Marketing for Integrated Building Systems (IBS) requires two separate discussions: What is marketing exactly? And how do I branch out into IBS? Regarding marketing: “Its purpose is to create a customer,” said Peter Drucker, an American business philosopher and author on marketing. “The business has two-and only two-basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are 'costs.'” The customer is the reason why a business exists; therefore, a marketing strategy has to center around the customer's wants and needs. Knowing your market is knowing your customers.

What is marketing, in general terms? Marketing is not sales. Marketing is researching, gathering and developing the data that will provide the blueprint for a marketing strategy. Sales' function is the implementation of marketing strategy.

To someone who is not a marketing professional, the discipline might seem like it could be summarized by the following concept: “If you lower the price, you can sell more.”

This is a gross oversimplification. Marketing is a process of planning and executing the conception, pricing, promotion and distribution of people, places, ideas, goods and services to create exchanges that will satisfy individual and organizational objectives.

Today, marketing must be understood not in the sense of making a sale, but in the sense of satisfying customer needs. The most basic concept underlying marketing is identifying human needs.

Executives who adopt the marketing concept see customer satisfaction as the path to profit and a better understanding of what it takes to satisfy a customer. To achieve these objectives it is useful to take the customer's point of view.

Customers look at a market offering from two sides. One side deals with potential benefits of the offering; the other considers what the customer has to give up to reap those benefits.

From a contractor's point of view, the question is “How do I protect the future of my business?”

Marketing product diversity satisfies both the customer's and the contractor's point of view. Diversity gives customers the newest technology at a best price, while contractors benefit from more flexibility and protection from seasonal marketing swings and, therefore, can retain their existing customer base.

Because of the demand from customers and the challenges of competition, contractors are forced to be diverse with their marketing strategies and product lines. New products are emerging, giving contractors the opportunity to become more diverse and profitable.

To enter into IBS-or really, any new market-organizations must take the following steps to ensure the success of the marketing effort:

°Communicating

°Reviewing the organization structure

°Marketing planning

Communication

Communicating with the customer is the first step. Knowledge of the customer's present needs and future wants is essential. There is no sense allocating resources if the demand of your customers is not there.

There should also be an understanding that it is the contractor's responsibility to inform the customers of new technology. This can lead to a first-time opportunity. Any marketing strategy must include a plan to obtain the information needed from the customer base. This information will dictate the products needed and the sales approach taken.

Customers' wants and needs are obtained by communicating with the customer by a face-to-face meeting, telephone call or e-mail. A face-to-face meeting is the best way to develop a relationship with customers and gather information that would otherwise be difficult to obtain by using other media.

Even though you may be able to speak with the customer in a phone call, it can be difficult to cultivate trust and develop a relationship over the telephone. E-mail is a sterile media and does not allow you to develop a relationship, let alone trust, either.

All customers should be asked two questions. First, what are their present needs and how would they best use new technology to enhance and upgrade their present system? Second, what direction does the customer see the company going in the future and what will be needed to meet those goals?

Most contractors have long-term growth projections in their business plan, which helps in establishing a direction for financial and human-resource allocation and product development.

When building a relationship with customers, you are given the opportunity to discuss issues of concern, thereby diverting potential problems. With a strong relationship, customers trust you as a supplier and depend on you to maintain their present systems and fulfill their future product needs. We then must review our infrastructure to support the new markets.

Review the organizational structure

By maintaining a status-quo, complacent approach, contractors may get locked into only offering conventional electrical services and will have a difficult time understanding changing markets and technologies. Not recognizing the industry changes creates a situation where contractors will have to deal in limited competitive markets that have become price sensitive with me-too products.

A complacent contractor will not meet customer needs or retain a strong customer base. One of the reasons for apathy may be in the way many contractor businesses are directed.

Most contractors are family-owned businesses that have evolved somewhat over the years. From generation to generation, the same way of doing business is applied to the current market. To counteract this complacency, contractors have to evaluate their organizational structure to understand how to apply the two business cornerstones: effective and efficient.

Being effective is the priority because it directly affects the customer. The most successful organizations are both effective and create greater profits by being efficient.

Contractors have misidentified their role in the marketplace. Organizations have identified themselves by their tangible product and not by the service they provide.

Contractors are in the service business, not just the electrical business. Today's electrical work remains, for the most part, unchanged; but there have been changes in the market, industry and, most important, customers.

Manufacturers have dedicated large portions of research and development money to the development of new IBS technology. Technology moves forward because our customers are demanding the latest technology and the upgrading of their present systems.

The electrical work has become the smaller piece of the integrated building project, resulting in electrical contractors becoming subcontractors to larger contractors. Electrical contractors can not continue to believe that their organization and the industry will continue operating the same way it has for years.

Contractors have adopted the “if it's not broken, don't fix it” attitude. This attitude has led to complacency, apathy, lack of growth and no flexibility to change.

Instead of following the current technology-oriented approach to business strategy, contractors must develop a marketing-oriented approach. Marketing starts with the customer, but you must have a plan.

Marketing planning

Planning is critical in directing today's businesses. Contractors need to develop a business plan that includes a marketing plan and marketing strategy.

We can no longer operate on a day-by-day basis because the market, products, customer and competitors are too sophisticated. If we fail to plan, we then plan to fail.

When preparing an IBS strategy, marketing plans become critical. You must effectively allocate resources, both human and financial.

A written marketing plan affects the entire organization:

°Your marketing plan will give you and your employees a schedule from which to work.

°Your marketing plan will establish criteria to measure the success of your strategy.

°Your marketing plan will provide you with a starting point. If your results are not what you wanted, you will be able to go back to your plan and revise it.

There are four parts to a marketing plan: product plan, marketing strategy, sales plan and advertising/promotional plan.

Product plan

This is developed by two input sources: customers and suppliers. We communicate with customers to ascertain what products our customers need and want; they dictate what products are needed, while suppliers, especially manufacturers, produce products to meet those needs. Trade shows are an excellent way to observe trends in products and an industry's direction.

Marketing strategy

A marketing strategy takes the products for the new market and develops a blueprint of how the organization will get the information and products to the customer. It will lay out a plan for selling, pricing and delivery. This data will provide the information the contractor will need to plan for purchasing the products, manufacturers/distribution agreements and personnel development needed to fulfill the organization's commitment to its customers.

Sales plan

A sales plan allocates who will implement what part of the marketing strategy. Since most contractors do not have a sales team, it is important that someone be appointed to be the point person for the sales effort.

Advertising/promotional plan

The most important part of this plan is the development of a quality piece of literature. This is a sophisticated market; contractors have to rise to the level of the customer's expectation and perception.

This means displaying your history, versatility, competence and raising your profile. I suggest to contractors that they should stay away from showing unfinished construction sites. A sophisticated customer wants to see the finished product.

IBS is a billion-dollar market. Contractors can be part of this growth and the diversity of this new technology. The organizations that are buying this new technology are our present customers.

We have a responsibility to our organization, industry and our customers. We must be consistently adjusting to the environment so that we can be successful in taking advantage of the opportunities that IBS and future new technology bring to us all. EC

MARTIN is a business consultant for Alan Martin & Assoc., consultant for SBA, speaker and adjunct instructor with NECA-MEI, based in Morris Plains, N.J. He can be reached at 973.540.1298 or necamartin@aol.com.