Chapter V

Managing the Marketing Function

Marketing is a group of activities designed to facilitate and expedite the designed to

facilitate and expedite the selling of goods and services, selling of goods and services.

The marketing concept states that the marketing concept states that the engineer must try
to satisfy the needs of engineer must try to satisfy the needs of his clients by means of a set of his
clients by means of a set of coordinated activities coordinated activities

When clients are satisfied with what company offers, they continually provide company
offers, they continually provide business.

The Engineer and the 4 P’s of Marketing

The engineering organization will be able to meet the requirements of its clients (or
customers) depending on how it uses the four P’s of marketing which are follows:

1. Product (Service)
2. Price
3. Place
4. Promotion

Product

In the marketing sense, the term “product” includes the tangible (or intangible) item and
its capacity to satisfy its specific need.

The services provided by the engineer manager will be evaluated by the client on the
basis whether or not his or her exact needs are met.
 When a competitor comes into picture and sells the same type of service, the pressure to
improve the quality of services sold will felt.

When the improvement is not possible, “extras” or “bonuses” are given to clients. An
example is the construction company that provides “free estimates” on whatever inquires on the
construction that are received.

Price

Price refers to “the money or other considerations exchanged for the purchase or use of
the product, idea or service”.

Some companies use prices as a competitive tool or as means to convince the customer to
buy. When products are similar in quality or other characteristics, price will be strong factor on
whether or not a sale will be made.

When a type of service becomes standardized, price can be a strong competitive tool.
When a construction firm, for instance, charges a flat 10% service fee for all of its construction
services, a competitor may charge a lower rate. Such action, however, will be subject to whether
or not the industry will allow such practice.

Place

If every factor is equal, customers would prefer to buy from firms that are easily
accessible to them. If time is of the essence, the nearest firm will be patronized.

It is very important for companies to locate in places where they can be easily reached by
their customers. Not every place is the right location for any company.

When a company cannot be near by the customers, it uses other means to eliminate or
minimize the effects of the problem.
Some of these problems are:

 Hiring sales agent to cover specific areas;

 Selling dealers in particular areas;
 Establishing branches where customers are located;
 Establishing franchises in selected areas.

Manufacturing companies can choose or adapt all of the above-mentioned options. Service
companies like construction firms adapt the modified versions. An example is the engineer
manager of a construction firm who gives commissions to whoever could negotiate a
construction contract for the firm.

Promotion

When engineer managers have products or services to sell, they will have to convince
buyers to buy from them. Before the buyer makes the purchasing decision, however, he must
first be informed, persuaded, and influenced.

There are promotion tools available and the engineer manager must be familiar with them
if he wants to use them effectively. These tools are as follows:

 Advertising
 Publicity
 Personal Selling
 Sales Promotion

Advertising

Nylen defines advertising as “a paid message that appears in the mass media for the
purpose of informing or persuading people about particular products, services, beliefs or
action”.
 The mass media referred to include television, radio, magazines and newspapers. If the
engineering manager wants to a large number of people, he may use any of the mass media
depending on the specific needs and his/her budget.

Publicity

The promotional tool that publishes news or information about a product, service or idea
on behalf of a sponsor but is not paid for by the sponsor is called publicity. The mass media is
also the means used for publicity.

If the engineer manager knows how to use it, publicity is very useful promotional tool.
His/her message maybe presented as news item, helpful information, or an announcement.

Personal Selling

A more aggressive means of promoting the sales of a product or service is called personal
selling. It refers to the”oral presentation in a conversation with one or more prospective
purchasers for the purpose of making sale”.

Personal selling may be useful to the marketing efforts of the engineer manager. If, for
instance, he/she is the general manager of a firm manufacturing spare parts, he may assign some
employees to personally seek out spare parts dealers and big trucking companies to carry their
product lines.

Sales Promotion

Any paid attempt to communicate with the customers other than advertising, publicity
and personal selling, may be considered as promotion. This includes displays, contests,
sweepstakes, coupons, trading stamps, prizes, samples, demonstration, referral gifts etc.

Contests and sweepstakes are very popular sales promotion tools.

Strategic Marketing for Engineers

Companies, including those managed by engineer managers, must serve markets that are
best fitted to their capabilities. To achieve this end, a very important activity called strategic
marketing is undertaken.

Under thus set-up, the following steps are made:

1. Selecting a target market

2. Developing a marketing mix

Selecting a Target Market

A market consists of individuals or organizations, or both, with the desire and ability to
buy a specific product or service.

To maximize sales and profits, a company has the option of serving entirely or just a
portion of its chosen market.

Within markets are segments with common need and which will respond similarly to a
marketing function

The Construction Management

Residential Segment Industrial Segment Government Segment

Actual Construction Actual Construction Actual Construction

Construction Materials Construction Materials Construction Materials
Sub- Sub- Sub- Sub- Sub- Sub-
Segment Segment Segment Segment Segment Segment

Figure 5: The Construction Management

 An analysis of the various segments of the chosen markets will help the company make a
decision on whether to serve all or some of the segments. The segments or segments chosen
become the target market.

In selecting a target market, the following steps are necessary:

1. Divide the total markets into groups of people who have relatively similar product or
service needs.
2. Determine the profit potentials of each segment.
3. Make a decision on which segment or segments will be served by the company.

Factors Used in Selecting Target Market

A target market must have the ability to satisfy the profit objectives of the company. In
selecting a target market, the following factors must be taken into consideration:

1. The size of the market, and

2. The numbers of the competitors serving the market.

Developing a Marketing Mix

After a target market has been identified, a marketing mix must be created and
maintained. The marketing mix consists of four variables:

1. Product
2. Price
3. Promotion
4. Place

Given a marketing environment, the engineer manager can manipulate any or all
variables to achieve the company’s goals. The quality of the product may be enhanced, or the
selling price made a little lower, or the promotion activity made a little more aggressive, or a
wider distribution area may be covered. Any of all the foregoing may be undertaken as
conditions warrant.
Source:

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