Role of Marketing Intelligence in Making Pricing Policy in Construction

Abstract

The pricing strategy predominantly used in construction is cost based. But this pricing logic may lead to the underpricing or overpricing of a bid offer. In response to this problem, alternate pricing strategies are proposed in this paper that make use of market-based approaches. These models are centered on marketing intelligence functions. In this paper, marketing intelligence systems developed and used in manufacturing industries are explored, including marketing research, marketing information systems, and decision support systems. The current developments and practices of marketing intelligence in construction are reviewed. The findings of a survey that investigates the marketing intelligence and pricing strategy practices of the largest 400 U.S. contractors are presented. In conclusion, it is discovered that contractors use mostly traditional marketing intelligence strategies. It is recommended that contractors develop computerized intelligence activities such as using resources on the Internet and developing management information systems and decision support systems. As expected, it is found that “marketing intelligence capabilities” is a significant variable associated with pricing strategy.