CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF STUDY

The construction sector is an essential part of any economy because of its size and the potential role it can play in the development efforts of the economy (Nisaet al., 2006). Construction is often used as an indicator of socio-economic development of a nation and, therefore, it is apparently that construction cannot be elicited in the process of socio-economic development. Its contribution to the national economy is well represented through the construction value addition, investment, employment, trade balance and sartorial linkages. Thus, quantity surveying was succinctly defined by the Royal Institution of Chartered Surveyors (RICS) as the profession concerned with ensuring that the resources of the construction industry are utilized to the best advantage of the society by providing, amongst others; the financial management for projects and a cost consultancy service to both clients and contractors during the whole construction process. Willis and Ashworth (2006) asserts that the Quantity Surveyor (QS) is the one who “ensures that the resources of the construction industry are utilized to the best advantages of society by providing the financial management for projects and cost consultancy services to the client and designer during the whole construction process. As emphasized, being one of the key professional experts in the construction sector, quantity surveyors have the utmost responsibility to address the key cost, financial and contractual issues of the construction process, which is always highly influenced by the environmental parameters, which are very sensitive to changes and are unique for every project.

Marketing is practiced all over the world and it is referred to as the activity of getting company to sell what the customer “wants” (goods or services). Its importance for the survival of companies cannot be overlooked (Waugh, 2004; Arslanet al., 2009). Polat and Donmez (2010) established that effective marketing plays an important role in the overall success of companies and it is critical for any business to grow in the competitive environment. The central objective of marketing quantity surveying profession according to Usman (2001) is to create a positioning strategy within the total market. There are many studies on the concepts of marketing in the construction industry. However, many studies show that construction firms are slow in adapting marketing principles and marketing is not integrated into the structure of the firms (Ene, 1995; Winter &Peerce, 2000; Bennett, 2005; Adegbile, 2008). Ganah, Pye and Walker (2008) investigated marketing strategies in the construction industry and the challenges facing small and medium enterprises in the development of these strategies. They found that there is a lack of understanding of construction marketing and strategies within small and medium enterprises in the construction industry. They also found that the strategy for marketing is nonexistence in most instances (Ashworth & Hogg, 2007). The profession of Quantity Surveying could be said to be as old as human existence and civilization because according to Moneke (2001), no wise person has ever embarked on a construction project without first guess estimating the financial implications.

Low (1991) has observed that marketing has attracted only little attention among construction contractors and professionals alike. Nevertheless, more recently commentary has tended toward recognition that marketing has made a significant contribution to this industry, and it has received more attention in the construction field (Moore 1984; Winter & Preece, 2001). However, a number of professional marketing practitioners point out that many properties and construction firms still pay lip-service to marketing, and fail to address their substantive marketing management capabilities (Humber, 1989). Nevertheless, the role of the Quantity Surveyor within the Nigeria construction environment is of great importance and is over emphasis to both clients and other industry professionals. Being in charge of financial matters carries with it a great responsibility and the Quantity Surveyor has the expertise to provide independent advice on these matters. Unfortunately, due to a lack of understanding by other industry professionals, the Quantity Surveyor, who is expected to fulfill the role of cost controller, is left simply playing the role of cost monitor. The client employs the Quantity Surveyor to assist in maintaining a budget surplus while the other consultants act without regard for the budget and without the Quantity Surveyor’s input, leading to a budget deficit which the Quantity Surveyor must take responsibility for.

Ojo (2011) examined the existing marketing strategies with the aim of determining their level of usage and the effectiveness of marketing among Nigerian Construction Professionals. She concluded that the level of awareness of marketing strategy is low among the construction professionals. Usman, 2001; and Olaniyi, Sanni&Garba (2011) investigated the marketing tools for creating awareness and found that press, radio, TV, personal contact, brochures, presentation, client entertainment, advertising, seminars, newsletters, sponsorship, authorship and exhibition are tools for creating awareness and spreading the Quantity Surveying services. Despite the fact that many research works on marketing abound, none has been recorded as a standard strategy used for positioning professional services in the overall national economy. Therefore, this study shows the collections of existing marketing strategies recommended by marketing professionals for the advancement of Quantity Surveying services within the construction industry and the overall economy and try to add more recommendations to the profession services in order to overcome the neglect.

An exigent construction industry demands all construction firms including Quantity Surveyors to continuously improve their services to create a competitive edge. Employing the right strategy is crucial as rivalry is not limited to existing QS firms but extends to new entrants and foreign firms. An uncertain financial climate has left companies with less opportunities and resources to commission new building projects, but in certain professions, this financial instability has caused a lack of job security. Therefore, the role of the quantity surveyor has increased in importance as they are perceived to be responsible for ensuring that the company meets its financial targets on its projects within the construction industry (Fanous, 2012). Quantity surveyors are traditionally known for their cost estimating services in the construction industry. However, concurrent with escalating demands from clients and pressures from the industry, quantity surveying (QS) firms have diversified their range of services beyond these traditional boundaries. A consultant QS will provide services to their clients from the initial appointment until the project concludes, with a certain amount of professional fees that in turn need to be used to sustain their firms. The survival and eventually the growth of the firms depend on the number or continuity of projects they secure without intermission. QS Firms need to respond to new opportunities, new geographical locations and new ways of doing business. They should counter environmental threats, seek project opportunities (Davies, Gilbert and Swartz, 2005), be vigilant and adapt to current market changes by adopting alternative strategies that are guided by decisions to enhance performance.

The construction industry in Malaysia is highly competitive (Adnan and Jusoff, 2009). The industry is changing due to new technology advancements, research and active collaboration between the government and various professional bodies that promote continuous improvement in the industry. There were a total of 316 registered QS firms under the Board of Quantity Surveyors Malaysia (BQSM) in 2011, which were actively competing in the industry. This number is expected to increase by the year (BQSM, 2011). Apart from competing with local existing QS firms, the open market, globalization and the fast pace of change in information technology means that competition is no longer localized (DeNisi, Hitt and Jackson, 2003). The role and scope of services that QS firms offer are continuously expanding parallel to the latest demands from clients and the construction industry (Hanid et al., 2007). The existence of small, medium and large QS firms have resulted in a different level of competition for firms with a strong reputation that are well established. Such firms are at a more advantageous position to secure new projects, but new or smaller firms have to struggle to build their reputation and seek new clients. According to Bishop and Megicks (2002), the different sizes of firms place greater emphasis on the role of diverse strategic positions. The QS firms should be cognizant of their strengths and weaknesses to overcome the challenges of increased competition.

Choosing the best-suited competitive strategy is an essential key to success. A clear strategy will direct the firm to identify their competition's capabilities and competitive stance. Porter (1985) has introduced three generic strategies: cost leadership, differentiation and focus strategy. Warszawski (1996) added a growth strategy to this list. This paper focuses on these four types of competitive strategies and their application to QS firms in Malaysia. The study was conducted during a five-year period of economic fluctuation to investigate which strategy the firms preferred when battling economic instability and how well these strategies performed when focused on QS firms in Malaysia. Although the study focused on QS firms in Malaysia, the findings are useful to any service-provider firm as they discuss the suitability of generic competitive strategies in the construction industry and relate them to business performance. The focus of this study on strategies used during economic fluctuation indicates that the firms cannot limit themselves to one type of strategy but need to adjust accordingly to suit the present needs, regardless of the firm size.

1. STATEMENT OF THE PROBLEM

In spite of the foregoing, it is observed in practice that marketing in professional QS firms is viewed as less important to the management and survival of the firm than finance and personnel issues (Morgan, 1992). According to Rutland (1991, p.37), the reasons for the neglect of marketing by construction firms are the facts that Marketing is seen as unimportant and unprofessional, the necessary skills are lacking, clients’ immediate needs are always put first, crisis management prevails in the firms, the discipline for a sustained marketing effort is lacking, and there are no written, measurable marketing plans. Pearce (1992) traced the origin of the apathy to marketing by construction professionals to the ‘English Gentleman’ behaviour of the early construction professionals. The early professionals pretended that they were not in business, but were merely responding to their peers’ requests for services. This tradition has been handed down to generations of construction professionals to the extent the limits of marketing observed in practice are more stringent than those actually set by professional codes of ethics. In Nigerian QS firms, marketing is treated with even more levity: marketing expenditures are often viewed as short term costs (rather than long term investments); and as financially unaccountable (Schulz & Gronstedt, 1997). Clark (2004); Rust, Lemon & Zeithaml, (2004); Srinivasan & Bharadwaj (2004); O’Sullivan & Abela (2007) and Seggie, Cavusgil & Phelan (2007) linked the lack of use of marketing with the difficulty in measuring return on marketing. Ifezue (2005) blamed it on marketing’s intangible nature, which hinders its quantification for planning purposes. Jaafar, Abdul Aziz & Wai, (2008) attributed it to lack of management commitment, understanding and acceptance of the marketing concept, and the incompatibility of marketing with ‘professional ethics’ Kadiri & Ayodele (2013) blamed it on the absence of good marketing strategies in QS firms. As remarked by Naranjo, et al., (2011), although marketing in the manufacturing sector is a well-known discipline, in the construction industry it is still misunderstood, as a result marketing is not viewed as a legitimate management activity in most QS firms (Tarawneh, 2013). The prevalence of these barriers to QS service marketing in Nigeria contributed to the finding that the level of marketing by professionals in the Nigerian construction industry is inadequate compared to the severity of competition in the industry (Ojo, 2011).

1. AIMS AND OBJECTIVE

The main aim and objective of this research is evaluating competitive marketing strategies for quantity surveying profession (a case study of FCT Abuja).

Also, two key questions become apparent from the hindrances to the marketing of QS professional services: the first relates to the actual limitations set by professional codes of ethics on marketing by professionals, while the second focuses on the framework and strategies for the adoption of marketing as a management tool by QS firms. The aim of this research is to develop a framework for the evaluating of marketing strategies by QS firms with a view to improving the impacts of the use of marketing strategies on the performance of QS consultancy firms in Nigeria (case study of FCT Abuja). The objectives of this research are to identify and evaluate the strategies for marketing by Quantity Survey firms in Nigeria and to develop a framework for the adoption of marketing strategies by the firms.

1. RESEARCH QUESTION

1. What is the relationship between marketing strategies and quantity surveyors?
2. How does marketing strategies help quantity surveyors in FCT Abuja?
3. How does competition help in the formation of marketing strategies by quantity surveyors?
   1. STATEMENT OF RESEARCH HYPOTHESIS

1. HO: evaluating of competitive marketing strategies has no significance to quantity surveying profession.
2. H1: evaluating of competitive marketing strategies has significance to quantity surveying profession.
   1. SIGNIFICANCE OF STUDY

Evaluating competitive marketing strategies for quantity surveying profession will be of a great benefit to quantity surveyors and contractors as well. It will help quantity surveyors to understand their competitors and the appropriate measure as regards marketing strategy to apply to stand out as the best.

Finally, it will be serve as a research tool to other researchers on competitive marketing strategies for quantity surveying profession.

1. SCOPE OF STUDY

The study covers evaluating of competitive marketing strategies for quantity surveying profession (a case study of FCT Abuja).

1. LIMITATION OF STUDY

1. Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
2. Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
   1. DEFINITION OF KEY TERMS

Evaluating

Evaluation is a process that critically examines a program. It involves collecting and analyzing information about a program's activities, characteristics, and outcomes. Its purpose is to make judgments about a program, to improve its effectiveness, and/or to inform programming decisions (Patton, 1987).

Evaluation is a systematic determination of a subject's merit, worth and significance, using criteria governed by a set of standards. It can assist an organization, program, design, project or any other intervention or initiative to assess any aim, realisable concept/proposal, or any alternative, to help in decision-making; or to ascertain the degree of achievement or value in regard to the aim and objectives and results of any such action that has been completed.[1] The primary purpose of evaluation, in addition to gaining insight into prior or existing initiatives, is to enable reflection and assist in the identification of future change.

evaluation is often used to characterize and appraise subjects of interest in a wide range of human enterprises, including the arts, government, health care, and other human services. It is long term and done at the end of a period of time.

Marketing

According to the traditional concept, marketing means selling goods and services that have been produced. Thus, all those activities which are concerned with persuasion and sale of goods and services, are called marketing. This concept of marketing emphasises on promotion and sale of goods and services and little attention is paid to consumer satisfaction.

The modern concept of marketing considers the consumers’ wants and needs as the guiding spirit and focuses on the delivery of such goods and services that can satisfy those needs most effectively. Thus, marketing starts with identifying consumer needs, then plan the production of goods and services accordingly to provide him the maximum satisfaction. In other words, the products and services are planned according to the needs of the customers rather than according to the availability of materials and machinery. Not only that, all activities (manufacturing, research and development, quality control, distribution, selling etc.) are directed to satisfy the consumers.

‘Marketing’ as stated earlier, emphasises on earning profits through customer satisfaction. In marketing, the focus is on the consumer’s needs and their satisfaction. ‘Selling’ on the other hand focuses on product and emphasises on selling what has been produced. In fact it is a small part of the wide process of marketing wherein emphasis is initially on promotion of goods and services and eventually on increase in sales volume. Marketing has long term perspective of winning over consumer loyalty to the product by providing him maximum satisfaction. However, selling has short-term prospective of only increasing the sales volume.

Strategy

The use of strategy in decision-making is the primary way in which managers take account of a constantly changing external environment. An effective strategy allows them to use their organization's resources and capabilities to exploit opportunities and limit threats in the external environment.

Strategy also refers to the means by which policy is effected, accounting for Karl von Clausewitz’s statement that war is a continuation of political relations via other means. Given the centuries-old military origins of strategy, it seems sensible to begin our examination of strategy with the military view. For that, there is no better source than B. H. Liddell Hart.

Quantity surveying

the action or profession of a person who estimates the cost of the materials and labour necessary for a construction job.

A quantity surveyor (QS) is a construction industry professional with expert knowledge on construction costs and contracts. They are not to be confused with land surveyors or building surveyors.

Quantity surveyors who are depreciation specialists assess, calculate and report the tax deductions a property investor can claim annually for the depreciation of their investment property. A depreciation schedule prepared by a quantity surveyor is key to ensuring you maximize the tax deductions available for your building works write off, as well as depreciation of all assets included in the property.