Marketing Architectural Services American Institute of Architects Lubbock Chapter October 10, 2007 Bob McDonald Rawls College of Business Texas Tech University
Dec 22, 2015
Marketing Architectural
ServicesAmerican Institute of Architects
Lubbock ChapterOctober 10, 2007
Bob McDonaldRawls College of Business
Texas Tech University
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Importance 2004: > $1 Trillion in construction in US
Represents 4.7% of US GDP
Impact on many aspects of society including housing, commerce, health care, education, worship, & entertainment
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Uniqueness Marketing of architectural and other
professional project services differs from marketing of other services: Demand is discontinuous Each product is unique Projects are complex
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Profession
Requires the ability to apply scientific principles to solve a problem
Skill based on theoretical knowledge
Developed through education & training
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Product: Professional Services Specialized knowledge and skills
Formal education Supervised practice Demonstrated competency via licensing
examination
Enables architect to create complex, unique, highly customized product that satisfies clients’ needs and budget.
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Consequences of Licensing Public protected from unqualified
practitioners Creates barrier to entry Customers incapable of differentiating
among licensed professionals Difficult for professionals to differentiate
themselves from other practitioners
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Differentiation Non-commoditization
Value Added
Sell a credible promise Capable of designing project more effectively
and efficiently than competitors
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Credible Promise Existing clients
Rely on trust earned through experience Relationship marketing
New clients Rely on cues
Reputation Track Record Staff, offices
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What works? Research Project
Interviews with 9 informants 7 principals, each > 25 years experience 2 marketing directors, each > 10 years experience
All 9 work for highly successful firms 3 firms, ranging from 25 to 150 employees Each has been in business more than 20 years Two firms are multi-disciplinary, one specialized Same large city with > 200 firms
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Conceptual Framework
External RelationalFactors
Interaction TiesTrust & Commitment
Internal RelationalFactors
Trust & Commitment
Operant Resources/ Capabilities:
Market SensingCustomer Linking
Marketing Strategy MakingMarketing ResponseProject Development
SuccessfulProject
Marketing
McDonald and Madhavaram 2007
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External Relational Factors Traditional Long-Term Relationships
Core of successful marketing strategy
Successful projects demonstrate value Projects inherently long and intense
relationships
But…
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External Relational Factors II Projects are lumpy
Likely to be long gaps between projects
Results in “sleeping relationships”
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External Relational Factors III
Pursue clients with multiple small projects
rather than fewer large projects e.g., multiple remodel vs. build from scratch
May work better for smaller firms
Maintain contact between projects One interiors firm touches base quarterly
Keep fingers on pulse
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External Relational Factors IV
Client following strategy Go on the road
Establish satellite offices
Clients with multiple project types Institutions, government, schools, hospitality
Referrals e.g., Hi-rise residential Cathedral
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Internal Relational Factors Within Firm: Principals often find leads for
each other
Within Network: Engineers, consultants, contractors, financiers, real estate brokers
Expand business network
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Operant Resources/Capabilities Operant resources: dynamic resources that
produce effects such as skills and knowledge, or organizational processes and core competences
Successful firms are market-driven
Leverage capabilities
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Market Sensing Capability Systematically gathering, interpreting and
using market information quicker and more effectively than competitors
Networking: Principals responsible for business development, i.e., sales, marketing directors focus on marketing
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Market Sensing Capability II Tie into large institutional and government
capital improvement plans
Capitalize on personal connections
Cannot wait for the RFP
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Customer Linking Capability Creating and managing close customer
relationships
Customers believe they have unique needs, especially as projects become more complex
Firms in large markets (> 500K) developing expertise in particular project types to compete
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Customer Linking Capability II Market-Facing Studios
Health care, commercial, religious, interiors, public works
Understand customer’s needs better Understand market better Develop specialized knowledge and skills
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Customer Linking Capability III Principals responsible for each studio must
be passionate about the project type
Expertise in a project type differentiates the firm in the local, regional, and even national and global markets
Need to emphasize expertise
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Marketing Strategy Making Capability
Structure: Geographic &/or Project Type
Follow markets to anticipate change Principals must keep fingers on pulse
Conduct a thorough market analysis Marketing Directors and Principals
Analyze Failures (Airport Garage)
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Marketing Strategy Making Capability II
Leverage expertise Hi-Rise Residential Long-Term Care
Pursue large, efficient projects Interiors pursued 60 – 80,000 sq ft projects Law, energy, accounting, consulting Not many in Lubbock
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Marketing Strategy Making Capability III
Traditional Market Planning SWOT Analysis Segment market and choose target segments Competitor analysis Forecasting Staffing: especially important in professional
project services
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Marketing Response Capability Must demonstrate “value-added” Clients often view architectural services as
commodities Must be innovative Develop new market offerings, e.g.:
Convert building plans to CAD Market Analysis/Repositioning Projects
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Marketing Response Capability Promotion
Public Speaking Seminars Technical Symposia Project Postcards Christmas Cards Hire market consultants, e. g., minister Newsletter Awards
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Project Development Capability
Raison d’etre
Conceptual, Technical & Human Skills
Coordination of multiple consultants
Contract Management
Code Knowledge
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Project Development Capability II Hire the best people Use the best consultants Continuous Training & Development Organizational Values
e.g., Quality Drawings Contractors value & can sharpen pencils Hand Letter Example
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Success Journey not destination Hard work Internal & External Relations Operant Resources (Capabilities)
Market Sensing Customer Linking Marketing Strategy Making Marketing Response Project Development