International Journal for Construction Marketing
Volume 1, Issue 2
Partnering: Practical Problems and Conceptual Limits to Relationship Marketing

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Hedley Smyth*

*Centre for Construction Marketing, Oxford Brookes University,

Keywords
Client Loyalty, Client Satisfaction, Partnering, Relationship Marketing, Repeat Business, Switching Cost

ABSTRACT

Partnering has become an important way in which contractors sell and clients procure construction services. Partnering has been approached tactically, such as project partnering, and as a strategy to increase repeat business. This paper conceptualises the economics of partnering. It analyses from the perspective of the contractor the theoretical role of marketing in the management of the economic context. It also examines the aggregate effect upon the sector derived from the theoretical application. The analysis finds there are few incentives for clients to maintain partnering arrangements and agreements in the long term unless partnering is underpinned by a strategic management approach - relationship marketing for the contractor plus a corresponding investment and loyalty from the client. Implementation of relationship marketing requires a transformation of the structure of contractors.

The primary obstacle to sustaining partnering arrangements in the long run is switching costs. Switching costs are a theoretical component of transaction analysis and thus the traditional marketing mix approach. The primary theoretical question concerns increasing the switching costs of transaction analysis through relationship marketing. The practical issue concerns what strategies and actions contractors can adopt to sustain partnering.

In the sector, the adoption of relationship marketing for partnering will lead to increasing differentiation of construction services and hence greater diversity among contractors. Theoretically there will be a consequential increase of concentration and hence a reduction of competition.

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International Journal of Construction Marketing
ISSN 1463-7189 (web)
ISSN 1463-770 (hardcopy)
© Oxford Brookes University

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