cement consumer insights

Confidential & Proprietary

Copyright © 2007 The Nielsen CompanyPage 1

Research Objectives

The primary research objective is to understand from end consumers, influencers and

dealers/trade:

their awareness, knowledge and perception of the category

how do they select brands, what are factors taken into consideration

how they rate good cement

perception and knowledge about benefits and drawbacks of finer cement

awareness about measurement of fineness of cement

Also to check on the values associated with famous personalities like A. R. Rahman,

Shah Rukh Khan, Aamir Khan, Akshay Kumar and Sachin Tendulkar in order to identify

the best match for the new brand



Research Design Methodology

Qualitative Research - Depth Interview Technique was used for this study

Centre

Guwahati

Silchar

Dibrugarh

Target Group

Individual House Builders

Multiple Brand Dealers

Chief mason / contractor and independent masons

Engineers

All decision makers/ involved in purchasing cement



Research Design Sample Size

A total of 40 In - Depth Interviews across segments and centers

Centers IHB Contractor Masons

Dealers Engineers Total

Guwahati 6 4 4 (2 big

+2small)

4 18

Silchar 4 3 3(2 big

+1small)

2 12

Dibrugarh 4 3 3(2 big

+1small)

- 10

Total 14 10 10 6 40

Fieldwork dates: 8th January to 13th January 2010



Findings



Category Understanding



Awareness and perception about types of cement Low awareness of types and grades of cement among individual house builders and

independent masons across centres

As per common perception, grades represent strength of the cement and 53 considered to

be the best grade

OPC and PPC were the two types of cements commonly mentioned across centres

Majority of the mason contractors/ head mistris and dealers, across centres were aware

of OPC and PPC cements. Most of their perception about the types of cement comes from

their own experiences with cement category and also from their liaison with their fellow

professionals

As expected, the engineers were not only aware but were quite knowledgeable about the

cement types and grades



Awareness and perception about types of cement OPC CEMENT

Mostly used in Government construction or by institutional consumers for building bridges,

roads, under water construction, etc

Some demand from the IHBs in Guwahati for construction of foundation and roof as OPC

associated with greater strength than PPC (since used for Government construction of

bridges, roads, etc)

Setting time less than that of PPC, so useful for under water construction or in damp area

Expensive than PPC and perceived to be less profit giving to the cement companies as well

No ready availability of OPC cement.

In Guwahati, some perceive OPC cement to be finer than the rest as associated with the

Ambuja which is considered to be the finest cement currently available in the market

Takes 21 days to attain maximum strength (Engineers)

Presence of grades – 33, 43, 53 (Engineers)



Awareness and perception about types of cement PPC cementCommonly used for individual buildings and other non Government projects that does not

involve construction under water or on damp ground As more in demand than OPC, most dealers stock only PPC cement Longer setting time than that of OPC cement

perceived to be better for regular construction by some easier to work for regular projects

Less curing requiredLess expensive than OPC cementAs per the engineers across centres :

Higher resistance to chemicals or “sulphate resistance” More durable More workability No presence of grades Greater resistance against compressive stress Slow strength gaining process -Takes 6 months to attain maximum strength



Perception of Strong Cement Strong Cement Durability

“If I am spending so much money to build my home, then I would want it to be long

– lasting”

Security and protection against natural calamity

“House should be able to protect us against harsh conditions”

“North East being a earth quake zone, we always want a cement that would be able

to resist the damage done by earthquakes”

Low maintenance – less cracks, water seepage, damp

“In Dibrugarh, damp is a major problem…so we would need a cement which is able

to resist that”

High compressive strength (Engineers)“should have the ability to bear the load of a number of stories”



Perception of Strong Cement Although setting time is considered an important criteria, there does not exist a uniformity

across respondents in the time duration mentioned as “good setting time”

In Guwahati, quick setting was generally associated with strength

“Bhutan cement that used to be available earlier used to get set in just

25 minutes …that was strong cement”

In Silchar, slow setting(24 hrs) perceived to be more durable and associated with

strength

“ for strength and durability, It should take at least 24 hours to set”

Dibrugarh, quick setting cement was associated with underground construction

or construction in damp area. Slow setting cement was associated with

construction of other parts of the house

“Cement for walls & roofs should have slow setting. Cement used

for foundation should set fast”



Perception of Good Cement

Pure-no adulterationDry, low moisture content

(Engineers)Fresh – within 3-6 months of

manufacturing dateFinenessSetting timeConsistency of qualityUniformity of colourA preference for dark

coloured cement observed,

mainly for the dark finish of the

flooring

Mixes well with sand and stone chipsEasy to apply

Strong setting Durable, long lastingLess cracks and water

seepageQuick setting (Mostly in

Guwahati & Dibrugarh)Prevent damp

“Parts of the wall should

not swell”Finish should be smooth

and glazy

PRODUCT APPLICATION BENEFITS

Some engineers and masons spontaneously mentioned fineness as an important criteria

However, majority, across segments mentioned fineness only on probing

ISO MarkGood pack – adulteration proof,

moisture proofOriginal pack with original stitching ,

no sign of repacking

OTHERS

National brands perceived to be of

better quality than the local brands

BRANDS



Perception of ‘World Class Cement’

Mostly related with cement which is being extensively used

Cement which have been manufactured following the international guidelines

Used for big projects

Used for Government works

Expensive



Perception of Fineness of Cement




Across segments, majority perceived fineness to be an important criteria in cement

“fineness in cement is important because fine cement will mix well with sand and

stone chips”(IHB)

“until cement mixes well with sand and stone, it will not give adhesive

strength”(IHB)

“one of the most important criteria in cement is fineness as it determines the

strength of the concrete ”(Engineer)

However, as cements of all standard brands available today are fine in texture, fineness

not considered to be much of a differentiator between brands




Common across segmentsMix easily with sand and stone

Easy to work with

More bonding power, strong, durable construction

Smooth finishSuitable for all type of work.

-’dhalai’ to flooring, plastering MasonDry cementGet more volume Give a good mixtureLess labour requiredSet easilySmooth uniform finish, no spotted look or gapsRequire less polishing

EngineerBetter quality, less moisture contentGet more volume for the weightStrong, durable construction

Fill up all gaps so less chance of damp or water seepage

Less chance of cracking

No drawback of fine cement mentioned by any segment

EXPECTED BENEFITS AND DRAWBACKS

IHBs (few in Guwahati)Good mixing leading to

strength as it would be able to seep deep inside

better binding uniform setting

Less crack and less seepage as there would be “compact setting”Can be used for plastering also as it would give a smooth finish

DealersEconomical as fine cement mean more volumeLess ratio of the cement in the mixture (sand, chips and cement) would be sufficient in making the concrete strongSpeedy construction process



Identification of Fine Cement

Fineness of cement usually judged by masons and few very involved Individual house

builders by feeling the cement with two fingers

“should feel very fine and smooth when touched ”

Another way of judging as mentioned by some respondents across centres was by the

quantity of cement in the 50kg pack

“Star, Topsem you get 21/2 tin of cement in a 50 kg pack but Ambuja you get

23/4 tin because the cement is more fine “

Engineers said they judge fineness if required, through laboratory tests

Cement Brands

Common perception that national brands have finer cement than local brands Among national brands Ambuja considered to be the leader in fineness



Perception of Extra Fine Cement

Common across segmentsMix easily with sand and stoneGood for plastering,flooring, fixing tiles etcSmooth finish, higher polish

MasonMajority unsure about its final strength.. Majority felt that extra fine cement will me more suitable for finishing work than ‘dhalai’Tendency to blow away while mixing, so lots of wastage, Thus not economicalHigher price..not value for money

EngineerSuitable for all type of

work..’dhalai’ to

flooring,plasteringMore volume for the weightDelicate, will absorb more

moistureLight cement so tendency to

blow away especially when

mixing manuallyExpensive

EXPECTED BENEFITS AND DRAWBACKS

IHBs No extra benefit associated

DealersNo extra benefit associated



Comparing Values Associated with Good CementGOOD CEMENT STRONG CEMENT FINE CEMENT

PRODUCT

Dry + + Fresh + +

Consistency of quality

+

APPLICATION

Mixes well +Easy to apply +

BENEFITS

Strong setting + +Durable + +Less cracks and water seepage

+ +

Smooth and glazy finish

+

Prevent damp +



Decision Making Process and Brand Selection Criteria


Copyright © 2007 The Nielsen Company

Decision Making Process

PLAN SANCTION

OTHER BUILDERS

STRUCTURAL DRAWING **+

ESTIMATE, BRAND SUGGESTION(ENGINEERS & ARCHITECTS)

INFORMATION SEARCH

MASONS/

CONTRACTORS DEALERS ADVERTISEMENTS

BRANDS IN THE CONSIDERATION SET

DEALER NEAR SITE / KNOWN DEALER

BEFEFITS OFFERED (CREDIT, DISCOUNTS ETC)AVAILABILITY

FINAL SELECTION

**By Government regulation, till 3rd storey of house building no structural design is required

** Also Assam being a earth quake prone zone, structural design is of extreme importance



Brand Selection Criteria- Among IHB

Previous experience if any

Recommended by engineers, masons, other users, dealers

Well known reputed brand (preference for national brand)

No recent history of duplication (Silchar)

Easily available in the market ( Silchar) Available in the near by known dealer’s shop

“we are assured of quality, and getting the best deal” “in case of complaint we know they will change it”

Some IHBs claimed to try new brands on dealer’s recommendation with the assurance that the dealer will change the brand if unsatisfactory Price

Discounts, credit

Fresh cement – check manufacturing date, pack, no gritty particles, etc

Condition of the pack, stitching - not adulterated

Volume of cement for 50 kg pack



Brand Selection Criteria- Among Influencers

Old trusted brand -Previous experience -Recommended by other masons,

engineers-Consistency of quality

Fresh cement – check manufacturing date, no lumps Unadulterated

-Condition of the pack, stitching - tests ( dissolve in water)

Sets easily “setting time should not depend on curing”

“should not crack even if curing not done in the stipulated time”

Technical support (mason’s meet)

No recent history of duplication

Schemes offered

EngineersMasons

ISO mark

Reputed brand – preference for National

brands but local brand also considered if it has

automatic plant

(Automatic plant ensures consistency regarding

the chemical composition of cement)

Earlier experience

Strength, durability of the cement gauged by

bonding and compressive test



Dealer’s selection criteria for stocking

Demand in the market

Trust – National brands are trusted more than the local ones especially in

terms of consistency

Consistency of quality over a period of time

Margin (For the Big dealers, margin is often as low as Re. 1 per bag of

cement. For them , it is the volume of sales that matters)

Availability

Often dealership of another brand of cement is taken in case a

particular brand fails in regular supplies

Unavailability also leads to lack of dependency on the brand and

less push from the dealer’s side

Discounts – discounts are of different types

Yearly discounts

Target based discounts

Credit period based discounts

Cash or quantity discounts



Dealer’s selection criteria for stocking

Credit period

National brands are considered to provide better credit period i.e. 1 month

Local brands’ credit period varies from 10-17 days

Security deposit – National brands require more security deposit

Compliant redressal of the dealers or IHB – Instant action to be taken

Technical support to the consumer (mostly given by the local players)

Monthly visit of the company officials (Company visits are generally limited to the big

dealers)

Relationship with the company – generally depends on behaviour of the company officials,

payment on time, margin, delivery as per demand

“Promises are to be kept by the company officials”

Price – currently both National & local brands have similar pricing. But during crisis in

availability of cement, the price of the cement goes high

Condition of the pack – no leakage, manufacturing date, etc.

Advertisement



Current need gaps of the dealers

Replacement facility as per guarantee period – maximum of 2 months (Current need

gap)

Availability

Visible Manufacture date

Target based incentive is generally given during the monsoons when the demand of

cement reduces as house constructions are not done in that season

Engineer’s help in dealer’s sale

Less scope for adulteration of the cement

“The presence of zip at the side of the cement bag make it easy for tampering.

That zip is provided to check the quality or freshness of the cement. Company

should find out way to stop such things”



Brand Standing



National brands

Trusted as they been present in the market for quite some time and have been tried all over

the country

Perceived to have less chance of adulteration

High association with strength and quick setting

Has more volume as its supposed to be finer than the local ones

No credit facility given to most of the small dealers

Less margin as compared to local brands

Problems in availability as there is no local manufacturing unit. High dependence on

railways. During crisis, few companies like Lafarge make use of the roads to meet the

demand

Tendency to use National brands for foundation and roof construction

Provides the facility of being both a dealer or a retailer

Automatic plants – maintains consistency



National brands

Lafarge Duraguard Have been used for a long

time in NE considered market leader Best in terms if discounts good at supply Maintains good relationship

ACC high demand in the market oldest company in NE market Moderate satisfaction

regarding supply

Ambuja High demand in the market finer cement than the other brands More volume

Often referred as “full volume

maal” Quick setting Greater strength Good for foundation Can be used for construction in

damp area Less availability Highly trusted as its often

recommended by Engineers and

used in construction of roads and

bridges

Hardly any differentiation across National brands



Local brands

Problems in availability as there is severe power crisis in Assam leading to low production

Credit facility

Local brands are priced less than the National brands by Rs. 5 -20/-

Tendency to use local brands for repairing works

Few local brands have problems with consistency

Among the local ones, the brands associated with Meghalaya cement are considered of a

superior quality as the limestone used in those cement is of better quality

Not preferred by apartment builders

“There have been news of failures of local cements… that makes builders apprehensive

about local cement brands”



Local brands

Star

Most trusted among the local brands

Owning automatic plant in Meghalaya

Perceived to be prompt in complaint redressal

Provides a lot of target based schemes and loyalty programmes. For example,

foreign trips if the dealer is able to sell 15,000 bags in a year

Yearly family picnic for all dealers

Certificate for dealership

Regular masons meet at the dealer’s outlet to increase the trust of the masons on the

dealer

Engineer’s guidance are given to the customers

Organizes mobile laboratories for conducting “cube test” during “dhalai”

Provides fresh cement



Local brands

Topcem

Owning manual plant in Meghalaya

Considered of the second wrung

Very close to Star in quality

Jambu Shakti

manufactured in Guwahati

Vinay

one of the first local cement to be launched in the market – about 5-7 yrs ago, many

have stopped the dealership due to irregular supplies and customers’ complains

about prolonged setting time

cement consumer insights

Documents

attain maximum

brand selection

dealers selection

segments mix

slow setting

company officials

important

extra benefit