Secondary research includes a study of the current state of the South African consulting engineering industry. Note: Group, company and individual names have been changed to preserve the confidentiality of the company's identity.
RESEARCH QUESTION
RESEARCH OBJECTIVES
RESEARCH DESIGN
In addition to information collected on the internal and external environment of the company, questionnaires addressing the macro environment of consulting engineering were sent to selected individuals of the consulting engineering industry.
ANTICIPATED CONTRIBUTION
CHAPTER PLAN
As discussed above, the purpose of this thesis is to identify key issues facing ABC and then to use these key issues to formulate a strategic marketing plan. The following chapter reviews the theory required for this process and explains the various elements of a marketing plan.
LITERATURE REVIEW: PART 1 PROCESS FOR SERVICES
CHARACTERISTICS OF A SERVICE Kotler (2000), defines a service as follows
- Intangibility
McColl et al (1998, p.46) further say that it would be more appropriate to speak of degrees of service orientation rather than describing the service sector as a homogeneous group of activities. Another important finding is that strong recovery strategies are needed when something goes wrong with services.
SERVICES STRATEGY
- Market Segmentation
Designing the marketing mix essentially involves working out the tactical details of the positioning strategy (Kotler et al, 2002, p.203). The marketing mix is the set of tools available to the marketing manager to shape the nature of the service offered to consumers (McColl et al, 1998, p.1?).
DEVELOPING A STRATEGIC MARKETING PLAN FOR SERVICES
It gives the user a good idea of the strength of each of the five competitive forces, the nature of competition in the market and the overall structure of competition. Proper analysis of the company's internal and external environment allows the firm to make strategic decisions that are in good agreement with the company's goals, existing resources and the environment in which the company operates.
TRENDS IN THE CONSULTING ENGINEERING INDUSTRY AND ABC'S CURRENT POSITION IN THE INDUSTRY
STATE OF THE SOUTH AFRICAN CONSULTING ENGINEERING PROFESSION
- Pending Concerns
This section first looks at findings about the overall economic position in the industry and then summarizes some of the key issues from the July-December 2005 survey. Economic growth slowed during the second half of 2005, largely as a result of the decline in the mining sector. Evidence of this can be found in the Municipal Infrastructure Grant, which includes R2l.5 billion to be spent over the next three years (SAACE, 2006b, p.6).
None of the firms reported an intention to cut any jobs, while there is a strong urgency to hire engineers, technologists, other technical staff and technicians in this profession (SAACE, 2006b, p.16). The growing lack of engineers in the country has improved the position of the engineering profession in terms of "value". The most immediate concern is the lack of skills in industry, regardless of race or gender, amid increasing use of existing capacity (SAACE, 2005a, p.31 and SAACE, 2005b, p.34).
ABC'S CURRENT SERVICES AND MARKETING SITUATION
The company is also close enough to Durban to provide services to the DWAF regional office (Director 1,2006). The company does not normally offer discounts on these rates and payment terms are 30 days. The company mainly targets specific individuals or specific corporate companies to get work on large agricultural developments.
The company always aims to hire people of good quality in terms of their private and professional life. In terms of ABC's current target market, the company does not operate according to a marketing plan. The next chapter details the methodology used to obtain the necessary information required to develop a strategic marketing plan for the company.
METHODOLOGY
- RESEARCH QUESTION
- RESEARCH OBJECTIVES
- RESEARCH DESIGN
- CONCLUSION
PESTlE and SWOT analyzes were then carried out as part of the focus group, using the information identified in the above assessments. This method highlighted the key issues discussed in the Macro Environment section of the Key Issues section in Chapter 6. Respondents were also asked to identify ways that consulting engineers should respond to these issues in the macro environment.
The sample of individuals selected to participate in the research study includes individuals coming from various sectors of the engineering industry. This method really highlighted the main issues as can be seen in the Findings Chapter (Chapter 5). It is interesting to note that many of the issues highlighted in the previous chapter (Section 3.2.6) are related to the main issues raised in the internal and external analyses.
FINDINGS
EXTERNAL QUESTIONNAIRE: MACRO ENVIRONMENT ANALYSIS In addition to the macro environment being analysed by the ABC technical staff in the
All respondents mentioned that BEE has a major influence on the consultancy and engineering industry. One of them stated that some of the implications of BEE and preferential procurement policies are an increase in the overall cost of projects and a decrease in the quality of services. One of the respondents stated that globalization seems to be having a huge effect on our local economy and that the consequences of the volatile exchange rate are very serious.
One of the respondents wrote that the South African economy is relatively small and is often directly affected by government decisions. Two of the respondents said that the biggest changes to customer procurement systems came from BEE and Preferred Procurement policies. One respondent wrote that there is an increasing awareness of the environment, ecology and conservation.
INTERNAL FOCUS GROUP: SITUATION ANALYSIS
It was agreed that this work has mainly been in the form of designing and repairing earth dams. One of the focus group members said that ABC has traditionally done a significant amount of work for local authorities such as the Department of Water Affairs and Forestry (DWAF), the Department of Agriculture and Environmental Affairs (DAEA) and the Department of Works (DOW). The current positioning of the company's services was analyzed by the focus group using a product/market matrix.
The rationale, given by the focus group, for the location of the services in Figure 5.1 above is as follows:. Deepening projects are relatively new types of projects and are thus in a new phase of the life cycle. The situation analysis and the above table identify a wide range of issues that pose a threat to the company's profitability in the short to medium term.
KEY ISSUES FACING ABC
MACRO ENVIRONMENT
- Threats
- Opportunities
He also stated that many young companies are resorting to hiring technicians instead of engineers, which is due to the lack of available suitably qualified engineers in the industry. This relates back to the previous key issue of skills shortages in client organisations. One of the consequences of this process is that the decision-making process is delayed.
By positioning the company in a larger city, it improves the accessibility of services for the customer (Kotler et al, 2002, p. 10). The company is engaged in the development of an ISO 9000 quality control system to comply with SAACE requirements and to ensure that quality procedures are in place within the company; however, there is currently insufficient manpower to complete this task. The resource audit above helped structure and quantify the severity of the company's strengths and weaknesses.
RECOMMENDATIONS
INTRODUCTION
STRATEGIC MARKETING PLAN
ABC should actively seek out and pursue these projects as they are part of the company's core competencies and have proven to be very lucrative in the past. ABC must combat this competition by promoting the company as a specialist in agricultural development. Product means the combination of goods or services that the company offers to the target markets to meet its needs (Kotler et al, 2002, p.l. 0).
The company should expand this service and concentrate their efforts to improve their position in the market. The focus group mentioned that company members were required to write and present papers at the SASTA conference to position the company as a leading technical service provider to the sugar industry. The resource analysis showed that the company's office environment is a great strength for the company.
RESEARCH LIMITATIONS
With a new hire, some changes in the arrangement of the office space are necessary. The second scenario is the pessimistic view, which represents the amount a company can expect to add to its annual turnover if it takes a pessimistic view of the outcome of the measure. Monitoring of marketing campaigns should be done through monthly marketing meetings where individuals can discuss the progress of their assigned tasks and any problems encountered.
It may have been useful to include more people from other engineering disciplines to draw on their knowledge of the macro environment. In relation to the current problems facing the industry, it would be beneficial if in the future research was done on how Consulting Engineers can handle and solve the problem of lack of skills in client organizations such as public organizations. South African Association of Consulting Engineers (SAACE). 2005a) State of the South African Consulting Engineering Profession in South Africa.
APPENDIX A
The current situation in the South African industry is very different to what it was when MBB Consulting Engineers was founded 35 years ago. At present, with the increased competition in the market and the implementation of Black Economic Empowerment (BEE), many consulting engineering firms find it more challenging to maintain a constant flow of projects to ensure positive returns in the long term. All involvement is completely voluntary and no one should be disadvantaged if they choose not to participate in the discussions.
Which important developments and trends in the local and global economy impact consulting engineers. What major changes are taking place in the relevant product and service technology and how do these changes impact consulting engineers? What changes are taking place internationally in the construction sector and what influence do these changes have on local engineering firms?
APPENDIXB
