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Determining customer satisfaction with the “Bulls Eye” marketing construct Ruben L. Anthony, Jr. Deputy Secretary Wisconsin Department of Transportation TRB ANNUAL MEETING January 14, 2008
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Abstract / overview Limited research exists on increasing the participation of disadvantaged business enterprise (DBE) firms on urban construction projects This study examined eight strategies used to increase DBE participation on the $810 million Marquette Interchange Project in downtown Milwaukee The study uses factor analysis on an underlying set of constructs; future work will develop a quadrant analysis
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Project background The Marquette Interchange, downtown Milwaukee First opened to traffic in 1968 By the 1990’s and early 2000’s, the original interchange had obsolete design and couldn’t handle 300,000 vehicles per day Concrete box girders and steel structures were crumbling
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Past effects of freeway construction Historically, freeway construction in Milwaukee harmed urban and ethnic areas, such as the African-American “Bronzeville” neighborhood African-Americans and minorities were skeptical about how they would benefit from reconstruction of the Marquette Interchange
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Project designed to benefit community In 2003, Governor Jim Doyle and Transportation Secretary Frank Busalacchi announce four-year, $810 million plan to rebuild the interchange Community benefits: Community sensitive design Economic stimulus for workers and businesses
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WisDOT philosophy for opportunity WisDOT knew that equal opportunity would be paramount to this project in the heart of Milwaukee’s urban community The philosophy to support DBE businesses, minority workers and other aspects of opportunity is “Make it, take it, respond and deliver”
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Make it Make opportunities for DBE firms to compete on the project Stand-alone contract opportunities to allow DBE’s to bid as primes Mandatory subcontracting to help DBE firms build skills and expertise High subcontracting goals – 20% or higher on most contracts
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Take it Take the opportunities and market them aggressively Bullseye marketing matches firms to the skills needed, and makes the contact Networking events helped encourage DBE-prime contacts, mentor-protégé options, joint venture agreements Pre-bid meetings helped DBE and prime firms to understand bidding requirement Major use of media, newsletters and community events to market contracting opportunities
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Respond Private sector has stepped up to respond 55 newly certified DBE firms in 2004-05 Primes and DBEs took advantage of networking opportunities Mentor-protégé relationships formed Hoffman Construction / South Star Pheifer Brothers / D’Arteaga Joint venture formed K Singh Making the Grade Toki & Associates
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Deliver All sides have stepped up to deliver Through October, DBE firms have earned $122.8 million of contracts out of $624.7 million total, a 197% share Through October, DBE firms have earned $100.6 million of expended dollars out of $550.4 million total, an 18.3% share. Five DBE firms earned prime contracts 74 different DBE contractors and consultants have participated on the Marquette Interchange Project, with more than 80% of these firms from southeast Wisconsin
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Exceeding federal requirements Federal government requires a minority labor goal of 8% and an “appropriate” DBE goal In past years, Wisconsin’s typical DBE goals and achievements have been in the 8% to 12% range Marquette Interchange thus far has achieved 22% minority labor and 18% DBE business participation
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Applying lessons learned Lessons learned about DBE business participation will be applied to future projects: I-94 NS Corridor connecting Milwaukee to Chicago, expected to begin in 2009 and cost $1.9 billion Zoo Interchange in western Milwaukee County, the state’s busiest interchange with an environmental / engineering study just getting underway
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Research questions 1. What are the opinions of DBE firms that participated on the Marquette about the importance and effectiveness of the strategies used to increase DBE shares? 2. Do the strategies have underlying constructs? 3. Have the construct relationships been hypothesized correctly? 4. Can a quadrant analysis be constructed to identify and prioritize strategies that should be eliminated or deployed in the future?
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Data and methods DBE companies surveyed 72 eligible firms 51 companies surveyed face-to-face 15 companies surveyed by phone Currently, 50 records included in data set Likert scale used for questions to establish importance and effectiveness of strategies on a 1 to 5 rating (very low to very high) DBE firms defined as 51% minority and/or women ownership with personal net worth less than $750,000
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Understanding the problems DBE firms may not get a fair share of WisDOT contracting Non-DBE prime contractors often request “good faith waivers” claiming they cannot find qualified DBEs to fill goals Through the Marquette Interchange and other projects, WisDOT has found DBEs to perform work 74 DBE firms involved on project More than 18% DBE share on construction & consultant dollars $122 million in contracts and subcontracts earned Five DBE firms serving as prime contractors
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“Bulls eye” marketing – hypothesized factors 1. Inform DBEs about opportunities 2. Expedite the DBE certification process 3. Demystify the process to compete for work 4. Connect DBEs with experienced prime contractors 5. Require primes to truly make a good faith effort 6. Create opportunities appropriate for DBE and small firms 7. Provide financial support and oversight 8. Establish encouragement and support from leadership
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“Bulls eye” marketing – computer model factors with variance explained 1. Level the playing field – 44% 2. Systematic assurance of info and opportunities – 9% 3. Rapid business development opportunities – 7% 4. Timely, fundamental education – 5% 5. Controlling risk factors – 5% 6. Responsive & expedited certification – 4% 7. Responsive & expedited pre-qualification – 3% 8. Including DBE commitments in bids – 2% Total variance explained – 79%
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Matching hypothesized to computer 1. Inform DBEs about opportunities 2. Expedite the DBE certification process 3. Demystify the process 4. Connect DBEs with primes 5. Primes make a good faith effort 6. Create opportunities appropriate for DBE and small firms 7. Provide financial support / oversight 8. Establish encouragement and support from leadership 1. Level the playing field 2. Systematic assurance of info and opportunities 3. Rapid business development opportunities 4. Timely, fundamental education 5. Controlling risk factors 6. Responsive certification 7. Responsive pre-qualification 8. Including DBE commitments in bids
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Matching hypothesized to computer 1. Inform DBEs about opportunities 2. Expedite the DBE certification process 3. Demystify the process 4. Connect DBEs with primes 5. Primes make a good faith effort 6. Create opportunities appropriate for DBE and small firms 7. Provide financial support / oversight 8. Establish encouragement and support from leadership 1. Level the playing field 2. Systematic assurance of info and opportunities 3. Rapid business development opportunities 4. Timely, fundamental education 5. Controlling risk factors 6. Responsive certification 7. Responsive pre-qualification 8. Including DBE commitments in bids
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Matching hypothesized to computer 1. Inform DBEs about opportunities 2. Expedite the DBE certification process 3. Demystify the process 4. Connect DBEs with primes 5. Primes make a good faith effort 6. Create opportunities appropriate for DBE and small firms 7. Provide financial support / oversight 8. Establish encouragement and support from leadership 1. Level the playing field 2. Systematic assurance of info and opportunities 3. Rapid business development opportunities 4. Timely, fundamental education 5. Controlling risk factors 6. Responsive certification 7. Responsive pre-qualification 8. Including DBE commitments in bids
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Matching hypothesized to computer 1. Inform DBEs about opportunities 2. Expedite the DBE certification process 3. Demystify the process 4. Connect DBEs with primes 5. Primes make a good faith effort 6. Create opportunities appropriate for DBE and small firms 7. Provide financial support / oversight 8. Establish encouragement and support from leadership 1. Level the playing field 2. Systematic assurance of info and opportunities 3. Rapid business development opportunities 4. Timely, fundamental education 5. Controlling risk factors 6. Responsive certification 7. Responsive pre-qualification 8. Including DBE commitments in bids
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Matching hypothesized to computer 1. Inform DBEs about opportunities 2. Expedite the DBE certification process 3. Demystify the process 4. Connect DBEs with primes 5. Primes make a good faith effort 6. Create opportunities appropriate for DBE and small firms 7. Provide financial support / oversight 8. Establish encouragement and support from leadership 1. Level the playing field 2. Systematic assurance of info and opportunities 3. Rapid business development opportunities 4. Timely, fundamental education 5. Controlling risk factors 6. Responsive certification 7. Responsive pre-qualification 8. Including DBE commitments in bids
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Matching hypothesized to computer 1. Inform DBEs about opportunities 2. Expedite the DBE certification process 3. Demystify the process 4. Connect DBEs with primes 5. Primes make a good faith effort 6. Create opportunities appropriate for DBE and small firms 7. Provide financial support / oversight 8. Establish encouragement and support from leadership 1. Level the playing field 2. Systematic assurance of info and opportunities 3. Rapid business development opportunities 4. Timely, fundamental education 5. Controlling risk factors 6. Responsive certification 7. Responsive pre-qualification 8. Including DBE commitments in bids
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Future quadrant analysis Future work will develop a quadrant analysis based on importance and effectiveness Effectiveness Importance High importance High effectiveness High importance Low effectiveness Low importance Low effectiveness Low importance High effectiveness
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Additional materials for handout Bulls eye marketing items by factor and mean score Factor structure (factor loading) for Bulls-eye marketing Sample of quadrant analysis results for one factor For information on the Marquette Interchange project, including DBE opportunities and successes, visit www.mchange.org. www.mchange.org
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Conclusions & implications Preliminary data show that the Bulls Eye marketing strategy is a construct in which 79% of the variation can be explained. This is an encouraging finding and one that deserves further examination. The computer generated factors are even more encouraging, because factors were clustered in a way that were very logical to WisDOT DBE program managers and also appear to be an enhancement to the hypothesized factors. After the quadrant analysis is conducted and the most important and effective strategies are identified, WisDOT can focus its resources on the strategies that are the most important and effective, especially for upcoming freeway projects in the Milwaukee urban area.
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Presenter contact information Ruben L. Anthony, Jr., Deputy Secretary Wisconsin Department of Transportation PO Box 7910 Madison, WI 53707 (414) 266-1114 ruben.anthony-jr@dot.state.wi.us
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