How to Create Competitive Advantage in Project Business PDF

JourtMl of Marketing Managemenl. 1993, 9, 105-121 Bernard Cova and Karin Holstius* European School of Management, Paris, and IRE, Lyon, France, and *Turku School of Economics and Business Administration, Finland How to Create Competitive Advantage in Project Business The Tnarketing of projects was s...

JourtMl of Marketing Managemenl. 1993, 9, 105-121 Bernard Cova and Karin Holstius* European School of Management, Paris, and IRE, Lyon, France, and *Turku School of Economics and Business Administration, Finland How to Create Competitive Advantage in Project Business The Tnarketing of projects was studied separatety from the seller's and from the buyer's points of view. The txm research approaches were then combined and e model for international project marketing was developed. First it was demonstrated how the different stages in the bui/ing process are related to the seller's project marketing cycle. Then, two separate empirical studies were conducted. In the first, three key succes factors for project business were isolated. These factors were then combined with six major action variables identified in the other study. The resulting model shows how the marketing of projects overlaps all corporate functions, and it is proposed that this model can be used for creating competitive advantage in project business. Introduction Background Project marketing is quite a new subject which still lacks its own theoretical corpus of original concepts validated by research. It has received little attention in marketing research, although projects have become increasingly important, particularly as an intemadonal business ojjerafion and as a strategic choice. Project business is essentially different from traditional trade with goods and services, and considering it as a strategic choice therefore requires organizational readiness and a new management approach. The big advantage of project business is that the new demands in international markets do not necessarily require the development of original new products. The ability to combine and restructure existing or expandable product and service potential can provide firms with new opportunities and relative sujjeriority in project business not only in relatively new market areas such as the oil-exporting and developing countries, but in industrialized countries as well. T/ie Purpose of the Study and the Research Method The purpose of this article is to establish some key success factors for creating competitive advantage in project business. The article is based on research about the seller's project marketing process and the stages in the buying process. Two empirical studies were conducted in order to identify (a) factors which influence the seller's success in project business, and (b) variables which are relevant to the project buyer. 0267-257X/93/020105+17 S08.00/0 © 1993 Academic Press Limited 106 Bernard Cova and Kaiin Holstius A concept analytical research approach is used in an attempt to combine the empirical findings into a project marketing model. A final conceptual synthesis is strived for in order to illustrate that project business differs from the traditional industrial inarketing concept. The angle of approach in this study is the international marketing of projects, although most of the findings also seem applicable to activities in the seller's home market. Theoretical Background Project: Clarification of a Concept There is no universally accepted definition of a "project", and the situation is further complicated by the fact that different terms are used about this type of business. However, there is a common feeling shared by some European researchers that it does need a specific marketing approach (Bansard et al. 1990), beyond the limited approaches of competitive bidding models (Boughton 1987; Allen and Cova 1989). Of several suggested tjrpologies for differentiating projects from other goods and services, the transaction/production typology (Vasconcellos e Sa 1988), which is described in a matrix (Figure 1), seems appropriate. Unit Maas Production Highly complex Industrial goods f Consumer N y services J Highly simple Marketing spreading Figure 1. A transaction/production typology. How to Create Competitive Advantage in Project Business 307 "Projects" occur at the most spedfic and most complex point, at the other extreme from mass marketing approaches to consumer goods (Figure 1). They feature high transaction complexity (sf>ecific investments, the importance of the purchase, perceived uncertainty) and are produced in units or spedfic batches. This is the latest point reached in markefing theory, in the eighties and early ninefies (Heap and Campbell 1990; Rudelius et al. 1990), having evolved for industrial goods in the sixfies and for services in the seventies. A separate marketing theory is needed for "projects" to avoid the erroneous direct applicafion of industrial marketing concepts, just as a consumer goods marketing approach was applied to industrial goods two decades ago. From this typology arises the following proposal for a definition of a project: "a complex transacfion covering a discrete package of products, services and other acfions designed spedfically to create capital assets that produce benefits for the buyer over an extended period of time". This definition encompasses the marketing of both extensive and parfial projects, such as some subcontractors' deliveries. A suitable starfing point for constructing a model for project marketing is the sixstage project cycle used by developmentzd and financial institufions (Baum 1982): (1) (2) (3) (4) (5) (6) idenfification; preparafion; appraisal; negofiafion; implementafion and supervision; evaluafion. The development of this cycle to suit the marketers of projects will first be presented as it emerged in earlier research (Holsfius 1987). Then the cyde will be elaborated from the seller's as well as from the buyer's points of view in order to create an interacfive project cycle. The Project from the Seller's Point of View In a study covering the most important Finnish project exporters (Holsfius 1987), a project marketing cycle was constructed and validated. A concept-analyfical model based on a literature survey was tested by means of interviews which concentrated on the marketing of projects and the concepts involved. The resulting project marketing cycle is presented in Figure 2. —The first phase is called the search phase. It consists mainly in scanning the environment and identifying project opportunifies. —The second phase is the preparation phase and focuses on a suitable project to exert influence not orsly on the buyer, but on all the entifies involved, in order to get informafion and to obtain tender specifications which are favourable to the company. —The third phase is the bidding phase and consists in setfing up the proposal after receipt of the invitafion to bid. —The fourth phase is the negotiation phase, which starts at the opening of the bids and finishes with the signing oiF the contract. —The fifth phase is the implementation phase, which includes supervision to 108 Bernard Cova and Karin Holstius A. Search B. Preparation I 1 C. Bidding D. Negotiation I E. Implementation F. Transition Figure 2. Source: HOLSTIUS (1987). The project marketing cycle. ensure the achievement of agreed objectives and the maintenance of a climate of cooperation between buyer and seller in the identification and solving of problems arising. —The final phase is the transition phase and involves evaluation of the project and the building up of knowledge and experience for future use. This cycle can be said to be self-renewing in much the same way as the project cycle is self-renewing from the point of view of developmental and financial institutions. Each phase of the project—the project cycle as well as the marketing cycle—leads to the next one and the last phase produce new approaches and ideas and result in the identification of new projects. The Projectfrom the Buyer's Point of View In a study of the project buying process (Cova 1989), three different cases were investigated in Southern Europe according to the inductive approach known as Dedsion System Analysis. The combination of the diagrams resulting from the three cases led to a general model of the project buying process. The project buying cycle presented in Figure 3 is a summary of this model. This project buying cycle may be distinguished by the following. A Long-lasting, Negotiated and Interactive Process. The project buying cycle is a long- lasting one with many phases. Negotiation is a major component of these phases. It occurs before the setting up of the bidder's list and requests for proposals. How to Create Competitive Advantage in Project Business 109 Need awareness i i i 1 i i i i i i i I i i Research on suppliers and contact for advice Specifications Bidders list Request for proposals Exchange of information* Analysis of proposals Shortlist Negotiation < New proposals Possible loops Analysis of new proposals Negotiation Final assessment Final selection Figure 3. Contract Source: COVA (1989) Between suppliers and the buyer's network. The project buying cyde. between invitations to bid and bids, between first bids and new bids and before final selections. These negotiations permit the buyer to adapt his demands according to the informafion he may have collected from different bidders; in the same way, he may express his requests more spedfically to the bidders. Negotiation seems to be the necessary medium for informafion in the buying of projects because of the direct interacdon it involves. A Request for Interfirm Linkages. Each of the three cases induded requests for indus- 110 Bernard Cova and Karia Hohtiia trial or financial interfirm linkages between the buyer (or an entity of his network) and the supplier. These ranked from the traditional countertrade agreement to the setting up of technology transfer agreements, licensing and joint ventures. A Comin£-into-play of Interpersonal Relations. Each of the three cases involved a high level of interpersonal relations between buyer and bidders. These relations play an informative role as information is transferred from the buyer (or an entity of his network) to the bidder in order to help him better to meet the requests, or from the bidder {or a member of his network) to the buyer in order to make him better aware of the seller's capacities. Great Importance Given to Relational Criteria. At each phase of the process, relational criteria seemed to play an important role. Being a current or a back-up supplier, or having local facilities, seemed to be as important as sound references, a good reputation and technical capacity at the pre-selection stage. For final selection, the quality of countertrade agreements and other interfirm linkages seemed to be as important as price or technical quality; this was obvious in one case in which the successful bidder's price was 10% above the lowest price for the same technical quality. A Large Set of Ghoice Griteria in the Various Phases. Price is no longer the sole criterion. Other criteria are used in the selection process, such as the relational ones mentioned above, plus warranty, reputation, norms and standards and, of course, quality and delivery time. These criteria are of two types: —those used to establish the bidders' list; —those used to evaluate the proposals. The Management of the Buying Gentre Through the Gombination "Buying + Engineer- ing". Regardless of how many people participate in the selection process, it is actually managed by the combination "Buying + Engineering". The responsible buyer and a specialist technician call on members of other departments or other entities to assist them in the process. This duo is the bidder's contact group in the buyer's organization; the CEO is usually present during some phases of the selection process. Towards an Interactive Project Cycle The seller's and the buyer's perspectives, as they emerge in previous research, can now be combined into a framework in which the interaction between the two parties is emphasized at each phase of the project cycle (Figure 4). Indeed, each one of the first four phases is concluded by an act of the buyer and is connected with the advancement of the supplier in the buying process. —(A) —(B) —(Q —(D) contact for advice from "potential" suppliers; bidder's list of "approved" suppliers; shortlist of "efficient" suppliers; final selection of "partner" suppliers. Each phase involves numerous exchanges between the buyer and the bidders in order to match demands and offers. In fact, the best approach is to focus on the buyer-seller transaction and on the transaction cycle, rather than to tackle the problem from the buyer's or the seller's How to Create Competitive Advantage in Project Business Seller's side Buyer's side A - Search Need awareness 111 i Research on suppliers and Contact for advice B - Preparation C - Bidding D-Neg otiation i 1 Bidder's list i Request for proposals i Exchange of information Analysis ofi proposals i Short-list i Negotiation Specifications New proposals 1 i Negotiation i Final assessment i Final selection I Contract Analysis of new proposals f E — Implementation F - Transition Figure 4. Towards a general model of the project marketing cycle. point of view. The object of project marketing is the transaction, i.e. the area of interaction between buyer and seller; the transaction cycle is therefore an interactive one and is the subject of study in this research. This project inarketing or transaction cycle is also a means of differentiating projects from industrial goods and services. The scope of marketing is more limited for a firm dealing only in goods and services, and wider when project business is involved. The stages in the project marketing cycle relevant to all industrial marketers are 112 Bernard Cova and Karin Hotstius bidding (C) and negotiation (D), and that is the way standard products are marketed. As is known from previous research (HSkansson 1982, 1987), most industrial goods and services need an interactive approach between buyer and seller and therefore some of the aspects of preparation (B), implementation (E) and transition (F) may also be relevant when the firm provides goods and services. Projects, however, always have to go through the complete range of the cycle, from A to F. The widening of the marketing scope when a firm proceeds from goods to projects is illustrated in Figure 5. This interpretation is supported by an analysis of A A. Search z B. Preparation C. Bidding D. Negotiation E. Implementation rB -E -F F. Transition Goods * Projects Figure 5. Types of activities and marketing scope. the new European directives for public procurement. These propose the use of a wide range of buying procedures, the shortest and simplest ones for standardized supplies, and the longest and most complex ones for projects indicating that the supplier has to pass through all the stages of the cycle suggested above. Finally, it can be observed that the interactive project cycle is consistent with cycles suggested in some earher work carried out in Sweden (Jansson 1989) and in France, particulariy by Duroure and Fraisse (1981), regarding a "business cycle" consisting of the phases: search (including preparation), study, negotiation, realization, follow-up. Empirical Findings The research method used throughout this study approaches the concept of project business in two different ways and in two different geographical areas. Northern Europe and Southern Europe. In the first empirical study, some factors are identified which further the seller's success in project business. In the second, major action variables are identified when the seller's bidding behaviour is related to phases in the project cycle. Key Success Factors in Project Business Previous research results suggest that factors that might influence the internatiortalization process of the product range towards projects are: an adequate Ho w to Create Competitive Advantage in Pro/ect Business 113 marketing organization and competent marketing personnel, arrangements for project financing and buy-back services, the capability of analysing the competitive situation and the relevant risks (see Holstius 1989, Kosonen 1984, 1990, Peruose 1959, Roman 1986, v. Troil 1986). When the idea of entering project business is introduced and accepted in a firm, we are—in Penrose's terms (Penrose 1959)—dealing with an entrepreneurial service. On the other hand, the concept of intrapreneuring, as developed by Pinchot (1985) is also relevant in connection with a firm's entering international project business. The role of the traditional as well as these intracorjjorate entrepreneurs is to recognize opportunities to make better use of the firm's technology and knowhow, and to suggest new means of satisfying customer needs. The services that a firm's entrepreneurs produce are dependent on their versatility, ingenuity and ambition and the quality of their entrepreneurial judgment (Peru-ose 1959). From the above, it is hypothesized in the first study that the process towards project exports is facilitated by the following factors. (a) entrepreneurial qualities in those who run the business; (b) the encouragement of an entrepreneurial and innovative spirit among intrapreneurs; (c) organizational readiness for project business embodied in the marketing organization; (d) internationally-oriented personnel engaged in marketing; (e) the capability of exploiting special financial arrangements for project business; (f) the capability of evaluating projects and assessing their risks; (g) readiness to respond to countertrade demands. Furthermore, it was hypothesized that an extension of the concept of marketing furthers project business: when bidding and negotiation are preceded by search and preparation, and followed by implementation and tiansition, this is expected to enhance success in project business. The hypotheses are summarized in Figure 6. This preliminary model for project marketing thus consists of three kinds of variables: independent variables, one intervening and one dependent variable. The model also comprises the concepts production capacity, technology, experience in export management and financial background, which are seen as necessary preconditions for a company embarking upon project business. These concepts were not operationalized in the study. The independent variables are the seven concepts derived from literature and hypothesized to promote project business and further the company's success in it: entrepreneurial qualities, intrapreneuring, organization, marketing personnel, risk management, countertrade and financing arrangements. The scope of marketing—consisting of the six different stages: search, preparation, bidding, negotiation, implementation and transition—may turn out to be an inferred variable or theoretical construct with no independent role, thus only comprising and summarizing the contents of the seven independent variables. On the other hand, it might be an intervening event or variable with its own effect on the company's success in project business. The dependent variable is success in project business, which in this study was defined as volume of projects in money. To test the model empirically, one group of projects was chosen, namely machinery and equipment. To ensure a high 114 Bernard Cova and Karin Holstius Nenssary di EntrepreiKurial qualities Organization Marketing perwmnel Production capacity Experience in eaporte Technology _L Financial background Intrapre neuring Scope of marketing Figure 6. A preliminary model for international project marketing. response rate, the empirical study was conducted only in Finland on a sample of 34 persons in charge of marketing projects in Finnish export firms. The rate of response was 82%. With correlation analyses it was clearly demonstrated that the wider the marketing scope A-F and the better the overall organizational readiness—comprising seven concepts—the more successful the companies were in their project business. The general impression from the review of the literature and the construction of the theoretical framework was that, in practice, a clear distinction cannot be made between different functions in project business. Therefore, there might be some overlapping and the data gathered may also include traits which are traditionally regarded as part of the administrative or financial function rather than the mcirketing function. Thus it was to be expected that factor analysis would shed some light on these questions. A further reason for conducting a factor analysis was to find out if new combinatorial information could be created, i.e. if the original set of seven independent variables could be reduced to a smaller set which would account for most of the variance in the initial set. A principal components analysis was chosen. The rotation procedure employed was VARIMAX, which was appropriate as there was no theoretical expectation of a general factor. When three factors were considered, the total value for the loadings on the factors constituted 60% of the total variance (see Table 1). Factor 1 contains "organizational readiness for project business" and "capability of exploiting special financial arrangements". This factor appears to stand for an adnninistrative dimension of the data. Organizational readiness for project business requires administration which favours collaboration between profit centres and between product line organization and project organization. As far as financial arrangements are concerned, it was pointed out in validation interviews that financing and management should be regarded as integrated parts of project busi- How to Create Competitive Advantage in Project Business 115 Table 1. Factor Loadings factor 1 Factor 2 Financial arrangements Organization Entrepreneurial qualities Risk management Intrapreneuring Marketing personnel Countertrade 0-853 0-000 0-742 0-000 0-000 0-777 0-000 0-633 0369 0-615 0-000 0-000 0-000 0-000 Loadings of less than -2500 were replaced by zero. factor 3 0-000 0-000 0-000 0-000 0-000 0-788 0-766 ness. The organization should also have its own high-class financial expert familiar with project financing at an international level. In view of the adniinistrative aspects of this dimension,/acfw I was called administrative effectiveness. The variables "entrepreneurial qualities of those who run the business" and "a company culture that favours intrapreneuring" were factored together. The third variable included in factor 2 was "risk management". In the validation of the model it was also pointed out by interviewees that the risk concept is closely interrelated with entrepreneiirship. Factor 2 can be called entrepreneurial culture. The third dimension comprises the variables "marketing personnel" and "readiness to respond to countertrade demands". Marketing personnel included all those who participate in the various stages of project marketing. This concept comprised these people's knowledge of languages and target country cultures, their international orientation and international contacts. As marketing personnel should also be knowledgeable and flexible enough to engage in negotiation with customers about countertrade possibilities, factor 3 was called personnel readiness. The role of the variable "scope of marketing A-F" was also explored by calculating correlations between the independent summary variable "organizational readiness" and project volume while keeping the variable A-F constant. The correlation was negative when A-F was not developed, and highly positive where 1 or 2 phases were added to the scope of marketing. These results confirm that project marketing is basically different from the traditional marketing of industrial goods and services. In project business, it is neither feasible nor interesting to make clear distinctions between the functions of the firm. Indeed, functions overlap and success in project business is much more linked with the totality of the firm's qualities (cf. the factors identified) than with the performance of a specific function. Major Action Variables for the Marketing of Projects On the basis of the conceptualization of the project marketing cycle described earlier, a second empirical study was conducted. The bidding behaviour of a successful French aerospace supplier was examined using a Etedsion System Analysis approach (DSA; Capon and Hulbert 1975), which was specially developed for use in industrial buying behaviour surveys (see MoUer 1986; and especially Woodside and Vyas 1987, for full details of this method). This analysis gave rise to a definition of the major action variables in project marketing at each phase of the project marketing cycle. A French landing gear supplier, Messier-Hispano-Bugatti (subsidiary of the 116 Bernard Cova and Karin Holstius French public sector firm SNECMA), provided the opportunity for an in-depth analysis of three typical cases of international competitive bidding for projects. The first case concerned the supply of landing gear for the CN 235, a commuter aircraft developed by Casa in Spain and Nurtanio in Indonesia. The second case was for the supply of landing gear for the ATR 42, a commuter aircraft developed by Aeritalia in Italy and Aerospatiale in France. The third case was more complex in nature. It dealt with the supply of main landing gear for the AMX, a fighter aircraft developed by Aeritalia and Aermecchi in Italy in association with Embraer in Brazil. On the basis of these three case studies, six major variables and their subvariables (underlined) were identified: —"Promotion" of the firm, its technologies, its experiences with other projects; —"Relations" with the buyer, or a member of its network, at an interorganizational level and at an interpersonal level; —"Sales force", with the international salesmen and the local agents; —"Corporate linkages", with the setting up of industrial and financial interfirm agreements; —"Price" with the escalation formula and the terms of payment; —"Offer", with its traditional constituents Technology/DesignlDelivery time but also Norms/Warranties/Logistics. These variables and sub-variables are combined with the three phases following the emergence of a project (A): the preparation phase B, the bidtUng phase C and the negotiation phase D. Table 2. A Matrix for tbe International Marketing of Projects Phases B C D Variables Preparation Bidding Negotiation Pramotion Relations Sales force iCL Price Offer X X X X X X X X X X In the first stage—preparation—the emphasis is centred around promotion, i.e. the firm's capacity to use its references, and on networking, i.e. the firm's capacity to identify potential partners who will guarantee award, either through their technical/international recognition or their influence in the local context. In the second stage—bidding—the emphasis shifts to value/cost analysis, quality and time span. This emphasis however, decreases if the bidder can demonstrate that the industrial process involved could be transferred to provide the local context with a greater degree of industrial integration between the indigenous private and public sectors. It is important, therefore, at this stage, to ensure that the concept and impact of the industrial process have been fully understood by the decision maker, who is often neither the direct user nor the implementor of Government policy. The third stage—negotiation—is totally directed to the aspects of co-operation. How to Create Competitive Advantage in Project Business 117 technological build-up and the definition of requirements in the transfer stages. It is important for the parties involved to be able to identify and anticipate the numerous restraints that can be encountered in this area. This implies that all companies have an excellent understanding of the availability of qualified personnel and of management practices. They also need to be fully aware of the expectafions of the local Ministry of Industry in the industrial integration process that has been identified for the indigenous manufacturing sector. It should be noted, too, that these variables extend beyond the marketing function to the entire firm. This strengthens the case for a combination of the seller's and the buyer's points of view. The combination of variables and phases leads to the following matrix for the internafional marketing of projects. Conceptual Synthesis Towards a Winning Marketing/Management Model Combining the two studies is not an easy task, and the emerging sjnithesis should rather be regarded as a hypothesis to be validated by further research than a normative model for project business success. The focus is now on the combination of the three key success factors of the factor analysis and its original seven sub-factors with the six major action variables and their fourteen sub-variables. These are synthesized into a model for the successful marketing and management of projects. This synthesis can be achieved through the division of the factors and variables into sub-factors and sub-variables in order to facilitate the discovery of probable linkages (Figure 7). Certain linkages are evident, such as the combining of "financial corporate linkages" and "capability of exploiting special financial arrangements". Others might appear somewhat forced, such as combining "offer" and "entrepreneurial qualities of those who run the business", and should be further verified. However, as the concepts entrepreneurial qualities and intrapreneuring stand for perception and the acceptance of new ideas, there is an obvious link between the idea of entering project business and the promotion and offering of projects. A company is able to exploit special financial arrangements if it has a high-class in-house expert, or group of experts, who are familiar with international project financing, and consequently can create and profjose original forms ot financial linkages. A prerequisite for organizational readiness for project business is co-operation between the product-line organization and the project organization. The importance top management attaches to the project organization and the collaboration between profit centres is also a measure of organizational readiness. Finally, in order to cope with local requirements, beyond its boundaries, an organization must include agents and logistics systems in the targeted countries, and must be ready to cope with international technical norms. Risk management can be operationalized as the number of different kinds of project risks that are analysed, and the readiness to evcJuate risk probability and to choose the appropriate strategies. This applies especially to the financial risks linked with price, escalation formula, terms of payment and warranties. Whereas the measurement of entrepreneurial qualities concerns versatility. 118 Bernard Cova and Karin Holstius Key BuccesB factors (and sub-factars) I Capability ore]q>loiting , special flctancial arrangementB Organizational readiness for project busineBs Action variables (and Bub-variablefi) Financial linka^ee ' Local agents Logistics - Norms Risk management Entrepreneurial qualities ' Intrapreneuring Price > Escalation formula * Terms of payment > Warranties Promotion Design Technology L Delivery time Readiness to respond to counter trade demands Industrial linkages Marketing personnel International sal^-force Interorganizational and interpersonal relationships Figure 7. Coupling tbe two approaches. ingenuity and ambition in those who run the business (qualities which are translated and transmitted to the customer through communication and offering), the occurrence of intrapreneurship is dependent on a corporate culture which encourages the entrepreneurial spirit of intrapreneurs. The readiness to respond to countertrade demands can be inferred by the very existence of a separate trading department, or by the number of employees specialized in countertrade and offset agreements. The international orientation of the marketing personnel can be operationalized as their familiarity with the target-country language, culture and legislation. This is valuable not only for the sales force, but for aU employees in contact with the client: those in after-sales, design, R&D, finance and fjroduction. A further development of the conceptual synthesis is presented in Figure 8. The central element of the project transaction, the "offer", is now placed in the centre of the hypothesized "project winning triad" (Figure 8). This conceptualization shows how the marketing of projects overlaps aU corporate functions. Consequently, the whole firm and not only the marketing department partid- How to Create Competitive Advantage in Project Business 119 Personnel readincBS Delivery time Warranties Technology Design Escalation formula Terms of payment Administrative effectiveness Figure 8. Tbe project winning triad: key success factors and marketing variables and sub-variables. pates in the "project scanning system" (for the concept "Project scanning system", see Boughton 1987, and Seurat/Rougeaux 19W). The same is true for the implementation of the "Relations" variable, which affects all departments and goes beyond the traditional boundaries of the firm. Conclusion Two different research approaches to defining key success elements for project business were developed on the basis of a central concept in the marketing of projects. This concept is the project marketing cycle with its six phases: search/ preparation/bidding/negotiation/implementation/transition. The first empirical study made it possible to isolate three key success factors for a firm engaging in project business: personnel readiness, administrative effectiveness and entrepreneurial culture. The second study resulted in the identification of six major action variables for the marketing of projects: promotion, relations, sales force, corporate linkages, price and offer. A conceptual combination of these two sets of factors resulted in a hypothetical project-winning model. This model, like other propositions, now needs to be validated. The results presented in this study highlight two major characteristics of project marketing: —the buyer/seller interaction at each of the six phases of the process; —the overlapping of all corporate functions in the marketing process. 120 Benard Cova and Karin Holstias These two characteristic features, together with the details of the phases in the project marketing cycle, support the idea of specificity in project marketing compared vnth the traditional marketing of industrial goods and legitimate the creation of the "European network on project marketing and systems selling" that groups the researchers implicated in this field. References Allen, T. and Cova, B. (1989), "New vistas in competitive bidding strategies", European Management Journal, 7, 4. Bansard, D., Cova, B. and Salle, R. (1990), "Project marketing: Clarification of a concept and basis for theory building". Proceedings of the 6th IMP Conference, Milan, pp. 43-73. Baum, Warren C. 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