pdm project report by piyush prasanna

7/31/2019 PDM Project Report by Piyush Prasanna

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2012

READY MIXMORTARPRODUCT MANAGEMENT PROJECT

PIYUSH PRASANNA,


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26/7/2012


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CONTEN

TS

INTRODUCTION ....................................................................................................................................... 3

ACC

LTD...................................................................................................................................................... 4

COMPETITORS.......................................................................................................................................... 6

OPPORTUNITIES ...................................................................................................................................... 7

MARKET SEGMENTATION

.................................................................................................................... 8

MARKET SEGMENTATION

.................................................................................................................... 9

TARGETING ............................................................................................................................................. 10

MARKET

POSITIONING........................................................................................................................ 11

MARKETING MIX................................................................................................................................... 12

PRODUCT ................................................................................................................................................ 12

MARKETING MIX

................................................................................................................................... 13

PLACE ...................................................................................................................................................... 13

MARKETING MIX

................................................................................................................................... 14

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MARKETING MIX

................................................................................................................................... 15

PRICING ................................................................................................................................................... 15

CONCLUSION .......................................................................................................................................... 16
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ith the constant effort made byment manufacturers and exporters,dia has become thesecond largestment producer in the world.adras Cement Ltd., Associated

ement CompanyLtd(ACC),,,

INTRODUCTIONINDIAN CEMENT INDUSTRY OVERVIEW

India is the second major cement producingcountry following China with 137 large and 365

mini cement plants. The large plants haveemployed approximately 120,000 people,according to a recent report on the Indian cementindustry published by Cement ManufacturersAssociation (CMA)

The cement industry in India has been on a robustgrowth trajectory for more than a decade, led bybuoyancy in sectors like real estate andconstruction. The Indian cement industry is veryenergy intensive and is the third largest user of coal

in the country. It is modern and deploys the latesttechnology, which is among the best in the world.Additionally, the industry has great potential fordevelopment as limestone of excellent quality isfound almost throughout the country.

Consumption has also increased with the same paceduring the last fiscal. The general expectation isthat both the cement production and consumptionwill grow substantially during the forecast period(2010-11 to 2017-18). Moreover, housing sector

accounts for more than 50% of the total cementconsumption in India and the same trend isexpected to continue in coming years

Demand in the cement industry has seentremendous growth on the back of infrastructure,residential and commercialprojects. Cementproduction in India is anticipated to swell to 320million tonnes (MT) by end of this fiscal year fromthe current 300 MT. The target was 290 MT bythe end of this year, which we have already

achieved. So, we expect the capacity to increase upto 320 MT by the year end, according to N AViswanathan, Secretary General, CMA. CMA istargeting to achieve a 550 MT capacity by 2020.

WceInce

MC

Ambuja Cements Ltd,Grasim

Industries Ltd, Holcim, Lafarge andJ.K Cement Ltd. are amongst the fewrenowned cement companiesoperating in India.

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ACC LTD.COMPANY OVERVIEW, PRODUCTS & SERVICES

The cement plants of ACC Ltd are located invarious regions of the country in a number ofstates. The gadgets and equipments are of highstandards and comply with internationalnorms. Presently, there are around 14 cementplants of ACC Ltd which cater to the differentmarket segments of the country. The cementplants work in coordination with each otherand also independently to increase the marketshare.

Established in 1936 as a merger of 10 cementcompanies, ACC Limited (hereafter called ACC) isthe only cement company that figures in Indias listof Consumer Super Brands.

The first success came in a move towards cooperationin the country's young cement industry andculminated in the historic merger of ten companies to

form a cement giant. These companies belonged tofour prominent business groups - Tatas, Khataus,Killick Nixon and F E Dinshaw groups. ACC wasformally established on August 1, 1936

Formerly called The Associated Cement CompaniesLimited - (the company changed its name in 2006) -ACCs corporate office is located in Mumbai. Thecompany has 14 modern cement factories, more than30 Ready Mix Concrete (RMX) plants, 20 salesoffices and several zonal offices.

It has a workforce of about 10,000 persons and acountrywide distribution network of over 9000dealers

All the ACC Ltd. Cement Plants use cuttingedge technologies and services which in turnproduce high quality cement brands. Set up inthe year 1936, ACC has always workeddedicatedly to produce some of the best brandsof cement and its business strategy is based onproviding the best of products to the changingconsumer market in the country and the world.

All the cement plants of the company are

equipped with advanced technologicalfacilities which make them completelyenvironment friendly. The plants usesophisticated pollution control devices invarious parts such as raw mills, power plants,cement kilns, coolers and other equipments. Inaddition, the mining technologies that havebeen implemented in the cement plants ofACC Ltd are also based on environmentsafeguard norms.

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ACCs PRODUCT LIST

Products & Services

Ordinary Portland Cementsa. 43 Grade Cement

b. 53 Grade Cement

Blended Cementsa. Fly-ash based Portland

Pozzolana Cement

b. Portland Slag Cement

Bulk Cement

Ready Mix Concrete RMX

High Strength Concrete

High Performance Concrete

Self-leveling Concrete

Self-compacting Concrete

Colored Concrete

Concrete made with binary &

ternary blends of cements

Early Strength Concrete

Fibre reinforced Concrete

Besides manufacturing ordinary Portland

cement, ACC is the largest producer ofblended cements in the country, offeringtwo varieties of blended cements, namely:Fly-ash based Portland PozzolanaCement (fly ash is a waste from thermalpower plants) & Portland Slag Cement(slag is a waste by-product from steelplants)

ACC has been a trend-setter in theindustry in this respect with as much as

85% of its total production comprisingblended cements. Through its subsidiarycompanies, ACC has pioneeredintroduction of two value added productsin India, namely Bulk Cement & ReadyMix Concrete

ACC has also extended its servicesoverseas to the Middle East, Africa &South America, where it has providedtechnical and managerial consultancy to avariety of consumers, and also helps in theoperation and maintenance of cementplants abroad. The overseas contract withYANBU Cement Company, Saudi Arabiafor management and operation of itscement plants, is an ongoing relationshipfor the last 29 years and has been renewedup to 2011.

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COMPETITORSMARKET SCENARIO

Similarity of raw materials and processing unitsmakes differentiation difficult, while on the otherhand large companies are acquiring smaller ones,changing industry dynamics.

Competitors: The Indian cement industry has largenumber of fragmented firms. There is also dearth ofnew players as incumbents have already procuredkey raw material sources, like limestone reserves onlong-term leases. Further, large firms areconsolidating by acquiring smaller ones that find it

difficult to attain efficient scales of production. Dueto similar raw material inputs and productionprocesses, there is no significant differentiation inthe cement produced across firms.

Competition in the Indian cement

industry has intensified over the last fewyears, with the global cement majorsgaining a major foothold in the country.Cement companies are looking for innovative strategies to capture asubstantial market share and surviveamidst aggressive competition.

The industry has seen constantmodernization and implementation oflatest technologies during past few years.

About 93 per cent of the total capacity isbased on eco-friendlydry processtechnology. The demand for office spacein India is being driven by the entry ofmultinational companies and the growthof the services sector, particularly the IT-BPO industry. Progressive liberalizationand easing of foreign direct investments(FDI) norms in various sectors paved theway for growth in FDI, which led togrowing demand for office space from

multinational companies (MNCs) andother foreign investors. Total FDI in thecement sector between April 2000 andAugust 2010 stood at US$ 1.9 billion.

45%

Sales

11

%

11%

10%

9%

4%4% 6%

ACC

Grasim

Ambuja

Ultratech

India

Cement

Jaiprakash

Birla Corp

The strategies adopted include non-priceinstruments such as branding, greaterexpenditure on advertising, innovativepackaging, strengthening of theirdistribution networks as well as several

customer-focused initiatives. Companiesare also integrating vertically by movinginto the ready-mix concrete business inan attempt to retain their clients.Regional players are also moving out oftheir regions in an attempt to establish apan-India presence. This is expected tointensify the level of competition in theindustry.

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OPPORTUNITIESIDENTIFYING WANTS AND NEEDS

Mortars are used throughout the construction industry for a variety of purposes, including

brick-laying, bedding of small concrete component such as ridge tiles, sealing of certaintypes of paving and everyday patching/repair jobs.

Mortars are traditionally prepared on site which leads to the following problems:

1. Inconsistent Quality

2. Time Intensive preparation

3. Sourcing problems

4. Preparation issues due to labor unavailability

5. Debris creation while preparing mortar mix

ACC Ltd should look to capitalize on this opportunity by manufacturing Ready Mix Mortarin packaged, ready to use bags to cater to the needs of the construction sector. Theadvantages provided by ready mix mortar are:

1. Consistent quality - Input material proportions are fixed and standardized

2. Time savings towards preparation of mortar viz. a viz. traditional method

3. Cost savings due to reduced labor requirement

4. Increased usage and functionality due to presence of additives viz. a viz. traditional

method of mortar preparation

5. Easy transportation

6. Easy storage

7. Reduction in unwanted debris at construction sites

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MARKET SEGMENTATION

The segmentation strategy followed is:

1. Understanding needs and preferencesof consumers -- Having housing,infrastructure, and commercial constructionas demand drivers, the company analyzesthe needs and preferences of consumers inthese sectors.

2. Grouping customers based on theirneeds and preferences -- Customers with

similar needs and preferences can beincluded in one segment.

3. Targeting the segment that thecompany can best meet the needs and

preferences of -- The Company shouldtarget those customers whose needs andpreferences can be met. i.e. customer needshigher- strength or low price or betterquality

4. Branding the commodity -- Thoughbeing a commodity product, branding isimportant for a cement company. Thecompany needs to position its brand amongContractors, Builders and householdindividuals.

5. Provide required product to meettargeted customers' needs and

preferences -- Delivering up to theexpectations of the targeted segment.

GEOGRAPHICAL SEGMENTATION

This form of segmentation is basically done onthe basis of country, city, region, city, density orclimate etc.

1. Tier I cities These cities have a demandfor premium housing and high qualityinfrastructure projects where packagedmortar can find appropriate usability.

2. Tier II & III cities These citiesgenerally have a demand for largeindividual homes with an increasing trendtowards quality consciousness.

3. Coastal cities The coastal belt generallyhas poor quality sand which is animportant ingredient for preparing mortar.

4. Rest of India The mainland hasadequate availability of sand of various

grades and quality. States like MadhyaPradesh and Rajasthan are known sourcesfor sourcing sand.

.

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MARKET SEGMENTATION

DEMOGRAPHIC SEGMENTATION

On the basis of INCOME Since ACC is a premium brand; the segment that is being looked atis high and medium income level for individual home owners and contractors.

BEHAVIOURAL SEGMENTATION

USER STATUS ACC can very well define its main potential users which are expected to beConstruction Companies, Builders, Contractors and Individual home owners.

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TARGETINGCONSUMER SEGMENT FOCUS

Target market is a group of consumers that the business has decided to aim its marketing effortsat and ultimately its merchandise. A well-defined target market is an important element to amarketing strategy.

ACC ADAPTATIONS:

FOR BUILDERS

Builders constitute a large chunk of our target audience. With rapid urbanization, the numbers ofconstruction projects are on a steady rise which has led to a spurt in demand for input materials

like ready mix concrete, cement and associated materials like mortar by builders. Premiumproperty builders are quality conscious and are likely to be positive recipients to the product.

CONTRACTORS

Contractors constitute another major segment of our target audience. The contractors generallyare key decision makers for sourcing input materials and generally are responsible forcompletion of the construction activity. Two distinct segments can be targeted:

1. Private Contractors For general commercial and residential construction works

2. Public Works Contractors For critical infrastructure projects like highways, dams,nuclear plants, refineries etc.

INDIVIDUAL HOME OWNERS

With rising income levels people are taking an increasing interest in their home architecture andconstruction and have become increasingly quality conscious. ACC already has a very strongcustomer relationship department and market surveys have revealed that ACC is amongst themost preferred brands in cement. This particular segment can be targeted by leveraging theexisting brand value for the ready mix mortar product.

CONSULTANTS / STRUCTURAL ENGINEERS

Consultants and Engineers advise builders, civil engineers and site engineers on the correct usageand quality of the input materials required for construction activities. They provide approvals forconstruction activities as well. Inputs on input materials to be used are taken critically bycontractors and builders and hence they become a natural choice for a target segment.

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MARKET POSITIONING

The ready mix mortar named INSTAMIX will position itself as a high quality, instant

preparation brand, and one that is reliable and easy to use.

INSTAMIX should be positioned to offer a quick and convenient way to prepare mortar for avariety of applications without worrying about quality. It should be portrayed as a hassle freeproduct provides high quality and strength because of fixed proportions, consistency andquality of input materials.

The positioning should emphasize the following points on the minds of the customers:

Consistent Quality: It has accurate and high quality cement, additives and sand ratios andtherefore overcomes any potential problem relating to mixing on site. This also results in

consistency of strength and color.

Quick Setting: The mortar mix takes less time to set and therefore speeds up constructionworks.

Instant Preparation: The preparation of the mortar is fast and easy. Only the required amountof water is needed to prepare the mix.

Ease of Storage: They have a retarding agent, which makes them fully usable and storable forlong periods of time.

Superior to Normal Mortar: The product should emphasize Point of Differences (POD) withnormal mortar w.r.t mortar color, increased binding strength and weather resistance.

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MARKETING MIXPRODUCT, PLACE, PROMOTION, PRICING

The marketing mix helps to devise fullyintegrated marketing programs to create,communicate, and deliver value for consumers.The marketing mix decisions help to influencetrade channels as well as the final consumer.

PRODUCT

Product Variety

The ready mix mortar will be available in asingle variant: Class II type

Product Quality & Design

The ready mix mortar will be a Class II mortarwhich is a good all round mortar for carrying

out brick-laying, bedding of small concretecomponent, sealing/filling and everydaypatching/repair jobs

The mix type for the mortar will be:

Sand, Lime plus Cement and BindingAdditives (Lime acts as plasticizer)

The sourcing for Sand, Lime and Cement willbe from existing channels so as to ensure high,

consistent quality for the product.

Product Brand Name

The product has been named INSTAMIXMortar SWIFT WAY TO FIX to emphasizeon the instant preparation of the product

Product Packaging

The ready mix mortar will be available inenvironmentally friendly, recycled plasticgunny bags

Product Sizes

The ready mix mortar will be available in thefollowing sizes:

1. 5 Kg Bags For catering towardseveryday patching/repair jobs,providing quick fixes and for carrying

out small decorative works

2. 25 Kg Bags For catering towardsbrick laying and tile laying jobs

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PLACE

The companys head office is atMumbai, Maharashtra. They have 3regional centers which are located atPune, Kolkata and New Delhi. Thecompany operates 19 sales units and54 zonal offices. The companys

countrywide supply chain is anenviable marketing and distributionnetwork that comprises 194warehouses, more than 9,000 dealersand 50,000 retail outlets.

ACC transport cements to ownwarehouses either via roadway orrailways. Then agents transport it tothe dealers/distributors and in turn tosub dealers who finally sell it to the

end users.

In rural and semi-urban area we aregoing to distribute it via dealers andsub-dealers. In urban areas, apart fromdealers and sub-dealers, we will focuson dealing with prime constructioncompanies.

As the product that we are targeting isnot different from our core

competency, hence the establisheddistribution channel of cements can beused.

For our new product we will have a trade push strategy.And to encourage the dealers to market our newproduct, we will do the following things:

Give them good Dealer Commission

Provide Gifts to those who achieve their targets

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MARKETING MIX

PRODUCT, PLACE, PROMOTION, PRICING

PROMOTION

Publicity Campaign

Tie ups with popular sport teams like

KINGS XI PUNJAB can be arranged to

promote Ready Mix Mortar by sponsoring

the team apparel.

Sales Promotion

The level of customer services has been

appreciably increased through the expansion

of ACCs sales network and sales force.

Customer Service Cells at each of the

regional marketing offices are manned by a

team of qualified civil engineers who would

interact with consumers, engineers, masons

and influencers to understand their

requirements, attend to their complaints and

provide pre and post sales services

including guidance on the correct usage of

Ready Mix Mortar.

Through these interactions, relationships

can be built and information can be

dispersed about Ready Mix Mortar.

An interactive website can be launched to

provide detailed information about ReadyMix Mortar for the benefit of small retail

consumers and home builders.

Print Media

Regular advertisements in trade journals and B2B

magazines can be given to create product

awareness. Magazines like good home and good

housekeeping can be targeted for the affluent home

owners.

Free Samples

In case of colored mortar, final choice should be

made with the erection of trial panels on site. Free

bagged mortar samples can be made available via

representatives for this purpose

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PRICING

The pricing strategy basically aims to be aDIFFERENTIAL PRICING STRATEGY. Owing tothe rising demand and low availability of suchproducts in India, a competitive pricing strategy hasbeen adopted in order to gain momentum and boostsales.

Prices can be set according to regional areas. Higherprices can be extracted from coastal states wheregrade of sand is an issue.

Lower prices should be extracted from states such asRajasthan, Madhya Pradesh as sand availability isnot an issue and people have to be incentivized touse branded quality products.

The product should be introduced on a pilot basis inselect tier I cities and coastal areas with differentialpricing to gauge market response. Pan Indiaintroductions can be made depending on pilotresults.

Quantity ACC price (Tier I & Coastal)

5kgs INR 400

25kgs INR 1800

Quantity ACC price (Tier II & Mainland)

5kgs INR 300

25kgs INR 1400

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CONCLUSION

Based on the analysis performed, ACC can expect to launch another successful product in the

form of INSTAMIX- SWIFT WAY TO FIX, which would not only cater to the needs of the

construction industry but also to that of individuals in the form of readily available, easy to use

and dirt free fixing mortar.

With the growth of the Indian economy, the construction industry is undergoing a growth period

itself. The product has good potential considering increasing focus on quality on the customers

part as well as lack of availability of Ready Mix Mortar in India. Labor shortages has increased

the need for convenience products like ready mix mortar in India and the trend is expected to

continue in the coming years. ACC would get the first movers advantage in case it decides to goahead with the new product launch. We believe that the unique product attributes along with the

already established brand of ACC would ensure that the product would fare well in the market.

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pdm project report by piyush prasanna

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