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A report submitted in the partial fulfilment of the requirements of the PGDM program
Academic Year 2011-13
A REPORT ON
MAPPING OF TOP RESIDENTIAL CUSTOMERS OF U.P/EAST SOUTH DELHI
INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA Page 1
BY
A report submitted in the partial fulfilment of the requirements of the PGDM program
Submitted To :Mr. NAVNEET CHADDHA TERRITORY SALES MANAGER DELHI (NCR) ACC CONCRETE Ltd. SUBMITTED ON :- 9.6.2012 Submitted by :ADARSH JOSEPH 12078
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The beatitude, bliss and euphoria that accompany the successful completion of any task would not be complete without the expression of appreciation of simple virtues to the people who made it possible. It is my great pleasure in taking this opportunity to express our sincere thanks and deep sense of gratitude towards our honourable and respected Company guide Mr. Navneet Chaddha (Territory Sales Manager) , who has given us valuable guidance constructive criticism, kind advice and constant encouragement to learn important concepts of concrete industry and for providing me this project work. The final project report is submitted to International School of Business & Media for partial fulfilment of Post Graduate Diploma in Business Management (PGDBM). I would like to thank all my colleagues and also my batch mates whose encouragement and ideas enriched my project.
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CERTIFICATE
Certified that this project report Mapping of Construction Site in NCR is the bonafide work of Adarsh Joseph (12078) who carried out the project work under my supervision in partial fulfilment of the requirements for the award of the masters in business administration in Marketing.
SIGNATURE
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TABLE OF CONTENTS
Chapter No. Ch. # 1.0 Ch. # 2.0 Subject Executive Summary Research Methodology Page No. 6 8 8 8 9 10 11 12 13 14 18 19 23 30 34 38 39 41 44 45
2.1 Primary Objective(s). 2.2 Hypothesis 2.3Research Design 2.4Sample Design.. 2.5Scope of the Study. 2.6Limitations. Ch. # 3.0 Company Profile . Holcim Profile.. Advantage & Disadvantage RMC Ch. # 4.0 RMX Business Process Flow................ Concrete mix design Coast of row material. Transportation cost... Ch. # 5.0 Ch. # 6.0 Ch. # 8.0 Ch. # 9.0 Ch #10.0 Swot Analysis .
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1-Executive Summary . Concrete is one the most important raw material for the construction industry. Without concrete construction industry cannot survive. Use of concrete started from the way back Roman Civilization. Previously concrete was made at the site which was known as Site Mixed Concrete. This procedure is still very famous. But now days it is not possible for construction companies to produce the concrete at the site because it takes a lot of time. Therefore they prefer to use Ready Mixed Concrete. Ready mixed concrete companies produces concrete at their plant and transfer that concrete to the site ready to be used by the builder. One of the places in India where construction is at boom is the Delhi/NCR region. This is the place where development goes on round the clock and that is why construction is at its peak. Therefore the requirement of Ready mixed concrete is huge over here . In 2010 India got the permission to host the Commonwealth games. For this reason construction was increased in fourfold way in the Delhi/NCR region which was the host city for the Commonwealth games. For that Commonwealth games new stadiums, competition venues, non-competition venues, Media center , training venues, roadways etc were been build. Therefore requirement of concrete was increased tremendously. This gave an opportunity for the RMC (Ready Mixed Concrete) companies to gain a huge profit. The RMC companies were changed a handsome amount from the construction companies .This opportunity given RMC company enough time to fix there roots in the NCR region. And the construction companies had no other option and therefore gave what the RMC companies were charging because time for the construction to be completed was little. Therefore at this situation Delhi/NCR region saw the sale of huge amount of concrete at a very high price. But this situation changed after common-wealth. The requirement for concrete is gone down hugely. The fall in the demand for Ready Mixed Concrete will be nearly 50000 cubic meters per month. That is why after the construction boom for common-wealth people are calling Delhi/NCR market as a diminishing market or in other words as shrinking market, because the requirement for concrete was reduced a lot. In the diminishing market customers are not going to buy concrete if suppliers charge a huge amount of money. Therefore prices have to be reduced. But reduction in price is not an easy task. Production of concrete depends on many raw materials such as cement, sand, aggregates, admixture etc. Therefore price of concrete depends heavily on the prices of these raw materials. And if we could see the trend analysis of the prices of these raw materials we will notice that their prices have increased gradually. Therefore it becomes a great challenge for a marketer to decide at what price they should sell their finished product i.e. concrete.
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The problem of thrust that is considered in this project is to find out the reasons why ACC Concrete is mostly perceived same as other completers , most of the people think that ACC concrete and normally manufactured concrete are one and the same thing in spite of being a separate concrete quality and service. The other problem is to mapping out the construction sites who can be future customer and making the more awareness of how ACC is different form others . The various RMC in market are loosing out their market share to the high-end players. The additional problem that we need to analyze is as to which class of constructors is to targeted and what kind of customer and what they should target. 2.1) Primary objective: To give a snapshot of the Ready Mix Concrete in India
To understand the pricing policy adopted by ACC. To know how ACC able to compete his competitors instead of having premium pricing.
To analyze the scope of RMC in NCR region : this will help in determining the scope and future of ACC RMCs in NCR regional market. Secondary objectives: To conduct market feasibility for ACC concrete in NCR: this will help in determining the awareness of ACC concrete as separate from the other competitors. Research Question: a) Why ACC is not able to be recognized as same ability of feasibility without compromising in quality? b) What is the reason for declining market share in ACC concrete ?
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Ho [null hypothesis]: customer satisfaction and quality criteria is governed entirely by the services being offered by the ACC concretes ,like various schemes and pricing schemes .customer satisfaction is directly related to the profitability of the organization. H1 [alternative hypothesis]: the above stated hypothesis has no relation with the profitability of the organization.
Descriptive studies are undertaken when the researcher is interested in knowing the characteristics of certain groups such as constructors ,builders ,quantity they used , a descriptive study may be necessary in other cases where a researcher is interested in knowing the proportion of the contractors in a given area who have behaved in a particular manner, making projections of a certain thing, or more variables. The objective of such a study is to answer the who, what, when, where, and how of the subject under investigation.
The data has been collected in two ways. Primary data Secondary data
Primary data: -
Primary data are those, which are collected for the first time, and they are original in character. I have collected these from the respondents in order to study a particular problem.
INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA Page 9
The secondary data are those, which are already collected by someone for some purpose and are available for the present study. These data have been collected from internet, library, books, etc. 2.4) Sample Design
Sample plan: Sample universe: The sample universe is that of relevant for this project includes some of the customers from different concrete providers in Delhi /NCR.
Sample Site: Delhi/NCR was selected for research project and filling up of the questionnaire from the different customers for the purpose of competitive analysis of loan providers. Sample Size: Sample ACC Concrete Ultra tech Lafarge Ltd, Others Respondent size 5 10 20 55
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Observation method: -
For this study the observation method was also used to know the awareness of ACC concrete which have been misinterpreted as same as most of the competitors. 2.5) Scope of the study 1) To find out the reason for which ACC concrete is considered to be same as others. 2) To find out the reason for which the revenues were dropped in the last financial year. 3) To find out the overall customers and ACC concrete ranking in Delhi /NCR region.
2.6) Limitations: Reliability of the Information The major draw back of the study is reliability of the information. The information may be vague or misleading. This is due to unwillingness of the respondent and dislike for the publish ment of the confidential data.
Survey Tool To generate information the survey tool used for the study is the survey questionnaire. The limitation of the questionnaire is to limited to the number of question(11).
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ACC (ACC Limited) is India's foremost manufacturer of cement and concrete. ACC's operations are spread throughout the country with 16 modern cement factories, more than 40 Ready mix concrete plants, 20 sales offices, and several zonal offices. It has a workforce of about 9,000 persons and a countrywide distribution network of over 9,000 dealers. Since inception in 1936, the company has been a trendsetter and important benchmark for the cement industry in many areas of cement and concrete technology. ACC has a unique track record of innovative research, product development and specialized consultancy services. The company's various manufacturing units are backed by a central technology support services centre - the only one of its kind in the Indian cement industry. ACC has rich experience in mining, being the largest user of limestone. As the largest cement producer in India, it is one of the biggest customers of the domestic coal industry, of Indian Railways, and a considerable user of the countrys road transport network services for inward and outward movement of materials and products. Among the first companies in India to include commitment to environmental protection as one of its corporate objectives, the company installed sophisticated pollution control equipment as far back as 1966, long before pollution control laws came into existence. Today each of its cement plants has state-of-the art pollution control equipment and devices. ACC plants, mines and townships visibly demonstrate successful endeavours in quarry rehabilitation, water management techniques and greening activities. The company actively promotes the use of alternative fuels and raw materials and offers total solutions for waste management including testing, suggestions for reuse, recycling and co-processing. ACC has taken purposeful steps in knowledge building. We run two institutes that offer professional technical courses for engineering graduates and diploma holders which are relevant to manufacturing sectors such as cement. The main beneficiaries are youth from remote and backward areas of the country. ACC has made significant contributions to the nation building process by way of quality products, services and sharing expertise. Its commitment to sustainable development, its high ethical standards in business dealings and its on-going efforts in community welfare program have won it acclaim as a responsible corporate citizen. ACCs brand name is synonymous with cement and enjoys a high level of equity in the Indian market. It is the only cement company that figures in the list of Consumer Super Brands of India.
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7-What is Ready Mixed Concrete Ready Mixed Concrete, or RMX as it is popularly called, refers to concrete that is specifically manufactured for delivery to the customer's construction site in a freshly mixed and plastic or unhardened state. Concrete itself is a mixture of Portland Cement, water and aggregates comprising sand and gravel or crushed stone. In traditional work sites, each of these materials is procured separately and mixed in specified proportions at site to make concrete. Ready Mixed Concrete is bought and sold by volume - usually expressed in cubic meters. RMX can be custom-made to suit different applications.
RMX- Adding value to concrete Ready Mixed Concrete is manufactured under computer-controlled operations and transported and placed at site using sophisticated equipment and methods. RMX assures its customers numerous benefits: ured quality of concrete
supervision of labour
The use of RMX is an environmental friendly practice that ensures a cleaner work place and causes minimal disturbance to its surroundings. This makes its utility more significant in crowded cities and sensitive localities. In contrast to this, conventional methods of making, transporting and placing concrete at most construction sites are somewhat labour-intensive and suffer from practices which may be erratic and not very systematic. Therefore the use of Ready Mixed Concrete can prove to more cost effective in the longer term while ensuring that structures are built faster and using concrete that comes with higher levels of quality assurance.
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Customer service-dependable ACC's fleet of Transit Mixers and Concrete Pumps helps ensure that our customers in cities like Mumbai, Bangalore, Kolkata, Delhi, Chennai, Hyderabad, Goa and Pune now just a phone call away from ACC Concrete - freshly blended premium quality concrete that is door delivered and efficiently placed at site on the day of concreting .For very large constructions or infrastructure works, we can consider dedicating an entire RMX plant catering exclusively to the project sites. In addition, our marketing team, which includes qualified and experienced engineers and concrete technologists, can assist customers in defining and specifying quality standards, designing specific concrete mixes to meet the most challenging of requirements as well as sourcing reliable supplies of good quality raw materials.
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Advantages of RMC:
site.
use, and yet the delivery trucks can service residential districts or inner cities.
ng of natural resources.
Disadvantages of RMC:
so the travelling time from the plant to the site is critical over longer distances. Some sites are just too far away. ave to be able to carry the weight of the truck and load. Concrete is approx. 2.5tonne per cum.
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Sales Person
Sales Admin.
Order Taker
Demand Graph Display Create/Change Sales Order
Credit Controller
Dispatcher
Demand Graph Display
Plant Staff
Sales document
Credit pass?
Truck log on
Confirmed Orders
Existing customer/ship-to No
Yes
Assign Truck
Yes No
No
Order Confirmed?
Load concrete
Print Ticket
Map Interface
Proof of Delivery
VSC interface
Truck Tracking
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Aggregates:
Fine and coarse aggregates make up the bulk of a concrete mixture. Sand, natural gravel and crushed stone are mainly used for this purpose. Recycled aggregates (from construction, demolition and excavation waste) are increasingly used as partial replacements of natural aggregates, while a number of manufactured aggregates, including air-cooled blast furnace slag and bottom ash are also permitted.
Decorative stones such as quartzite, small river stones or crushed glass are sometimes added to the surface of concrete for a decorative "exposed aggregate" finish, popular among landscape designers.
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10 mm
SAND
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Mix design is the process of selecting suitable ingredients of concrete and determining their relative proportions with the object of producing concrete of certain minimum strength and durability as economically as possible. The purpose of designing as can be seen from the above definitions is two-fold. The first object is to achieve the stipulated minimum strength and durability. The second object is to make the concrete in the most economical manner. Cost wise all concretes depend primarily on two factors; namely cost of material and labour. Labour cost, by way of formworks, batching, mix in transporting, and curing is nearly for same good concrete and bad concrete. Therefore attention is mainly directed to the cost of materials. Since the cost of cement is many times more than ingredients, attention is mainly directed to the use of as little cement as possible consistent with strength and durability.
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CEMENT FLY ASH WATER 20 MM 10 MM SAND GRADE (Kg) (kg) (lt) (kg) (kg) (kg) 70 160 M05 200 590 405 830 M7.5 107 190 190 590 395 810 M10 125 165 190 610 415 785 M15 200 130 180 667 451 722 M20 240 120 175 650 455 700 M25 270 110 175 650 455 690 M30 320 85 175 665 467 650 M35 370 100 178 645 440 630 M40 420 100 175 635 435 610 M45 445 90 170 641 444 600 M50 470 90 170 640 435 590
ADMIXTURE 1-1.2% 1-1.2% 1-1.2% 1-1.2% 1-1.2% 1-1.2% 1-1.2% 1-1.2% 1-1.2% 1-1.2% 1-1.2%
Optimized mix design for OPC-43 with Fly ash & pump (ACC Concrete ltd) GRADE M15 M20 M25 M30 M35 M40 M45 M50 CEMENT WATER(LT) 20MM(KG) 10MM(KG) SAND(kg) ADMIXTURE (KG) 260 180 634 422 864 2.912 320 185 634 423 798 3.584 340 183 660 433 767 3.808 400 180 637 425 738 4.48 425 175 639 425 738 4.76 455 170 639 426 710 5.096 470 165 639 426 710 5.264 500 165 662 441 648 5.6
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RMC suppliers are of 2 categories, viz., reputed and local. Players like ACC, Birla Ready Mix, RMC India, Lafarge, Ultratech etc fall under the "reputed supplier" category; whereas, other RMC
players fall under the "local supplier" category. Prices of "reputed suppliers" are seen to be higher than that of "local suppliers". The current grade-wise average RMC prices are given in the Table below:
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Note: Prices are in Rs/ cu m and without tax, but including pumping and average transportation costs.
Prices of RMC suppliers in NOIDA and Faridabad are higher than that of similar RMC suppliers in Gurgaon. This is due to greater concentration of RMC players in Gurgaon. The "local RMC suppliers" tend to have lower prices as they have lower overheads and often produce poor quality of concrete. Some of the "local RMC suppliers" evade taxes, allowing them to further drop their prices.
There are many cost involved in production of Ready Mixed Concrete. They are as follows: 1) Cost of the raw materials (Cement, Aggregate, Admixture, and, Fly ash) 2) Production Cost 3) Administrative cost 4) Transportation cost 5) Pumping cost
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ACC takes into account Production cost and Administrative cost together. The costs that are involved are as follows: 1) Diesel/Gasoline cost (variable) 2) Electrical Energy (variable) 3) Wages 4) Salaries 5) Incentives/bonus 6) House rent allowance 7) Other allowances 8) Leave encashment 9) Medical Encashment 10) Labor expense own 11) Labor expense subcontract
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These are the costs involved in production and administration. If we calculate all these expenses and divide by the monthly average production then the cost comes to be Rs 350/cubic meter approximately.
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Safety equipment= (((16-4)*3500)/12) =3500 They are giving 12 number of safety equipments.
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Let the: Average productivity = 2000 cubic meter Average fuel consumption=0.5litre/cu m Diesel= Rs 33.56/litre Therefore fuel cost for pump = 2000*.5*33.56 =33560 Therefore fuel cost for cab= 2000/7*33.56 = 9589 Therefore Variable cost per cubic meter = 95719/2000= 47.9 Therefore Total cost= 223097/2000+47.9= 159.44 =Rs 159/cu m (approx)
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Pricing of Concrete by ACC: M20 and M25 are the quite popular among the customers. Therefore the pricing process of one of these two concrete are shown below
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Let the price of: Cement = Rs 4.4/kg Fly ash = Rs 0.7/kg 20 mm = Rs 0.57/kg 10 mm = Rs 0.57/kg Sand = Rs 0.47/kg Admixture = Rs 28.5/kg Therefore Ready Mix Cost = 240*4.4 + 120*0.7 + 175*0 + 650*0.57 + 455*0.57+ 700*0.47 + 2.688*28.5 = 2175.458 Overhead cost = 350 Transportation cost (fixed) = Rs 150 Transportation cost (variable) = Rs 7/km Pumping cost = Rs 175/cu.m Suppose the distance travelled is = 20km Therefore cost = 2175.458+350+150+7*20+175 = 2990.458 This is the base price. Now in this base price profit is added and tax is also added and that becomes the final price that is to be paid by the customers.
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RMC suppliers are of 2 categories, viz., reputed and local. Players like ACC, Birla Ready Mix, RMC India, etc fall under the "reputed supplier" category; whereas, other RMC players fall under the "local supplier" category. Prices of "reputed suppliers" are seen to be higher than that of "local suppliers" due to many reasons such as the reputed players are much bigger organization, they have much more employees than the local players, they are much more organized, and they use modern age technologies and equipment. The current grade wise average RMC prices are given below:
Note: Prices are in Rs/ cu m and without tax, but including pumping and average transportation costs.
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STRENGTH
WEAKNESS
High on service aspect Strong last mile approach Focus on recovery Easy & fast appraisal and disbursement Able to generate higher yield on asset Own employees versus DSAs
Largely restricted to South India & metropolitan Weaker system of service delivery
OPPORTUNITIES
High cost of funds Asset quality deterioration may not only wipe out profit but also network Entry of foreign players in recent future.
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Distribution
The survey of 150 construction sites was done across various area to remove biasness of any particular company group. A major chunk of the sample size ranged from 30-50, which together formed a majority of 63% of the respondent company. But the age distribution showed interesting results when the comp. group was divided based on the interest of the respondent to take on company quality. GRAPH SHOWING COMPANY GROUP DISTRIBUTION AMONG PEOPLE INTERESTED TO TAKE RMC FROM ACC CONCRETE.
4% 21% 29% 20 - 30 30 - 40 40 - 50 46% > 50
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Sales
20-40 40-50 50-60 >60
INCOME DISTRIBUTION The survey revealed the demographics of the respondents in terms of their annual construction sites. While the survey was being conducted, it was done in an unbiased way so as to remove disparity among various construction groups. The survey was conducted in a purely random basis to avoid such kind of discrepancy in the data. The demographics of the income group of the respondents of the survey, as per the data collected are as follows in the pie-chart. Graph showing the construction distribution of respondents of the survey
13% 29%
12%
46%
The same graph when plotted for people already taken RMC of some other RMC companies or sources doesnt change much.
INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA Page 40
With regard to customer guidance and support, ACC concrete is perceived to be better. This is evident from the fact that the mean scores Lafarge concrete is 2.92 and that of ACC is 3.533 ,whereas mean score of Ultatech is 3.033.And as per the rating scale it is evident and clear that ACC Concrete is perceived much better as compared with both Lafarge and Ultratech respectively as ACC Concrete scores second least in this which is nearly more than good followed by Ultratech which has been rated as good followed by Lafarge for which most of the customers rate it as average when it comes to customer guidance and support.
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Ultratech is perceived to be much better than the ACC & Lafarge when it comes to handling of customer grievances, which has been highlighted by their respective mean scores. The mean score of Ultratech is 3.23 whereas that of ACC & Lafarge is 2.22 & 2.16 respectively which is highly significant.
3. GOODWILL & REPUTATION OF THE COMPANY EXCELLENT (1) VERYGOOD (2) GOOD (3) AVERAGE (4) BELOW AVERAGE (5)
The Lafarge scores over the ACC & Ultratech .The mean score of 1.43 (for Lafarge) and 1.92 & 2.03 (for ACC & Ultratech respectively), reveal that the goodwill and reputation of Lafarge as perceived by their customers is slightly better when compared to the others .
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Regarding this parameter Lafarge has an danger over others, which is reflected by the mean scores of 3.56 (for Lsfsrge) and 2.16 (for others) which is significant. This shows that both ACC as well as Ultratech are perceived to be on the same stage and has been rated as very good by their respective customers but when it comes to Lafarge customers are not at all convenient with officials when it comes to the ability or ease when interacting with office staff lafarge staff are not able to make customers feel comfortable while interacting with them.
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Recommendation
1. ACC should launch more to attract customers. 2. ACC also lacks in customer interaction it should take feed back from customers and try to improve their services.
3. In order to diversify in the rural sector the business line the ACC concrete should invest more and more in rural area development project.
5. It will decrease the amount of delinquency that has been the major cause losses citi has encountered recently in 2006-07 financial year. 6. It can also use the latest technology that is mobile technology to tap the customers
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Bibliography
1. www.acclimited.com 2. www.accconcrete.com 3. www.wikipedia.org 4. www.readymix.co.il 5. www.indianconstructionindustry.com 6. www.rmcmaindia.org 7. www.concreteproducts.com 8.Business Research Methods (BY Donald R Cooper& Pamela S Schinder) Chapter 1:Page22-23. 9. Business Research Methods (BY Donald R Cooper& Pamela S Schinder) Chapter 2: Page 40-45 10. Business Research Methods (BY Donald R Cooper& Pamela S Schinder) Chapter 3:Page72-77 11. Business Research Methods (BY Donald R Cooper& Pamela S Schinder) Chapter 4:Page96-98. 12. Business Research Methods (BY Donald R Cooper& Pamela S Schinder) Chapter 6:Page140-144 13. Business Research Methods (BY Donald R Cooper& Pamela S Schinder) Chapter 15, 16, 17. 14. Research Methods (BY Ram Abuja) Chapter 1: Pages 70-74 15. Research Methods (BY Ram Abuja) Chapter 3: Pages 120-127. 16. Research Methods (BY Ram Abuja) Chapter 4: Pages 155 -165. 17. Research Methods (BY Ram Abuja) Chapter 6: Pages 193 -19
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