You are on page 1of 24

DHAKA UNIVERSITY

knowledge based
innovation practices a
small industry in
Bangladesh
A case study of cement Industry
Submitted to:
Course name:
Submitted by:
ID:

Samina Yasmin

Page 0

Contents
Introduction......................................................................................................................................2
Organization of the business development function........................................................................4
Cement in Bangladesh.....................................................................................................................5
Demand and Supply.........................................................................................................................9
Situation Analysis/ SWOT analysis...............................................................................................12
MARKETING OBJECTIVES.......................................................................................................14
COMPETITIVE ADVANTAGES.................................................................................................15
Target Market.................................................................................................................................17
CHOOSING A TARGET MARKET.............................................................................................18
Marketing Mix...............................................................................................................................20
MARKETING IMPLEMENTATION...........................................................................................21
Bibliography..................................................................................................................................21

Samina Yasmin

Page 1

Introduction
Creation of growth through development of new business is a vitally important capability of the
firm, but top-line growth is difficult to sustain. Practices that contribute to new business
formation are called a variety of names - corporate venturing, corporate entrepreneurship,
entrepreneurship, new product development, commercialization, or business development depending when they take place in the life cycle of the firm or the product, the actors that carry
them out, the extent of risk or novelty that they entail, and whether they involve the creation of
new internal or external business units. New business formation activities vary in complexity and
formality from day-to-day entrepreneurial or customer prospecting activities to highly structured
approaches to new product development, alliancing, and venturing.
Business development [BD] practices are a subset of new business formation practices, a variety
of corporate entrepreneurial behavior. Business development aims to create growth through
expansion or extension of existing product-markets or through development of product-markets
that are new to the firm. BD practices are part of the innovation process but are not subsumed by
technology development, product development, or marketing and sales functions. As part of the
family of corporate entrepreneurial practices, they may lead to the establishment of new business
organizations or units within or outside the firm, but this is not a necessary or even typical
feature of business development practices.
Business development capabilities are especially important in the Information Technology
industry, where successful firms typically generate half or more of their revenue from products
introduced within the past few years. The BD capabilities of such firms are critical growth
enablers. Despite the importance of business development capabilities in firm growth processes,
these capabilities have not been well described in the management literature. Technological,
financial, entrepreneurial, and marketing capabilities in IT firms have received attention from
researchers. The business development activities that have received most attention are those that
involve relatively larger degrees of organizational change that entail initiatives with relatively
greater degrees of risk – venturing, strategic alliancing, and acquisition activities. Normal
business development activities in most IT firms involve lesser degrees of risk and organizational
change (but enough risk that deliberate risk management is part of the firm’s set of capabilities).

Samina Yasmin

Page 2

In small firms, business development capability accumulates in developers through a
combination of industry experience, learning-by-doing, and mentoring. Little formal training is
involved. When explicit, highly structured BD routines exist, they are generally found in medium
and larger firms. Even in these firms, much of business developers’ knowledge is tacit. Because
business development capabilities are highly tacit and often relatively unstructured, they are
difficult for competitors to observe and copy. Additionally, since business development
capability aims at relationship development and care, business development capability is
embedded in business relationships. These features of BD capability have important implications
for managers and executives, innovation support agencies, and business educators.
Research reported here was motivated by the desire to understand the origins and nature of firmlevel business development capabilities in IT SMEs in a regional innovation cluster. In many
regional economies, the home market is too small to offer significant growth opportunities to
indigenous IT firms. Growth-oriented IT SMEs therefore need to develop business linkages with
markets outside the home region.
In this paper we describe business development capabilities in IT SMEs in a regional economy,
providing a perspective on BD practices in this industry. We draw primarily from the literatures
on corporate entrepreneurship, strategic management, and innovation in the Information
Technology industry. Our discussion is based on an analysis of business developer job
descriptions and an analysis of BD functions and attributes derived from in-depth qualitative
interviews with 26 business developers from IT
Business development as entrepreneurial capability In this section we situate business
development capabilities within the conceptual frameworks provided by the organizational
capabilities and corporate entrepreneurship literatures.

Organization of the business development
function
Samina Yasmin

Page 3

How is the business development function organized? Structured BD routines of ac-company
highly structured product innovation processes. New product development processes and sales
processes are often organized as a stage-gating funnel (Crawford and De Benedetto, 2000;
Rosenau, 1996). The sales funnel is for following up deals while the BD funnel is for following
up opportunities. Unlike the sales funnel, which usually covers one to three months, the BD
funnel is much longer – in one of the firms in our sample possessing a highly structured BD
process, it is an 18-month process that links ideation to commercialization. The BD funnel
determines which ideas will be pursued, when the firm will pursue them, and what resources will
be required.
Consequently, the BD funnel helps the firm to operationalize its business plan, bring focus to its
efforts, and achieve the desired benefits from its ideas. The steps in the business development
funnel are Priorities, Blueprint, Build, Take to Market, and Customer Care. The business
developer’s work occurs during the pre-contract and contract stages, with little involvement in
the post-contract stage of new business implementation and day-to-day business delivery.
Business developers are responsible for finding opportunities and preparing new business.
Business developers provide input into requirements elicitation, help prepare business cases and
project plans, contribute to the operational readiness and implementation checklists, and
complete project closure and benefits review audits to get approvals of decision teams at
different stages of the funnel.
In smaller IT firms, BD capabilities are expressed through relatively unstructured routines.
Smaller firms have fewer layers of management and fewer specialized units, and so business
development is often the responsibility of multifunctional individuals, including owners.
Managers’ involvement in new business development requires leveraging firm competences to
create new value propositions. Therefore, for example, to engage in business development,
managers must be familiar with the range of firm competences (Gosselin and Heene, 2000).

Cement in Bangladesh
Samina Yasmin

Page 4

Cement sector is the largest increase sector in Bangladesh. There are 70+ cement factory in
Bangladesh

and

daily

production

capacity

is

16.687

Million

MT.

Unique Cement Industries Ltd. : Unique cement industries ltd established in the year 2002.
The factory is built with modern machinery imported from Germany and China with production
capacity of 1800 M/T per day. Unique cement industries ltd. has ISO 9001:2000 Certificate.
They have two brands of cement in the local market namely "FRESH" and "MEGHNACEM".
Holcim (Bangladesh) Ltd. : Holcim (Bangladesh) Ltd started its operation in this country with
of the acquisition of the-then Hyundai cement. Subsequently it acquired United Cement and
Saiham

Cement.

Holcim (Bangladesh) Ltd is affiliated with the Holcim Group worldwide and is one the largest
multinational cement producers in the world with manufacturing in over 70 countries. The group
has a production capacity of more than 120 million tons of cement per year.
MTC Cement Industries Ltd. : MTC Cement Industries Ltd established with the technical cooperation of CITIC engineering of PRC in year of 1998 is situated on the embankment of the
river Meghna. There is a two unit cement plant with capacity of 1200 MT per day. TIGER
BRAND Cement started its commercial voyage on july 2001. Currently MTC is on an expansion
program in pagla with a small 150 MT per day capacity cement grinding plant.
Lafarge Surma Cement Ltd. : Lafarge/cement mills is setting up the only modern, integrated
cement manufacturing plan known as Lafarge Surma Cement Ltd. in Bangladesh at Chattak
under Sunamgonj district. The majority of Lafarge Surma Cement Ltd. Shareholding (60%) is
held by a 50/50 joint venture company bewteen Lafarge and cementos molins. Founded in 1833,
Lafarge operates in 75 countries, employing 77,000 people. In 2002, the group generated annual
sales of Euro 14.6 billion and globally holdstop ranking positions in Cement, Aggregates &
Concrete, Roofing and Gypsum. Cementos Molins is a renowned spanish cement company with
an annual revenue of Euro 485 million and net profit of Euro 70 million. Operating in Spain,
Argentina, Uruguay and Mexico, it produces Portland and Calcium-Aluminate cement, Concrete
and Precast concrete, Aggregates and Special purpose mortars.

Samina Yasmin

Page 5

Lafarge Surma Cement Ltd. will extract and procss the basic raw materials like limestone and
shale from its from its own quarry in Meghalaya, India. A 17 km crossborder belt conveyor will
be installed to link the quarry with the cement plant for transportation of raw materials.
A massive land filling and site development has been completed on the 90 acre plant site. The
construction and erection is also. The plant will initially produce 1.2 millions tons of cement per
year.
Premier Cement Mills Ltd : Started its production in March, 2004, Premier is the second
largest

cement

manufacturer

in

Bangladesh.

With a total installed cement capacity of almost a million tons per year at Muktarpul,
Munshiganj, the Company is recognized as a leading cement producer with abundant supply of
raw materials, low production cost and an energy efficient operation. The Company currently
employs 216 persons and has an extensive distribution system throughout the country.
Their transportation subsidiaries, with three prominent transport companies in Bangladesh,
operate a large fleet of trucks to distribute cement products in bags almost anywhere in the
country.
The Company was founded in 2001 as the private cement producer in Bangladesh, with a factory
in Muktarpul, Munshiganj. The Company started production in March, 2004 with Unit 1, which
had an installed capacity of 730,000 tons of cement per year, and would be followed by Unit 2,
also

at

730,000

tons

of

cement

per

year,

by

the

mid

of

2005.

The factory is equipped with world-class European technology built in Denmark and Germany.
Within the span of first 5 months, the company has achieved the ISO 9000-2001 certification
from TUV, with highly skilled employees.

Samina Yasmin

Page 6

Industry Overview: Growth & Present Scenario of Cement Industry in Bangladesh
The cement industry of Bangladesh is a rapidly developing sector of the economy. Over the
years, the amount of construction projects have followed an increasing trend as the urban growth
rate has boosted all across the country in places like Chittagong, Bogra, Mongla and others in
addition to the expanding capital city, Dhaka.
Currently, domestic production is unable to meet the complete demand for cement.
Approximately 60% of the demand is met by the local cement industry while the rest is
imported. According to the Banglapedia, per capita consumption of cement in the country (38
kg) is fairly low compared to India (89 kg), Indonesia (127kg), Malaysia (582 kg) and Thailand
(642

kg).

Cement has not traditionally been a major product for the country due to low availability of
required natural resources to produce it. In addition to that, in less developed regions cement was
not a required raw material for construction of buildings. Over the years, however, cement
emerged as a substitute to traditional construction materials and by the mid-1980s, with an
increase in hefty infrastructure projects, accelerated rate of urbanization and increased
construction of multistoried buildings, there was a sharp increase in its demand.
Samina Yasmin

Page 7

One intriguing aspect of this industry is the reliance on the import of clinker. Except Lafarge
Surma Cement Ltd., a multinational cement manufacturing company, all cement manufacturers
go through the expensive of importing clinker which involves high freight cost, import duties
and other handling charges. Hence, this is a scope for other companies to minimize costs by
producing the raw material locally and increasing their competitive performance.

Situation

Analysis:

SWOT

Internal

Factors

An examination of the interviews that we took revealed that most companies are satisfied with
the quality of the finished product. In this intensely competitive market with over seventy
companies are trying to outdo one another, high quality of product is not just a strength – it is a
necessity. In addition to that, each of the firms assessed has strong financial backup with little or
no long term liabilities. Strong links with the distributors is also one common strength among the
firms.
Over

reliance

on

limestone

may

be

a

weakness

for

the

local

firms

When it comes to weakness, it is difficult to get out the actual information from managers as they
are reluctant to give such an internal insight into the company. As we can see, they mentioned
“uneven competition” as a weakness because some of the companies have to pay VAT while
others do not. However, external study suggests that other weaknesses may include: heavy
reliance on limestone-based cement and inadequate investment in research and development
which

could

have

External

improved

future

competitiveness.

Factors

High tax rate on imported cement is an opportunity for local producers. They can better compete
Samina Yasmin

Page 8

in the market by selling at a lower price. In addition to that, there are high freight costs involved
with import of cement which can be avoided by most of the local manufacturers. However, as
mentioned before, most local firms still rely on imported clinker, which reduces the advantage
they

had

over

foreign

firms

in

terms

of

cost.

Reduction in global prices of cement has become a threat for the industry. In addition to that,
high cost of carriage and raw materials make profit maximizing a big challenge. Moreover, the
slow progress in terms of infrastructural development also poses problems for some companies.
Weak road linkages result in delayed distribution and inaccessibility of certain regions.

Access

to

Finance

The cement manufacturers we analyzed have a fairly easy access to finance mainly because of
goodwill. The tough competitiveness in the banking sector itself creates a an opportunity for the
firms to gain better offers and become more accessible to long and short term loans of differing
proportions. However, as we know there are over seventy firms competing within the market,
this cannot be true for all firms. Many small manufacturing companies are operating within the
market, and their access to finance will surely not be as easy as those that have established
themselves

as

Demand

a

and

known

brand.

Supply

When it comes to supply, the main raw material is limestone. Many firms import this from India
while others get local supplies. The interviewees reckon that the local suppliers should be given
better training on producing higher quality limestone and more research and development should
be carried out in this sector so no company has to go for import of limestone.
The demand for cement is somewhat stable, according to the managers and the growth rate is
more or less average. To improve this condition, they urge the government to provide subsidies
Samina Yasmin

Page 9

and

greater

consistency

in

the

Annual

Development

Competitive
Meghna

Program.

Scenario
Cement

Mills

Ltd.

It is generally agreed that the present scenario is extremely competitive. With multinational
companies as well as local companies trying to grab a bigger slice of this growing market with
extensive advertising that try to attract, inform and persuade the viewers – this is one of the most
emulous industries of the country. Naturally, there are questions asked of fair play. Some
companies have complained that a handful of firms are gaining unfair advantage by avoiding tax.
The competitive scenario maybe improved by ensuring proper collection of taxes. We can also
see that there is a scope for production of clinkers locally, which has a growing demand as well.
Therefore, investment in this particular part of the industry will also increase the
competitiveness.
When it comes to globalization, most firms mention the high freight costs as a big hindrance for
the development of the industry. It makes imports more expensive (which is a good thing in case
of finished products, but a problem in case of raw materials) and also export of locally
manufactured cement less price-competitive in the international market. Low global prices of
cement

also

deter

firms

from

vying

for

export

deals.

The cement industry of Bangladesh is one of the fastest growing, intensely competitive sectors of
the economy. With plenty of scope to invest in R&D, and plenty of scope to utilize the advent of
new technology, this is a sector that is bound to get more competitive. While existing firms
suggest that this is a nearly saturated industry and new entrants are not encouraged, with the
increasing urbanization all across the country and an escalating rate of construction of high rise
buildings, this opinion may be questioned. Our group is extremely grateful to have had this
opportunity to explore one of the most vibrant business sectors of Bangladesh, as it was an

Samina Yasmin

Page 10

insightful learning experience. Last but not the least; we would like to thank all the interviewees
who took valuable time off their busy schedule to help us out in our survey.
History

of

CEMEX

Cement

Bangladesh

Ltd.

1999
In November, 1999, CEMEX made its inception in Bangladesh
2000
Started sales and distribution activity in May 2000 by importing finished goods from Indonesia.
Sales and distribution was limited at that time.
On April 2000, ground breaking ceremony of local plant and started construction of own
manufacturing unit.
2001
On 21 April, started own manufacturing and started sales of own manufactured product instead
of import of finished product.
CEMEX International

CEMEX is a global building materials company that provides high quality products and reliable
service to customers and communities throughout the Americas, Europe, Africa, the Middle East,
and Asia. Their operations network produces, distributes, and markets cement, ready-mix
concrete, aggregates, and related building materials in more than 50 countries, and maintain trade
relationships with more than 100 nations.
This company was founded in Mexico in 1906, and grown from a local player to one of the top
global companies in our industry, with close to 47,000 employees worldwide.
CEMEX has a rich history of improving the well-being of those it serves through its efforts to
pursue innovative industry solutions and efficiency advancements and to promote a sustainable
future.
Samina Yasmin

Page 11

CEMEX

Cement

Bangladesh

Ltd.

In the year 2000, CEMEX has expanded its operations in Bangladesh. Built with the most
advanced state of the art European FLS technology, the CEMEX plant in Mahmudnagar, Bandar,
Narayanganj has a production capacity of 550,000 MT. CEMEX Cement Bangladesh Ltd. has
earned a well reputed respect for its finest quality and service, exceeding customers expectations.
The company is certified with ISO 9001 Quality Management System (QMS) and ISO 14001
Environment Management System (EMS), complying with quality and environmental standards
and ensuring strict adherence to CEMEX global standards. Currently CEMEX Cement
Bangladesh Ltd. is producing CEMEX brand Portland Composite Cement (PCC).CEMEX
Cement Bangladesh Ltd. is highly committed to maintain the consistency of the product quality
at any cost

Situation Analysis/ SWOT analysis
Strengths
The cement industry has much strength to be considered. Cement is, literally, the building block
of the construction industry. Almost every building constructed relies on cement for its
foundation. The cement business is a $10 billion industry, measured by annual cement
shipments. There is also a strong reputation behind the cement industry. Cement is a solid
material and consumers rarely have complaints about the product. Regional distribution plants
have also made cement widely available to any type of buyer.
Market share leadership
Hand tied to infrastructure growth
International diversification
Balanced sales: as a result of the incorporation of RMC, Cemex’s sales are balanced between its
subsidiaries based in the Bangladesh and the rest of the world.
International diversification: Cemex’s operations are geographically diversified, having a
direct presence in most of its main markets.
World-class cement producer: Cemex is an international leading producer of cement and
ready-mix concrete. In addition, since the acquisition of RMC Cemex is one of the world’s
largest traders of cement and clinker.

Samina Yasmin

Page 12

Vertical integration: Cemex owns a full-scale network of mining facilities, inland and Maritime
terminals as well as distribution centers.
Weaknesses
The cement industry is not without its drawbacks. The cement industry relies on construction
jobs to create a profit. But the cement industry heavily relies on weather. About two-thirds of
cement production takes place between May and October. Cement producers often use the winter
months to produce and stockpile cement, to meet demand. Another weakness is the cost of
transport; the cost of transporting cement is high and this keeps cement from being profitable
over long distances. In other words, shipping cement costs more than the profit from selling it.
Debt in USD, Income in foreign currency
US$ denominated debt: a large portion of Cemex’s total debt is US$-denominated and since
Cemex do not generate enough US$-denominated revenues to meet all of its US$- denominated
obligations, currency exchange variations could have a negative impact on Cemex’s financial
performance
Dependency on weather conditions: Cemex’s sales suffer a strong decline in periods of cold
weather in Bangladesh during the rainy season
Opportunities
The cement industry has opportunities as well. One such opportunity is the cement industry's
efficiency. The cement industry has recently streamlined its production efforts, using dry
manufacturing instead of wet, which is heavier and more time-consuming.
Innovation
Takeovers
High expansion rate in Bangladesh market
Cost synergies: Cemex estimates significant savings as a result of cost synergies resulting from
the RMC acquisition.
Long-term growth markets: Cemex’s strategy is primarily focused on markets with high
potential for long-term expansion

Samina Yasmin

Page 13

Cemex – Ready Mix USA joint venture: Cemex has the opportunity to consolidate its presence
in the Southeastern region of the US through Ready Mix USA’s local management team and
focus on customers.
Threats
The natures of the economy have uncovered a number of threats to the cement industry. The
cement industry greatly relies on construction. The current economy has lessened the number of
construction jobs, which in turn hurts the cement industry.
Politic changes
Political instability: political instability in certain countries could have a negative impact on
Cemex’s local operations
Competition against major players: Cemex competes in its main markets with other worldclass players such as Holcim and Lafarge
Rising costs of basic inputs: increments in the price of energy (primarily electricity and natural
gas) have a direct negative impact on output and distribution costs
Risks associated to RMC integration: the incorporation of the RMC Group is the first
integration of an international player into the structure of Cemex, which has to simultaneously
coordinate new operations on a global scale mainly focused on ready-mix and aggregates,
whereas cement has traditionally been Cemex’s core product.
Global recession: in an international recessionary environment Cemex’s sales will be negatively
impacted in its key markets

MARKETING OBJECTIVES
First marketing objective is to consistently market different types of high quality cement
products. To provide consistently products in the market, it is necessary to make sure that some
stock of the product is always available in the warehouses so that in case of any big market order,
the order can be fulfilled without any problem. This consistency can only be achieved when the
production process is totally interrupted and in case of any problem, the backup is always
available. The raw material for the production of cement should always be available; there must
not be interruption at any time.

Samina Yasmin

Page 14

This objective can become an opportunity when there is a sudden increase in the demand of
cement in the local market.
This objective can be converted in to threat if the transportation problem is not solved and the
company hasn’t enough trucks to deliver their products to the location where there is need of a
heavy demand. The oil prices will also play an important role in the transportation charges.
Second objective is to compete the market with quality products and efficient process. To
provide the quality products, it is necessary to use the best and the latest technologies in the
production process of the product. The process can be made efficient by optimum usage of
resources available and by decreasing the unnecessary expenditures which lead to the higher
production cost of the product.
When the product is of high quality and is made through efficient process then it will be of low
price with good quality. This will be the main strength of product if we can provide the high
quality product with comparatively low price. This objective will convert the weakness of
Cemex of high production cost of products into strength, when the process will be efficient and
use that technology which is less expensive and having a good quality.
These both objectives are consistent with the organization’s goal and mission. The mission of
Cemex Cement Bangladesh Limited is to put the customers first, flexible to the customer’s
needs, give them the highest quality, and deliver them the results. These goals are achieved with
the marketing objectives, when the product produced will be of high quality and produced
through a efficient process, and there will be consistency in the production of high quality
cement product, it will cost less and increase the profitability of the company, satisfy the need of
the customers and will be delivered to the customer what he needs.

COMPETITIVE ADVANTAGES
Leading position in attractive Bangladesh‘s grey cement market.
Cemex cement manufactures have consistently operated at the highest levels of capacity
utilization among Bangladesh’s five divisions. We believe this reflects the strong demand in
Bangladesh for cement products relative to supply. Further, based on capacity expansions
announced by cement manufacturers, we expect cement plants in Bangladesh to continue to
operate at high utilization levels and anticipate continued strong demand for our grey cement

Samina Yasmin

Page 15

products in the near and medium-term. We believe that we are well positioned to take advantage
of this demand, as the largest grey cement manufacturer in Bangladesh.
Proximity and access to large reserves of high quality limestone
We have access to large reserves of limestone for both our grey and white cement operations,
which we believe are sufficient to sustain our operations well into the future. Based on
independent geological surveys of different mines during 2008 to 2010, we believe that our
limestone reserves are sufficient to support our current and planned capacity for approximately
40 years for both grey and white cement. (Put in risk - assuming we are able to renew our
existing leases upon their expiry) As one of the first cement producers in Bangladesh, we were
able to choose our limestone reserves in an area with high quality limestone resources. In
addition to allowing us to produce white cement, which requires high quality limestone, it also
provides us with a cost advantage, as we are not required to purchase sweeteners to improve the
quality of limestone. Further, our manufacturing plants are in close proximity to our limestone
reserves, resulting in lower transportation costs. Finally, our mines that supply our white cement
plant at Bangladesh also have a supply of white clay, an important additive necessary for white
cement production.
Quality of products and strong brand name
We believe that brand name and reputation are important to retail purchasers of cement in
Bangladesh. We have built a strong reputation among cement purchasers by consistently
providing high quality products. We believe that there is strong customer awareness of our
brands, Cemex Cement (Titan), for grey cement in our principal market in Bangladesh, and
Cemex White (Sparta), for white cement across Bangladesh. Further, we believe that our brand
name and our reputation for consistently supplying high quality products provide us with a
competitive advantage in ensuring that cement dealers carry our products.
Extensive marketing and distribution network
We have a wide distribution network for grey cement in Bangladesh. We also have a strong allBangladesh distribution network for white cement. Our distribution network for grey cement
products consists of 44 feeder depots serviced by seven regional sales offices in Dhaka,
Narayangong, Rajshahi, Sylhet, Rangpur, Khulna and Chitagong. Our white cement network
comprises 20 feeder depots serviced by 13 regional sales offices in Dhaka, Narayangong,
RajshahiSylhet, Rangpur, Khulna and Chitagong.
Samina Yasmin

Page 16

In addition, we have more than 1,000 retail stores that stock our grey and white cement products,
as well as 15 sales promoters and four handling agents. We believe that the extent of this
network, and our relationships with our dealers, enables us to market and distribute our cement
widely and efficiently.

Target Market
A target market is a group of customers that the business has decided to aim its marketing
efforts and ultimately its merchandise. A well-defined target market is the first element to a
marketing strategy. The target market and the marketing mix variables of product,
place(distribution), promotion and price are the four elements of a marketing mix strategy that
determine the success of a product in the marketplace.
Strategies for Reaching Target Markets
Marketers have outlined four basic strategies to satisfy target markets: undifferentiated marketing
or mass marketing, differentiated marketing, concentrated marketing, and micromarketing/ niche
marketing.
Mass marketing is a market coverage strategy in which a firm decides to ignore market segment
differences and go after the whole market with one offer. It is type of marketing (or attempting to
sell through persuasion) of a product to a wide audience. The idea is to broadcast a message that
will reach the largest number of people possible. Traditionally mass marketing has focused on
radio, television and newspapers as the medium used to reach this broad audience.
For sales teams, one way to reach out to target markets is through direct marketing. This is done
by buying consumer database based on the segmentation profiles you have defined. These
database usually comes with consumer contacts (e.g. email, mobile no., home no., etc.). Caution
is recommended when undertaking direct marketing efforts — check the targeted country's direct
marketing laws.
The Psychology of Target Marketing
A principal concept in target marketing is that those who are targeted show a strong affinity or
brand loyalty to that particular brand. Target Marketing allows the marketer / sales team to
customize their message to the targeted group of consumers in a more focused manner.

Samina Yasmin

Page 17

Research has shown that racial similarity, role congruence, labeling intensity of ethnic
identification, shared knowledge and ethnic salience all promote positive effects on the target
market. Research has generally shown that target marketing strategies are constructed from
consumer inferences of similarities between some aspects of the advertisement (e.g., source
pictured, language used, lifestyle represented) and characteristics of the consumer (e.g. reality or
desire of having the represented style). Consumers are persuaded by the characteristics in the
advertisement and those of the consumer.

CHOOSING A TARGET MARKET
Market target simply means choosing ones target market. It needs to be clarified at the outset that
market targeting is not synonymous with market segmentation. Segmentation is actually the
prelude to target market selection. One has to carry out several tasks besides segmentation before
choosing the target market.
Through, segmentation, a firm divides the market into many segments. But all these segments
need not form its target market. Target market signifies only those segments that it wants to
adopt as its market. A selection is thus involved in it.
In choosing the target market, a firm basically carries out an evaluation of the various segments
and selects those segments that are most appropriate to it. In the previous paragraph, we
mentioned that to be of practical use, the segments must be relevant, accessible, sizable and
profitable. The evaluation of the different segments has to be actually based on these criteria and
only on the basis of such an evaluation should the target segments be selected. The firm must
assess the sales and profit potential of each; examine the worth of each segment from its
viewpoint “whether the segment is relevant to the firm, whether it is sizable, accessible,
attractive and profitable. It must examine alternative possibilities” whether the whole market has
to be chosen for tapping, or only a few segments have to be chosen, and if so, which ones. It may
look for segments that are relatively less satisfied by the current offers in the market from
competing brands. It must look at each segment as a distinct marketing opportunity. It must also
evaluate its resources and choose the segments that match its resources.
The points below explain the process of choosing the target market.

Samina Yasmin

Page 18

Choosing the target market is related to, but not synonymous with, market segmentation.
Segmentation is the means or the tool; choosing the target market is the purpose.
Segmentation can also be viewed as the prelude to target market selection.
Choosing the target market usually follows multi-level segmentation using different bases.
Choosing the target market involves several other tasks in addition to segmentation.
Looking at each segment as a distinct marketing opportunity.
Evaluating the worth of each segment (sales/profit potential).
-Evaluating

whether

the

segment

is:

3-Distinguishable
-Measurable
-Sizable
-Accessible
-Growing
-Profitable
-Compatible

with

the

firm’s

-Resources
Examining whether it is better to choose the whole market, or only a few segments, and deciding
which ones should be chosen.
Looking for segments, which are relatively less satisfied by the current offers in the market from
competing brands
Checking out if the firm has the differential advantage/distinctive capability for serving the
selected segments
Evaluating the firm’s resources and checking whether it is possible to put in the marketing
programs required for capturing the spotted segments with those resources.
Finally selecting those segments that are most appropriate for the firm.
Competitor’s Analysis
There are many competitors of Cemex Cement. Among them are both the established local
brands and also some multinational brands. The companies which are the competitor’s of Cemex
Cement are mainly those companies which are on the higher rating scale of Cemex Cement like
Shah Cement, Heidelberg Cement, Meghna Cement Mills ( Bashundhara Group), Holcim BD
ltd, Seven Circle, Unique Cement Industries, M.I. Cement Factory and Akij Surma. Be it in
Samina Yasmin

Page 19

terms of brand image, product quality or sales, each of these companies have their own
distinctive feature for which they are positioned in a higher rank than Cemex Cement. Thus
Cemex Cement sees these companies as their competitors as they are constantly fighting with
these companies to reach their desired position in the market. However the cement companies
which are just below Cemex Cement in ranking are also viewed as competitors and the company
always keeps a look out for these companies’ activities. It is so because these companies can take
the position of Cemex Cement any day. Thus both the cement companies performing better than
Cemex Cement and the ones performing at the same level as Cemex Cement are the competitor’s
of the company.

Marketing Mix
Product
Cemex Cement provides a low construction material- a type of cement which contains fly ash.
Cement making starts with purely organic materials delicately extracted from the earth, refined,
mixed with other all-natural materials, heated, and then milled.
Each stage of our proven process employs technologically advanced systems and is conducted
with respect for our natural environment.
Pricing
Focus on bundle pricing strategies: for example - monthly retainer; annual retainer; all services
bundled for a set rate; certain services bundled together for better pricing – e.g. employee
problem prevention, wrongful dismissal and severance proposals/packages.
Prices/billings compared and analyzed annually against top three competitors in the cement
industry in Bangladesh.
Costs analyzed monthly – cost containment and reduction a key strategy for competitive pricing
Promotion
Advertising programs: local newspapers, local radio, local magazines, business trade journals
Personal selling: Sales and Marketing staff; face-to-face
Direct marketing campaigns to targeted and existing clients; including permission-based email
marketing.
Website: search engine optimized; http://www.cemexbangladesh.com

Samina Yasmin

Page 20

Newsletter: hot topics in Financial Express
Place or Distribution
Order taking assistance issuing by fax, internet and mobile phone
Checking delivery status at the factory
Direct sales to business clients (this is also an advantage – you are close to your customers and
will better understand their changing needs) – keep in regular contact.
There are around 70 distribution centers across Bangladesh to distribute Cemex Cement.

MARKETING IMPLEMENTATION
The marketing unit can be organized by increasing the existing market and expanding the market
in the south zone of the country. They have to lower down their production cost to compete in the
markets of south zone in the country. Due to the high production cost, the company is unable to
compete in the south zone. The decision making unit has to make sure that they increase the
market share in the north zone and expand their market in the south zone where Karachi is the
main market in that area. Depending on the organization’s structure and the environment, the
first line and middle managers can be empowered to make decisions. If the demand for the
product is increasing rapidly in the market then the company has to increase the production to
capture the maximum market share. They have to increase the sale in the north area of country
by advertising in more areas.

Bibliography
Afuah, Allen, 2000. “How Much Do Your Co-opetitors’ Capabilities Matter in the Face of
Technological Change?” Strategic Management Journal 21: 387-404.
Alajoutsijärvi, Kimmo, Kari Mannermaa, and Henrikki Tikkanen, 2000. “Customer
Relationships and the Small Software Firm,” Information and Management 37: 153-159.
Amit, Rafi, and P.J. H. Shoemaker, 1993. “Strategic assets and organizational rent,”
Strategic Management Journal 14: 33–46.
Samina Yasmin

Page 21

APEC, 2003. “Trends in Economic Performance: a Long Term Assessment of Atlantic
Canada,” Atlantic Report 38(2): 2-7.
Balthasar, Andreas, Christoph Bättig, Alain Thierstein, and Beate Wilhelm, 2000.
“’Developers:’ Key Actors in the Innovation Process,” Technovation 20: 523-539.
Beal, Brent D., and Javier Gimeno, 2001. “Geographic Agglomeration, Knowledge
Spillovers, and Competitive Evolution,” Academy of Management Proceedings 2001, p. A1, 6
pp.
31
Becker, Markus C., 2003. The Concept of Routines Twenty Years after Nelson and
Winter. Copenhagen Business School: Druid Working Paper No. 03-06.
Beckstead, Desmond, Mark Brown, Guy Gellatly and Catherine Seaborn, 2003. A Decade of Growth: the Emerging Geography of New Economy. Ottawa: Statistics Canada.
Bresnahan, Timothy, Alphonso Gambardella, and Anna-Lee Saxenian, 2001. “’Old
Economy’ Inputs for ‘New Economy’ Outcomes: Cluster Formation in the New Silicon Valleys,”
Industrial and Corporate Change 10(4): 835-860.
Bresnahan, Timothy, and John Richards, 1999. “Local and Global Competition in
Information Technology,” Journal of the Japanese and International Economies 13: 336-371.
Buckman, Jim, Richard Cardozo, Curt Reimann, and Roger Schroeder, 1998. “Qual-ity,
New Business Formation, and the Future of the Corporation,” paper presented at the Conference
of the International Association for Management of Technology, Or-lando, February.
Canada, 2002. Achieving Excellence: Investing in People, Knowledge, and Opportunity.
Canada’s Innovation Strategy. Ottawa: Industry Canada.
Cooke, P. (2002). Knowledge Economies. Clusters, learning and cooperative advan-32
tage. London: Routledge.
Coviello, Nicole, and Hugh Munro, 1997. “Network Relationships and the
Internationalization Process of Small Software Firms,” International Business Review 6(4): 361386.
Covin, Jeffrey G., 1999. “Corporate Entrepreneurship and the Pursuit of Competitive
Advantage,” Entrepreneurship: Theory and Practice 23(3): 47-62.
Crawford, C. Merle, and C. Anthony De Benedetto, 2000. New Products Management.
Boston: Irwin McGraw Hill.

Samina Yasmin

Page 22

Cummings, Jeffrey L., and Jonathan P. Doh, 2000. “Identifying Who Matters: Map-ping
Key Players in Multiple Environments,” California Management Review 42(2): 83-104.
Dalziel, Margaret, 2001. “Large Firm-Small Firm Equity-Based Partnerships in the
Networking Industry,” Proceedings of the Administrative Sciences Association of Canada
(ASAC) annual conference.
Davis, Charles H. and Norbert V. Schaefer, 2003. “Development Dynamics of a Startup
Innovation Cluster: the ICT Sector in New Brunswick,” pp. 121-160 in D.

Samina Yasmin

Page 23