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W16235

Teaching Note

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HOUSING.COM: MARKETING A SERVICE OFFERING

Astha S. Gupta and Kirti Sharma wrote this teaching note as an aid to instructors in the classroom use of the case Housing.com:
Marketing a Service Offering, No. 9B16A011. This teaching note should not be used in any way that would prejudice the future use
of the case.

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This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the
permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights
organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western
University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com.

Copyright © 2016, Management Development Institute Gurgaon and Richard Ivey School of Business Foundation Version: 2016-04-25

SYNOPSIS
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The case revolves around Advitiya Sharma, chief marketing officer of Housing.com, and the challenges
he faces. Despite proving itself as a threat to big players such as 99acres.com and Magicbricks.com in the
online real estate listing space, Housing.com is still struggling to establish itself as the preferred option
among the brokers. Conflicts of interest between the two key segments — sellers (i.e., brokers, builders,
developers, and landowners who list property online) and buyers (i.e., end-user who searches the website
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for a house or property) — are a matter of concern for Housing.com. What should be done to encourage
more listings on the website by the seller segment? How should the website manage traffic and encourage
more visitors? What should it do to win the trust of both segments? Sharma is trying to find an answer to
these questions, thinking that reliving the start-up journey in his mind will give him clarity as to where the
company is lacking in its efforts to provide a world-class solution to the built-in information asymmetry
and transparency problem hindering the Indian real estate industry.
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LEARNING OBJECTIVES

 This case can be used for teaching the basic concepts of service in an introductory class on marketing
management.
 This case can be helpful in teaching the GAP model of service marketing. The case outlines the
journey of Housing.com, from the germination of the idea and identifying a GAP in current service
offerings to its effective implementation.
 The service value chain of Michael Porter can be taught through the case.
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 The case can be used to teach the segmentation, targeting, and positioning of online services.
 The case can also be used to explain the difference in consumer behaviour based on high- or low-
involvement service.

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POSITION IN COURSE

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This case can be used to teach marketing, service marketing, and consumer behaviour, while highlighting
online service issues for a portal. This case can be useful for an introductory course in marketing to help
beginners understand various consumer segments and the often conflicting values desired by consumers
in services. If used in an introductory course in marketing, it is recommended that the case be used once

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the students are familiar with basic concepts of marketing; as such, it is beneficial to use this case toward
the end of the course. The case presents a decision dilemma and different forces that affect dot-com
business start-ups. The case challenges students to help Housing.com provide a solution to the problem of
handling conflicting interests of various consumer segments. It also challenges students to devise a unique
approach for Housing.com wherein the company creates a harmony of interests while maintaining its
unique selling proposition (USP), providing consumer value, and building trust in the face of aggressive
competition.

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RELEVANT READINGS

 Michael E. Porter and Victor E. Millar, “How Information Gives You Competitive Advantage,”
Harvard Business Review (July–August 1985): 149–151. Available from Ivey Publishing, product no.
85415.
 Michael E. Porter and Mark R. Kramer, “Creating Shared Value,” Harvard Business Review
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(January–February 2011): 1–17. Available from Ivey Publishing, product no. R1101C.
 Anantharanthan Parasuraman, Valarie A. Zeithaml, and Leonard L. Berry, “A Conceptual Model of
Service Quality and Its Implications for Future Research,” Journal of Marketing 49, no. 4 (Fall 1985):
41–50.
 G. Lynn Shostack, “Designing Services That Deliver,” Harvard Business Review (January–February
1984): 132–139. Available from Ivey Publishing, product no. 84115.
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 Kristian Möller, Risto Rajala, and Mika Westerlund, “Service Innovation Myopia? A New Recipe for
Client-Provider Value Creation,” California Management Review 50, no. 3 (Spring 2008): 31–48.
Available from Ivey Publishing, product no. CMR395.

ASSIGNMENT QUESTIONS
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1. How is Housing.com creating value through its innovative products?

2. Which segment should Housing.com concentrate on to gain market share? How should it deal with
the conflicting interests of the buyer and seller segments?
3. What should be done to increase the listings on the website? Highlight the gaps in current services
offered to the seller segment by Housing.com and how the gaps can be filled.
4. What should be done to increase traffic on the website? Highlight the gaps in current services offered
to the buyer segment by Housing.com and how the gaps can be filled.
5. How is the service provided by Housing.com different from other online services?
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TEACHING PLAN

The introduction should explain the company, its business model, and its objectives. Students should
understand that the company was able to find a gap in current service providers and, thus, decided to fill
the gap through the application of technology. The instructor should bring out in the discussion the

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motivation to start the company and the real estate market conditions in India. Students should also
understand the requirements of the market. For any firm to be successful in real estate property portals, it
must have an ample amount of data, with the objective of helping consumers find their dream house. With
the verification of listings, Housing.com is adding value but also compromising on time and the number
of listings on the portal. Students should understand that the consumer is the end-user or the buyer of the
property, and the client is the broker, property dealer, builder, or home owner. Thus, there is a conflict of

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interest in various consumer/customer segments.

ANALYSIS

1. How is Housing.com creating value through its innovative products?

Students can be introduced to the concept of Michel Porter’s value chain analysis in this question. The

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value chain analysis is based on the process view of organizations — the idea of seeing a service
organization as a system made up of subsystems involving inputs, transformation processes, and outputs.
The value chain determines costs and affects profits. The service blueprint shown in Exhibit TN-1 can be
drawn as a board plan, and students can be asked to explain how the service provided by Housing.com
passes through the chain and at each activity gains value. The primary activities can be explained to them
by discussing:
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 Inbound logistics: Arranging the inbound movement of data collected from the brokers after they
subscribe.
 Operations: Housing.com verifies the authenticity of information by sending its officials to the
addresses provided by the brokers and the land owners. This verification of information is the unique
feature of Housing.com.
 Outbound logistics: This is when the requisite information about the verified property is transferred
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and updated from the data science laboratory on the website for the end-users to assess.
 Sales and marketing: Creating, communicating, delivering, and exchanging the offerings that are of
some value to the customer, keeping in mind that this process of selling products and services creates
value for not only the customer but also society at large.
 Services: Tracking the after-sales performance of the product and service to achieve customer loyalty
and increase the lifetime value of the consumer.
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Trigger: Students can be further probed to answer how Housing.com can further create value.

The instructor can re-introduce certain case facts about the real estate industry and the lack of authentic
information in the current service offerings. This question will provide a background with which to enter
into a discussion about the products launched by Housing.com; students should be able to understand that
the company moved from a mere property classifieds model to a more specialized and sustainable
property-mapping strategy. However, the company can further add value by emphasizing information
processing and sales and marketing. Above-the-line (ATL) advertising can help the company encourage
more consumers to log in to the website, and constant contact with brokers and builders will help in
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increasing the amount of data on the website. The company can also try to add value by offering after-sales
services and collecting constant feedback from various customer segments it is catering to. Students can be
asked to draw the service structure of Housing.com to show the value creation at each stage in detail.

The instructor can further introduce the concept of innovation, innovation strategies, and type of service
innovation in creating value. Housing.com’s service follows the incremental innovation strategy shown in

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Exhibit TN-2. To create value, Housing.com requires high levels of interaction with customers. There are
three types of customer interactions possible in the case of any innovation in services:

a) Client-driven: The client intimates the gap in current service and encourages the service provider to
enter into collaboration for new service innovation.
b) Balanced: The client and customer co-create to address the current gap in service.

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c) Provider-driven: The service provider identifies gaps in the current service and innovates to provide a
solution.

Students would be quick to identify that Housing.com is provider-driven. When service providers design
new services, they have to realize that the customer’s perceived value addition lies in the benefit the
service provides and not the offering as such. The service should motivate customers to achieve a change
in their lives by adopting the service. If the functionality of the service exceeds the customer’s ability and

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intention to use the service, the innovation activity does not create extra value for the customer. This is
exactly what happened with Housing.com. The best solution to this is to move to the balanced approach,
where service augmentation will be co-created by customer segments that Housing.com caters to.
Customer co-creation can help Housing.com enhance the value in its service.

2. Which segment should Housing.com concentrate on to gain market share? How should it deal
with the conflicting interests of the buyer and seller segments?
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Students will struggle to put together all the case facts to arrive at a cogent decision on this question. The
instructor should ensure at the very beginning that students are able to identify different segments the
company is catering to. The seller segment is the one paying the subscription fees, and the buyer segment
is the end-user of the service who is using the application to hunt for houses. Usually students tend to take
extreme views. Some may argue after looking at the case facts that the company is facing issues in getting
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re-subscriptions from the brokers and that, hence, it should concentrate on the subscriptions and re-
subscriptions. Further, from a consumer behaviour point of view, the availability of options while making
choices in the real estate sector is a far greater need for buyers than genuineness. Newcomers who see just
a handful of genuine listings are not going to be very impressed with the choices offered. Procuring seller
registration and increasing the data adds to the competitive advantage in the industry; thus, it is important
to emphasize the seller segment.
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However, one set of students might argue that the end-user of the application must be made aware of the
website through extensive ATL advertising. Increasing traffic can help increase the number of listings as
well. The case facts indicate that brokers are not happy with getting the listings verified, but once they
observe the website gaining consumer preference, which leads to increasing the number of leads, the
listings will increase automatically. Thus, the end-user should be the one the company emphasizes, and
this can be done by creating brand awareness and awareness of the services offered.

Trigger: Which consumer segments is Housing.com catering to?

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Students are likely to start creating the chart (see Exhibit TN-3) by segmenting the market in terms of
buyers based on the types of property — renting or buying, international or national, and city-wise.
However, the instructor needs to lead them to the most important segment the company is catering to —
the seller segment — and the company also needs to emphasize this segment’s needs. The property seller
or the landlord in the case of rented property is the key consumer segment for web portals. The duality of
segmentation is the key issue in the property portal market, and this differentiates the market’s firms from

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other dot-com companies’ business models. One segment (buyer) wants genuine information, while the other
segment (seller) benefits from information asymmetry. The sellers are the revenue generators for the company.

Here, students need to be guided to the case facts, which state that Housing.com has taken a step forward
to cater to the problem of the lack of transparency and genuineness in the real estate market, and that it is
consumer-oriented in approach, but this approach itself restricts it from creating buyer consumer value, as

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the number of listings is smaller. Because of this, the sellers are not interested in re-subscribing.

3. What should be done to increase the listings on the website? Highlight the gaps in current
services offered to the seller segment by Housing.com and how the gaps can be filled.

Execution: Participants should be asked to provide every detail of the strategy they wish to employ —

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e.g., if they were the protagonist, what would they do at this point in time?

Students will be quick to understand that the company is not able to retain brokers and builders on the
website. Because the company is new in the market, the number of property listings is lower compared to
competitors.

GAP 1: Students can be asked to draw a GAP model for Housing.com. Some of them will be able to
identify quickly that a Knowledge GAP exists, as customer expectations of service quality and
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management perceptions of customer expectations do not match. The company is of the view that brokers
would like to provide more detail about the properties so that buyers can compare the offerings online.
However, the brokers are only interested in getting more leads through the portal, and they want the
clients to contact them through the portal.

This GAP can be filled by educating the brokers about the merits of uploading photographs. Students
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should be able to identify that training and regular interaction with the brokers would help Housing.com
in harmonizing relationships and building trust with them. Thus, the views of the properties and the
photographs should be put forth as a service for the benefit of the brokers and not as a requirement of the
company to list the properties on the portal. Students should be able to suggest that the company apply the
concept of market research and comprehensive studies, measuring satisfaction after subscriptions through
surveys or customer panel interviews. This could be one of the solutions to the Knowledge GAP so that the
company can better understand the problems of customers and can co-create innovation in service offerings.
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Advancing: A board plan is given in Exhibit TN-3 where the table shows segments of brokers and
developers; it can be used to make the students understand the diversity of needs of the various segments
and how the company can understand their requirements.

GAP 2: The Standards GAP is the difference between the service provider’s perception of client
expectations and the subsequent development of schemes to foster a customer-driven approach. Students
might be asked here to provide a solution to bridge the GAP. Some of them would be able to come up
with a solution like offline property melas (gatherings) for brokers, where they can put up stalls and
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interact with customers. Students might be able to understand, after looking at the case facts, that the
brokers want leads and that any offline activity will give them a platform to meet end-users.

GAP 3: The Delivery Gap is the gap between service design and actual delivery. Here, the students might
be able to point out that the actual delivery would be when the broker or builder gets the leads through

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Housing.com. Thus, the company must ensure that more consumers log in to the website and use it for
their property hunt.

Advancing: A consumer segmentation table is provided in Exhibit TN-3. It can be used as a board plan to
highlight the various consumer segments. This will help students understand the needs of consumers and
how the website can use a brand management strategy to approach consumers and increase traffic.

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GAP 4: The Communication Gap is the disparity between the actual service delivery and the external
communications made by the provider. Some students will be quick to identify that the company is doing
little for ATL promotion and that this GAP is huge. The company needs to communicate its strengths to
the brokers and builders so that more are encouraged to subscribe to the website. Brand building should
be done through corporate communication, sponsorships, advertising, and sales promotions to highlight
the services provided by the company (see Exhibit TN-4).

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4. What should be done to increase traffic on the website? Highlight the gaps in current services
offered to the buyer segment by Housing.com and how the gaps can be filled.

Execution: Participants can be asked to discuss every detail of the strategy they wish to employ, and to
give a valid argument as to how this strategy can help the company.
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The students may struggle to gather the case facts and arrive at a decision as to what needs to be done at
this point to increase traffic. The instructor can guide them to create a GAP model for the buyer segment
as well as to check for the GAP in the current services provided by Housing.com.

Knowledge GAP: The students will be quick to answer that the company was efficient enough to identify
the information asymmetry problem in Indian real estate and was able to offer a technology-based
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solution by providing photographs and verifying properties through personal visits by company data
collectors. Thus, the Knowledge GAP is not there.

Standards GAP: Students may be able to identify that the Standards GAP is also not there as far as the
buyer segment is concerned. Housing.com has been successful in providing authentic information on its
website, the website is user-friendly, and the photographs create buyer interest so that they keep surfing
the site. This extra information helps those in the buyer segment with their house hunt.
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Delivery GAP: Few students will be quick to identify that though the company was successful in filling
the Knowledge GAP and Standards GAP, the Delivery GAP is huge. The buyer segment, on the one hand,
benefits from the verification of property done by the Housing.com team and, on the other end, finds the
listings limited, as compared to other sites. The site is user-friendly and exciting for the buyer, but there
are fewer options available. Thus, by emphasizing listings, Housing.com can bridge the Delivery GAP.

Communication GAP: Students may be able to identify that this is the biggest GAP. Due to the lack of
ATL advertising, the company is lagging behind the competition. The company was successful in
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addressing the problem of transparency, authenticity, and innovation in the services by filling the gap in
the existing model. However, the company fails to communicate it well to the buyer segment. The traffic
can be increased by undertaking extensive advertising and branding activity. Students can be guided to
the case, where the protagonist has said that the company intends to spend US$30 million on advertising
in the years to come.

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5. How is the service provided by Housing.com different from other online services?

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Execution: Students can be given this question as a small test or take-home assignment after the case
discussion. It would be preferable to introduce this question toward the end of the case discussion.

Housing.com is competing in the real estate sector, which is a high-involvement product industry.

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Consumers are more cautious and evaluative while buying/renting a house as compared to ordering
lunches and dinner online, buying groceries, booking tickets, or shopping for clothes, accessories, or
electronics. Buying or renting a house is a long-term decision. A large amount of money is at stake.
Hence, developing trust and gaining consumer satisfaction is a critical, difficult, and lengthy process. The
real estate industry is complex because of the huge amount of money involved on the customer end.
Usually people buying houses enter into an extensive search, which is stretched to months, if not years.
Also, house hunting is a part of a whole service structure, which starts with searching for a property based

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on customer specifications on online portals — connecting the middlemen, such as brokers, builders,
landowners, banks, interior decorators, etc. It is not a single service; hence, looking into all the other
service aspects is also a prerequisite to customer trust and satisfaction.

High-involvement services like banking commitments, purchasing a house, and healthcare expenses are
different from routine or low-involvement services such as ordering meals or buying books online. Such
services involve sensitive customer data, and other resources like time and money are employed more in
high-involvement services as compared to low-involvement services. Housing.com is different from other
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online services, and its business model is complex. Unlike other competitors in the online property portal
space, Housing.com checks for the authenticity of its listings. It acts as a bridge between the buyer
segment and the seller segment, trying to protect the interests of both parties.

WHAT HAPPENED
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The company withdrew its online loan agreement service and established a strategy focused on buying,
selling, and renting homes. The portal acquired three companies in line with strengthening its growth
strategy, including customer relationship management developer Homebuy360, real estate analytics
company Realty Business Intelligence, and online real estate community India Real Estate Forum. Major
changes were made in the company’s senior management, with the departure of CEO Rahul Yadav. The
board was of the belief that establishing a company with innovative ideas and running a company were
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two different things. The company invested 42 per cent of its revenue on advertising in FY 2015.
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EXHIBIT TN-1: BLUEPRINT OF SERVICE STRUCTURE AT HOUSING.COM

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Buyer

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Login

Buy Rent

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Specify BHK Budget
Specify city, locality
BHK Budget
location,
developer

Get property details

Get
customized
home loan Get rental
Get property agreement online
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details

View property details/

photographs

View property details/

photographs No
Select property
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Yes
Select property

Call & book meeting

Check Check Call &

Broker/
loan payment book
landlord
meeting
No

options options
No
Yes

Note: BHK – bedroom, hall, kitchen

Source: Based on insights given by the protagonist; developed by the case author.
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EXHIBIT TN-2: TYPES OF SERVICE INNOVATION STRATEGIES

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HIGH
Market Radical/
Innovation Disruptive
Innovation

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MARKET
UNCERTAINTY

Incremental Technical
Innovation Innovation
LOW

LOW HIGH

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TECHNOLOGY UNCERTAINTY

Source: Developed by the case author.

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No
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EXHIBIT TN-3: SEGMENTATION OF HOUSING.COM

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Products/Services Housing.com
Segment Type of Segment Specific Needs
Offers
Basis of segmentation (buyer): Type of property and ownership title
1. Residential House/flat/ Furnished/ Rental agreement (only for Bengaluru),

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renter independent floor unfurnished, verified properties with photographs
number of rooms
Paying guest and Food preference, Verified properties with photographs
hostel specific gender
Service apartment Number of rooms Verified properties with photographs
2. Residential House/flat Number of rooms Price of properties, verified properties
buyer with photographs, customized home
loans

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New project Number of rooms Price of properties, verified properties
with photographs, customized home
loans
Land Area in square feet Land classifieds for farmers and
villagers to sell their land, price, verified
properties with photographs
Plot project Area in square feet Plots by land owners and brokers, price,
verified properties with photographs
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Basis of segmentation (seller): Type of seller
1. Sellers Broker Number of inquiries Photographs of properties through
for buy/rent professional photographer, broker
profile, contact information of broker
Builder Sale of inventory Photographs of properties through
professional photographer, builder
profile, contact information of builder
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Developer Sale of inventory Exclusive tie-up with Tata Group, other

developers in line for exclusive tie-ups
2. Resellers House owner Sell/rent Photographs of properties through
professional photographer, contact
information
Flat owner Sell/rent Photographs of properties through
professional photographer, contact
information
No

Land owner Sell Photographs of land through

professional photographer, every listing
linked with Google Maps for easy
location

Source: Based on insights given by the protagonist, developed by the case author.
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EXHIBIT TN-4: PICTORIAL REPRESENTATION OF SERVICE GAP MODEL

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•Gap between customer expectation and management
Knowledge GAP
perception

•Gap between management perception and service

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Standard GAP quality specification

Delivery GAP •Gap between service quality specification and service

delivery

Communication GAP •Gap between service delivery and external

communication

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Source: Developed by the case author. op
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No
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