Market survey of cement industry with reference to

A presentation by SNEHA SINHA BBA/4555/08

DEPARTMENT OF MANAGEMENT

BIRLA INSTITUTE OF TECHNOLOGY NOIDA CAMPUS

COMPANY PROFILE
India is the fifth largest producer of cement in the world. ACC was formally established on August 1, 1936 by F E

Dinshaw.
The first success came in a move towards cooperation in the countrys young cement industry and culminated in the historic merger of ten companies to form a cement giant. These companies belonged to four prominent business groups Tatas, Khataus, Killick Nixon and F E Dinshaw groups. At present ACC is India's foremost manufacturer of cement and concrete.

More about ACC:

The company uses the process of ESP (Electro Static Precipitation) to avoid pollution.

Marketing policies: ACC launches new products according to changes in

environment & work situation. ACC has taken manifold steps: Brand strengthening After sales services

SWOT ANALYSIS ACC

STRENGTHS :Quality dealer network,Cement quality,High corporate image WEAKNESSES :Logistics management,Fluctuation in price across the border,Irregular availability of cement OPPORTUNITIES :Brand name,Government projects THREATS :Higher transportation cost

Problem formulation
The achievement of marketing objectives are twofold i.e. consumer satisfaction and profitable sale. Customer satisfaction is gained in the manner in which the marketing functions are organized. Hence, demand in cement industry is considered as an important one. The penetration of other companies in the market is the main problem faced by the company due to which considerable less shares appear in the market. Conducting a market survey and collecting dealers opinion about pricing, quality, servicing and the margin provided by the company is equally important. Hence a study on there behavior is taken and also the future prospective are derived.

objective
Basic objectives are: To study various competitors and their behavior in cement industry. To study market strategies adopted by cement companies. Market and dealers feedback for enhancing the cement sales.

Research methodology
SAMPLE SIZE : In Kolkata area office, there are nearly 80 authorized cement dealers of ACC.Owing to the time and a monetary constraint it was impossible to visits all these dealers. Hence nearly 32 cement dealers in Kolkata were chosen for the study. The conclusion and findings are based on the replies from these dealers.

DATA COLLECTION :
The methodology used for data collection was based on field survey, personal observation and personal interview. For this purpose a questionnaire was designed based on the topic for which the research was being conducted. Personal visits were made to all these 32 dealers.

Analysis and Interpretations

Break up of dealers (Acc and Ambuja) according to their stock :
Out of 32 dealers, 6 dealers maintain more stocks of ACC than ambuja for per 100 bags. Stocks for per 200 bags are same for both. And 3 dealers said that they maintain higher stocks of ACC for per 400 bags than Ambuja cement.

Maximum sales(quarterly) of Acc & Ambuja :

Quarter ACC April June 61% July September 39% AMBUJA 30% 70%
Sales of ACC are at its peak during apriljune (summers) as it requires less water to prepare its mixture while Ambujas sales maximise in between july-sept.

70% 60% 50% 40% 30% 20% 10% 0% April-June July-Sept. ACC AMBUJA

Promotion Policies: Break up of advertisement used by Acc & Ambuja :

ACC uses more of print media to advertise its products whereas Ambuja prefers electronic media over print media and thus ACC lacks proper communication with its dealers and customers.

Break up of reasons for using Acc & Ambuja :

Acc

Market share :

Satisfaction level of ACC dealers.

Reasons of dissatisfaction : Supply problem Less advertisement Inadequate incentives

Break up of reasons for shifting ACC to other brands :

ACCs major problem is its supply which creates less availability of cement in stores. Suppliers who deal in multiple brands, emphasis to the sale of that cement brand from where they get high incentives or more Profit margin. ACC does not provide cement to dealers or consumers on credit as followed by others. So it is one of the reasons for shifting. Advertisement is the main factor of increasing sales. Compare to ACC other companies have more advertisement on TV which attracts the customers to purchase that brand.

Product quality
no. of respondents average good excellent

average 13% good 25%

excellent 62%

Out of 32 dealers, 62% dealer says that the quality of cement of ACC is excellent.

Conclusion and findings

The average stock demanded by the dealer is 10-12 trucks per month. The security is fixed at Rs.50,000 per year by ACC. Average stock maintained by dealer is 300 bags. Sales are maximum in the month of APRIL JUNE & minimum in OCT - FEB. Average delivery period is 3 4 days. Dealers make payment through cheques. Company only gives cement on advance payment. There is a lot of price fluctuation in cement industry. ACC has a quality distribution network. Immediate competitors are Ambuja and Lafarge. Both use extensive advertising programs. Price of a large is lower than ACC in most of the places. Competitors adopt promotion measures like gift vouchers and coupons.

LIMITATIONS
Some major problems have been faced while conducting the research. These are given below : Time was a constraint for the study even though attempts were made to study to the maxim limits but only 32 respondents were covered to fill up the questionnaire. Since all the dealers of Kolkata could not be contacted so the conclusions and the result are based on the information provided by these 15 dealers. Sample size of number of candidates for the study varies. The major limitation of the research was time and monitory constraints due to which the study had to be restricted to a limited area. There is lot of price fluctuation in cement business. So the difficulty was experienced regarding drawing conclusion. problems were faced while dealing with the customers as language was a constraint and translation of questionnaire in Hindi and Bengali was required at times.

RECOMMENDATIONS
The delivery period of the cement from the plant to dealer in case of ACC is longer , so efforts should be made to reduce this delivery period. ACC does not make direct supply to the individual small customers as is in the case of other companies like GACL, so company should take proper step to supply directly to the customers with bulk orders. Company should give more emphasis on TV advertisement.