Power
distance, uncertainty avoidance shirking and Individualism-community. By Individualism
cooperation, He alludes to the essential degree of conduct guideline, regardless of
whether by people or gatherings. Individuals high on independence see self and close
family as generally more important than the system. He characterizes community as a
social example that comprises of people who consider themselves to be a basic piece of at
least one aggregates or in-gatherings, for example, family and collaborator or settlement.
Individuals who are increasingly collectivist are frequently propelled by standards and
obligations forced by the in-gathering, they offer need to the objectives of the in-
gathering and attempt to accentuate connectedness with the in-gathering (Brewer &
Venaik, 2011). These social examples are required to impact purchasing conduct through
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their effect on an individual's self-distinguish, responsiveness to standardizing impacts,
and the need (or absence of need) to smother interior convictions so as to act suitably.
2.3.1 Norms and Custom
Social standards are principles or desires through which a general public aides the
conduct of its individuals and regularly reflect social qualities. Social standards are
systems of social control which advance conformity (Lawan & Zanna, 2013). They can
be both prescriptive, controlling what we ought not to do and prescriptive, building up
and desire for what we ought to do. Especially purchasing and expending. Standards
might be formalized in law or different kinds of standardized administrative strictures, or
they might be casual conduct regularities or traditions. Societal standards controls the sort
of fabric we purchase and not clinging to it, even those which are casual, and regularly
bring about noteworthy outcomes, in light of the fact that a hidden social worth or good
standard is abused. People build up the ability to assess their conduct by encountering the
outcomes of having acted in manners that disregard social standards of the general public
in which they live (Dörtyol, Coşkun, & Kitapci, 2018).
According to Amin (2017), norms can be regarded as the most principal determinant of
an individual's need and conduct. The growing child acquires a lot of qualities,
recognition inclinations and practices through his or her family and other key
organizations. Culture impacts impressively the example of utilization and the example of
basic leadership. Advertisers need to investigate the social powers and need to casing
promoting techniques for every classification of culture independently to push up the
offers of their items or administrations. Be that as it may, culture isn't lasting and changes
bit by bit and such changes are logically acclimatized inside society (Ramya & Ali ,
2016).
2.3.2 Social Class
Consumer buying behavior is dictated by the social class to which they have a place
(Ramya & Ali , 2016). The characterization of financial gatherings is known as Socio-
Economic Classification (SEC). Social class is moderately a perpetual and requested
division in a general public whose individuals share comparable worth, intrigue and
conduct. Social class isn't controlled by a solitary factor, for example, pay however it is
estimated as a mix of different variables, for example, pay, occupation, instruction,
expert, control, property, possession, and ways of life, utilization, design and so forth.
17
There are three diverse social classes in our general public. They are high society, white
collar class and lower class. These three social classes vary in their purchasing conduct
(Kacen & Lee, 2013). Privileged purchasers need high-class merchandise to keep up their
status in the society. White collar class shoppers buy cautiously and gather data to think
about various makers in a similar line and lower class customers purchase on drive.
Hence showcasing directors are required to think about cautiously the connection
between social classes and their utilization example and take proper measures to engage
the general population of those social classes for whom their items are implied (Shang &
Shi, 2013).
2.3.3 Sub Culture
Each culture comprises of smaller sub-societies that give progressively explicit
recognizable proof and socialization for their individuals. Sub-culture alludes to a lot of
convictions shared by a subgroup of the principle culture, which incorporate nationalities,
religions, racial gatherings and geographic locales (Swaidan, 2012). Many sub-Cultures
make up significant market sections and advertisers need to plan items and promoting
projects custom fitted to their needs. In spite of the fact that this subgroup will share a
large portion of the convictions of the primary culture, they share among themselves
another arrangement of convictions, which might be inconsistent with those held by the
principle gathering (Lee, 2015). For instance, Indians are typically observed as universal,
moderate individuals, however rich, up-showcase adolescents don't dither to appreciate
night parties with alcohol and ladies.
According to Lawan and Zanna (2013), subcultures are distinctive gatherings of
individuals in a general public whose life examples contrast partially from the
overwhelming social examples of a general culture. Albeit most sub social gatherings do
share social implications with the more noteworthy society, sub social implications are
one of a kind and unmistakable. Individuals from sub social gatherings can share
enthusiastic responses, qualities, convictions, and objectives, and they can have
comparative traditions, conventions, connection to objects, dialects, ways of life, and
ceremonies (Wang & Lin, 2014). Regularly sub social attributes speak to ancient rarities
of a gathering's adjustment to their verifiable social experience inside the bigger society.
Sub social groupings can be founded on different blends of restricted and explicit
gathering enrollments as well as expansive statistic absolute refinements, for example,
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sex, race, and nation of beginning, religion, age, geographic locale, and network (Ramya
& Ali , 2016).
2.4 The Effect of Psychological Factors on Consumer Buying Behavior
The psychological factors refers to the factors that concern the psychology of an
individual that drives his actions to seek satisfaction (Ramya & Ali , 2016). Purchaser
Behavior in a general sense can be viewed as everything, as each part of our lives spins
around the utilization of products and ventures. The field of consumer behavior covers a
wide stretch of bases as it centers on the whole utilization process, including issues that
impact a customer previously, after and during a purchase. Almost all practices that
individuals take part in will be somehow connected to utilization (Fandos & Flavian ,
2016). Regardless of whether it be travelling, shopping, or watching television,
individuals are legitimately or in an indirect way captivating in purchaser conduct. It
tends to be characterized as the procedures included when people select, buy and use
items or administrations to satisfy their needs and wants (Sultan, Joireman, & Sprott,
2012).
People consume and buy various items as indicated by our needs, inclinations and
purchasing power. These can be consumable merchandise, strong products, forte products
or, modern products (Amin, 2017). In our globalizing world the challenge among the
organizations creating similar products and administrations have escalated and the
purchaser, who is viewed as the chief center point in a cutting edge business approach,
become increasingly significant. Subsequently, realizing the customers become a need for
firms. Marketing begins with the requirements of the client and finishes with his
fulfillment (Kigige, 2017). When everything spins around the client then the investigation
of shopper conduct turns into a need. In the advanced promoting, the clients have
incredible alternatives to choose so influence of the clients by the advertisers vitally
affects their purchasing. So as to influence the customers, the advertisers need to think
about the shopper conduct (Fandos & Flavian , 2016).
Successful organizations see how to use the various elements that impact shopper
purchasing conduct to adequately showcase their items and augment deals (Wekeza &
Sibanda, 2019). Studies demonstrate that there are commonly four principle factors that
assume a job in the purchaser's purchasing conduct. These elements incorporates, social
elements, individual elements and mental elements (Dörtyol, Coşkun, & Kitapci, 2018).
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The psychological factors that influence an individual's decisions to make a purchase are
further categorized into motivations, perceptions, leaning and beliefs and attitudes
(Ramya & Ali , 2016).
2.4.1 Motivation
A purchaser's motivation is the essential level of the mental drive behind a particular buy.
On the off chance that the purchaser's inspiration is high, that fundamentally implies that
the degree of need, or the customer's impression of that need, is genuinely solid (Roman,
Kozak, & Popiela-Pleban, 2013). Given a high level of inspiration, the individual will
effectively look to fulfill that need by making that purchase. Consumer inspiration is
identified with the "Maslow's Hierarchy of Needs" proposed by clinician Abraham
Maslow. This hypothesis expresses that individuals effectively look to fulfill physical
needs first, trailed by wellbeing, social, regard and self-completion needs, in a specific
order (Santos & Ribeiro, 2012). Organizations that effectively address these
requirements, and fill them, will propel purchasers to purchase their items.
According to Durmaz (2014), Motivation is an enacted inner need state prompting
objective guided conduct to fulfill that need. In like manner intentions can be
characterized as generally enduring, solid, and persevering interior upgrades that excite
and direct conduct toward specific objectives. The beginning stage in the purchasing
procedure is acknowledgment of need. A need might be characterized as absence of
something valuable. An individual can be persuaded to purchase an item for comfort, for
style, for renown, for self-pride or being at standard with others (Chol, 2017). On the off
chance that the advertisers recognize what makes inspiration, they might almost certainly
create showcasing strategies to impact shoppers' inspiration to consider, be engaged with,
as well as procedure about their image or advertisement (Ngulula, 2015). The degree of
inspiration impacts the purchasing conduct of the shoppers. It is very much clarified by
Maslow through his need order hypothesis including essential needs, security needs,
social needs, regard needs and self-completion needs(Strack, 2016). Ordinarily, the
fundamental needs and the security needs are more squeezing needs than the other and
consequently, these requirements become a thought process that guides the buyer conduct
to look for fulfillment.
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2.4.2 Perception
Perception is called as the vitality which makes us mindful of our general surroundings
and connects an importance to it after a detecting procedure. Every person on the planet
sees his/her surroundings in an unexpected way. A few people have similar thoughts
regarding a particular occasion (Durmaz, 2014). The author further mentions that the
marketplace’s perception of a brand or industry is extremely important, which is why big
brands work so hard to ensure that the general perception surrounding them and their
industry is as positive as possible. As a result, companies like Gillette, will pay David
Beckham to ‘model’ their products. By aligning the way people feel about Beckham, with
the Gillette brand, Gillette can improve the perception of their brand or reinforce what’s
already positive about it. According to Clee and Wicklund (2014), nobody can see or feel
the 100% of all things. Ever wonder why individuals purchase certain items? It is about
discernment. Recognition is the manner by which purchasers comprehend the world
around them dependent on data got through their faculties. Because of boosts, purchasers
subliminally assess their needs, qualities and desires, and after that they utilize that
assessment to choose, sort out and decipher the improvements.
Perception is basically the manner in which an individual specifically perspectives, forms
and translates the bigger world or any piece of it. It's essentially how we as individuals
compose and understand information to shape some kind of perspective (MacInnis &
Folkes, 2010). According to Brinkmann (2014), Customers likewise have view of
themselves that may influence a specific buy. For instance, individuals who view
themselves as having lovely taste are eager to pay more for a particular brand or item that
is seen to be "the best." By a similar token, purchasers who pride themselves on being
extraordinary deal seekers may pick a lesser-estimated item, despite the fact that they may
some way or another incline toward the pricier alternative. Durmaz (2014), argues that it's
human instinct for customers to make a wide range of affiliations, both cognizant and
subliminal, from their encounters. When a brand has set up itself as having a specific
character for instance, Walmart and other comparable stores' minimal effort situating it's
hard to conquer that in the commercial center. The shopper perception is that items from
these stores are shoddy and on an intuitive level, the items are in this way lower quality.
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2.4.3 Experience
Buyers are over every person, and every individual are results of their encounters. We
index each experience we have as either positive or negative. At that point we review that
experience and how we ordered it when a comparative circumstance emerges (Ramya &
Ali , 2016). These encounters impact a customer's conduct by changing the manner in
which the purchaser responds to items like those they're comfortable with. For instance,
numerous buyers purchase Toyota vehicles since they have had great encounters with
their recently possessed Toyota autos. Organizations that emphasis on the shopper
experience gain rehash business from those clients. The buyer doesn't have to look
anyplace else to take care of that particular issue or address that issue. Related knowledge
regularly exceeds the way that the challenge might be less expensive or far and away
superior at times (Lawan & Zanna, 2013).
2.4.3 Beliefs and Attitudes
A purchaser's convictions and demeanors enormously impact the purchasing choices that
a consumer makes. Convictions are the manner in which individuals consider a specific
item or brand, while a demeanor is the person's reliably great or ominous assessment,
inclination or feeling about an item or brand.(Gibler & Nelson, 2013)These convictions
and mentalities shape the buyer's view of the item. It tends to be intense for a business to
survive or change those convictions and mentalities. That is on the grounds that they
come from the person's character and way of life. They're characteristically close to home
and associated with the purchaser's feeling of self. Buyers frequently shut out or disregard
data that contentions with their convictions and frames of mind. They will in general
specifically hold data or even contort the data to make it reliable with their past view of
the item (Durmaz, 2014).
Marketers are keen on the convictions that individuals plan about explicit items and
administrations on the grounds that these convictions make up item and brand pictures
that influence purchasing conduct (Clee & Wicklund, 2014). In the event that a portion of
the convictions aren't right and forestall buy, the advertiser needs to dispatch a crusade to
address them. A buyer may accept that Sony's Cyber-shot camera takes the best HD
video, is simplest to utilize, and is the most sensibly estimated. These convictions might
be founded on information, confidence, or prattle. Purchasers will in general build up a
lot of convictions about an item's properties and after that, through these convictions,
22
structure a brand picture a lot of convictions about a specific brand (Brewer & Venaik,
2011).
2.5 Chapter Summary
The first section of this chapter presented the literature on the effect of economic factors
on consumer buying behavior, second section has presented a literature on the effect of
socio-cultural factors on consumer buying behavior and the third section offered a
literature review on the effect of psychological factors on consumer buying behavior. The
next chapter presents the research methodology that will guide the study.
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CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
The study methodology of this study entails; the research design describing the approach
the study will take, the population of the study, the sample size, sampling technique, data
analysis techniques as well as the procedure adopted by the study. The chapter ends with
a chapter summary.
3.2 Research Design
According to Cooper and Schindler (2014), research design refers to the framework
which is used in data collection and the analysis of the data with an attempt to address the
research questions or the research objectives of the study. Equally, the research design is
used in providing the justification for the effective choice of data resources, the collection
and the analysis (Jogulu & Pansiri, 2014). Descriptive research design was adopted for
this study, the research adopted this method because it helps the collection of both
qualitative and quantitative data without doing changes or influencing the study
environment.
A descriptive research design also helps to ascertain and being able to describe the
characteristics of the variables of interest in a situation by portraying the characteristics of
a particular situation and it has the advantage of accuracy and the flexibility (Shang &
Shi, 2013). This method further enables the researcher to summarize the findings in a way
that provided information on factors influencing consumer buying behavior in real estate.
The views of the respondents was based on a likert scale based on the strength views
ranging from the weakest to the strongest view on the subject matter. Descriptive
statistics was used to analyze both frequencies and percentages addressing the
independent variables of the study that is economic factors, socio-cultural factors and
psychological factors in relation to the dependent variable consumer buying behavior.
3.3 Population and Sampling Design
3.3.1 Population
Population is the collection of items or individuals in a study in which references are
drawn to address the research problem (O’Beirne, 2013). Cooper and Schindler (2014),
also defines population of the study as the total units that form the study subjects a
24
researcher intends to examine. For this study, the population of 335 registered real estate
agencies in Nairobi County according to Estate Agents Registration Board (EARB,
2019). The study targeted 117 real estate marketing and sales officials from 10 biggest
real estate firms selected from the list 0f 335 real estate agents as shown in Appendix III.
Table 3.1: Population Distribution
Organization Population Percent (%)
Knight Frank 21 18
Hass Consult Ltd 16 14
Llyod Masika 13 10
Aziz Realtors 10 9
Ryden International 9 8
Dinara Developers 7 6
Homoscope Properties Ltd 15 13
Suraya Property Group 11 9
Homes Universal 9 8
Villa Care Ltd 6 5
Total 117 100%
3.3.2 Sampling Design
According to Cooper and Schindler (2014), defines sampling design as the procedure or a
systematic process which researchers use in selecting the individuals for a study which
are a representation of the whole population of the study. Lavrakas (2013), sampling
design is the framework which depicts on how the study will be conducted being the
process by which the researcher engages to select the elements or units from a population
that is the representation of the whole population.
3.3.2.1 Sampling Frame
Sander et al., (2013), regard sampling frame as the final list that is used to represent the
population of the study from which the researcher is able to make a sample selection. The
list can contain the total units of both homogeneous and heterogeneous groups of the
study. Sampling frame for this study was obtained from the Estate Agents Registration
Boards. The sampling frame contained a list of registered real estate firms in Nairobi.
25
3.3.2.2 Sampling Technique
Sampling technique in research refers to the technique deployed by the researcher to
ensure that different groups that are either heterogeneous or homogeneous are well
represented in the final selected sample size (Cooper & Schindler , 2014). This study used
simple random sampling technique. Simple random sampling technique refers to the
sampling technique where every element in the population has an even chance and the
likelihood of being selected in the sample (O’Beirne, 2013). This study used simple
random sampling technique so that every employee is given an equal chance of being
selected in the sample without any bias, hence, justification of its selection.
3.3.2.3 Sample Size
Sample size refers to the act of choosing the number of observations or replicates to be
included in the sample size (Cooper & Schindler , 2014). This study used Yamane’s
formula (1960) in determining the suitable sample size for this study, with assumption of
95% of confidence level.
Where, n = sample size
N = Study Population, 117 in this case
e = Alpha level of 0.1
Substituting these values in the above equation, the sample size was:
With the use of Yamane’s formula the sample size of this study was determined to be 91
respondents.
26
Table 3.2: Sample Size Distribution
Organization Population Sample Percent (%)
Knight Frank 21 16 18
Hass Consult Ltd 16 13 14
Llyod Masika 13 10 10
Aziz Realtors 10 8 9
Ryden International 9 7 8
Dinara Developers 7 5 6
Homoscope Properties Ltd 15 12 13
Suraya Property Group 11 8 9
Homes Universal 9 7 8
Villa Care Ltd 6 4 5
Total 117 91 100%
3.4 Data Collection Methods
According to Cooper and Schindler (2014), data colleting refers to the process of
gathering of gathering and measuring information on targeted variables in an established
system which then enables the researcher to answer relevant questions and evaluate
outcomes. They further suggest that gathering of statistical data ranges from a simple
observation to a large survey of multinational companies at sites in various parts of the
world. This study was based on primary data to draw conclusions. Primary data was
collected through the use of questionnaires which consisted of four sections covering the
bio data of the respondents, the effect of economic factors on consumer buying behavior,
followed by the effect of social factors on consumer buying behavior and the effect of
psychological on consumer buying behavior. The questionnaire was used for data
collection from target respondents. The questionnaire was based on Likert scale with five
measurements, (1-strongly disagree, 2-disagree, 3-neutral, 4-agree and 5-strongly agree).
3.5 Research Procedures
According to Cooper and Schindler (2014) research procedures is a detailed description
entailing a step by step guide on how the research should be carried out in order to meet
the objectives guiding the study. For this study, after the project proposal had been
approved, IRB letter was obtained from the institution research office to be used in
applying for research permit at NACOSTI. After the research permit was obtained, a
27
letter of introduction was drafted to the director of human resource for real estate
companies in Nairobi requesting for their permission to conduct the study in their
premises. Once the permission was granted, a pilot test was done to test the validity
which is the extent to which the instrument used in research measures what is purports to
measure. The researcher then ensured the accuracy and the consistency of the instruments
through a pilot study, piloting of the study involved 10% of the respondents that is 6
respondents that did not participate in the final study. The researcher then administer the
questionnaires to the respondents. In order to ensure a high response rate the respondents
were given a period of two weeks to respond to the questionnaires after which they were
collected. The questionnaire was checked for completeness after which data was analyzed
by the researcher.
3.6 Data Analysis Methods
Data analysis refers to the process of evaluating data obtained using analytical and
statistical tools with an attempt to discover useful information and aid in business
decision making (Cooper & Schindler , 2014). Once the researcher has collected the
questionnaires, they was cross-checked for accuracy and this was done by checking
whether the responses are legible, all important questions have been answered, the
responses are complete and whether all contextual information is included, which is a
critical step emphasized in research (Elvik, 2017). After gathered data was coded and
transferred into the computer for analysis using SPSS software version 24. Bothe
descriptive statistics and inferential statistics were put into use for this particular study.
Descriptive statistics was essential in analyzing percentages and frequencies while
inferential statistics were essential in analyzing correlation and regression analysis.
Figures and tables were used in tabulating as well as presentation of the findings.
3.7 Chapter Summary
This chapter presented the research methodology for the study. The research presented
the research design adopted by the researcher, presented the population of the study, the
sampling technique that the study applied followed by data collection methods, research
procedures and the data analysis methods. The next chapter covers results and findings of
the study.
28
CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
This chapter presents the findings obtained from the respondents. The first section
highlights general information of the respondents and response rate followed by the
second section presenting the findings on the effect of economics on consumer buying
behavior. Third section presents the findings on the effect of socio-cultural factors on
consume buying behavior and the final section presents the findings on the effect of
psychological factors on consumer buying behavior.
4.2 Response Rate and Demographic Information
4.2.2 Response Rate
A response rate of 71% was acquired from the respondents of this investigation whereby,
out of 91 surveys that were given to the respondents, out of 91 questionnaires that were
issued to the respondents, 65 of them were dully filled and the remaining 26 accounting
for 29% were not filled.
Figure 4. 1: Response Rate
4.2.2.3 Respondents Gender
When the respondents were asked to indicate their gender, 46% were female and 54%
were male as shown in Figure 4.2. This implies that the study had a diverse gender
representation.
29
Figure 4. 2: Respondents Gender
4.2.2.4 Respondents Age
This examination looked to set up the age of the respondents, the discoveries uncovered
that 3% aged over 61 years, 8% matured between 51-60 years, 34% of the respondents
matured between 41-50 years, 43% matured between 31-40 years and 12% matured
between 18-30 years. This inferred the investigation had a various sexual orientation
portrayal.
Figure 4. 3: Respondents Age
4.2.2.5 Respondents Education
At the point when the respondents were solicited to demonstrate their most elevated level
of education, 14% of the respondents have a diploma, 49% have a four year college
30
education and 37% have a graduate degree as appeared in Figure 4.4. This suggested the
respondents had the capacity to peruse and decipher the data looked for in this
investigation.
Figure 4. 4: Respondents Education
4.2.2.6 Years in the Organization
At the point when the respondents were solicited to demonstrate the number from years
they have been in the association, 24% had been in the firm for a time of 1-3 years, 63%
for a time of 4-6 years and 13% between a times of 10-12 years as appeared in Figure 4.5.
This inferred the respondents had adequate information on the association.
Figure 4. 5: Years in the Organization
31
4.3 The Effect of Economic Factors on Consumer Buying Behavior
This study sought to determine the effect of economic factors on consumer buying
behavior. The findings are presented as follows:
4.3.1 Economic Factors and Consumer Buying Choice
At the point when the respondents were approached to demonstrate whether financial
variables assume an incredible job in shopper purchasing decision, 2% emphatically
dissented, 5% deviated, 35% firmly concurred, 0% unbiased, and 58% concurred as
appeared in Figure 4.6. This suggests monetary elements assume an extraordinary job in
customer purchasing conduct.
Figure 4. 6: Economic Factors and Consumer Buying Choice
4.3.8 Rate of Employment
At the point when the respondents were solicited to demonstrate whether the rate from
employment impacts purchaser purchasing conduct of real estate products, 4% deviated,
0% firmly dissented, 2% nonpartisan, 43% unequivocally concur and 51% concurred as
appeared in Figure 4.7. This suggested the rate of employment impacts purchaser
purchasing conduct.
32
Figure 4. 7: Rate of Employment
4.3.9 Interest Rates
At the point when the respondents were approached to demonstrate whether financing
costs impact purchaser purchasing decision on land items, 0% dissented, 3%
unequivocally deviated, 3% dissented, 34% emphatically concurred and 60% concurred
as appeared in Figure 4.8. This suggested loan costs impact shopper purchasing decision
on land.
Figure 4. 8: Interest Rates
33
4.3.10 Unemployment Rates
The respondents were asked to indicate whether unemployment rates affects consumer
purchasing power, 0% were neutral, 0% disagreed, 0% strongly disagreed, 45% agreed
and 55% strongly agreed as shown in Figure 4.9. This implied that unemployment rates
affects consumer purchasing power.
Figure 4. 9: Unemployment Rates
4.3.11 Personal Income
At the point when the respondents were approached to demonstrate whether individual
pay decides buying behavior of client in their decision of real estate, 3% deviated, 5%
impartial, 0% firmly dissented, 40% unequivocally concurred and 52% concurred as
appeared in Figure 4.10. This inferred individual pay decides buying behavior of client in
their decision of land.
34
Figure 4. 10: Personal Income
4.3.12 Availability of Consumer Credit
When the respondents were asked to indicate whether the availability of consumer credit
enhances purchasing power of consumers in real estate, 0% strongly disagreed, 0%
disagreed, 0% neutral, 54% strongly agreed and 46% agreed as shown in Figure 4.11.
This meant that the availability of consumer credit enhances purchasing power.
Figure 4. 11: Availability of Consumer Credit
4.3.13 Consumer Credit and Sales
When the respondents were asked to indicate whether consumer credit is essential in
enhancing sales of real estate credit, 0% strongly disagreed, 2% disagreed, 4% neutral,
35
42% agreed and 52% strongly agreed as shown in Figure 4.12. This implied that
consumer credit is essential in enhancing sales of real estate.
Figure 4. 12: Consumer Credit and Sales
4.3.14 Change in Personal Income
When the respondents were asked whether change in personal income determines the
purchasing power of real estate product, 2% disagreed, 4% disagreed, 0% strongly
disagreed, 44% strongly agreed and 50% agreed as shown in Figure 4.13. This implied
that personal income determines purchasing power of real estate products.
Figure 4. 13: Change in Personal Income
36
4.3.15 Correlation between Economic Factors and Consumer Buying Behavior
Correlation analysis was conducted to establish the relationship between the independent
variable (economic factors) and the dependent variable (consumer buying behavior). The
findings in Table 4.1 highlights a correlation between economic factors and consumer
buying behavior. The findings of the study revealed a strong and significant relationship
between economic factors (independent variable) and consumer buying behavior
(dependent variable), r (0.758); p-value < 0.01.
Table 4. 1: Correlation between Economic Factors and Consumer Buying Behavior
Correlations
Variable
Economic
Factors
Consumer Buying
Behavior
Economic
Factors
Pearson Correlation 1
Sig. (2-tailed)
N 65
Consumer
Buying
Behavior
Pearson Correlation .758** 1
Sig. (2-tailed) .000
N 65 65
**. Correlation is significant at the 0.01 level (2-tailed).
4.3.16 Regression Test for Economic Factors and Consumer Buying Behavior
Regression analysis was conducted in order to determine the underlying relationship
between the independent variable economic factors and dependent variable consumer
buying behavior.
The results in Table 4.2 indicate the model summary derived from the regression test for
economic factors and consumer buying behavior. The computations deduced an adjusted
R square value of (0.567). This implied that economic factors accounts for 56.7%
variability in consumer buying behavior and 43.3% variability is attributed to factors
outside the regression model.
Table 4. 2: Regression Test for Economic Factors and Consumer Buying Behavior
Model Summary
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .758a .574 .567 .20659
a. Predictors: (Constant), Economic Factors
37
The ANOVA test results presented in Table 4.3, indicate that the Fisher statistics value is
84.854 with a p-value of 0.000. This indicates that; F (1, 63) = 84.854, p = 0.000 (p-value
< 0.01). This implies that there exists a substantial variance between the independent
variable economic factors and dependent variable consumer buying behavior.
Table 4. 3: Analysis of Variance between Economic Factors and Consumer Buying
Behavior
ANOVAa
Model
Sum of
Squares df
Mean
Square F Sig.
1 Regression 3.622 1 3.622 84.854 .000b
Residual 2.689 63 .043
Total 6.310 64
a. Dependent Variable: Consumer Buying Behavior
b. Predictors: (Constant), Economic Factors
The coefficients Table 4.4, indicates the beta coefficient values for the variables under
study are computed as, constant (β0) = 1.668 and beta for economic factors (β1) = 0.621.
The p-value for economic factors is recorded as 0.000 (p=0.000, p-value < 0.01). The
regression equation was established as follows:
Y (consumer buying behavior) = 1.668 + 0.621 X1.
The findings implied that there exists a significant relationship between economic factors
and consumer buying behavior. The findings implied that for every unit change in
economic factors, there will be 0.621 unit change in consumer buying behavior.
Table 4. 4: Coefficient Table for Economic Factors and Consumer Buying Behavior
Coefficientsa
Model
Unstandardized
Coefficients
Standardize
d
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 1.668 .295 5.657 .000
Economic
Factors .621 .067 .758 9.212 .000
a. Dependent Variable: Consumer Buying Behavior
38
4.4 The Effect of Socio-cultural Factors on Consumer Buying Behavior
This study sought to determine the effect of socio-cultural factors on consumer buying
behavior. The findings are presented as follows:
4.4.1 Culture and Consumer Buying Behavior
At the point when the respondents were approached to demonstrate whether culture
impacts shopper purchasing conduct, 0% emphatically dissented, 3% deviated, 3%
unbiased, 42% concurred and 52% firmly concurred as appeared in Figure 4.14. This
inferred culture impacts shopper purchasing conduct.
Figure 4. 14: Culture and Consumer Buying Behavior
4.4.2 Market Segment
On the inquiry whether culture is significant in growing land properties for an objective
market section, 0% emphatically dissented, 3% deviated, 3% impartial, 42%
unequivocally concurred and 52% concurred as appeared in Figure 4.15. This suggested
culture is significant in growing land properties.
39
Figure 4. 15: Market Segment
4.4.3 Customer Behavior and Real Estate Trends
On the question social standards influences customer behavior in developing real estate
trends, 0% neutral, and 0% disagreed, 0% strongly disagreed, 53% agreed and 47%
strongly agreed as shown in Figure 4.16. This implied that social standards influences
customer behavior in developing real estate trends.
Figure 4. 16: Customer Behavior and Real Estate Trends
4.4.4 Purchasing Decision
At the point when the respondents were asked to demonstrate whether purchasing
decision of customers in real estate, 3% strongly disagreed, 2% neutral, 3% disagreed,
40
27% agreed and 65% strongly agreed as shown in Figure 4.17. This implied that social
standards influences purchasing decision of customers in real estate.
Figure 4. 17: Purchasing Decision
4.4.5 Social Class
On the inquiry whether social classes decide the sort of real estate to be created to serve
the market as needs be, 2% unequivocally dissented, 3% deviated, 2% unbiased, 51%
concurred and 42% emphatically concurred as showed in Figure 4.18. This suggested
social class decides the sort of land to be created to serve the market as needs be.
Figure 4. 18: Social Class
41
4.4.6 Real Estate Trends
On the question whether trends in real estate are determined by social classes and
standards in the market, 0% strongly disagreed, 0% neutral, 0% disagreed, 42% strongly
agreed and 58% agreed as shown in Figure 4.19. This implied that trends in real estate
trends are determined by social classes.
Figure 4. 19: Real Estate Trends
4.4.7 Culture and Sales
On the question whether culture plays a significant role in sales of real estate properties in
the organization, 3% disagreed, 2% neutral, 0% strongly disagreed, 49% agreed and 46%
strongly agreed as indicated in Figure 4.20. This implied that culture plays a significant
role in sales of real estate properties in the organization.
Figure 4. 20: Culture and Sales
42
4.4.8 Correlation between Socio-cultural Factors and Consumer Buying Behavior
Correlation analysis was conducted to establish the relationship between the independent
variable (socio-cultural factors) and the dependent variable (consumer buying behavior).
The findings in Table 4.5 highlights a correlation between socio-cultural factors and
consumer buying behavior. The findings of the study revealed a strong and significant
relationship between socio-cultural factors (independent variable) and consumer buying
behavior (dependent variable), r (0.601); p-value < 0.01.
Table 4. 5: Correlation between Socio-cultural Factors and Consumer Buying
Behavior
Correlations
Variable
Social-cultural
Factors
Consumer Buying
Behavior
Social-cultural
Factors
Pearson Correlation 1
Sig. (2-tailed)
N 65
Consumer
Buying
Behavior
Pearson Correlation .601** 1
Sig. (2-tailed) .000
N 65 65
**. Correlation is significant at the 0.01 level (2-tailed).
4.4.9 Regression Test for Socio-cultural Factors and Consumer Buying Behavior
Regression analysis was conducted in order to determine the underlying relationship
between the independent variable socio-cultural factors and dependent variable consumer
buying behavior. The results in Table 4.6 indicate the model summary derived from the
regression test for socio-cultural factors and consumer buying behavior. The
computations deduced an adjusted R square value of (0.351). This implied that socio-
cultural factors accounts for 35.1% variability in consumer buying behavior and 64.9%
variability is attributed to factors outside the regression model.
Table 4. 6: Regression Test for Socio-cultural Factors and Consumer Buying
Behavior
Model Summary
Model R R Square
Adjusted R
Square
Std. Error of the
Estimate
1 .601a .361 .351 .25294
a. Predictors: (Constant), Socio-cultural Factors
43
The ANOVA test results presented in Table 4.7, indicate that the Fisher statistics value is
35.631 with a p-value of 0.000. This indicates that; F (1, 63) = 35.631, p = 0.000 (p-value
< 0.01). This implies that there exists a substantial variance between the independent
variable socio-cultural factors and dependent variable consumer buying behavior.
Table 4. 7: Analysis of Variance between Socio-cultural Factors and Consumer
Buying Behavior
ANOVAa
Model
Sum of
Squares df
Mean
Square F Sig.
1 Regression 2.280 1 2.280 35.631 .000b
Residual 4.031 63 .064
Total 6.310 64
a. Dependent Variable: Consumer Buying Behavior
b. Predictors: (Constant), Socio-cultural Factors
The coefficients Table 4.8, indicates the beta coefficient values for the variables under
study are computed as, constant (β0) = 1.129 and beta for socio-cultural factors (β1) =
0.739. The p-value for socio-cultural factors is recorded as 0.000 (p=0.000, p-value <
0.01). The regression equation was established as follows:
Y (consumer buying behavior) = 1.129 + 0.739 X1.
The findings implied that there exists a significant relationship between socio-cultural
factors and consumer buying behavior. The findings implied that for every unit change in
socio-cultural factors, there will be 0.739 unit change in consumer buying behavior.
Table 4. 8: Coefficient Table for Social-cultural Factors and Consumer Buying
Behavior
Coefficientsa
Model
Unstandardized
Coefficients
Standardize
d
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 1.129 .545 2.073 .042
Socio-
cultural
Factors
.739 .124 .601 5.969 .000
a. Dependent Variable: Consumer Buying Behavior
44
4.5 The Effect of Psychological Factors on Consumer Buying Behavior
This study sought to determine the effect of psychological factors on consumer buying
behavior. The findings are presented as follows:
4.5.1 Psychological Factors
When the respondents were asked to indicate whether psychological factors influences
consumer buying behavior, 0% strongly disagreed, 0% neutral, 45% strongly agreed, 4%
disagreed and 51% agreed as shown in Figure 4.21. This implied that psychological
factors influences consumer buying behavior.
Figure 4. 21: Psychological Factors
4.5.2 Purchaser’s Motivation
When the respondents were asked to indicate whether a purchaser’s motivation is the
essential of mental drive behind purchasing real estate property, 0% were neutral, 3%
strongly disagreed, 3% disagreed, 24% agreed and 70% strongly agreed as shown in
Figure 4.22. This implied that a purchaser’s motivation is the essential of mental drive
behind purchasing real estate property.
45
Figure 4. 22: Purchaser’s Motivation
4.5.3 Customer Motivation
On the question whether customer motivation enhances customer buying behavior, 0%
strongly disagreed, 0% disagreed, 6% neutral, 27% agreed and 67% strongly agreed as
shown in Figure 4.23. This implied that customer motivation enhances customer buying
behavior.
Figure 4. 23: Customer Motivation
4.5.4 Customer’s Perception
When the respondents were asked to indicate whether customer’s perception influences
consumer conduct on the choice of real estate, 0% strongly disagreed, 3% disagreed, 3%
46
neutral, 40% agreed and 54% strongly agreed as shown in Figure 4.24. This implied that
customer’s perception influences consumer conduct on the choice of real estate.
Figure 4. 24: Customer’s Perception
4.5.5 Developing of Real Estate Properties
On the question whether consumer’s perception is used in developing real estate
properties in certain market segment, 0% disagreed, 0% strongly disagreed, 0% neutral,
32% agreed and 68% strongly agreed as shown in Figure 4.25. This implied that
consumer’s perception is used in developing real estate properties in certain market
segment.
Figure 4. 25: Developing of Real Estate Properties
47
4.5.6 Consumer Attitude
On the question whether consumer attitude influences consumer buying behavior towards
the choice of real estate properties, 0% strongly disagreed, 3% disagreed, 2% neutral,
67% strongly agreed and 28% agreed as shown in Figure 4.26. This implied that
consumer attitude influences consumer buying behavior towards the choice of real estate
properties.
Figure 4. 26: Consumer Attitude
4.5.7 Attitudes and Behaviors
When the respondents were asked to indicate whether attitudes and behaviors influence
consumer buying decision in real estate, 0% disagreed, 0% neutral, 0% strongly
disagreed, 48% strongly agreed and 52% agreed as shown in Figure 4.27.
Figure 4. 27: Attitudes and Behavior
48
4.5.8 Customer Belief
When the respondents were asked to indicate whether customer belief is crucial when it
comes to purchasing decision of real estate properties, 0% strongly disagreed, 4%
disagreed, 3% neutral, 44% strongly agreed and 49% agreed as shown in Figure 4.28.
This implied that customer belief is crucial when it comes to purchasing decision of real
estate properties.
Figure 4. 28: Customer Belief
4.5.9 Correlation between Psychological Factors and Consumer Buying Behavior
Correlation analysis was conducted to establish the relationship between the independent
variable (psychological factors) and the dependent variable (consumer buying behavior).
The findings in Table 4.9 highlights a correlation between psychological factors and
consumer buying behavior. The findings of the study revealed positive relationship
between psychological factors (independent variable) and consumer buying behavior
(dependent variable), r (0.217); p-value < 0.01.
49
Table 4. 9: Correlation between Psychological Factors and Consumer Buying
Behavior
Correlations
Variable Psychological Factors
Consumer
Buying Behavior
Psychological
Factors
Pearson
Correlation 1
Sig. (2-tailed)
N 65
Consumer Buying
Behavior
Pearson
Correlation .217 1
Sig. (2-tailed) .082
N 65 65
4.5.10 Regression Test for Psychological Factors and Consumer Buying Behavior
Regression analysis was conducted in order to determine the underlying relationship
between the independent variable psychological factors and dependent variable consumer
buying behavior.
The results in Table 4.10 indicate the model summary derived from the regression test for
psychological factors and consumer buying behavior. The computations deduced an
adjusted R square value of (0.032). This implied that socio-cultural factors accounts for
3.2% variability in consumer buying behavior and 96.8% variability is attributed to
factors outside the regression model.
Table 4. 10: Regression Test for Psychological Factors and Consumer Buying
Behavior
Model Summary
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .217a .047 .032 .30893
a. Predictors: (Constant), Psychological Factors
The ANOVA test results presented in Table 4.11, indicate that the Fisher statistics value
is 3.120 with a p-value of 0.000. This indicates that; F (1, 63) = 3.120, p = 0.002 (p-value
< 0.01). This implies that there exists a substantial variance between the independent
variable psychological factors and dependent variable consumer buying behavior.
50
Table 4. 11: Analysis of Variance between Psychological Factors and Consumer
Buying Decision
ANOVAa
Model
Sum of
Squares df
Mean
Square F Sig.
1 Regression .298 1 .298 3.120 .002b
Residual 6.013 63 .095
Total 6.310 64
a. Dependent Variable: Consumer Buying Behavior
b. Predictors: (Constant), Psychological Factors
The coefficients Table 4.12, indicates the beta coefficient values for the variables under
study are computed as, constant (β0) = 3.216 and beta for psychological factors (β1) =
0.265. The p-value for psychological factors is recorded as 0.002 (p=0.000, p-value <
0.01). The regression equation was established as follows:
Y (consumer buying behavior) = 3.216 + 0.265 X1.
The findings implied that there exists a significant relationship between psychological
factors and consumer buying behavior. The findings implied that for every unit change in
psychological factors, there will be 0.265 unit change in consumer buying behavior.
Table 4. 12: Coefficient Table for Psychological Factors and Consumer Buying
Behavior
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 3.216 .657 4.897 .000
Psychological
Factors .265 .150 .217 1.766 .002
a. Dependent Variable: Consumer Buying Behavior
4.6 Chapter Summary
Chapter four presents results and findings of the study. The first section presents the
findings on the effect of economic factors on consumer buying behavior. The second
section presents the findings on the effect of socio-cultural factors on consumer buying
behavior. The third section highlights the findings on the effect of psychological factors
on consumer buying behavior. Chapter five presents the discussion, conclusion and
recommendations of the study.
51
CHAPTER FIVE
5.0 DISCUSSION, CONCLUSION AND RECOMMEDNDATION
5.1 Introduction
This chapter presents the summary of the study, followed by the discussion of the study
findings, conclusion and recommendations of the study. The first section covers the study
summary, the second section presents the discussion of the findings, and third section
presents conclusions of the study and finally recommendations of the study.
5.2 Summary
The purpose of this study was to investigate the determinants of consumer behavior on
choice of real estate industry in Nairobi County. This study was guided by the following
research question; What is the effect of economic factors on consumer buying behavior
on choice of real estate in Nairobi County?, What is the effect of socio-cultural factors on
consumer buying behavior on choice of real estate in Nairobi County? and what is the
effect of psychological factors on consumer buying behavior on choice of real estate in
Nairobi County?
This study used descriptive survey design to integrate various elements of the study to
effectively address the research problem. The population of the study consisted of 163
employees working in top real estate firms in Nairobi County, stratified sampling
technique was deployed since the entire population was studied. This study used a
questionnaire in gathering primary data from target respondents. The study used
descriptive statistics to analyze frequencies and percentages. Inferential statistics used to
analyze correlation and regression analysis. A Statistical Package for Social Sciences
(SPSS) software version 24 was used for analysis.
The first research question of the study aimed to determine the effect of economic factors
on consumer buying behavior. The findings of the study revealed a strong and significant
relationship between economic factors (independent variable) and consumer buying
behavior (dependent variable), r (0.758); p-value < 0.01.
The second research question of the study aimed to determine the effect of socio-cultural
factors on consumer buying behavior. The findings of the study revealed a strong and
significant relationship between socio-cultural factors (independent variable) and
consumer buying behavior (dependent variable), r (0.601); p-value < 0.01.
52
The third research question of the study aimed to determine the effect of psychological
factors on consumer buying behavior. The findings of the study revealed positive
relationship between psychological factors (independent variable) and consumer buying
behavior (dependent variable), r (0.217); p-value < 0.01.
5.3 Discussion
5.3.1 The Effect of Economic Factors on Consumer Buying Behavior
This study aimed to determine the effect of economic factors on consumer buying
behavior. The findings of the study revealed that there is a strong and significant
relationship between economic factors and consumer buying behavior. These findings
corresponds to the findings of Wills, Kennedy and Cheese (2013) who argues that the
success or failure of a county’s economy can greatly impact consumer behavior based on
various economic factors .When the country’s economy is strong, consumers tend to have
more purchasing power and money is pumped into the thriving economy. When the
economy is struggling, the reverse can also be true. According to Rehman and Yusoff
(2017) a struggling economy is likely to affect various factors like interest rate,
employment while at the same time people losing consumer confidence. The law of free
market activity exhibits the connection between supply, request and costs. As interest
drives upward, so do the costs. This relationship draws in more providers, serving to
balance out the costs as well as to keep the interest at solid customer levels. Free market
activity influence shopper conduct provided that an item is excessively costly, purchaser
interest for that item will diminish (Urumsah, 2015).
The findings of the study show that interest rates influences consumer buying behavior.
The findings corresponds with the findings of Amin (2017) who indicates that interest
rates vacillations influence consumer spending since when rates are high, customers are
less disposed to obtain cash from the banks to buy expensive things, for example, a house
or a vehicle. Interest rates decide a buyer's buying power. For instance, if an individual
obtained cash to buy a home with a movable rate contract, when that rate goes up, that
individual may never again have the option to manage the cost of that house. According
to Fandos and Flavian (2016) an expansion in inflation implies an increment in costs.
This influences whether a buyer can manage the cost of the more expensive rate. Inflation
directly influences the estimation of the dollar since when inflation goes up, the dollars’
53
worth goes down, thus does the purchaser's buying power. Inflation particularly
influences customer conduct when wages don't increase to suit the increase in prices.
The findings of the study also show that personal income determines consumer buying
behavior. According to Ramya and Ali (2016) the personal income of an individual is
determinant of his purchasing conduct. The gross personal pay of an individual comprises
of extra cash and discretionary income. The expendable individual salary alludes to the
real pay (for example cash balance) staying at the transfer of an individual in the wake of
deducting charges and obligatorily deductible things from the gross salary. An increase in
the disposable income prompts an increment in the use on different things (Dörtyol,
Coşkun, & Kitapci, 2018). A fall in the discretionary cash flow, then again, prompts a fall
in the consumption on different things. Musyoki (2012) argues that the optional
individual salary alludes to the parity staying in the wake of gathering essential
necessaries of life. This pay is accessible for the buy of shopping products, tough
merchandise and extravagances. An expansion in the optional pay prompts an increment
in the use on shopping merchandise, extravagances and so on which improves the way of
life of an individual.
In addition Ramya and Ali (2016) salary desires are one of the significant determinants of
the purchasing conduct of a person. In the event that he anticipates any increase in his
pay, he is enticed to spend more on shopping merchandise, sturdy products and
extravagances. According to Roberts and Pirog (2014) an Individual's desire as for his
salary level later on impacts his purchasing conduct today. For example, on the off chance
that an individual anticipates that his pay should increment later on, at that point he will
spend more cash on the buy of the extravagance products, durables and shopping
merchandise. Furthermore, despite what might be expected, on the off chance that he
anticipates that his pay should fall later on his consumption on such things likewise
diminishes (Wills, Kennedy, & Cheese, 2013).
The findings of the study also show that consumer credit influences consumer buying
decisions. Ngula (2016) argues that consumer credit alludes to the credit facility
accessible to the customers covetous of buying tough solaces and extravagances. It is
made accessible by the venders, either directly or indirectly through banks and other
money related foundations. Contract buy, portion buy, direct bank advances and so on are
the ways by which credit is made accessible to the shoppers. Customer credit impacts
54
shopper conduct. Ramya and Ali (2016), in the event that more customer credit is
accessible on liberal terms, use on solaces and extravagances increments, as it initiates
buyers to buy these merchandise, and raise their expectation for everyday comforts. The
credit facility accessible to the purchaser additionally impacts his purchasing conduct. On
the off chance that the credit terms are liberal, and EMI plan is likewise accessible, at that
point the clients are probably going to spend more on the extravagance things, solid
products, and shopping merchandise (Shah, Kumar, & Chen, 2012)
5.3.2 The Effect of Socio-cultural Factors on Consumer Buying Behavior
This study sought to determine the effect of sociocultural factors on consumer buying
behavior. The findings of the study show that there is a significant relationship between
socio-cultural factors on consumer buying behavior. The findings corresponds to the
findings of Götze (2011) who argues that culture is that complex entire, which
incorporates information, conviction, craftsmanship, law, ethics, traditions and some
other capacities and propensities gained by people as individuals from society. According
to Martins and Brooks (2010) culture impacts the example of living, utilization, and basic
leadership by people. Culture can be obtained from the family, from the locale or from
the sum total of what that has been around us while we were growing up and learning the
methods for the world. Culture shapes a limit inside which an individual thinks and acts.
When one supposes and acts past these limits, he is embracing a multifaceted conduct and
may be considered by his prompt society or gathering as degenerate. Culture is a very
basic what not inescapable impact in our life. Social convictions and qualities can in this
manner be said to be mental pictures that influence a wide scope of explicit demeanors,
which thusly impact the manner in which an individual is probably going to carry on in a
particular circumstance for example acquiring another garments; the assessment, picking
among choices lastly paying for a specific kind of garments is generally an element of
center social convictions and qualities (Dörtyol, Coşkun, & Kitapci, 2018).
The findings of the study show that culture influences customer buying behavior. Chol
(2017) argues that each society has a culture, and social standards impacts on purchasing
conduct may differ incredibly all around. Gibler and Nelson (2013) argues that inability
to conform to these distinctions can bring about insufficient showcasing or humiliating
slip-ups. Worldwide and National advertisers must comprehend the way of life in every
one of their business sectors and adjust their showcasing techniques in like manner.
55
Advertisers are continually attempting to discover social moves so as to find new items
that may be needed. For instance, the social move toward more prominent worry about
wellbeing and wellness has made an immense industry for exercise gear and dress, low-
fat and increasingly regular sustenance, and wellbeing and wellness administrations. The
move toward familiarity has brought about more interest for easygoing apparel and easier
home decorations. The expanded want for relaxation time has brought about more interest
for comfort items and administrations, for example, microwaves and cheap food (Lu &
Chang, 2015).
The findings show that social standards influence consumer buying behavior. Lawan and
Zanna (2013) regards social standards as principles or desires through which a general
public aides the conduct of its individuals and regularly reflect social qualities. Social
standards are systems of social control which advance conformity. These can be both
prescriptive, controlling what we ought not to do and prescriptive, building up and desire
for what we ought to do. Especially purchasing and expending. Standards might be
formalized in law or different kinds of standardized administrative strictures, or they
might be casual conduct regularities or traditions. Societal standards controls the sort of
fabric we purchase and not clinging to it, even those which are casual, and regularly bring
about noteworthy outcomes, in light of the fact that a hidden social worth or good
standard is abused. People build up the ability to assess their conduct by encountering the
outcomes of having acted in manners that disregard social standards of the general public
in which they live (Dörtyol, Coşkun, & Kitapci, 2018).
Furthermore, Amin (2017) argues that norms can be regarded as the most principal
determinant of an individual's need and conduct. The growing child acquires a lot of
qualities, recognition inclinations and practices through his or her family and other key
organizations. Culture impacts impressively the example of utilization and the example of
basic leadership. Advertisers need to investigate the social powers and need to casing
promoting techniques for every classification of culture independently to push up the
offers of their items or administrations. Be that as it may, culture isn't lasting and changes
bit by bit and such changes are logically acclimatized inside society (Ramya & Ali ,
2016).
56
The findings revealed that social class influence consumer buying behavior. These
findings are in line with the thinking of Ramya and Ali (2016) who indicates that
consumer buying behavior is dictated by the social class to which they have a place.
According to Kacen and Lee (2013) social class is moderately a perpetual and requested
division in a general public whose individuals share comparable worth, intrigue and
conduct. Social class isn't controlled by a solitary factor, for example, pay however it is
estimated as a mix of different variables, for example, pay, occupation, instruction,
expert, control, property, possession, and ways of life, utilization, design and so forth.
There are three diverse social classes in our general public. They are high society, white
collar class and lower class. These three social classes vary in their purchasing conduct.
Shang and Shi (2013) argue that privileged purchasers need high-class merchandise to
keep up their status in the society. White collar class shoppers buy cautiously and gather
data to think about various makers in a similar line and lower class customers purchase on
drive. Hence showcasing directors are required to think about cautiously the connection
between social classes and their utilization example and take proper measures to engage
the general population of those social classes for whom their items are implied.
5.3.3 The Effect of Psychological Factors on Consumer Buying Behavior
This study sought to determine the effect of psychological factors on consumer buying
behavior. The findings show that there is a positive relationship between psychological
factors and consumer buying behavior. The findings of the study show that psychological
factors influence consumer buying behavior. According to Amin (2017) people consume
and buy various commodities as indicated by their needs, inclinations and purchasing
power. These can be consumable merchandise, strong products, forte products or, modern
products. The author further argues that in a globalizing world the challenge among the
organizations creating similar products and administrations have escalated and the
purchaser, who is viewed as the chief center point in a cutting edge business approach,
become increasingly significant. Subsequently, according to Kigige (2017) realizing the
customers become a need for firms. Marketing begins with the requirements of the client
and finishes with his fulfillment. When everything spins around the client then the
investigation of shopper conduct turns into a need. In the advanced promoting, the clients
have incredible alternatives to choose so influence of the clients by the advertisers vitally
affects their purchasing. So as to influence the customers, the advertisers need to think
about the shopper conduct (Fandos & Flavian , 2016).
57
The findings show that customer’s motivation influences consumer buying behavior.
Roman, Kozak and Popiela-Pleban (2013) argues that a purchaser's motivation is the
essential level of the mental drive behind a particular buy. On the off chance that the
purchaser's inspiration is high, that fundamentally implies that the degree of need, or the
customer's impression of that need, is genuinely solid. Given a high level of inspiration,
the individual will effectively look to fulfill that need by making that purchase. Consumer
inspiration is identified with the "Maslow's Hierarchy of Needs" proposed by clinician
Abraham Maslow. This hypothesis expresses that individuals effectively look to fulfill
physical needs first, trailed by wellbeing, social, regard and self-completion needs, in a
specific order (Santos & Ribeiro, 2012). Organizations that effectively address these
requirements, and fill them, will propel purchasers to purchase their items.
According to Durmaz (2014), the beginning stage in the purchasing procedure is
acknowledgment of need. A need might be characterized as absence of something
valuable. An individual can be persuaded to purchase an item for comfort, for style, for
renown, for self-pride or being at standard with others. On the off chance that the
advertisers recognize what makes inspiration, they might almost certainly create
showcasing strategies to impact shoppers' inspiration to consider, be engaged with, as
well as procedure about their image or advertisement (Ngulula, 2015). The degree of
inspiration impacts the purchasing conduct of the shoppers. It is very much clarified by
Maslow through his need order hypothesis including essential needs, security needs,
social needs, regard needs and self-completion needs (Strack, 2016). Ordinarily, the
fundamental needs and the security needs are more squeezing needs than the other and
consequently, these requirements become a thought process that guides the buyer conduct
to look for fulfillment.
The findings also revealed that perception influences consumer buying behavior.
According to Durmaz (2014) every person on the planet sees his/her surroundings in an
unexpected way. The author further argues that it's human instinct for customers to make
a wide range of affiliations, both cognizant and subliminal, from their encounters. When a
brand has set up itself as having a specific character for instance, Walmart and other
comparable stores' minimal effort situating it's hard to conquer that in the commercial
center. The shopper perception is that items from these stores are shoddy and on an
intuitive level, the items are in this way lower quality. A few people have similar thoughts
regarding a particular occasion. The author further mentions that the marketplace’s
58
perception of a brand or industry is extremely important, which is why big brands work
so hard to ensure that the general perception surrounding them and their industry is as
positive as possible. According to Maclinnis and Folkes (2010) perception is basically the
manner in which an individual specifically perspectives, forms and translates the bigger
world or any piece of it. It's essentially how we as individuals compose and understand
information to shape some kind of perspective. According to Brinkmann (2014),
Customers likewise have view of themselves that may influence a specific buy. For
instance, individuals who view themselves as having lovely taste are eager to pay more
for a particular brand or item that is seen to be "the best." By a similar token, purchasers
who pride themselves on being extraordinary deal seekers may pick a lesser-estimated
item, despite the fact that they may some way or another incline toward the pricier
alternative.
5.4 Conclusion
5.4.1 The Effect of Economic Factors on Consumer Buying Behavior
This study concluded that economic factors influence consumer buying behavior in their
choice of real estate properties. When the nation’s economy is strong, customer tend to
have more purchasing power and income pumped into the economy. On the other hand,
when the economy is struggling, the reverse can also be true. This study concluded that
interest rates influence consumer spending in a sense that when rates are high customer
are less disposed to obtain cash from commercial banks to purchase commodities. Interest
rates decide a buyer's buying power.
This study concluded that inflation influences purchasing power of buyers. An expansion
in inflation implies an increment in costs. This influences whether a buyer can manage
the cost of the more expensive rate. Inflation directly influences the estimation of the
dollar since when inflation goes up, the dollars’ worth goes down, thus does the
purchaser's buying power.
5.4.2 The Effect of Socio-cultural Factors on Consumer Buying Behavior
This study concluded that socio-cultural factors are essential in determining consumer
buying behavior. Social standards are principles or desires through which a general public
aides the conduct of its individuals and regularly reflect social qualities. They can be both
prescriptive, controlling what we ought not to do and prescriptive, building up and desire
for what we ought to do. This study concluded that norms influences consumer buying
59
behavior. Norms are regarded as the most principal determinant of an individual’s need
and conduct. This study concluded that sub-culture influences consumer purchasing
decision. Many sub-Cultures make up significant market sections and advertisers need to
plan items and promoting projects custom fitted to their needs.
5.4.3 The Effect of Psychological Factors on Consumer Buying Behavior
The study concluded that there is a positive relationship between psychological factors
and consumer buying behavior. A customer’s motivation is the essential level of the
mental drive behind a particular buy. The purchaser’s inspiration is high, that
fundamentally implies that the degree of need, or the customer's impression of that need,
is genuinely solid. It was also concluded that a purchase’s convictions and demeanors
enormously impact the purchasing choices that a consumer makes. Marketers are keen on
the convictions that individuals plan about explicit items and administrations on the
grounds that these convictions make up item and brand pictures that influence purchasing
conduct.
5.5 Recommendations
5.5.1 Recommendations for Improvement
5.5.1.1 The Effect of Economic Factors on Consumer Buying Behavior
Since, there is a relationship between economic factors and consumer buying behavior,
therefore, this study recommended that real estate firms should develop real estate
properties that are in line with interest rates in the country. This is crucial because interest
rates play a significant role in purchasing power of real estate. This study recommended
that real estate firms should take inflation rates into consideration when developing
properties to match with consumer purchasing power. This study also recommended that
real estate properties should be in developed in line with consumer credit limit to enhance
consumer purchasing power in the real estate industry.
5.5.1.2 The Effect of Socio-cultural Factors on Consumer Buying Behavior
This study recommended that real estate firms should take into consideration socio-
cultural factors when developing as well as marketing real estate properties to clients
since they play a critical role in influencing consumer buying behavior. Socio-cultural
factors are essential to customers when it comes to making purchasing decisions and
choices of products and services, therefore, they should be taken into consideration. This
60
study recommended that real estate firms should appeal to social class by creating
products and services that are in line with their real estate needs and wants. This study
also recommended that norms and customs should be put into consideration in developing
and creating real estate products, this will influence as well as motivate consumers to
initiate purchase.
5.5.1.3 The Effect of Psychological Factors on Consumer Buying Behavior
This study recommended that real estate firms should create and develop real estate
products that take into account psychological factors of consumers in order to trigger their
purchasing behavior. This study recommended that real estate firms in Nairobi should
create innovative real estate products that are in line with the perception of customers in
regards to housing needs and desires. This study also recommended that beliefs and
attitudes of consumers should be considered in developing housing projects so that
consumers are motivated to purchase housing products.
5.5.2 Recommendation for Future Studies
Future studies should investigate other determinants of consumer buying behavior on
choice of real estate industry. This study was limited to economic, socio-cultural and
psychological factors. Therefore, future studies should investigate other factors such as
technology, legal, and ecological factors.
61
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66
APPENDICES
APPENDIX I: LETTER OF CONSENT
Ahmed Ali Hassan
United States International University – Africa
P.O BOX 14634-00800
Nairobi, Kenya
January 2020.
Dear Respondent
RE: REQUEST FOR YOUR PARTICIPATION
I am a graduate student at the United States International University - Africa pursuing
Master’s Degree in Business Administration program. I am currently conducting a
research titled “Determinants of Consumer Behavior on Choice of Real Estate
Industry in Nairobi County in Kenya”
The results of the survey will be instrumental in understanding the determinants of
consumer buying on choice of real estate industry in Kenya. This is an academic research
and confidentiality will be strictly adhered to. Kindly spare your time and fill in the
questionnaire attached.
Yours sincerely,
Ahmed Ali Hassan
67
APPENDIX II: QUESTIONNAIRE
SECTION I: Demographic Information
Kindly respond to the questions below by ticking in the boxes. Where space is provided
you can write your answer
1. Name (optional) __________________________________
2. Kindly indicate your gender.
Male
Female
3. What is your age bracket?
18- 30 yrs.
31- 40 yrs.
41- 50 yrs.
51- 60 yrs.
Over 61 yrs.
4. What is your highest level of education?
Diploma
Bachelor’s Degree
Master’s Degree
Doctorate
5. For how long have you been working in your organization?
1-3 Years
4-6 Years
7-9 Years
Over 15 Years
68
SECTION II: The Effect of Economic Factors on Consumer Buying Behavior
This section contains questions on the effect of economic factors on consumer buying
behaviour. Kindly tick (√) the appropriate answer. (Strongly disagree = 1; Disagree = 2;
Neutral = 3; Agree = 4; Strongly Agree = 5)
Variables 1 2 3 4 5
6. Economic factors play a great role in consumer
buying choice of real estate.
7. Employment rates influences consumer buying
behavior of real estate products in the organization.
8. Interest rates influence consumer spending on real
estate products offered by the organization in the
market.
9. Unemployment rates affects consumer purchasing
power negatively.
10. Personal income determines purchasing conduct of
a customer in their choice of real estate.
11. Availability of consumer credit enhances
purchasing power of a customer in their choice of
real estate products.
12. Consumer credit is essential in enhancing sales of
real estate products.
13. Change in personal income determines the
purchasing power of real estate products.
Kindly indicate any other economic factors that influence consumer buying behavior
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………
69
SECTION III: The Effect of Socio-cultural Factors on Consumer Buying Behavior
This section contains questions on the effect of socio-cultural factors on consumer buying
behavior. Kindly tick (√) the appropriate answer. (Strongly disagree = 1; Disagree = 2;
Neutral = 3; Agree = 4; Strongly Agree = 5).
Variables 1 2 3 4 5
14.
Culture influences consumer buying behavior to a
certain extent.
15.
Culture is important in developing real estate
properties for a targeted market segment.
16. Social standards influences customer behavior in
developing real estate trends.
17. Social standards influences purchasing decision of
customers in real estate products.
18. Social classes determines the kind of real estate to
be developed to serve the market accordingly.
19. Social standards influences purchasing decisions
on the choice of real estate property.
20. Trends in real estate are determined mostly by
social classes and standards in the market.
21. Culture plays a significant role in sales of real
estate properties in the organization.
Kindly indicate any other socio-cultural factors that influence consumer buying behavior
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
……………….
70
SECTION IV: The Effect of Psychological Factors on Consumer Buying Behavior
This section contains questions on the effect of psychological factors on consumer buying
behavior. Kindly tick (√) the appropriate answer. (Strongly disagree = 1; Disagree = 2;
Neutral = 3; Agree = 4; Strongly Agree = 5).
Variables 1 2 3 4 5
22. Psychological factors influences consumer buying
behavior on choice of real estate property.
23. A purchaser's motivation is the essential level of the
mental drive behind purchasing real estate property.
24. Motivation of the customer enhances consumer
buying behavior of the real estate.
25. Consumer’s perception influences consumer conduct
on the choice of real estate purchase.
26. Consumer’s perception is used in developing real
estate properties in certain market segment.
27. Consumer attitude influences consumer buying
behavior towards real estate properties.
28. Attitudes and behaviors influence consumer buying
decisions in real estate.
29. Customer belief is crucial when it comes to
purchasing decision of real estate properties.
Kindly indicate any other psychological factors that influence consumer buying behavior
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
Thank you for your participation
71
APPENDIX III: IRB LETTER
72
APPENDIX IV: NACOSTI RESEARCH PERMIT