MARKETING EXPENDITURES in THE INDONESIAN CONSTRUCTION INDUSTRY
Stimulated by past failures of "product oriented" marketing and harsher competition, a new concept of marketing that stresses the importance of a firm's market orientation has been developed in manufacturing industries after World War II. In the 1960s, a “new” marketing concept known as "four Ps marketing mix" appeared that shifted the focus from the product to the customer. The objective of the new concept was not only profit, and the means of achieving the objective expanded to include the entire “marketing mix”: product, price, promotion, and place (channels and distribution). Consequently, expenditures of marketing in a company may be explored from these mixes, because each mixes should have impact on cost of total marketing expenditures. The mixes should represent almost all expenditures in marketing in a company, in this research the Indonesian large contractors member of AKI (Asosiasi Kontraktor Indonesia). From this research it is discovered that most Indonesian contractors have only average efforts to improve or innovate their service, mostly using the latest construction methods and management approach. It is confirmed that this mix only expenses the third priority of four mixes. Correlated to their policy in the fourth mix (Place), they are still national oriented and not international oriented in marketing their places. The attitude to use more intensive “fees” policy rather than both product innovation and promotion is also discovered. Attitude to use more product innovation and true promotion approach in marketing in construction must be encouraged systematically in the future, to improve competitiveness in the long term. The average 8.9% total marketing expenditures confirm Mochtar’s (2001) finding that 60% of Indonesian contractors expense over 2% of annual contract value for marketing purposes.