Relationship Marketing In Thai SME Contractors: A Case Study Of Bangkok And Khonkaen SME Contractors

Nowadays, clients are more knowledgeable, more informed, more aware of, and more expecting about anything that is surrounding the construction environment. Clients have more choices because of more contractors are competing in the market as oppose to less clients’ investment in the projects. The client wants the best possible value from contractors to satisfactorily accomplish their project. The satisfaction that a client was provided by a contractor in terms of construction product and construction services was directly influencing the client’s willingness to select that contractor in forthcoming projects.

In Thailand, after the crisis, contractors also faced this situation similar to other countries. There are more players in the market compared with the decreasing of construction’s investment volume. Contractors must form themselves to outstanding among their competitors to maintain and gain their clients and market share. Moreover, the construction industry will be a key engine of economic stimulus as the Thai Government aims to use construction of large scale infrastructure projects to stir investment and create jobs, thus stimulating the economy in the short-term. These will be an optimal opportunity for contractors to catch up the clients as much as possible. Relationship marketing therefore became a tool for attracting clients who desired personalized service. Thus, using marketing as a source to identify clients’ need is becoming an important process and priority for success in Thai construction industry.

As describe previously, contractors have to be effectively evolved to handle a dynamic condition in this present market environment. Rather than aligning the organizations through the long-terms direction, contractors must aware of sensitive changes that will generate affects among their stakeholder; especially to clients whom control the volume of investments. Therefore, relationship marketing tends to be an organization’s capability to complete a missing puzzle that a few organizations point out as an important factor.

Mr. Amnarch Pirmsinthavee made a study which objectives were to investigate and identify relationship marketing activities of contractors that occur in Thai construction industry. The detailed objectives were to: (1) investigate the relationship marketing activities of SME contractors in Thai construction industry; (2) explore a perception and understanding of contractor’s relationship marketing and the significant key marketing activities those are driven by Thai SME contractors, Bangkok and Khonkaen organizations; and (3) propose a recommendation that guides the contractors to effectively implement marketing activities for competitiveness of the organization.

Results

In order to achieve the objectives of study, the analysis framework consists of 4 processes. In the first process, the researcher identifies the definition of factors influencing the Relationship Marketing (RM) that contribute to SME contractors in Thailand by reviewing the literature and interviewing the representative of construction companies. The researcher acquires 25 activities that influence the relationship marketing in Thai SME contractors from literature review and interviewing the representative of the organizations.

The first objective was achieved by implementing two statistical methods, Descriptive Analysis and Mann-Whitney U Test. The descriptive analysis is to classify the importance level of marketing activities into a mean and ranking. The hypothesis testing (Mann-Whitney U Test) is to test the perception difference between SME contractors located in Bangkok (BKK) and SME contractors located in Khonkaen (KK) by proving the hypothesis as following:

H0: There is no difference between the perception of SME contractors located in Bangkok and perception of SME contractors located in Khonkaen on marketing activities influencing the relationship marketing.

H1: There is a difference between the perception of SME contractors located in Bangkok and perception of SME contractors located in Khonkaen on marketing activities influencing the relationship marketing.

The descriptive analysis is shown in below, the marketing activities (the first top 10th) influencing the relationship marketing that affects the SME contractors located in Thailand are Adjusting the difficulty in working period, Network, Weekly meeting within the organization, Organization’s evaluating, Improving through the result of evaluating, Relationship with consultant, Commitment in working performance, Relationship with client after bidding period, Relationship with a client’s employee, Low price bidding, Relationship with competitors, and Hiring new employees.

Table: Analysis of Marketing Activities Influencing Relationship Marketing that affects SME contractors located in Thailand



All these top 10th activities are classified as a high importance level for influencing the relationship marketing. There are 5 activities from Performance Satisfaction, 4 activities from Cooperation and each 1 activity from Commitment, Trust and Mutual Goals. The groups of each category are shown below:
- Performance Satisfaction
- Commitment in working performance
- Low price bidding
- Organization’s evaluating
- Improving through the result of evaluating
- Hiring new employees

Cooperation
- Relationship with consultant
- Adjusting the difficulty in working period
- Weekly meeting within the organization
- Relationship with a client’s employee

Commitment
- Relationship with client after bidding period

Trust
- Network

Mutual goals (relational partnering)

- Relationship with competitors

To achieve the second and the third objective of this study, the researcher has to clarify the perception difference between SME contractors located in Bangkok (BKK) and SME contractors located in Khonkaen (KK) of Thailand. After that, the researcher attempt to propose the recommendations and strategic guideline that appropriate for SME contractors on each key activity that influencing the relationship marketing. Then, the result was explained and summarized in each category.

Recommendations for Improvement

In order to achieve the last objective of this study, the researcher proposes that Thai SME organizations should more concern on the relationship marketing activities regarding to the result. Because they could perform the organizations the competitive advantage beyond others. The major consequences of implementing the marketing activities are increasing the opportunities in repetitative purchasing the service and entrancing of new clients, and also gaining the client’s loyalty. According to the economic crisis during this day, the researcher believes that these activities could help the organization in increasing the volume of dealt projects. Anyway, the recommendations and benefits of the first top 10th activities are presented in table below.



His thesis abstract is copied and posted.

Abstract

Nowadays, a contractor has to survive in the severely competitive construction industry in Thailand. Unfortunately, many Thai SME contractors were bankrupted during an economic crisis. Survived contractors have to remain themselves by implementing many strategies. Marketing strategy is also being a competitive strategy that many SME contractors are neglected. Therefore, this study aims to investigate key activities that influencing the relationship marketing in Thai SME contractor and propose the recommendation that effectively implement to be a competitive advantage in the SME construction industry.

The researcher considered to use a quantitative research by implementing survey design. There are 2 statistical methodologies were implemented to analyze the data from questionnaire surveys: Descriptive Analysis and Mann-Whitney U Test. The descriptive analysis is to classify the importance level of marketing activities into a mean and ranking. The hypothesis testing (Mann-Whitney U Test) is to test the perception difference between SME contractors located in Bangkok (BKK) and SME contractors located in Khonkaen (KK).

The result were found that there are 10 key activities that influencing the relationship marketing as the high influence including of: Adjusting the difficulty in working period, Network, Weekly meeting within the organization, Organization’s evaluating, Improving through the result of evaluating, Relationship with consultant, Commitment in working performance, Relationship with client after bidding period, Relationship with a client’s employee, Low price bidding, Relationship with competitors, and Hiring new employees. The benefits and recommendations for improving the relationship marketing strategy of the first top 10th keys activities were discussed in this study.