Relationships and project

marketing success
Maria Anne Skaates
Assistant Professor, Department of International Business, Aarhus
School of Business, Denmark
Henrikki Tikkanen
Professor of Marketing, Department of Management, Helsinki
University of Technology, Finland
Jarno Lindblom
Project Manager, Tactica Marketing Communications, Helsinki
Keywords International business, Networks, Projects, Marketing
Abstract Project operations are a dominating mode of international business. Managing
relationships and networks is crucial to project marketing success both at the level of the
individual project and at the level of multiple projects. This article first defines key
characteristics of project business, identifies potentially relevant actors in the project
marketing milieu, and emphasizes the importance of constantly nurturing project business
relationships, also in ``sleeping relationship'' periods where concrete projects are not
expected. Thereafter the points made are illustrated with a Finnish-Chinese turnkey
project case at the level of the individual project and a Danish-German professional
service project case at the level of multiple projects. It is concluded that project managers
and marketers should focus their attention on the management of project relationships
before, during, and after projects, as well as on relevant environmental factors in the
project marketing milieu, instead of using resources on sporadic or last minute running
after potential projects.
Introduction
Project operations are one of the dominating modes of international business
today (Hadjikhani, 1996), as the ``products'' of industrial companies
increasingly exhibit project-like features (Gunter and Bonaccorsi, 1996).
This is due to the increased complexity and ``systemization'' of the offerings
of many international companies. This implies that industrial marketers have
to develop their capabilities in supplying ever more complex ``total
solutions'' that include both tangible (products) and intangible (services)
aspects (e.g. Gronroos, 1997). Thus, it is not surprising that projects, project
management, and project marketing have recently received increased
scholarly attention (see e.g. the project management special issue of
Scandinavian Journal of Management, 1995; the project marketing and
systems selling issue of International Business Review, 1996; Hadjikhani,
1998).
There is also an issue-based research group called the International Network
for Project Marketing and System Selling or INPM (Cova and Ghauri, 1996;
Gunter and Bonaccorsi, 1996; Skaates, 2000). Closely affiliated with the
IMP (Industrial Marketing and Purchasing) community of researchers, the
INPM's research emphasizes the role of relationships and networks of
relationships in project marketing.
In the 1990s, relationship marketing and management were established as
key areas of research (Gummesson, 1999; Gronroos, 1997). However,
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International business
today
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002, pp. 389-406, # MCB UP LIMITED, 0885-8624, DOI 10.1108/08858620210439068 389
An executive summary for
managers and executive
readers can be found at the
end of this article
variations in project marketing relationships and situations have not yet been
studied systematically or in detail (cf. Hadjikhani, 1996; 1998; Skaates,
2000). Therefore this article analyzes the management of relationships and
networks at two separate levels, first focusing upon the level of individual
projects (Alajoutsijarvi, 1996). Thereafter the emphasis shifts to the level of
multiple projects (Alajoutsijarvi, 1996), which encompasses relationship
development and maintenaince during a (longer) period of multiple project
activity, including possible periods in which there are no projects. At both
levels, the aim of the article is to illustrate the relevance of the project
marketer's awareness of the project marketing milieu (Cova et al., 1996) and
important relationships, as well as his or her identification of potentially
relevant actors in the project marketing milieu. It is proposed that the
management of relationships at both levels influences project marketing
success defined as the acquisition of subsequent projects.
The article is structured as follows: First, main project marketing concepts
are defined, and key characteristics related to managing relationships in
project business are examined. Second, a turnkey project a Finnish-Chinese
technology transfer project is used to illustrate the importance of
inter-organizational relationship management during a complex individual
project acquisition and delivery process. Third, the case of Danish
architectural design project exports to Germany in the 1990s is used to
illustrate the role that relationships play in the marketing of multiple
projects. Finally, on the basis of the two cases presented, suggestions for
practitioners in project marketing and systems selling firms are made and
avenues for further studies are proposed.
Projects and the project marketing process
There are many definitions of the term project (Ahmed, 1993); however, in
the project marketing literature, as opposed to the project management
literature, where one also finds projects within one firm, the projects of the
project marketing literature always involve purchasing and selling
organizations. On a general level, a project refers to ``a transaction
concerning a functioning whole which is delivered to the buyer'' (Holstius,
1987). Following Cova and Ghauri (1996), a project is ``a complex
transaction covering a discrete package of products, services and other
actions designed to create (capital) assets for the buyer over a certain period
of time'' (emphasis added). Systems selling, i.e. the sale of a complex
combination of products and services offered by a company in an industrial
market (see e.g. Mattsson, 1973; Kosonen, 1991), often appears to be
synonymous with the delivery of projects (cf. Gunter and Bonaccorsi, 1996).
However, while a project can most often be considered as system[1], a
system does not have to be supplied as a project, i.e. in the sequential manner
of Cova and Ghauri's (1996) definition.
Project operations are classified by Luostarinen and Welch (1990) as
contract operations (other contractual operations being licensing,
franchising, management contracts, and subcontracting) and subdivided into
partial projects, turnkey projects and turnkey plus projects. Partial projects
include partial system deliveries such as the delivery of professional services
projects or a waste disposal system to a factory in construction. In a turnkey
project, a complete unit is delivered to the buyer. Turnkey plus projects are
complete unit deliveries plus supplementary services such as personnel
training.
Multiple projects
Project operations
390 JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002
The INPM argument for studying project marketing rests on the assertion
that it is not enough to regard a project delivered by one firm/a group of
firms to another organization/group of organizations as a set of managerial
actions taken by the suppler(s), i.e. as mere ``project management''
(Tikkanen and Lindblom, 1998). Instead project acquisition and delivery
processes entail the coordination of buyer and seller activities, as the details
of the project are agreed upon during extensive buyer-seller interaction, often
over a substantial period of time. Consequently relationships between actors
in the buying and selling firms are important before, during, and after the
delivery process (cf. Hadjikhani, 1996). Thus project marketing is a broader
term than project management; it always implicitly includes project
management but not vice versa.
INPM researchers also emphasize that relationship development has an
overall effect on a firm's project acquisitions, as will be explained in the
following. However, relationships are not easy to maintain, due to three
D-U-C features that distinguish project marketing from other types of
business-to-business marketing (see e.g. Cova and Ghauri, 1996; Mandjak
and Veres, 1998; Tikkanen, 1998):
D. the discontinuity of demand for projects;
U. the uniqueness of each project in technical, financial and socio-
political terms; and
C. the complexity of each individual project in terms of the number of
actors involved throughout the supply process.
The implication of discontinuity is often a lack of bonding, dependence, and
mutual orientation beyond the single project, although there is substantial
interaction during the delivery of an individual project. The uniqueness and
complexity of each project may furthermore imply that different actor firm
constellations or actors from a given firm are used in each individual project,
thus further affecting the discontinuity of relationships.
Building on the above insights, Alajoutsijarvi (1996) has stated that there are
two ``nested'' levels of relationship management in the marketing of
industrial projects. The first level is that of managing networks and
relationships related to individual projects from beginning to end. The
second level is ``the level of multiple projects''; it encompasses relationships
during a (longer) period of multiple project activity, including possible
periods in which there are no projects.
At the level of the individual project, each project passes through a relatively
similar process (Baum, 1982; Cova and Holstius, 1993; Holstius, 1987),
which is characterized by substantial buyer/seller interaction during each
phase and substantial corporate function overlap, i.e. between the marketing
and management department (cf. Gronroos, 1997). Seen from the project
selling firm's point of view, the six phases are as follows (Holstius, 1987;
Cova and Holstius, 1993):
(1) Search phase: identifying project opportunities and relevant industry
developments.
(2) Preparation phase: undertaking a feasibility study; preparation for the
bidding process; establishing contacts to buyer(s); evaluating the
competitive situation.
Delivery process
Relationship development
Individual project
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002 391
(3) Bidding phase: preparing the bidding documents after receiving the
invitation to bid; making decisions concerning price and the use of local
resources.
(4) Negotiation phase: starts when the seller makes the preliminary offer for
the project; ends at the signing of a contract.
(5) Implementation phase: delivering and supervising the project; training
buyer's personnel; possibly creating after-sales systems.
(6) Transition phase: evaluating the project as a whole; building up
knowledge for future offerings; possibly supplying additional services to
the buyer.
Concerning the level of multiple projects, the project marketing cycle is
self-renewing, in that the sum of experiences related to a particular project
are evaluated in the transition phase for use in subsequent project activities
(Holstius, 1987). At this multiple project level, however, discontinuity (i.e.
the ``D'' characteristic of the D-U-C framework) in buyer-seller relationships
is the major strategic problem in project marketing (Hadjikhani, 1996).
After a project is completed, the relationship becomes a ``sleeping
relationship'' (Hadjikhani, 1996), i.e. a relationship without contract-related
activity and resource ties, but possibly with bonds of after-market
dependency, social ties, and trust. It is thus necessary for project marketers to
focus on the implications of a single project for subsequent project marketing
efforts during the delivery process of the project in question. Furthermore,
they must nurture both sleeping and potential relationships in periods when
concrete projects are not being prepared for or competed (Cova et al., 1996).
To aid in this task, Cova et al. (1996) have developed the concept of the
``milieu'' of project marketing. It is a socio-spatial configuration
characterized by:
.
a network of actors;
.
a representation constructed and shared by these actors; and
.
a set of rules and norms regulating the interactions between these actors.
Within the milieu, project marketing firms have to generate credibility, i.e.
convince other actors of their ability to perform what they claim they can do
(Blomqvist, 1997) and follow the rules and norms of the milieu, to be able to
nurture sleeping and potential relationships. This credibility generation is
undertaken within relationships inside the milieu as well as through word-of-
mouth and the use of references (Salminen, 1997). Potentially relevant actors
with regard to credibility generation activities are presented in Table I (see
also Hadjikhani, 1998). In this table, actors have also been classified at
different levels of aggregation because formal collectives such as a board of
directors or a governmental organization often make marketing/purchasing
decisions based on information received from individuals and informal
collectives (Webster and Wind, 1973).
In our first case, the establishment and maintenance of credibility in
relationships and networks is examined in depth at the level of the individual
project. The second case more specifically focuses upon credibility
generation at the level of multiple projects. Concerning methodology, the
cases have been taken from two research projects concerning international
project selling firms (Skaates, 2000; Tikkanen and Lindblom, 1998). The
studies included embedded case studies (Yin, 1994), in which the primary
source of data was semi-structured qualitative interviews (Kvale, 1996).
``Sleeping relationship''
Establishment and
maintenance
392 JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002
Supplementary data, i.e. annual reports, minutes from meetings, and export
statistics, were acquired from other sources to enable data triangulation (see
Silverman, 1993; Marshall and Rossmann, 1989).
Relationship management within a single project: the FinSys case
The Finnish project selling firm FINSYS[2] started to operate in China in the
1980s. It has since delivered more than a dozen large projects there. The
turnkey plus project under scrutiny in this article, a complex technology
transfer project, was successfully delivered at the beginning of the 1990s.
The project concerned the supply and start-up of a medium-sized power
plant in the Quangzhou area.
In order to study the relationships during the process, the project was divided
into the phases of the project marketing cycle (Holstius, 1987). However, a
distinction between the search and the preparation phase was not made
because FINSYS China was informed of the project by the agent at the
buyer's initiative. Instead the search and preparation phases are combined
into a ``scanning phase''.
The scanning phase
From the seller's perspective, the project started when an agent contacted
FINSYS China. FINSYS then determined whether it would respond to the
invitation to bid on the basis of a feasibility assessment, i.e. a study of
project-related opportunities and threats. An initial offer was sent to the
buyer via the agent. The relevant project network of this phase and a further
phase description are presented in Figure 1.
Business actor Community actors Government actors
The level of
individuals
Employees, owners of
firms
Citizens as owners,
influencers,
consumers, etc.
Governmental
employees, politicians
The level of formal
intra-organizational
bodies
Intra-firm
departments or formal
ad hoc bodies: e.g.
marketing
departments, R&D
units, project teams
Formal bodies of
non-governmental,
not-for-profit
organizations: party
boards and
committees, boards of
directors of not-for-
profit organizations
etc.
Intra-organizational
departments or formal
ad hoc bodies of
governmental
organizations: e.g.
ministry departments,
committees, project
teams
The level of whole
formal organizations
Firms in their
different roles:
suppliers, buyers,
competitors,
consultants, etc.
Non-governmental
not-for-profit
organizations
Governmental
organizations:
ministries,
universities, research
units etc.
The level of formal
collectives
Formal business
collectives:
corporations, formal
alliances, industry
organizations, etc.
Formal civil
collectives: e.g.
regional or
international umbrella
organizations of not-
for-profit
organizations
Formal governmental
collectives: national,
regional, or local
governments, the EU,
the UNDP etc.
The level of informal
collectives
Informal networks,
e.g. within firms or
industries
Circles of friends/
relatives, ethnic
groups, social classes,
political cliques, etc.
Informal public sector
networks
Source: Tikkanen and Lindblom, 1998
Table I. Potentially relevant project marketing milieu actors
Project marketing cycle
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002 393
The bidding phase
In this phase, a second, more detailed offer was prepared and sent. The
project network is presented in Figure 2.
The negotiation phase
Negotiations started when the buyer accepted the second offer as a basis for
further negotiations. FINSYS' marketing and sales team, FINSYS China, the
Figure 1. The project network in the scanning phase
394 JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002
buyer's negotiators, the agent, the bank's representatives, and the warrantor
were involved in the detailed negotiations. During this phase, the scope of
the solution, the equipment, guarantees, and training of Chinese employees
were agreed upon. Negotiations finished with the signing of the contract. The
units presented in Figure 3 participated in the negotiations.
The implementation phase
At the beginning of this phase, the responsibility for the project shifted from
the M&S team to FINSYS projects organization in a kick-off meeting where
all information concerning the project was given to the selected project
management team. Even though the general features, e.g. equipment and
materials, were defined in the contract, technical negotiations (so-called
follow-up negotiations) between the FINSYS project management team and
the buyer continued. After all technical details had been agreed upon, the
Figure 2. The project network in the bidding phase
Project responsibility
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002 395
project team delivered the needed equipment and materials to the site.
FINSYS' project team in Europe also sent orders to subcontractors and
arranged for their delivery to the site. Chinese contractors set up the plant in
accordance with FINSYS' instructions. The buyer's employees were trained
by FINSYS' employees in China and in Europe, where a training course for a
Chinese delegation was held. When the plant was ready to run, the
equipment was checked and tested for commercial use, then handed over to
the buyer. The project network in the implementation phase is presented in
Figure 4.
The transition phase
After the plant had been handed over to the customer the transition phase
began. FINSYS' guarantee engineer stayed at the site for a year, educating
the local employees. If a problem had occurred, the guarantee engineer
would have been able to help and give advice, due to his on-site presence.
The project network is presented in Figure 5.
Figure3.TheprojectnetworkinthenegotiationphaseG
u
a
r
a
n
t
e
e
e
n
g
i
n
e
e
r
396
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002
Case analysis
In this section, the relationship dynamics of the FINSYS case are analyzed.
With regard to governmental actors (see Table I), the Chinese government
was involved in the first phase, as they decided on law-related issues.
Figure 4. The project network in the implementation phase
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002 397
Community actors, on the other hand, never played any role. Concerning
business actors, the agent's role was extremely strong during the first three
phases of the project. After these phases, when FINSYS was familiar with
the project's milieu, it was less strong. FINSYS China and FINSYS Europe's
marketing and sales were strongly involved in the project until the end of the
third phase. The project management team and the project organization were
committed to the project during the implementation phase. Their role was to
deliver and implement as promised. The involvement of the guarantee
engineer was key in the transition phase, which also was the longest
individual phase in real time. Furthermore, the actions of the guarantee
engineer probably affected the customer's final perception of the project
measurably, as he was the person to whom it had its final contacts.
As is evident from the above and Figure 6 below, no single actor from
FINSYS was involved throughout the project nor was the buyer-seller
interaction limited to a single level of Figure 1. From a project marketing
Figure 5. The project network in the transition phase
Buyer-seller interaction
398 JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002
perspective, the lack of an individual coordinating actor throughout the entire
project supply process made FINSYS' development of credibility in the
relationship to the Chinese customer more difficult.
Buyer-seller relationships may be severed if there are substantial breaks in
the selling firm's information flow. In the FINSYS example, there were two
possible information break-points. The first one occurred at the kick-off
meeting, when the marketing and sales department passed the responsibility
for the project to the project management team. The second break-point was
the shift from the implementation phase to the transition phase, when the
plant was handed over to the customer by the project management team and
a guarantee engineer from FINSYS was sent to the site. However, in both
cases, FINSYS managed to achieve a high level of informational continuity,
thus maintaining the trust of their Chinese customers and safeguarding the
relationships that had been established and also putting itself in a good initial
position for the work of nurturing the relationship in its ``sleeping'' phase.
Relationship management across projects: Danish architectural firms in
Germany
At the beginning of the 1990s, all EU construction markets, with the
exception of the German and Luxembourg markets, were in the midst of a
recession. Therefore many European construction industry firms decided to
begin operations on the German market, to achieve higher turnover and
alleviate capacity problems. The expectations of most of these firms were,
however, not fulfilled, as achieving credibility in the eyes of potential
German customers, and thus relationships, was much more difficult than
expected.
Danish architectural firms were no exceptions. Therefore the project
acquisition efforts of unsuccessful Danish architectural firms were initially
studied; subsequently the focus was placed upon the acquisition practices of
a few Danish architectural firms that had managed to secure successive
German orders.
Among these ``successful'' firms were one of the largest Danish architectural
firms, which has decades of experience in its home market, and a small firm
that had only had four years of experience in its domestic market when it
Figure 6. Project involvement
Information flow
Acquisition practices
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002 399
began its activities in Germany. Both firms initially greatly underestimated
the differences in the milieus of the Danish and German construction
industries. In their initial years in Germany, they therefore had to learn about
``rules and norms'', e.g. German construction laws, common German terms
of contract, German building norms, and the German interpretation of the
EU Public Services Directive. Furthermore, they had to familiarize
themselves with German actors' understanding, or mental representations, of
e.g. ``inexpensive, high quality construction'', ``environmentally friendly
design'', or ``Nordic architecture''. This necessitated personal interaction,
yet contact with potential clients was difficult to establish. These were
receiving many calls from foreign firms, many of whom did not seem
``serious'' in the eyes of the Germans. Thus many Danish firms found
themselves in a Catch-22 situation.
In this difficult situation, German construction industry receptions and
discussion forums, as well as official cooperation agreements between the
Danish Ministry of Housing and the corresponding German ministries at the
federal and state levels, served as door openers. At these occasions, business,
community, and governmental actors (see Table I) were present and
interacted, making it necessary for the Danish firms to make a good
impression upon all parties present.
Additionally, in order to establish credibility, the two Danish firms initially
served as general advisors to potential design project clients, preparing initial
bidding specifications to be given to other architectural firms that would be
asked to submit design proposals. (On the Danish market, in contrast, the
Danish firms did not involve themselves in this initial preparatory work, as
they had the relationships contacts necessary to be asked to submit the more
lucrative design proposals.) Moreover, the Danish architectural firms showed
interest in the design/construction projects for which they had been initial
project specifications advisors after their tasks had been completed, in order
to maintain these relationships during their ``sleeping'' phase.
The above-mentioned activities can be characterized as part of the search
phase. After having generated credibility in the new milieu as part of the
search for projects, the successful Danish architectural firms also
participated in bidding and negotiations, eventually winning design projects.
In these projects, they ensured that each project phase was completed
smoothly and to the satisfaction of the purchaser, to create further client trust
and own firm credibility that would potentially endure during the phase of
the ``sleeping relationship'' (Hadjikhani, 1996). This entailed more intra-
firm cooperation than in domestic projects, as the initial phases of the project
were usually completed by employees in Denmark and then passed on to
German-born employees/Danish employees working in Germany.
Furthermore the Danish firms informed their previous German clients of
projects that they subsequently won (and, thus, of some of the special
purpose facilities they now had designed in Germany) and well as of market
changes, in order to maintain as close bonds as possible. This is illustrated by
the following statement from a partner in the large firm:
I believe that if one is loyal towards one's customer who after all has proved his
confidence in us [. . .], one must be just as loyal by saying to him ``Now the market
is changing and this means that we are lowering our prices'' or the opposite. [. . .]
One must do this before the customer himself discovers the changes on the market
because otherwise he may begin to speak of changes in the premises for our
cooperation.
German construction
industry
Search phase
Special purpose facilities
400 JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002
Finally previous German clients were invited to receptions and informational
gatherings in further efforts to nurture sleeping relationships, when this was
deemed in accordance with the social rules of the German milieu.
However, as many clients only have a very intermittent need for architectural
projects, and as public sector tendering procedures encourage arm's length
relations, only a small number of German clients placed repeat orders or
considered placing repeat orders with the two Danish architectural firms,
despite their substantial relationship nurturing efforts. Nevertheless the two
firms considered each incident in which a client considered them in
subsequent projects to be a business success, because it gave them the
potential for acquiring projects without having to start the very
time-consuming and expensive process of credibility and relationship
building from scratch.
Managerial implications and suggestions for further research
In this article, we have illustrated that the identification of relevant actors
and management of relationships influence success in project marketing, as
work in subsequent project phases as well as subsequent project acquisitions
are facilitated by these actions. However, as highlighted in the above cases,
differences in relationships mandate variations in managerial attention. To
take a point from the Finnish-Chinese turnkey case, relationships
characterized by short-term interactions relating to minor contracting issues
during the implementation phase of one project probably do not often require
long-term attention on the part of the project marketer. On the other hand,
relationships with, for example, central financiers or customers need
different, long-term oriented attention, which involves coordination during
all project phases as well as the ``sleeping'' phase of the relationship between
individual projects, when, for example, the customer considers his potential
future demand (cf. Cova, 1998; Hadjikhani, 1996). This latter type of long-
term attention is also illustrated by the Danish-German architectural case, in
which contacts to previous customers are discretely maintained, whereas
government and civil society actors are given more intermittent attention.
From a practitioner's perspective, it is important that the issues of
relationship management in all phases of the projects as well as the
post-project ``sleeping relationship'' and credibility generation among the
relevant actors of the milieu not be overlooked. Our experience tells us that
this point cannot be stressed enough, as project marketing firms all too often
focus only upon the management of individual projects during the delivery
process and on sporadic, last moment ``pell-mell'' running after ``promising''
potential projects (cf. Mazet and Cova, 1992; Tikkanen and Lindblom,
1998).
With regard to theoretical implications, to date only a few longitudinal and
contextual studies have been made of individual projects (e.g. Welch et al.,
1996; Tikkanen and Lindblom, 1998) or of the more long-term development
of relationships related to project business (e.g. Ahmed, 1993; Alajoutsijarvi,
1996; Skaates, 2000). We therefore still lack general understanding of
networks dynamics and processes, i.e. how networks and relationships
develop in various situations of discontinuous, complex and differentiated
project business.
Furthermore, although institutional theory (e.g. Scott, 1995) has provided
insights into the relationship between actor representations and actor's
actions and requirements, we lack knowledge of the interplay between the
socially constructed representations, norms, and rules of the milieu (Cova
Management of
relationships
Theoretical implications
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002 401
et al., 1996) and specific project-related criteria. For example, we do not
know whether the socially constructed actor representations are more
volatile in professional services projects, due to the greater percentage of
(potentially evolving) knowledge-content, and, if so, how this influences
project-related specifications. Similarly, we lack knowledge as to whether
the norms, rules, and representations change more rapidly in newer project
business areas such as software projects.
Moreover, one might intuitively expect that for professional service partial
projects in, for example, architecture, engineering, or advertising, the
relationships between the client and selling firm would take place primilarly
at the level of individuals, as one or a few specific individuals in the project
selling firms would represent the firm. In contrast, for the more complex
turnkey or turnkey plus projects, the expectation would be that the
relationship would take place at several levels of Table I. As in the FINSYS
project, many individuals would only be active in certain project phases and
formal collectives generally would play a greater role throughout the project
marketing cycle. These differences could in turn have consequences for
practitioners' project marketing efforts. For example, a given project selling
professional service firm might want to manage its relationships in such a
way as to ensure that the client perceived itself as having a relationship
to the firm, to guard itself against the situation where a departing
professional takes clients with him. Thus it is also relevant for future
research to encompass comparative studies of the levels of actor links in
varying types of projects.
A final unexplored issue is client learning processes. If clients demand
similar projects over time, they may learn from each project cycle, thus
influencing their specifications for the next project (see e.g. Lwendahl,
2000). However little is known about the exact nature of these learning
effects in different project situations.
On the basis of the above research deficits, we suggest that there is a need for
further retrospective or real-time case studies that focus on the dynamic
effects between the social construction of meaning in projects at the level of
individual and multiple projects and the ``concrete'' specifications of
individual projects. Subsequent comparison of such in-depth studies could
contribute to increased understanding of the dynamics of relationships and
networks in different project marketing situations as well as the specific
needs of practitioners in these situations. This could, in turn, contribute to
rigorous institutional theory building for the specific case of project
marketing.
Notes
1. One possible exception is professional service partial projects, e.g. the supply of design,
planning, and/or engineering services.
2. To ensure anonymity, all firm names have been changed in this article.
References
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Paradoxes. A Study of Finnish Project Exports to the Arab Countries, PhD dissertation,
Swedish School of Economics and Business Administration, Helsinki.
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makrovoimat 1948-1990'' (``A dyad made of steel. Kymmene Corporation and Valmet
Paper Machinery and their relationship, local network and macro environment
1948-1990''), PhD dissertation, Jyvaskyla Studies in Computer Science, Economics and
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Executive summary and implications for managers and
executives
The need for ``total solutions''
As the products of industrial companies become increasingly complex,
industrial marketers have to be able to supply total solutions that include
both tangible (products) and intangible (services) aspects. This development
means that new emphasis is being placed on projects, project management
and project marketing.
Project marketing and project management
The process of acquiring and delivering projects entails co-ordinating the
activities of buyers and sellers, as the details of each project are agreed
during often-extensive interaction between the two sides. The relationships
between employees in the buying and selling firms are therefore important
before, during and after delivery. The term ``project marketing'' embraces
all this. Project marketing is a wider term than project management. It
always implicitly includes project management, but not vice versa.
The discontinuity of demand
Project marketing differs from other types of business-to-business marketing
because of:
.
the discontinuity of demand for projects;
.
the uniqueness of each project; and
.
the complexity of each project in terms of the number of people involved
throughout the supply process.
During the course of each project, there may be substantial bonding,
dependence and mutual orientation. This, however, may not last beyond that
project. Furthermore, because each project is unique and complex, different
projects are likely to involve different people. Both these factors tend
towards discontinuity of relationships.
Individual and multiple projects
Networks and relationships in an individual project must be managed from
the project's beginning to its end. Multiple projects, in contrast, encompass
relationships during a (longer) period of multiple project activity, including
possible periods in which there are no projects.
The individual project, seen from the project-selling firm's viewpoint,
involves the following phases:
.
search identifying project opportunities and relevant industry
developments;
.
preparation undertaking a feasibility study, preparing for the bidding
process, establishing contacts with buyers and evaluating the
competitive situation;
.
bidding preparing the bidding documents after receiving the invitation
to bid, and making decisions about price and use of local resources;
.
negotiation which starts when the seller makes the preliminary offer
for the project and ends with the signing of a contract;
.
implementation delivering and supervising the project, training the
buyer's employees and possibly creating after-sales systems;
JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002 405
This summary has been
provided to allow managers
and executives a rapid
appreciation of the content
of this article. Those with a
particular interest in the
topic covered may then read
the article in toto to take
advantage of the more
comprehensive description
of the research undertaken
and its results to get the full
benefit of the material
present
.
transition evaluating the project as a whole, building up knowledge for
future offerings and possibly supplying additional services to the buyer.
At the level of multiple projects, the project marketing cycle is self-renewing,
in that the sum of experiences related to a particular project is evaluated in
the transition phase for use in subsequent project activities. But discontinuity
in buyer-seller relationships is the major strategic problem at the
multiple-project level.
The sleeping relationship
A sleeping relationship is entered after the project is completed. Although
the contract-related activity is then over, there may be a bond of dependency,
social ties and trust. Project marketers should therefore focus on the
implications of a single project for subsequent project marketing efforts
during the delivery process of the project in question. They must also nurture
both sleeping and potential relationships in periods when concrete projects
are not being prepared for or competed.
The project-marketing milieu
At the level of both individual and multiple projects, the project marketer
must be aware of the project-marketing milieu, which is made up of a
network of actors, a representation constructed and shared by these actors
and a set of norms and rules regulating the interactions between the actors.
Within the milieu, project-marketing firms have to generate credibility. They
must convince other actors that they can perform what they claim they can
do, and follow the rules and norms of the milieu.
What project managers and marketers should do
Skaates et al. conclude that, in order to increase their chances of acquiring
subsequent projects, project managers and marketers should focus their
attention on:
.
the management of project relationships before, during and after
projects; and
.
relevant environmental factors in the project-marketing milieu instead of
using resources on sporadic or last-minute running after potential
projects.
(A precis of the article ``Relationships and project marketing success''.
Supplied by Marketing Consultants for Emerald.)
406 JOURNAL OF BUSINESS & INDUSTRIAL MARKETING, VOL. 17 NO. 5 2002