Stone, Sand & Gravel Review - January/February 2009 - (Page 67)

What Moves THE MARKET? What Moves A Customer? by Tim Reagan NSSGA Vice President for Marketing and Membership Services omo economicus: Latin for economic man; the belief that man is motivated purely by self-interest and that he will always make the most rational decisions. Therefore, economists believe that they can predict man’s behavior, even a whole society’s behavior, with this principle. But they may be two competing motivations. Having been in the marketing arena for 25 years and the construction industry for the last 10, I’ve often found myself arguing against that position with people who think that marketing is ineffective in this industry (and the industry’s customers). They argue that all business decisions are made purely from a rational position, even arguing that self-interest in H the engineering community is rational decision-making. While I’ve been most confident in the concepts of the economic man theory (the alternative theory being hope and intuition, in which I have little confidence), I’ve always believed that marketing is the intersection of economics and psychology — where the rational economist in each of us meets our irrational psyche, resulting in a sweet spot most likely to achieve marketing success. The recent “economic meltdown” got me thinking about the purely rational assumptions we count on in economics and how easily they can morph into something else. As we listen to talking heads and read the pundits, we have to wonder how this could have happened. No rational thinker would accept the absurd risks that were routinely accepted and resulted in the meltdown. In this case, otherwise smart rational people, in an industry that is easily quantified, made buying decisions that make no rational sense now. And the amazing thing is that whole organizations bought into this approach, making purely self-interest an unlikely reason for bad decisions. On a more local level, consider all of the people who bought houses with subprime mortgages. The buyers knew they couldn’t afford to buy a house that cost 10 times their annual salary, and the banks knew they were selling mortgages that depended on a 10 -percent-per-yea r i ncrease i n 67 Stone, Sand & Gravel Review, January/February 2009

Table of Contents for the Digital Edition of Stone, Sand & Gravel Review - January/February 2009

Stone, Sand & Gravel Review - January/February 2009
Events Calendar
Table of Contents
Legislative and Regulatory Calendar
AGGI: The Unofficial Guide
A Quick Guide to NSSGA's 2009 Annual Convention
New President, New Congress—What's on the Agenda?
Performance Optimization in an Existing Operation
Water Infiltration Mitigation Project at Clinton Point Quarry
The Human Element
Return on Investment: Committee Membership
Shaping Landscapes for Tomorrow
What Moves the Market? What Moves a Customer?
MSHA/NSSGA Rip & Share
Working the Web
NSSGA on the Road - CEMEX Davenport
Products & Services Guide
Buyers’ Guide Index

Stone, Sand & Gravel Review - January/February 2009