The Impact of Bad Planning on Customer Perception in the Dubai Real Estate Industry

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Table of Contents

Introduction
Literature review
Research methodology
References List

Introduction

Real Estate Industry in United Arab Emirates has been experiencing growth of 20% per annum since the year 2010 (Lasalle, 2012). As demand for housing increases, the industry strives to meet the demand by rolling out multimillion apartment projects such as the one in the Greens at Emirates Golf Club in Dubai.

However, such big projects may not meet their goal, especially when response from end users is negative (Afsar, Rehman, and Bangash, 2010). Fortunately, the Real Estate Regulatory Authority in Dubai (RERA) has been mandated by the government to regulate this industry and review customer concerns.

In the last one year, occupants of the newly completed multimillion dollar apartment project called the Greens have registered complains to RERA on the billing system on water and electricity consumption. This prompted RERA to commission an inquiry into the planning of this apartment.

Interestingly, the body established some faults in the planning blue print. Thus, this research treatise attempts to explicitly review impacts of bad planning in the Dubai real estate industry on customer perception, in terms of value and level of satisfaction.

Research background

Recently, the topic of utility and service charges has become a hot debate amongst the residents of apartment complexes in Dubai. Many people pay utility bills that do not reflect their actual consumption of electricity and water.

The Real Estate Regulatory Authority in Dubai (RERA), which is the sector responsible for these matters, had to step in and find out the root cause of this problem (Mochal, 2003).

After requesting to have a look at documentations of the planning phases of apartment complex projects, the authority discovered that a mistake was made during the planning process of most of the apartment complex within the UAE (Deulgaonkar 2012).

The mistake was that there was no separate electricity or water meter installed in each of the apartments in the complex, which means that the entire electricity and water consumption of all the residents was measured by one meter then the bill split between water and electricity consumption.

Research Problem

This research will deal with the problem of how a mistake in the initial planning phase of an apartment complex construction project in the Greens at Emirates Golf Club in Dubai, has produced a long term negative effect on the residents of that complex.

This will definitely lower the resale value of such apartments despite the current boom in the Dubai real estate industry.

Research questions

Research questions for this project are listed as;

What are the short term problems occupants of the apartment at the Greens Emirates Golf Club experience with the billing system?
What are the long term problems the occupants of the apartment at the Greens Emirates Golf Club project to experience in the future when correctional measures are not taken?
What are the suggestions of the participants on the billing problem in Greens Emirates Golf Club apartment and others?
What are the recommendations of the RERA on such problems in order to improve the level of customer satisfaction?

Research aim

The aim of this research is to examine how bad planning affects the outcome of the real estate projects in Dubai, in terms of customer perception on level of satisfaction and property resale value.

Research objectives

Research objectives encompass the expected results and focal point of the research in order to merge hypothesis and actual results. The following are the objective of this research paper.

To explore how project planning and project success, in terms of the level of customer satisfaction, are related to each other.
To investigate the case of the Greens Emirates Golf Club apartment, in terms of the perception of customers on level of satisfaction.
To suggest solutions to solve the problems that may lower the level of customer satisfaction within the Dubai real estate industry.

Rationale of research

This research will explore how proper planning leads to project success. It will also use the case of the Greens Emirates Golf Club apartment to show how bad planning results in mistakes that may not necessarily show while the project is undergoing, but are visible and have a serious effect on stakeholders after the project is completed.

Besides, the project attempts to identify specific concerns, possible reasons for the oversight, and the impacts on the level of customer satisfaction.

Research hypothesis

There are lots of researches existing on the relationship between real estate project planning and project success. These research reports were done by identifying the success measures of project organizations and developers, not its end-users.

This research will be focusing more on the point of view of the end-users in the Dubai real estate industry, with the aid of the Greens Emirates Golf Club apartment as the case study. The hypothesis for this is presented below.

Null hypothesis: Bad planning has impact on the outcome of real estate projects within the Dubai real estate industry.

Alternative hypothesis: Bad planning does not have impact on the outcome of real estate projects within the Dubai real estate industry.

Literature review

Consumer behaviour determines the success of a real estate project across the globe. Reflectively, the success is best understood from the consumer’s perception on level of satisfaction, value, and quality in comparison to other alternatives (Nicosia, 2006; Anderson and Duncan, 2004).

It is easy to plan a real estate project but the challenge is how to “correctly” plan that project in order to meet all objectives and goals.

Studies conducted by Dvir (2005) and Shenhar (2001) show that many real estate projects are considered failures because they “failed to produce actual benefits to the customer” (Shenhar 2001, p. 8) despite having been perfectly executed as per the project plan.

This shows that when setting goals and objectives in the planning stage, project managers tend to focus mainly on solving problems that can be seen at the time of project completion, rather than on situations that may arise sometime in the future to final consumers of the project end users (Ansari, Carl, and Scott, 2004; Ansari, Essegaier, and Kohli, 2000).

Customers measure the success of a real estate project according to their point of view (Shenhar 2001; Du, Wagner, and Carl, 2005). Some projects can be forecasted as failure by their developers, but may turn out to be widely successful amongst the customers, and vice versa.

Organizations measure success by meeting budgets, deadlines, and technical specifications whereas customers declare a project successful when their needs are fulfilled and their satisfaction is achieved (Bodapati, 2004; Kumanr and Kanchu, 2012).

According to Pidd and Robinson (2008), the definition of success is based on a four stage model of changing perceptions and it assumes that success is not a simple binary variable, but can vary considerably throughout the life of a project.

To keep your projects from ending up in the in the failure range, you must avoid making the single biggest project management mistake: inadequate project definition and planning (Pidd and Robinson 2008, p. 200).

Therefore, determinant of real estate project success on the side of the consumers rely on what they define as value against monetary use. It is important to reflect on consultative planning to incorporate needs and customize demands of the stakeholder or intended users of a project.

In a residential apartment project, utilities contribute substantially in the classification of satisfaction against monetary expenditure. Customers across the business globe demand satisfaction against value of their money (Blattberg, Gary, and Jacquelyn, 2001).

Comfort and accuracy in design determines satisfaction level. When purchasing or renting an apartment, a potential customer will review maintenance cost, utility reliability, and cost of using the utilities such as electricity, water, and internet among others (Kamakura et al. 2003).

Quality and authenticity of services, besides durability and comfort of an apartment, are important and largely determine consumer satisfaction. In business, consumers rarely complain when satisfied. However, since money is involved, customers always demand quality.

Consumers rely heavily on experience to evaluate quality of service and reliability of billing equipment used (Storbacka, 2009). When expectations fall below the perceived quality, satisfactory level will be lower in the ideal perception.

Service delivery must therefore align to consumer expectation since consumption decision is often controlled by perception on a service.

Olatoye and Araloyin (2011) assert that: services have become more and more important factor for organizations. Most service providers’ depends on performing the services correctly but also others find services as an important means of differentiation and creating better customer satisfaction.

The problem facing many real estate agents is how to meet their client’s taste, retain them and be able to gain competitive advantage over others. There is need to know what the consumers actually value so as to meet their needs and probably retain them (Olatoye and Araloyin 2011, p. 140).

Thus, the outcome of a real estate project in Dubai should strive to create conducive atmosphere in the interaction chain so as to make views of the customer important.

It is important to develop “a better understanding of the perspective of the concerned consumer and devise strategies to increase their service quality. This will give the consumer satisfaction and also encourage repeat business” (Olatoye & Araloyin 2011, p. 140).

Research methodology

This is a systematic but comprehensive method of data collection, grouping, and analysis in order to scientifically apply reasoning from the analysed data. As a matter of fact, the result of this process combine outcome, purpose of the research, and actuality.

As stated by Kothari (2004), a blue print is transformed into a research design through series of operational study aimed at drawing a factual outcome comprising of factual assertions.

In investigating the customer concerns for the Green Emirates Golf Club apartment, qualitative analysis will be adopted to incorporate a systematic investigation in line with a specific phenomenon approach.

The actual scenario will then be analysed through mathematical, statistical, and computational modus operandi (Kothari 2004).

Research approach

This research will be conducted using a qualitative case study approach. This is because the scope of the research is focused, subjective, dynamic, and discovery oriented. The qualitative approach is better suited to gain proper insight into the situation of the case study (Silverman, 2010).

Besides, qualitative data analysis is more detailed when testing the hypothesis and research objectives. Moreover, this approach will create room for further analysis using different and divergent tools for checking the degree of error and assumptions limit (Dov 2003).

Data to be gathered will be regarding

How correct planning is important for projects to succeed in the Dubai real estate industry, in terms of the level of customer satisfaction.
How success is measured by both real estate players and customers in the Dubai real estate industry.

Selection of the emperical context and research participants

The researcher will approach the Real Estate Regulatory Authority in Dubai (RERA) and asked to be permitted to interview experts in planning evaluation, those who were selected as members of the ad hoc committee, to investigate into complains registered by occupants of the Green Emirates Golf Club apartment.

Their opinion and finding may support the research hypothesis. The researcher will conduct one-to-one interviews with subject matter experts in the field and analysed the findings. Thus, this forms the rationale for the choice of experts in the Dubai real estate industry who have been on the receiving end of the heated debate.

The Real Estate Regulatory Authority in Dubai (RERA) is a government regulatory body on real estate development industry. The body has the best experts who have adept knowledge in real estate planning and review quality assurance on the side of consumer satisfaction.

From the body, the researcher will request to be accorded support through introduction letter to interview willing experts within the industry.

The one-on-one interview will comprise of open-ended questions directed towards the main hypothesis of how bad planning affect the outcome of a project in the Dubai real estate industry, in terms of the level of customer satisfaction.

The reason for use of open-ended but directive questions will be to get an expertise opinion on how planning mistake influence customer satisfaction (Bell, 2003).

Interviews to be conducted will comprise of eight experts across the regulatory body, who were involved in the inquiry, over complaints presented by occupants of the Green Emirates Golf Club apartment. Criteria for selection will depend on willingness to give an interview and availability of each target interviewee.

Data collection

Adopting semi-structured open-ended questions interview, data collection through one-on-one interview will take a period of six days. The choice of one-on-one interview was based on the rationale of gaining insight on feelings, opinion, and experiences besides official findings of the ad hoc committee.

Moreover, the semi structured interviews will give room for further probing depending on nature of data collected (Mugenda & Mugenda 2003).

The process of a one-on-one interview will involve scheduling a meeting between the researcher and each informant at a time. As a matter of fact, this method is easy to apply and allow direct interaction with the informant.

Besides, these meetings are not complex to arrange since each of them involve the informant and the interviewer. In addition, the interviewer has full control of the interview process and likely to get first hand information with minimal biasness.

Moreover, the researcher is in a position to seek further clarification on specific ideas and responses given within the interview time. From responses gathered, the one-on-one interview makes it easy to scribe clear responses that answer the questions asked (Mugenda and Mugenda, 2003).

In the process, the respondent may in fact provide an insight into a forgotten aspect of the study aim. Securing an introduction letter from the HR of RERA will enable the researcher to freely interact with members of staff within the Dubai real estate regulatory authority.

Data Analysis

Data collected through one-on-one interviews will be scrutinized in detail. The analysis will identify evidence supporting the claim that bad planning affects the success of a project outcome within the Dubai real estate industry, in terms of the level of customer satisfaction.

Transcription will then be done to each of the recorded interviews. For each response, from each participant, the recorded transcripts will be perused to coin relevant and most appropriate response. Factually, instances of divergent or convergent opinions by one or more respondents will be marked appropriately (Anderson, 2004).

Ethical issues

During the data collection phase of this study, the researcher will strive to uphold ethics appertaining to scientific research.

This will be pursued through inclusion of an informed consent form in the interview, which the participants being interviewed will be required to read, understand, and consent to before the study commences (Mason, 2005).

Additionally, authorisation for conduction of this study will be sought from relevant authorities to ensure transparency. Similarly, the researcher will ensure confidentiality of the subjects included in this study by insisting on their anonymity.

Each subject will be identified using a unique letter as opposed to use of real names. The data collected will not be used for any other purpose rather than the primary intention of academic research (Denscombe, 2002).

References List

Afsar, B., Rehman, A., & Bangash, R 2010, Customer relationship management in Relationships as Valuable Assets, Harvard Business School Press, Boston, MA.

Anderson, T., & Duncan, S 2004, “Long-Run Effects of Promotion Depth on New Versus Established Customers: Three Field Studies,” Marketing Science, vol. 23 no. 1, pp. 4–20.

Anderson, V 2004, Approaches to gathering data in research, CIPD, London, UK. Bell, J 2003, Doing your research project: A guide for first time researchers in education, health and social science, Open University Press, Buckingham, UK.

Ansari, A., Carl, M., & Scott, A 2004, “Customer Channel Migration,” in Working Paper, Columbia University School of Business, pp. 41-69.

Ansari, A., Essegaier, A., & Kohli, R 2000, “Internet Recommendation Systems,” Journal of Marketing Research, vol. 37 no. 3, pp. 363–375.

Blattberg, C., Gary, G., & Jacquelyn, S 2001, Customer Equity: Building and Managing Relationships as Valuable Assets, Harvard Business School Press, Boston, MA.

Bodapati, V 2004, “Recommendation Systems,” in Working Paper, Anderson School of Management, UCLA.

Denscombe, M 2002, Ethics: Ground rules for good research, Open University, Buckingham, UK.

Deulgaonkar, P 2012, “RERA blames chiller cost for service fee hike”, Emirates, vol. 247, pp. 123-127, via rera database.

Du, R., Wagner, K., & Carl, F 2005, “Customers’ Share of Category Requirements,” in Working Paper, Duke University Marketing Department.

Dvir, D 2005, “Transferring projects to their final users: The effect of planning and preparations for commissioning on project success,” International Journal of Project Management, vol. 23 no. 2, pp.257-265.

Kamakura, W., Michel, W., Fernando, R., & Jose, A 2003, “Cross-Selling Through Database Marketing: A Mixed Data Factor Analyzer for Data Augmentation and Prediction,” International Journal of Research in Marketing, vol. 20 no. 2, pp. 45–65.

Kothari, C 2004, Research methodology: Methods and techniques, New Age International (P) Limited Publishers, New Delhi, India.

Kumar, M., & Kanchu, T 2012, “Customer relationship management with reference to Business,” The Electronic Journal on Information Systems in Developing Countries, vol. 36 no. 8, pp. 1-31.

Lasalle, J 2012, Dubai real estate market overview. Web.

Mason, J 2005, Designing qualitative research, Sage, London, UK.

Mochal, T 2003, Poor planning is project mistake number one. Web.

Mugenda, M., and Mugenda, G 2003, Research methods: Quantitative and qualitative approaches, Acts Press, Nairobi.

Nicosia, F M 2006, Consumer Decision Processes: Marketing and advertising implications, Prentice-Hall, Englewood Cliffs, NJ.

Olatoye, O., and Araloyin, F 2011, “An analysis of real estate consumers’ perception of service quality in estate agency practice in Dubai metropolis”, Journal of International Economics, vol. 3 no. 3, pp. 139-145.

Pidd, M., and Robinson, S 2008, “Provider and Customer Expectations of Successful Simulation Projects,” The Journal of the Operational Research Society, vol. 49 no. 3, pp. 200-209.

Shenhar, A 2001, “Project Success: A Multidimensional Strategic Concept,” Long Range Planning, vol. 34, pp.699-725.

Silverman, D 2010, Doing qualitative research: a practical handbook, Sages, Los Angeles, LA.

Storbacka, K 2009, “Customer Profitability: Analysis and Design Issues,” in J Sheth (ed.), Handbook of Relationship Marketing, Sage Publications, Thousand Oaks, CA, pp. 565-586.

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