THE ROLE OF MARKETING ACTIVITIES IN REDUCING RISK FOR CONSTRUCTION COMPANIES

Abstract

The construction industry could be described as a playground for intense competition, with a high complexity of operations that are performed within the boundaries of projects, with high risks emerging from the cyclicity of economic activity and with adversarial relations between the clients and the contractors, the contracts often being concluded after a process of competitive bidding based on lowest price. Other major risks identified in construction industry can stem from the behavior of an individual stakeholder or from the interfaces among internal stakeholders (sub-contractors with different cultures and values), risks termed network project risks. In this context, the development of trust-based relationships is vital in construction industry. Such long-term relationships with clients and other parties in the business network are the subject of relational marketing, which can prove its effectiveness for the business success of construction industry actors. The paper reviews the critical conditions that have to be fulfilled by the collaborative relationships called partnering, as manifestations of a relationship marketing approach, in order to bring added value to the involved parties.

Keywords

• relationship marketing
• construction industry
• project management
• partnering