Turner Construction Company | HBS Case Study on B2B Marketing | IIM (A)
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Transcript of Turner Construction Company | HBS Case Study on B2B Marketing | IIM (A)
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Turner Construction CompanyGroup 9:
Rohan, Gowri, Soni, Parag & Archal
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Major Markets
Commercial
Health Care
Public
Hotel/Residential
- Large portion of biz.- Cyclic in nature.- Highly o/p oriented- Fast, reliable & on-time reqd.
- Recession proof- State involvement- Info. well in advance- 10.5% CAGR of sector
- Fastest growing mkt.- Lacks constr. knowledge- Imp. to users specs
- Demand vary city to city- Large chains at times- Customer has knowledge- Fast, reliable & on-time reqd.
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Types of contractsAs on ‘83
Negotiated feeLump-sumConstr. Mgr.
Philosophy of contracts
0 20 40 60 80 100
Distribution of projects based on value. As on ‘83.
< $ 1 m$ 1 to 50 m> $ 50 m
- Turner primarily believes in philosophy of pre-negotiated projects
- Contingency fee of 3% was generally charged.
- Saving on project cost was shared with customer. Turner’s share @ 25%.
- Unless for agreed contingency/force majeure cost due to delay & over-runs is borne by turner.
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Locate prospect & Create awareness @ turner
Meet Decision maker
Send Proposal & References
30 to 45 min. ppt. to board
Final pricing and offer
Selling Process
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Project Selection
Proj
ect s
elec
tion
1. Contract type: Lump-sum/Negotiated
2. Job Size:Mix of big & small
3. Owner:Long term + Margins
4. Staffing required:Qty + Quality + trg.
5. Level of business in territory
6. Client (Turner is keen to work with)
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Today’s decision
Option Facts Pros Cons
Approve Commercial – bldg. project
- Intro. by DA (30 yr)- competitor: local
- Add Clientele - Use efficiency of territory A (comm.)- Chance to optimize operations- Partner with growing developer
- Unavail. of staff- For territory A, only one nature of biz.- The schedules were tight, with less slack availability
Persuade Hospital chain
- Territory A has not built hospital in 10 yr- In hospital domain, it takes time till materialization of project.
- Gain expertise in separate field (Demand in hospital field is non-cyclic)- Strengthen staff- Train youngsters
- No/less previous experience- Would consume entire staff for months- Deal with new subs - Estimation where territory has less exp.
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Today’s decision
1. The group should persuade Hospital business. Reason: (a) Train new staff (b) Easily augment staff (c) less recession effect.
2. The second preference should be given to building up capacity for co-ordination with territories to meet target of “Goodnight Hotels”
3. Subsequently plan and rig-up manpower available at territory A, to not to miss opportunity like of commercial building (where territory is already proficient)
4. Ask GM reason for not seeking prior approval of project.
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Thank You