Measuring Prestige in Real Estate

Transcription

1 , pp Measuring Prestige in Real Estate Min-Seok Baik Department of Real Estate, Semyung University , 65 Semyung-Ro, Chechon, Chungbuk, Korea. Abstract. This study aimed at examining the general characteristics of prestige in real estate, based on the of luxury goods in general. The term, prestige, has been frequently used in recent real estate market without common consent. Therefore, it attempted to develop the measuring scales for prestige in real estate to provide guidelines and references to potential real estate customers for purchasing, and to practitioners and marketers for better understanding of customer behaviors in real estate market. Based on Churchill(1979)'s scaling procedures, the study suggested 4 factors(traditional functionality, excellence, superiority, expensiveness), and 15 scaling descriptive items for measuring the prestige in real estate; 5 items for traditional functionality, 5 items for excellence, 3 items for superiority, and 2 items for expensiveness. The traditional functionality contains items related not only to tradition in prestigious real estate, but to the current augmented needs of potential customers, such as serviced spaces. Excellence items are related to the location and scarcity of prestigious real estate, with its operation while securing the return on investment. Superiority items are about the exclusiveness of ownership or of the wealthy upper class community. Finally, expensiveness are referring to the very high cost of purchasing and maintaining of prestigious real estate. Keywords: real estate, prestigious real estate, scale development, luxury, the wealthy upper class 1 Introduction The global luxury brand market has been flourishing and rapidly growing with more than 10 percent sales increase every year since the year 2008, at which the trade volume amounted to one hundred billion dollars [1]. While the consumption of luxury goods and the size of related markets are being greatly expanded, little studies have been done in terms of the prestige in real estate. For this reason, this study attempted to examine the characteristics of prestigious real estate, and to develop optimized scales to measure prestige in Korean real estate market. The luxury goods are products preferred by the rich upper class [2, 3]. People have prestige because they own and use a certain type of goods [4]. The purpose of traditional luxury or prestige is to impress others, while that of new-luxury is to confirm the private status people wish to hold, and further to reassure their sense of belonging to a certain type of class [5]. In studies of prestige measurement, luxury or prestige goods are defined as 'products or brands with much higher symbolic and pragmatic benefits than those of the same level or kind, so that they strongly motive customers to willingly pay more for its ownership'[6]. Customers make a ISSN: ASTL Copyright 2015 SERSC

2 subjective judgment about whether to call a specific brand prestigious or not. Furthermore, even amongst luxury brands, they often evaluate which luxury brand is higher in the prestigious rank. Dubois and Laurent introduced 34 items to measure customer perception of luxury[7], Vigneron and Johnson introduced 20 descriptive measuring items(bli) based on five value luxury-pursuing customers conceive [8]. Lim and al. suggested values for measuring the of luxury, such as product value, exclusiveness, quality, reputation, and showing off, and developed BLIS(brand Luxury Item Set) consisted of 25 measurement scales for luxury brand [6]. The characteristics of exclusiveness of the wealthy upper class in real estate were explored with the analysis of living space and residing experience at Tower Palace residence, in Kangnam-Ku, Seoul, [9]. 2 Methodology This study intended to analyze the measurement scales for the of luxury on the basis of prior studies, and attempted to develop the measuring scales for luxury or prestige in real estate. The wealthy class with higher income who had experienced in real estate transaction, such as purchasing, were selected. The survey method was applied using structured questionnaire for data ( , N=131). Factor analysis was used to empirically analyze the data collected using PASW 18.0, and the procedures for development of scales followed those of Churchill's [10]. First, to make the boundaries of prestige in real estate clear and concrete, extensive prior research papers were reviewed. Second, by using SERVQUAL, the leading quality evaluation model, the development and measurement scales for luxury or prestige were considered. In addition, the additional descriptive items to assess prestige in real estate were developed in the process of focused group discussions with real estate specialists, VVIP and PB at financial institutions, and professors of real estate. As a result, 32 measuring descriptive items for prestige in real estate were selected, and trimmed with finesse to final 30 statements [1, 3, 9, 11, 12, 13, 14, 15, 16]. Table 1. Prestige Measurement in Real Estate 개념 Prestige Measurement in Real Estate 출처 Symbolic Functional Prestigious real estate has superior transportation accessibility. Dubois& Duquesne(1993) Prestigious real estate should have excellent views and landscape. Dubois& Duquesne(1993) Prestigious real estate can't be replaced and they are one and only. Park E. C.(2004) Prestigious real estate is a brand new type of real estate product. Prestigious real estate should take a form of outstanding landmark in the area. Prestigious real estate should be designed and built by world Vigneron&Johnson(2004), renowned architects and designers, unlike ordinary real estate. Dubois,Laurent & zellar(2001) High-end materials and state of the art technology should be used in the prestigious real estate. The renowned leading companies should take care of the development and construction. Nia & Zaikowsky(2000) Prestigious real estate should have its own brand. Prestigious real estate should have utmost service facilities. The experts should take part in the process of development and of Dubois,Laurent & zellar(2001) the management of the prestigious real estate. The quality of the service should be excellent in use or ownership. The service should fit my own lifestyle. The needs of the prestigious real estate residents should be always Kim J. M.(2002) taken care of. The prevention of crime and fire should be always taken care of. Prestigious real estate has useful space planning and lay-out., 100 Copyright 2015 SERSC

3 Prestigious real estate should have much higher purchasing cost than the ordinary under the same condition. Prestigious real estate should have much higher maintaining cost than the ordinary under the same condition. To purchase prestigious real estate, a lot of personal efforts are needed. Dubois,Laurent & zellar(2001) The chosen only own the prestigious real estate in the market, not the ordinary. The value of prestigious real estate should go up as compared to the Investment initial investment The operating income of prestigious real estate should be extremely higher as compared to the ordinary real estate of same condition. Prestigious real estate doesn't have common market price. Dubois & Duquesne(1993) The owner of prestigious real estate should have higher education, intelligence, and economic background. Those whom shares cultural thoughts with me are entitled to own Trigg, Andrew B, Veblen(2001) the prestigious real estate. We belong to the high society by just owning and living in the prestigious real estate. Money couldn't simply buy the prestigious real estate. Cultural Prestigious real estate has traditional and cultural background. Shah(2000) Prestigious real estate is not just known for Korean, but for the world. Vigneron & Johnson(2004) The very highest class owns the prestigious real estate. 3 Results and Implications 3.1 The Restpondens' demographic characteristics The respondents' demographic characteristics were described with factors, such as age, gender, income, and education; a total of 131 respondents consisted of 82 males (63.1%) and 49 females (36.9%). Their average age was 43.9 years. The majority of the respondents (82.8%) were college graduates. The monthly income of most respondents (85.4%) were over 5,000,000 Korean won, and almost half of them (52%) were with more than 300 million won cash asset. The average size of currently residing house of respondents was m2 (43 pyung), and the residence type of the respondents (74.2%) was apartment buildings (high-rise, and mixed-use). The demographic characteristics of the sample seemed plausible for the purpose of this study 3.2 The Factor Analysis of Prestige in Real Estate The results of factor analysis of prestige in real estate are shown in Table 2. The 4 factors (traditional functionality, excellence, superiority, expensiveness) were drawn from the analysis: 5 items for traditional functionality, 5 items for excellence, 3 items for superiority, and 2 items for expensiveness. The Cronbach's α was used to measure internal reliability. They were 0.867, 0.798, 0.724, and respectively, all were over 0.70, so that confirmed its reliability. Table 2. Factor Analysis Result of Prestigiousness in Real Estate (N=131) Variables Factors Measurement Copyright 2015 SERSC 101

4 Traditional Functionality Excellence Superiority Expensiveness TF TF TF TF TF E E E E E S S S C C Eigen Value Variance explained(%) Accumulated rate(%) * KMO, Bartlet's verification results, KMO measuring value: 0.789(p=0.000) items Verification of Reliability Cronbach Alpha Results In this study, the author used Churchill(1979)'s procedures to develop the scales for measuring the prestige in real estate. On the basis of them, it developed 4 factors (traditional functionality, excellence, superiority, expensiveness) and 15 scale items for measuring the prestige of real estate: 5 items for traditional functionality, 5 items for excellence, 3 items for superiority, and 2 items for expensiveness. The traditional functionality contains items related not only to tradition in prestigious real estate, but to the current augmented needs of potential customers, such as serviced spaces. Excellence items are related to the location and scarcity of prestigious real estate, with its operation while securing the return on investment. Superiority items are about the exclusiveness of ownership or of the wealthy upper class community. Finally, expensiveness are referring to the very high cost of purchasing and maintaining of prestigious real estate. Given the absence of related studies, this study contributes to the prestigious real estate market business, providing invaluable information to potential customers seeking for prestigious real estate in the process of their optimal decision making, and to practitioners and marketers for segmenting and targeting related customers, and for further undertaking more effective strategies for competitive advantage. It may also serve as a departure point for future studies of the same field. 102 Copyright 2015 SERSC

5 Acknowledgement. This paper was supported by the Semyung University Research Grant of References 1. Shah, David.: A New definition of luxury. Textile View. 52, 6-7(2000) 2. Douglas, M & Isherwood, B.: The world of goods: toward and anthropology of consumption. Harmond-Sworth: Penguim. (1978) 3. Dubois, B & Duquesne, P.: The market for luxury goods, Income versus culture. European Journel of Marketing. 27, (1993) 4. Grossman, G, M & Shapiro, C.: Counterfeit-product trade. The American Economic Review. 78, 59-79(1988) 5. Silverstein, M, J & Fiske, N.: Luxury for the masses. Harvard Business Review, 49-57(2003) 6. Lim, Ji-hoon, Lee, Hak-sik, Kim, Hyung-sik.: Measuring Perceptions of Brand Luxury in Korea. Advertising Research. 73, (2006) 7. Dubois, B & Laurent, G.: Attitude towards the of luxury: an exploratory analysis. Asia -Pacific Advanced in Consumer Research, (1994) 8. Vigneron, T. M & Johnson, L. W.: A review and a ual framework of prestigeseeking consumer behavior. Academy of Marketing Science Review, (1999) 9. Cho, eun-jin.: Tower Palace, a Space of Dualistic Representation - A Study on Spatial Analysis of the Residential Complex and the Significance of People's Experience, Economy & Society, 76, (2007) 10. Churchill, Gilbert A.: A Paradigm for Developing Better Measure of Marketing Construct. Journal of Marketing Research. 16, 64-73(1979) 11. Park, Eok-chul.: A Study on the Luxury Design Strategy through the User Analysis. Korean Society of Basic Design & Art. 5(1), (2004) 12. Vigneron, F & Johnson, L, W.: Measuring perceptions of brand luxury. Brand Management. 11, (2004) 13. Nia, A and L, Zaikowsky.: De counterfeits devalue the owership of luxury brand. Journal of Product & Brand Management. 9(7), (2000) 14. Dubois, B, Laurent G & zellar, S.: Consumer rapport to luxury: Analyzing complex and ambivalent attitudes. Consumer Research Working, (2001) 15. Kim, Jae-moon.: Conditions of Luxury. LG Week Economic Trends. 677, (2002) 16. Trigg, Andrew B, Veblen.: Bourdieu and Conspicuous Consumption. Journal of Economic Issues. 35, (2001) Copyright 2015 SERSC 103