AMARAL REMODELING COMPANY
With over 30 years of experience and ten years of owning and operating a licensed construction company, Tom Amaral has built his company from ground up and is a proud contractor in the Alameda County area. His diverse background and ethical professionalism has been the result of his company to market itself though the “word of mouth” since it began; however, due to the down-slope of the economy in the recent years, his company revenue has come to a halt forcing him to seek other methods of increasing his market share. As part of a group, we took the task upon us to create a marketing plan which will attack the question: how can Amaral Remodeling increase its revenue through a new marketing strategy? Throughout this document, we will analyze and explore all potential means of achieving our objective. The external environment has changed the landscape of the construction industry. Contractors face economic, legal and technological challenges. The prices of homes have decreased, the building of new homes has slowed, and there have been an increased number of foreclosures. Contractors are being out priced by unlicensed contractors who do not have the overhead costs related to being licensed. The use of the internet has changed how contractors advertise and their communication between possible customers.
EXTERNAL ENVIRONMENT. The state of the economy since the 2007 recession has had a lasting effect on the environment of the construction industry. There has been a higher rate of unemployment and a greater number of people have less disposable income. This has reduced the size of possible customers. The situation that the housing market is in today has also changed the demand of the industry. The price of homes has declined, the building of new homes has slowed down, and the number of foreclosures has been high over the past couple of years. People who are looking for a home are looking at lower priced homes and foreclosures that might need work instead of building new homes. Foreclosures have at times been trashed or stripped down by the previous owners and need a lot of work. Overall, the current condition of the organization’s external environment has greatly impacted demand and sales.
Contractors require a license and a license bond to work. Contractors are also required to get proper building permits through the county and have inspections performed to approve that their work is built to code. Licensed contractors are facing competition from unlicensed contractors who out bid them. Licensed contractors face the problem of losing business because some customers choose have an unlicensed person do the work who does not take the proper route to performing within legal guidelines because they are cheaper. Unlicensed contractors don’t have the overhead of paying for permits, worker’s compensation, and commercial general liability insurance coverage.
Technological advancements have created new machinery, equipment and tools. These newer offerings have the potential to make work faster and more precise, but it costs more to keep up with the latest equipment. At the same time with the new developments owners face obsolescence of old machinery, equipment and tools. Technological advances have also affected this industry with respect to communication and advertising. Technology, the internet in particular, has changed the way people consume. People now have exposure to companies through the internet and at times it can be the first contact point with customers. Consumers research and compare companies online, for example when choosing what company to call for a bid. Customers also look for references and feedback about companies to aid in their decision of choosing a contractor. Companies today must consider their reputation and image through online outlets. INDUSTRY ANALYSIS. As...