JANUARY 20, 2022

ULTRATECH CEMENT
SALES AND DISTRIBUTION MANAGEMENT

JOB JOSEPH – BD20031

KSHITIJ GUPTA – BD20033
MAANVI AGARWAL – BD20035
NIKUNJ PRATAP SINGH – BD20041
SAMIN BHATEJA – BD20052
SOORAJ KAMATH – BD20062
V LOHITA – BD20068

XLRI
Contents
Introduction ............................................................................................................................................. 2
UltraTech Cement ............................................................................................................................... 2
Competitors ......................................................................................................................................... 2
Shree Cements ................................................................................................................................ 2
Ambuja Cements ............................................................................................................................. 3
Customers ........................................................................................................................................... 3
Cement ................................................................................................................................................ 4
Current Distribution Strategy .................................................................................................................. 4
Project Objective..................................................................................................................................... 5
Project Scope .......................................................................................................................................... 5
Methodology ........................................................................................................................................... 5
Primary Research .................................................................................................................................... 5
Secondary Research ................................................................................................................................ 5
Relationship marketing: ...................................................................................................................... 5
Distributor Satisfaction: ...................................................................................................................... 6
Competitive benchmarking ................................................................................................................. 6
Observations: .......................................................................................................................................... 7
Insights ................................................................................................................................................ 7
Pain points........................................................................................................................................... 7
Recommendations ................................................................................................................................... 8
Short Term .......................................................................................................................................... 8
Advertising...................................................................................................................................... 8
Promotions ...................................................................................................................................... 8
Incentives ........................................................................................................................................ 8
Communication ............................................................................................................................... 8
Long Term .......................................................................................................................................... 9
Marketing Mix ................................................................................................................................ 9
Marketing Initiatives ....................................................................................................................... 9
Annexure:.............................................................................................................................................. 10
Introduction
India, the world's second-largest cement producer, represents more than 7% of the world's
installed capacity. India has a lot of development potential in the infrastructure and
construction sectors, and the cement industry stands to benefit the most. Recent initiatives to
boost the industry are the establishment of 98 smart cities. Several foreign players, including
Lafarge-Holcim, Heidelberg Cement, and Vicat, have recently invested in the country due to
appropriate foreign policy. The ready availability of raw materials for cement production,
such as limestone and coal, is critical in driving growth.
Overall cement output in India totalled 329 million tonnes (MT) in FY20 and 294.4 million
tonnes (MT) in FY21 and is expected to reach 381 MT in FY22. However, consumption
stood at 327 MT in FY20 and is expected to rise to 379 MT by FY22. Because India has a
large quantity and quality of limestone reserves all over the country, the cement sector has
enormous expansion potential.
UltraTech Cement
UltraTech Cement Ltd. is India's largest producer of grey cement, ready-mix concrete, and
white cement. Also, one of the world's leading cement producers. Its operations span India,
UAE, Bahrain, Bangladesh, and Sri Lanka. It is also India's largest exporter of cement.
UltraTech entered the white cement industry under the brand name 'Birla White.' UltraTech
Cement has a total annual capacity of 116.8 million tonnes (MTPA).

Top Cement Producers in India 2020

UltraTech Cement
4% 4%
5% Ambuja Cement
5% 31% Acc Ltd.
Shree Cement Ltd.
8%
Dalmia Bharat
Birla Corporation Ltd.
10%
India Cements Ltd.
The Ramco Cement Ltd.
12% 21%
Others

Competitors
Shree Cements
The primary products/services of Shree Cement Limited are cement and clinker. The
company's production operations are dispersed throughout six North and East India states
with a capacity of 44.4 MTPA for cement manufacturing. The company works in Rajasthan,
Uttarakhand, Bihar, Haryana, Chhattisgarh, and Uttar Pradesh. Shree JungRodhak, Bangur,
and Rockstrong are among the company's brands.
Ambuja Cements
Ambuja Cements Limited is an Indian holding company that produces clinkers and cement.
The company sells cement and cement-related items. They offer a variety of products for
both the B2B and retail markets. In addition, the firm co-owns two micro materials brands:
Alccofine, which comprises a variety of micro slag materials, and Dirk Pozzocrete, which
includes superfine fly ash. Alccofine micromaterials are employed in various building
projects, including metro rail, dams, roads, flyovers, bridges, and tunnels. Ambuja Cements
has a total annual capacity of 29.65 million tonnes (MTPA)
Customers
Customers can be categorized into Trade and Non-Trade customers:
Trade customer: Dealer/retailer/sub-dealer/whole seller who sells cement to the retail
customer. They are the direct customers of cement companies as they lift cement through the
authorized CFA of the company. Trade customers include customers who can buy cement
from a retail outlet. Mason/contractors/engineers/architect who builds housing infrastructure
and opts to purchase cement through distribution channels are retail customers.
Individual home builders: These are trade customers or retail customers who purchase
cement from cement retail stores and build private houses for their accommodation.
Non-trade (Industrial) customers: A consumer with a registered firm who purchases
substantial cement can purchase cement directly from sales points. The government is an
industrial customer. This category includes large builders and promoters.
Generally, there are five types of non-trade customer segmentation:
1. Builders and promoters: Private companies specialise in developing housing or
commercial complexes to sell them on the market. E.g., PS Group, Fort group, Merlin
Group, Riddhi Siddhi Group.
2. Big infrastructure contractors: These are corporate companies that handle main
civil construction projects for the government or private customers: water waste,
airports, major bridges. E.g., Jusco, L&T ECC, Simplex Infrastructure, Ramky
Infrastructure
3. Small projects contractors: These are small public or private contractors which
work essentially for government infrastructure projects at a smaller scale: roads,
schools, irrigation, etc. E.g., Block Government Office.
4. Manufacturers: These are industrial manufacturers who use cement as a raw
material for their production: ready-mix, AC sheets, or concrete blocks. E.g., Ramco,
RDC Concrete, Rigid bricks, RMC Ready-mix.
5. Expanding companies: These are private companies building new industrial units to
increase production. They consume cement for their purpose. E.g., Tata metaliks,
Ramsarup, Utkarsh Galva.
 Cement Demand in FY21

13%

10% Housing and Real Estate

Infrastructure

55% Industrial Development

Low-Cost housing
22%

Cement
Cement is a binder, i.e., a substance used in building that hardens, sets, and adheres to other
materials to bond them together. Cement is rarely used on its own; instead, it is utilized to
bind sand and gravel (aggregate) together. Cement mixed with fine aggregate creates mortar
for construction, and cement mixed with sand and gravel creates concrete. Concrete is the
most frequently used material, trailing only water as the most utilized resource on the planet.
Types of Cement: Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC),
Portland Slag Cement (PSC), and Super Grade Cement.

Current Distribution Strategy

Project Objective
To evaluate UltraTech's distribution network in the Delhi West region and provide
recommendations to strengthen relations with their existing dealers to counter the Covid-19
pandemic's impact on their network.

Project Scope
• Understand the pain points of distributors in purchasing UltraTech cement.
• Identify the limitations of sales to retailers and the constraints.
• Identify ways to strengthen soft strength by improving distributor-suppliers
relationship viz. incentives and schemes.

Methodology
Initially, conversations were held with the company SPOC which helped determine the
context and the distribution network. Based on their input, the fundamental points were
summarized into research questions. They were routed to the distributors via a telephonic
interview to confirm the underlying hypothesis and identify missed issues.

Primary Research
Primary research in the form of hybrid telephonic interviews was conducted with the
distributors of the West region in Delhi. The questions contained both open-ended and scale
questions. They proved to be an effective method to determine the pain points of distributors.

Secondary Research
Relationship marketing:
Relationship Marketing is extremely important in the Cement Industry as it increases repeat
purchases. By doing repurchasing, brand loyalty and brand image also increase. Sometimes
because of relationship marketing, some customers are not affected by the low price of
competitor's brands. Thus, the primary goal of relationship marketing is to build and maintain
a base of committed customers who are profitable for the organization. By doing this,
competitors cannot get into the business with those customers. It can be done in various
ways; sometimes, it can be established through 3rd parties who work as an influencer or
consultants.
 In B2B sector, consumers and customers have enough confidence about quality, consistency,
and distribution. Customers have good faith in UltraTech products because of their brand
image and the previous record of the product.
Nowadays, everyone consults with civil engineers before construction. Ultratech practically
established a superior image in the engineer's mind; they are working as an influencer for
unknown customers.
Distributor Satisfaction:
Due to the structure and operation of the markets, the importance of distributors for
penetration of products is enormous. Paired with very high competition in the cement
industry, manufacturers must ensure the satisfaction of the distributor network. Below are
some of the key factors contributing to the same:

S.No. Factor Description

1 ROI & Market A bare margin of 8-10% exists in the cement industry, with Ambuja
Support and UltraTech towards the high end. Distributors expect long-term
support in infra, legal, key accounts, etc.
2 Ordering & 20% of the retail price depends on transportation, ease and accuracy of
Logistics ordering, quality of service, and booking to delivery cycle.
3 Commercials Clear communication of policies, credits, monthly account statements,
and the process of raising and processing claims needs to exist.
4 Care and A relationship forms a key pillar for established brands in sustaining
Concern long-term relationships through timely address of concerns, easy
access to company managers, etc.
5 Training As new technology and processes develop, training on cost
management, sales planning, and storage practices can save up to 30%
and must be imparted by manufacturers.

Competitive benchmarking
Shree, Ambuja, Shree Ram are the most stated brands that dealers hold stock of apart from the
UltraTech brand. A few dealers raised the point that some of the competition has better pricing
flexibility and discounting than UltraTech. In all the other factors considered, UltraTech was rated
much higher than the competition.
Observations:
Insights
Likert scale observations
1. Through the telephonic surveys, we found that Ultratech was, in fact, one of the most
preferred brands by the dealers and the customers alike. This was mainly attributed to
the proactive inventory management, good packaging, and high approachability of the
sales representatives. That the average visits of a company official per dealer were
close to 4.6 times a month is indicative of how invested the company is in dealer
relationship management.
2. The average respondent was a dealer of Ultratech Cement for close to 9 years. Hence,
it can be assumed that the survey findings are applicable long term.
3. A key observation regarding order fulfillment was that 9/10 dealers rated the
punctuality of arrival of new stocks a solid 5/5. Four of these dealers rated the same
for the fill rate, while the remaining five rated it 4/5. An important observation here is
that stock out is rarely an issue. The perennial availability of Ultratech Cements
makes it one of the most preferred brands. Better packaging is yet another key factor
in why Ultratech Cements is one of the favorites among the dealers.
4. As mentioned, the proactive nature of sales representatives from Ultratech helps
maintain its stance as a favorite among the dealers. 6/10 dealers rated the behavior of
sales representatives as 5/5, whereas the rest believed it to be worthy of 4/5.
5. A particular metric where Ultratech has a lot of scopes to improve is the credit limit,
where the dealers scored the company 3.6 on average. Two of the dealers were
particularly unhappy with the credit limit and rated Ultratech just 2/5 in this aspect.
The same can be inferred regarding the ease of transaction, where Ultratech scored
3.7 on average. Several dealers even commented that specific competitors provide
better schemes and bulk discounts.
6. As we move to the evaluation aspect, we can see that 9/10 dealers are satisfied or
happy regarding the efficiency and fairness of the evaluation system. An average
rating of 3.9 was measured across both aspects.
Pain points
Almost 30%-40% of respondents reflected some dissatisfaction with the following issues,
which gives rise to improved service quality rather than complete changes in the existing
process. These problems, while intermediate in nature, can help strengthen relationships and
create standards for B2B relationships in the industry.
Packaging Quality
The response for packaging indicated that while the quality is good, there is always scope for
improvement. A sack bag can hold up to 50kg of weight and is easily recyclable, but its
disadvantages are vulnerable to the external environment, especially moisture. Moisture not
only hardens the cement but leads to a fall of quality. For distributors who store a large
quantity of cement, this can lead to material loss.
Fill Rate
A minor dissatisfaction with the fill rate was observed. Due to the highly competitive
wholesale industry, year-round speed is critical to stay ahead. The problem in shipment is
possibly due to 2 reasons: shipment in batches and untimely shipment.
A problem in timely shipment leads to issues in demand forecasting and warehousing
constraints which impacts overall ROI.

Recommendations
Short Term
Advertising
Advertising helps UltraTech to become popular. The advertisement shows the technology we
use in manufacturing the cement and the secret of our higher strength. We make an
informative yet easy-to-understand advertisement that can attract people to use our cement
even without extensive knowledge of cement.
Promotions
The major customer base which buys cement in India even today is the household owner and
contractors for big infrastructure projects. The end customer's purchase is influenced by
opinion leaders, contractors, masons, architects, etc. Thus, to attract them, sales teams
organize seminars for contractors and masons. They also interact with retailers and
distributors, who are the channel members representing the company to the end customer.
They act as the connecting link. They also act as a channel between the company and
contractors. The retailers or distributors play an essential part in influencing the end
customer.
Incentives
1. UltraTech should create trust among the dealer by taking immediate corrective actions
for the problems like shortage and breakage and concentrating on the credit facility of
the dealers to extend their service for required dealers.
2. Apart from the promotions, companies also come up with merchandises often wherein
the dealers, wholesalers, masons, contractors are gifted with caps, key chains-shirts
with the logo of the companies to enhance the brand recall and sales
3. Besides, they have other performance-linked incentive schemes for their retailers and
dealers, including gifts and foreign trips. Also on offer are insurance covers for
personal accidents, scholarships for their children, etc.
Communication
Integrated marketing communications: Today's consumers receive communications from a
far wider variety of marketing vehicles, websites, social media, mobile advertising, blogs,
virtual communications, direct mail, movie theatre advertising, e-mail solicitation, targeted
magazines, and a host of sales promotions. While a company cannot control outside sources,
ensuring that messages from all company sources are consistent is a significant challenge for
service marketers. UltraTech also tries to send a unified message to consumers through
interactive marketing communications and external marketing communications.
Integrated marketing communications build a strong identity in the marketplace by trying
together and reinforcing all your images and messages. IMC means that all your corporate
messages, positioning, images, identity are coordinated across all venues.
This integrated marketing communication is essential, where many employees from service
providers communicate with the consumers.
Long Term
Marketing Mix
The marketing mix should consist of digital and rural marketing strategies. We should focus
our efforts on rural marketing and identify the strategies that work with the target audience.
With this lockdown, digital penetration has also increased in rural areas, and aligning our
marketing strategies to cater to the same will work in our favor. Strategies to employ SMS
and WhatsApp campaigns with our channel partners through which we are trying to reach out
to more and more people can lead to higher volume sales.
Marketing Initiatives
Marketing strategies play a crucial role in a product like cement. It caters more to B2B
customers than B2C; marketing strategies always help build our brand presence and recall
value.
Today's social customers and clients look for an understanding of what a brand stands for.
The only way to accomplish this is with a strategic and consistent brand representation in
every channel. Having a positive impression of our target audience and businesses translates
directly into a lower cost of sales and a higher company valuation. A content strategy goes a
long way in producing the kind of content that a B2B buyer seeks for. Also, in a B2B setup,
the sales and purchase cycle lasts longer. The differences in products are complex; hence,
they need to be delivered using effective communication and marketing strategies.
Annexure:

ORDER FULFILMENT [HOW SATISFIED ARE

YOU REGARDING THEIR PUNCTUALITY?]
1 2 3 4 5

13%
22%

21%

22%

22%

ORDER FULFILMENT [HOW SATISFIED ARE

YOU REGARDING THEIR FILL RATE?]
1 2 3 4 5

5%
20%
25%

25%

25%

ORDER FULFILMENT [HOW SATISFIED ARE

YOU REGARDING THEIR PACKAGING
QUALITY?]
1 2 3 4 5

20% 20%

20% 20%

20%
SALES REPRESENTATIVE [HOW SATISFIED ARE
YOU REGARDING THEIR BEHAVIOUR?]
1 2 3 4 5

17%
22%

17%

22%

22%

SALES REPRESENTATIVE [HOW SATISFIED ARE

YOU REGARDING THEIR PROBLEM
RESOLUTION ABILITY?]
1 2 3 4 5

10%
20%

20%

25%

25%

BENEFITS [HOW SATISFIED ARE YOU

REGARDING THE CREDIT LIMIT?]
1 2 3 4 5

16%
28%

17%

11%
28%
 BENEFITS [HOW SATISFIED ARE YOU
REGARDING THE EASE OF TRANSACTIONS /
SYSTEM OF TRANSACTIONS?]
1 2 3 4 5

16%
22%

17%

28%
17%

BENEFITS [HOW SATISFIED ARE YOU

REGARDING THE SCHEMES OFFERED BY US?]
1 2 3 4 5

16% 16%

16%
26%

26%

EVALUATION [HOW SATISFIED ARE YOU

REGARDING THE EFFICIENCY OF OUR
PERFORMANCE EVALUATION
METHODOLOGY?]
1 2 3 4 5

17% 11%

16%

28%

28%
EVALUATION [HOW SATISFIED ARE YOU
REGARDING THE FAIRNESS OF OUR
PERFORMANCE EVALUATION
METHODOLOGY?]
1 2 3 4 5

16% 16%

16%
26%

26%