Chinese Realty

Chinese Realty Customer satisfaction/China/Realty It would appear, from work done by Pelham that there is not reason to attempt to achieve customer satisfaction in any industry except to create significant company performance improvement. He constructs this by noting that results indicate that, "compared to strategy selection, firm size, or industry characteristics, market orientation has the strongest positive relationship with measures of performance.

The most influential market orientation elements are fast response to negative customer satisfaction information, strategies based on creating value for customers, immediate response to competitive challenges, and fast detection of changes in customer product preferences" (2000, p. 48). He attempts, also, to removed the idea from that academic sphere that firms should "embrace the philosophy of the marketing concept, which holds that customer needs should drive the firm's decisions" (Pelham, 2000, p.

48) and move it into practice, particularly in small and medium-sized firms; arguably, these constitute a great many of the realty firms in China at this nascent period of Chinese commercial and private residential real estate. Indeed, Pelham's work echoes Levitt's (1960) that noted that firms that adopt this philosophy and convert it into action will see superior performance. Market orientation is, in fact, the underlying factor operative in customer satisfaction.

Narver and Slater have defined market orientation as the "organization culture that most effectively creates the necessary behaviors for the creation of superior value for buyers and, thus, superior performance for the business" (Narver and Slater, 1990, p. 21). The definition implies that the firm will understand its need to perform activities that are most likely to achieve superior customer satisfaction.

Other researchers who contributed to the understanding of the concept of market orientation and its relationship to customer satisfaction were Kohli and Jaworski (1990), who tested a more comprehensive model than either Pelham or Narver and Slater had tested, but arrived at similar conclusions: customer satisfaction is more important to the success f a firm than is customer understanding or competitive orientation dimensions of the company's marketing efforts. The work of all three indicated that understanding customer needs could, along with knowing competitor capabilities, be an important determinant of performance.

There was one caveat, however, allied with the studies of all three of these researchers: that is, that all of this was operative only when high levels of behaviors designed to increase customer satisfaction were also present. Also paramount was quick response to negative customer satisfaction information, and competitive campaigns targeting the firm's customer base, according to Pelham, Kohli and Jaworski and Narver and Slater. Pelham gathered the results of his own studies and those of Kohli and Jaworski and Narver and Slater and provided a raft of action steps.

He noted that monitoring customer satisfaction and the activities of competitors should be done; responding quickly to both opportunities and threats discovered thereby was also important. He argued that success depends on an understanding of how to create superior value for a firm's customers, but that must not be based on industry conditions alone, but rather pro-active efforts of the company vis-a-vis customer satisfaction efforts.

Pelham notes that: The chief executive must increase his/her personal attention to customer satisfaction and must challenge the adequacy of current assumptions about the relationship between product benefits and customer needs in order to improve the firm's understanding of its customers (2000, p. 48). Certainly, Pelham's translation of a theory of customer satisfaction into a call to action is of value to the emerging realty market in China.

Jacoby, Johar and Morin reported on a great deal of research in an attempt to find the locus of consumer satisfaction, including research that addressed attribute satisfaction, information satisfaction and the impact of marketing communications. Others, such as Arnould & Price (1993) studied individual businesses (in their case, white-water rafting) and suggested there was only a weak link between expectations and consumer satisfaction. More valuable was the more general work of Ostrom and Iacobucci (1995) that suggested that customer satisfaction is based on different attributes for different types of services.

In short, in Chinese realty, the link between expectations and consumer satisfaction might be either weaker or stronger than it is in white-water rafting. A corollary to that was proposed by research conducted by Johnson et al. (1995) who demonstrated that customer expectations and consumer satisfaction are dynamic in nature. Schultz and Bailey noted that it is relatively easy to measure customer consistency and longevity.

However, they also note that researchers have found it difficult to explain why otherwise satisfied customers, or "at least those who claim satisfaction in various research situations, often drift away from the company or the brand" (2000, p. 41). They offer a timeline of knowledge/theory concerning customer satisfaction. They examined, briefly, the "heavy half" theory and Haley's "benefit segmentation" theory; both of these, they claim focused on how customers behaved in the marketplace.

That was all before the 1960s, when the research began to focus on the economics of information, that is, the "cost and ability of consumers to search for information about alternatives and to understand brand choices" (Schultz and Bailey, 2000, p. 41). Jacoby and Kyner (1973) decided to differentiate brand loyalty from repeat purchasing behavior, and suggested that loyalty might be based on buyer psychological factors.

Their work was expanded in 1978, when Jacoby and Chestnut published a book called Brand Loyalty: Measurement and Management, which has provided the base upon which our understanding of how consumers relate, decide and purchase various brands occurs. After supermarket scanner data became available in the 1980s, research shifted toward consumer choice; "direct marketers and catalogers began to develop very sophisticated approaches using regression, CHAID, CART, and other statistical techniques. There, the focus was almost entirely on observable consumer behaviors in the form of longitudinal purchase occasions" (Schultz and Bailey, 2000, p. 41).

Jones and Sasser (1995) and Reichheld (1996) proposed an economic value of customer loyalty. All of these have been developed form the marketers view, with little involving direct responses from consumers regarding wht their brand loyalty was (Schultz and Bailey, 2000, p. 41).

Schultz and Bailey lamented that there had been so little done on the consumer side, and were seemingly equally distressed that the research that has been done regarding consumer satisfaction involved the "rapidly developing electronically driven markets of the United States, United Kingdom, Scandinavia, Australia, Japan, and the like" and they proposed that it was "time to revisit what is known about the consumer view of brand or customer loyalty" (2000, p. 41). Hall investigated customer satisfaction vis-a-vis the federal government in the United States.

Although this would seem to have limited application to the current issue, it should be noted, as Hall stated, that customer satisfaction means something different in a governmental setting than in a commercial one; because of China's recent history, some of her findings may be useful to understanding the realty market and its relationship to customer satisfaction in China.

This statement of Hall's makes her research relevant to the current topic: In the federal sector, loyalty is not as important a component of customer satisfaction as it is for the private sector. For most federal sector services there are no alternative sources. The natural market forces, which drive private sector organizations, generally are not present. Rather than repeat customer business, customer satisfaction in the federal sector is generally represented by trust citizens have in the overall operations of the government (2002, p. 23+).

Because of the recent and in many ways continuing overwhelming presence of government mandates and expectation is China, trust may well turn out to be a primary factor in consumer satisfaction concerning realty transactions in China. Moreover, Hall's findings were based in great degree on the American Customer Satisfaction Index (ACSI), which in turn is based upon the Swedish Customer Satisfaction Barometer. In the United States, ACSI has been in use since 1994. ACSI I uses customer surveys and econometric modeling.

It incorporates a computer-assisted telephone interview function to collect responses to specific survey questions concerning perceived quality, expectations, satisfaction, and dissatisfaction, or complaints (Hall, 2002, p. 23+). An computer-based econometric model is then used to predict the power of various activities believed to be the drivers of satisfaction. Hall notes, however, that it is not logical to simply use drivers believed to be responsible, but rather to find out what drivers are responsible. She gives the example of a motor vehicle department that consistently earned low ASCI scores.

Believing that long lines were the problem, they increased the number of clerks and shortened the lines, but the scores remained low. After conducting data from customers, they discovered that it wasn't the lines at all causing the problem, but rather unflattering photographs for the license cards. "In fact, [consumers'] were willing to saya in line 20 to 30 minutes to obtain a better photograph since they would not have another photo for four years (Hall, 2002, p. 23+). The ACSI model, then, has two major drivers, customer expectations and perceived quality.

While other instruments can be used, the best reason to adopt ACSI is that it quantifies customer satisfaction in ways that allows comparison of answers with those of other groups, thereby enabling a business to answer not only the 'How are we doing?' questions, but to determine how they are doing in relationship to a standard or to others. In addition, repeating ACSI can provide trend data (Hall, 2002, p. 23+), important to government agencies, but also to new industries.

Hall notes that, "Besides the ability of the ACSI to maintain a pulse on customer satisfaction, the ACSI is an index, not just a survey. This means it groups all participants and provides an integrated score, or index" (2002, p. 23+). Schay et al. reported that the United States federal Office of Personnel Management uses a similar instrument that measures nine core dimensions underlying customer satisfaction. "These dimensions were distilled from 139 dimensions identified in the management, marketing, and organizational psychology literature.

The dimensions are empirically related to organizational effectiveness and relevant to all service sectors" (Schay et al., 2000, p. 30), and therefore would need to be developed specifically for each industry. While ACSI is the dominant measuring tool in much of U.S. consumer satisfaction research, the Kano system has arisen in Japan for the same purpose. It is widely known that the Japanese economy runs on businesses that believe quality is paramount, and that Total Quality Control (TQC) is the most important function.

"Some Japanese quality experts believe that Japanese TQC has no intrinsic value beyond the pursuit of customer satisfaction and quality assurance" (Gitlow, 1994, p. 197+). Typically, however, there were equal numbers of Japan experts who believe the convers. Gitlow "asked a senior Japanese quality expert if TQC is a philosophy with wide application to life. He said yes; it is a combination of techniques and spirituality. He said jujitsu is only techniques, whereas judo is spirituality and techniques. He said that Japanese TQC is like judo" (1994, p. 197+).

Kano, the Japanese originator of this paradigm, was translating the theories of W. Edwards Deming from the factory floor to the realm of customer satisfaction. Deming's (1982, 1986, 1993) theory of management had been, in any case, to "transform Western leaders so that they will allow all people to experience joy in their work and pride in the outcome, optimize the system of interdependent stakeholders so that everybody wins, and improve and innovate the condition of society" (Gitlow, 1994, p. 197+).

Based on this, "Japanese TQC is an empirically-based paradigm that is structured functionally for practical usefulness to increase customer satisfaction and quality assurance" and it perfectly supports Deming's theory of management, a theoretically-based paradigm that seeks soundness in pursuing the aims of the system. In addition, "an underlying principle of Japanese TQC is respect for humanity, which means that employees can contribute to customer satisfaction and quality assurance if they are given suitable education and training" (Gitlow, 1994, p. 197+).

Stern built upon the theories of customer satisfaction and moved on to "relationship marketing," a tactic that would seem essential in a realty setting. "In personal sales, factors such as characteristics of the customer and the salesperson, pairing dynamics, and situational influences have been found to influence customer preferences. These reflect the customer's assessment of the costs/benefits of entering, remaining, or leaving the relationship" (Stern, 1997, p. 7+). Other researchers went even farther in the same vein.

Wiersema (1996) evaluated customer intimacy, a feature of relationship selling, as "the most important strategic transformation of the decade" (p. 6). Work by Webster suggested that what was needs was "models that focus on the relationship themselves, not just on the market exchanges that are the subject of the microeconomic paradigm" (1992, p. 13). Berry and Thompson's work (1982) formulated three bases for proceeding in this manner to produce customer satisfaction (assuming a priori, as suggested above, that customer satisfaction is essential to corporate success).

They contend that intimacy "accounts for the influence of emotion in relationships as well as that of cognition (feelings as well as thoughts)" and it allows insight into the deterioration of relationships as well as into their formation and maintenance," and, finally; " it emphasizes the association between relationship stages and persuasive communication that enhances the services firm's ability to apply relationship management to advertising as well as to personal sales." Treacy and Wiersema (1993) propose that Home Depot's relationship strategy is a workable one, and in the current discussion, it also has much to suggest for Chinese realty.

Home Depot relies on its clerks to spend whatever time is needed with a customer to solve his or her home-repair needs. Home Depot store personnel are "not in a hurry" (p. 88) and are encouraged to spend time and effort as customers are not always able to express themselves clearly, especially if they are not sure what they really want or need, but know they need some solution to a home-repair dilemma.

On the other hand, they are also expected to get to the point with a customer who does know what is needed and simply wants to buy the item in the most efficient way possible. As Treacy and Wiersema (1993) point out, that customer would not want a chatty, interested clerk, but merely one who took them to or procured what they needed as soon as possible.

Taking these varieties of customer desires into account, Stern rounded up various portions of the research of others to propose the Five C's of Intimate Service Relationships (Stern, 1997, p. 7+). These C's are: communication (self-disclosure), caring, commitment, comfort (compatibility), and conflict resolution (trust). Waring et al. argued that the central defining attribute of the first of these, communication, is self-disclosure (1980).

Chelune, Robison and Kommor (1984) suggested that this includes both cognitive self-disclosure (the revelation of private thoughts and ideas) and affective self-disclosure (the revelation of feelings), arguments agreed with by Duck (1988), and Levinger and Snoek (1972). Commitment has also been called bonding with customers, which is sustained by self-disclosure on the part of the buyer and "sympathetic listening" on the part of the seller (Stern, 1997). This also assists in customer retention, which is considered to be more cost-effective than continually prospecting for new customers (Rapp and Collins, 1994).

While residential real estate customers may not be repeat customers in the same way Home Depot's customers looking for tile and hammer are, in commercial real estate, the likelihood of repeat business is much greater. Commitment, especially in that arena, assists in creating enduring relationships (Morgan and Hunt, 1994).

While it seems almost a cliche, a caring company is essential to develop the sort of 'intimate relationship' that will result in success, and, as in personal relationships, they are demonstrated by the qualities of affection, warmth and protectiveness by the sales personnel (Perlman and Fehr, 1987). Nurturance is also important, and is achieved by expressing "a needs rule rather than an equity rule" (Mills and Clark, 1982, p. 374). Eventually, this results in success for both buyer and seller as the result of a closer "physical, mental and social association" (Oden, 1974, p. 3).

Comfort, or compatibility, the fourth C, is based on a customer's sense of security in a relationship, according to Bowlby (1982). Waring et al. noted that relationships a customer believes are compatible are also perceived as irreplaceable and are characterized by feelings about "the other in relation to me" and "me in relation to the other" (1980, p. 26). Conflict resolution and trust comprise the final C, and are perhaps the most essential part of Stern's equation.

Conflict is predictable in any relationship; Clinebell and Clinebell say it is not in itself a cause of dissolution, but rather the inability to solve it that causes relationships, from personal to business, to fail. Stern notes that conflict may even increase intimacy as a "result of the good feelings that flow from the ability to resolve [an issue] satisfactorily" (Stern, 1997, p. 7+). An alternative model for achieving customer satisfaction is the "ABCD" model.

This model relies on a logical progression of stages to display progression of a relationship, although it is likely that success would not be enhanced by the final phase. The ABDC model includes the stages of: Acquaintance Buildup Continuation Dissolution (Stern, 1997, p. 7+) Dwyer, Schurr and Oh (1987) noted that this pattern applies to product life cycles, family life cycles and the relationship between consumers and businesses or businesses and businesses.

Within the Acquaintance portion, the 'first impression' stage, there are a number of things that motivate a consumer to attention-readiness to buy (Bettman, 1979).

Among those, the important ones are: Novelty, arousal and ambiguity (as the consumer does not know what to expect, but expects something) (Levinger, 1983) Personal relevance (Celsi and Olson, 1988) During the Buildup stage, partners are drawn into testing their level of tension and is hallmarked by risk-taking in terms of self-disclosure to determine whether the seller will indeed by a sensitive listener adequate to the relationship the consumer wants (Duck, 1988).

Continuation occurs almost as a defiant attitude, in which the partners maintain the relationship even though they are aware others are possible (Scanzoni, 1979). Dissolution can be caused by changes in the dynamics between the partners, personal characteristics of needs of one or both partners, and situational stress (Levinger, 1983).

On the other hand, even in the process of dissolving, relationships may be held together by internal or external factors and the stress of dissolution itself may help hold the relationship together, either for a short period or indefinitely (Dwyer, Schurr, and Oh, 1987). It is almost redundant to suggest that businesses need to concentrate on relationship skills.

In fact, Schaefer and Olson (1981) note that it would be advisable for those looking to build relationships with consumers to adapt ideas from the therapeutic literature, and they suggest that therapy and counseling literature is particularly rich in providing ideas about intimacy development skills. It would pay for those employing staff in relationship settings to be aware that there are those incapable of sustaining an intimate relationship, those who prefer "reclusive, isolated lifestyles" (Schaefer and Olson 1981, p. 51).

Methodology In order to determine the level of Chinese realty consumers' satisfaction, several methods will be employed. First, a number of recent purchasers of residential real estate will be identified via real estate company records. In order not to violate expectations of confidentiality, the real estate companies themselves will be asked to send email questionnaires to their recent clients, not selected for any particular attributes or characteristics except for having purchased within the past six months. The same method will be applied to consumers of commercial real estate.

When the responses have been collected, they will be assessed through an SPSS program or similar. The second portion of the research will include one-to-one interviews with principals at a number of active Chinese realty companies. The interview will be based on a five-point Likert scale so that answers can be easily categorized and tabulated. The resulting picture of real estate professionals' assessment of customer satisfaction will be compared to and assessed with the data that emerges from the consumer questionnaires.

The resulting information will not produce specific cures for problems in the industry, but should lead to knowledge concerning the weaknesses in the industry as perceived by the consumer. In addition, the presence of the professionals' responses will help them to understand where and perhaps how they are creating any negative perceptions on the part of the real estate services consumer. Works Cited Arnould E.J. And L.L. Price. River.