Technology is changing products and how they’re marketed

As part of our strategic planning, my firm is trying to identify trends that will affect the future of the construction industry. What major issues do you see for building product marketing during the coming decade?—J. W. H., market analyst

In the May issue we discussed five trends affecting the industry, from environmentalism to labor shortages. Here are five more that are opening doors for construction manufacturers.

6. Computers
Construction used to be the manipulation of materials; now it is primarily the manipulation of information. More effort is spent processing documents than materials. The computer has become the most important piece of construction equipment, affecting every aspect of building- product sales and marketing.

Your customer is more likely to sit at a computer than at a drawing board or in a backhoe-loader. So, your product presentation should include, where appropriate, computer- aided design (CAD), word- processing files for specifications, and engineering programs that make it easier for designers to use your product.

Electronic catalogs and databases will present new media options to stretch advertising budgets. And sales automation can extend the reach of properly trained and motivated salespeople.

Computers are also creating new distribution channels. For example, a building supply center in Berkeley, CA, created an electronic bulletin board to allow customers to check prices and place orders online, even at night or on weekends. Look for bar-coded building products to facilitate jobsite distribution and handling and CAD- CAM systems to feed an architect’s design data directly into the manufacturing process.

7. Intelligent buildings
The potential of intelligent building systems or smart house technology has been growing since the development of the personal computer and microchip. With progress being made toward defining industry standards, building automation will become a market force to reckon with.

When we visualize every product in a building containing a microchip “neuron” wired to a central processor, we begin to think of buildings as organisms that sense and respond to their environment. Opportunities abound to rethink every building appliance, component, and system. This will stimulate a huge demand for remodeling and spawn new categories of building- product and service providers.

8. International markets
For most of civilization’s history, buildings were built from materials harvested or quarried near the site. Starting with the industrial revolution, regional and national markets developed. We are now witnessing a rapid expansion into an international market for building materials, design talent, financing, construction services, and building ownership.

Faced with a slowly growing economy at home, many North American manufacturers and contractors are finding their most lucrative opportunities in Asia, Eastern Europe, and other rapidly expanding economies. At the same time, foreign manufacturers are rapidly opening markets in North America through imports or acquisition of domestic firms or facilities. Large U.S. design and construction firms have discovered that their services are easily exportable. North American free-trade agreements will encourage trade across borders, reshaping distribution patterns.

9. Niche markets
While one trend is drawing construction into a single worldwide market, other forces are breaking it into increasingly smaller segments, or niches. Each requires its ownproduct design, pricing, distribution channels, and promotional strategies.

Major industry segments such as heavy construction, housing, and do-it-yourself are composed of finer segments. Different product configurations may be required for different building types. For example, windows are positioned according to their end users, with hospitals looking for different features than schools.

Construction decision-making authority is becoming fragmented, architecture and engineering are consultants are playing greater roles. Contractors and construction managers have a larger role in product selection, as do owners and facility managers.

Better micro-marketing techniques must be developed, targeting customers who fit narrowly defined profiles. A proliferation of design and construction magazines and trade shows allows you to be more selective in matching audiences to your message. With design documentation becoming computerized, all that information will eventually be gathered into a database defining the specifying or purchasing behavior of firms and individuals.

10. New technologies
Building-product literature has a half-life of 12 months; that is, half the information will be obsolete within 1 year. Where once we tested natural materials to find their limitations, material science now begins by defining desired characteristics and inventing products that provide them. New technologies are redefining products like wood, stone, glass, and concrete and blurring the difference between synthetic and natural materials. Specifiers must be increasingly adept at analyzing exotic chemicals, composites, plastics, and ceramics. Replacement of electrical and mechanical devices with less costly but more reliable electronic devices is affecting everything from door hardware to plumbing fixtures.

Tremendous competitive advantages are possible for manufacturers who can invest in the missionary work to get new materials approved and accepted. But along with this comes the technical risk of rushing products out of the laboratory before their performance is completely understood, and the marketing risk of backing a new technology which may soon become obsolete itself.

The only constant in markets is that they change. What additional trends are significant in your view of the industry? Write me and I’ll discuss them in future columns.

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By Michael Chusid
Originally published in Construction Marketing Today, Copyright © 1991