Home

In launching this Journal, the editorial focussed upon how the market for construction market as an academic subject area is growing.  In my forward to the Proceedings for the 4th National Construction Marketing Conference (Centre for Construction Marketing in association with CIEMCIG, held at Oxford Brookes University on 1st July) the focus was upon how the academic interest is now being less general and more specific as confidence grows and the search for improvement in understanding and practice is pursued. The papers in this second edition are diverse too.  They are a good reflection of the subject discipline.  I wish to use them to make two points.  The first is to address why industry has yet to fully catch up with the level of detail and diversity of academic pursuit in its practices.  The second point is to address marketing in relation to economic cycles.

Marketing is becoming a much more serious activity in construction - born out of necessity as much as any innate desire to pursue its "virtues".  What has yet to occur is for industry to adopt marketing practice as a cornerstone of strategy and management.  In other words, it is seen as something that is bolted onto a given position or strategic approach.  It does not generally inform the approach.  Contractors are not client driven or client orientated.  In the UK, the failure to use the restructuring forced upon the industry in the early 1990s was a missed opportunity to become client orientated.

The underlying reason why marketing is pursued as a surface function is that there exists a blame culture.  It is the culture of the street fighting man (Smyth, forthcoming November 1999).  Internal power relations dominate over client relations on the priority list of what makes the organisation work.  Internally, the vying to retain significance and position means that strategy, which suggests commitment to something that may fail for which blame may be attached, is always sacrificed in favour of career tactics and reactive power play.  What hope marketing?

What is interesting is that the external environment is changing so fast.  The vagaries of economy whether local, national or global are such that change is forced upon industry.  Better, surely, to manage the change than be a victim of change, especially when its impact is far more significant than the blame culture in industry.  This is where the papers in this edition are so interesting and relevant.

The paper from the group at the Helsinki University of Technology, led by Professor Kiiras, is looking at a way of managing the changing EU market, particularly in regard to market penetration for the material supply sector.  The paper has a broad application and makes an important contribution as to how markets can be modelled.  Modelling is both a means for understanding and through application a means for managing the market more effectively.

The work of Siehler turns attention towards markets in flux.  This is very relevant from the perspective of economic cycles.  His paper clearly shows a strategic switch amongst effective players in the global market.  In broad terms the approach has changed from gaining market share in times of recession towards securing profitability during the upswing. Whilst this is hardly revolutionary in terms of economics, what is interesting has been the absence of marketing literature that relates to economic cycles.  Perhaps it takes marketers in a highly cyclical industry, like construction, to address this.  The importance of the paper by Siehler is that it begins to map the process, which academics and practitioners alike can develop in a way that may help inform corporate decisions about shifts in marketing policies in the future over the economic cycles.

The paper by Pheng and Hua also looks at the impact of recession, this time the focus being the response of Asian contractors to the financial crisis in that region.  Again the process of adjustment to market change is being mapped.  The interesting point made by the authors in their conclusions is that contractors are not simply reacting with savage cuts.  The approach is not just a defensive one.  Contractors say they are investing in their future in a positive way.  It may be tentative rather than aggressive in most cases, however, the paper implies a strategic change compared to the UK experience of the early 1990s.

The paper by Smyth is more of a theoretical or position paper.  Like the previous two, it tackles change.  Repeat business levels are low, yet important in construction.  Alliances, partnering and so on are being seen as one way of overcoming low levels of repeat business.  The importance of switching costs in client decision making is addressed in the paper.  It links economics and marketing by posing the question, as to what conditions prompt the client to switch supplier.  Keeping the same contractor is only desirable where the service is good.  In itself that is insufficient.  If the cost to the client of switching contractors is low, then the temptation to do so is great, especially in a fragmented market and even more so when competition hots up in times of recession.

This has major implications for partnering and other alliances in recessive times.  It demonstrates the importance that costs of switching are increased through partnering.  The initiative, it concludes rests with the contractor.

The review section deals with a book on relationship marketing management and therefore is highly relevant to the issues and questions posed in the papers.  Marketing is a strategic management task.  For some it is the management strategy, although other considerations are pertinent too.  The papers and review therefore take the marketing debate forward and raise interesting and key questions for both theory and practice.

Dr Hedley Smyth
Editor

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

This page is maintained by the Centre for Construction Marketing
at Oxford Brookes University. Editor Brian Wood .
Last Modified: Friday, 12-Apr-02 17:25:31 BST.