A GRADUATE COURSE IN MARKETING CONSTRUCTION SERVICES

INTRODUCTION

The traditional system of contracting for construction work has, in the past several years, undergone a radical change through which owners have initiated construction projects. As competition for construction projects increased, owners realized the "low bidder" was not always capable of producing the product expected. Often low bidders "bought" the project, attempting to survive until the next lucrative project was found.

In addition, owners often found the lowest estimate of project cost was not necessarily synonymous with quality or on-time completion of the project. Concurrently, contractors, recognizing the cyclic nature of construction, attempted to project their annual volume of work on being the successful bidder. Long range planning was an erratic venture, to say the least.

National economic conditions, owner dissatisfaction in the methods for purchasing their capital projects, adversary environments, too many contractors in the industry---are all major elements encouraging the contractor and owner to develop a unique relationship during the early stages of initiating a project, which continues through out the construction process.

To meet the demands of this changing construction environment, contractors have had to move from being "production oriented' to a "marketing orientation". This change in operational philosophy allows the contractor to manage his business in a more controlled manner and focus on the market segments he can do best. At the same time, this process requires a managed flexibility within the company structure and its personnel.

"Marketing" can be roughly defined as a system through which a firm plans and implements a process to convince owners that their firm can provide all the necessary construction services to complete a project, with greater satisfaction, than any other construction firm.

To develop an effective marketing plan, contractors must move from planning of the single project to a broad based strategic plan, encompassing projected operational objectives over a span of several years. From the strategic plan comes the basis for a defined marketing plan, providing specific directions to the procurement of construction work, which, if accomplished, will meet the financial goals of the company.

Objective of Paper

The primary objective of this paper is to outline major components of this course in construction marketing. The marketing concepts presented in the course are listed in topical form in the appendix and are extensively covered in the listed references. The author has prepared a number of appropriate overhead viewgraphs, copies of which would be available at reproduction cost.

Construction Management Graduate Program

The marketing course, listed as IS 562--Trends in Project Development, is one of seven graduate level construction management courses in the Colorado State University master's degree program in Construction Management. The elements and concept: presented in this course are not included in any course at the undergraduate level.

COURSE OVERVIEW

It is the intent of this course to provide a basic background in the strategic planning process, the development of a marketing plan, and a review of the various tools available to accomplish the marketing plan.

Course Objectives

In addition to the objectives listed above, the graduate program in general places significant importance on the development of writing skills, presentation techniques, and the ability to orally' present ideas on an informal and interactive basis.

Course Format

In line with the typical schedule of construction management graduate classes, this course was scheduled from 6:30 pm to 9:30 pm, one night per week. The class was held in the Department's industry training seminar room, which allows a varied arrangement of tables and chairs. The non-traditional academic environment encouraged interaction of "participants" and placed outside speakers in a more informal and relaxed atmosphere. An interactive discussion mode was the desired objective in the presentation of course materials. This approach was tempered with topical lectures, individual presentations, assigned student panels, and a most important feature, outside "guest" presenters.

Course Assignments

To accomplish course objectives, assignments were designed to provide opportunity for expression of ideas through written and oral presentations. A term paper was required, with a specific subject selected by the participant after discussing his topic with the instructor. Some investigative research was required, with primary emphasis on a well organized document, concise and readable. Each participant was required to make a 15 to 20 minute presentation on his term paper, using appropriate visual aids.,

Investigation of selected construction markets within the region was the basis of an in-class activity. The group was divided into teams of three to five participants on the basis of individual interest in various markets, i.e., residential, commercial, industrial, and heavy/highway. With about four weeks to investigate the status of each market area, each team prepared a panel on their market area. Each participant was required to give a five to six minute presentation on a particular segment of that market. Time was given for total class discussion at the conclusion of the panel presentation.

Individual assignments during the semester also included brief analytical reports and papers on various subject area components of the course. For example, participants were asked to prepare a marketing development plan for a hypothetical company, from the point-of-view of an outside marketing consultant, which would be presented to the executive officers of the company. The instructor's role was that of the CEO of the company, who answered questions concerning the company's current operations and general projections for the future.

Course Text and References

During development of the course materials, it was discovered that two major construction industry associations had sponsored development of educational material on marketing processes and procedures. After a review of available construction marketing books, a book sponsored by the AGC and authored by Warren Friedman was selected as the course text. It appeared to be the most comprehensive (also the most expensive) and pragmatic in developing marketing systems for a construction company.

The Engineering News Record proved to be an excellent source of week to week information on construction marketing activities. In addition, reference was made to the Commerce Business Daily and project information services provided by the F. W. Dodge Company.

A book by John Woolery, based on marketing procedures used in England, was an excellent resource for theoretical research techniques and statistical methods appropriate to construction marketing. Some of the information and techniques may require adaptation to processes used in the United States, but the presentation of information is excellent.

CONCLUSIONS

This course was offered for the first time during the Fall Semester, 1988. Student reaction to the overall course was excellent. Of the 17 students, three were foreign nationals, and four were seniors in the Construction Management program. One graduate student had an MBA in Business, with a marketing emphasis. The construction work experience by students ranged from one to 15 years, including residential, commercial, industrial, and public works.

The most significant comments from students related to two primary areas:

The instructor and students agreed that there was insufficient course time for adequate discussion of project financing concepts. A longer range recommendation was to have a separate graduate level construction finance course.

In preparation for the next offering of this course in the fall semester of 1989, the students and instructor recommend the following modifications and additions:

ACKNOWLEDGEMENTS

The author would like extend his thanks to Leonard Arnold, Vice-President for Project Development, Hensel Phelps Construction Company, for giving the author opportunity to take part in company marketing activities during the summer of 1988.

Much credit for the success of this initial offering of the course, must go to the construction industry representatives who provided the "real life" component to the course. Listed alphabetically, they are: Ronald Baker, Colorado State University; Ed F. Baldwin, Baldwin Construction Company: Fred R. Cornwall, Prudential-Bache Capital Funding; Stan Everitt, Everitt Enterprises; James N. Mellor, Jr., Gerald H. Phipps, Inc.; Richard Newcomb, Hensel Phelps, Inc.; Mark Warsewa, F. W. Dodge.

REFERENCES

APPENDIX A