Académique Documents
Professionnel Documents
Culture Documents
ON
AND
BY
PG20095502
1|Page
A REPORT
ON
AND
BY
PG20095502
The requirements of
PG Program of
IILM GURGAON
Distribution list:
2|Page
ACKNOWLEDGEMENT
I owe my thanks to many people who helped and supported me in making this project report a
success. Any attempt at any level can’t be satisfactorily completed without the support and
guidance of learned people. I would like to express my immense gratitude to the head of my
internship organization and my company guide Mr. PUNEET DHIR (GM-SALES AND
MARKETING-DALMIA CEMENT (BHARAT) LIMITED) for his constant support and
motivation that has encouraged me to come up with this project.
I am also grateful to my faculty guide Ms. SHRUTI SINGH for her guidance throughout the
project and who rendered her whole hearted support at all times for the successful
completion of this project.
My heartfelt thanks to MR. PUNEET DHIR and MR. AMOGH AGARWAL who were there to
help, guide and encourage me throughout the training period. They gave their precious
time to teach me the ways of the organization and also provided me with the company
insight.
My sincere thanks to my parents, friends and the people working in DALMIA CEMENT as
their support was extremely important for the completion of this project report.
PG20095502
3|Page
EXECUTIVE SUMMARY
It is a general phenomenon that buyers in same market seek products for broadly same
function, but different buyers have different evaluation criteria about what constitute the right
choice of performing the function. As a consequence different offering will attract different
buyers. A market segment is explained is explained to mean homogeneous group consisting of
buyers who seek the same offering. Brand is a, “name, term, sign, symbol or design, or a
combination of them intended to identify the goods and services of one seller or group of
sellers and to differentiate them from those of other sellers. Therefore it makes sense to
understand that branding is not about getting your target market to choose you over the
competition, but it is about getting your prospects to see you as the only one that provides a
solution to their problem. The objectives a good brand will achieve include:
To succeed in branding you must understand the needs and wants of your customers and
prospects. You do this by integrating your brand strategies through your company at every
point of public contact. Your brand resides within the hearts and minds of customers, clients
and prospects. It is sum total of their experiences and perceptions, some of which you can
influence and some that you cannot. A strong brand is invaluable as the battle for customers
intensifies day by day. It’s important to spend time investing in researching, defining and
building your brand. After your entire brand is the source of a promise to your consumer. It’s a
foundational piece in your marketing communication and one you do not want to be without.
Marketing strategy is a method of focusing an organization’s energies and resources on a
course of action which can lead to increased sales and dominance of a targeted market niche. A
marketing strategy combines product development, promotion, distribution, pricing,
relationship management and other elements; identifies firm’s marketing goals, and explain
how they will be achieved, ideally within a stated timeframe. Marketing strategy determines
the choice of target market segments, positioning, marketing mix, and allocation of resources.
It is most effective when it is an integral component of overall firm strategy, defining how the
organization will successfully engage customers, prospects and competitors in the market
arena. As the customer constitutes the source of a company’s revenue marketing strategy is
4|Page
closely linked with sales. A key component of marketing strategy is often to keep marketing in
line with a company’s overarching mission statement.
The project focuses only on the non-trade segment of the cement industry in Hyderabad
region, and their perception of the cement brand DALMIA in relation to other competing
brands. And also study and analyze the factors that affect the sales of DALMIA CEMENT in the
non-trade segment. In the end the project aims at providing some valuable to the company and
suggestions that can help increase the sales and hence improve market share of the company in
the non-trade segment.
The study was done by meeting 50 builders, construction companies and institutional buyers
etc and they were asked to fill questionnaire. They were asked to rate 9 different brands of
cement on the scale from 1 to 9 where 1 being the lowest and 9 being the highest on different
attributes. And there were 5 open ended questions where they were asked to mark their choice
of option again on different attributes.
5|Page
TABLE OF CONTENTS
ABSTRACT…………………………………………………………………………………………7
INTRODUCTION…………………………………………………………………………………9
INDUSTRY OVERVIEW………………………………………………………………………10
PROJECT PROFILE……………………………………………………………………………34
QUESTIONNAIRE………………………………………………………………………………35
FINDINGS…………………………………………………………………………………………65
RECOMMENDATIONS……………………………………………………………………….67
CONCLUSIONS………………………………………………………………………………....69
REFRENCES……………………………………………………………………………………..70
6|Page
ABSTRACT
The study deals with the market survey of prospective buyers of Dalmia cements. The
prospective buyers are the builders, construction companies and the projects undertaken by
GHMC (greater Hyderabad Municipal Corporation). This is the non trade segment of cement
industry which includes government and non-government sector. These buyers were
interviewed and asked to fill the questionnaire. The data hence collected will be used to analyze
the market in relation to 4(P) that is the marketing mix of price, product, promotion and place
(distribution) so as to study the brand perception of the prospective buyers of Dalmia cements
in relation to the competing brands and factors affecting the sales of Dalmia cements. The study
also aims at providing suggestions in the end so as to enhance the market share of Dalmia
cements in the non-trade segment. The four parameters defined above are in control of a
marketing manager, subject to the internal and external constraint. The goal is to make
decisions that center the 4P’s on the customers in the target market in order to create
perceived value and generate positive response. Brand positioning is very important and is
done to create an image or identity in the minds of the target market of the product so the
outcome of the study aims at suggesting ways in which the product can be positioned so as to
create an image or an identity of brand Dalmia in relation to other competing brands. The
second study is undertaken to understand the factors which influence and drive the sales of
Dalmia cements. Hence, suggest ways to improve sales that in turn will enhance the market
share of Dalmia cements in the non-trade segment. Brands compete for “share of mind” in the
battle for overall market share. In many cases the competing products have very similar feature
sets and price points that are available through comparable channels. Brand can often be the
key discriminating factor in a customer’s decision to select one product over the other. Brand
perception is based on various functional experiences (i.e. speed, quality, reliability, ease of
use) and emotional experiences (loyalty, association with the brand). The perception of a brand
is based on the awareness and previous experience with the brand, interaction with the sales
and customer employees, recommendations, after sales service, sales promotion activities and
most importantly the competitors. The product positioning process:
Defining the market in which the product or brand will compete (who the relevant
buyers are)
Identifying the different attributes that define the product space.
Collecting information from a sample of customers about their perceptions of each
product on relevant attributes.
7|Page
Determine each product’s share of mind.
Determine each product’s current location in the product space
Determine the target market’s preferred combination of attributes (ideal vector)
Examine the fit between (a) the positions of your product (b) the position of the ideal
vector.
Position
The factors influencing the sales of Dalmia cements can be varied example price, quality,
sales promotional activities, lead time, setting time, quality accreditation, logistics and
supply patterns etc. These factors influence the sales in negative and positive way. A
proper marketing mix of price, promotion, place (distribution) and product can help
boost sales.
8|Page
INTRODUCTION
Cement is a binder which sets and hardens independently, and can bind other materials
together. The word "cement" traces to the Romans, who used the term "opus caementicium"
to describe masonry which resembled concrete and was made from crushed rock with burnt
lime as binder. Cement is an essential component of infrastructure development and most
important input of construction industry, particularly in the government’s infrastructure and
housing programs, which are necessary for the country’s socioeconomic growth and
development. Cement ranks second in volume among the industrial products manufactured in
the world. And it is the most widely used man-made product and second only to water as
world’s most heavily consumed substance. Cement is poly-phased inorganic compound of
complex nature formed by burning of calcareous and argillaceous raw materials as a binding
material. Cement is used as a binding material in various types of civil constructions. Earlier,
clay or lime was used for binding materials together. Its properties include-
Building block
9|Page
INDUSTRY OVERVIEW: INDIAN CEMENT INDUSTRY
Cement is the preferred building material in India. It is used extensively in household and
industrial construction. Earlier, government sector used to consume over 50% of the total
cement sold in India, but in the last decade, its share has come down to 35%. Rural areas
consume less than 23% of the total cement. Availability of cheaper building materials for non-
permanent structures affects the rural demand. The Indian Cement industry is the second
largest cement producer in the world. The industry has undergone rapid technological up
gradation and vibrant growth during the last two decades, and some of the plants can be
compared in every respect with the best operating plants in the world. The industry is highly
energy intensive and the energy bill in some of the plants is as high as 60% of cement
manufacturing cost. Although the newer plants are equipped with the latest state-of-the-art
equipment, there exists substantial scope for reduction in energy consumption in many of the
older plants adopting various energy conservation measures. There are around 11 different
types of cement that are being produced in India. The production of all these cement varieties
is according to the specifications of the BIS (Bureau of Indian Standards). Some of the various
types of cement produced in India are:
Clinker Cement
White Cement
The production of PPC and PSC are based on Fly Ash and Blast furnace slag, the waste product
of Thermal Power Plant and Steel Plant respectively.
CHARACTERISTICS-
North (Punjab, Delhi, Haryana, Himachal Pradesh, Rajasthan, Chandigarh, J&K and
Uttaranchal)
West (Maharashtra and Gujarat)
South (Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Pondicherry, Andaman &
Nicobar and Goa)
East (Bihar, Orissa, West Bengal, Assam, Meghalaya, Jharkhand and Chhattisgarh)
Central (Uttar Pradesh and Madhya Pradesh)
South accounts for 33.03% of cement production capacity of the country, with Andhra Pradesh
accounting for 15.27% of the total production capacity of India. It has an installed capacity of
around 20mn tons of cement and ranks first in the country, followed by Tamil Nadu with 9.94%
of the total production capacity. North accounts for 18.02% of the total production capacity,
with Rajasthan at 12.55% of the total production capacity of the country. West accounts for
16.85% of the total production capacity. Maharashtra and Gujarat have production capacity of
6.89% and 9.96% respectively. East and Central Regions account for 16.33% and 15.77% of the
total production capacity of the country respectively. Production & Dispatches (Region-wise):
During the month of December 2008 the cement industry posted excellent growth in
production mainly from the northern and the eastern region of the country. The demand
continued to be strong as can be evident from the capacity utilization levels in all the major
regions. Increase in installed capacities by some players also contributed to improved
production growth.
The central region of the country acherved the highest capacity utilization rate of 98%.
The northern region and the eastern region had a capacity utilization rate of 93%
respectively.
11 | P a g e
The western region and the southern region had a capacity utilization level of 95% and
86% respectively.
The overall cement production and dispatches increased by 11% to 15.82 million metric tonnes
and 15.81 million metric tonnes respectively during the month of December 2008 as compared
to the same period last year. Excess dispatch implies that there is strong demand as inventories
are being disposed off quickly. The production and dispatches were higher by 10% and 11%
respectively as compared to the previous month.
12 | P a g e
LIMESTONE RESERVES
Limestone is the main raw material for manufacture of cement. For manufacture of one tonnes
of cement, a quantity of 1.5 tonnes of limestone is required. India is endowed with large
deposits of limestone. The estimated total reserves of cement-grade limestone are 95.623
billion tonnes. However, the limestone deposits are not uniformly distributed in all the States.
There is a concentration of about 73 per cent of the total reserves in five States, namely,
Andhra Pradesh, Karnataka, Gujarat, Rajasthan and Madhya Pradesh. This concentration is
about 48 per cent in South Zone, 23 per cent in North Zone, 21 per cent in West Zone and the
remaining 8 per cent in East Zone.
COAL
The consumption of coal in a typically dry process system ranges from 20-25% of clinker
production. This means for per ton clinker produced 0.20-0.25 ton of coal is consumed. This
contributes 35-40% of the production cost. The cement industry consumes about 10mn tons of
coal annually. Since coalfields like BCCL supply a poor quality of coal, NCL and CCL the industry
has to blend high-grade coal with it. The Indian coal has a low calorific value (3,500-4,000
kcal/kg) with ash content as high as 25-30% compared to imported coal of high calorific value
(7,000-8,000 kcal/kg) with low ash content 6-7%. Lignite is also used as a fuel by blending it
with coal. However this process is not very common.
ELECTRICITY
Cement industry consumes about 5.5bn units of electricity annually while one ton of cement
approximately requires 75-85 units of electricity. Power tariffs vary according to the location of
the plant and on the production process. The state governments supply this input and hence
plants in different states shall have different power tariffs. Another major hindrance to the
industry is severe power cuts. Most of the cement producing states like Andhra Pradesh
experience power cut to 25%-30%.
TRANSPORTATION
Cement is mostly packed in HDPE (High Density Poly Ethylene) bags. It is then transported
either by rail or road. Road transportation beyond 200 kms is not economical therefore about
55% of cement is being moved by the railways. There is also the problem of inadequate
availability of wagons especially on western railways and southeastern railways. Under this
scenario, manufacturers are looking for sea routes, this being not only cheap but also reducing
the losses in transit. Today, 70% of the cement movement worldwide is by sea compared to
13 | P a g e
10% in India. However, the scenario is changing with most of the big players like ACC and
Ultratech having set up their bulk terminals.
TECHNOLOGY
Cement Industry has been in existence in India for over eight decades. From the initially
available wet process technology the industry has travelled through semi-dry and the latest
energy efficient dry process technology. Recent plants have been erected with state-of-art
technology comparable to those available in the world. The earlier cement plants that came
into existence were mostly of small kiln capacities of 300 to 600 tpd based either on wet or dry
process; however, the new plants set up later were of the order of 3000 tpd or more exclusively
of dry process. Kilns of the capacities 5000 to 7000 tpd are also in operation now. At present
91% of the total kiln capacity comprise dry process, 7% wet process and the remaining 2% on
semi-dry process based technologies. Indian cement industry has been actively pursuing various
avenues to improve its productivity and energy efficiency. There has been all-around up
gradation of technology in all sections of the plant like mining, process, equipment and
machinery, packaging and transportation. Adoption of modern techniques like photo-
grammetry and remote sensing has enabled the industry to discover virgin limestone. Advanced
equipment like hydraulic excavators, surface miners, large wheel loaders and mobile crushers
have helped the industry in increasing its productivity considerably. The modern raw material
evaluation and management system starts from computerized mine planning through on-line
bulk material analysis to automated X-ray analysis and process computers to control the weigh
feeders. Expert systems based on ‘fuzzy logic’ are used to control the operation of kilns and
mills to ensure that the process systems operate at optimum levels of energy efficiency all the
time. Energy efficient technologies are being adopted for a new as well as for retrofits,
modernization and expansion of existing plants. A number of cement plants in the country are
now equipped with double string pre-heater towers with pre-calciners, vertical roller mills,
roller presses, high efficiency fans and motors with slip power recovery systems. Besides this,
the software approach involving detailed process diagnostic studies and energy audits are used
successfully by almost every large and medium sized cement plant in the country.
ENERGY CONSERVATION
The cement industry is an energy intensive industry by virtue of high temperature reactions and
various physical operations involved in its manufacture. The industry uses both coal and power
as energy inputs. The cost of energy accounts for about 45% of the total production cost.
Energy management in modern cement plants in India meets the standards comparable with
the best in the world. Energy studies of cement plants are being carried out in a large number
of plants on a continuing basis by the National Council for Cement & Building Materials (NCB).
NCB has a mobile energy diagnostic unit (Energy Bus) equipped with necessary instrumentation
14 | P a g e
and on-board computer with relevant software for conducting the energy studies on systematic
and accurate manner. NCB has been giving National Awards for Energy Efficiency in Indian
Cement Industry to the best performing cement plants on annual basis since 1986.
POLLUTION CONTROL
The main source of pollution in cement industry is dust emission. The industry’s achervement in
controlling particulate emission has been quite satisfactory. Considerable progress has been
made in installing Electrostatic Precipitators (ESPs) and bag houses/fabric filters in various
sections of cement plants, especially after the promulgation of the environment legislation in
1981 and 1986.
PRODUCTION COSTS
Cement companies reported 10 per cent growth in their revenues, while their net profit
declined by 21 per cent on compression of margins, last year. Almost all cement companies
faced margin pressures on account of an increase in their overall production costs. Coal
accounts for 35%-40% of the total production cost and is in short supply. Coal prices increased
by over 100 per cent in the last one year. This has lead to an overall increase in the cement
prices, thus affecting the demand for it.
Cement industry is highly capital intensive industry and nearly 55-60% of the inputs are
controlled by the government.
Technological change is the way to the future. Continuous technological upgrading and
assimilation of latest technology has been going on in the cement industry. There is
tremendous scope for waste heat recovery in cement plants and thereby reduction in emission
level.
15 | P a g e
Government Policies
Government policies have affected the growth of cement plants in India in various stages. Their
control on cement for a long time and then partial decontrol and then total decontrol has
contributed to the gradual opening up of the market for cement producers. The stages of
growth of the cement industry can be best described in the following stages:
Price and Distribution Controls (1940-1981): During the Second World War, cement was
declared as an essential commodity under the Defense of India Rules and was brought
under price and distribution controls which resulted in sluggish growth. The installed
capacity reached only 27.9 MT by the year 1980-81.
Partial Decontrol (1982-1988): In February 1982, partial decontrol was announced. Under
this scheme, levy cement quota was fixed for the units and the balance could be sold in the
open market. This resulted in extensive modernization and expansion drive, which can be
seen from the increase in the installed capacity to 59MT in 1988-89 in comparison with the
figure of a mere 27.9MT in 1980-81, an increase of almost 111%.
Total Decontrol (1989): In the year 1989, total decontrol of the cement industry was
announced. By decontrolling the cement industry, the government relaxed the forces of
demand and supply. In the next two years, the industry enjoyed a boom in sales and profits.
By 1992, the pace of overall economic liberalization had peaked; ironically, however, the
economy slipped into recession taking the cement industry down with it. For 1992-93, the
industry remained stagnant with no addition to existing capacity.
Government Controls
The prices that primarily control the price of cement are coal, power tariffs, railway, freight,
royalty and cess on limestone. Interestingly, all of these prices are controlled by government.
EXPORTS
The cement sector is relatively insulated from international markets. This is largely due to
inadequate infrastructure to carry on international trade. Being a very bulky item, international
trade is very limited and only between neighboring states. This is amply borne out by the facts
that cement accounts for not more than 0.20% of total world exports. Having a long coastline,
India is well positioned to export cement to the Middle East and Sri Lanka. However, congestion
at the Indian ports and lack of cement handling facilities restrict the free movement of cement
out of India. Hence, only those companies who have their own jetties are able to export.
16 | P a g e
Moreover, currently, prices in the international market too are at un-remunerative levels.
Nevertheless, companies like Gujarat Ambuja and L&T are major exporters, who export mainly
to get incentives like duty-free import of high grade coal and oil. This apart, large scale cement
exports are possible only when cement prices in the international market look up.
Demand for cement is linked to the economic activity in any country. Broadly, it can be
categorized into demand for housing construction (homes, offices etc.) and infrastructure
creation (ports, roads, power plants etc). The real driver of cement demand is creation of
infrastructure; hence cement demand in emerging economies is much higher than developed
countries where the demand has reached a plateau. In India too, the demand for cement will
be affected by spending on infrastructure (including housing).
17 | P a g e
HOUSING 40%
18 | P a g e
“We are committed to creating exceptional value for our customers, employees, Shareholders,
vendors and the communities we operate in, through our core values of Learning, teamwork,
speed and excellence”
Values
Values are beliefs about what is right and wrong and what is important in life. Values are what
drive our conduct every moment. Values are the rich cultural heritage of any society. Values are
the binding force and the guiding principles behind the evolution and prosperity of all
civilizations. Like mankind, companies too with the right set of values, have prospered over a
long period of time. As an organization which believes in fair conduct, our shared values have
been our means to acherve inclusive and sustainable growth. The aggressive growth trajectory,
we will be guided and governed by our newly adopted values. Binding 3500 people across 15
locations and driving the cumulative energies of one company, one belief and one dream are
our four core values of LEARNING, TEAMWORK, SPEED and EXCELLENCE.
HISTORY
Early on in DCBL’s history DCBL learnt that a strong business is an amalgamation of strong
relationships. The key to establishing such relationships is to learn from each other, to enjoy a
spirit of camaraderie, and to recognize and identify with their needs of the people we work
19 | P a g e
with. Today with the rich experience DCBL have been able to broaden the horizons to include a
holistic approach to the best practices in the industry.
DCBL prides itself on having been at the forefront of pioneering and introducing many new
technologies, which exist today, which are followed by others in the industry. DCBL has been
and continues to be an industry leader in the niche market segments.
QUALITY ACCREDITATION
1. ISO CERTIFICATIONS
2. LEADERS IN THE PRODUCTION OF HIGH STRENGTH SPECIAL CEMENT- 1976
3. AUTHORITY TO USE MONOGRAM OF AMERICAN PETROLEUM INSTITUTE.
4. LICENCE FOR THE QUALITY MANAGEMENT SYSTEMS CERTIFICATION-1993-BUREAU OF
INDIAN STANDARDS
5. LICENCE FOR THE ENVIRONMENTAL MANAGEMENT SYSTEMS CERTIFICATION-2004-
BUREAU OF INDIAN STANDARDS
6. NATIONAL AWARD FOR EXCELLENCE IN ENERGY MANAGEMENT-2007 CONFERRED BY
CII-CONFEDERATION OF INDIAN INDUSTRY
7. NATIONAL AWARD FOR CEMENT EFFICIENCY IN INDIAN CEMENT INDUSTRY-1999
8. NATIONAL ENERGY CONSERVATION AWARD-2001
9. LEADERSHIP AND EXCELLENCE AWARD IN SAFETY, HEALTH AND ENVIRONMENT-2003
CEMENT
20 | P a g e
Pioneer in cement manufacturing since 1939, DCBL has been synonymous with super
specialty cement. It has got an ISO 9002 certification for its highest quality cements for over
seven decades.
SUGAR
The manufacture of sugar started in mid-nineties and set up its unit Ramgarh Chinni mills
(dist sitapur) Uttar Pradesh. The installed capacity then in 1994 was 2500 TCD (tonnes cane
crushing per day) which has now further been expanded to 7500 TCD. The manufacture and
sale of sugar accounts for major part of DCBL’s revenue and it aims to build deep
capabilities in these segments.
The areas of R&D focus are PRODUCT DEVELOPMENT, In particular special cements, energy
efficiency (both power and fuel), optimization of raw material resources, increasing inputs
of blending component particularly Fly Ash in PPC and improving quality of all the products
made by the company to international level.
Though the R&D activity Dalmia Cement has acherved success in the area of Oil Well
Cement- a product claiming essential import substitution and saving lot of foreign exchange
is attributed to the R & D efforts of this Center. This product was first time developed in the
21 | P a g e
country. The company also has to its credit development of railway concrete sleepers for
the first time in the country. Besides these products Dalmia cement introduced for the first
time concept of computerized mine planning, VRM for cement grinding, expert cement for
controlling kiln operation.
At Dalmia Cement, quality is the baseline. Special emphasis is placed on Research &
Development facilities to augment product quality. Each division has a well-equipped R&D
cell, pursuing product and process improvements related to that division. The company has
state-of-the-art manufacturing facilities including an on-line X-ray analyzer, a modern
Stacker Reclaimer, computerized mine planning, environment friendly electrostatic
precipitators and a host of other technological features. Constant control by hi-tech systems
at every step of the manufacturing process ensures that every bag of cement that rolls out
of the factory is of the highest quality.
SYNOPSIS
• Dalmia Cement (Dalmia), a member of the Dalmia Sanjay Group is engaged mainly in the
activities of cement production. Besides, the company also produces dead burnt magnesite
and monoliths, iron ore, multi layer ceramic chip capacitors, and sugar. The company also
provides travel-related services and has a total wind energy generation capacity of 11.5
MW.
• Dalmia Cement Bharat has arranged funds of over Rs 3,100 crore from a syndicate of
banks to undertake capital expenditure or capex plans. The funds have been raised via
company’s 100% subsidiary, Dalmia Cement Ventures as debt.
• The revenue of the company for the quarter ended on Sept 30th increased 24% YoY while
profit increased 34% YoY.
• The top line of the company is expected to grow at a CAGR of 19% over 2008A to 2011E.
Key Concerns
22 | P a g e
• Any change in the existing policies of Government of India and/or State Governments or
new policies, providing or withdrawing support to the industries in which the company
operates or otherwise affecting these industries, would adversely affect the supply and
demand balance and competition in markets in which the company operate there by
impacting the margins of the company.
• The Company's exposure to currency risk arises out of the import of materials like coal for
its cement plants and machinery and equipment for its projects.
• On the basis of EV/EBDITA, the stock trades at 2.23 xs and 2.03 xs for FY10E and FY11E
respectively.
• Price to Book Value of the stock is expected to be at 0.85 and 0.72 respectively for FY10E
and FY11E.
• The Net sales of the company are expected to grow at a CAGR of 19% over 2008 to 2011E.
• Dalmia Cement Bharat has arranged funds of over Rs 3,100 crore from a syndicate of
banks to undertake capital expenditure or capex plans. The funds have been raised via
company’s 100% subsidiary, Dalmia Cement Ventures as debt.
• At present, Dalmia Cement is working on 10 million tonnes capacity addition plan, which is
likely to be completed in coming 2-3 years.
• The company is focused on becoming a pan-India player over a 10-year period. While the
company is present in the South through Dalmia Cement (Bharat) and in the east through a
sister company OCL, it is planning to deepen its presence in these regions and also establish
its footprint in North India.
INDUSTRY OVERVIEW
23 | P a g e
India is the world's second largest producer of cement after China, with cement companies
adding nearly eight million tonnes (MT) capacity in April 2009, taking the total installed
capacity to 219 MT. A few of the leading manufacturers are the UltraTech/Grasim combine,
Dalmia Cements, India Cements, etc. With the boost given by the government to various
infrastructure projects, road networks and housing facilities, growth in the cement
consumption is anticipated in the coming years.
Moreover, cement dispatches were 15.95 MT in July 2009, showing a growth of 9.92 per
cent as compared to 14.51 MT in July 2008. During July 2009, cement production was 16.23
MT, registering a growth of 10.63 per cent as compared to 14.67 MT in July 2008. Between
April-July 2009, cement production totaled 66.38 MT while cement dispatches totaled 65.80
MT.
TECHNOLOGICAL CHANGE
Continuous technological upgrading and assimilation of latest technology has been going on
in the cement industry. Presently, 93 per cent of the total capacity in the industry is based
on modern and environment-friendly dry process technology and only 7 per cent of the
capacity is based on old wet and semi-dry process technology. There is tremendous scope
for waste heat recovery in cement plants and thereby reduction in emission level.
NEW INVESTMENTS
• JSW Cement, part of the OP Jindal Group, plans to set up cement units near the group’s
steel plants at Kurnool, Andhra Pradesh, and Vijayanagar, Karnataka. The units which will
have a combined capacity of 5.5 MT per annum will be set up at a cost of US$ 393.1 million
• Reliance Infrastructure will invest US$ 2.1 billion to set up cement plants with a total
capacity of 20 MT per annum over the next five years.
• Reliance Cementation, an Anil Dhirubhai Ambani Group (ADAG) company, plans to set up
a 5 MT integrated cement plant in Yavatmal district of Maharashtra at a cost of US$ 463.2
million.
• Jaiprakash Associates Ltd has inked a MoU with state-owned Assam Mineral Development
Corporation Limited (AMDC) for setting up a 2 MT per annum capacity cement plant at an
estimated cost of US$ 221.36 million.
• Iron ore mining firm Rungta Mines (RML), the flagship company of SR Rungta group, plans
to set up a one million tonnes cement plant in Orissa with an investment of around US$ 123
million.
24 | P a g e
MERGERS AND ACQUISTIONS
• Holcim strengthened its position in India by increasing its holding in Ambuja Cement from
22 per cent to 56 per cent through various open market transactions with an open offer for
a total investment of US$ 1.8 billion. Moreover, it also increased its stake in ACC Cement
with US$ 486 million, being the single largest acquirer in the cement sector.
• Leading foreign funds like Fidelity, ABN Amro, HSBC, and Nomura Asset Management
Fund and Emerging Market Fund have together bought around 7.5 per cent in India's third
largest cement firm, India Cements (ICL), for US$ 124.91 million.
• Cimpor, the Portugese cement maker, paid US$ 68.10 million for Grasim Industries' 53.63
per cent stake in Shree Digvijay Cement.
• CRH Plc, the world's second biggest maker and distributor of building materials, acquired a
50 per cent stake in My Home Industries Ltd for almost US$ 372.64 million.
• Vicat SA, a French cement maker acquired a 6.67 per cent stake in Hyderabad-based Sagar
Cement for US$ 14.35 million.
GOVERNMENT INTIATIVES
25 | P a g e
Government initiatives in the infrastructure sector, coupled with the housing sector boom
and urban development, continue being the main drivers of growth for the Indian cement
industry.
• Increased infrastructure spending has been a key focus area over the last five year
indicating good times ahead for cement manufacturers.
• The government has increased budgetary allocation for roads under National Highways
Development Project (NHDP).
• Appointing a coal regulator is looked upon as a positive move as it will facilitate timely and
proper allocation of coal (a key raw material) blocks to the core sectors, cement being one
of them.
Keeping in mind the global meltdown which is impacting the cement companies in India, the
government re-imposed the counter-veiling duty (CVD) and special CVD on imported
cement in January. This is likely to provide a level playing field to domestic companies.
ROAD AHEAD
According to a report by the ICRA Industry Monitor, the installed capacity is expected to
increase to 241 MTPA by FY 2010-end. India's cement industry is likely to record an annual
growth of 10 per cent in the coming years with higher domestic demand resulting in
increased capacity utilization. Moreover, according to the Centre for Monitoring Indian
Economy (CMIE), cement production is expected to grow by 8.1 per cent and demand for
the same is likely to rise by a healthy 7-7.5 per cent in FY 2009-10.
KEY HIGHLIGHTS-MACRO
a) Capacity utilization in South, which was down from 91% to 78% YoY during 1HFY10, is
now marginally improving on the back of strong demand coming from real-estate, rural
housing and government sponsored constructions,
b) Cement price, which was reduced during 1HFY10 to 250-260/bag in the southern region
are again inching up on the back of firm demand
26 | P a g e
The Government of Karnataka amongst the top five industrial states in India and where
DCBL’s derives 11% of its cement sales is set to unveil infrastructure projects, including
Public Private Partnership projects, worth INR 1000bn over next 12-15 months and increase
the State GDP from 7% to 9%. The Karnataka government is expected to come up with ten
industrial infrastructure projects in the near future. Government of Karnataka is also in the
process of selecting a contractor for executing 35 km high speed rail link project from
Bangalore Airport Davanahalli to the City centre. The cost of the project is estimated at INR
57.67bn for which five consortiums have been short listed and are expected to be
implemented in a PPP mode. The Centre will invest INR 40.1bn in this project as viability gap
funding and the state government will provide the land assets. Some of the major
infrastructure projects to be taken up using PPP model include:
All these lead to good demand in the southern region, where there is concern of excess
cement capacity over demand.
KEY HIGHLIGHTS-MICRO
CEMENT SEGMENT
a) DCBL has availed services of FLSmidth, a world leader in cement plant designs to erect its
new plant at Ariyalur. The materials handling equipment supplies include a circular
limestone stacker / reclaimer three side scraper stacker / reclaimer systems for raw mill
additives, coal and cement mill additives, respectively. The alternative fuels used in
pyroprocessing include used lubricating oil, greases, sludge from furnace oil and LSHS (Low
Sulphur Heavy Stock), spent carbon, and oil soaked cotton waste.
b) The benefit of new plant getting commissioned at Ariyalur (taking DCBL’s cement
capacity to 9MnT on standalone basis) will lead to volume growth from Q4FY10 and
onwards.
27 | P a g e
c) Post Ariyalur plant becoming operational, market mix will change in favor of Tamil Nadu
and Kerala market which would be beneficial to DCBL as both these regions has high growth
potential.
POWER SEGMENT
DCBL has captive power plant of 88.5MW, of which 16.5MW is Wind energy farm at Tamil
Nadu (PLF of 23%) and 45MW thermal power plant at Dalmiapuram, Tamilnadu with PLF of
82-85%. From this plant, 10MW is sold to the TNEB through PTC and rest is meant for
captive consumption. At its Ariyalur plant, DCBL is adding 27MW of thermal power plant,
exclusively for captive consumption. DCBL imports coal mainly from South Africa / Indonesia
and also uses alternative fuel like pet coke and lignite. DCBL has a one year contract with
the coal supplier from South Africa and its shipment cost is USD 17-18/tonnes against
current shipment cost of USD23/tonnes. The current cost of imported coal stands at USD
85/tonnes, including shipment.
28 | P a g e
others 7%
power 4%
BREAK UP OF EXPENDITURE
Depreciation 9%
other expenditure 18%
29 | P a g e
employee cost 11%
power and cost 31%
consumption of raw material 14%
freight charges 16%
purchase of traded goods 1%
30 | P a g e
Q2 FY 09 4548.5 401.9
Q3 FY 09 4099.4 237.1
Q4 FY 09 4921.4 442.7
Q1 FY 10 5576 585.7
Q2 FY 10 5637 538.5
31 | P a g e
KERELA 25%
ANDHRA PRADESH 11%
KARNATAKA 9%
OTHERS 4%
32 | P a g e
CEMENT 72%
SUGAR 16%
POWER 6%
OTHERS 6%
PLANT INFORMATION
33 | P a g e
The cement manufacturing plant of Dalmia Cement (Bharat) Ltd (DCBL) at Dalmiapuram and
Ariyalyur in the state of Tamil Nadu (representing 72% of its installed capacity of 9 million
tonnes per annum (MnT) to understand its manufacturing technology, assessment of regional
demand-supply and over all plan of the company. Following are the key takeaways from the
management meet.
Company Background
DCBL has business interests in two major segments namely Cement and Sugar with share of
72% and 16% respectively for FY09 and rest coming from Power and others. DCBL has cement
plants in Southern States of Tamil Nadu (Dalmiapuram & Ariyalur) and Andhra Pradesh
(Kadapa), with combined capacity of 9 million tonnes per annum (MnT). With 51% of its cement
getting sold in Tamil Nadu, 25% in Kerala, 11% in Karnataka, 9% in Andhra Pradesh and rest 4%
in eastern and other regions, DCBL enjoys double digit market share in its region. DCBL is a
pioneer in super specialty cements like Oil well, Railway sleeper and Air strip. DCBL also has
three Integrated Sugar Mills in the State of UP with installed capacity of 22,500 tons of cane
crush per day, distillery capacity of 80 kilo litres per day (KLPD) and cogeneration facility. DCBL
also has stake in OCL 21.7% having cement manufacturing capacity of 5.4 MnT
34 | P a g e
INSTALLED AT THE END OF Q2 FY ADDITION H1 FY10 EXPECTED H2 FY10 E
CAPACITY 09
ALL INDIA 231 12 25
SOUTH 83 5 10
EAST 34 3 6
35 | P a g e
PROJECT PROFILE
INTRODUCTION
This project was undertaken to provide Dalmia Cement (Bharat) Limited with some information
related to the non-trade segment of the cement industry and the perception of the buyers of
brand Dalmia in the market. The report also aims at providing suggestions to the company
regarding positioning of the brand with respect to the competing brands so as to improve sales
in the non-trade segment by studying the prospective buyers. The factors that affect the sales
of Dalmia cement are also studied in this study; the most influential factors that drive the sales
are then segregated from the least important factors. In the end the study aims at providing
suggestions to improve sales in the Hyderabad region and position the brand so as to increase
the market share.
METHODOLGY
The methodology was simple, the sample size was 50 respondents they were asked to fill
questionnaire. The questionnaire had 11 questions based on points, the respondents were
asked to give points to 9 different cement brands from the scale 1 to 9 where 1 being lowest
and 9 being highest. The aggregate was then calculated and the brand getting maximum points
was ranked first on the basis of consumer choice and the brand getting least score was ranked
ninth. The five open ended questions in the questionnaire were also tabulated and calculated
and the data hence collected is used to draw conclusions and inferences. The data is also
analyzed to give recommendations and suggestions to the company to improve sales.
LIMITATIONS
1. The scope of the project is limited to only one market segment-that is the non-trade
segments only the builders, construction companies and institutional buyers.
2. We are not providing the respondents with incentives so it may be possible they are not
honest in replying to the questionnaire.
3. The study covers only the Hyderabad region and not any other place so the findings
won’t be applicable to any other region.
4. Some builders showed preference towards some particular brand, as they might have
been biased in answering the questionnaire.
5. Lack of cooperation from the builders and construction companies.
6. Most of the builders and construction companies were not ready to disclose the data or
provide the relevant information as they feared competition.
QUESTIONNAIRE
36 | P a g e
DOCUMENT NUMBER:
ADDRESS:
: (Landline)
37 | P a g e
QUESTIONNAIRE
Give points to the following brands on the scale 1 to 9, where 1 is the lowest
and 9 being the highest.
2. Give points to the following brands on the basis of sales promotional activities:
3. Give points to the following brands on the basis of price flexibility they give:
38 | P a g e
6. Give points to the following brands on the basis of their response to customer complaints if
any:
10. Give points to the following brands on the basis of credit period they give:
11. Give points to the companies on the basis of the number of brands they offer:
39 | P a g e
Maha Dalmia Penna Ambuja Ultratech Zuari Priya Coromande Rassigold
l
13. Does the art of making and maintaining the relationship of the marketing representative
matter to you?
Yes
No
15. Are there any other government policies that affect your consumption of cement?
Yes
No
40 | P a g e
16. What is the most important factor that affects your consumption out of the following?
Technical assistance
After sales service
Promotional activities
Quality accreditation
Logistics and supply pattern
Promotion
Sales promotion and incentive schemes are mostly short term and designed to
stimulate quicker or greater purchase of particular product or services by
consumer on the trade. The various sales promotion methods adopted by the
company are:-
1. Advertisement is a way of promotion and making the buyers aware of the product
through television, newspaper, wall paintings, calendar etc.
2. Dealers and retailers meet.
3. Training programmes
4. Architect and engineer meet.
5. Incentives schemes to dealers like cash discount, quantity discount, annual discount,
target setting, loyalty discount, annual visits to tourist places, annual gifts.
6. Dealer's relationship programme like best seller award and other award programs.
7. Company visits to dealer's shop.
41 | P a g e
Product
Oil well cement-Oil well cement as the name suggests is used for grouting of oil wells,
also known as the cementing of the oil wells. This is done for both, the off shore and on
shore oil wells. As the number of oil wells in India is increasing steadily, the sales of oil
well cement have also increased. This has boosted the Indian cement industry to a large
extent. Oil well cement is manufactured from the clinker of Portland cement and also
from that has been hydraulically blended.
Railway sleeper cement- used for railway sleepers.
Air strip cement- used for air strips
Sulphate resisting Portland cement-is a Portland cement in which the quantity of
tricalcium aluminates is less than 5%. It can be used for purpose wherever Portland
pozzolana cement, slag cement and ordinary Portland cement are used. The use of
sulphate resisting Portland cement has proven beneficial, particularly in conditions
where there is a risk of damage to the concrete from sulphate attack. It is recommended
in places where the concrete is in contact with the soil, ground water, exposed to sea
coast and sea water.
Ordinary Portland cement- Is manufactured in the form of different grades and is
manufactured by burning siliceous materials like limestone at 1400 degree Celsius and
thereafter grinding it with gypsum.
OPC grade 43-is in high demand in India and is largely used for residential, commercial
and other building purposes. It has a compressive strength of 560 kg per square cm.
OPC grade 53-is rich in quality and is highly durable. It is called SUPEROOF. Expert
opinion is required and is used for constructing higher structures.
Portland pozzolana cement-is manufactured by blending pozollanic materials, OPC
clinker and gypsum either grinding them together or separately. Today Portland
pozzolana cement is widely in demand for industrial and residential buildings, roads,
dams and machine foundation. Dalmia has named PPC as VAJRAM.
Place
Two type of distribution network mainly followed by the company are followings
1. Trade- This is available for the distributer, in this type company supply the cement
through deport or directly from the factory.
42 | P a g e
2. Non Trade- It is basically contract basis, it includes contractors and government. It is
for a fix period at fix rate.
There are two methods which followed by company regarding transportation cost
1. To be billed- In this category company pay freight and transportation cost, it is
applicable in stock transfer only. The company first supply the cement to depot then
supply to the dealer.
2. To Pay- In this category supply cost is given by the stockiest or dealer. Application in
direct sale means from industry to Dealer. 75% transportation is through railway and
rest through from road.
Price
Price is one of the important elements of marketing mixture. Various factors affecting
pricing policy of company are:-
1. Competitor's price- competitor polices affects DCBL’s pricing strategies and needed to
be continuously watched.
2. Market positioning-a company can earn more profit if position of their product
is good Dalmia also consider brand positioning of various brands.
3. Godown stock, market demand and supply also affect the pricing strategies.
4. Transportation cost is one of the major costs which the company is continuously
trying to reduce by transporting right quantity through most suitable mode of
transportation.
5. Brand image-brand image plays important role in pricing policy.
Dalmia cements are continuously trying to reduce the cost without affecting the quality
of product. The study deals with the market survey of prospective buyers of Dalmia
cements. These prospective buyers include the non-trade section of the company
government and non-government (builders, construction companies, institutional
buyers and projects by GHMC (greater Hyderabad municipal corporation).These buyers
are interviewed and given questionnaires to fill and then the data will be analyzed to see
which factors affect the buyers consumption habits. Factor analysis is used as the
technique and is a class of procedures used for reducing and summarizing the data. Each
suggests ways to deal with variable is expressed as a linear combination of the
underlying factors. Like wise, the factors themselves can be expressed as linear
combinations of the underlying factors. Then the study aims at finding the factors that
affect the prospective buyer behavior because some buyers go by mind and some go by
heart. It also studies the factors that affect the buying behavior. The study will also help
us study the brand perception i.e. how our brand is perceived in the market. Building
strong brands is very important because brand sells. The other variant of the study is to
43 | P a g e
suggest ways to deal with the competition and manage services. Each competitor seeks
its own market some want profits, growth and expansion and some want the market
share. The main focus of Dalmia cements is to enhance the market share by capturing
different markets and market segments. The motive of my study is to do the market
analysis of (4P) in relation to competing brands through data analysis and suggest ways
to promote sales that will in turn help in enhancing the market share of the company.
Brand loyalty
“You learn that creating customer loyalty is neither strategic nor tactic; rather, it is the
ultimate objective and meaning of brand equity. Brand loyalty is brand equity”
Brand loyalty implies that consumers bind themselves to products and services as a
result of a deep seated commitment. A repeat purchase behavior “Is the actual re-
buying of the brand” whereas loyalty includes a reason/fact occurring before the
behavior.
Brand loyalty is of two types “spurious” and “true” loyalty:
Spurious loyalty exhibits the following attributes: biased, behavioral response,
expressed overtime, by some decision making unit with the respect to one or more
alternate brands, a function of inertia.
True brand loyalty includes the above, but replaces inertia with a psychological process
resulting in brand commitment.
Organizations seek to develop and project brand perception based on internally driven
needs and goals. Positioning refers to a brands subjective (or) perceived attributes in
relation to competing brands. This perceived image of the brand belongs not to the
product but rather is the property of the consumer’s mental perceptions in some
instances, could differ widely from a brand’s true physical characteristics. Positioning is
the art of selecting, out of number of unique selling propositions, the one which will give
you maximum sales. The most important DECISION WE WILL MAKE HERE AFTER THE
STUDY ON BRAND PERCEPTION IS DONE IS “HOW MY CUSTOMERS PERCEIVE MY BRAND
44 | P a g e
THAT IS THEIR UNDERSTANDING OF MY BRAND IN RELATION TO OTHER COMPETING
BRANDS?” AND “HOW SHOULD I POSITION MY BRAND TO GET MAXIMUM SALES?”
2% 2% 2%
38%
commercial
civil
residential
retail
it building
55% independent
2%
45 | P a g e
The data collected shows that the builders, construction companies and institutional buyers
surveyed most of them were into residential and commercial construction. And the rest
were civil, independent, retail etc.
2.
BAGS
0-200 2 6.896552
201-400 6 20.68966
401-600 12 41.37931
601-800 8 27.58621
801-1000 1 3.448276
29 100
46 | P a g e
3% 7%
28% 21%
0-200
201-400
401-600
601-800
801-1000
41%
This data shows that cement is a highly consumed product and is used for various infrastructure
activities.
3.
4.
47 | P a g e
40%
YES=20
NO=30
60%
The above data shows that brand DALMIA is a popular brand as 100% builders, construction
companies and institutional buyers surveyed are aware of the brand. So hence this proves
that brand DALMIA is a strong brand in Hyderabad region and brand awareness is not a
problem with this particular brand. The builders, construction companies and institutional
buyers are very well aware of the brand. In fact, most of them i.e. 60% of them have used
Dalmia cement earlier.
5.
48 | P a g e
10%
YES
NO
90%
The above data shows that most of the builders have tie up with different brands i.e. 90% of
the sample size have tie ups with other companies.
And if we analyze the above data, BIRLA cement and ULTRATECH, are the two most preferred
brands of cement amongst the buyers of non-trade segment. L and T, PRIYA, DECCAN and
ACC follow just after that. The least preferred brands are GREY GOLD CEMENT, RASSI GOLD
CEMENT, RAMCO CEMENT, SAGAR CEMENTA and ORIENT CEMENT.
49 | P a g e
L and T
2; 4% 1; 2% 1; 2%6; 12% Birla cement
2; 4%
1; 2% Grey gold cement
1; 2%
Ultratech
3; 6%
Priya cement
15; 31%
Rassi gold cement
Ramco cement
16; 33% Deccan cement
Acc cement
1; 2% Sagar cement
Orient cement
1.
50 | P a g e
20% 2% 24%
When asked this question that will they switch to another brand the respondents were in
favor of getting lower prices, 40% are in favor of that if they get lower price they will switch
to another brand this proves that the market is price sensitive. The change in price does
affect the buyers’ behavior. The second most important factor with 24% is getting a better a
quality.
2.
51 | P a g e
26%
YES=37
NO=13
74%
The art of making and maintaining the relationship of the marketing representative does
matter to the buyers as 74% are in favor of that is the art matters to them.
3.
12% 10%
54%
52 | P a g e
The companies motivate the buyers by giving them incentives and gold coins with 24% and
54% respectively.
4.
ARE THERE ANY OTHER GOVERNMENT POLICIES THAT AFFECT YOUR CONSUMPTION
OF CEMENT?
YES=3 6%
NO=47 94%
6%
YES=3
NO=47
94%
5.
The most important factors that affect the consumption of buyers are quality accreditation and
logistics and supply pattern. The buyers are more concerned about the quality and also the way
53 | P a g e
the cement is transferred and the supply chain pattern. As this industry is highly dependent on
transport for the supply of cement from the plants to the depots and the direct customers; the
supply and chain pattern should be very effective and efficient. As promotional activities don’t
score high on the list the above question that says that what companies do to motivate you;
gold coins and incentives don’t play a vital role. So the companies rather than investing in
promotional activities can go for improvement in supply chain pattern and quality
improvement.
6.
54 | P a g e
On the basis of quality the buyers ranked Ultratech number 1, Ambuja was ranked 2, Dalmia
was ranked 3, Penna was ranked 4, Priya ranked 5, Zuari ranked 6, Maha ranked 8 and
Rassigold ranked 9. The 3 strong brands here are Ultratech with 379 points, Ambuja with 327
points and Dalmia with 321 points. This shows that Dalmia is perceived as a good quality
brand in relation to other competing brands but still has a good competition with Ultratech
and Ambuja with 379 and 327 points.
7.
55 | P a g e
On the basis of sales promotional activities Ultratech was ranked 1, Ambuja 2 and Dalmia 3
this proves that all these three brands are doing well in sales promotional activities.
8.
56 | P a g e
On the basis of price flexibility Dalmia is again ranked 3 with 316 points after Ambuja and
Ultratech.
9.
57 | P a g e
161 114 131 325
306 MAHA
DALMIA
PENNA
AMBUJA
315
ULTRATECH
190 ZUARI
PRIYA
COROMANDEL
366 356
RASSIGOLD
On the basis of price offered Dalmia is ranked 3 with 325 points, with Ultratech taking the
lead with 366 points and Ambuja with 356 points.
10.
58 | P a g e
On the basis of awareness also ultratech ranks 1 with 375 points, Ambuja with 352 points is
ranked 2 and Dalmia with 333 points ranked 3. This shows that brand awareness is not a
problem with DALMIKA CEMENTS.
11.
59 | P a g e
On the basis of customer complaints Dalmia is ranked 3 with 309 points.
12.
GIVE POINTS TO THE FOLLOWING BRANDS ON THE BASIS OF LEAD TIME TOTAL
1. MAHA RANK 5-289
2. DALMIA RANK 3-342
3. PENNA RANK 4-335
4. AMBUJA RANK 2-348
5. ULTRATECH RANK 1-380
6. ZUARI RANK 8-130
7. PRIYA RANK 6-190
8. COROMANDEL RANK 7-139
9. RASSIGOLD RANK 9-108
60 | P a g e
On the basis of lead time Dalmia is ranked 3 with 342 points.
13.
61 | P a g e
14.
62 | P a g e
On the basis of setting time DALMIA is ranked 3 with 319 points.
15.
GIVE POINTS TO THE FOLLOWING ON THE BASIS OF THE CREDIT PERIOD TOTAL
THEY GIVE
1. MAHA RANK 5-281
2. DALMIA RANK 2-344
3. PENNA RANK 4-300
4. AMBUJA RANK 1-388
5. ULTRATECH RANK 3-329
6. ZUARI RANK 7-152
7. PRIYA RANK 6-186
8. COROMANDEL RANK 8-146
9. RASSIGOLD RANK 9-126
63 | P a g e
On the basis of credit period they give DALMIA ranks 2 with 344 points.
16.
64 | P a g e
On the basis of brands they offer DALMIA ranks 3 with 332 points.
65 | P a g e
FINDINGS
STRENGHTS
1. DALMIA is strong brand name with a strong brand image as perceived by the
customers in the non-trade segment.
2. It is a quality product and brand awareness is not a problem with this particular brand.
WEAKNESS
1. DALMIA faces a strong competition from ULTRATECH and AMBUJA as in all the above
mentioned attributes Ultratech and Ambuja ranks higher than Dalmia.
2. There is also a lack of advertisements and marketing techniques in DALMIA CEMENT.
3. SUPPLY and LOGISTICS i.e. the transportation is also another problem as the cement is
not delivered on time.
4. Companies don’t offer credit period and the lead time offer results in delay in
construction activities.
5. Power cut in the plants is also another weakness as power and transportation
accounts for maximum cost to the company that is 31%.
OPPORTUNITIES
1. DALMIA has a lot of potential to grow in the northern, western and eastern region.
DALMIA has a strong hold in the southern region and setting up plants in northern,
western and eastern regions will increase production and hence will improve a lot of
supply related problem. Supply will be able to match the demand hence solving the
problem of delay in supply as production will be able to meet the excessive demand.
2. Improving infrastructure is another opportunity for DALMIA cement, as in setting up a
new power plant to solve the problem of power cuts in this region.
3. It has a lot of scope to improve in the commercial areas that is non-government
institutions.
THREATS
1. The biggest threat is from the competitors like Ultratech and Ambuja who are actually
eating up the major proportion of sales and are the dominant players in the cement
industry.
2. Government control is also another factor as the major cement price controllers like
coal, power, tariffs, railways, government freight are in the hands of the government.
As this market is price sensitive as seen in the study above a change in price can
66 | P a g e
actually motivate the buyer to buy another brand. So government control will play a
role here.
3. High transportation cost is also another threat and the transporters are not very
sincere in delivering the cement.
4. Threats from other competitors like Duncan, Grasim, Lafarge, holcim etc; as few of
them are international brands.
5. Coal and power are the energy inputs and coal is in short supply; the total production
cost of cement is highly dependent on these two major energy inputs coal and power.
67 | P a g e
RECOMMENDATIONS
68 | P a g e
7. PRODUCTION COST REDUCTION TO GET AN EFFECTIVE AND REASONABLE PRICE
FOR THE MARKET, AND IMPROVING ON SUPPLY AND LOGISTICS PATTERN CAN BE
THE UNIQUE SELLING PROPOSITION FOR DALMIA CEMENT. THEY CAN WORK ON
IMPROVING THE DELIVERY TIME AND FULFILLING THE COMMITMENTS ON TIME.
BECAUSE IF THE COMPANY IS SUCCESSFUL IN DOING SO THE POSTIONING OF THIS
PARTICULAR BRAND IN THE MINDS OF THE CONSUMERS WILL BECOME FIRM AND
STRONG.
8. THE BUILDERS WANT CREDIT PERIOD AND MORE PRICE FLEXIBILITY. AND AS THE
MARKET IS PRICE SENSITIVE WORKING ON THIS PARTICULAR AREA CAN IMPROVE
SALES.
69 | P a g e
CONCLUSION
70 | P a g e
REFERENCES
1. To produce 2.50 Million tonnes of Dalmia brand OPC and Dalmia Vajram brand (PPC)
Cement BY Vishal
Dated: Mar 06, 2009
4. "Marketing battles take place in the mind of a consumer or prospect. That's where you
win. That's where you lose.” Jack Trout, Big Brands, Big Trouble
6. www.indiamaps.com
8. www.dalmiacements.com
9. www.accement.com
10. “You learn that creating customer loyalty is neither strategic nor tactic; rather, it is the
ultimate objective and meaning of brand equity. Brand loyalty is brand equity”
11. "A strong brand position means the brand has a unique, credible, sustainable, and
valued place in the customer's mind. It revolves around a benefit that helps your product or
service stand apart from the competition.” Scott Davis, Brand Asset Management
-Subroto Sengupta
71 | P a g e
13. www.invetopedia.com
14. www.marketing.about.com
15. www.en.wikipedia.org
16. www.dot.gov.in
72 | P a g e