project report chapters)

8/9/2019 Project Report Chapters)

http://slidepdf.com/reader/full/project-report-chapters 1/67

CHAPTER 1:

INTRODUCTION AND THEORETICAL BACKGROUND

1



DISTRIBUTION NETWORK:

Most manufacturers do not sell their goods directly to the final consumers. Between them

stands a set of intermediaries performing a set of functions. These intermediaries help thecompany in the distribution of its goods so that it can reach the final users. For this the

intermediaries constitute a network of various channels of distribution. This distribution

network is used by the company to deliver its goods to the final users for consumption.

Successful value creation needs successful value delivery. Marketers are increasingly

taking a value network view of their business. Value network is a system of partnerships

and alliance that a company creates to source and deliver its products. Instead of limiting

their focus to their immediate distributers and customers, they are examining the whole

process that shows how the manufactured goods move towards the final consumers.

Companies are looking at their distributers downstream for this purpose. They are

looking at the customer segments and how the resources of the company can best be

organised to meet needs. Companies are also using this as a tool to increase their profit

margins and create a brand name in the market and in the customer’s mind as well.

Failure to have a good value network and to coordinate with it properly can have dire

consequences which can cause a lot to the company.

It can even lose its brand identity in the market along with the profit margins it expects to

gain from selling the particular product.

CHANNEL OF DISTRIBUTION:

2



A channel of distribution (sometimes called as the marketing channel) is a group of

individuals and organization that directs the flow of products from producers to the end

use customers. Between the producers and the end use customers there lies a number of intermediaries which facilitate the distribution of the products. It depends on the channel

level selected by the producer to distribute its products.

The main function of these intermediaries is to find appropriate ways through which

products and goods are made available to the customers in markets. Marketing channels

are the most complicated phenomenon encountered in the study of marketing. They

involve elaborated behavioral systems that usually involve many decision makers and are

often extended over a wide geographical area.

One aspect of these systems is their constant interaction. They lead, they follow, they

control, and they cooperate with each other. The American Marketing Association has

defined the term as "the structure of intra-company organization units and extra-company

agents and dealers, wholesaler and retailer through which a product or service is

marketed".

The channel is also described as grouping of intermediaries from first owner to the last

owner who take title to the product during the marketing process. Depending on these

intermediaries the channel level is selected by the manufacturers for the distribution of

their products in the market the channel level is of many types depending on the number

of intermediaries as decided by the manufacture.

DISTRIBUTION CHANNEL SELECTION:

3



The process of selecting the distribution channel involves the following steps:

STEP-I

STEP-II

STEP-III

STEP-IV

STEP-V

STEP-VI

The process of selecting the distribution channel is very complex and it requires a

detailed study of the market, conditions prevailing in the market and the needs and

requirements of the customers. In this process firstly, the potential customers are

4

Identifying Target Customers

Determining Customers Buying Pattern

Locating Potential Customers

Finding Channel Alternatives

Evaluating Channel Alternatives

Selecting Channel Members



identified and examined. It is checked whether the channel will reach the target

customers or not.

In the second step, the buying pattern of the customers is studied and their needs are

found. Thirdly, the location of the customers is also studied so that the goods should

reach them through the channel selected. In the fourth and fifth step the various channel

alternatives are studied and evaluated to select the most appropriate one.

Lastly in the sixth step, the channel members i.e. the intermediaries are selected along

with deciding on the channel level. Here the manufacturer should ensure that it should be

able to provide adequate product flow and timely deliveries to the channel members.

Channel selected should be ultimately beneficial to all the members and it should exceed

the cost of selecting the channel.

CHANNEL LEVEL:

5



After the step of selecting the channel, comes the step of selecting the channel level.

Channel level determines the number of intermediaries that the company will keep in its

value chain for the distribution of its products. The company should select a channel level

that suits its requirements the best and should be capable of distributing the goods properly and make it available to all the consumers wherever and whenever they need

and the delivery should be on time.

Producers and the end use customers are part of the distribution channels. The number of

intermediaries that comes in a channel between the producers and customers defines the

channel level, whether it is a zero-level, one-level, two-level, or a three-level channel.

These intermediaries may include stockist, wholesalers, distributors, dealers, and

retailers.

1. Zero-level channel: It contains no intermediaries. This is also known as the direct

marketing channel. Under this method the manufacturer directly sells goods to the

ultimate consumer without any intermediary.

2. One-level channel: It contains only one intermediary. Under this method the

manufacturer sells their goods to agents, dealers or wholesalers. These people then sell

those goods to the ultimate consumers.

6

MANUFACTURER CUSTOMER

MANUFACTURER

AGENTS/DEALERS/

WHOLESALERS CUSTOMER



3. Two-level channel: It contains two intermediaries. Under this method the

manufacturer sells their goods to the wholesalers and dealers in large quantity. These

wholesalers and dealers distribute these goods to the retailers in small quantities

according to their needs. The retailers finally sell them to the ultimate consumers.

4. Three-level channel: It contains three intermediaries. Under this method the

manufacturer sells their goods to the distributors and stockists in very large quantities.

These distributors and stockists then sell these goods to the wholesalers. Retailers buy

these goods from the wholesalers according to their needs and then sell it to the ultimate

consumers.

7

MANUFACTURER

WHOLESALERS

/DEALERSRETAILERS

CUSTOMER



LOGISTICS:

Owing to various reasons corporate world is still passing through hard time and every

manufacturer is not sparing any effort to excel. To counter the challenges properly,

competence building and content - specific partnership among all concerned are

absolutely necessary. Every manufacturer is going to face tough competition in the near

8

MANUFACTURER

DISTRIBUTORS/

DEPOTS/STOCKISTS WHOLESALERS

RETAILERSCUSTOMER



future and to cope with it they have to respond with constant improvements in standards

of products and service to meet global acceptance in the market. So, when the

manufacturers spend their time in tackling cost in their corporation’s major function like

production, personnel, finance, and of course administration, managing the logistics, theflow of raw materials to the assembly line and supply of the finished goods to the

customers more efficiently is one of the most important function which can save large

money of the manufacturer.

In the present market scenario product differentiation is gradually becoming non-existent

and that too in the commodity segments like cement is very prominent. Now a Days true

differentiation is achieved only in terms of delivering the goods to the consumer faster on

right time as and when demanded. Due to this concept logistics is gaining popularity

rapidly. Logistics involve planning, implementation and controlling the physical flow of

material and final products to the point of consumption from the point of origin keeping

the customer satisfied and maximizing the profits. Since, the main aim of every

manufacturer is the logical distribution of its products.

The above mentioned objectives can only be achieved through logistics. Experts have

called logistics as “the last frontier of cost economics”. Lower marketing logistics will

keep the prices of goods low, yielding higher profits. The main aim of every manufacture

behind the market logistics is to dispatch the right quantity of its good quality products, at

right place, at right time by incurring the least possible cost which will ultimately

increase the profit margins.

MARKET LOGISTICS:

Market logistics is the process of planning the infrastructure to meet demand, then

implementing and controlling the physical flows of materials and final goods from points

of origin to points of use, to meet customer requirements while earning a considerable

profit. It leads to an examination of the most efficient way to deliver goods and value.

9



It involves the following steps:

1. Deciding the company’s value proposition to its customers.

2. Deciding the best channel design and network strategy for reaching the customer.3. Developing operational excellence in sales forecasting, warehouse management,

transportation management, and materials management.

4. Implementing the solution with the best information systems, equipments, policies, and

procedures.

BIRLA CEMENT’S DISTRIBUTION NETWORK AND LOGISTICS:

10

PLANT

RAILWAYS ROADWAYS



BIRLA CEMENT’S DISTRIBUTION:

Birla Cement uses two modes of transportation in its cement distribution. These two are

railways and roadways. Out of the total production around 75% is distributed through rail

route and the rest 25% by road transportation. The company mostly prefers rail route for

the distribution of the products that are send to markets at distant places and in very large

quantities. This is because rail route is cheaper, safer and the rails have very large

carrying capacity in comparison to the roadways.

11

CUSTOMERS DUMPS

DEALERS CUSTOMERS

SUB-

DEALERS

CUSTOMERS

CUSTOMERS

DUMPS CUSTOMERS DEALERS

CUSTOMERSDEALERS

CUSTOMERS SUB-

DEALERS

CUSTOMERS



1. DISTRIBUTION BY RAIL ROUTE:

Rail route is used to dispatch the goods from the company when the demand of cement is

in very large quantity and at very distant place. Mostly it is preferred when it is to be sent beyond a distance of 300 Kilometers (KM). This mode is preferred over the road

transportation because it is much more economical and has more load carrying capacity.

This will help to dispatch large amount of cement at once as and when it is required.

PROCEDURE:

The company first goes to railway and place the demand of racks and wagons according

to its requirements. This process is known as the demand registration for empty wagons.

Then, the railway provides the company with rakes and gives them certain fixed time for

loading it at the packing plant of the company. The company then issues a Dispatch

Instruction (DI) from the marketing and logistics department to the packing plant. This

DI consists of all the information regarding the type of cement, price of cement, quantity

of cement which is to be loaded along with other specifications as demanded. Then,

loading of rake is carried out as per the instructions given in the DI.

After the loading is over all the wagons are sealed by railway. Once the sealing is done

then it won’t be opened under any circumstances until the wagons reach the destination

for delivery. After loading a forwarding note is filled, the freight is calculated and the

railway gives a receipt which consists of the wagon number, wagon capacity and the

invoice number. The delivery of goods is given when this railway receipt is produced at

the destination point. The whole responsibility for loading the wagon is on the company

and it should also take care of the quantity. If the company overloads the wagons then the

railway will charge fine for it. Up to one tonne railway don’t charges fine because this

may occur by mistake but beyond that it will charge three times of the normal freights

which it charge per tonne per kilo meters.

12



RAKE & MINI-RAKE:

One rake of railway consists of a minimum of 43 wagons. For this they take indent from

the railway. Indent refers to the railway clearance here. The demand should be for aminimum of 43 wagons at least or else the railway will charge higher freight than what

they charge normally. Railway provides 9 hours of time for loading the wagons at the

packing plant and another 9 hours for unloading the goods at the destination. One mini-

rake consists of 20 wagons. For loading the wagons at packing plant and unloading the

wagons at the destination, railway provides five hours each.

DEMURRAGE:

If the company takes more than nine hours for loading and unloading a rake and more

than five hours for loading and unloading a mini-rake, then the railway charges

demurrage (fine for taking extra time in loading and unloading of goods) from the

company and also gives a discount of 5% on the total freight if the company takes less

time than the normal given time.

TYPES OF WAGONS AND THEIR CARRYING CAPACITY:

ROUTE WAGON TYPE

CARRYING

CAPACITY (CC)

IN METRIC TONNES

(MT)

NORMAL

BCN

BCNA

BCNAHS

61

63

63

13



CC+6

BCN

BCNA

BCNAHS

61

64

64

CC+8

BCN

BCNA

BCNAHS

63

66

66

The carrying capacity of the wagons is decided by the railway depending on the route

which it will use for the transportation of the cement. It also depends on the compactness

of the soil on which the railway track has been laid down in that particular route.

FREIGHT CALCULATION BY RAILWAY:

Railway has prepared a standard table for the calculation of the freights. For different

classes of goods it has different classes of freights. For cement it uses the standard class

of TRAIN LOAD 140 CLASS.

In train load 140 class the minimum charge is Rs 116.80 per tonne per 100 km i.e. it is

coming around Rs 1.16 per tonne per km. The quantity is given in tonnes, freight is given

in rupees, and distance of destination point is given in kilo meters. Taking all these

information the total freight is calculated. To this total freight, fine or surcharge is added

if any and the discount is reduced from it if applicable and the final applicable freight is

calculated.

14



Railway has divided the whole year in two parts. One extends from October to April and

is known as the peak season and the other one extends from July to September which is

known as the lean season. In the peak season railway charges an additional 7% seasonal

surcharge. Along with this railway also charges an additional 2% development chargethroughout the year. This is also included by the company in the calculation of the final

freight.

Once the delivery of good is done at the destination point certain other expenses like

unloading the goods, transporting it to the warehouses, and some miscellaneous expenses

also occurs including that of the goods which are damaged in the transportation process.

All of these are together calculated and are added to the company expenses.

2. DISTRIBUTION BY ROAD ROUTE:

Road route is used for the transportation of the goods from the company when the

demand of cement is not very large in quantity and the distance between dispatch point

and the delivery point is not big. Mostly this mode is preferred when the good is not to be

sent beyond a distance of 300 Kilo Meters (KM). This mode is preferred over the railway

when the quantity is not that large and has to be sent to nearby places and where the rail

routes are not available. This will help to dispatch less amount of cement whenever it is

required i.e. frequently.

For transporting to the nearby markets in the nearby states like Uttar Pradesh, Bihar,

Rajasthan, Chhattisgarh, Jharkhand etc. trucks are used. Mostly six wheeler and ten

wheeler trucks are used. These six wheeler trucks have a permitted loading capacity of

15



10-12 Metric Tonnes (MT) and the ten wheeler trucks have a permitted loading capacity

of 16-18 Metric Tonnes (MT).

PROCEDURE:

The dispatch procedure through road route is somewhat similar to the dispatch procedure

which is followed by the rail route. The distributors of company according to their needs,

requirements and market demands place their orders to the marketing department of the

company. The company then issues a Dispatch Instruction (DI) from the marketing and

logistics department which goes the packing plant. This DI consists of all the information

regarding the type of cement, price of cement, quantity of cement which is to be loaded

along with other specifications as demanded by the distributors. Then, loading of trucks

is carried out as per their loading capacity and the instructions given in the DI.

FREIGHT CALCULATION OF ROAD ROUTE:

Normally the road route is found to be much more expensive than the rail route. In case

of road transportation the expenses comes to Rs 162 per tonnes per 100 km i.e. it is

coming around Rs 1.62 per tonne per km. If we compare this freight only we can say that

the road route of transportation is expensive than the rail route.

After the delivery of good at the destination point certain other expenses like unloading

the goods and some miscellaneous expenses also occurs including that of the goods

which are damaged in the transportation process. All of these are together calculated and

are added to the company expenses.

So after comparing both the modes of transportation we see that the road route is not

economical at all in comparison to the rail route. But, then also company uses this route

16



for transporting its products to the nearby markets where rail route is not available and

when the product is required in less quantity.

CHAPTER 2:

RESEARCH METHODOLOGY

17



Objectives of the Study:

1. Study of the various distribution networks and logistics at Birla Corporation Limited in

the distribution of its various brands of cements.

2. Study of the various distribution channels for the distribution of the products.

3. Study of the logistic practices followed by the company.

4. Analysis of other suitable distribution channels for the company’s products.

5. Identification of requirements of changes if any in the current distribution practices

followed by the company and suggestions & recommendations if required.

This research was descriptive in nature. The major objective of a descriptive research is

the descriptions of something say a problem or topic of study. In this type of research the

topic of the research is defined and suitable solutions to the problem are found. In this

18



type of research the magnitude of knowledge, perception, beliefs, preferences and

satisfaction level of the respondents are measured related to the company and its

products. This process included a market survey in the third phase of the project. The

data to be used in the study was of both type i.e. primary and secondary data. Primarydata was collected from the records of the company. Industry profile and the company

profile have been collected from various sites on the internet. Secondary data was

collected from a pool of around 100 Transporters, Stockist, Dealers, Distributors and

Retailers using questionnaire based market survey.

Sample:

The field of study constituted a very large population of transporters, stockists, dealers,

distributors and retailers. The complete study of the entire population was not possible

due to various constraints like time, money, etc. So, it was very necessary to select an

appropriate sample size for the study.

Sample Size:

The selected sample size resembled the entire population appropriately for a proper study

of the whole population and proper results.

A sample size of 100 Transporters/Stockist/Dealers/Distributors/Retailers was used in the

study.

Data collection method:

19



Here a questionnaire based structured interview method was used by the student to

collect the date. A structured questionnaire based interview was formulated. The

questionnaires were filled directly in front of the respondents by taking their views andresponses.

Statistical tools used for data analysis:

• SPSS (Statistical Package for the Social Sciences)

• Bar Graphs

• Percentage method

• Tabulation of Data

Approach of survey and data analysis procedure:

The data was collected from a pool of around 100 transporters, stockists, dealers,

distributors and retailers. They were approached directly on the reference of Birla

Corporation Limited. The questionnaire was designed to obtain specific information. The

questionnaire contained questions in a pre-arranged order. Thus, the method was direct.

The use of similar type of questionnaire helped to reduce biased information and helped

to get most appropriate result after analysis of the data. The data was then arranged in a

proper manner and analysed using SPSS (Statistical Package for the Social Sciences).

Probable Limitations:

1. Respondents did not disclose the information due to competition and price wars.

2. Respondents did not entertain the surveyors properly.

3. Time and money constraints were there.

20



4. Geographical constraints were there due to the vast population of the respondents

spreading in different regions in the market.

CHAPTER 3:

PROFILE OF THE COMPANY

21



INDUSTRY PROFILE:

Cement is basic material for all construction activities. Cement industry forms the

backbone of the infrastructural development of any country. This reason gave cement the

importance it is enjoying now a days due to the massive developmental works being

carried out in each and every part of the world. This important status that cement enjoys

in the roads of development and its growing demand in the market due to the

infrastructural boom has made cement one of the most important and most sort after

commodity in the market.

Mason Joseph Aspdin of Leads in England invented the Cement in 1824. He took a

patent for this Cement and called it “Portland Cement”. This is because after setting it

resembles the colour of a variety of sand stone which was found in Portland in England in

abundance quantity. In 1985 the prototype of modern Portland cement first appeared.

22



The Cement industry in India dates back to 1914, when the first unit was established in

Porbander (GUJRAT) with a production capacity of just 1000 tons a year. Severe

competition from imported Cement in the earlier years, followed by decade’s long war of

price & distribution controls, resulted in slow & stunted growth of this industry.Government has taken many steps to help cement industry and is also the major

consumer and customer for the companies in this sector.

COMPANY PROFILE

“Birla Corporation Limited” is one of the largest Industrial houses in India. The Group

owns over 500 factories in a wide range of industries such as textiles, man-made fabrics,

cables, woolen products, automobiles, industrial and textiles machines, sugar, paper,

shipping, cement, jute, aluminum, copper, fertilizers, chemicals, power plants, non-

ferrous alloys, etc. The Group also has over 40 joint ventures and management contracts

in several countries such as Nigeria, Kenya, England, Philippines, Indonesia, Thailand,

Uganda, Ethiopia, Egypt, etc. The Group is known for its social and educational

activities. Every year it donates millions of rupees to technical institutions, relief funds,

hospitals and religious organizations. It has set up some of the most renowned

educational institutions and hospitals in the country. M. P. Birla Group controls

substantial assets of the Birla Group. It also has interests in the other companies of the

Birla Group by means of investments in their equities.

23



Birla Corporation Limited is a multi activity company and pioneer in many fields is

committed to the overall development of the country by its widespread operations. The

company’s annual turnover exceeds Rs. 1900 crores from a diverse range of products

including Jute & synthetic yarn, Cement, Calcium Carbide, Industrial Gases, VinoleumFloor Coverings; PVC (Poly Vinyl Chloride) coated Cloths & Wall papers as well as

Auto trims. “Satna Cement Works & Birla Vikas Cement”, are industries of Cement

division of “Birla Jute & Industries Limited”, and these are situated in north-east corner

of Satna city about 5 km from Satna railway station. Nearly 81 years back, Birla jute

manufacturing company was established in outer Calcutta by a young person,

Ghanshyam Das Birla. It was not only Birla’s first unit but also first Indian jute mill. He

worked a lot for the growth and development of the company for many years.

The company grew steadily under the guidance of G. D. Birla. After sometimes in 1936

Madhav Prasad Birla took over the charge. M. P. Birla also was a man of strong sense

and understanding of business and of clear vision. Working as a chairman of the

company, M. P. Birla helped in transforming the company from a manufacture of jute

goods to a leading multi-product corporation with wide spread activities and the name of

the company was changed from “Birla Jute Manufacturing Company” to “Birla Jute

Industries Limited” which ranks among the top thirty companies in the country.

In 1959 this company embarked it’s most significant new venture i.e. cement. The

commissioning of Satna Cement works in Madhya Pradesh marked the company’s entry

into Cement industry. This way the first Cement plant in home of Birla came into

existence and the plant was the largest single unit in “terms of production capacity” in

our country at that time.

Now the name of "Birla Jute Industries Limited" has been changed to "Birla Corporation

Limited" and today its chairman is Rajendra S. Lodha. Counted one among the largest

plants of the Cement division, Satna Cement works and Birla Vikas Cement at Satna

24



(M.P.) have an installed capacity of 2.18 Million tons (MT) at present which is projected

to rise to 3 MT in the near future. “Birla Cement Samrat” and “Birla Cement Khajuraho”

are the leading brands and front runners of the company's products in the market. Due to

very high standard of quality and its brand equity in the market the products of thecompany are in a great demand in the market. Birla Corporation Limited, Cement

division has seven plants i.e. two at Satna in Madhya Pradesh, one at Raebareli in Uttar

Pradesh, two at Chanderia in Rajasthan, and two at Durgapur in West Bengal with its

head office based at Kolkata in West Bengal.

PRODUCT PROFILE:

All the plants together manufacture various types of cement, including (OPC) Ordinary

Portland Cement (43 & 53 grades), fly ash–based (PPC) Portland Pozzolana Cement,

(PSC) Portland Slag Cement, and low alkali Portland cement. The company has also

started producing (SRC) Sulphate Resistant Cement in the recent times and it has been

well accepted due to its good quality in the market. The cement is marketed under the

name of Birla Cement “SAMRAT”, Birla Cement “KHAJURAHO”, Birla cement

“CHETAK”, and Birla cement "DURGAPUR”.

Locations Units Products Brand Name

Chanderia

(Rajasthan)

Birla Cement Works

Chanderia Cement Works

PPC and

OPC (43

and 53

Grade)

Birla Cement Samrat &

Birla Cement Chetak

Satna (M. P.) Satna Cement Works

Birla Vikas Cement

PPC and

OPC (43

and 53

Birla Cement Samrat &

Birla Cement Khajuraho

25



grade)

Raebareli (U. P.) Raebareli Grinding Unit PPC Birla Cement Samrat &

Birla Cement Premium

Durgapur (W. B.) Durgapur Cement Works

Durgapur Hitech Cement

PSC

PPC

Birla Cement Samrat

GRADES OF CEMENT:

The grades of cement show the compressive strengths of the cements. It is measured in

MPa (Mega Pascal) or kg/square cm. It is of following types:

1. 33 Grade: It means the compressive strength of the cement is 330 kg/square cm.



26



CHAPTER 4:

DATA ANALYSIS AND ENTERPRETATION

27



GRAPHICAL DATA ANALYSIS

GRAPH 1: Customer’s perception towards advertisement as a factor to buy

cement.

28



In the survey we found that 19% customers give importance to advertisement while

buying cement, 44% customers give somewhat importance to advertisement while buying

cement, 28% customers can’t say anything about giving importance to advertisement

while buying cement, and 9% customers don’t give importance to advertisement while

buying cement.

This shows that a majority of customers in the market gives importance to the

advertisements of the products by the cement company while buying cement which

shows that it also plays an important role in increasing the sales of cement in the market.

This shows that the advertisements which the company uses definitely have a great deal

of effect on the buying behaviour of the customers. They relate the advertisements with

29

Customers considering advertisements as a preference to buy cement

NOCANT SAYSOMEWHATYES

P e r c

e n

t

50

40

30

20

10

0

9

28

44

19



the quality of the cements and use them as a criterion for judging a particular brand of

cement along with its brand image or brand name.

GRAPH 2: Customer's preferring availability as a factor for buying cement.

30



In the survey we found that 51% customers give importance to readily availability of

cement while buying cement, 43% customers give somewhat importance to readily

availability of cement while buying cement, and 6% customers can’t say anything about

giving importance to readily availability of cement while buying cement.

This shows that a majority of customers in the market gives importance to the readily

availability of cement while buying cement which shows that it’s an important decisive

factor in increasing the sales of cement in the market. This shows that the availability of

cement in the market when the customers go to buy it is very important factor which

31

Customers considering availability as a preference to buy cement

CANT SAYSOMEWHATYES

P e r

c e n

t

60

50

40

30

20

10

0

6

43

51



motivates the customers to buy the particular cement brand whenever they need it.

Customers think that as cement is a commodity there is not much scope for

differentiation in the product. So, if they get any cement brand easily they can go for it

and if it is a well known brand then its much better or else any cement brand will do.

GRAPH 3: Customer’s response towards Birla Cement.

32



Response of customers towards Birla Cements

VERY POORPOORAVERAGEGOODEXCELLENT

P e r c e n t

60

50

40

30

20

10

0

12

50

32

4

Out of the total respondents covered in the survey 4% thinks that customers give

excellent response to Birla cement, 32% thinks that customers give good response to

Birla cement, 50% thinks that customers give average response to Birla cement, 12%

thinks that customers give poor response to Birla cement, and 2% thinks that customers

give very poor response to Birla cement.

This shows that Birla Cement has got average response from the customers in the

market which is not excellent but an average one. This gives the company a lot of scope

to find out what is wrong with the brand which is responsible for the not so good

average response in the market. This also shows that the competitors of Birla cement are

33



doing well in the market in comparison with the company. Company should try to

eliminate the possible reasons for this average response to increase its sales. They

should try to improve the image of its products to get a good response.

GRAPH 4: Customer’s satisfaction level with Birla Cement’s distributionpattern.

34



In the survey we found that 16% customers are satisfied with the distribution pattern of

Birla Cement, 58% customers are somewhat satisfied with the distribution pattern of

Birla Cement, 23% customers are not sure and can’t say anything about the distribution

pattern of Birla Cement, and 3% customers are not satisfied with the distribution pattern

of Birla Cement.

This shows that a large portion of the customers are not fully satisfied with the

distribution pattern of Birla Cement and many are in doubt to say anything about it. This

shows the poor distribution pattern of the company. There is a lot of scope for the

company to improve its distribution pattern by which it can reach the customers easily.

35

Customer’s satisfaction with the distribution pattern of Birla Cement


P e r

c e n

t

70

60

50

40

30

20

10

0

23

58

16



The company should try to make its distribution pattern more effective and by this they

should make the products easily available within the reach of the customers.

GRAPH 5: Brand with the most effective distribution network in market.

36



Brand having effective distribution network

JAYPEEBIRLA GOLDACCPRISMBIRLA

P e r c e n t

50

40

30

20

10

0

40

4

16

35

5

In the survey it was found that 40% of the customers says that Jaypee has the most

effective distribution network in market, 35% of the customers says that Prism has the

most effective distribution network in the market, 16% of the customers says that ACC

has the most effective distribution network in the market, 5% of the customers says that

Birla Cement has the most effective distribution network in the market, and 4% of the

customers says that Birla Gold Cement has got the most effective distribution network

in the market.

This shows that in effectiveness of the distribution network the first place goes to

Jaypee, second place goes to Prism, third place goes to ACC, fourth place goes to Birla

Cement, and Birla Gold Cement has secured the fifth place. Here the customers have

again given a low ranking to Birla cement when it comes to the question of having an

37



effective distribution network. They think that Jaypee, ACC, and Prism are having a

good distribution network in the market when it is compared with Birla Cement. This

gives them a competitive edge and has also pushed the customers away from the

products of Birla Cement lowering down its market share in the local market.

GRAPH 6: Customer’s preference of brand image for buying cement.

38



According to this if other constraints are not in place like price, availability to name a

few then the customers will go only for a trusted and renowned brand of cement if they

have to buy it because along with good brand image comes good and quality products.

GRAPH 7: Customers preference of various factors for buying cement.

40



Out of the total respondents covered in the survey 14% says that customers buy a

particular brand of cement due to its quality, 49% says that customers buy a particular

brand of cement due to its price, and 37% says that customers buy a particular brand of

cement due to its brand name.

This shows that while buying cement the customers give most preference to the price of

the cement. They give second preference to brand of the cement, and they give least

preference to quality of the cement because they think that all the brands have good

41

While buying Cement the customer gives more preference to

BRANDPRICEQUALITY

P e r

c e n

t

60

50

40

30

20

10

0

37

49

14



name in the market and are trusted brands over time. They also think that all of the

cement has more or less the same quality as there is not much scope to bring

differentiation in their products as cement is a commodity. It is also seen that all the

company have more or less the same quality. So, here price is the most decisive factor which attracts the customers to buy a particular brand of cement.

GRAPH 8: Customers satisfaction level with distribution network of Birla

Cement.

42



In the survey we found that 23% customers are satisfied with the distribution network of

Birla Cement, 55% customers are somewhat satisfied with the distribution network of

Birla Cement, 17% customers are not sure and can’t say anything about the distribution

network of Birla Cement, and 5% customers are not satisfied with the distribution

network of Birla Cement.

This shows that a large portion of the customers are not fully satisfied with the

distribution network of Birla Cement and they say that there is a lots of scope for the

company to improve on it. This also shows that a large portion of the customers are in

doubt to say anything about it. This shows the poor distribution network of the company.

There is a lot of scope for the company to improve its distribution network by which it43

Customer satisfaction with distribution network of BIRLA CEMENT


P e r

c e n

t

60

50

40

30

20

10

05

17

55

23



can reach the customers easily and promote their products. The company should try to

make its distribution network more effective and by this they should make the products

easily available within the reach of the customers and make it available in the market.

GRAPH 9: Rank of Birla Cement in market in terms of availability.

44



Rank of BIRLA in terms of availaibility

POORAVERAGEGOOD

P e r c e n t

70

60

50

40

30

20

10

0

17

58

25

In the survey based on the availability of Birla Cement in the market 25% customers

have ranked it as good, 58% have ranked it as average, and 17% have ranked it as poor.

This shows that the availability of Birla Cement in the market is average and not so

good. The company should try to make the presence of the brand felt in the market by

making it readily available in the market by improving its distribution network which

will ultimately boost its sales and revenues increasing its profitability.

GRAPH 10: Rank of Birla Cement in market in terms of marketing strategy.

45



Rank of BIRLA in terms of marketing strategy

VERY POORPOORAVERAGEGOOD

P e r c e n t

50

40

30

20

10

0

7

42

43

8

In the survey based on the marketing strategies of Birla Cement in the market 8%

customers have ranked it as good, 43% have ranked it as average, and 42% have ranked it

as poor and 7% customers have ranked it as poor. This shows that the marketing

strategies of Birla Cement in the market are not so good.

The company should try to make the presence of the brand felt by massive campaigning,

advertisements, and sales promotion activities in the market which will ultimately boost

its sales and brand name in the market by spreading awareness about the brand in the

market. It’s evident that the company is not having much market share in the local

46



markets of Madhya Pradesh. But in order to penetrate the market and acquire larger

market shares it will have to concentrate on its marketing strategies too which are not in

par with its competitors.

GRAPH 11: Rank of Birla Cement in market in terms of its quality.

47



Rank of BIRLA in terms of quality

AVERAGEGOODEXCELLENT

P e r c e n t

60

50

40

30

20

10

0

37

53

10

In the survey based on the quality of the products in the market 10% customers have

ranked Birla Cement as excellent, 53% have ranked it as good, and 37% have ranked it

as average. None of the customers think the quality of Birla Cement to be as poor.

This shows that the quality of Birla Cement in the market is found to be very good.

Moreover customers think that being a commodity all cement brands have same quality

with very little difference in the products. The company should try to improve its quality

further by taking customers feedback about the products and trying to come up with new

48



products having features according to the needs of the customers. As the quality is found

to be good and the brand name of the company also exists there is a lot of scope for the

company to increase its sales and get a larger market share.

GRAPH 12: Normal time taken (in days) for delivery of cement by BirlaCement after order is placed by the customers.

49



Time taken for delivery

6-7 days4-5 days2-3 days1 day

P e r c e n t

60

50

40

30

20

10

0 4

16

50

30

In the survey we found that 30% of the dealers say that it takes only one day from the

company to deliver the cement to them, 50% of the dealers say that it takes two to three

days from the company to deliver the cement to them, 16% of the dealers say that it

takes four to five days from the company to deliver the cement to them, and 4% of the

dealers say that it takes six to seven days from the company to deliver the cement to

them.

The dealers say that this delay is due to the absence of dumps and warehouse in their

area and this is also causing them to lose a lot of orders at times. The delay is one of the

outcomes of the poor distribution network of Birla Cement in the local market. Due to

this delay in fulfilling of orders the dealers are losing their customers and this is also

affecting the brand image of the company in terms of its overall operational efficiency.

50



GRAPH 13: Customers considering timely delivery and after sales service.

51



In the survey we found that 50% customers give importance to timely delivery and after

sales service while buying cement, 36% customers give somewhat importance to timely

delivery and after sales service while buying cement, 10% customers can’t say anything

about giving importance to timely delivery and after sales service while buying cement,

and 4% customers don’t give importance to timely delivery and after sales service while

buying cement.

This shows that a majority of customers in the market gives importance to the timely

delivery and after sales service by the company while buying cement which shows that it

plays an important role in increasing the sales of cement in the market. Here the

52

Customers considering timely delivery and after sales service as apreference to buy cement


P e r

c e n

t

60

50

40

30

20

10

0 4

10

36

50



customers along with getting the delivery on time also consider the after sales services

from the companies. Many companies are having their technical assistance cell to help

customers once they buy their products. Companies give technical support and

suggestions to the customers in the use of the products too which also attracts thecustomers to buy their cement as they are getting free of cost technical assistance from

the company where they are paying for the product only.

GRAPH 14: Most preferred brands of cements by customers.

53



In the survey it was found that 15% customers prefer Birla Cement, 28% customers

prefer Prism Cement, 17% customers prefer ACC, 10% customers prefer Birla Gold

Cement, and 30% customers prefer Jaypee cement. Here it’s clear that Birla cement is not

the most preferred brand in the local market.

This shows that Jaypee is the most preferred brand of cement in the market. Second place

goes to Prism, third place goes to ACC, fourth place has been taken by Birla Cement, and

Birla Gold Cement has got the fifth place in the market. In spite of having two plants

there with large production capacity along with good brand image and good quality of the

54

Brand of cement preferred mostly by the customers

JAYPEEBIRLA GOLDACCPRISMBIRLA

P e r

c e n

t

40

30

20

10

0

30

10

17

28

15



products Birla Cement is not the most preferred brand in the local market. The most

probable reasons for this is the poor distribution network and marketing strategies of the

company. It shows that there is a lot of scope for the company to push its brand in the

local market which it can do by improving its distribution pattern and by employingaggressive marketing strategies.

HYPOTHESIS TESTING

ANOVA TEST 1:

55



1 5 6 . 7 0 6 3 5 2 .2 3 5 4 .9 9 6 .0 0

1 0 0 3 . 6 5 4 9 6 1 0 .4 5 5

1 1 6 0 . 3 6 0 9 9

( C o m b i n e d )B e t w e e n

G r o u p sW it h in G r o u p s

T o t a l

B r a n d o f c e m e n t p r e fe r r e d m o s t ly b y t h e

c u s t o m e r s * C u s t o m e r s a t is f a c t io n w it h

d is t rib u t io n n e t w o r k o f B I R L A C E M E N T S

S u m o f

S q u a r e s d f

M e a n

S q u a r e F S ig .

A N O V A T a b le

Null Hypothesis: There is no association between brand of cement preferred mostly by

the customers and customer satisfaction with the distribution network of Birla Cement.

Alternate Hypothesis: There is an association between brand of cement preferred

mostly by the customers and customer satisfaction with the distribution network of Birla

Cement.

Significance Level: 0.003

Result: From ANOVA table the critical value is 9.95

The significance level found is less that 0.05

Hence the null hypothesis is rejected. There is no association between brand of cement

preferred mostly by the customers and customer satisfaction with the distribution

network of Birla Cement.

ANOVA TEST 2:

56



1 6 6 .7 9 3 3 5 5 .5 9 8 5 .3 7 2 .0 0

9 9 3 .5 6 7 9 6 1 0 .3 5 0

1 1 6 0 .3 6 0 9 9

( C o m b i n e d )B e t w e e n

G r o u p sW i t h in G r o u p s

T o t a l

B r a n d o f ce m e n t p r e f e r r e d mo s t l y b y t h e

cu s t o me r s * cu s to m e r s co n s i d e r in g

a d ve r t ise m e n t s a s a p r e fe r e n ce t o b u y ce me n t

S u m o f

S q u a re s d f

M e a n

S q u a re F S ig .

A N O V A T a b l e

Null Hypothesis: There is no association between brand of cement preferred mostly by

the customers and customers considering advertisement as a preference to buy cement.

Alternate Hypothesis: There is an association between brand of cement preferred

mostly by the customers and customers considering advertisement as a preference to

buy cement.

Significance Level: 0.002

Result: From ANOVA table the critical value is 9.95

The significance level found is less that 0.05

Hence the null hypothesis is rejected. There is an association between brand of cement

preferred mostly by the customers and customers considering advertisement as a

preference to buy cement.

57



CHAPTER 5:

FINDINGS AND CONCLUSION

FINDINGS:

1. Birla Cement has got a very good reputation and brand name in the market.58



2. The quality of Birla Cement is very much appreciated.

3. The distribution network of the company is not very effective in the local market inMadhya Pradesh.

4. Birla Cement’s promotional activities and advertisements are below par as compared

to other cement manufacturers in the market.

5. It does not provide any extra financial or non-financial perks and benefits to its dealer,

distributors and retailers like other companies.

6. There is a lack of interaction and communication gap between the company and its

dealers and distributors.

7. The company is also facing transportation problems from road route due to lack of

vehicles hindering its distribution network.

8. The company doesn’t have sufficient dumps and stores at all the places causing lack of

supply and timely delivery of cement.

9. The company is facing problem in entering new markets and is also facing problem of

price instability.

CONCLUSION:

Distribution network and logistics are believed to be two of the most important aspects

which help the organisations to deliver their products to the end customers. These help

59



the company a lot when coupled with good marketing strategies. On one hand where

distribution helps to make the products available in the market to the end use customers,

outbound logistics help to deliver the products physically to the customer and cut cost for

the company if it is managed effectively.

In the duration of project it was found that the distribution network and logistics of the

company in the local markets within Madhya Pradesh is not up to the mark and very less

effective. The marketing strategies are also not so aggressive in order to get higher

chunks of the market. In spite of having two plants with huge production capacities the

company is not concentrating too much on the local market in Madhya Pradesh. It is

covering less than 2% of the requirement of the local market. The company is

concentrating mainly in the markets in Uttar Pradesh, Bihar, Jharkhand, Rajasthan and

West Bengal where it holds much bigger market shares.

In order to enter the local market the company is coming up with its third cement plant at

Satna where its two plants are located. Once the third plant starts the production of

cement the company will focus on the local markets also along with its existing markets

with new marketing strategies in order to penetrate the local market of Madhya Pradesh.

60



CHAPTER 6:

SUGGESTIONS AND RECOMMENDATIONS

SUGGESTIONS AND RECOMMENDATIONS:

1. Birla Cement should try to improve its sales promotion activities to boost its sales.

2. The company should emphasis much more on advertisements to capture new market.

61



3. It should try to improve is distribution network through road route by adding more

vehicles to its fleet and by collaborating more with the local transporters.

4. The company should try to bind its dealers and distributors by providing them withextra financial and non-financial perks.

5. It should try to bind with its dealers and distributors by increasing more and more

interaction with them.

6. The company should attract customers by providing them with offers, gifts, technical

support and after sales services as done by other companies.

7. It should come up with more dumps and stores in order to meet the demand of market

easily and on time.

8. It should also try to stabilize its prices to help dealers, distributors, and customers as

well.

9. The company should also try to concentrate in the local market and market in Madhya

Pradesh as there are quite a lot opportunities and a high potential market.

62



BIBLIOGRAPHY

BIBLIOGRAPHY:

Kothari, C.R (2003): “Research Methodology” (II Edition), New Age International

Pvt. Ltd.

Khan and Martin (2003): “Sales and Distribution” (I Edition), Anurag Jain

publishing company, New Delhi

63



Saxena Rajan (2003): “Marketing Management” (II Edition), Tata McGraw - Hill

publishing company Ltd., New Delhi

Malhotra, N. K. (2005): “Marketing Research” (IV Edition), Pearson Education

publishing Pte. Ltd., Singapore

Philip Kotler et. al. (2007): “Marketing Management” (XII Edition), Dorling

Kindersley publishing Pvt. Ltd., India

Nair, R. K. et. al. (2007): “Marketing Management” (VII Edition)

Birla Corporation’s records, brochures, and manuals

http:\\www.birlacorporation.com dt. 08/07/2008

64



APPENDICES

APPENDICES:

QUESTIONNAIRE:

DEALER NAME: _______________________________________________

ADDRESS: _________________________________________________

_______________________________________________

CONTACT NUMBER: _________________________________________________

65



Q. 1. What is the response of customers about BIRLA Cement?

a) Excellent [ ] b) Good [ ] c) Average [ ] d) Poor [ ] e) Very Poor [ ]

Q. 2. While buying Cement what does the customer gives more preference to?a) Quality [ ] b) Price [ ] c) Brand [ ] d) Others [ ]

Q. 3. Which brand of cement is preferred most by the customers?

a) Birla [ ] b) Prism [ ] c) ACC [ ] d) Birla Gold [ ] e) Jaypee [ ]

Q. 4. Are customers satisfied with the distribution pattern of Birla Cement?

a) Yes [ ] b) Somewhat [ ] c) Can’t Say [ ] d) No [ ]

Q. 5. How much time does the delivery of Birla Cement takes after placing the

order?

a) One Day [ ] b) Two to Three Days [ ] c) Four to Five Days [ ]

d) Six to Seven Days [ ] e) More than Seven Days [ ]

Q. 6. Are customers satisfied with the distribution network of Birla Cement?


Q. 7. Which of the following brand has the most effective distribution network?

a) Birla [ ] b) Prism [ ] c) ACC [ ] d) Birla Gold [ ] e) Jaypee [ ]

Q. 8. Do customers consider brand image as a preference to buy cement?


Q. 9. Do customers consider readily availability as a preference to buy cement?


Q. 10. Do customers consider on time delivery and after sales services from the

company as a preference to buy any cement?


Q. 11. Do customers prefer to buy any cement, which is very much advertised?


Q. 12. Rank Birla Cement on the basis of the following:

a) Excellent b) Good c) Average d) Poor e) Very Poor

66



Excellent Good Average Poor Very Poor

Price

Quality

Availability

Marketing strategy

Timely Delivery

Q. 13. Would you like to give any suggestions and comments? ____________________________________________________________

____________________________________________________________

* Thank you for your kind cooperation and valuable time.

project report chapters)

Documents