Introduction

Origin of the report: This is an assigned term paper of the course Business Environment the aim of which is to enable us to learn about preparing a marketing plan. This study provides us with valuable theoretical knowledge about preparing a marketing plan for a specific product of Cemex Cement Limited in respect to Bangladesh scenario. Objective of the study: 1. To present an overview of Cemex Cement Bangladesh Limited. 2. To apply our theoretical tools for preparing a marketing plan for a specific product of Cemex Cement Bangladesh Limited.

Methodology: For preparing this report we used the theoretical tools that we learned in the class and applied them specifically here. We also used some secondary data to make the report more fruitful. The sources are Internet, Brochures, Manuals and Publications of Cemex Cement Bangladesh Ltd., Newspapers etc. Limitation: This report had been written within a short period of time. Due to time constraint, we could not gather as much information as we could have.

Company Profile
History of CEMEX
CEMEX is the world's largest building materials supplier and third largest cement producer. Founded in Mexico in 1906, the company is based in Monterrey, Mexico. Cemex has operations extending around the world, with production facilities in 50 countries in North America, the Caribbean, South America, Europe, Asia, and Africa. As of late 2003, Cemex had annual cement production capability of 82 million tons and over 25,000 employees. Lorenzo Zambrano is the current chairman and chief executive officer. About one-third of the company's sales come from its Mexico operations, a quarter from its plants in the U.S., 15% from Spain, and smaller percentages from its plants around the world. Cemex currently operates on four continents, with 66 cement plants, 2,000 ready-mixconcrete facilities, 400 quarries, 260 distribution centers and 80 marine terminals. The company's world headquarters are in San Pedro Garza Garca, a city that is part of the Monterrey metropolitan area in the northeastern Mexican state of Nuevo Len.

In 1992, Cemex began its push into the international landscape with the purchase of Spain's two largest cement companies, Valenciana de Cementos (Valcem, currently head of Cemex Spain) and Cementos SANSON. Venezuela's largest cement company, VENCEMOS, was acquired by Cemex in 1994, and plants were purchased the same year in the United States and in Panama. In 1995 Cemex acquired a cement company in the Dominican Republic, and with the purchase of a majority stake in a Colombian cement company in 1996, Cemex became the third largest cement company in the world. In 1997-1999, the company expanded its scope to include Asia and Africa, making major purchases in the Philippines, Indonesia and Egypt, as well as Costa Rica. The acquisition of U.S. based Southdown made Cemex the largest cement company in North America,

and further international purchases were made in the following two years a Thai company in 2001, and in 2002, a Puerto Rican company. On March 1, 2005, Cemex completed its $5.8 billion acquisition of the Londonbased RMC Group, which made Cemex the worldwide leader in ready-mix concrete production and increased its exposure to European markets. With the acquisition, the company expected its annual cement production to increase to 97 million tons. Also they had hoped to see its annual sales grow to $15 billion, just shy of the market leader, Lafarge NYSE: LR, which had sales of $17 billion. As none of these targets were met, Cemex started looking for another suitor in its M&A push. On October 27, 2006, Cemex announced a US$12.8 billion offer to acquire all of the outstanding shares of Rinker Group, Limited. Seven months later, on April 10,2007, the Rinker board of directors approved an upgraded offer of USD 14.2 billion, and on June 7, 2007, Cemex secured the commitment from the holders of more than 50% of the shares to complete the acquisition.

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.

Mission Statement
"Our mission is to serve the global building needs of our customers and build value for our stakeholders by becoming the world's most efficient and profitable building materials company."

SWOT Analysis
Strength:
1. Diversification: Cemexs operations are geographically diversified, having a direct presence in most of its main markets 2. 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 worlds largest traders of cement and clinker. 3. Vertical integration: Cemex owns a full-scale network of mining facilities, inland and maritime terminals as well as distribution centers.

Weakness:
1. US$ denominated debt: A large portion of Cemexs 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 Cemexs financial performance. 2. Dependency on weather conditions: Cemexs sales suffer a strong decline in periods of rainy season in Bangladesh.

Opportunity:
1. Cost synergies: Cemex estimates significant savings as a result of cost synergies resulting from the RMC acquisition. 4

2. Bangladeshs positive demographics: The population of Bangladesh is rapidly increasing. So, housing and infrastructure will be needed in a large scale. This is an opportunity for Cemex.

Threat:
1. Political instability: political instability in Bangladesh could have a negative impact on Cemexs operations. 2. Competition against major players: Cemex competes in Bangladesh with other world-class players such as Holcim and Lafarge. 3. 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. However, Cemex has implemented an alternative fuel program in order to improve its capacity to absorb this type of fluctuations.

Marketing Plan Objectives

Market Share
Cemex is a notable company in Bangladeshs building materials market place. Introducing a new product by this company can have measurable significance in the market share. It is hoped in this marketing plan that this new product, which is a comparatively low cost construction material, can grab at least a standard percentage of the total market share and gradually due to cognigence of the buyers the existing market share will be increased.

Anticipated Sales
It is expected that the sales volume of the new product of Cemex Cement Bangladesh Limited will reach 3 million metric ton within the said period of time. This sales figure can be achieved by implementing the marketing plan efficiently. 5

Time
This anticipated sales figure will be achieved within a short period of time. The time period is September 1, 2011 to December 31, 2012.

Product Profile
Cemex makes cement and cement related products. In Bangladesh the company focuses on the cement business. The product that has been focused here is cement (blended cement). Before discussing anything else, first of all it must be known what cement is. Cement is a building material made by grinding calcined limestone and clay to a fine powder. It acts as the binding agent when mixed with sand, gravel or crushed stone and water to make concrete. The main raw materials of cement are Clinker and Gypsum. Clinker is gathered by burning limestone. Both of them create Ordinary Portland Cement (OPC). Later on other materials inorganic in nature were added. The original reason for using these materials usually economic: they were cheaper; sometimes they existed as natural deposits requiring no or little processing, sometimes because they were byproduct or waste from industrial processes. A further spur to the incorporation of these supplementary materials was given by the sharp increase in the cost of energy in 1970s and to get other types of cement various types of supplementary cementitious materials have to be added to it and their concentration varies according to cement type. Fly-ash, the most widely used supplementary cementitious material, is a byproduct of the combustion of pulverized coal in electric power generating plants. Upon ignition in the furnace, most of the volatile matter and carbon in the coal are burned off. During combustion, the coals mineral impurities fuse in suspension and are carried away from the combustion chamber by the exhaust gases. In the process, the fused material cools and solidifies in two spherical glassy particles called fly-ash. 6

The fly-ash will be used as a partial replacement of clinker in the blended cement, which Cemex is going to launch in the market. There are standards for the concentration of various materials in cement. One is EUROPEAN STANDARD and the other is AMERICAN STANDARD (ASTM). The AMERICAN STANDARD is as followsTypes of Portland cement (ASTM) Type I Type IA Type II Type IIA Type III Type IIIA Type IV Type V Normal Normal, air-entraining Moderate sulfate resistance Moderate sulfate resistance, air-entraining High early strength High early strength, air-entraining Low heat of hydration High sulfate resistance

The EUROPEAN STANDARD is-

Table Main types of cement and composition

Composition in percentage by mass1) Main constituents

Artificial additional Mai Pozzolana pozzolana constituents Types of common Blastn 2) (fly ash) Limeston Clink cement furnac type er e s e slag natu natural siliceou calcacalcine ral s reous d

Minor

Title CE MI Portland cement

Label

S -

P 6-20 21-35 -

Q 6-20 21-35 -

V 6-20 21-35 -

W 6-20

L 0-5 0-5 0-5 0-5 0-5 0-5 0-5 0-5 0-5 0-5

PC 95-100

CE M II

PC Portland- 20S 80-94 6-20 slag cement PC 65-79 21-35 35S PC 80-94 20P PC Portland- 35P 65-79 pozzolan a cement PC 80-94 20Q PC 65-79 35Q PC 80-94 20V PC Portland- 35V 65-79 artificial pozzolan PC a cement 20 80-94 (fly ash) W PC 35 65-79 W PC Portland- 20L 80-94 limeston e cement PC 65-79 35L PC 80-94 20M Portlandcomposit PC e cement 35 65-79 M -

21-35 -

6-20 21-35

0-5 0-5 0-5 0-5 0-5

------------------------ 6 - 20 ------------------------ ----------------------- 21 - 35 ----------------------- -

CE Blastfurna M 35-64 36-65 M ce 35K

0-5

III

cement

M 20-34 66-80 20K M 5K 5-19 81-95 -

0-5 0-5 0-5 0-5 0-5 0-5

CEM P 35 65-89 IV Pozzolanic cement P 55 45-64

----------- 11 - 35 --------- ----------- 36 - 55 --------- -

CEM MP 40-64 18-30 ----- 18 - 30 ----- V Composite 30 cement MP 20-38 31-50 ----- 31 - 50----- 50
1)

The value in the table refer to the particles of cement without gypsum and other additives. 2) Minor additional constituents could be filler or any of main constituents except if it included as a main constituent of cement.

Marketing Strategy
Target Market Strategy
For the cement business in Bangladesh, Cemexs customers are of two types. The first is corporate organizations like real estate companies, big construction firms, government construction departments etc. And the second is personal house builders. Majority of Cemexs customer is in the personal house builder market. Cemex Cement Bangladesh Ltd. aims to target the customers in two tiers-(i) personal house builders (ii) real estate companies. Cemex prefers to work with them because they are sensitive to the price. And blended cement will be cheaper than ordinary Portland cement. Moreover, they believe in the company and they will always support the

company. Cemex also prefers those customers who pay their dues on time. Most of the buyers of our country are not that much regular when it comes to paying bills. So, the company prefers to deal with this sentient customer. Cemexs customers are shown below in percentageCategory Percent

Personal house builders

80%

Real estate companies

20%

All the reasons for choosing personal house builders are1. Cash Payment 2. Brand Loyalty 3. Respond to marketing mix quicker than corporate organizations 4. More in number compare to the corporate organizations

Target Market Category

20%

Personal house builders Real estate companies

80%

Fig: percentage of the target market.

Market Segmentation
For this new product of Cemex Cement Bangladesh Limited, the whole target market will be segmented as follows-

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Geographical segmentation: Geographical segmentation is to divide a market into homogeneous groups on the basis of population locations. The capital of Bangladesh, Dhaka is having more and more population rather than other parts of the country. Infrastructures will be needed significantly in this region. So, this low cost construction material can capture the market here most. Cemex will focus on mainly Dhaka for its new product marketing. Cemex expects that 60% of its sales will come from Dhaka region, 20% from Chittagong, 5% from Rajshahi, 5% from Khulna, and 10% from Sylhet region.

Expected Sales

10% 5% 5% Dhaka Chittagong Rajshahi 20% 60% Khulna Sylhet

Fig: percentage of expected sales in different regions.

Demographic segmentation: It distinguishes markets on the basis of various demographic or socioeconomic characteristics. Cemex can subcategorize the demography of its target market into following two-

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i)

Age: Age is a big factor in the sense of cement consumption because cement is the concern of adult people to some extent. From our findings cement consumption rate is high in the age level of 50 to 65 years for the personal house builders. Cemex can emphasize their marketing activities on these people.

ii)

Monthly Income: Monthly income is one of the important matters to understand consumer behavior. People having monthly income of around 40,000 BDT are capable to buy cements and less than this can not afford it. They mainly depend on developers because the cost of making flats is too high for them. So, for the lower income people, Cemex can market for real estate companies.

Product-Related Segmentation: Using product-related segmentation, marketers can divide a consumer market into groups based on buyers relationships to the good. Cemex can also use this segmentation method. It can be subcategorized into three levelsi) Benefits Sought: The product is a low cost construction material which is called blended cement. The most significant benefit from this product is, it is environment friendly. This benefit will attract customers to buy it. ii) Product Usage Rate: Cemex expects that its new product will have a medium usage rate, because the product is comparatively new to the market. Most of these medium users are personal house builders, so, Cemex can direct their heaviest marketing efforts to them. iii) Brand Loyalty: Cemex already has a good reputation in the market. It can use this asset to market its new product.

Marketing Mix
Product: The Company must assure quality in all the levels of production and distribution of the new product (the low cost construction material). The company has to concentrate on the Total Quality Management (TQM) all the way from production

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to the distribution in the hands of the consumers. But the company must not overlook the fact of cost regarding TQM. The company will have to meet the best quality possible at all levels that is covered by the present cost with skilled employees. As skilled employees are hard to find in our country, Cemex can train the employees so that production capacity of each worker may increase. The Company must also keep an eye on its profit scale while doing all these things. In the short run profit may seem to decline, but in the long run this training may prove to be fruitful. Price: Most customers are highly sensitive about price of the product they use. They tend to think that if the price is more the product will be better. But if the price is too high then the customers cannot afford it. So, the price of the new product (i.e. Cemex is going to introduce) has to be high but it has to be closer to the competitors. If this high price can gain the trust of the consumer the company can afford to lower the price with increase in sales volume. The company should have a long-term plan to reduce cost and then reduce price later. So, they have to use a psychological pricing approach for the new product with a little bit reduction. Promotion: Cemex can send its representatives in different corporate organizations (i.e. real estates) office to let them know about the quality of the new product and benefits of buying it. They will inform the corporate organizations that the new construction material is very useful for them. Moreover, seminars can be arranged by Cemex to create awareness about the beneficial aspects of blended cement that contains fly ash. To persuade the consumers, Cemex can appoint different people from construction related businesses (like brick, sand, rod etc) as Premium Dealer. This will help Cemex and also the people getting appointed. Those people can pass on information about the quality of Cemexs new product while they are selling their usual products. Cemex will have new premium dealers and those dealers will also act as a media to the consumers. Cemexs advertising methods are not sufficient enough for the market. The reach of its advertising is very low. Cemex should publicize ads more often in the news paper and electronic

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media. Advertising positioning should such that waste is minimized and the circulation is higher. The frequency of advertising should also be higher. Distribution: Cemexs main strength is its Premium Dealers. So, we are proposing to increase its Premium Dealers mainly in the capital Dhaka. Number of Premium Dealers in this region is around 10; but the market demand is too big for these premium dealers to control. So, increase in premium dealer in this area is a must for the company. Cemex can initiate a contractual agreement with retailers. They should propose an association of retailers, which will do the work of District Dealers. This will reduce the retail price, which will be beneficial for the consumers as well as to Cemex.

Manufacturer (Cemex Cement Bangladesh Ltd.)

Premium Dealer

Retailers Association

Retailer

Retailer

Retailer

Consumer

Fig: Distribution Strategy for the new product of Cemex.

Brand Image and Product Positioning

Brand Image:

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Brand image is a very important factor in market. If image is good then sales will must increase, but if it is negative then it will be opposite. So, for this new product, Cemex must ensure high quality and value added service to the customer including on time delivery of the product, and excellent responsiveness to the queries as well. This will bring in brand loyalty among the customers. Product Positioning: Positioning is the act of designing of the companys offering and image to occupy a distinctive in the mind of the target market. When some one thinks about Cemex, They know that it possesses a high quality and right price. Cemexs new products target customers are conscious people. They are always looking high quality product and high quality service. And Cemex always provides it. Customer believes it, because Cemex creates their position in customers mind.

High Quality

Cemexs new Product Low Price Right Price

Low Quality

Brand Equity: Brand Equity is the value consumers assign to a brand above and beyond the functional characteristic of the product. Cemex by providing value added service to

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the customers strives to create brand equity which is nearly synonymous with the word cement. Product Personality: This is the characteristic that Cemex imbibe in it and which helps the customers to identify them. Benefits of the Cemexs new productSince Fly-ash is a byproduct of the combustion of pulverized coal in electric power generating plants its use in cement ingredients is desirable from the national environmental and energy conservation standpoint. Moreover, use of this supplementary cementitious material improve concrete property in which this kind of cement is used.

Implementation
Depending on the organizations structure and the environment, the first line and middle managers can be empowered to make certain decisions. If the demand for the new product increases rapidly in the market then, the company has to increase the production to capture the maximum market share. They have to increase the sales mainly in Dhaka and also in the rest of the country by advertising on TV, newspapers and billboards. Activities, responsibility and timetable for completion-

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Product Activity Increase the sales volume Decrease the production cost Designing efficient transportation strategy

Person Responsible Sales Manager Production Manager Transportatio n In-charge

Target Completion December 2012

Outsourcing Needs

Advertising Agencies Engaging resource persons for the seminar.

December 2011

Importing new process plant and reengineering of the process.

December 2011

Buy more trucks according to requirement. Outsourcing transportation in case of necessity.

Alignment with others:

Internal: In order to complete these activities with in the due time, the organization is motivating its employees by rewarding them with overtime s, already paying much better salary than the other industries. The organization plan to provide the employees with incentives like free transportation, annual leaves with salary etc. The organization will also ensure that there is no dearth of resources to complete these activities. External: Appropriate strategy will be shared with the suppliers of the raw materials, transportation provider and other stakeholders.

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Evaluation and Control

Performance and Financial controls
Product Activities Advertisement Budget (BDT) 1 million Performance Standards Big billboards & Celebrities on Import new process plant 10 million Possible Corrective Action Additional advertisement in Print Media

advertisements Waste heat Efficient use of recovery plant that reduces the production cost Transportation for long resources

Buy new trucks for transportation

7.5 million

Outsourcing transportation

distance routes needs

Monitoring Procedure:
Although Cemex Cement Bangladesh Limited has a very strong brand name, there is a little need to advertise in the print media if required, as most of the consumers are aware of its products. The only printed advertisement needed is in those areas where the company have not captured market and in those areas where its market share is very low. These activities are continuously monitored by the persons who are responsible for it. A new plant will be imported to ensure the cut down in the price of production.

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A marketing audit will be performed to ensure that the budget allocated for the activities are being used in the right direction and not wasted by the responsible people. This increases the trust of share holders and investors in the company and will be very helpful to the company in terms of finances. This trust will create a loyalty for Cemexs customers and consumers towards its brand and its products. In audits, advertisement revenues will be monitored. All finances will be monitored which will be used in the growth of the company to ensure that the finances are utilized in the right direction.

Conclusion
Since this new product will provide added value to the customers in terms of improved product performance, Cemex is hopeful of achieving the projected target. However, careful monitoring will be required to keep the environment proactive. Promotion and distribution activities should be on the proper track and implemented efficiently. Different departments of Cemex should work cordially and the coordination among them should be effective otherwise this marketing plan may go in vain. Quarterly appraisal will be taken to review the performance against the target and remedial action will be planned accordingly.

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Bibliography
1. Louis E. Boone & David L. Kurtz, Contemporary Business, International Student Edition, 2006. 2. www.wikipedia.org/cemex. 3. Search engine: Google. 4. Brochures, journals and manuals related to business. 5. Publications of Cemex Cement Bangladesh Limited. 6. Newspapers.

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