SHREE CEMENT LTD.

SUMMER TRAINING PROJECT

PROJECT ON

“DEVELOPING MARKETING STRATEGY FOR

BANGUR CEMENT”

Submitted To: - Submitted By :-

ACKNOWLEDGEMENT

First of all I would like to thank my Institute “...........................”, ............... for giving me opportunity to do summer project in Shree Cement Ltd.

Many people have influenced the shape & content of this project & many supported me through it. I express my sincere gratitude to Mr Anil Jhanwar (Sr. GM Marketing) for his invaluable guidance & support throughout the project. He has been an inspiration & role model for this topic. His guidance & active support has made it possible to complete the project.

Special thanks to Mr Amit Kaushal, Sr. Manager (Pers & HR) and Mr. B.L Sharma, AGM (logistic) for inspiring me throughout the project & providing me necessary information.

Discussions with employees of the organization were fruitful & gave me a great help in my project. I would like to express my deepest and sincere gratitude towards all those who have helped me throughout the project.

I would also like to thank my family for their constant support & encouragement throughout the project.

Lastly, I would like to thank my Almighty God for always helping

CONTENTS

1. EXECUTIVE SUMMARY

2. COMPANY PROFILE

3. PRODUCT PROFILE

4. SWOT ANALYSIS

5. EXTERNAL ANALYSIS (PESTEL)

6. INTERNAL ANALYSIS (VALUE CHAIN)

7. PORTER’S FIVE FORCES MODEL

8. PORTER’S THREE GENERIC STRATEGIES

9. ANSOFF MATRIX

10. SEGMENTATION, TARGETING &POSITIONING

11. 4 P’S (PRODUCT ,PRICE, PLACE& PROMOTION)

12. CONCLUSIONS

13. RECOMENDATIONS

14. BIBLIOGRAPHY

EXECUTIVE SUMMARY

This project consists of developing marketing strategy for Bangur Cement. This is one of the three brands of Shree cement company other two are Shree Ultra Red oxide &Tuff Cemento. These three brands have different marketing &distribution team. Positioning &marketing strategy of the three brands differ.

For developing strategy first step is to assess ourselves through SWOT (Strength Weakness Opportunity & Threat) analysis. A lot of secondary research was done for it. First external analysis was done through PESTEL (Political Economical Social Technological Environmental & Legal).

Then internal analysis was done with the help of value chain which helped us to find out that competitive advantage we have is the unique freight bidding system followed by the company.

After assessing the situation where we are we developed vision, mission, goals & objectives for the company just to answer these questions that what business we are in? Where we want to go?

We also did structural analysis through porter’s five force model to find out industry profitability.

Then we applied three generic strategies to find out competitive advantage

.We found out that we are following both cost leadership&

differentiation strategy. Then, I applied Ansoff matrix which gave us option to follow market development strategy in which we will enter into new geographical markets & expand our distribution network.

With consultation of my senior colleagues we did segmentation, targeting & positioning for the company. Then we also decided marketing mix for this brand.

I also conducted survey with dealers, retailers to find out their requirements &consumer preferences for brands of cement.

I came to a conclusion that consumer mostly demanded Ambuja cement because of its brand identity. Customers had to be pushed or diverted to buy Bangur Cement.

As positioning of Bangur suggest a premium brand , still local people don’t believe that quality is good .Hence, emphasis must be laid on quality improvement so that it becomes par with positioning.

AN INTROUCTION TO SHREE CEMENT LTD

Its’ august privilege to welcome you to the Shree Cement Ltd an ISO 9001-2000(Quality Management),ISO 14001- 2004(Env Mgt),OHSAS 18001(Occupational Health & safety management) certified company endeavoring for SA-8000. The largest cement manufacturing plant at a single location in Northern India, under the flagship of Executive Chairman Shri B. G. Bangur & Managing Director, Shri H. M. Bangur. The company is aiming for 20 Million Ton Annual productions by the year 2015.

Location of Shree Cement

Nestled amidst & astride the baroness of Aravalies in the close hustles of strings of rural remote hamlets in the proximity of village Bangur Nagar on Masuda Road, in central Rajasthan, satelliting the Beawar city at radius of 10 Kms. Its geographical continuity with holy shrine of Khwaja Moinudeen Chisti at Ajmer 60 Kms, 195 Kms from the Pink City i.e. Jaipur and approximately 155 Kms from the Sun City, Jodhpur and around 235 kms from the Venis of the east i.e. Udaipur.The nearest airport is Jaipur, however the Beawar subdivision is well connected through Rail and Road both, situated on National Highway No. 8.

4.5

42

45

4.8

The powerful deity Sankat Mochan Hanuman Temple, a unique example Nagar and Basar Styles is one of the emerging tourist places in Rajasthan near and around, and an enchanting peace of architecture in the region.

The company is managed by a core group of professionals under the visionary and adroit leadership of Executive Director Shri M.K.Singhi.

Shree Cement limited is one of the most energy efficient plants in India and is a recipient of National Energy Conservation awards for consecutive five years by Ministry of Industry Government of India.

It is also awarded by the prestigious bodies like NCCBM, NEEC, Bureau of Indian Standards, National Safety Awards, Jawahar Lal Nehru Memorial Awards etc and is endeavoring for many more such laurels through its professional excellence.

The commercial Production of Unit I started in the Year 1985. The production augmented exponentially from the capacity of 0.6 MTPA in 1985 to around 4.8 million ton presently through Modification, capacity enhancement, continuous improvement and with the cooperation a professionally committed team of its employees also putting a few more units.

The second Unit was set up with initial capacity of 1.2 MTPA in 1997 with an investment of Rs.300crores.

A completely petcock based 45 (18+18+06+03) MW Thermal Power Plant was commissioned in the year 2003, and 54 (18*3) MW thermal Power Plant at Bangur City in RAS Distt.- Pali.

HYPSOGRAPHICAL DEPICTION OF THE PRODUCTION

A Brief Overview Of The Unit Wise Production Is Follows:

UNIT-1 at Beawar Distt: Ajmer

Incorporated in 1979.Put up in 1985.Cement Production (Expected) – 1.20 million tones

UNIT-2 at Beawar Distt: Ajmer

Put-up in 1997.Cement Production– 2.10 million tonnes

UNIT 3 at RAS Distt: PaliIncorporated in 2005Cement Production – 1.50 million tones

UNIT - 4 at RAS Distt: Pali

Cement Production – 1.70 million tones

UNIT – 5 & 6 at RAS Distt: Pali

Cement Production – 1.00 million tones Each

Khuskheda Grinding Unit Distt: Alwar

Two grinding units at Kushkhera in Rajasthan,

Shree has achieved a world record by setting UNIT – 7 at Ras

Distt: Pali in just 367 days with a grinding facility at Suratgarh , in Rajasthan.

Production with Efficiency: it has a track record of over 100% capacity utilization in the eighteenth year of its existence. Against the national industry average of 84% it has registered the highest record production of 3.02 MT with 116% of capacity utilization.

UPCOMING PROJECTS

The Company is also expanding the power generation capacity by setting up 3nos. of Green Power Plant utilizing waste heat of Cement Plant with the capacity of 18 MW, 15 MW & 10 MW each and 2no. Of Captive Power Plant of 50 MW capacity at Ras with an approx. investment of 595 Crores thus taking the total investment in new projects is over 1000 Crores.

PROJECT NAME EXPECTED

COMPLETION

1.50 MTPA Suratgarh

grinding unit

Mar 10

1.0 MTPA Roorkee grinding

unit

Mar 10

Roller Press at RAS Jan 10

Roller Press at Beawar FEB 10

Roller Press at Khushkhera JULY 09

20-25% SiO2 + Al2 O3 + Fe2 O3

Clay, Sand, Shale75-80% CaCO3

Chalk, Lime Stone, marl

Quarrying

Crushing

Quarrying

Crushing

Mixing

Raw Grinding

Burning to Clinker

5-6 % Gypsum Additives

Cement Grinding

Cement

Packing & Transportation

CEMENT                                              

Cement manufacturing 

Cement when mixed with water and allowed to set and harden can joint different components or members together to give a mechanically strong structure. First of all Joseph Aspdin patented his product as “PORTLAND CEMENT”. 

                              Cement is basically a mixture of grinded form of limestone, gypsum and metals such as iron etc . cement is basically prepared by the following two processes 

1. Dry process (pyro- processing) 2. Wet process (hydro processing)

 

Dry process

                     In dry process the main raw material limestone first of all crushed , then it is grounded to fine dust like material then it is blended with finely grinded iron and coal now this mixture is fed to kiln inside it the material is burnt at a temperature upto 1600deg C . At this much high temperature the material turns into molten forms which on cooling turns to solid lumps known as clinkers .These clinkers are now grinded with gypsum to prepare cement. In dry process kilns requires less fuel. 

Wet process 

             In wet process the raw material is same but in this process we also add water to the raw material to form the slurry of raw material. It is used less in comparision of dry process as the fuel requirements in wet process is more than dry process. Wet process is easiest to control and is better for moist raw materials.

Types of cement 

   

Types of  cement ApplicationOrdinary Portland cement (OPC)

General construction

Portland slag cement

General construction and marine works

Portland pozollona cement(PPC)

General construction, hydraulic construction & marine

White Portland cement

Architectural purposes, decorative work and in manufacturing of tiles

Oil well cement Connecting the steel casing to the walls of gas oil wells at high temp and to seal porous formations in petroleum industry

Low heat Portland cement

Where low heat of hydration is required as in mass concrete for dams

Super sulphated cement

In a variety of aggressive conditions like marine works. Concrete sewers carrying industrial effluents

High alumina cement

Mainly as refractory cement and as structural material giving high early strength developments in cold regions

Raw material for cement 

Limestone (calcerous) and clay (argillaceous) are the convectional raw material basically used in the cement industry. Sometimes sandstone (siliceous), bauxite (aluminious) and iron ore(ferruginious) are used as corrective material to maintain desired composition for potential property of clinker. 

Types of raw material 

      It is known that raw meal feed for cement manufacture basically          

      Consists of two components –

      1). Calcium carbonate

      2). Alumino silicates 

                 Due to depletion of cement grade limestone, it is necessary to go in, more and more, for byproducts and waste materials of chemical, metallurgical, coal and other industries as raw material for cement manufacture. 

Flow Diagram of Cement Manufacturing Process

20-25% SiO2 + Al2 O3 + Fe2 O3

Clay, Sand, Shale75-80% CaCO3

Chalk, Lime Stone, marl

Quarrying

Crushing

Quarrying

Crushing

Mixing

Raw Grinding

Burning to Clinker

5-6 % Gypsum Additives

Cement Grinding

Cement

Packing & Transportation

QUALITY CHARACTERSTICS OF CEMENT 

The broad quality parameters of cement relate to chemical and physical properties as per IS codes are as mentioned below: 

Chemical Properties 

loss of ignition [LOI] insoluble residue [IR] sulphur trioxide [SO3] magnesium oxide [MgO] total chloride [Cl] lime saturation factor [LSF] alumina modulus [AM]

 

Physical properties 

Fineness Consistency Setting time – initial and final Soundness Compressive strengths (3 days, 7 days, 28 days ) Heat of hydration

Gradation of cement 

The grade of cement is decided on the basis of the pressure required to break the settled cement :

OPC

a. 33 grade : 330 M Pab. 43 grade : 430 Mpac. 53 grade : 530 Mpa

In Shree both OPC & PPC cement is manufactured. OPC is now less in demand its production has gone down from 80% to 40% . PPC is even encouraged by the government as it consists of 15 – 35 % fly ash by weight which is a waste product of thermal power plant.

BRANDS OF SHREE CEMENT

AWARDS (07-08)

2007-08 -

Best Employer Award for Rajasthan for the year 2007

2007-08 -

Golden Peacock Award for Excellence in Corporate Governance in manufacturing sector.

2007-08 -

Second prize for National Energy Conservation by Bureau of En-ergy Efficiency in cement sector for the year 2007.

2007-08 -

National awards for Excellence in Water Management as “Water efficient Unit” by CII, 2007.

2007-08 -

NCCBM award for Best Improvement Electrical Energy Perfor-mance during year 2005-06.

2007-08 -

NCCBM award for Best Improvement in Thermal Energy Perfor-mance during year 2006-07.

2007-08 -

NCCBM award for Best environmental excellence in plant opera-tion during 2006-07.

2007-08 -

NCCBM award for 2nd Best Quality excellence during year 2006-07.

2007-08 -

India Manufacturing Excellence award by Frost and Sullivan for the year 2007.

2007-08 -

9th Golden Peacock Award for Environment Management Award 2007.

2007-08 -

Greentech Environmental Excellence Award 2007.

2007-08 Golden Peacock Award for excellence in Corporate Governance.

-

WHAT BUSINESS ARE WE IN AND WHY?This question focuses on company’s purpose (mission), its aspiration for future results (vision), and the internal compass that will guide its actions (values),specific time bound mission (goals) ,Measurable goals (objectives).

MISSIONTo sustain its reputation as most efficient cement manufacturer in the world, drive down costs through innovative plant practices & increase awareness of superior product quality through realistic communication process with the customers.

VISIONTo register a strong consumer surplus through superior cement quality and affordable price. VALUESWe believe in good corporate governance practices, encourage integrity of conduct and clarity in communication. We remain accountable to all stakeholders and encourage socially responsibleBehavior. GOALTo increase annual production up to 20 million tons by the year 2015. OBJECTIVEOur objective is to achieve 1800 crore profit this year along with customer satisfaction & society development.

SWOT analysis

INTERNAL

STRENGTHS - Things that company does well.

WEAKNESSES - Things that company doesn’t do well.

EXTERNAL

OPPURTUNITIES – External conditions in the environment that favors strengths.

THREATS – External conditions in the environment that favors weaknesses.

Identification of threats and Opportunities in the environment (External) and strengths and Weaknesses of the firm (Internal) is the cornerstone of business policy formulation; it is these factors which determine the course of action to ensure the survival and growth of the firm.

ETOP analysis (External threats & opportunities analysis)

GOVERNMENT POLICIES / POLITICAL1. Removal of import duty on import of raw material for

cement.2. Govt. lifted ban on exports.3. Reduction in excise duty.4. Control on raw material (coal, diesel) price & availability.

ECONOMICDemand for cement is closely related to overall economic development.1. Cement demand is growing at the rate of 9%.2. Economy is recovering, with the change of government huge

impetus is given on infrastructural development like roads, bridges etc.

3. Economic development is leading to increase in public private partnership & increase in domestic consumption.

SOCIALHow company contributes to the society / area around which it operates?

Employment to people of nearby areas & increase their standard of living.1. Promotion of local suppliers &contractors.2. Promoting education, health awareness & hygiene in nearby

areas.3. Community development & performing corporate social

responsibility.

TECHNOLOGICALUse of latest technology to compete with others & become cost effective.

1. Employees provided with P.C & connected with intranet.2. ERP / SAP3. RFID (Radio Frequency Identification Card) based on access

control & remote surveillance.4. High level mining (limestone) with screening system which

replaced reject ratio from 83:20 to 83:17.

ENVIRONMENTALReduction of green house gases (CO2) etc, emission within limits & commitment to sustainable development.

1. Use of energy saving device to reduce carbon footprint.2.3. CDM (Clean Development Mechanism) project for reduction

of green house gases.4. Use of alternate fuels & raw materials to help reduce

emissions.5. Use of special designed vehicles to reduce air pollution &

also conserve water.6. Emphasis on green belt development in the vicinity.

LEGALLegal requirements to be fulfilled by the companies.

1. ISO 14001 , ISO 9000:2000, ISO 8000(OH&S)2. Various reports to be submitted at the end of financial year

like environmental statement.3. Legislation should include permits, licenses,

directives,treaties. Protocols & order issued by regulatory agencies.

OPPORTUNITIES

1. Cement demand is growing at the rate of 9%.

2. L1 buyer is government in which Shree excel.

3. Per capita consumption in India is only 110 kgs against world average 255 kgs.

THREATS

1. Acquisitions eg. Holcim (which acquired Ambuja &ACC) which are producing quality cement.

2. Govt. has lifted duties like basic custom duty etc on imported cement which has decreased price of imported cement.(Pakistan which has excess capacity.)

3. Risks - slowdown in the implementation of govt. policies.

Checklist for Strengths/ Weaknesses:

Competency Performance ImportanceMajor

StrengthMinor

StrengthNeutral Minor

WeaknesMajor

WeaknesHi Med Low

A.Marketing Factors1) Company Reputation

Y Y

2) Market Share

Y Y

3) Product Quality

Y Y

4) Service Quality

Y Y

5) Pricing Efficiency

Y Y

6)Distributn Efficiency

Y Y

7)Promotionl Efficiency

Y Y

8) SalesForceEfficiency

Y

9) Innovation Efficiency

Y

10)Geogrphic Efficiency

Y

(B) Finance Factors1) Cost/ Availability Of Capital

Y Y

2) Cash Flow Y Y3) Finance Stability

Y Y

Competency Performance ImportanceMajor

StrengthMinor

StrengthNeutral Major

WeaknesMajor

WeaknesHi Med Low

(C) ManufacturingFactors1) Facilities Y2) Economies Of Scales.

Y Y

3) Work Force Y Y4) Technical Skills

Y Y

5) Timely Prod. Y Y(D)Organizational Factors1) Leadership Capability.

Y Y

2) Dedication of Employees

Y Y

3) EntrepreneurialOrientation

Y Y

4) Flexibility/ Responsiveness

Y Y

To be successful, companies need to develop:- Core competencies.- Superior “In-Company” capabilities to evaluate strength &

weakness

“In Company” capabilities achieved through frequent strength/ weakness analysis & action thereon leading to “capabilities based competitiveness”.

STRENGTHS

1. Strong financial muscles i.e financial back up.

2. Freight Bidding system which is practiced only in this company.(Not only this is a gain to the company but is a transparent system giving total freight to transporters.)

3. Dedicated employees with good leadership skills who constantly give innovative ideas.

4. Company has won many international awards &has high reputation.

WEAKNESSES

1. Low Brand awareness & Brand identity.

2. Competition between in-house brands.

3. Demand for Bangur cement is high but supply is not consistent.

4. Bangur cement still has not reached the interior part of the villages.

INTERNAL ANALYSIS – Identifying core competencies

Core competencies must be distinctive.◦ Capabilities that are done better than competitors

Identifying core competencies is a key to development of sound strategy.

We use the value chain to help identify core competencies.

A framework for identifying core competencies◦ Inside the firm◦ In the supply chain

Can be used to◦ Identify strengths and weaknesses◦ Identify sources of competitive advantage◦ Identify market opportunities

PRIMARY ACTIVITIES IN VALUE CHAIN

Inbound Logistics ◦ Materials handling, warehousing, inventory control

used to receive, store and disseminate inputs to a product

◦ Fertilizer and chemical storage, delivery of inputs, application of inputs

Operations◦ Take inputs from inbound logistics and convert to final

products◦ Plowing, planting, spraying, harvesting, feeding,

medicating, weighing,etc. Outbound Logistics

◦ Collecting, Storing, and physical distribution of the final product.

◦ Crop storage, finished hog handling, Processing and determining delivery dates, delivery to the packer or elevator etc.

Marketing and Sales◦ Provide means through which customers can purchase

products and to induce them to do so◦ Advertising, communicating with buyers, developing

customer relationships, pricing products (futures, hedging, forward contracting, etc.), delivery scheduling

Service◦ Activities designed to enhance or maintain a product’s

value◦ Timely delivery, identity preservation, ISO9000,

certifying as organic, etc.

SUPPORTING ACTIVITIES IN VALUE CHAIN -

Procurement◦ Activities to purchase the inputs needed to produce

products◦ Negotiating with suppliers, standard timing of

replenishing parts and tools, setting up buying groups, etc.

Technological Development◦ Activities that improve the firm’s products and/or

processes ◦ Volunteering for test plots, being a part of feeding

trials, attending technology seminars/field days, designing equipment to make specific production tasks more efficient, etc.

Human Resources◦ Recruiting, hiring, training, developing, and

compensating all personnel

MARGIN

◦ Capture the value from performing value-creating activities as cheaply as possible

◦ The basic idea is that the consumer is willing to pay a certain amount for the value you create. This is depicted as the size of the overall pentagon.

◦ The size of the individual activity boxes represents the cost of performing those particular activities.

◦ Thus, the smaller the size of the individual activity boxes relative to the value the consumer is willing to pay, the greater the MARGIN will be for the firm.

A firm’s value chain must be compared to competitors’ value chains to determine where competitive advantages exist.

To be a source of competitive advantage a resource or capability may allow a firm to:

◦ Perform an activity in a manner that is superior to competitor’s performances

◦ Perform a value-creating activity that competitors cannot complete

PORTER’S FIVE FORCES MODEL

The Value ChainFirm Infrastructure

Human Resource Management

Technological Development

Procurement

InboundLogistics

OperationsOutbound Logistics

MA

RG

IN

MA

RG

IN

Relationship with Suppliers Relationship with Buyers

Elapsed Time - Value added time cost

cost of selecting & recruiting, training & development

Machinery, refractory, coke, warehousg, storage, vehicle scheduling

order processingSchedulingDispatchingFinished goods warehousing

Advertisg

Pricing

promotn

Meeting(mason)(dealer)(retailer)

Activities-planning, finance, accounting, legal ,govt. affairs, quality management .MIS

office automation, (erp,) intranet ,GPS ,RFID

Raw material (refractory), machinery, lodging ,meal, bidding system

Manufactrngprocess, packaging, testing

Marketng& sales

SERVICE

Prim

ary

Act

iviti

esS

uppo

rtin

gA

ctiv

ities

According to Michael Porter, competitiveness is a composite of following five forces:

1. Rivalry among competing firms2. Potential entry of new competitors3. Potential development of substitute products4. Bargaining power of suppliers5. Bargaining power of consumers.

These five forces pin-point those factors that are critical to competition, for strategic innovation, capacity utilization & profitability.

2RIVALRY BETWEEM COMPETING FIRMS

Porter’s Five-Forces Model of Competition

1

Potential development of substitute

products

Rivalry among competing

firms

Bargaining power

of suppliers

Potential entry of new competitors

Bargaining power

of consumers

Intensity of rivalry is high when:a. Industry is growing at the rate of 8% hence competition is

intense everyone wants to capture the market share & increase profitability.

b. There is no such difference in product (cement) of different companies.

c. Customer switching cost is low hence they are able to switch from one company to other.

d. Since 130 large companies are involved in cement manufacture competition is intense.

e. Also, exit barriers are high, capital invested is large & huge stakes are involved.

2POTENTIAL ENTRY OF NEW COMPETITORS

a. Since market would be experiencing a situation of oversupply from September onwards hence it would be difficult for the new competitors to enter the market.

b. Entry is not easy as capital requirements are huge.c. For the entry of competitors it is not an easy task to get an

access to distribution easily.d. Since fuel & freight cost is increasing hence it is difficult to

maintain low cost unless economy of scale is achieved.e. It would be difficult for a new competitor to establish as a

brand.

3. POTENTIAL ENTRY OF NEW SUBSTITUTE

Slag, silica fumes, fly ash can be used as substitutes but they can be costly & are still not marketed. These substitutes can’t replace original Portland cement.

4. BARGAINING POWER OF BUYERS

1. Since product is undifferentiated, customer can easily switch from one brand to the other, since he may be price sensitive or quality conscious.

2. Mini plants who buy clinker from us can’t integrate backwardly i.e. they can’t manufacture cement as it would require huge investment.

3. Consumers who buy in bulk like government which is L1 buyer can have high bargaining power. We even gave once 43 grade cement to Govt at a price of 33 grades.

5. BARGAINING POWER OF SUPPLIERS

1. When there are too many suppliers for some product there is competition between them in such case company benefits.

2. We have tried to backwardly integrate i.e (grinding media),(screw conveyors) etc.

3. In case of Original Equipment Manufacturer (OEM) bargaining power of that supplier is higher.

PORTER’S THREE GENERIC STRATEGIES

LOWER COST DIFFERENTIATION

BROAD TARGET

NARROW TARGET

1. COST LEADERSHIP STRATEGY

Drop price to become No.1 Low OVERALL costs, not just manufacturing costConcentrate on cost reduction every year in every

conceivable mannera) Out-price rivals & gain market share, orb) Sell at going price & earn higher profit.

(Eg NANO)

STRENGTHS Better protection from negotiating power of customersEffective entry barrier to new entrantsBetter defence against substitute products.Outsmart competitors

DIFFERENTIATION STRATEGY

COST LEADERSHIP DIFFERENTIATION

COST FOCUS DIFFERENTIATION FOCUS

Build customer loyalty by incorporating differentiating features in your product

Find ways to create value for your buyers that can’t be easily copied by your rivals

Spend on differentiation LESS than the price premium you get for superior product

Add such features in your product which will: A. Reduce buyer’s cost (in using it)B. Raise benefit the buyer gets from using itC. Enhance buyer’s intangible satisfaction (feel good value).

STRENGTHS

Customer loyalty: discourages rivals creates entry barrier to new entrants weakens threat from substitutes

Reduces bargaining power of buyers since alternatives are less attractive.

COST + DIFFERENTIATION STRATEGY

Combine low cost with differentiation Make upscale product at lower cost Give buyers more value for money.

Shree cement company is following this strategy as it is the lowest cost producer of cement in the country & also it differentiates its three brands i.e Shree Ultra Red Oxide as rust free cement, Bangur cement as premium brand & Tuff Cemento as Rock strong cement.

FOCUS STRATEGY

Select a market niche where customers have distinct preferences, unique needs or special requirements: Two Approaches:

A. Focussed Low Cost Strategy: Achieve lower cost than your rivals in serving the niche market

B. Focussed Differentiation Strategy: Offer the niche something different from rivals.

ANSOFF MATRIX

1.Market Penetration Strategy.

- Try to gain more market share with current products in current market.

- Approaches:o Encourage current customer to buy more per period by

increased usage rate or showing additional uses. Eg: Brushing with Colgate dental cream twice

o Attract customers from weaker competition (Detect weakness in competition Customer Delivered Value). Eg: Colgate capturing market of Forhans.

o Encourage non – users to start using. (Works id non user group is large).

Eg: Colgate dental cream campaign in rural market, especially for children.

2. Market Development Strategy .

- Look for new markets whose needs may be met by current products.

- Approaches:o If current market is in retail (individual customer) look at

institutional markets (groups). Eg: Kahalgaon NTPC, Hero-Honda in Angul, Orissa.

o Seek additional distribution channels. Eg: CSD supplies DG(supplies & distribution)

o Seek additional geographical market. Eg: All geographical location.

: 3 . Product Development Strategy .

- Involves development of new/additional products or features to deliver superior Customer delivered value (CDV). Eg: Different types of handles available in bikes.

- Categorize customer into groups and offer different CDV to different groups at different price.

- Use technology to alter product satisfying same/ similar customer need/ want. Eg: computers – desktops, laptops…

Integrative Growth Opportunity:

- Increase sales/ profits through integration within industry.- Integration could be:

o Backward (Develop/ Acquire supplier).o Forward (Develop/ Acquire Whole seller/ Retailer)Next step, it may venture into fan manufacturing (Forward). Apart from that, it may also acquire competitor’s motor manufacturing unit (Horizontal).

Diversification Growth opportunities:

- Makes sense when good opportunity can be found outside present business.o Good opportunity - Industry is highly attractive.

Company has business strategic required to be successful.

Diversification could be:

-1- Concentric Diversification:- New products that have technical marketing synergies with

existing product line.- New product may appeal to a different customer group.

Eg: Bajaj scooter to motorcycle.

-2- Horizontal Diversification:- New products that could appeal to its current customer even

though new products are technologically unrelated to its current products. Eg: - Bajaj Auto to Bajaj Auto Finance.

-3- Conglomerate Diversification:- New business that have no relationship to company’s

current technology/ Products & Markets. Eg: - Bajaj Auto to Bajaj Allianz (Acquire competitor with government approval).

FOR BANGUR CEMENT

We will follow option 2 ie Market Development strategy.In this strategy we will try to enter into new markets. For eg Bangur has 95% sale from trade segment so we will try to increase sale from non –trade segment (institutional sales).We will also seek for new geographical locations i.e. the interior parts of villages. We will expand our distribution network i.e. more & more retailers.

MARKETING STRATEGY FOR BANGUR CEMENT

Segmentation, Targeting, and positioning

- Organizations operating in broad market cannot serve all customers in that market since customers are numerous/ diverse.

- Instead of competing everywhere, organizations need to identify market segments that it can serve most effectively.

- For this, they need to choose/select its markets & serve them well, i.e., instead of scattering the marketing effort (Shot Gun Approach), they can focus on buyers whom they have greatest chance of satisfying (Rifle Approach). This is called target marketing.

- Target marketing consists of: Market Segmentation:

Identify/Profile distinct buyer group who may require separate products/marketing mix.

Market Targeting: Select one/more segments to enter.

Market Positioning: Establishing/Communicating product’s key

distinctive benefits to markets

Steps in STP (Segmentation, Targeting, Positioning):

* Identify Segmentation variables & S Segment the Market Market

Segmentation * Develop Profiles of Resulting Segments

* Evaluate Attractiveness of each T Segment Market Targeting.

* Select the Target Segment

* Identify possible positioning concept P For each Target Segment Market Positioning.

* Select / Develop/ Communicate Chosen Positioning Concept

MARKET SEGMENTATION

We have divided market into segments depending upon type of buyer. Cement buyers can be of two types.

Customer who buys through distribution network is a TRADE segment.

Here we have a distribution network i.e Company ↓ Business Partner / Market organizer /C& F handling ↓ Business associates /Dealer ↓ Retailer

TARGETING

Bangur Cement is launched as a premium brand.As 95% of total sales of Bangur Cement is through trade segment. We focus on this segment & in this we focus on those regions whose naked cement realization (NCR) is highest. We are selling cement in states like Rajasthan, Haryana, Delhi, Punjab, U.P, Uttranchal. Out of these states we target these States as NCR of these states is high as these states are nearest to the plant. Main concern for cement plants is the rising cost due to fuel & freight. So we try to reduce cost of freight by selling in areas where our grinding units & plant are located.

POSITIONING

Bangur Cement was launched as a premium brand, comptetive with the best in the world. Designed to fulfill user aspirations for high quality construction, the brand’s punch line reflects its promise of top-of-market value “Sasta Nahin ,Sabse Achha”!

4P’S (Product, Price, Place & Promotion) MARKETING MIX

PRODUCT – We have both OPC (Ordinary Portland Cement) & PPC (Pozollona Portland Cement) of 43 grade.

PRICE - Pricing of cement varies from area to area & varies with demand & supply of cement. If demand is high then price of cement rises & vice versa. Pricing also depends upon the cost of transportation to that place.

PLACE - Basically, we sell in the North i.e. Delhi, Haryana, U.P Bihar, Punjab, Rajasthan, Uttranchal, J& K. We have a strong distribution network which is supported by a matching network of Business Partners &Business Associates carefully selected for their track record in selling to high-end market segment. We have separate marketing team for Bangur Cement & We have offices in many cities of different states. We have a strong dealer & retailer network.

PROMOTION We promote our brand by advertising in print media & on television. Wall painting on retailer’s outlet is another form of advertisement. We give free articles like slip pads, pens, Key rings, paper weight, calendars on which Bangur Cement is printed. We have dealer, retailer meetings also in which they are made aware of schemes, quality of cement, its manufacturing & also are given gifts.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

For maintaining CRM we conduct meetings with dealer, retailer, and mason 3-4 times in a year. We are constantly in touch with the dealers & try to solve their problems. In the meetings we make them aware about manufacturing process, quality of the product, Discount schemes available .We also give them free gifts like key rings, pens, calendars, lunch boxes etc. We also listen at their suggestions &try to implement the same.

A Questionnaire was conducted with dealer & retailer to find out consumer preferences regarding brands of cement

QUESTIONNAIRE

Dear Dealer / RetailerWe are conducting a brief survey to find out consumer preferences regarding different brand of cement. We would be grateful if you will spare few minutes with us. This will help us in serving you in a better way.

Thanking you for your cooperation.

DEMOGRAPHICS

Name ------------------------------------------------------------------

Address ---------------------------------------------------------------

Phone ----------------------------------------------------------------

Status Dealer/ Retailer

Capacity of selling Tonnes --------- / bags -----------

Exclusive ----------------- Non exclusive --------------------

Q1.What is the market potential of Beawar?

------------------------------------------------------------------------------

Q2. Do you sell Bangur Cement?

Yes ------------------------

No -----------------------

If yes continue,if no go to Q5

Q3.Who are the major customers to whom you supply Bangur Cement?

Wholesaler Retailer Contractor OthersRankCredit daysExtra charges

Q4. Are supplies of Bangur Cement on time?

Yes ------------- No ----------

Q5.Please give details of following brands.

BRANDS AMBUJA BANGUR SHREEULTRA

TUFF BINANI ULTRATECH

JK(N)

JK(L)

AnyOthr

BillingCashTradeExclusiveNonexclusiveQuantityOtherRetail priceRetail marginNet landed costCredit days

Q6. What are other problems you face in the procurement of cement?

------------------------------------------------------------------------------------------------------------------------------------------------------------------

Q7. What are other brands of cement you sell?

a. Ambuja --------------

b. Binani --------------

c.JK Laxmi ------------

d. Any other ------------

Q8. Do you think all the cement brands are same?

Yes -------- No ---------

If yes go to Q 10.

Q9. Please rate the following brands?

1 2 3 4 5 6

Very low very high

BRANDS AMBUJA BANGUR SHREE TUFF JK(N)

JK(L)

BINANI ULTRA TECH

ANYOTHER

QualityPriceProfit margin

Promotion / Ad.

Q10. Have you seen Bangur Cement advertisement?

Yes ------------ No --------------

If yes continue, otherwise go to Q12.

Q11. Do you remember the punch line of Bangur Cement?

Yes-------------------- No ----------------

Q12. Which media channel do you think is most effective for cement advertisement?

T.V------- RADIO -------- NEWSPAPER ---------- MAGAZINE ------

Q13. Which brand is most demanded by the customers?

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Q14. Is there any brand that you would like to offer as alternative to the brand demanded by the customer? Name it.

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Q15. Do you face competition from in house brands?

Yes ------------ No -------------

Q16. If given an option, would you be ready to sell a new brand of cement & why?

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Q17. What are the sales promotion articles you receive?

Bangur Cement ----------------------------------------------------------------------------------------------------------------------------------------

Others -----------------------------------------------------------------------------------------------------------------------------------------

Q18. Give the frequency of meetings? (d- Days, m- months, y-years)

MEETING BANGUR AMBUJA SHREE ULTRATECH

BINANI TUFF JK(N)

JK(L)

ANYOTHER

CONTRACTOR

DEALERMASON

Q19. What is done in meetings?

a. Bangur Cement ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

b. Others ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Q20. How can we improve sales of Bangur Cement? (Recommendations) ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Signature: - ----------

Date: - ------------

CONCLUSIONS OF SURVEY

This survey was conducted exclusively for Beawar city. Hence, Dealers retailers are aware of the fact that all the three brands Shree Ultra Red Oxide, Bangur &Tuff Cemento belong to Shree Cement Company. They also have this perception that raw material for all the three brands is same.

Few retailers even believe that Shree brands are not good in quality when asked about the reason they said that lab reports justifies it.Some of sub-dealer believed that Gujarat Ambuja is good in quality but Ambuja Cement manufactured here is not the real one as raw material is same of DLF still, Ambuja sells because of big brand name.In laymen language quality refers to:-

a. Cement should not burst out when mixed with water, it should have plasticity.

b. Good quality cement requires less water.

Many retailers were ready to sell a new brand of cement provided if quality is high. Dealer of Bangur Cement agreed that there is intense competition between in-house brands. As Tuff Cemento has no single dealer whereas it has sub- dealers who have direct contact with the company. These sub-dealers are retailers for other brands. Hence, they get Rs 6 (dealer margin) &Rs 2 (retailer margin) per bag i.e better margin then dealers. This is proving hindrance for other in- house brands.

Many retailers believe that newspaper is effective media & some even believe that they can mould a customer brand preference.

SUGGESTIONS FROM DEALERS/ RETAILERS

1. To increase sale dealer must be promoted & given good margin.

2. Shree brands will sell high provided quality is improved.

3. Marketing strategy of Tuff Cemento should be changed.

RECOMMENDATIONS

1. Since Tuff cemento has sub-dealers (Beawar ) who not only get the dealer’s margin but also retailer’s margin who can sell at less than retail price but marketing team doesn’t believe this. According to them Tuff cemento distribution network is as follows:

Business Partner/ Market organiser ↓ Business Associates/ dealer ↓ RetailerHence, this must be sorted out.

2. Production of Bangur Cement must be increased so that supply matches demand.

3. Distribution network must be expanded so that we can reach the interior parts of the villages.

4. Perception of local people about the quality of cement can be changed by laying emphasis on quality by the following ways:-

a. In meetings mason (who is the opinion leader), architect, dealer& retailer must be made aware of the quality of cement.b. Technical skilled hands should be associated with marketing team to provide information to the users.

BIBLIOGRAPHY

1. COMPETITIVE ADVANTAGE by Michael .E.Porter

2. MARKETING MANAGEMENT by Philip Kotler

3. LEADERSHIP &STRATEGY (Reproduction of HBR as study material)

4. ANNUAL REPORT (08-09) Of Shree Cement Ltd.

5. ANNUAL PERFORMANCE REVIEW (08-09) Of Shree Cement Ltd.

WEB SITES:

www.shreecementltd.com

www.google.com