Construction market has a tremendous impact on our national economy. Whathappens in the construction industry reflects society's demands, both from a perspective ofdemographic trends and especially of the financing. The current economic slowdown requires toreview the way marketing is done. The companies must eliminate unaccountable marketingprograms and actions that generate insufficient sales leads and fail to support the sales teamefforts. The marketing can be done in a better way.marketing, economic crisis, construction market, direct marketing

Cristina Dinu

English

Research Papers in Economics

Annales Universitatis Apulensis Series Oeconomica, 11(2), 2009 
 
 
1055 
 
MARKETING ON THE CONSTRUCTION MARKET 
 IN A ECONOMIC CRISIS 
 
 
Dinu Cristina
1 
 
 
ABSTRACT:  Construction  market  has  a  tremendous  impact  on  our  national  economy.  What 
happens  in  the  construction  industry  reflects  society's  demands,  both  from  a  perspective  of 
demographic trends and especially of the financing. The current economic slowdown requires to 
review  the  way  marketing  is  done.  The  companies  must  eliminate  unaccountable  marketing 
programs  and  actions  that  generate insufficient  sales  leads  and  fail to  support  the  sales  team 
efforts. The marketing can be done in a better way. 
 
Key words: marketing, economic crisis, construction market, direct marketing  
 
JEL Code: M31 
 
 
Introduction 
On the construction market you will come across more often than before to a dynamic and 
better informed involvement from the project beneficiary (final client). Nowadays’ beneficiary is 
the  one  who  have  the control  over  the  money  to  be  invested,  therefore  he  defines  the  project 
according with the terms that desires. Then he looks for the necessary expertise to carry out the 
project.   
To  satisfy  demand  from  the  residential  sector,  commercial  and  industrial  sectors,  the 
construction industry needs to change. Some entrepreneurs will look at this step with confidence, as 
a solution generating exciting new opportunity while others will make mistakes for fear of the 
unknown. The businessman’s reactions to the changes is which will lead him to a market full of 
opportunities for the company's favor, or the disappearance of the market. 
Construction industry offers to designers, architecture, engineering but also for marketers, 
the chance of exciting professional challenges and many different ways to build a career. But lately, 
there is a need for people that work in this market to change their perceptions in order to cope with 
the  current  business  environment.  They  need  more  flexibility  in  thinking  and  ingenuity  in  the 
strategies discussed. "The work is planned and plans are achieved through work "   is true but 
sometimes work is not enough. It feels the need  of a "spark" or an idea, a new approach (maybe) 
that make the company more visible to potential customers and win loyalty of existing clients. "To 
succeed, must first believe that we can succeed" said Michael Korda. 
 
Characteristics of the construction market  
Before developing some aspects of construction market we need to define some specific 
terms:  
* Beneficiary / client is a person which/who owns the project to be build 
* General Contractor (or general builder) is the company which provide manpower and managerial 
skills needed to execute the project.  
*Construction Project Manager has competent staff necessary to prepare feasibility studies as well 
as  administrative  and  executive  experience  in  terms  of  subcontracting  by  subcontractors.  
                                                 
1 Spiru Haret University, Bucharest, Email: dinu.cristina@gmail.com Annales Universitatis Apulensis Series Oeconomica, 11(2), 2009 
 
 
1056 
 
*The architect or a design engineer conduct technical design documentation for construction of the 
objective in question. 
 *Subcontractors is the provider providing services in a particular category of works. 
The  difference  between  a  main  contractor  and  subcontractor  is  on  such  a  contractual 
relationship:  general  contractor  receives  the  contract  directly  from  the  beneficiary,  while 
subcontractors contracting with the project manager.  
*The final product is the purpose built. 
Construction manager or general contractor works on two core markets: the public market 
and  private  market.  There  are  great  differences  in  terms  of  processes  that  general  contractors, 
project managers and subcontractors must comply for bidding on these two very different markets. 
In  the  public  domain,  anyone  interested  should  strictly  according  to  tender  documents  and 
specifications issued by the competent authority. In the public auctions, construction works are 
attributed to builders or project managers by a single law: the one who comes with the lowest price 
wins.  This  applies  both  to  the  architect  and  the  main  contractor,  project  manager  and  the 
subcontractors. Public procurement are not paid to think, but to submit a bid with the specifications. 
Therefore, there is no need for too much marketing. Firms of this type, carefully monitors the 
sources in announcing and awarding tenders for public works projects, such as Official Monitor, 
specialized web site (www.e licitatii.ro, etc..), mayor’s websites, specialized publications, etc..  
Private  market  is  on  the  opposite  side,  there  is  a  close  cooperation  between  all  parties 
involved: the beneficiary, designer, builder. The beneficiary know what type of building wishes to 
build and both the architect and the constructor gives him several options and solutions for the 
desired  comfort.  The  private  sector  is  composed  of  several  categories:  commercial  spaces  for 
private  operators  (for  example  commercial  buildings),  spaces  for  rent  (for  example  an  office 
building,  hotels),  industrial  buildings  (for  example  halls),  objective  educational  (schools, 
kindergartens), institutions and places of worship (churches, chapels, etc.).  
Within the construction companies, (usually small), the function of marketing and sales that 
are  combined  in  a  single  department.  Most  construction  companies  do  not  have  any  financial 
strength nor the personnel needed to set up two separate departments. 
Basically,  marketing  staff  works  with  statistical  data  on  various  types  of  construction 
markets by developing lists of potential customers for other groups of staff from the company who 
sell construction services or products. Often, in charge of marketing activity is one and same as in 
charge of business development. It happens quite often that when businesses begin to stagnate or 
while decreases the number of customers and revenues are also adversely affected the owner or 
manager to be engage in strategic planning and marketing process problems. These are signs that 
have taken some measures and plans are needed. 
Strategic planning is a fundamental component of economic activity, but most employers do 
not find time to ensure the prosperity of their businesses. When businesses drop, the managers are 
aware of the importance of the strategic plan but when things go well (on the spur overall market 
growth), the plan is totally ignored. Marketing plan (as a component of strategic planning) must 
have marketing objectives and results to be pursued and a final goal, which indicate where the 
company will be more than one year, two, is a plan with concrete measures to enforce. 
(Too)  Many  construction  companies  prepare  their  marketing  plans  vague,  with  no  set 
deadlines  and  without  practical  issues.  When  turnover  is  heading  into  an  unwanted  direction, 
company executives are interested in what it was done or not. They say: 'We' contracts! We need 
more contracts! but does not review what goes wrong and what is to do further. 
 
Current economic context 
In 2008, According to the "Construction sector in Romania 2009 – Development forecasts 
for 2009 2011", 3
rd edition, an report published by PMR in  2008 (PMR press releases, (2009), “A 
challenging  year  ahead  for  Romanian  construction”,  available  on line  at Annales Universitatis Apulensis Series Oeconomica, 11(2), 2009 
 
 
1057 
 
http://www.pmrpublications.com/press_room/en_A challenging year ahead for Romanian 
construction.shtml),  the value of construction and assembly works in Romania increased by 34% 
nominally (26% in real terms). The fastest growing segment was non residential, which increased 
by 37%. The situation is due to the fact that Romania, a country with a very rapidly developing 
economy, needed mainly non residential buildings, such as office space for services and industrial 
buildings. Structural works are by far the ones covering the largest share of costs of a construction 
project, followed by installation and equipment and site preparations. The smallest shares are held 
by finishings and rental of construction equipment.  
However,  the  problems  on  the  international  financial  markets  affected  the  national 
construction industry. Robert Obetkon, a senior construction market analyst at PMR says that : "The 
most affected year will be 2009, but the following few years may not see a major recovery if the 
international economic circumstances do not improve. The construction sector will, however, be 
supported by the spending of EU funds allocated for Romania, which will be directed mainly into 
infrastructure." (PRLog (Press Release) – Apr 22, 2009,  “Construction sector in Romania 2009” 
available  on line  at  http://www.prlog.org/10222009 construction sector in romania 2009.html).  
Non residential  construction,  which  used  to  be  the  fastest  growing  segment  of  the  Romanian 
construction market, seems to be most affected, because of its overdependence on credit (some 
developers launched before ensuring their financing) to which is added the decrease in demand for 
these buildings. Only those of which construction works were already begun before Q4 2008 will be 
completed in 2009.  
The present situation of residential construction in Romania has been determined by the 
property market. After two years of constantly growing demand which powered the rising prices of 
homes, the residential property market started to contract in Q4 2008. This was mainly the result of 
the  fact  that  banks  have  been  unwilling  to  grant  mortgage  loans  to  the  population.  Similarly, 
developers  are  facing  crediting  difficulties  and  therefore  in  2009  only  a  few  projects  will  be 
delivered,  generally  those  which  were  either  delayed  from  last  year  or  are  in  an  advanced 
construction state.  
 The  economic  climate  in  the  Romania  forced  most  business  owners  to  step  up  their 
marketing efforts as well as reduce their expenses. Therefore, businesses owners will need to review  
how  they  are  creating  value  for  their  customers.  Budgets  for  marketing  will  be  reduced  and 
companies will look for more cost effective ways to reach their target audiences. Maybe being more 
innovative is the key to attract customers to your products. 
 
How you advertise during crisis 
Some companies are quick to cut their marketing budgets in an effort to cut costs in the 
wake  of  an  unforeseeable  future.  I  think  the  exact  opposite  is  necessary.  Reducing  marketing 
budgets in times of crisis, despite innovative marketing being the most efficient solution to weather 
through  a  slowdown  is  a  big  mistake.  History  has  shown  that   companies  which  implemented 
efficient marketing strategies during crises, tend to grow in times of economic recovery. On the 
contrary, companies which reduce their marketing budgets during such periods do our company can 
surv not exceed a growth rate of 17 per cent. Adapting does in no way mean cutting your budget for 
actions that generate more sales. How does anyone expect sales numbers to stay constant or to 
increase, if they tear apart their advertising campaigns? 
A  means  solution  would  be  migration  from  expensive  traditional  advertising  to  online 
marketing and direct marketing because advertisers are able to measure instant returns from small 
investments, which they can then scale up if they work well. 
The  Internet  is  a  means  of  communication  that  marketing  cant  ignore  because  of  it’s 
advantages:    the  Internet  offers  possibilities  to  smartly  communicate  to  a  target  group  in  a 
sophisticated and interactive way, far away from pure advertising language, and trustable and true 
for the recipient, Online Marketing is a clear alternative to the traditional methods of advertising, is Annales Universitatis Apulensis Series Oeconomica, 11(2), 2009 
 
 
1058 
 
a universal source of information .The costs to market products on the Internet are much lower than 
conventional means and may help the retailer to reduce costs in view of the lower profits that are 
expected. So, many companies will be going to the Internet in an attempt to market their products. 
This means the construction companies will have to learn such things as how to design a website, 
how to write a blog, how to participate in the social networks and how to conduct e mail marketing. 
Each company needs to find the tools which will be most useful for their business.  
Many on line marketers are making use of blogs and videos to promote themselves and their 
companies. Blogs offer a way to reveal more information about the company or its products without 
giving  a  sales  pitch  but  I  don’t  think  that  is  the  most  suitable  for  construction  market.  Most 
consumers on the construction market trust the opinion of friends or specialists (even strangers) 
when it comes to choosing products for construction. That is why, online communities like blogs or 
forums don’t have a great success in our country (on construction segment ). If you type the name of 
a hotel into Google, you’ll find fewer or more comments by people who stayed recently and you 
will find them more reliable than the claims on the hotel’s own website. But what will you find 
typing on Google a name of a constructor or a  building materials providers? A list of providers and 
their websites and some online catalogs. There are still many construction companies that have no 
website. Some of them can be found online catalogs.  
The Internet is the ideal medium for direct marketing development because it allows direct 
and accurate targeting marketing messages to specific individuals, especially individuals who were 
identified  and  characterized  on  the  basis  of  their  behavior  on  the  Internet.  It  offers  the  real 
possibility  of  implementation  of  marketing  techniques  individually  (one     to     one  marketing). 
Involving  users  in  the  transactional  process  is  greatly  increased,  because  they  can  choose 
promotional messages or information they wish to access. Getting an instant feedback from users, is 
extremely effective in providing services to services with direct effects on consumer loyalty. 
 
Why should we turn to direct marketing in the construction marketing during crisis? 
1. Because direct marketing is targeted. Targeting means to achieve a very well defined 
target segment and send them personalized messages. This involves:  
  defining the target by using socio demographic, economic and financial indicators(income, 
gender, age, environment: rural / urban, etc. if the beneficiary is a person, turnover, number of staff, 
profit type of work performed, etc. if the company sales to a company ( activates in a business to 
business market)  
  test the various categories of potential consumers / customers  
  customize the message according to characteristics of the target 
 
2. Because direct marketing is interactive. Direct marketing initiates a dialogue between the 
seller (the vendor) and buyer (or potential customer). Interaction is achieved through the fulfillment 
of two conditions: establishing a means of response to the target: call, enter the site, send SMS, 
complete a questionnaire, comes at one place, buy, etc.. and use of a stimulus (offer, customizing 
the message, personal visit) to get a reaction. 
 
3. Direct marketing is measurable. At the end of direct marketing campaign you will know 
exactly how much money has been invested and how much money has been recovered by analyzing 
the efficiency indicators 
 
 
. 4. Direct marketing is aimed at cost. It will be very easy at the end of the campaign to 
calculate profitability.  
 
5. For direct marketing can be tested. Unlike classical advertising, direct marketing can be 
tested.  Testing  consists  in  achieving  one  or  more  monitor programs  to  promote  proper 
implementation.  After  testing  to  draw  some  conclusions  and  based  on  their  campaign  directly 
marketign results will be higher. Thus, much of the budget that could be invested wrong is saved. 
 
 Annales Universitatis Apulensis Series Oeconomica, 11(2), 2009 
 
 
1059 
 
6. Direct marketing builds loyalty. As practice has shown many times, winning a customer 
can cost ten times more than his preservation. Customers are a permanent source of reference and 
continuous sales, they will pay more when you consider that the services / products worth using 
detailed  database  specialists  can  adapt  their  offer  to  the  specific  needs  of  each  client  and 
communicate with him personally.  
 
7.  Direct  marketing  is  easy  to  "hid".  Direct  marketing  can  take  any  form:  a  phone,  a 
brochure, a person who comes directly to potential customers, a mail, a TV show, a radio spot, etc.. 
The more creative the more results will be higher.  
 
8. Direct marketing uses a variety of channels of communication: from advertising by mail, 
magazines, newspapers, telephone, TV, radio, Internet and more recently, mobile phone. 
 
Conclusions 
Consumers have curtailed their spending and because of that are seeking bargains more than 
ever. So, they will not be spending the exorbitant amounts of money they were accustomed to 
spending in the past. In a crisis people buy brands they know and trust because they what not to 
spend their money on something that doesn’t last. Even though there is less money flowing in the 
economy, customers still need products. The companies will need to go back to the basics of selling 
and hone up on your skills and in the same time, must learn new ways of marketing their products 
in a way which will attract customers to their business. People buy  because of the value they 
perceive in products. Therefore, the companies must help their prospect to see value in buying their 
products. The clients must also feel confident about the company’s ability to resolve their problem. 
People are still going to buy what they need and want badly enough, they just need to find 
your product/service and company before they find your competitor’s. That is why, the  need that a 
company to be “omnipresent” is greater than it has ever been before. In time like this of uncertainty, 
the company must market more aggressively, and in the same time, manage costs effectively. 
Unlike  other  industries,  building  industry  comes  with  a  unique  specific  feature,  that 
companies need to sell "products" through relationships established with recipients. The effort to 
obtain lucrative contracts is a collective, not individual. The work of construction companies was, is 
and  will  always  be  founded  on  direct  relationships,  face  to  face  with  customers.  
In other economic branches can happen that sales representatives of some companies do not have to 
meet customers face to face   but not in the building industry. Regardless of financial instruments 
and technologies, construction industry will remain "a world of concrete and glass", an area that is 
concrete, tangible. 
 
 
References: 
1.  Pryor  P.,  2005.  Marketingul  serviciilor  de  construcţii,  Codecs  Publishing  House, 
Romania, Bucure ti. 
2. Stone B., Jacobs R.,  2000.  Metode de succes  în marketingul  direct, ARC  Publishing 
House, România, Bucure ti. 
3. Veghe  C., 2003. Marketing Direct, Uranus Publishing House, România, Bucure ti. 
4. www.pmrpublications.com 
5. www.prlog.org 
6. http://marketingpr.suite101.com 
7. www.globalchange.com 

MARKETING ON THE CONSTRUCTION MARKET IN A ECONOMIC CRISIS

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