Marketing in Project Management - Essay Example

Project Management-Construction Business Faculty I. Introduction II. Significance of Marketing in Project Management III. Marketing Strategies and Policies in Project Management IV. Conclusion V. Reference I. Introduction Marketing is one of the integral aspects of any business from the product to service industry. The marketing industry changes according to the industry, product and offerings. This paper is about the marketing strategy of the construction industry. Construction industry is one of the heavy investment industries that work within the specific regulatory environment. According to the Department for Business Innovation and Skills “The UK construction industry consists of over 250 000 firms employing 2.1 million people in a multitude of roles. The sector is defined as one which embraces the construction materials and products; suppliers and producers; building services manufacturers, providers and installers; contractors, sub-contractors, professionals, advisors and construction clients and those organisations that are relevant to the design, build, operation and refurbishment of buildings.” This industry contributes significantly to the economy of UK as a major employment sector. The industry performance depends on the commitment to the health and safety of people, sustainable construction and supporting the national performance indicators. The competitiveness of the industry is leading to innovativeness and adoption of new policies and focusing on sustainable constructions. Government is regulating the construction industry for the payment practices, involving the industry in the regulation and policy development processes. The marketing of the construction products is a challenging task for any company involved in construction marketing. The products offered by construction sector are the high value products. Many of the customers would have been buying the product for the first time and once in a life time only. In such scenario, the marketing becomes a challenging aspect due to high involvement of the prospects and customers in the decision making process. II. Significance of Marketing The five process groups of the Project Management are initiating, planning, executing, monitoring and controlling, and closing. The project management depends on three primary goals that are scope goal, cost goal and time goal. These goals allow achieving the target and satisfying the parties investing into the same. In the case of construction sector, the three goals are very important. The cost of the materials and resources increases with time. The people investing in the project would like to see their expected returns. The finance, marketing and operations all have important role in the construction industry. The marketing allows reaching and communicating with the clients and helping them making favourable decision. The marketing mix strategies in the construction industry consist of people, price, product, physical environment, place, process and promotions. Table: Extended Marketing Mix (7ps) People Employee Management Culture Customer Distributors Price Leader/First Mover pricing Skimming Penetration Loss leader Premium pricing and others Product Design Quality Value for money Benefits Convenience Branding and Packaging Others Marketing Mix Physical Environment Facilities Look Ambience Level of comfort for customers and employees Interface and interactivity Place Wholesaling, Retailing, mail order, internet and telephone, direct dales, multichannel and many others. Process The way product or service is being delivered Promotion Discounts Offers Endorsements Trials Pamphlets and posters Co-branding and others Source: Developed on the basis of Kotler (2000) The place of marketing in the project management depends on the company to company. Some construction companies complete the project and during the final phase they start marketing their products to the prospective clients where as in other cases it is in the initiation and planning phase marketing strategy starts. The reason of this depends on the available funds and financial capabilities of the builder. The selling of final product allows constructors to sell the product at the current market price. If the product is sold before or during the construction, the funds can be partially or fully generated through the same. Project Management Figure: Triple Constraints of Project Management (Source: Schwalbe, PPT) Marketing is a significant part of the construction sector. The project management depends on the proper flow of funds. In majority of the construction work the project and dummy model is prepared in the planning phase, benchmarks are decided and once the project is approved it is marketed to the potential customers. Company collects deposits in advance according to the development phases. Once the project is complete and full amount is paid the client gets possession of the property. The significance of the marketing is in the area of communicating various aspects of the project to various stakeholders and prospective customers for various purposes. The marketing mix is prepared according to the management goals and objectives. The product for the construction projects are the residential or commercial properties. These products are shown to the prospective clients in the form of images, miniature models or model prepared for demonstration. The images can be sent to the client where as the other two are shown when the client shows interest and visits the office or site of the property. III. Marketing Strategies and Policies There are various types of marketing strategies used in the construction industry. This can be advertisement on national TV channel, newspapers and leading magazines. This can also be done with unconventional marketing channels like relationship management (Pheng, 1999), face to face marketing, direct response marketing and internet based marketing. These strategies are used according to the target audience, competitiveness, available resources and marketing channel. The internet based marketing allows reaching the prospective clients or audience in lesser cost as compared to the other mode of communication. However it is very difficult to track the success rate of the online promotions or communication. The brand name and the unique selling proposition of the project are the important aspects of the marketing strategy in construction industry. The construction industry works within the regulation and policies of the government regarding the safety, health, light and other aspects of the property. The marketing and communication strategies needs to be within the policy frameworks and should have all the required information and terms and conditions clear if applicable. The marketing strategy starts with the identification of prospects in the construction business and identifying the factors relevant to them and within the agenda of constructor. The construction marketer than develops marketing plan which covers the marketing mix aspects of product, price, place and promotion. The price leadership or the product leadership depends on the target customers and strategic goals of the company. Construction companies may also target the niche segment that have specific needs and can pay premium for their products and services. Marketing strategy is always aligned with the strategic plans and goals of the company. The construction marketing may have the collaterals and direct mailers, Public relations and media outreach, participation in seminars, target advertising, referred marketing strategy, green marketing strategy and others. The residential and commercial places need to be constructed according to the regulatory requirements of safety and health of people. The marketing strategy can be developed for a project of construction industry before the plan is executed or during the construction and final phase. The objectives of the marketing strategies would vary according to the company objectives. The company may adopt marketing strategy before the execution of the project to generate funds for the project and continue with the project. The advertising tools can be different according to the target audience and project planning. The marketing mix of the construction industry is different from the traditional mix. The customer needs to reach to the product at the site of the project. The communication material can be of various types from being material for attractive prospective clients to informative providing different necessary information on the project like size, facilities, pricing and others. IV. Conclusion The construction industry offers different kind of product which is high value and first time purchase for majority of the customers. Marketing is an important factor in the construction industry. It provides strategic advantage to reach to the client and informed them about the unique selling preposition and offers. It also allows in informing about various facilities and benefits of the project. The construction industry is one of the high investment industries. Marketing strategy also helps construction companies to generate funds from the market through sponsors and potential buyers. It helps the customers to have an expectation from the constructing company and communicate about the promises made by the company. V. Reference A Guide to the Project Management Body of Knowledge, (2004) Third Edition, PMBOK Guide, Project Management Institute Bartels, R (1988). The History of Marketing Thought (3rd. edition Ed.). Columbus: Publishing Horizons. Construction retrieved on 23 November 2009 from http://www.berr.gov.uk/whatwedo/sectors/construction/index.html Fourth Edition, Thompson Course Technology retrieved from http://212.100.200.71/psu/cis/bena/Project%20Management/MS_Project2003_Guide.pdf (23 November 2008) Kotler, P (2000) Marketing Management, New Jersey: Prentice-Hall Inc., 10th Edition Schwalbe, Image of Triple Constraints of Project Management, http://www.projectmanagement.net.au/triple_constraints Schwalbe, K (2006) Information Technology Project Management, Pheng, L S (1999) The extension of construction partnering for relationship marketing, Marketing Intelligence & Planning Volume: 17 Issue: 3 Page: 155 – 162, ISSN: 0263-4503, DOI: 10.1108/02634509910271614, Publisher: MCB UP Ltd available at http://www.emeraldinsight.com/10.1108/02634509910271614 Zeithaml Valarie A. and Mary Jo Bitner, 2002 ‘Services Marketing-Integrating Customer Focus Aross the Firm’. 2nd Ed., New York: Tata McGraw-Hill Read More