Marketing Practices of U.S. Contractors

Abstract

The construction industry possesses characteristics of the production and service industries. This uniqueness requires marketing practices tailored specifically to match the construction market. A questionnaire survey of 65 U.S. contractors was conducted to determine the extent to which they are implementing a modified marketing mix theory that is compatible with the construction industry. The modified marketing mix theory recommends that contractors confront marketing from five perspectives, known as the five P’s of marketing: product, price, promotion, place, and people. This study showed that the five P’s of marketing are used by U.S. contractors in this decreasing order: product, price, place, promotion, and people. According to the survey results, U.S. contractors allocate about 1.5% of their annual revenue to marketing, but they may be spending more than they report. There seem to be only few differences between contractors that negotiate their contracts versus contractors who competitively bid their contracts, larger versus smaller companies, and contractors with a higher success rate in getting new contract awards versus contractors with a lower success rate.