A REPORT ON MARKETING STRATEGIES

FOLLOWED BY AMBUJA CEMENTS

PRODUCT MIX:
Cement industry does not have a large product mix and same applies for
Ambuja Cements. The product mix can be classified on the basis of the
types of cement available.
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Types of cement
Produced at Ambuja Cements are:
Mortar Cement
Portland Pozzolano cement (PPC) - PPC is manufactured by blending a
mixture of ordinary portland cement and pozzolana materials such as fly
ash, in proportions not less than 15 per cent and not over 35 per cent by
weight of cement. The Portland Pozzolana Cement is ideally suited for the
following construction viz. Hydraulic structures, Mass concreting works.
Ordinary Portland cement (OPC) (GRADE-43, GRADE-53, GRADE- 33)
The 43 grade OPC is the most popular general-purpose cement in
the country today. The production of 43 grade OPC is nearly 50%
of the total production of cement in the country.
The 43 grade OPC can be used for following
applications:
General Civil Engineering construction work
RCC works(preferably where grade of concrete is up to
M-30)
Precast items such as blocks, tiles, pipes etc
Asbestos products such as sheets and pipes
Non-structural works such as plastering, flooring etc.
White Cement
PPC is manufactured by blending a mixture of ordinary portland cement
and pozzolana materials such as fly ash, in proportions not less than 15 per
cent and not over 35 per cent by weight of cement. It is sold in packets of
different quantities:
1.
OPC contains a mixture of portland clinker and gypsum ground to a very
fine powder.
About 75% of all the cement produced goes into ready-mix concrete, which
is used for buildings, bridges, sidewalks, walls and all types of structures.
The rest is used for building materials such as concrete blocks, pipes and
pre-cast slabs in road building and repairs and other nation building
applications.
The Group's principal activity is to manufacture and market cement and
clinker for both domestic and export markets. Nowadays cement
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manufacturing companies also provide ready mix concrete for construction

sites.

PROBLEMS IN PRODUCT MIX

High Production Costs- Due to requirement of commodities like Coal
for production and high consumption of fuel required. Major raw
materials used include Lime, Clinker, Gypsum
Low or less product differentiation- Product differentiation between
two brands is next to impossible.
High Transportation cost- Due to the bulky nature of product and
sensitivity to external factors like rain or humidity we need to transport
it in the right possible way. Once bagged cement becomes a
perishable commodity. Accounts for approximately 25% of the total
costs.
High competition- There are 370 companies operating in the
organised sector in India. With the top 5 players accounting for 40%
of market share.

BRAND NAME STRATEGY

The company and its product is named after the place where its first
manufacturing plant was set up .i.e. Ambuja Nagar in Gujarat. Due to
limited products they are named under the product family name of Ambuja
Cements. The company was initially named Gujarat Ambuja Ltd. which was
changed after Holcim bought 46% stake in Gujarat Ambuja Ltd. The only
way the products in the product line can be differentiated through is the
different grades the cements have and the different types of cement i.e
PPC, OPC, white cement, sanla as mentioned earlier.

ast time, this wall could not be broken down). As a disappointed Choksi
leaves with his men, the children and their caretaker start dancing in joy,
and the voiceover concludes, Ambuja Cement. Yeh Deewaar Nahin
Tootegi.
Apart from this Ambuja cements also come up with merchandises often
wherein the masons, contractors are gifted with caps, keychains, t-shirts
with the logo of Ambuja cement to enhance the brand recall.

Ambuja has been harping on its giant compressive strength proposition;

the
brand even created the visual of a giant and then a
broken hammer. Perhaps its most memorable ad
was the one involving two estranged brothers
trying to break down the wall that runs between
their houses (Bhai Bhai, featuring Boman Irani,
which was released six years ago). After that
humorous attempt, came some ads which presented
the brand in a sentimental vein (the Dadi ad), a
move that Vivek Deshpande, Ambuja Cements vice-president for brand
and promotions, agrees was rather disastrous, so much so that the Bhai
Bhai ad was recalled. Our new ad is a correction of this, he says, adding
that the brand will now strike a balance between emotion and humour.
SALES PROMOTION SCHEMES:
The sales promotion schemes are not directly implemented for the end
user but channel members are the one who benefit from sales promotions.
Gujarat Ambuja Cements has an I can Initiative which gives an individual
an opportunity in its sales team to come up with its own idea. Apart from
this they also felicitate the best performers. They provide performance
based incentives.
Gujarat Ambuja Cements has worked out an equity-incentive scheme for its
retailers.
Under the plan, a retailer who sells a minimum of 200 tonnes (equivalent to
4,000 bags) will be eligible for 30 shares of the blue-chip cement maker.

Once the minimum target is achieved, he is entitled to three shares for

every additional 20 tonnes sold. The scheme will be valid till May 31, 2000.
Thus, sales of 300 tonnes of cement will fetch a GACL stockist 45 shares of
Gujarat Ambuja, which will shoot up to 300 shares (cash equivalent of Rs
1.04 lakh at Tuesday's prices) once sales touch 2,000 tonnes.
The scheme will be a novel route to cement the fortunes of the stockists
with that of the company and will help Gujarat Ambuja leverage on the
inherent strength of its stock.
On an average, stockists sell around 300-400 tonnes a month, and with this
new scheme they will be tempted to push Ambuja cement. Cement retailers
generally hawk various cement brandsavailable, and the new arrangement,
analysts say, is a ploy to usher in greater loyalty for the Ambuja brand.
The company is, however, not creating any new shares for rewarding the
retailers. Instead, they are given the option by the dealers to convert their
cash incentives into equivalent number of shares in GACL.
"Instead of giving cash incentives, retailers are given the option to own
shares in the company. The understanding is between the dealer and the
retailer and the company is no way involved in the share purchases," said a
company official.
Besides, Gujarat Ambuja has also launched a host of other performancelinked incentive schemes for its retailers which include gold coins and
foreign trips. Also on offer are insurance covers upto Rs 5 lakh for personal
accidents and scholarships for their children.
The company has worked out a mechanism under which one particular
scheme can be availed of in combination with other available schemes as
well.
For enjoying a 10-day trip to the US or a12-day vacation to Europe or 160
grams of gold, GACL stockists will have to meet a sales target of 2,000
tonnes. The same tonnage sales will also entitle the dealer to a six-day trip
(for two) to Singapore or Bangkok.
To win gold coins, the retailer will have to sell a minimum 100 tonnes upon
which he becomes entitled to 8 grams of the yellow metal. Thereafter, the
retailer can win two grams of gold for every 25 tonnes of cement sold.

Retailers can also avail of a combination of two incentive offerings

depending on his sales performance. A retailer selling 400 tonnes of
cement, for instance, can both enjoy a vacation to Goa and win 16 grams
of gold. The combination may be altered to suit the retailers' wishes.
The scheme is an innovative incentive to retailers, and has the effect of
tying the retailer closely to the company.

PUBLIC RELATIONS ACTIVITIES

They have a website GRIHA-SHILPI which assists customers by assisting
in different aspects of building a home. It also provides a list of contractors
and their contact numbers across different districts in India. They also help
provide expert help wherein experts visit the construction site to guide you
and even test the concrete slabs. The link for the website is
http://www.ambujagrihashilpi.com/GrihaShilpi.php

They have a corporate social responsibility cell The Ambuja Cement

Foundation which has been at the forefront of environmental and social
activities. It operates near the companies manufacturing plants. The
Ambuja Cement Foundation is the Corporate Social Responsibility wing of
Ambuja Cements Ltd. that works with the rural communities surrounding
Ambujas manufacturing sites. The Foundation is engaged in a variety of
people-centric, integrated rural development projects.
Website: http://www.ambujacementfoundation.org/
Facebook

page:

http://www.facebook.com/pages/Ambuja-Cement-

Foundation/107287509345492