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Cement Business Topic- Meaning, Inference & Importance Synopsis Questionnaire Sample- size Analysis
Conclusion
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CEMENT BUSINESS
Jaypee group is the 3rd largest cement producer in the country. The groups cement facilities are located in the Satna Cluster (U.P), which has one of the highest cement production growth rates in India. The group produces special blend of Portland Pozzolana Cement under the brand name Jaypee Cement (PPC). Its cement division currently operates modern, computerized process control cement plants with an aggregate installed capacity of 26.20 MnTPA. The company is in the midst of capacity expansion of its cement business in Northern, Southern, Central, Eastern and Western parts of the country and is slated to be a 35.90 MnTPA by FY12 (expected) with Captive Thermal Power plants totaling 672 MW. Keeping pace with the advancements in the IT industry, all the 260 cement dumps are networked using TDM/TDMA VSATs along with a dedicated hub to provide 24/7 connectivity between the plants and all the 120 points of cement distribution in order to ensure track the truck initiative and provide seamless integration. This initiative is the first of its kind in the cement industry in India. The Group is committed towards the safety and health of employees and the public. Our motto is ' Work For Safe, Healthy, Clean & Green Environment '.
INFERENCE:Each channel member plays a specialized role in the channel. E.g. The Company- will produce item according to consumers usability, requirement & create demand through advertising. The supplies are also to be maintained effectively. The Dealers now needs to bring item to consumers eyes, answers all the queries related & to complete sales targets. The efficiency of Channel depends on the right people for the right job. The understanding & acceptance of roles, co-ordination among activities & co-operations required to attain channel goals.
IMPORTANCE OF TOPIC
In marketing, as we know everything revolves around 4Ps i.e. Product, Price, Place & Promotion. Weve a product Cement. By the study of Channel behaviour, we get to know about the place, how the product reaches the market & ultimately the end user. Now this is not only the study restricted to place, albeit it is extended into pricing & promotion because place decides the price of a product in commodities as these have a high price sensitive index.
THE CHANNEL PROCESS OF JP CEMENT IS AS FOLLOWS:Cement Plant ( Rewa, Bela, Ayodhya, Allahabad, Panipat, Talda, Roorkee, Bagha, Bagheri, Sonebhadra, Sidhi, Mirzapur)
Authorised Stockist
Consumer
Questionnaire for Consumer/ Channel Behavior in Delhi Market for JayPee Cement
Name of Shop: Name of Proprietor: . Zone: Address: .. Contact: 1. What all brands do you sell? a. Jaypee b. Ambuja c. Shree d. Ultratech e. Others 2. What is your total potential per month? a. < 50 MT b. 50- 200 MT c. 200- 500 MT d. >500 MT 3. What is the share of Jaypee Cement in total sales? a. < 25% b. 25- 50% c. 50- 75% d. >75% 4. How has been your association with Jaypee Cement till now? a. Highly satisfied b. satisfied c. Not satisfied d. Highly dissatisfied 5. How are the supplies of Jaypee Cement? a. Just in time b. Regular c. Irregular d. Highly irregular 6. How is the pricing of Jaypee Cement as compared to other brands?
Brand Name Ambuja
Shree Ultratech Others
Higher than
At par
Lower than
7. What are the brands preferred for selling by you? a. JP b. Ambuja c. Shree d. Ultratech e. Others 8. What are the reasons for prioritizing? a. Consumer Demand b. Company Scheme Structure c. Profit Margin d. Better Branding e. Others: (Logistics, Quality, Accounting, etc) .. 9. Which of the brands are preferred by consumers? a. JP b. Ambuja c. Shree d. Ultratech e. Others 10. On a scale of 1- 10 (ascending order); how would you rate Jaypee Cement? (10: full satisfaction) 1 2 3 4 5 6 7 8 9 10 11. Where would you want Jaypee Cement to serve you better? a. Pricing b. Logistics c. Branding d. Accounting e. Others:- ....
Question No. 1) Which all brands are sold by the Proprietor? JP Ambuja Shree Ultratech Others (Shri Ram, ACC, Birla, Binani, JK Laksmi etc) Shree has the maximum sales in the Delhi Region with around (65,000*12) MT annually & has presence at almost all the counters in the state, apart from its own network of Dealers. Ambuja stands at 2nd position with around (45,000*12) MT annually. It has a genuine presence in North & South region. Ultratech is also growing thick & fast with annual sales of (30,000*12) MT with strong presence in East, North & West region. JP Cement has grown nicely over sometime & with growing Production, itll substantially over the coming years. Now itll increase its production in tradable market. JP presently sells (20,000*12) MT annually. JP- 150 counters, Ambuja- 120, Shree- 125, Ultratech- 90, & Others- 80.
Sales
JP Ambuja Shree Ultratech Others
Question No. 2) What is the Total potential per month? Less than 50 MT 051- 200 MT 201- 500 MT More than 500 MT
Selling potential
< 50 MT 050- 200 MT 200- 500 MT > 500 MT
Question No. 3) Share of JP Cement in total share of visited counters? Less than 25% 25- 50% 50- 75% More than 75% Authorized Stockists are the sellers of, usually, only 1 Brand; hence theyll always have more than 75% sales (100%) The Consignees/ Retailers/ Dealers sell more than 1 Brand; theyre attracted towards Scheme Structures pertaining discounts, other gifts. Hence theyre complex to handle as they dont have sale binding & security depositions. A. 40 B. 30 C. 50 D. 30
Share in Sales
Question No. 4) Hows been your association with JP Cement so far? Highly satisfied Satisfied Unsatisfied Dissatisfied Satisfaction with the company is marked on the basis of Quality & Quantity of the product, Logistics, Accounting. The Quality of the Brand has always been its strong point, Quantity was an issue earlier when the supply was through railway network because:Every loading & unloading requires pinching of bags by sharp tongs which lead to tearing of packing & spillage of cement. By Road network & improved packaging, this concern is reduced. A. 45 B. 65 C. 30 D. 10
Plant Trains Dump Consignees
Rail Godown
Rail Godown
Stockists
Consumers
Association
Highly satisfied Satisfied Not satisfied Highlydissatisfied
Question No. 5) How are the supplies of JP Cement? Just in Time Regular Irregular Highly Irregular Just in Time means within 5 hours of the order placed. Regular means the same day of the order placed. Irregular means 2nd or 3rd of the order placed. Highly irregular means later than 3 days. It also depends upon the size of order. Big orders of full 320 bags vehicles are directly dispatched from dumps nearby, hence needs few hours. Small orders are cleared by authorized stockiest, up to 150 Bags. A. 60 B. 40 C. 30 D. 20
Logistics
Just in Time
Regular Irregular Highly irregular
Brands
Ambuja Ultratech Shree
Higher than
At par
Lower than
Others
Ambuja price is always higher than other Brands be it in any market. It sells at around Rs 8 higher than 2nd expensive Brand. Ultratechs price varies from being at par to high at some places. E.g. in West Delhi, its higher than JP Cement & In South, its equal or a Rupee less. Shree keeps its price lower than other major brands, its focus has been on high sales than Quantity targets & so far, it has succeeded. Other Brands like Shri Ram, JK Lakshmi are at par as far as pricing is concerned, but most of the others are on lower side. Ambuja- Higher, Shree- Lower, Ultratech- At par, & Others- Lower
Higher Priced than JP
At par with JP
Question No. 7 & No. 8) Which are the preferred Brands for selling? Reasons for it. JP Ambuja Shree Ultratech Others The preference for any Brands depends upon:Consumer Demand, Company Schemes, Branding, Profit- margin, Logistics, Quality, Accounting Processes, Sales potential of the Dealer. JP- Quality, Brand Name Ambuja- Consumer Demand, Logistics Shree- Profit- margin, Availability Ultratech- Company Schemes, Accounting
Quality Brand Name
Ambuja
JP Cement
Shree
Ultratech
Question No. 9) Which is the most preferred Brand by Consumers? JP Ambuja Shree Ultratech Others Most of the consumers go by the Brand their Contractor/ Builder/ Masseur suggest them. The percentage of such consumers is very high at around 60%. The Contractors/ Builders looks up for the profit- margin & commission they can get from using particular cement. The Masseurs suggest the brand, which provides them with some gift items. E.g. Tiffin box, wrist- watches etc. Only around 25% go by the brand of their choice, as suggest by relatives. Then again the choice of brand depends upon price & quantity needed. E.g. someone needing 10- 15 bags wont mind paying Rs 8- 10 more. But if the requirements high say full home to be constructed, then it becomes an important criteria. 20% B. 30% C. 25% D. 15% E. 10%
Consumer's Choice
JP AMBUJA SHREE ULTRATECH
OTHERS
Question No. 10) On a scale of 10, how would you rate JP on overall parameters? 1 2 3 4 5 6 7 8 9 10 The parameters of rating are the same that are reasons for prioritizing during selling. Consumer Demand, Company Scheme Structure, Branding, Profit-margin, Logistics, Quality, Accounting Processes, Sales potential of the Dealer. Consumer Demand is a major factor, it affects the rating greatly. E.g. Ambuja has created demand for its cement through branding, thus enjoys good consumer base. Company Scheme Structure is a major factor for Dealers. Everyone needs appreciation, credit for hard work done, so is with Dealers. If theyre increasing sales, they want special discounts, margins. Ratings were usually concentrated b/w 5- 8 points out of 10. Most gave around 5 in West Delhi, 7 in North Delhi & 8 in East N South Delhi.
RATING
Question No. 11) Which area(s) would you want us to provide you with better service? Pricing Logistics Branding Accounting Others (Company Scheme Structure etc) The response to this question depends upon the mindset of the Dealer. The one who asks for better pricing only doesnt think on long- terms association. He wants to make more money. Accounting is an important feature as well; it shows how transparency is maintained in day- to- day transactions. It keeps trust going & relationship is improved. Branding is the area of focus for JP Cement, if it has to make a niche in the market for itself. Quality wise, it is best, so Branding has to come to the mark. Logistics is the parameter depending upon production, demand. As Delhis tertiary market as most of the plants are based at a distance, it has suffered. With Panipat plant operating now, itll improve certainly. A. 80 B. 60 C. 120 D. 50 E. 60
Areas to improve
Pricing
Logistics
Branding Accounting Others
THREAT
1. Consumption 2. Logistics 3. CSS
STRENGTH
1. Quality 2. New Packaging 3. Trust
SWOT
OPPORTUNITY
1. New markets 2. Increased Production
WEAKNESS
1. Pricing 2. Accounting
3. Dealer Network
3. Branding
STRENGTHS:Quality has traditionally been the strength of JP Cement. It has 53+ Grade, which has greater strength than any of its competitor presently. The new packaging has been developed to give it high strength to overcome earlier issues of weight. It also has attractiveness now. Trust of the builders is always there on JP Cement, as the company has its own big projects of Hydroelectricity Production; Constructions of Dams, Highways, Freeways, Expressways; Hospitality & Real Estate. The company uses its own cement in all of these projects, due to its unmatchable strength.
The Pricing is a complex & dynamic factor in todays age of cut- throat competition. Cement selling depends on weather conditions, in rainy season goes down due to storage issues. The company also needs to keep a range of pricing as high fluctuations are not accepted by Dealers comfortably. With JP actually expanding its business, it becomes a weak point. The accounting process is also quite a complex job, there are certain targets set up for the Dealers. When these are not achieved, some of the benefits given are withdrawn, this leads to accounting issues. It is a common scenario with almost all the brands. Now comes the main point of concern i.e. branding of the product. It is a crucial thing with so many options available to the consumer; thus to make your brand on lips, it requires a no. of branding activities. These can be segregated into 3 parts. 1. Dealers- Apart from Dealers Meetings, caps, vests, wall- paintings, banners, diaries, pens, key- rings etc. 2. Consumers- Print advertisements, T.V. commercials, Hoardings on the Metro Station, Railway Station, Shopping Centers, Expressways. 3. Masseurs- these people influences buyers & are actual end users of the product. Technical persons from company can tell them about the plus points, some Tiffin boxes, wrist- watches etc with JP logo.
OPPORTUNITIES:With a no. of new markets arising due to vast constructions, real- estate developing in Delhi & extended part of Delhi- NCR; there lies a scope of large selling over a consistent period of time. The increase in production leads to higher selling potential. Thus gives a chance to expand the business at faster pace & on a larger scale. With production reaching to 36 Million ton annually, JPs growing aggressively now. It has further aims of having 50 Million tons by the end of 2015. Dealer network grows commensurately with the supply from the company. As the productions increasing now, so is the dealer network as Quality speaks for itself. The Dealers are eager to associate themselves with the JP Cement.
THREATS:With many big national projects & companys own projects going on, the internal consumption is very large. Thus the selling portion is to be looked after with utmost care & distribution share becomes complex & crucial. No company reduces supplies to the primary market i.e. up to 100 Kms radius of the Production Unit. Thus development of Secondary & tertiary markets takes a back-seat. Logistics factor depends on the above point itself. With increasing supplies to Secondary, tertiary markets; the cost to the company also increases leading to cut down in profit share. Company Scheme Structures are different from company to company, every company has different policies, targets, costs of production. Hence one company cannot just blindly follow CSS of other company. A dealer doesnt believe in this logic.
Internal Consumption
Logistics Company scheme strcuture