WEB SITE AS a MARKETING TOOL IN WESTERN

2, 77000 Bihać, BiH kenan.mahmutovic@gmail.com WEB SITE AS A MARKETING TOOL IN WESTERN BALKAN REAL ESTATE BROKERAGE INDUSTRY Abstract The Internet is an information technology that has

MSc Kenan Mahmutović, Senior Teaching Assistant

Faculty of Economics, University of Bihac, Pape Ivana Pavla II br 2, 77000 Bihać, BiH

kenan.mahmutovic@gmail.com

WEB SITE AS A MARKETING TOOL IN WESTERN BALKAN

REAL ESTATE BROKERAGE INDUSTRY Abstract

The Internet is an information technology that has radically changed the world and contributed to its globalization The rapid development and commercial application of the Internet as a global computer network, has led to significant changes in business enterprise, changing the internal relationships in organizations, as well as their relationships with customers and other stakeholders in the market Internet as a medium has enabled cheap, fast and effective communication between the company and its public, allowing companies to improve their marketing activities and reduce the three strategic business risks: the risk of demand reduction, the risk of innovation and the risk of inefficiency

Real estate brokerage is information intensive business, based on control and distribution of information Real estate companies are marketing intermediaries * brokers, whose task is to connect buyers and sellers, through carrying out marketing activities such as informing, promoting, contacting, connecting and negotiating The Internet has provided customers a fast, easy and free access to information on real estate market, reducing the power of real estate agencies that they had acquired as a result of the former monopoly control of market information The Internet has also provided real estate agencies with ability to improve their productivity and increase overall efficiency and quality of doing business

In the process of real estate brokerage, real estate agents communicate with their stakeholders via the Internet using a variety of promotional activities, using specific online tools and techniques Real estate agency web site is the main online communication tool that integrates other elements of marketing communication, providing support not only to the online, but also

to the offline marketing activities

The subject of this paper is to analyze the use of web site as marketing tool in Western Balkan real estate agencies, and to identify its function in different stages of the sales process Also, author wants to give specific suggestions for improving online marketing communications in the real estate agencies, through the comparison of theoretical possibilities and practical applications of web site as marketing tool in the real estate agencies

Keywords: internet, real estate brokerage, marketing communications, online

marketing, web site

1 Introduction

Internet is the information technology that most radically changed the world and contributed

to the internationalization the most Until today no technology has in such a short time period experienced such quick development and stronger application than the Internet The explosion

of the Internet simply breaks the limits of traditionalism, changes the world and opens new views and opportunities in science, education, economics, democracy, ethics, politics and life and behavior of every individual who uses this technology The Internet is today seen as the carrier of a new wave of digital revolution It is at the same time the infrastructural and communicational premise of the concept of the world's economy globalization and modern e*

business The Internet became the electronic path into a world without boarders and could be defined as information infrastructure that enables the connected computers the interchange of informational contexts with no regard to place and time Through commercial use the Internet very quickly motivated the development of electronic business, electronic trade and electronic marketing and became the catalyst of economics growth in all countries of the world We define e*marketing (Internet marketing) as the application of information and communication technology (digital technology) in the process of value creation, communication and delivery

to the clients and for the management of client relationships in a way that contributes to the organization and its interest groups

Strauss et al emphasize a few advantageous features of the Internet, which lead to positive changes in the usage of marketing, making marketing more efficient and effective, whereby some of the internet features change traditional marketing in a thorough and crucial way (Strauss, 2006, p 12):

Thanks to the easy and quick access to information, the power shifts from firms to customers;

Geographic location is not any more an influential factor in cooperation of business partners, firms in delivery chains or the customers, whereby some of traditional

middlemen are bypassed;

The Internet compresses time and time zones disappear, so time is not any more a limiting factor in communication;

Technological adjustment possibilities (personalization) of web sites to the customers and the possibility of better advertisement targeting, enables the firms to segment the market to the level: one customer – one market;

Easier information collection, its processing and memorizing, enables data base

creations, i.e knowledge bases which support high quality strategic decision making

Chaffey et al emphasize the possibility of using the Internet as an integral part of modern marketing concept, since it can be used for:

the support of many organizational functions and processes that are involved in delivery of products and services to costumers and other interest groups (sales increase, cost reduction, better customer support, new channel for building public relations, marketing research etc.);

as a powerful communication medium which is able to act as “corporation glue” , which binds and integrates different functional organization parts;

as support to information management which has been recognized as an important marketing tool for supporting strategic formulation and implementation (Chaffey,

2006, p 5)

Watson, Zinkhan and Pitt highlight that firms, besides challenges from the work environment, face three critical strategic risks: the risk of demand reduction, the risk of innovation and the risk of inefficiency The Internet and especially the World Wide Web can be tools for an essential risk reduction and through their application four growth strategies can be achieved: market penetration, market development, product development and diversification (Watson, 2000)

Basic benefits of the Internet are its services Two basic and for marketing purposes most important services are e*mail and the World Wide Web, that represent a unique digital alternative to the traditional services of sending mail (post office, fax) and reading newspapers (magazines, books, catalogues etc.) Beside e*mail and the Web other internet

services or application fields are the following: Usenet (news groups, e*conferences), FTP, TELNET and IRC (Internet Relay Chat)

The Web is a service that provides a graphic user interface for navigation through hyper textual documents (web sites and other contents), using computer applications * the so called web browsers – the most spread of which are MS Internet Explorer, Mozilla Firefox, Google Chrome and Safari Web sites can contain any forms of multimedia elements such as text, images, audio and video records Today the Web has integrated all other internet services and many users equate it with the Internet For example, web portals, such as www.yahoo.com, allow users to browse and view web sites, send and receive emails, chat and exchange or download files

The internet revolution did not circumvent the real estate market The Web quickly became dominant medium for advertisement on the real estate market Together with market liberalization the Internet opens local real estate markets towards the global market and foreign investors For many agents on the real estate market the Internet became one of the main sources of demand Agencies for transactions and mediation of real estates use the Internet for profitability improvement by attracting new customers (real estate sellers), managing the relations with existing clients and for selling, i.e for attracting new buyers and making contracts of sale with reduced costs and time needed for the selling

2 Overview of former research

An overview of former research of the use of e*marketing in the real estate brokerage industry

is given in the following table

Table 1: An overview of former research in the field of e*marketing with an emphasis on the real estate brokerage industry

Year Authors, title, source

1997

Bean, J S., Guttery R S.: The Coming Downsizing of Real Estate: Implications of Technology, Journal of Real Estate Portfolio Management; 1997; 3; 1; ABI/INFORM Global

Authors point to the explosive growth of data base availability that allow for a user friendly access to information and services on the real estate market The simplicity of collecting and processing information reduces the need for traditional personal services in this sector The study suggests that the number of participants in the process of buying and selling real estates will decrease considerably due

to efficiency increase induced by the development of technology The authors conclude that the number of needed service providers and total costs per transactions will decrease

1998

Buxmann, P., Gebauer, J.: Internet*Based Intermediaries * The Case of the Real Estate Market, 6th European Conference on Information Sytstems (ECIS’98), Aix*en*Provence , 1998

The authors explore the role of agents in the age of developing technologies such as the Internet and the Web After a short overview of differences between a traditional market and an internet based market from the perspective of economic theory, the authors state a case of real estate agents

1999

Crowston, K., Wigand R.: Real Estate War in Cyberspace: An Emerging Electronic Market?, International Journal of Electronic Markets, 1999, Vol 9

The authors explore how e*commerce and the Web influence the real estate market The real estate brokerage industry is suitable for the exploration of e*commerce, since it is information intensive and information driven industry, based on transactions, with a large number of agents and which is under the influence of constant changes induced by the changes of information technology The authors analyze the process of real estate selling to be able to suggest, where ICT could change it.

1999

McMahan, J.: The Impact of E*Commerce on Real Estate, Real Estate Issues, Winter 1999/2000

In this paper the author explores general impact of e*commerce on the real estate market, especially on the demand of specific kinds of real estates

2000

Littlefield, J E., Bao, Y., Cook, D L.: Internet Real Estate Information: Are Home Purchasers Paying Attention to It?, The Journal of Consumer Marketing, Santa Barbara: 2000 Vol 17, Iss 7;

The study's focus lies on the examination of using the Internet when buying real estates A model of using the Internet when buying a real estate has been developed and tested The focus of this examination lies on the following: what proportion of the whole time devoted for information search is spent on using the Internet, in what extent is the Internet useful to the buyers and what other factors influence using the Internet in the process of buying a real estate

2000 Bond, M T., Seiler, M Y., Seiler, V L., Blake, B.: Uses of Websites for Effective Real Estate

Marketing, Journal of Real Estate portfolio Management, Apr*Jun 2000; 6, 2; ABI/INFORM Global The purpose of this study was to determine in what degree real estate agencies use the advertisement possibility of their offer and themselves (firm promotion) on the Internet The research was conducted

in real estate agencies in Ohio, U.S The questionnaire was sent to 1800 addresses and the rate of answered questionnaires of 13.8 per cent was achieved by 249 completed questionnaires

2000

Muhanna, W A.: E*Commerce in the Real Estate Brokerage Industry, Journal of Real Estate Practice and Education, 2000., Vol 3., No 1

In this study the author investigates how real estate agencies in Ohio (U.S.) intend to use the Internet

in their business and what is their perception regarding this medium

2000

Crowston, K., Wigand R., Sawyer, S., Allbritton, S.: How Do Information and Communication Technologies Reshape Work? Evidence From the Residential Real Estate Industry, Proceedings of International Conference on Information Systems (ICIS), Brisbane, Australia, 2000

The authors investigate how the use of information and communication technology (ICT) influences the work of real estate agents, the process of buying/selling real estates and the whole structure of the real estate brokerage industry in buying and selling real estates

2001

Jud, G D., Roulac, S.: The Future of the Residential Real Estate Brokerage Industry, Real Estate Issues, Summer 2001., 26, 2; ABI/INFORM Global

In this study the authors investigate how is new cyberspace technology going to influence the business

of real estate agencies, how it will influence the institutional structures and how it will form the ways agencies will do business in future The authors predict five possible scenarios: FSBO Model, Unbundled Services Model, Alternate Delivery Model, Product Extension Model and Financial Supermarket Model.

2001 Seiler, M J., Seiler, V l., Bond, M T.: Uses of Information Technology in the Real Estate Brokerage

Industry, Real Estate Issues, Spring 2011.

The study had two goals: First goal was to identify and describe how the industry of real estate agents uses and plans to use the technology in their business Second goal was to establish the existence of economies of scale in the industry of real estate agents

2001 Crowston, K., Sawyer, S., Wigand, R.: Investigating the Interplay Between Structure and

Communications Technology in the Real Estate Industry, Information Technology & People, Vol 14,

No 2, 2001.

ICT changes many industries mostly by changing the way of information distribution Although the effects of using ICT are related to organisations (industries), the application of ICT happens on an individual level This paper examines the relationship between individual use of ICT and the changes

in organisational and infrastructural structure in the real estate brokerage industry

2002 Muhanna, W A., Wolf, J R.: The Impact of E*commerce on the Real Estate Industry: Bean and

Guttery Revisited, Journal of Real Estate Portfolio management; May*Aug 2002; 8; 2; ABI/INFORM Global

The authors revise the predictions of Bean and Huttery about the influence of the Internet (the Web) as

an open medium on the role of real estate agents as market middlemen Through an analysis of statistical data (Labor Statistics, NAR study from 1999), the authors confirm and deny some of the predictions made by Bean and Guttery.

2002

Benjamin, J D., Jud, G D., Roth, K A., Winkler, D.T.: Technology and Realtor Income, Journal of Real Estate Finance and Economics, jul 2002; 25; 1; ABI/INFORM Global

The study points to the fact that an accelerated information flow, which is made possible through the use of Internet and other information technologies (mobile phones, PDA etc.), increases the productivity and efficiency of real estate agents, which is followed by a higher income of the agents This article investigates how the use of information technology by real estate agents influences their income The research was conducted on a sample of 6000 examinees from the data base of the National Association of Realtors (NAR) in the U.S

2004 Gwin, C R.: International Comparations of Real Estate E*nformation on the Internet, Journal of Real

Estate Research, 2004., Vol 26, No 1.

This article presents a choice model of a real estate agency on „what amount of information should be distributed through one's own web site?“ A web site allows the agency to decrease costs of offering information to potential buyers, but it can face disintermediation if it offers to much information The study shows that agencies from different countries offer different amounts of information on their web sites, depending on how high are browsing costs for potential buyers.

2004

Bristow, D., Bulati, R., Mooney, S., Dou, W.: The Impact of Internet Savvy and Innovativeness on Real Estate Agent`s Internet Utilization and Sales Performance

The authors in this study develop a conceptual model and (a) investigate the influence of two variables (understanding the Internet and innovations) on the use of the Internet as a resource of real estate agents for their selling activities and (b) assess the perception of the effects of internet use on selling performance

2005

Kamery, R H.: Marketing for the 21st Century: the Internet and the Real Estate Industry,Proceedings

of the Academy of Legal, Ethical and Regulatory Issues, Vol 9, No 1

The author investigates the influence of the Internet and new trends in the real estate brokerage industry He concludes that the Internet is a perfect place for building the future of the real estate brokerage industry The Internet shows continuous growth per user, access and flexibility The Internet becomes main and broadly accepted communication medium The presence of an individual or a firm

on the Internet can strengthen their communication abilities and hence strengthen the connection to the customers Disadvantages of the Internet can be mitigated.

2005

Benjamin, J D., Jud, G D., Chinloy, P., Winkler, D.T.: Technology and Real Estate Brokerage Firm Financial Performance, Journal of Real Estate Research, Oct*Dec 2005, 27, 4; ABI/INFORM Global This study investigates the influence of using the Internet on financial performance of real estate agencies The survey was conducted on a sample of 1700 real estate agencies from the NAR data base The results show positive influence of internet utilisation on the revenue and the net income of real estate agencies

2005 Sawyer, S Wigand, R T., Crowston, K.: Redefining Access: Uses and Roles of Information and

Communication Technologies in the US Residential Real Estate Industry from 1995 to 2005, Journal

of Information Technology , Dec2005, Vol 20 Issue 4, p213*223

In this paper authors investigate three changes in the real estate brokerage industry in the U.S induced

by the change in ICT: 1) changes in the process of buying and selling real estates, 2) change in the role of information and 3) change in the agency process of real estate selling.

2010 Saber, J L., Messinger, P R.: The Impact od e*Information on Residential Real Estate Services:

Transaction Costs, Social Embeddedness, and Market Conditions, Canadian Journal of Administrative Sciences, Mar 2010; 27, 1; ABI/INFORM Global

In this article the authors investigate a possible “disintermediation” of real estate agents due to an increased access to information (e*information) from the real estate market via the Internet The Transaction Costs approach suggests a decrease in the perceived value of the agency service by the buyer under the influence of an easier access to e*information The Social Embeddedness perspective suggests the opposite, since the value of the agency service does not only consist of the ability to aggregate information but also of a certain number of transaction activities which an agent can perform successfully thanks to his social networks.

2010

Acharya, R N., Kagan, A., Zimmerman, T.: Influence of Email Marketing on Real Estate Agent Performance, Journal of Real Estate Literature, vol 18, No 2, 2010

This study develops a behaviour model of real estate agents based on the theory of reasoned action (Fishbein and Ajzen, 1975; Ajzen and Fishbein, 1986) and assesses the role of e*mail marketing in the improvement of agent’s performance, by using empirical data from the real estate market in Phoenix (U.S.)

Former studies are mostly focused on investigating the influence of e*marketing application to business success of real estate agencies, the success of agents and to the influence of the Internet on disintermediation on the real estate market Considered geographical area is most often the market of the U.S A small number of studies focus on the use of a web site as a marketing tool Therefore, the focus of our research lies in the ways of using web sites as a marketing tool in real estate agencies of the Western Balkan countries

3 Investigation of the use of web sites as a marketing tool in real estate agencies in Western Balkan countries

The EU institutions and EU members define Western Balkans as the region that includes countries from South*eastern Europe: Albania, Bosnia and Herzegovina, Croatia, Serbia, Montenegro, Macedonia and Kosovo

Table 2: Number of internet users in Western Balkans

EUROPE Population Internet Users, Penetration % Users

( 2011 Est ) Latest Data (% Population) Europe

Total Western Balkans 23.975.956,00 10.820.800,00 45,13 2,27

TOTAL Europe 816.426.346,00 476.213.935,00 58.3 % 100.0 %

Our empirical study will focus on three countries of Western Balkans with largest populations: Serbia, Bosnia and Herzegovina and Croatia This could be seen as a research limitation and the recommendation for future research is to include all Western Balkans countries Due to accessible data from the first specialized internet search machine for real estates in Europe, www.gohome.eu, which also covers markets of certain Western Balkans countries, real estate e*market of Serbia, Bosnia and Croatia advertises around 357 000 real estates

Table 3: Number of advertised real estates on the internet in Croatia, Serbia and Bosnia

State Number of ads Estimated number of real estates

( ;35% )

Bosnia and Herzegovina 54575 40426

Source: www.gohome.eu (data on the real estates numbers were corrected for the estimates of double ads, whose proportion according to the information from gohome.eu is about 35%)

Selling of real estates is an information intensive business Agents connect buyers and sellers through information control and distribution They are being rewarded for their information skills Real estates are expensive goods, they are not bought often and easy to describe, so most buyers have the need for professional assistance when buying a real estate

The process of buying and selling real estate can be divided into five phases (Crowston, K., Wigand, R.T., 1999, p.37*44):

Selling announcement (listing)

Information search

Evaluation

Negotiation

Execution

Real estate agencies use different online advertisement activities and different tools for the communication with clients (sellers) and buyers in every phase of the process Hereby, a web site of the agency is the basic online communication tool that integrates and supports other elements of marketing communication, such as advertising, public relations, direct marketing and sales promotion

Table 4: Web site as a support to the elements of the promotion mix of real estate agencies

Promotion mix

element

Application of the web site

Advertisement Support of automatic advertisement on the advertisement web sites

through RSS and XML feeds Support of online and offline advertisement – advertising the web address of the agency in offline and online media

Sales promotion Publishing discount coupons for services

Online sweepstakes Publishing service warranties Public relations Publishing press announcements

Hosting an agency blog on the web site Giving support for agency newsletter (sign in/out forms, newsletter archive etc.)

Support for WOM marketing (statements of happy customers, e* postcards, …)

Direct marketing Web site as the multimedia real estate catalog

Support of the direct e*mail marketing (data base forms for data of potential clients and buyers)

Simplifying personal

selling

Web site as a catalog with multimedia presentation possibilities and possiblities of virtual panorama interior presentations

Publishing answers to frequently asked questions of clients and buyers

In the phase of real estate announcing the primary interest group that is communicated with are the sellers/landlords of the real estate (clients) and following promotion activities are used: advertisement, sales promotion, public relations and direct marketing Communication goals that are meant to be achieved are the following: informing potential clients and creating familiarity with the agency, creating and strengthening the positive image of the agency, persuading of service quality of the agency and inducing customers to buy services, i.e making an agreement with the agency Specific online techniques and tools of online advertisement in the announcement phase are the following: (1) web site, (2) advertisement through web displays and text links, (3) advertisement in areas for organized promotion, (4) content and section sponsoring of web sites, (4) marketing search activities (paid search, paid

listing, contextual advertisement and (5) affiliate programs Potential online sales promotion tools in the announcement phase are the following: online coupons, sweepstakes and warranties Online public relations tools in the announcement phase are the following: web site, online communities, blogs and micro blogs, e*newsletters and techniques of WOM communication Direct online marketing in the announcement phase uses web for information collection about potential clients and e*mail service for sending personalized messages to potential clients

In the phases of search, evaluation, negotiation and execution the primary interest group an agency communicates with are potential buyers and/or tenants of real estates

In the search phase, in which potential buyers look for an appropriate real estate, the agency communicates through the activities of online advertisement, public relations, direct marketing and simplifying personal selling Online advertisement techniques and tools in this phase are the following: advertisement in the areas for organized promotion, advertisement through display ads and activities of marketing search Online public relations are conducted through the use of: agency’s web site, online communities, blogs and micro blogs, e* newsletters and techniques of WOM marketing The activities of online direct marketing in this selling phase are the following: presentation of the agency offer in an electronic catalog

on the agency’s web site and direct e*mail marketing The data base of potential clients for the needs of direct e*mail marketing can be created by the agency in three ways: (1) data collection from advertisement sites from the demand category, (2) through online contact forms on one’s own web site, (3) buying the queries from specialized real estate advertisement web sites

In the evaluation, negotiation and execution phases online techniques and tools for the simplification of the personal selling process dominate and their function is directed to: real estates presentation and dealing with eventual client complaints In these phases of support of the sales process the agencies mostly use their own web site (electronic multimedia real estates catalog) and e*mail communication

3.1 Research methodology

The research uses the method of content analysis of real estate agencies’ web sites Content analysis is a research technique which in an objective, systematic and quantitative way describes the content of a communication aspect (Milas, 2005) The analysis of 19 studies that have used this technique resulted in the recognition that this stable research technique can successfully be used in a dynamic environment such as the Internet

A code unit is the smallest segment of a content which is observed and evaluated in the content analysis (McMillan, 2000) In this study we use online marketing communication tools that can be used by the real estate agencies on their own web sites, as units of analysis Through the content analysis of agencies' web sites and based on a code sheet, the presence and absence of certain contents (online tools) on the agency's web site are evaluated A code sheet is a measurement instrument created on the basis of the knowledge about the ways of using real estate agencies' web sites in different phases of the marketing communication process The code sheet consists of 32 code units represented in the form of research questions

Table 5: Code sheet for the content analysis of real estate agencies’ web sites

No Observed unit of analysis (code unit)

1 The agency has an online real estates catalog on its web site?

2 Firm information is published on the web site?

3 Services information is published on the web site?

4 Information about the selling and buying process is published on the web site?

5 There is s section with answers to frequently asked questions on the web site?

6 Satisfied clients statements are published on the web site?

7 Contact data are published on the web site?

8 There is an online contact form on the web site?

9 Discount coupons are published on the web site?

10 A sweepstake is organized on the web site?

11 Warranty statements are published on the web site?

12 There is a section with press releases (online press center) on the web site?

13 There is a forum on the web site?

14 There is an agency blog on the web site?

15 There is a newsletter sign up form on the web site?

16 There is a link to the facebook.com profile on the web site?

17 There is a link to the twitter.com profile on the web site?

18 There is an online data collection form about potential clients on the web site?

19 There is a form for direct queries of potential clients on the web site?

20 The web site is multilingual?

21 Real estates on the web site are represented by images?

22 Real estates on the web site are represented by videos?

23 Real estates on the web site are represented by virtual panoramas?

24 Real estates on the web site are represented on maps?

25 There is a content recommendation form on the web site?

26 The web site integrates content recommendation services?

27 There is a guestbook on the web site?

28 There is an online contact form on the pages of the real estate catalog (ads)?

29 There is a browser on the web site?

30 There is a possibility of content download from the web site through the RSS service?

31 There is a map of the web site on the web site?

32 There is a symbol of Skype online status on the web site?

The sample that has been used for the research using content analysis contains 273 real estate agencies that own a web site, from Croatia, Serbia and Bosnia and Herzegovina

Table 6: Geographic structure of the content analysis sample of real estate agencies’ web sites

Country Number of agencies

owning a web site

Included in sample Percentage in relation to

the total number

To get a simpler analysis we categorize single online content tools as follows:

Used very often (75% * 100%)

Used often (50% – 75%)

Used from time to time (25% * 50%)

Used rarely (10% – 25%)

Used very rarely (< 10%)

3.2 Results of the research

Table 7: Frequency and percentage of participation of single online marketing communication techniques on real estates agencies’ web sites

Category and online marketing

communication technology

Frequency Percentage

Croatia Serbia B&H Croatia Serbia B&H Total

Information on the buying/selling process 43 11 5 25,9 17,7 11,1 21,6

Section for frequently asked questions 23 10 4 13,9 16,1 8,9 13,6

Online press center (press releases) 5 1 0 3,0 1,6 0,0 2,2

Blog on the agency’s web site 18 11 0 10,8 17,7 0,0 10,6

Web site integrates content recommendation

Content recommendation form for friends 37 7 11 22,3 11,3 24,4 20,1

DIRECT MARKETING

(ADVERTISEMENT SUPPORT;

Online real estates catalog * 165 61 45 99,4 98,4 100 99,3

Published contact information 166 62 45 100,0 100 100 100,0