Part Two: Understanding Buyers and Markets
Case Synopsis
On May 4, 2007, the Green Acres Bed & Breakfast at 122 W. Iowa in Greensburg, Kansas was destroyed by an F5 tornado. To innkeepers Janice and John Haney, this wasn’t just the loss of a business, but also of their home. The brick, split-level house was built in 1926 by a high school shop teacher. It was tidy, charming, and filled with period detail and Janice’s hand-made quilts. “We had never had any intentions of ever building a new house; we were just very happy with the house we had,” Janice said. As inviting as the home was, Janice admits that it was drafty and in need of some energy-efficient upgrades. “This was an opportunity for us to want to do something bigger and better and a once-in-a-lifetime opportunity to make it as green as possible,” she said. The Haneys did not decide to rebuild right in town; they chose instead to build a larger, more energy-efficient home about eight miles out of town. For the most part, Janice left the construction to contractors and kept the decorating for herself.
Farrell Allison lived off Route 54 in a beautiful 100-year-old Victorian with stained glass and elaborate woodwork that he artfully restored with his wife. It was a labor of love, but when the tornado damaged the home and plans were announced to reroute a highway through the backyard, it was time to move on. Allison hit the books and set out to build the greenest house in Greensburg. He achieved his vision, and the Allisons’ new home is truly state-of-the-art, even for the new Greensburg. Unlike the Haneys, Farrell Allison acted as his own contractor; he sourced materials, hired crews, and managed the budget.
“Contractors are a different breed,” says Allison. “I had the heating and air guy say, ‘You know you are really particular!’ and I said, ‘I’m payin’ the bills, I’m the one who’s gonna be living in this house, you’re not, and this is the way we’re gonna build it.'” Allison has developed such expertise in green building that contractors and government agencies have come to him for advice on building green.
Mike Boyles, owner of Calmarc Construction, had been building homes in the Wichita, Kansas, area for years, but when the tornado destroyed 700 houses in Greensburg, he knew exactly what he had to do: he went home. “We couldn’t be here by ourselves,” says Boyles, speaking about his firm’s dependence on B&B Lumber, their regular lumber vendor from Wichita. Even before the tornado, Greensburg residents had a tough time getting contractors, repair services, and supplies. After the tornado, it was impossible to source materials locally, especially environmentally friendly materials.
Calmarc Construction’s ability to serve customers depends on relationships with vendors like B&B Lumber. Randy Mude, a sales representative with B&B, doesn’t mind going the extra mile. “Every stick you move and every piece of plywood you sell is a benefit to your company,” says Mude. “If we give Mike and the homeowners out here some extra attention and time, we have to do it to make things right.”
While the town provides residents with a list of reliable contractors, most are not from the area and don’t understand the needs of the people the way Boyles does. “They didn’t ask for this, and we have to understand that,” he says. Those who choose to build back green are constantly researching and bringing questions and ideas to Mike and Randy. Boyles often incorporates pieces from the old homes into the new homes he builds, and he spends a lot of extra time working with his Greensburg clients. “If this was a different place and I didn’t know the people, it wouldn’t be worth it,” Boyles remarks.
When it comes to buyers and sellers, it’s always caveat emptor – “let the buyer beware.” The Haneys, like most homeowners, put their trust and dollars in an outside contractor. Luckily for them, their new home came out beautifully. Sadly, not all Greensburg residents have been this lucky. Some homeowners have fallen victim to shady contractors who have overcharged or left them with half-finished homes.
Answers the Following Questions:
1. How are the Haneys, Farrell Allison, and Mike Boyles similar in terms of their consumer behavior? How are they different?
2. Would you consider Mr. Allison a regular consumer or a B2B buyer?
3. Why is it important that Calmarc maintain a good buyer–seller relationship with B&B? What does Calmarc get out of it and what’s in it for B&B?
