Executive Summary

This is my first exposure to the corporate world and I am extremely grateful to Shree
Cements Ltd for giving me this opportunity to know and work with one of the best
cement companies of India as a management trainee. Shree Cement Ltd. is well
established cement manufacturing industries primarily based in Beawar, Rajasthan. It
currently caters to the markets of Rajasthan, Haryana, Delhi and Punjab under the
name of Shree Ultra, Bangur Cement and Tuff Cemento.
For the past two months I have been working on this project assigned to me for
Bangur cement. The idea was to study the market perception of Bangur cement vis-vis leading brands regarding price, quality and promotional support. To this effect, a
research was conducted using both primary and secondary information. Primary data
was collected through a structured questionnaire from multibrand dealers and builders
across Delhi and Faridabad, while secondary information was extracted from
company database of Bangur Cement. The various parameters were to find:
The level of satisfaction of the dealers with the cement.
The problems/complaints with the cement quality, distribution and
company policies.
The brand awareness of Bangur Cement.
Getting suggestions from the dealers on any improvement that would
help Bangur cement become a stronger brand.
Delhi was divided into four regions-North, South, East and West so that price
variation and problems prevalent in each region could be studied systematically. The
report throws light on sales of Bangur Cement in each region, price per bag, dealers
s view, market perception of Bangur, position where Bangur Cement stands and
leading brands in the market.

Since Bangur is new to the market and is trying to establish itself in the premium
segment, this information will be very useful to know intrinsic things to improve their
image in the market and to increase sales.

Cement Industry in India

For India, the world's second largest producer of cement, the recent boom in
infrastructure and the housing market has only boosted its cement industry. Add to
that, an increasing global demand and a flurry of activity in infrastructure projects
highways roads, bridges, ports and houses has sparked off a spate of mergers and
acquisitions in the sector. Furthermore, the countrys finance minister, P.
Chidambaram, has stated that India would double spending on infrastructure over the
next five years to sustain its record economic growth and modernise its infrastructure.
Cement companies are fast developing plants to provide for a rapidly expanding
economy. The cement industry is therefore poised to add 111 million tonne (mt) of
annual capacity by the end of 2011-12 (FY10), riding on the back of approximately
241 outstanding cement projects. According to a report by the ICRA Industry
Monitor, the installed capacity is expected to increase to 186 mt per annum (mtpa) by
FY08-end, and 309 mtpa by end of FY09, and further up to 241 mtpa by FY10-end.
As a result, Indias cement industry will record an annual growth at 15 per cent in the
coming years with higher domestic demand resulting in increased capacity utilisation.

Current Scenario
The Indian cement industry is the second largest producer of quality cement, which
meets global standards. The cement industry comprises 130 large cement plants and
more than 300 mini cement plants. The industry's capacity at the end of the year
reached 188.97 million tonnes which was 166.73 million tonnes at the end of the year
2012-13. Cement production during April to March 2013-14 was 168.31 million
tonnes as compared to 155.66 million tonnes during the same period for the year
2012-13.Despatches were 167.67 million tonnes during April to March 2013-14
whereas 155.26 during the same period. During April-March 2013-14, cement export
was 3.65 million tonnes as compared to 5.89 during the same period.

Domestic Players
While the Cement Corporation of India, a Central public sector undertaking,
comprises 10 units; the various State governments own 10 large cement plants.
Among the leading domestic players in terms of cement manufacturing are: Ambuja
Cement, Aditya Birla Group (which owns UltraTech Cement), ACC Ltd., Binani
Cement, India Cements, Shree Cements Ltd, and J K Cement. They are not only the
foremost producers of cement but also enjoy a high level of equity in the market.

Industrial production
The cement industry is enhancing its production levels as new homes and offices are
being built, and in keeping with the economys annual growth rate. According to the
Cement Manufacturers Association, the overall cement production rose by 8.11 per
cent during 2013-14 to 168.29 million tonnes (mt) as against 155.66 mt in 2012-13.

Cement

(million tonnes)
2012-13

2013-14

(Apr-Mar)
(a)

(b)

Production
Dispatches
(Including Export)

255.66

268.31

255.26

267.67

(c)

Export

8.65

10.89

(d)

Cap. Uti.(%)

196

194

Exports
The export of Indian cement has increased over the years, giving a boost to the Indian
cementindustry.
The demand for cement in the foreign countries is a derived demand, for it depends on
industrial activity, real estate, and construction activity. Since growth is taking place
all over the world in these sectors, Indian export of cement is also increasing.
The cement industry in India has around 300 mini cement plants and 130 large cement
plants. The total production capacity of these plants is around 167.36 million tons.
The India cement industry is technologically very advanced, as a result of which the
quality of Indian cement is now considered the second best in the world. This has
given a major boost to the Indian export of cement. The production of cement in India
is not only able to meet the domestic demand, but large amounts are also exported. A
fair amount of clinker and cement by-products are also exported by India. As the
quality of Indian cement is very good, its demand in the international market is
always high.
In 2010-2011, 3.38 million tons of cement was exported from India. That figure stood
at 3.47 million tons in 2011-2012, and 3.36 million tons in 2012-13. In 2010-11, 1.76
million tons of clinker was exported from India. In 2011-12 clinker exports amounted
to 3.45 million tons, and in 2012-13 the figure stood at 5.64 million tons. This shows
5

that the export of Indian cement has been increasing at a steady pace over the years.
Export of India cement has been mostly to the West Asian countries.

The major companies exporting Indian cement are:

Gujarat Ambuja

Ultra Tech Cement

L&T Limited

Export of Indian cement has registered a fair amount of growth, giving a boost to the
Indian economy. That it continues to rise, more efforts must be made by the cement
industry in India and the government of India.

Types of cement
The types of cement in India have increased over the years with the advancement in
research, development, and technology. The Indian cement industry is witnessing a
boom as a result of which the production of different kinds of cement in India has also
increased.
By a fair estimate, 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.

Ordinary Portland Cement (OPC):

OPC, popularly known as grey cement, has 95 per cent clinker and 5 per cent gypsum
and other materials. It accounts for 70 per cent of the total consumption.

Portland Pozzolana Cement (PPC):

PPC has 80 per cent clinker, 15 per cent pozzolona and 5 per cent gypsum and
accounts for 18 per cent of the total cement consumption. It is manufactured because
it uses fly ash/burnt clay/coal waste as the main ingredient.

Cement Industry: Structure

Installed capacity 114.2 mn tonnes per annum (mntpa)
Production around 87.8 mn tonnes
Usage
Private housing sector is the major consumer of cement (65%) followed by the
government infrastructure sector at 15% (down from 20%) < 1% of the cement
produced is sold in bulk form unlike US & Japan.

Transportation

Transportation costs high - freight accounts for 17% of the production cost.

Road is the preferred mode for transportation for distances less than 250kms.
However, industry is heavily dependant on roads as the railway infrastructure
is not adequate - shortage of wagons.

Industry inputs

Highly capital intensive industry.

Nearly 55-60% of the inputs controlled by the government.

Facing problems due to power shortage.

Coal availability and quality affecting production.

Mini plants realisation of revenue lower than large plants, survival difficult.

Capacity Additions

Buoyed by the strong demand, increased capacity utilization and highly remunerative
price levels many companies have been planning major capacity additions. According
to the latest ICRA Industry Monitor report, installed capacity of the cement industry is
expected to increase to 186 million tonnes per annum (mtpa) by end of 2013-14, 219
mtpa by end of 2011-12, and up to 241 mtpa by end of 2012-13.
The Anil Dhirubhai Ambani Group (ADAG), by incorporating a new arm,
Reliance Cement, plans to set up four cement plants of 5 mt capacity each
with a total investment of US$ 2.54 billion.
Dalmia Cement (Bharat) Ltd plans to invest 14 billion rupees to morethan-double its capacity to 8 mt by March 2009. 3
Binani Cement plans to invest around US$ 457.95 million over the next
three years to put up two Greenfield plants each with a capacity of 2.5 to 3
mt.
Burnpur Cement plans to invest US$ 2.54 billion over the next 7-8 years to
increase cement grinding capacity from 0.3 million tonnes per annum
(mtpa) to 10 mtpa.
Jaiprakash Associates will invest US$ 1.01 billion by 2013 to increase its
cement capacity by more than three-fold to 25 mt.
Grasim Industries is expanding capacity by 10.2 mt at subsidiary
UltraTech by spending US$ 885.38 million.
Along with the investment in Greenfield projects, the Indian cement industry has also
witnessed a flurry of mergers and acquisitions within the domestic players, bringing
smaller players under the umbrella of larger companies, and larger companies coming
under the umbrella of global players like Holcim and Heidelberg. For example, the
top two groups in the industry, Aditya Birla Group and Holcim Group, now control
more than 40 per cent of total capacity in the country.

10

Future of Cement Industry

Demand drivers
Infrastructure & construction sector the major demand drivers. Some
demand determinants

Economic growth

Industrial activity

Real estate business

Construction activity

Investments in the core sector

Future
Signs of a revival

growth in the housing sector

central road fund established for national highways and

railway over bridges to provide the necessary impetus

expansion plans, greenfield projects on the anvil

Capacity likely to be 126.9 mn. tonnes by 2013-14

By 2011 - 1.9 mn tonnes addition expected

2012-2013 - 2 mn tonnes

2013 - 2014 - 5 mn tonnes

Demand - supply balance expected in the next 12 - 15 months

Higher capacity utilisation likely in the future
Encouraging trend in demand due to pick-up in rural housing demand and
industrial revival
Industry likely to grow at 8-10% in the next few years

11

Company Profile:
Shree Cement is among the top ten Cement makers in India. The company is one of
the most cost-efficient Cement producers in the country. Shree created major
landmark in 2013-14 with an operating margin of 45%, one of the best in world
cement industry.
With corporate office in Kolkata, the company presently has plants located at Beawar
& Ras in Rajasthan. An aggressive capacity expansion drive currently underway will
add two clinkarisation unit at Bangur city Ras and two grinding unit at Khushkhera, in
Alwar district. Shree Cement Ltd. is making ahead with vision of 20 million ton by
2015.
Shree is Indias second fastest mid-sized growing company (according to a Business
Today survey). Shree serves prime market in North India. The company currently has
the highest market share in Rajasthan and Delhi, the second highest in Haryana and
distinguished positions at the top in Punjab, West Utter Pradesh and Uttaranchal.
The company multi-brand portfolio consists of both OPC & PPC offers like Shree
Ultra Ordinary Portland Cement, Shree Ultra Jung Rodhak Cement, Bangur Cement
and the newly established Tuff Cemento 3556.

Locations:
Shree Cement Unit I & II is located at Beawar, 185 Kms. from Jaipur off the DelhiAhmedabad highway. Amongst the plants in the state it is nearest from its marketing
centers.
Bangur Cement Unit (III,IV,V & Vi) is lacated at RAS,28 Km from Beawar in pali
Dist.
Shree Cement Grinding Unit (KKGU) is located at Khush Khera Dist. Alwar Nearest
to Delhi.

12

2009-10

2009-10

2010-11

2010-11

2011-12

2011-12

13

2012-13

2012-13

2013-14

2013-14

Bangur Cement
Bangur Cement is not merely a brand; it is also a new business model at work. And a
very successful one at that.

World-class cement
A high-powered and independent marketing and sales team was organised to craft a
new branding and distribution strategy. A market-gap analysis found that there were
few cement brands that addressed a particular segment - the individual house builder.
This was an extremely quality conscious customer bent on getting the best for his
home. This was a customer who wanted to feel privileged and distinguished from his
association with a particular brand. Bangur Cement was launched as a premium brand
to cater to this niche. To drive home the claim of a cement meant for the privileged,
Bangur Cement was positioned with the tagline 'Sasta Nahin, Sabse Achhaa' (Not
cheap, but the best). With aim of conveying its international standards.

The Challenge:
Bangur Cement was launched in December 2005 and since then it has been
consistently available in the market. In this short span of time, it has done quite well
in making its presence felt in the market and has been successful in capturing a decent
market share. But with the presence of a number of competing brands in the market,
challenge confronting the company is to know about market perception of Bangur
brand into existing market, and how to increase the market share.

14

Research Process:
Problem Definition:
The first step in any research project is to define a research problem. A research
problem, in general, refers to some difficulty which a researcher experiences in the
context of either a theoretical or practical situation and works to obtain a solution for
the same. This stage involves discussion with the decision makers, interview with the
industry experts, and analysis of secondary data. After going through all above
process in the context of the cement industry and Bangur Cements especially, some
key problems are;
Analyzing the importance of the various elements of the marketing mix
(product, price, promotion, and service ordering) individually and how to
optimize the marketing mix to enhance market performance.
To identify the key purchase behaviour of customers.
To identify the customers perception about Bangur Cement.
To identify the key competitors, and elements of competition on the
existing market.

Research Tittle: To study the market perception of Bangur Cement vis--vis

leading brands regarding price, quality and promotional support.

15

Research Objective
The key Research Objectives are:
To identify key brands present in Delhi and Faridabad, their prices and
schemes offered to dealers.
To find the perception about Bangur Cement in the market.
To measure the advertisement effectiveness/brand recall of Bangur Cement.
To get suggestions to improve the image of Bangur cement from business
associates.

Research Plan
It involves decisions on Data sources, research instruments, sampling plan and contact
methods.

Data Sources:

Secondary Data
Primary Data

Survey: Survey is undertaken to learn about peoples knowledge, beliefs and

preferences. Primary Data is collected through the survey.

16

Operational Definitions of the Variables

The success of product in the market: The success of a product is defined
here as the success of its marketing strategy in driving the dealer to sell a
brand and a consumer to buy a brand. Respondents are asked how much the
various elements of the marketing mix drive the brand. Product success is
determined by its sales.
The retail price of the cement: The final price that a retail consumer pays to
obtain a single bag of cement. The effect of the retail price is studied by
understanding the relationship between the sales of the various brands of
cement and their retail price. Also its role in cement marketing is studied by
asking respondents to allot weights to various elements of the cement
marketing one of which is the retail price.
The benefit provided to the dealer by each brand: Each brand provides
special benefits to all its dealers to enhance the brand preference in the mind
of the dealer. The various benefits offered to the dealer affects the dealers
drive to sell a particular brand or push that brand which provides him with the
maximum benefit.
Margins which are calculated as a difference between the retail price and the
billing price to the dealer to which the sum of all monetary discount may be
added.
Billing price is the price at which the company sells the cement bag
to the dealer.
Cash discounts are discounts offered to the dealer on each bag he
purchases from the company. The discount is given in the bill at the
time of purchase or may be given monthly.

17

 Trade discounts/Quantity discounts given to dealers monthly,

quarterly, or half yearly.

Some brands also offer an exclusive discount to its exclusive

dealers to reward their loyalty. This discount is usually offered
annually.
Benefits in kind: some brands provide dealers with special benefits and
schemes in terms of gifts or tour packages organized by the company. This
may holds social gatherings as well as special events for dealers.
Additional benefits in terms of payment credit period, freight, rate difference
adjustment etc.
Some brands provide an extended credit period to the dealers to
clear pending payments thus giving the dealer the flexibility to pay
at ease.
Rate differences in cement prices may be adjusted monthly by
some brands so that dealers who have bought at a higher price are
at the same level as those who purchase when prices fall.
Freight and Unloading charges are handled by brands in different
ways.

FOR billing: freight and unloading charges included in the

billing price.

Ex billing: billing price not inclusive of freight and unloading.

Dealers pay additional for these services.

18

The type of dealers: Dealers belong to two categories, Multibrand (ie having
dealership of more than one brand) or Single brand (Exclusive) dealers who
choose to have dealership of a single brand only.
Promotional activities of the various cement brands: Advertising and publicity
done by each brand.
Cement Quality: The perceived quality of the various brands by the dealer as well
as consumer.
Brand image is the opinion or idea formed in the market about the perceived
benefit of a particular brand.

Services provided by the brand: in term of timely availability of product to meet

demand. Technical support as well as dealer support.
Dealers biases and personal preferences: dealers personal reason and
relationships with companies that may influence brand preference.
The product: only PPC cement brands considered. PPC means Portland Pozzolana
Cement. It is manufactured by blending a mixture Ordinary Portland Cement and
Pozzolana materials such as Fly Ash, in proportions not less than 15% and not
more than 35% by weight of cement. The fineness of PPC will be greater than
OPC.
Seasonal effects: Season may be defined in terms of time and climate according to
which cement sales in the market may fluctuate.

19

Success of the product

QUALITY

TECHNICAL
SUPPORT

DEALER
TYPE

BENEFITS
IN KIND

Success of product
Increased SALES

BENEFITS IN
CASH/MARGINS

20

BRAND
VISIBILITY

PROMOTIONAL
SUPPORT

DEALER
LOCATION

Effect of the chain on price levels

The chain consists of the company followed by the stockist than the dealer/wholesaler
and the retailer.

Company

Stockists

Wholesaler/Dealer
Consumer
Retailer/Sub-Dealer

The company decides a price level to be maintained for its brands. The stockists are
people who are a touch point or the point of contact between the company and the
chain ahead. They are also people who store the materials in return of a commission
from the company. They do not affect the prices to a great deal, i.e. they do not disturb
the prices set by the company.
Wholesalers/Dealers/Distributors are those individuals, merchants, or business firms
who act are the medium between the company on one hand and industrial consumers,
retailers and general consumer on the other. They are one of the most important

21

agents in the supply chain and is solely responsible for pushing a particular brand of
cement in the market. Wholesaler is responsible for controlling the supply or outflow
of quantity of cement in the market. It is mainly because of its efforts that one brand
becomes famous. Generally company sets a margin for the wholesalers keeping in
mind the price levels it wants to maintain, but the wholesalers reduce there margins to
increase there volumes to earn more. This is mainly when the brand is price sensitive.
Even at times the wholesaler sells at the same price at which it gets from the
company. The reason for selling the product at such a low price is the annuity it
receives from the company at the end of a specified period, generally a year. It is
based on the volume so they try to maximise these annuities by increasing the
volume. This disturbs the prices of a particular brand in the market in the long run and
results in low prices or low sales.
Retailer or the sub dealers are the last middlemen in this chain of distribution, which
ends with the final consumers. The retailer is an important intermediary as it
maintains a direct and constant link with the consumer. He occupies a strategic
position in the distribution system. They generally get a 5 rupee margin. They
generally do not play much with the margins but are also volume conscious not
because of incentives but for the net income. They look to only reduce margins when
there net income is increasing. This is for the retailers dealing primarily in cement. In
some markets the competition is so tough that the retailer have to sell the particular
brand at a very low margin or at the same price as it is getting from the wholesalers.
At times they even sell at below the price at which they get from the wholesalers. This
generally happens when the retailer is selling other construction materials with
cement and is getting higher margins on those materials and they dont want to loose
their old customers. This further disturbs the price levels in the market.

22

Sample Size
Target Group: This study was aimed at the various cement dealers and builders in
Delhi and Faridabad. Only multibrand dealers were chosen who may or may not be
dealing in Bangur Cement. Delhi was divided into four regions North, South, East
and West so that each region is covered systematically.
A structured questionnaire was administered in order to obtain an insight into dealer
opinion as well as to gather concrete information about what schemes were being
offered in the market by various brands and where Bangur Cement stands.

Sample Size:
PLACE
NORTH DELHI
SOUTH DELHI
EAST DELHI
WEST DELHI
FARIDABAD
TOTAL

MULTIBRAND DEALERS VISITED

27
15
24
25
16
107

23

Location based Sample Distribution

Sample Distribution in Delhi (total sample size-91)

Sample Distribution in Delhi and Faridabad (total sample size-107)

24

Analysis of Secondary Data

25

NORTH DELHI
Sales trend of Bangur Cement in Metric Tonne(MT)

Percentage of sales Dealer-wise

In North Delhi, 42% of Bangur dealers contribute to 76% of sales where as 58% of
Bangur dealers contribute to only 24% of sales. Hence company should provide more
support and try to build a solid relationship with those dealers who lift more of
Bangur Cement.

26

SOUTH DELHI
Sales trend of Bangur Cement in Metric Tonne (MT)

It is clear from the graph that Bangur cement is doing well in South Delhi market,
although graph is going down during nov-dec but these are only seasonal variations.
Sales of bangur cement is highly dependent on the performance of Business partner
also and it seems that business partner is working well in this region.

27

Percentage of sales Dealer-wise

In South Delhi, 45% bangur dealers contribute to 87% of sales whereas 55% dealers
contribute just 13% of sales. Spending time, effort (of field officers) and money
(promotional support) on these 55% dealers is useless as they are not yielding any
productive results. Spending time, effort and money on those 45% dealers will help in
solidifying relationship with them and might increase sales also.

28

EAST DELHI
Sales trend of Bangur Cement in Metric Tonne(MT)

TOTAL SALES OF BANGUR CEMENT IN EAST DELHI LAST YEAR - 19802.05 MT

29

SALES TREND OF 3 BIG DEALERS IN EAST DELHI

The graph is almost similar to the graph of whole east delhi sales trend. I found two
reasons for the decline of sales:
Lack of company support and improper service (availability and supply of
material).
East delhi lies at the UP border where price of bangur cement is less as compare to
Delhi, hence there is infiltration problem.

PERCENTAGE OF SALES DEALER-WISE

30

In East Delhi, 32% of Bangur Dealers contribute to 70% of sales and 68% of Bangur
dealers contribute only 30% of sales. So its better for the company to concentrate on
those 32% and divide advertising budget among dealers keeping this in mind.

31

DEALERS VIEW
The company made a good start when the Bangur Cement was launched, it was very
enthusiastic, the quality and packaging was also good. But suddenly the employees
changed and whatever was committed was not fulfilled the dealers, also the
complaints about quality started coming. For the 3 months duration there was no
proper supply and no support from the company thats why the sales declined
drastically. Company people visit once in 7-10 days whereas other brands field officer
visit us every alternate day (Ambuja, Ultratech and ACC major players in the East
Delhi market). To get back the same position, the company needs to start from the
step 1.
Price mainly drives the market and the dealers mainly push that brand which gives
them higher profit as compare to others. Brands like Ambuja, ACC and Ultratech sells
itself as they are well established in the market, although they sell at a premium but
they assure the profitability of the dealers by giving them hidden discounts.
Promotional support provided by these companies is also good (in terms of wall
paintings, shutter paintings, boards and pop material). The main reasons for their
success is:
Brand image
Support from lower end
Quality Product
Past performance
Good distribution network
Advertisement
Easy availability

32

Services

Since Bangur Cement is new and there were numerous quality fluctuations when it
was attaining pace so people are quite reluctant to buy this brand, we need to push this
brand. Hence company needs to go for aggressive marketing to establish itself in the
market again.

33

WEST DELHI
Sales trend of bangur Cement In Metric Tonne (MT)

Percentage of sales Dealer-wise

34

Survey Findings
Analysis of Primary Data

35

Whole Delhi
Sales trend of Bangur Cement in Delhi last year in Metric Tonne
(MT)

Mo

Apr-013

May-13

Jun-13

Jul-13

Aug-13

Sept-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

nth
Sale

12055.05

13017.4

11286

8743.

9970.45

10869.70

8686.7

9005.20

5349.55

6368.1

6749.95

8231

s(in

50

.65

MT
)

Monthly Potential of Delhi per month in Trade Segment - 1.80 Lacs

Metric Tonne (MT)

Average Sales per month of various brands in Metric Tonne (MT):

Brands
Bangur

Average Sales per month(MT)

9194

36

Shree
Ambuja
ACC
Ultratech
JK Lakshmi
Shriram
Jaypee
Binani
Cemento
Birla Uttam
JK(N)
Birla Chetak
Others

25000
37000
10000
11000
12000
12000
10000
9000
2800
6000
9000
10000
17006

Percentage Share of Various brands in Delhi

37

38

Dealer Benefits in kind

Following are the benefits in kind provided by the company to their dealers;

Brand

ACC

Ultra
tech

Bangur

Ambuja

Shree
Ultra

Birla
Chetak

Birla
Plus

Birla
Uttam

JK
Lakshmi

Binani

JK (N).

Cemento

Domestic
Tour

NR

Internation
al
Tour

Gold
Scheme

Other
Benefit

Gift

Pariv
ar
card

NR

S.D.
schem
e

NR

NR

NR

NR

NR

Gift

NR

NR

N R No Response, S.D. Sub-dealer

* - last year

For the cement business Dealers, Masons/ Contractors are major influencer when it
comes to buying cement. From above result it is clear that well recognized brand like
Ambuja, Ultra tech, ACC which has a great market share also are having different
scheme to lure dealer, sub-dealer, Mason that helps to establish good relationship and
increases brand preference

39

Dealer Monetary Benefits

Following are the monetary benefits, billing and retail price structure offered by
various cement brands in Delhi.

Price per bag (50 kg bag) in Delhi

Brand

ACC

Billing

234 235 232

3
3
3

Cash
discounts
Trade
discount
Special
deiscount
Rate diff
Target
Discount
Quantity
Discount
Exclusive
Discount
Annual
Quarterly
Discount
Net Landed
Cost
Total
Discount
OPC/PPC
diff
Retail price
Wholesale
price
Total
margin
DAYS
CREDIT

Ultra
tech

0.5

Bangur

Ambuja

Shri
Ram

Shree
Ultra

Birla
Chetak

235
3

237 227.5 223

3
3
2

JK
Lakshmi

Binani

JK(N)

JAY
PEE

Cemento

Mangalam

235
4

228
4

224
3

226
4

231
3

223
3

1.5

1
2-3
2

3-5
2

4-5

1.5

2
1.5

1.5

2
2

10

11

10.5

2
2

1.5

2.5
2

2
2

7.5

13

14.5

10

235 235 232

230 231 226

238
233

240 230
234 222

230
225

232
228

230
223

230
225

40

230
223
0

Company (Brand) Analysis

In a short span of 6 months from its launch, it has been succeedd in making its
presence felt in the market. It was launched as a premium quality brand. Despite the
presence of other powerful brands in the market, it has been able to take its market
share because of the fact that it is the oly new brand to come to the market since last
10 years and has been made with the usage of latest world class german technology
which makes it of better quality than other existing brands in the market.
As per the market, wholesale prices of cement generally vary between Rs. 220 to Rs.
235 only. The variation in pricing is relatively low as compared to other industries
where price ranges are huge.. The cement market can thus roughly be divided into
three segments as per brand image and perceived quality into the low cost segment
(comprising of Shree,Cemento, JK Super, Mycem etc) , mid segment(Bangur, Birla
Chetak, JK Lakshmi, Birla Uttam etc.)and the premium segment (comprising of
Ambuja, Ultratech, ACC, Shriram etc).
Although bangur was launched as a premium quality cement but it lies in the mid
segment as per the market perception.
This has happened mainly due to negative publicity of Bangur by Shree and Cemento
people. There is lot of intra-brand competition existing in the market. So Bangur has
to compete with this as well as premium segment brands also.

41

Current Bangur Ratings

To get the current picture, respondents of the survey were asked to rate Bangur brand
over the various parameters on a scale of 1 to 5 with 1 being lowest and 5 being
highest. Then the ratings of all parameters were averaged out over all respondents and
average ratings are plotted in a bar graph. Below is the bar graph showing the average
rating of various parameters.

42

Comparison of Bangur Cement with other brands

Quality

When Bangur was launched there was scarcity of cement in the market. The company
launched 53 grade cement and the quality was superb at that time. Every other brand
available were PPC and Bangur offered OPC. But later on, quality degraded and there
were numerous fluctuations in the quality in a very short span of time. So it harmed
the image of Bangur a lot.

Price

43

The survey shows that the price at which Bangur Cement is selling is not appropriate
because the perception is that bangur lies in mid segment and it charges price of
premium segment.

44

Availability

45

Promotional Support/ Advertisement

Bangur is not a market leader, even in many places it is not among the top three brand
also. Perhaps the main reason behind this may be very less brand awareness.
According to respondents, the advertisement compaign of bangur cement has been
very sluggish. Dealers of Bangur cement are not at all satisfied with the overall
promotional support provided by company in the form of TV advertisement, POP
materials and stationary items, Wall paintings, Shop painting, Hoarding, Trolly
painting, Dealer/ Mason/ Customer meetings, Technical support/ assistance,and
Training program. Respondents of the survey were asked to rank various brand
regarding promotional support and advertisement on a scale of 1 to 5,with one being
indicating lowest and 5 being highest. Then the ranking of all the brands were
averaged out over all respondents and average ranking were plotted. The Bar Graph
given above shows the average ranking of various brand.
To increase the brand awareness, aggressive promotion needs to be carried out
ensuring its ffectiveness in making a mark. Also as survey results confirm that its the
contractors, masons who is the ultimate decision maker in choosing a barad, so efforts
need to be made to build long term relationship with masons by designing our
promotional program in a way to best ensure their understanding and satisfaction.

46

Profit Margin

Among the respondents of survey, Bangur brand is perceived as a less relative

profitable brand. As dealers play a prominent role in sales of a brand every possible
effort need to be made to make a strong dealer network.
Respondent claims that they have been making sales through their personal efforts in
the absnce of aggressive marketing by the company. Majority of the masons are using
cement because they trust the dealer or the dealers are taking full responsibility about
the performance of cement. Dealers are just selling the cement on their goodwill. So
they expect addtional benefit of any form - monetary or kind.

47

Overall Brand Rating of Various Brands

Ambuja emerged as market leader with overall brand rating of 5 out of 5, followed
by Ultratech and ACC with overall rating of 4.62 and 4.42 respectively. Bangur has a
overall rating of 2.74 out of 5 and it is at 8th position.

Advertisement effectiveness/Brand recall of Bangur Cement

48

The advertisement campaign of Bangur Cement has been very sluggish according to
the dealers. The dealers complained of the low frequency of advertisement although
71.42% of dealers recalled the punch line Sasta Nahin Sabse Acha.

Out of 91 dealers surveyed in Delhi, 78 dealers complained of low advertisement.

49

Brand Recall

Out of 91 Dealers surveyed in Delhi, 65 dealers were able to recall the Bangur
Cement punchline. 71.42% seems to be good and it shows that Bangur Cement made
a good start when it was launched.

50

Ad Medium Effectiveness: The survey made the respondents rate various

advertisement mediums on a scale of 1 to 5, 5 being highest and 1 being lowest. The
results show that the TV commercials are the biggest source of generating good
publicity/awareness. Wall paintings are the next best medium followed by POP
material. Tractor trolley Paintings are effective in rural areas.

In House Brand Competition

51

Out of 91 dealers surveyed in Delhi, 43 dealers said that their exists intra brand
competition.
From the above bar graph, it can be stated that Delhi market is affected by intra brand
competition. Since Bangur is positioned as a premium brand therefore other two
brands Cemento and Shree Ultra is trying to associate itself with Bangur Cement.
People working for Cemento and Shree Ultra are trying to do this by saying that
there is no difference between all three brands, only price and name differ but the
quality is same because all three are using the same raw material, process and
packaging unit is also same.
This type of intra brand competition is not only harmful for Bangur Cement but also
harmful for Cemento and Shree Ultra, because all three brands are involved in
diluting brand image of each other and all are lagging behind to competition with
other top brands like Ambuja, ACC, Ultratech etc.

52

FARIDABAD
Market Potential per month-35000 MT

Sales trend of Bangur Cement in Metric Tonne (MT)

53

Sales of various brands in April-14

54

Percentage share of various brands in Faridabad

Ultra tech has emerged as a market leader in terms of average sales per month with a
market share of 25.70%, followed by Ambuja with a market share of 24.28%. Bangur has a
market share of 7.14% and is at 5th position.

Overall rating of various brands in Faridabad

55

56

Price per bag (in Rs. , 50kg bag) in Faridabad

Brand

ACC

Bangur

Ambuja

232
3

Ultra
tech
232
3

Billing
Cash discounts
Target/trade

232
3
2

Unloading

charges
Net
landed

Shri
Ram

Birla
Gold
212
3

JK
Lakshmi
230
4
2

Binani

Cemento

Mycem

234
3

Shree
Ultra
226
3

230
3

230
3

223
3

221

219

213

discount

219.5

217

cost
Annual
exclusive
OPC/PPC diff
Retail price

213.5

211

12
232

2
12
232

15
230

235

223-

220

227

224-226

230

220-224

Total margin
Wholesale

12.5
229

15
230

11
228

15
232

226
13
220

215

224-225

16.5
226

223

12
218

price
DAYS

CREDIT

Wholesale and Retail Prices

57

There is not much gap between the retail prices of Premium and Low price
brands. The margin of at most 10 rupees was found between Premium and
Low price brands.
The Retail price of any brand is not fixed and is depended on the quantity
of purchase, the urgency of requirement and the payment system adopted.
This shows how and why a Retailer charges different prices from different
consumers.
Higher the quantity, lower the price. This shows that the industry is
volume conscious rather than margin conscious.
A considerable amount of cash discount is offered for ready payment.
This

shows that the market is cash sensitive. This is mainly because the

dealers have to pay ready cash either on order or on delivery.

The margin on retail sales is approx 5 rupees and the margin on wholesale
depends upon dealers and quantity. Most of the dealers I met where into both
wholesale and retail and the said there margins where approx rupees 5 on both
but they even reduced there margins considerable on bulk orders.
Met few stockists, Shri Ram and ACC, tried differently to extract prices from
them. In one place I was a bulk buyer and in other I wanted to become a
dealer. In both places they where stubborn and highly reluctant in disclosing
the prices and margins and other offers attached with the cement.

58

Price Variation
The major problem that small dealers came up with is the price variation. If dealers
lift material from company depots than they have to pay Rs. 6 per bag as Freight
charges.
But if the order is big (more than 250 bags) than there is direct trolley movement
from khushkera plant that delivers the material at the dealers place and they dont
have to pay Rs. 6 per bag for the freight.
Here comes the problem for small dealers who order only 100-150 bags. They pay
Rs.6 extra for the freight and hence they sell cement at higher price whereas big
dealers will sell at lower price and will encroach into others territory to increase its
sales.
Hence company should make this compulsory for all the dealers despite of quantity of
material they lift that they will lift material from company depots only.

59

Problems/Complaints of Dealers
1) Quality perception of Bangur Cement:
The market perception is that all the three brands Bangur, Shree Ultra and Tuff
Cemento are being feeded from the same unit and even from the same pipe; this is
doing more harm to the brand as among the three brands only Bangur is being sold at
a premium of five rupees.
Now among the dealers and retailers its a matter of discussion that if the quality of all
the three brands is similar why they should spend five rupees more on bangur.
Inconsistent Quality
Builders and few dealers have complained of numerous quality fluctuations in a very
short span of time, which resulted in increased number of quality complaints, but now
quality has been improved.

2) Supply Service Problem

There were instances when the company is having surplus materials at their depots
and sometimes not a single Bag. Dealers generally complain of getting material in 2-3
days from ordering. Sometimes OPC is available, sometimes it is strictly prohibited.
3) Lack of attractive schemes till date For Dealers and Retailers
With the arrival of Foreign Schemes for dealers we hope situation will be much more
different and will be in our favour.But still we dont have any retailer retaining
schemes i.e We dont have any retailer oriented schemes like that of ACC, Grasim,
JP .Because schemes not only give the retailers the direct monetary benefits but gives
them the feeling of association with the company.

60

4) Less aggressiveness
Bangur has been less aggressive in recent times and the criteria of measuring
aggressiveness is Profitability of Dealers and Promotional campaign of the Brand
which contain many things like Ad material(Banners ,pen ,Pads etc),Mason, Architect
and Customer meets. Wall and shop paintings and Retailer based schemes.
Company is conducting mason meeting once in a year and no architect and customer
meets. Wall Paintings are very rare in every area.

5) Supply from Rajasthan

Areas like Faridabad which lie on Rajasthan border is facing a severe problem of
Bangur Cement being supplied from the dealers of Rajasthan at a lower price. Though
this is a problem with other brands also but as Bangur is new and is not so well
established and known brand in the market, so it could be at much greater loss.

61

Observations
First in First out: It has been observed that first in first out is not being
followed at dealers warehouses. There is only one entry as well as exit gate.
This might cause a problem as old cement is not good for use in terms of quality
(setting and strength).

Inventory: It is found that 90% of Bangur dealers surveyed maintain a

inventory level of 7-10 days which is not advisable so as to maintain the quality
of cement.

Bangur Certificate: The colour of Bangur certificate that is given to the

business associate is very dull as compare to various brands (Shriram-bright
yellow and bigger in size). When I visited dealers as a customer I did not find
that certificate in the visible area. Some have placed in their drawers and some
have placed at the back where customer dont even look.

Wall paintings: In whole Delhi I have just seen around 8-10 wall paintings
of Bangur Cement whereas Ambuja and Ultratech have their wall paintings in
every 2 km. Being new in the market, company is still not making any effort to
increase its visibility.

Stationery Items: 72% of Bangur dealers visited are not satisfied with the
stationery items provided by the company.

Dealers awareness: Through the survey it has been found that dealers
dont even know how cement is manufactured. I visited few dealers who have
dealership of TATA TISCON along with Bangur Cement dealership, those
dealers were fully awared of manufacturing process but dont know about the
manufacturing process or composition of cement.

62

Management Take
Bangur has an added advantage of being a part of the Shree Cement Family which is welll
established and has presence in the market from the last 40 years. But, during the survey and
discussion with the employees in the office, I came to know that management has asked
Bangur marketing people not to approach those areas and projects where Shree Ultra has their
presence or has already approached (in non-trade segment only).
And whatever be the case Bangur Cement always has to sell its material at a rate higher than
the rate at which Shree Ultra sell its material by rupees five.
So, if Shree Ultra increases its rate by rupees two or more, Bangur also has to increase its rate
by rupees two or more.
This restriction has limited the growth of Bangur Cement to some extent. The intra brand
competition is diluting the brand image of Bangur Cement.

63

The Biggest Advantage

Bangur has set up an amazing network of dealers and retailers in Delhi and
Faridabad. It has around 100 dealers in Delhi and around 25 dealers in
Faridabad. It has presence in remote locations of Delhi also like Nathupura,
Bakhtarpur, Pushta etc. Setting up such a vats network in a short span of time
is really a difficult task.

64

Results
Ambuja emerged as the brand to receive highest brand rating in terms of brand
image with an overall rating of 5 out of 5, followed by Ultratech, ACC,
Shriram with an overall rating of 4.62, 4.42, 4.06 respectively. Bangur has
come up with overall rating of 2.92.
In terms of average sales per month, Ambuja emerged as leader with an
average sales per month of about 37000 MT (metric tonne). Bangur stands at
8th position with an average sales of about 9194 MT.
The market share of Bangur Cement is coming out to be 5.1% in Delhi.
The strength of Bangur Cement is its vast network and Cost effective
manufacturing (khushkera plant nearest to Delhi).
The weakness of Bangur Cement is its lethargic attitude towards dealers, low
brand awareness and negative marketing by Shree and Cemento.

65

Recommendations
Differentiation: Shree, Cemento and Bangur needs to be differentiated
in the market well in terms of price and quality. Untill and unless it is made
clear in the market by the management itself that Bangur is a premium brand
and its quality is far better than Shree and Cemento it is difficult to increase
sales and hence market share and profitability.

Dealers

Training

(QUALITY):

Program,

Product

specific

Negative marketing by Shree and Cemento people is

harming companys brand image a lot. Hence there should be a training

program for dealers(plant visit) which will make them aware of the
manufacturing process as well as that Bangur quality is not same as Shree and
Cemento. This will help in improving brand image of Bangur.

Higher margins : Ambuja and Ultratech are giving higher discounts to

dealers as compare to Bangur. So if Bangur has to compete with these brands
so it should also give higher discount as market is price sensitive.

Discount on Trial Period:

Since the market is price sensitive and

dealers mainly push those brands which gives them higher margins (except
Ambuja and Ultratech which sells itself). So company should give Rs. 1
discount per bag to dealers for 2-3 months and check whether they are able to
increase the sales or not.

Customer Information: It should be made mandatory for all dealers

to maintain a proper record of all the customers who buy Bangur cement from
them- quantity, date, address and phone number. A customer feedback form is
also a nice way to know our customers view point.

66

Customer Meets: The company needs to define its customers first likearchitects, builders, individual households and contractors, and than should
conduct meetings with them to get them know about the Bangur Cement, its
quality.

Test Certificates: As company will be having the list of its customers, it

should provide test certificates within two days of purchase to the customers
which will prove that they have purchased cement from the company
authorised dealer and have purchased genuine quality of cement.

Frequent visits by field officer:

Differentiation on price and

quality is the foremost requirement than comes the role played by field
officers. Since it has been found that Bangur people visit dealers once in 7-10
days and other brands like Ambuja and Ultratechs field officers visit dealers
every alternate day. So it will be in favour of the company if there are frequent
visits of field officers to dealers, this will help in solidifying relationship with
the dealer and will show that company supports well.

Advertising budget:

For every region there is small %tage of dealers

that are contributing higher to the total sales. Hence the advertising budget
should not be same for all the dealers. The dealers who contribute more should
be supported more for promotion (wall paintings, stationery items etc.)

Advertising through Bus Panels, Metro and Auto

Rickshaws:

Since Bangur Cement is new to the market and it needs

aggressive marketing to establish itself among premium segment brands so it

should spend heavily on advertising for brand awareness. Auto rickshaws are a
very good medium to advertise as they are moving objects which would mean
that they will catch more visual attention.

67

Customer Feedback form

Customers Name:_____________________
Construction Site Address:______________
Contact No.___________________________
Is it your first time interaction with Dealer Name
Convinced to buy Bangur Cement by Dealer

__Yes

__Mason

__No
__Architect

__Other

Performance of Customer Service Engineer or Sales Executive:

1. Knowledge of workman-ship

__ Good

__Ok

__Needs Improvement

2. Behaviour

__Good

__Ok

__Needs Improvement

3. Dedication

__Good

__Ok

__Needs Improvement

4. Presentation & Attitude

__Good

__Ok

__Needs Improvement

Remarks:_____________________________________________________________
_____________________________________________________________________
Performance of Dealer:
1. Knowledge of the product

__Good

__Ok

__Needs Improvement

2. Behaviour

__Good

__Ok

__Needs Improvement

3. Delivery of Material

__Good

__Ok

__Needs Improvement

4. Presentation & Attitude

__Good

__Ok

__Needs Improvement

Remarks:_____________________________________________________________
_____________________________________________________________________
Total Rating for the services provided by the Dealer:
Excellent

Good

Ok

Needs Improvement

68

Appendix

69

Tables
1. Sales of Bangur Cement in Delhi in from April 013 to
March 14 (Metric Tonne)

Mon
th
Sale

Apr-013
12055.05

May-13
13017.4

Jun-13

Jul-

Aug-13

Sept-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

11286

13
8743.

9970.45

10869.70

8686.7

9005.20

5349.55

6368.1

6749.95

8231.6

s(in

50

MT)

2. Sales of Bangur Cement in North Delhi in from April 07 to

March 08 (Metric Tonne)

Mon

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sept-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

th
Sale

2980.4

3339.9

3090.8

2163.25

2356.9

3132.4

2477.05

2931.8

1514.4

1701.1

1967.85

2329

s(in

.8

MT)

3. Sales of Bangur Cement in South Delhi in from April 13 to

March 14 (Metric Tonne)

Mon

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sept-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

th
Sale

2752.15

2774.15

2449.6

2427.8

3071.95

2749.8

2498.8

1931.4

1544.85

2004.35

2144.8

2713

s(in

.25

MT)

70

4.

Sales of Bangur Cement in East Delhi in from April 07 to

March 08 (Metric Tonne)

Mon

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sept-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-08

th
Sale

3326

3255.05

2513.8

1705.55

1953.2

1898.9

1276.65

1548.85

481.05

664.9

617.7

556.

s(in

MT)

5. Sales of 3 big dealers in East Delhi in from April 07 to

March 08 (Metric Tonne)
Mon

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sept-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

th
Sale

1636.9

1399.1

1142.6

735

751.8

723.45

470.65

646.45

154.6

367.65

293.75

143.

s(in

85

MT)

6. Sales of Bangur Cement in West Delhi in from April 07 to March

08 (Metric Tonne)

Mon

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sept-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

th
Sale

2995.9

3648.3

3231.7

2446.9

2588.4

3088.6

2434.2

2593.15

1806.25

1997.75

2019.6

2631

s(in

.8

MT)

71

7. Sales of Bangur Cement in Faridabad in from Aug-07 to April-08

(Metric Tonne)

Month Aug-13

Sept-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

Apr-14

Sales

2277

2342.55

1504.95

1766.55

1802.9

1788.9

2314.1

1854.8

2519.25

(in
MT)

72

SUMMER PROJECT REPORT

ON
Market perception of Bangur
Cement vis--vis leading
brands regarding price,
quality and promotional
support.

Submitted by:
SHUBHAM AGRAWAL
IBM (20130112
Manglayatan University
Beswan Aligarh

73

Table of Contents
Topics

Page

No.
Executive Summary

Cement Industry in India

Company Profile

12

Research Process

15

Operational Definition of Variables

17

Success of the Product

20

Effect of the Chain on Price levels

21

Secondary Data Analysis

25

Wholesale and Retail Prices

58

Price Variation

59

Problems/Complaints of Dealers

60

Observations

62

Management Take

63

The Biggest advantage

64

Results

65

Recommendations

66

Customer Feedback Form

68

Annexure

69

74

Acknowledgement
I would like to express my sincere gratitude to Shree Cements Ltd for giving me the
opportunity to work on this project, and thereby familiarizing me with the practical
applications of my knowledge in the industry besides theoretical teachings in the
classroom.
I wish to express my profound gratitude to Dr. R.J. Masilamani, Birla Institute of
Management Technology, Greater Noida, for his constant guidance. He has been a
constant source of inspiration and his critical evaluations during the course in the
institute have helped me to complete this project properly.
I am especially thankful to Mr. P.S. Sharma, Mr. Harish Gehlot as well as Mr. Sunil
Chaudhary for their continuous guidance and support. I would also like to thank Mr.
Ajay Sharma and the entire team in the Delhi marketing office for their constant
support and timely help.
I am also thankful to the respondents of my questionnaire, the Cement dealers and
few builders in Delhi and Faridabad for taking out time to respond to the survey and
for sharing their opinions with me.

Neelu Taneja

75

76