THE INFLUENCE OF
ONLINE MARKETING ON REAL ESTATE BUSINESS
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
The
growth of the use of the Internet, and in particular the World Wide Web, over
the last 10 years has been phenomenal and impacted on nearly every area of life
in developed societies. One of the most important aspects of peoples’ lives is
their physical living conditions and in Nigeria just like in many other
countries. Traditionally Nigeria has adopted new technology rapidly, with the
relatively large population of over 170 million and the high demand for
housing. Internet use has followed this pattern with World Wide Web access now
available to the vast majority of Nigerian homes.
The Internet is still seen as a fairly
new tool by many people. With respect to the current graphic-intensive state of
the media (multi-media presentations) and encrypted e-commerce (secure on-line
purchasing) used on the internet, this technology is very new (Birvin, 1999). However,
the backbone of the Internet has roots going all the way back to the Soviet
Union’s launching of Sputnik in 1957. In response (to Sputnik), US forms the
Advanced Research Projects Agency (ARPA), the following year, within the
Department of Defense (DOD) to establish America’s lead in science and
technology applicable to the military. Real estate listings were part of the
fabric of the Internet. Originally, entire Usenet message boards were reserved
for listing homes, with eager homeowners looking to cut out the real estate commission
which has been in operation in advanced countries (Rosen, 1996). When the
Internet started to boom, real estate practitioners got in on the game as well,
adding their listings on their own sites. Real estate services also started developing
Internet platforms. In 1996, LendingTree.com introduced their marketplace
concept. This was the first service offered for real estate that existed only
in cyberspace. Many other banks offering on-line loans already existed, but
this showed the unique power of the Internet. Today, sites offer a myriad of
real estate services in an online environment all over the world. While some of
them have traditional brick and mortar operations, many of these new companies
exist only over TCPIP (Transmission Control Protocol over Internet Protocol)
(Rosen, 1996).
The
role of internet marketing in real estate has grown profoundly over the past
few years. In an industry that once used print media as its primary form of
delivering the marketing message, there is now an urgent need to have
transitioned to the internet in order to reach today’s homebuyer. An online
presence is a vital component of a real estate professional’s marketing
strategy. Because today’s consumers want accurate information quickly and
conveniently, real estate professionals must harness the features and
capabilities of online marketing to meet these ever-increasing needs. In this study,
the researcher will provide information on the influence of online marketing on
real estate business.
Real estate is an information-intensive
business. Agents connect buyers to sellers through control and dissemination of
information. Agents are valued for the information skills they bring to making
both listings and sales. Since houses are expensive, not easily describable and
infrequently bought or sold, most individuals still feel the need for
assistance with this transaction from a professional. As well, these are all
factors that tend to increase transactions costs (Williamson, 1981). However,
the use of online marketing in real estate business can be used to
disintermediate the traditional agent and broker is of focal interest here, as
it potentially threatens the traditional relationship between agent and home
owner. Disintermediation is the elimination or displacement of market
intermediaries, enabling direct trade with buyers and consumers without agents
(Wigand, 1997).
1.2 STATEMENT OF THE PROBLEM
Real estate is a
promising setting for studying online marketing because it is an
information-intensive and information-driven industry; transaction-based, with
high value and asset-specificity; market-intermediary (agents and brokers
connect buyers and sellers rather than buying or selling themselves); and
experiencing on-going information technology (IT) related changes through
online marketing. In
an attempt to increase popularity, productivity and profitability, real estate
agents and brokerage firms are using the Internet to deliver market information
to consumers about the residential real estate market. This study examines to
what extent has online marketing influenced real estate business.
1.3 OBJECTIVES OF THE STUDY
The
following are the objectives of this study:
1. To
examine the influence of online marketing on real estate business.
2. To
determine the effectiveness of online marketing in real estate business.
3. To
identify the problems associated with online marketing in real estate business.
1.4 RESEARCH QUESTIONS
1. What
is the influence of online marketing on real estate business?
2. What
is the effectiveness of online marketing in real estate business?
3. What
are the problems associated with online marketing in real estate business?
1.5 HYPOTHESIS
HO:
Online marketing does not influence real estate business
HA:
Online marketing does influence real estate business
1.6 SIGNIFICANCE OF THE STUDY
The
following are the significance of this study:
1. The
result from this study will educate the general public on the rudiments of
online marketing and especially how it can influence the real estate business.
2. This
research will also serve as a resource base to other scholars and researchers
interested in carrying out further research in this field subsequently, if
applied will go to an extent to provide new explanation to the topic.
1.7 SCOPE/LIMITATIONS OF THE STUDY
This
study on the influence of online marketing on real estate business will cover
the level of online marketing in Nigeria especially in the real estate
development sector. It will also cover the online business activities of real
estate agents in Nigeria.
LIMITATION OF STUDY
Financial constraint– Insufficient fund tends to impede the
efficiency of the researcher in sourcing for the relevant materials, literature
or information and in the process of data collection (internet, questionnaire
and interview).
Time constraint– The researcher will
simultaneously engage in this study with other academic work. This consequently
will cut down on the time devoted for the research work.
REFERENCES
Bivins R.
(1999): New Houston Realty Firm Has Success Melding Internet, Standard
Approach, Knight-Ridder/Tribune Businesss News November 7 1999.
Rosen.,(1996) Virtual Reality Real Estate-Agents
Face Extinction in an Information Rich Century 21, Dallas Observer,
January 18,1996, pg.6
Wigand, R.
T., Picot, A. and Reichwald, R. (1997). Information, Organization and Management:
Expanding Markets and Corporate Boundaries. Chichester, England: John Wiley
& Sons.
Williamson,
O. E. (1981). The economics of organization: The transaction cost approach. American
Journal of Sociology, 87(3), 548–577.