A REPORT ON MARKETING STRATEGIES FOLLOWED BY AMBUJA CEMENTS

Submitted by: HARSHAD NITIN LUNAVAT SECTION: B ROLL NO: 2011089

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GRADE33)  The 43 grade OPC is the most popular general-purpose cement in the country today.  The 43 grade OPC can be used for following applications:  General Civil Engineering construction work  RCC works(preferably where grade of concrete is up to M-30)  Precast items such as blocks. in proportions not less than 15 per cent and not over 35 per cent by weight of cement. About 75% of all the cement produced goes into ready-mix concrete. The product mix can be classified on the basis of the types of cement available. The production of 43 grade OPC is nearly 50% of the total production of cement in the country. The Portland Pozzolana Cement is ideally suited for the following construction viz.PPC is manufactured by blending a mixture of ordinary portland cement and pozzolana materials such as fly ash. flooring etc. walls and all types of structures.  Ordinary Portland cement (OPC) (GRADE-43. bridges. Hydraulic structures. in proportions not less than 15 per cent and not over 35 per cent by weight of cement. sidewalks. which is used for buildings. Types of cement Produced at Ambuja Cements are:  Mortar Cement  Portland Pozzolano cement (PPC) . It is sold in packets of different quantities: 1. tiles. GRADE-53. Mass concreting works. OPC contains a mixture of portland clinker and gypsum ground to a very fine powder.PRODUCT MIX: Cement industry does not have a large product mix and same applies for Ambuja Cements.  White Cement PPC is manufactured by blending a mixture of ordinary portland cement and pozzolana materials such as fly ash. The rest is used for building materials such as concrete blocks. pipes etc  Asbestos products such as sheets and pipes  Non-structural works such as plastering. pipes and 2 .

Product differentiation between two brands is next to impossible. The only way the products in the product line can be differentiated through is the 3 . PROBLEMS IN PRODUCT MIX  High Production Costs. Once bagged cement becomes a perishable commodity. Ambuja Nagar in Gujarat.pre-cast slabs in road building and repairs and other nation building applications.  High Transportation cost.Due to the bulky nature of product and sensitivity to external factors like rain or humidity we need to transport it in the right possible way. The Group's principal activity is to manufacture and market cement and clinker for both domestic and export markets.Due to requirement of commodities like Coal for production and high consumption of fuel required. which was changed after Holcim bought 46% stake in Gujarat Ambuja Ltd. Gypsum  Low or less product differentiation. Due to limited products they are named under the product family name of Ambuja Cements. The company was initially named Gujarat Ambuja Ltd.There are 370 companies operating in the organised sector in India. Major raw materials used include Lime. BRAND NAME STRATEGY The company and its product is named after the place where its first manufacturing plant was set up .e. Accounts for approximately 25% of the total costs. Nowadays cement manufacturing companies also provide ready mix concrete for construction sites. With the top 5 players accounting for 40% of market share.  High competition. Clinker.i.

the onus 4 . Their cement plants cover strategic locations in all these regions. PLACE: DISTRIBUTION INVOLVED CHANNELS They have a nationwide reach with strong footprints in the West. Cement is an intermediate product -. OPC. lt also has its trademark logo of a macho holding building which highlights the message “GIANT COMPRESSIVE STRENGTH”. From there on. Even today the most preferred medium is bags. or a concrete manufacturer.it either goes to a builder. storage. Only the dimensions will change. North and East India.different grades the cements have and the different types of cement i. There are various types of bags made out of PP/ HDPE and with or without lamination. white cement. Apart from it there are Jumbo bags which are used to pack bulk quanitities. is a preferred medium for bale wrapping and rain protection in the form of Tarpaulin. minimizing pilferage. sanla as mentioned earlier. it does not require any specialized designing of product package to attract customers as other products do.e PPC. The package should not allow entry of water as cement hardens when it comes in contact with water. or small contractors for repairs and renovations. It is a perfect and simple set-up. The major concern is ease of transportation. and this trend will continue. Off late Woven fabric which is the first stage of Woven sacks. Thus. A wide dealer network of over 26000 dealers and retailers nurtured on empowered partnership enables Ambuja cement to reach even the tiniest village. The package of Ambuja cement is yellow in colour with woven ends and has hooks so that the porters find it easy to load and unload without hampering the main package. in the sense that manufacturers sale cement to dealers. Visual appeal is not a major concern. The concept of a two-tier distribution chain comprising of manufacturers and dealers functions very well. The sac should be lightweight as the product itself is bulky. PACKAGING Woven sacs are the most cost effective packaging.

Distributor network in cement industry is highly dominating and companies are compelled to hire as they do not really have that rapport and touch with the end consumer of their product. There may or may not be physical ownership of goods. dealers and sub dealers take order from buyers and place it to the companies. What was predominantly sold in bags is now being sold in bulk. Indian cement companies are now beginning to adopt innovative strategies that have revolutionized the way cement is sold in India. Also. However. Company invariably hires c & f agents or transport cements to own or government warehouses either via roadway or railways. Apart. In the second case. with a view to adding value to their products. 5 . from this. albeit in different quantities. transportation of goods and final delivery.is on the dealers who established contact with builders. with the mushrooming of large plants engaging in cut-throat competition to grab a bite of the market pie. from c & f agents or warehouses the cement is transported to the dealers/distributors and in turn to sub dealers who finally sell it to the end users. the distributors have storage facilities as well which help control well in the entire supply chain as they are the ones who bring orders and therefore are directly responsible for the business that a manufacturer would do. manufacturers have now started selling concrete instead of cement. and sold to retailers. government and institutional buyers. In case of exports. Domestically. co ordinate and monitor the timely dispatch of said orders. cement reaches the nearest port via roadways or railways and is then transferred to the importing country.

the costs of raw material used and other factors. Ambuja Cements is a premium brand having an edge when it comes to cost because of their transportation system they have minimized costs and thus. 6 . the variations in regional supply and demand. Apart from this the prices keep on varying throughout the year depending upon the demand and supply dynamics. DISCOUNTS: The company does provide discount in case of bulk purchases.PRICING On studying the prices across 6 different districts of Maharashtra a slight variation in Prices were observed which can be observed through the following table. The profit margins are already low in cement industry thus discounting is not practiced in case of small quantities. difference in the intensity of competition amongst local retailers and distributors. DISTRICT Pune Nagpur Solapur Ahmed Nagar Mumbai Aurangabad PRICE in Rs/50 kg 279 289 284 276 276 282 This variation in prices can be observed all over India. have a price advantage. The major factors contributing towards the variation in prices are the regional transportation costs.

seasoned with an emotional (almost humanitarian) twist. Ambuja Cements is one of the companies that realized the potential of brand as a differentiator.  USE OF ADVERTISEMENTS IN PROMOTION Ambuja cements are the pioneer of branding in cement industry. The retailers or distributors play an important part in influencing the end customer. etc. Though the end customer the purchase is influenced by opinion leaders viz. These activities include hoardings during major festivals like Ganesh festival in Maharashtra. The TVC opens on a shot of the caretaker of an orphanage introducing the children to a Mr Choksi. wall paintings and boards at retail stores. Thus. They act as the connecting link. but is unable to bring it down. architects. “Sir. They also interact with retailers and distributors who are the channel members representing the company to the end customer.. It also uses outdoors for advertising to enhance the brand recall. The following morning.. masons. to attract them Gujarat Ambuja cements sales teams organize seminars for contractors and masons. Even in the eighties. A television commercial (TVC) for Ambuja Cement. At his signal.. Choksi tries his best. They also act as a channel between the company and contractors. last 7 . but is not able to demolish the orphanage. The little boy tries to explain again. As he wonders about the strength of the building. contractors. par last time. the heartless Choksi arrives with bulldozer in tow. created by Grey Worldwide.PROMOTION  ROLE OF SALES PERSONAL IN PROMOTION The major customer base which buys cement in India even today is the household owner. At this point. “Arre sir. Ambuja cements started its activities for building the brand.” But he is shushed by an older boy. but is stopped midway again by the elder one. the bulldozer delivers a powerful blow on the building. She tells them that Choksi is going to build a hotel on the site of the orphanage. Ambuja cements are the first cement brand to start advertising on television. a little boy says to Choksi. the little boy says. According to Superbrands report. revolves around the story of a wall that doesn‟t break.

featuring Boman Irani. Yeh Deewaar Nahin Tootegi.time bhi yeh deewar nahin tooti thi (Sir.” Apart from this Ambuja cements also come up with merchandises often wherein the masons. the children and their caretaker start dancing in joy. t-shirts with the logo of Ambuja cement to enhance the brand recall. “Ambuja Cement. which was released six years ago).” he says.  SALES PROMOTION SCHEMES: The sales promotion schemes are not directly implemented for the end user but channel members are the one who benefit from sales promotions. After that humorous attempt. came some ads which presented the brand in a sentimental vein (the Dadi ad). agrees was rather disastrous. adding that the brand will now strike a balance between emotion and humour.” As a disappointed Choksi leaves with his men. 8 . Ambuja has been harping on its „giant compressive strength‟ proposition. Gujarat Ambuja Cements has worked out an equity-incentive scheme for its retailers. so much so that the Bhai Bhai ad was recalled. the brand even created the visual of a „giant‟ and then a broken hammer. a move that Vivek Deshpande. contractors are gifted with caps. Ambuja Cement‟s vice-president for brand and promotions. keychains. Gujarat Ambuja Cements has an „I can Initiative‟ which gives an individual an opportunity in its sales team to come up with its own idea. “Our new ad is a correction of this. Perhaps its most memorable ad was the one involving two estranged brothers trying to break down the wall that runs between their houses (Bhai Bhai. Apart from this they also felicitate the best performers. They provide performance based incentives. this wall could not be broken down). even last time. and the voiceover concludes.

000 tonnes. and the new arrangement. is a ploy to usher in greater loyalty for the Ambuja brand.000 tonnes. On an average. a retailer who sells a minimum of 200 tonnes (equivalent to 4. Gujarat Ambuja has also launched a host of other performancelinked incentive schemes for its retailers which include gold coins and foreign trips. 9 . they are given the option by the dealers to convert their cash incentives into equivalent number of shares in GACL. retailers are given the option to own shares in the company. GACL stockists will have to meet a sales target of 2. Once the minimum target is achieved.Under the plan. For enjoying a 10-day trip to the US or a12-day vacation to Europe or 160 grams of gold. stockists sell around 300-400 tonnes a month. The company is. Besides. which will shoot up to 300 shares (cash equivalent of Rs 1. Thus. The scheme will be valid till May 31." said a company official. sales of 300 tonnes of cement will fetch a GACL stockist 45 shares of Gujarat Ambuja. The understanding is between the dealer and the retailer and the company is no way involved in the share purchases. analysts say. 2000. not creating any new shares for rewarding the retailers. and with this new scheme they will be tempted to push Ambuja cement. he is entitled to three shares for every additional 20 tonnes sold. Cement retailers generally hawk various cement brandsavailable. The same tonnage sales will also entitle the dealer to a six-day trip (for two) to Singapore or Bangkok. however. Instead. Also on offer are insurance covers upto Rs 5 lakh for personal accidents and scholarships for their children.000 bags) will be eligible for 30 shares of the blue-chip cement maker.04 lakh at Tuesday's prices) once sales touch 2. "Instead of giving cash incentives. The scheme will be a novel route to cement the fortunes of the stockists with that of the company and will help Gujarat Ambuja leverage on the inherent strength of its stock. The company has worked out a mechanism under which one particular scheme can be availed of in combination with other available schemes as well.

php They have a corporate social responsibility cell “The Ambuja Cement Foundation” which has been at the forefront of environmental and social activities. and has the effect of tying the retailer closely to the company. It operates near the companies manufacturing plants. for instance. Thereafter. The scheme is an innovative incentive to retailers.com/pages/Ambuja-CementFoundation/107287509345492 10 .ambujagrihashilpi. A retailer selling 400 tonnes of cement. integrated rural development projects. The link for the website is http://www.To win gold coins.facebook. PUBLIC RELATIONS ACTIVITIES They have a website GRIHA-SHILPI which assists customers by assisting in different aspects of building a home. They also help provide expert help wherein experts visit the construction site to guide you and even test the concrete slabs. Website: http://www.com/GrihaShilpi. that works with the rural communities surrounding Ambuja‟s manufacturing sites. The Ambuja Cement Foundation is the Corporate Social Responsibility wing of Ambuja Cements Ltd. The combination may be altered to suit the retailers' wishes. The Foundation is engaged in a variety of people-centric. the retailer can win two grams of gold for every 25 tonnes of cement sold. Retailers can also avail of a combination of two incentive offerings depending on his sales performance.org/ Facebook page: http://www. It also provides a list of contractors and their contact numbers across different districts in India.ambujacementfoundation. the retailer will have to sell a minimum 100 tonnes upon which he becomes entitled to 8 grams of the yellow metal. can both enjoy a vacation to Goa and win 16 grams of gold.

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