Marketing relationships in the steel construction sector: for the Anglo-Dutch steelmaker, Corus,...

Faster, more efficient construction has been a primary driver behind the growth in design and build contracting and other `fast-track' construction techniques. Here Corus is well placed to capitalise. Steel's ready, off-the-shelf availability, its suitability for prefabrication and its ease

But although these may be strong advantages for steel in many applications, they are not necessarily decisive. In the majority of cases the choice of material is not so clear-cut with the designer having, for example, a clear choice between steel and other primary materials such as concrete, timber or masonry, each with their own pros and cons. In such instances the question of value-for-money becomes crucial. The perception of steel as offering value for money compared with other primary materials is highly dependent on a number of differentiating factors relating to both product and service.

The product factors include the physical attributes of steel such as its tensile strength, its formability, its ease of fabrication, and, of course, its ability to be produced in a huge range of customised formulations to suit specific applications. However, with a metal like steel, it is in service-related areas where most of the scope for differentiation lies. This is because steel customers increasingly need suppliers that are close to the market and nimble on their feet, suppliers that truly understand their needs and, of course, suppliers that deliver true cradle-to-grave value.

A customer that believes he has received good value is a satisfied customer; one that will come back again and again with more business.

RELATIONSHIP MARKETING

It is in recognition of the need to create differentiation by adding value through innovation in both product and service that has pushed the concept of `relationship marketing' to the fore at Corus. Relationship marketing or `partnering' is the process of establishing, developing, and maintaining successful long-term exchanges between organisations in the supply chain. It has become of increasing importance in recent years in part because research has shown that it costs up to five times as much to acquire a new customer as it does to service an existing one.

The establishment of the Corus Construction Centre, the company's new market-oriented sales structure, and its leading role in industry-wide initiatives such as the Construction Manufacturers' Partnering Association (COMPASS) are testimony to the commitment of Corus to differentiating its offering through customer-focused innovation and service.

The Construction Centre, based at Scunthorpe, England, is a centre of excellence that has been set up to provide a single source of expertise on the use of metals in construction and to promote integrated metal construction solutions. And with its technical expertise and involvement spanning the entire construction spectrum it is in a key position to keep abreast of market developments.

One of these developments is a renewed interest in steel framing for residential buildings. There is huge potential in this market as builders seek to raise quality and reduce construction time. Although around 25% of all houses in the United States are built with steel framing, in the UK the figure is less than 1%. The Corus `Surebuild' system is rapidly gaining ground with house builders as changing regulations, skill shortages and an awareness of the environmental and other benefits of steel framing become more widely recognised. Corus output in this sector has doubled year-on-year for the past three years.

Other niche markets with substantial potential for steel include short to medium span bridges, basements and sports stadia.

TOWARDS SYSTEM BUILDING

Another market trend is the gradual shift towards system building -- the supply of pre-engineered, and often pre-assembled, building elements for rapid, high-quality on-site construction requiring low labour and skills-dependency. In concert with the shift towards supply chain integration, clients are increasingly demanding integrated building elements or even complete turnkey packages. The KALZIP[R] roofing system from Corus Building Systems is a good example of a product that is supplied as part of a `Total Solution'. According to Mike Nevitt, KAL-ZIP's Marketing Director: "We supply the KAL-ZIP as a complete material package exclusively through our TEAM-Kal network of licensed cladding contractors. This allows us to exercise control throughout the prolonged specification/construction process and has helped make the KALZIP name synonymous with quality. We see ourselves as providers of complete building envelope solutions rather than simply building sheet manufacturers."

GREEN MARKETING

The challenge of sustainability is a recent business philosophy in societal marketing. This enlarges the marketing concept by asserting that organisations should determine customers' needs and wants and then deliver superior value to the target market in a way that improves customers' and society's well-being. It takes into account the need for organisations to act responsibly not only towards their customers, but also towards the environment and other needs of society.

A high proportion of the steel used today is already a recycled product, and most of the structural steel from building demolition is recycled. This provides salvage value, reduces demolition expenses, reduces landfill volume, reduces tipping fees, and helps the environment. Therefore, from an added-value marketing perspective, the quest for sustainability presents much more of an opportunity than a threat and is currently an area of significant focus for Corus.

One of its initiatives here lies in the development of Life Cycle Analysis (LCA), a decision support tool which evaluates the environmental impacts of a system or process involved in the production of a product across all stages of its life cycle. This information will be fundamental to the material

decision-making process in the future.

SUSTAINABLE DESIGN

The sustainability theme runs through into design. Corus aims to be a customer-focused, innovative metal solutions provider. One method of delivering this is through its Design Programme. Designers specify the materials that the products of tomorrow will be made from. Corus aims to ensure, right at the concept stage, that designers think metal, and more importantly, think Corus. Helen Williams, Head of Company Communications, Corus, maintains that "good sustainable design is about competitive differentiation, which is crucial to commercial success". As one of Europe's leading metals companies, Corus works with designers and architects at the early creative stage to find real solutions to take their ideas from the drawing board into production.

The Corus Design Programme promotes excellence in design and supports a number of initiatives that involve Corus customers. For example, the Design Sense Award was launched by the Design Museum in 1999 and is sponsored by Corus and supported by the Rufford Foundation. It is the only award for sustainable architecture and industrial design that measures buildings and products against the same criteria.

This year's 40 000 [pounds sterling] prize was awarded to architects Chetwood Associates for the Sainsbury's supermarket on the Greenwich Peninsula, London, which sets a new standard for building design in the retail industry. The result of wide-ranging research, the design is a radical rethink of the supermarket. It is built on a brownfield site, makes maximum use of natural light, and consumes half the power of a standard supermarket using an on-site combined heating and power plant.

Accessibility on foot and by public transport has been given a high priority.

Other initiatives in Corus' design programme include patronage of the D&AD (Design and Art Direction) Product Industrial Design awards; support for BEDA (Bureau of European Design Association) seminars aimed at putting the value of design on the EU agenda; sponsorship of the Young Architect of the Year Awards to support the next generation of architects; running the Steel Packaging Design Awards to inspire student innovation and last but not least, hosting the Motor Show Awards which are geared to rewarding engineering excellence.

CITY Of TOMORROW

In Wales, Corus has launched a `City of Tomorrow' initiative to provide the company with a common framework for action based on the emerging markets for sustainable urban development. `City of Tomorrow' provides a platform for partnerships with customers, suppliers and the research community that will develop the knowledge base that is needed to identify best practices and opportunities for innovations.

The company has several collaborative projects currently underway exploring the market potential for sustainable design. For example, the ECO-Factory is a steel frame building with metal cladding and integrated photovoltaics. Initiated through the Port Talbot Partnership Challenge in conjunction with the Centre for Research in the Built Environment at Cardiff University, it stands as an exemplary project in design excellence and eco-efficiency.

Another partnership -- with the European Regional Development Fund, National Assembly Office, Welsh Development Agency, Local Authorities, regional businesses and others, including major UK contractors -- involves the Corus team in supporting Cardiff Business School with their innovative ECO-Clusters in Construction project. This has been set up to pilot a `cluster' approach to improving the eco-efficiency of small and medium-sized construction businesses.

RENEWABLE ENERGY

An example of the Corus emphasis on partnering, systems solutions and sustainability is its pivotal role in a collaborative project with the goal of developing what could be the world's largest urban wind farm.

Three national companies -- Corus, Northern Electric Generation and AMEC Border Wind -- are together investigating the feasibility of a wind farm largely on Corus land at Teesside. If favourable, work will start on site in 2003.

Corus will supply the steel and engineering services to build the farm and a subsidiary of Corus, Cogent Power Ltd, is ideally placed to provide turbines for the blades and electricity generation. In marketing terms, the project will promote Corus to the forefront of the UK Government's drive to promote renewable energy. As Graham Hillier, Corus Director, Construction says: "The threat of climate change can be turned into an exciting opportunity to promote steel and emerging clean technologies which will in turn improve profit and could create new industries and jobs. Corus has much to contribute to the development of renewable energy and we will use the full range of our products and services to make a significant contribution to its development."

Article supplied by Corus Group, Construction Centre, PO Box 1 Brigg Road, Scunthorpe, Lincs, DN 16 IBP UK. Tel +44 (0) 1724 404444 Fax +44 (0) 1724 285774 email: corusconstruct@cs.com