Project Report Vyom

8/8/2019 Project Report Vyom

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A REPORT

ON

BRAND PERCEPTION OF DALMIA CEMENTS IN RELATION TO

COMPETING BRANDS

AND

MARKET ANALYSIS OF 4(P) AND STUDY THE FACTORS AFFECTING THE

SALES OF DALMIA CEMENTS TO SUGGEST WAYS TO ENHANCE THE

MARKET SHARE IN NON-TRADE SEGMENT

BY

VYOM SHAKTI NIGAM

PG20095502

DALMIA CEMENTS (BHARAT) LIMITED


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A REPORT

ON

BRAND PERCEPTION OF DALMIA CEMENTS IN RELATION TO COMPETING

BRANDS

AND

MARKET ANALYSIS OF 4(P) AND STUDY THE FACTORS AFFECTING THE

SALES OF DALMIA CEMENTS TO SUGGEST WAYS TO ENHANCE THE

MARKET SHARE IN NON-TRADE SEGMENT

BY

VYOM SHAKTI NIGAM

PG20095502


A Report submitted in partial fulfillment of

The requirements of

PG Program of

IILM GURGAON

Distribution list:

Company guide: Mr. PUNEET DHIR

Date of submission: 14 May, 2010


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ACKNOWLEDGEMENT

I owe my thanks to many people who helped and supported me in making this project report a

success. Any attempt at any level cant be satisfactorily completed without the support and

guidance of learned people. I would like to express my immense gratitude to the head of my

internship organization and my company guide Mr. PUNEET DHIR (GM-SALES AND

MARKETING-DALMIA CEMENT (BHARAT) LIMITED) for his constant support and

motivation that has encouraged me to come up with this project.

I am also grateful to my faculty guide Ms. SHRUTI SINGH for her guidance throughout the

project and who rendered her whole hearted support at all times for the successfulcompletion of this project.

My heartfelt thanks to MR. PUNEET DHIR and MR. AMOGH AGARWAL who were there to

help, guide and encourage me throughout the training period. They gave their precious

time to teach me the ways of the organization and also provided me with the company

insight.

I acknowledge my alma mater IBS-HYDERABAD, as the college provided me with an

opportunity to learn and understand the corporate culture.

My sincere thanks to my parents, friends and the people working in DALMIA CEMENT astheir support was extremely important for the completion of this project report.

VYOM SHAKTI NIGAM

PG20095502


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EXECUTIVE SUMMARY

It is a general phenomenon that buyers in same market seek products for broadly same

function, but different buyers have different evaluation criteria about what constitute the right

choice of performing the function. As a consequence different offering will attract different

buyers. A market segment is explained is explained to mean homogeneous group consisting of

buyers who seek the same offering. Brand is a, name, term, sign, symbol or design, or a

combination of them intended to identify the goods and services of one seller or group of

sellers and to differentiate them from those of other sellers. Therefore it makes sense to

understand that branding is not about getting your target market to choose you over the

competition, but it is about getting your prospects to see you as the only one that provides a

solution to their problem. The objectives a good brand will achieve include:

y Delivers the message clearly.y Confirms your credibility.y Connects your target prospects emotionally.y Motivates the buyery Concretes user loyalty.

To succeed in branding you must understand the needs and wants of your customers and

prospects. You do this by integrating your brand strategies through your company at every

point of public contact. Your brand resides within the hearts and minds of customers, clients

and prospects. It is sum total of their experiences and perceptions, some of which you can

influence and some that you cannot. A strong brand is invaluable as the battle for customers

intensifies day by day. Its important to spend time investing in researching, defining and

building your brand. After your entire brand is the source of a promise to your consumer. Its a

foundational piece in your marketing communication and one you do not want to be without.

Marketing strategy is a method of focusing an organizations energies and resources on a

course of action which can lead to increased sales and dominance of a targeted market niche. A

marketing strategy combines product development, promotion, distribution, pricing,

relationship management and other elements; identifies firms marketing goals, and explain

how they will be achieved, ideally within a stated timeframe. Marketing strategy determines

the choice of target market segments, positioning, marketing mix, and allocation of resources.

It is most effective when it is an integral component of overall firm strategy, defining how the

organization will successfully engage customers, prospects and competitors in the market

arena. As the customer constitutes the source of a companys revenue marketing strategy is


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closely linked with sales. A key component of marketing strategy is often to keep marketing in

line with a companys overarching mission statement.

STUDENT INFORMATION: VYOM SHAKTINIGAM; PG PROGRAM, IILMGURGAON -2009-2011

ORGANIZATIONDESCRIPTION: Cement industry-DALMIA CEMENT (BHARAT) LIMITED

The company manufactures cement, sugar and research and development.

The project focuses only on the non-trade segment of the cement industry in Hyderabad

region, and their perception of the cement brand DALMIA in relation to other competing

brands. And also study and analyze the factors that affect the sales ofDALMIA CEMENT in the

non-trade segment. In the end the project aims at providing some valuable to the company and

suggestions that can help increase the sales and hence improve market share of the company in

the non-trade segment.

The study was done by meeting 50 builders, construction companies and institutional buyers

etc and they were asked to fill questionnaire. They were asked to rate 9 different brands of

cement on the scale from 1 to 9 where 1 being the lowest and 9 being the highest on different

attributes. And there were 5 open ended questions where they were asked to mark their choice

of option again on different attributes.


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TABLE OF CONTENTS

ABSTRACT7

INTRODUCTION9

INDUSTRY OVERVIEW10

FACTORS AFFECTING CEMENT INDUSTRY..13

COMPANY PROFILE-DALMIA CEMENT (BHARAT) LIMITED..19

PROJECT PROFILE34

QUESTIONNAIRE35

DATA PRESENTATION AND INTERPRETATION.44

FINDINGS65

RECOMMENDATIONS.67

CONCLUSIONS....69

REFRENCES..70


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ABSTRACT

The study deals with the market survey of prospective buyers of Dalmia cements. The

prospective buyers are the builders, construction companies and the projects undertaken by

GHMC (greater Hyderabad Municipal Corporation). This is the non trade segment of cement

industry which includes government and non-government sector. These buyers were

interviewed and asked to fill the questionnaire. The data hence collected will be used to analyze

the market in relation to 4(P) that is the marketing mix of price, product, promotion and place

(distribution) so as to study the brand perception of the prospective buyers ofDalmia cements

in relation to the competing brands and factors affecting the sales of Dalmia cements. The

study also aims at providing suggestions in the end so as to enhance the market share ofDalmia

cements in the non-trade segment. The four parameters defined above are in control of a

marketing manager, subject to the internal and external constraint. The goal is to make

decisions that center the 4Ps on the customers in the target market in order to create

perceived value and generate positive response. Brand positioning is very important and is

done to create an image or identity in the minds of the target market of the product so the

outcome of the study aims at suggesting ways in which the product can be positioned so as to

create an image or an identity of brand Dalmia in relation to other competing brands. The

second study is undertaken to understand the factors which influence and drive the sales of

Dalmia cements. Hence, suggest ways to improve sales that in turn will enhance the market

share ofDalmia cements in the non-trade segment. Brands compete for share of mind in the

battle for overall market share. In many cases the competing products have very similar feature

sets and price points that are available through comparable channels. Brand can often be the

key discriminating factor in a customers decision to select one product over the other. Brand

perception is based on various functional experiences (i.e. speed, quality, reliability, ease of

use) and emotional experiences (loyalty, association with the brand). The perception of a brand

is based on the awareness and previous experience with the brand, interaction with the sales

and customer employees, recommendations, after sales service, sales promotion activities and

most importantly the competitors. The product positioning process:

y Defining the market in which the product or brand will compete (who the relevantbuyers are)

y Identifying the different attributes that define the product space.y Collecting information from a sample of customers about their perceptions of each

product on relevant attributes.


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y Determine each products share of mind.y Determine each products current location in the product spacey Determine the target markets preferred combination of attributes (ideal vector)y Examine the fit between (a) the positions of your product (b) the position of the ideal

vector.y Position

The factors influencing the sales ofDalmia cements can be varied example price, quality,

sales promotional activities, lead time, setting time, quality accreditation, logistics and

supply patterns etc. These factors influence the sales in negative and positive way. A

proper marketing mix of price, promotion, place (distribution) and product can help

boost sales.


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INTRODUCTION

Cement is a binder which sets and hardens independently, and can bind other materialstogether. The word "cement" traces to the Romans, who used the term "opus caementicium"

to describe masonry which resembled concrete and was made from crushed rock with burnt

lime as binder. Cement is an essential component of infrastructure development and most

important input of construction industry, particularly in the governments infrastructure and

housing programs, which are necessary for the countrys socioeconomic growth and

development. Cement ranks second in volume among the industrial products manufactured in

the world. And it is the most widely used man-made product and second only to water as

worlds most heavily consumed substance. Cement is poly-phased inorganic compound of

complex nature formed by burning of calcareous and argillaceous raw materials as a bindingmaterial. Cement is used as a binding material in various types of civil constructions. Earlier,

clay or lime was used for binding materials together. Its properties include-

y Low cost, high performancey Binder with almost any hard materialy Building blocky Gain strength progressively with ageingy Substitutes with steel, polyester, epoxy-resin, plasticizers

With advancement in manufacturing technology, today cement is a completely technical

product. Various types of grades of cement are being manufactured to satisfy different needs of

the construction industry. However, cement is still considered as a non-technical product and

used in a traditional and often unscientific manner. Compressive strength is the important

known parameter for approving the quality of cement. Strength of cement is also affected by

water-cement ratio, grading of aggregates, methods of preparation, methods of compaction,

curing conditions and atmospheric conditions.


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INDUSTRY OVERVIEW: INDIAN CEMENT INDUSTRY

Cement is the preferred building material in India. It is used extensively in household and

industrial construction. Earlier, government sector used to consume over 50% of the total

cement sold in India, but in the last decade, its share has come down to 35%. Rural areas

consume less than 23% of the total cement. Availability of cheaper building materials for non-

permanent structures affects the rural demand. The Indian Cement industry is the second

largest cement producer in the world. The industry has undergone rapid technological up

gradation and vibrant growth during the last two decades, and some of the plants can be

compared in every respect with the best operating plants in the world. The industry is highly

energy intensive and the energy bill in some of the plants is as high as 60% of cement

manufacturing cost. Although the newer plants are equipped with the latest state-of-the-art

equipment, there exists substantial scope for reduction in energy consumption in many of the

older plants adopting various energy conservation measures. There are around 11 different

types of cement that are being produced in India. The production of all these cement varieties

is according to the specifications of the BIS (Bureau of Indian Standards). Some of the various

types of cement produced in India are:

y Clinker Cementy Ordinary Portland Cement (OPC)y Portland Blast Furnace Slag Cement (PSC)y

Portland pozzolanaC

ement (PPC

)

y Rapid Hardening Portland Cementy Oil Well Cementy White Cementy Sulphate Resisting Portland Cement

The production of PPC and PSC are based on Fly Ash and Blast furnace slag, the waste product

of Thermal Power Plant and Steel Plant respectively.

CHARACTERISTICS-


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StatewiseCapacity

As cement is a low value commodity, freight costs assume a significant proportion of the final

cost. Transporting costs render the prices of cement in distant destinations uncompetitive. For

instance, it is financially infeasible to transport cement by road over 250 kms. Railways are

mostly used to transport cement over longer distances. However, its bulky nature and

infrastructure bottlenecks render even rail transport unviable over very long distances (that is

why Madras Cements or India Cements, located in the south, can hardly make a difference to

the fortunes of west-based companies like Gujarat Ambuja). Therefore, manufacturers tend to

sell cement at the nearest market first and sell in distant markets only if additional realization is

greater than freight costs incurred. This highlights the regional nature of the cement industry.

The Indian cement industry has to be viewed in terms of five regions:-

y North (Punjab, Delhi, Haryana, Himachal Pradesh, Rajasthan, Chandigarh, J&K andUttaranchal)

y West (Maharashtra and Gujarat)y South (Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Pondicherry, Andaman &

Nicobar and Goa)

y East (Bihar, Orissa, West Bengal, Assam, Meghalaya, Jharkhand and Chhattisgarh)y Central (Uttar Pradesh and Madhya Pradesh)

South accounts for 33.03% of cement production capacity of the country, with Andhra Pradeshaccounting for 15.27% of the total production capacity of India. It has an installed capacity of

around 20mn tons of cement and ranks first in the country, followed by Tamil Nadu with 9.94%

of the total production capacity. North accounts for 18.02% of the total production capacity,

with Rajasthan at 12.55% of the total production capacity of the country. West accounts for

16.85% of the total production capacity. Maharashtra and Gujarat have production capacity of

6.89% and 9.96% respectively. East and Central Regions account for 16.33% and 15.77% of the

total production capacity of the country respectively. Production & Dispatches (Region-wise):

During the month of December 2008 the cement industry posted excellent growth in

production mainly from the northern and the eastern region of the country. The demand

continued to be strong as can be evident from the capacity utilization levels in all the major

regions. Increase in installed capacities by some players also contributed to improved

production growth.

y The central region of the country acherved the highest capacity utilization rate of 98%.


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y The northern region and the eastern region had a capacity utilization rate of 93%respectively.

y The western region and the southern region had a capacity utilization level of 95% and86% respectively.

The overall cement production and dispatches increased by 11% to 15.82 million metric tonnes

and 15.81 million metric tonnes respectively during the month ofDecember 2008 as compared

to the same period last year. Excess dispatch implies that there is strong demand as inventories

are being disposed off quickly. The production and dispatches were higher by 10% and 11%

respectively as compared to the previous month.


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FACTORS AFFECTING CEMENT INDUSTRY:

LIMESTONE RESERVES

Limestone is the main raw material for manufacture of cement. For manufacture of one tonnes

of cement, a quantity of 1.5 tonnes of limestone is required. India is endowed with large

deposits of limestone. The estimated total reserves of cement-grade limestone are 95.623

billion tonnes. However, the limestone deposits are not uniformly distributed in all the States.

There is a concentration of about 73 per cent of the total reserves in five States, namely,

Andhra Pradesh, Karnataka, Gujarat, Rajasthan and Madhya Pradesh. This concentration is

about 48 per cent in South Zone, 23 per cent in North Zone, 21 per cent in West Zone and the

remaining 8 per cent in East Zone.

COAL

The consumption of coal in a typically dry process system ranges from 20-25% of clinker

production. This means for per ton clinker produced 0.20-0.25 ton of coal is consumed. This

contributes 35-40% of the production cost. The cement industry consumes about 10mn tons of

coal annually. Since coalfields like BCCL supply a poor quality of coal, NCL and CCL the industry

has to blend high-grade coal with it. The Indian coal has a low calorific value (3,500-4,000

kcal/kg) with ash content as high as 25-30% compared to imported coal of high calorific value

(7,000-8,000 kcal/kg) with low ash content 6-7%. Lignite is also used as a fuel by blending it

with coal. However this process is not very common.

ELECTRICITY

Cement industry consumes about 5.5bn units of electricity annually while one ton of cement

approximately requires 75-85 units of electricity. Power tariffs vary according to the location of

the plant and on the production process. The state governments supply this input and hence

plants in different states shall have different power tariffs. Another major hindrance to the

industry is severe power cuts. Most of the cement producing states like Andhra Pradesh

experience power cut to 25%-30%.

TRANSPORTATION

Cement is mostly packed in HDPE (High Density Poly Ethylene) bags. It is then transported

either by rail or road. Road transportation beyond 200 kms is not economical therefore about

55% of cement is being moved by the railways. There is also the problem of inadequate

availability of wagons especially on western railways and southeastern railways. Under this


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scenario, manufacturers are looking for sea routes, this being not only cheap but also reducing

the losses in transit. Today, 70% of the cement movement worldwide is by sea compared to

10% in India. However, the scenario is changing with most of the big players like ACC and

Ultratech having set up their bulk terminals.

TECHNOLOGY

Cement Industry has been in existence in India for over eight decades. From the initially

available wet process technology the industry has travelled through semi-dry and the latest

energy efficient dry process technology. Recent plants have been erected with state-of-art

technology comparable to those available in the world. The earlier cement plants that came

into existence were mostly of small kiln capacities of 300 to 600 tpd based either on wet or dry

process; however, the new plants set up later were of the order of 3000 tpd or more exclusively

of dry process. Kilns of the capacities 5000 to 7000 tpd are also in operation now. At present

91% of the total kiln capacity comprise dry process, 7% wet process and the remaining 2% onsemi-dry process based technologies. Indian cement industry has been actively pursuing various

avenues to improve its productivity and energy efficiency. There has been all-around up

gradation of technology in all sections of the plant like mining, process, equipment and

machinery, packaging and transportation. Adoption of modern techniques like photo-

grammetry and remote sensing has enabled the industry to discover virgin limestone. Advanced

equipment like hydraulic excavators, surface miners, large wheel loaders and mobile crushers

have helped the industry in increasing its productivity considerably. The modern raw material

evaluation and management system starts from computerized mine planning through on-line

bulk material analysis to automated X-ray analysis and process computers to control the weighfeeders. Expert systems based on fuzzy logic are used to control the operation of kilns and

mills to ensure that the process systems operate at optimum levels of energy efficiency all the

time. Energy efficient technologies are being adopted for a new as well as for retrofits,

modernization and expansion of existing plants. A number of cement plants in the country are

now equipped with double string pre-heater towers with pre-calciners, vertical roller mills,

roller presses, high efficiency fans and motors with slip power recovery systems. Besides this,

the software approach involving detailed process diagnostic studies and energy audits are used

successfully by almost every large and medium sized cement plant in the country.

ENERGY CONSERVATION

The cement industry is an energy intensive industry by virtue of high temperature reactions and

various physical operations involved in its manufacture. The industry uses both coal and power

as energy inputs. The cost of energy accounts for about 45% of the total production cost.

Energy management in modern cement plants in India meets the standards comparable with


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the best in the world. Energy studies of cement plants are being carried out in a large number

of plants on a continuing basis by the National Council for Cement & Building Materials (NCB).

NCB has a mobile energy diagnostic unit (Energy Bus) equipped with necessary instrumentation

and on-board computer with relevant software for conducting the energy studies on systematic

and accurate manner.NC

B has been givingN

ational Awards forE

nergyE

fficiency inI

ndianCement Industry to the best performing cement plants on annual basis since 1986.

POLLUTION CONTROL

The main source of pollution in cement industry is dust emission. The industrys achervement in

controlling particulate emission has been quite satisfactory. Considerable progress has been

made in installing Electrostatic Precipitators (ESPs) and bag houses/fabric filters in various

sections of cement plants, especially after the promulgation of the environment legislation in

1981 and 1986.

PRODUCTION COSTS

Cement companies reported 10 per cent growth in their revenues, while their net profit

declined by 21 per cent on compression of margins, last year. Almost all cement companies

faced margin pressures on account of an increase in their overall production costs. Coal

accounts for 35%-40% of the total production cost and is in short supply. Coal prices increased

by over 100 per cent in the last one year. This has lead to an overall increase in the cement

prices, thus affecting the demand for it.

Issues concerning Cement Industry -

y High Transportation Cost is affecting the competitiveness of the cement industry.Freight accounts for 17% of the production cost. Road is the preferred mode for transportation

for distances less than 250km. However, industry is heavily dependant on roads for longer

distances too as the railway infrastructure is not adequate.

y Cement industry is highly capital intensive industry and nearly 55-60% of the inputs arecontrolled by the government.

yThere is regional imbalance in the distribution of cement industry.

L

imestone availabilityin pockets has led to uneven capacity additions.

y Coal availability and quality is also affecting the production.y Technological change is the way to the future. Continuous technological upgrading andassimilation of latest technology has been going on in the cement industry. There is


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tremendous scope for waste heat recovery in cement plants and thereby reduction in emission

level.

Government Policies

Government policies have affected the growth of cement plants in India in various stages. Their

control on cement for a long time and then partial decontrol and then total decontrol has

contributed to the gradual opening up of the market for cement producers. The stages of

growth of the cement industry can be best described in the following stages:

y Price and Distribution Controls (1940-1981): During the Second World War, cement wasdeclared as an essential commodity under the Defense of India Rules and was brought

under price and distribution controls which resulted in sluggish growth. The installed

capacity reached only 27.9 MT by the year 1980-81.

y Partial Decontrol (1982-1988): In February 1982, partial decontrol was announced. Underthis scheme, levy cement quota was fixed for the units and the balance could be sold in the

open market. This resulted in extensive modernization and expansion drive, which can be

seen from the increase in the installed capacity to 59MT in 1988-89 in comparison with the

figure of a mere 27.9MT in 1980-81, an increase of almost 111%.

y Total Decontrol (1989): In the year 1989, total decontrol of the cement industry wasannounced. By decontrolling the cement industry, the government relaxed the forces of

demand and supply. In the next two years, the industry enjoyed a boom in sales and profits.

By 1992, the pace of overall economic liberalization had peaked; ironically, however, the

economy slipped into recession taking the cement industry down with it. For 1992-93, the

industry remained stagnant with no addition to existing capacity.

Government Controls

The prices that primarily control the price of cement are coal, power tariffs, railway, freight,

royalty and cess on limestone. Interestingly, all of these prices are controlled by government.

EXPORTS

The cement sector is relatively insulated from international markets. This is largely due to

inadequate infrastructure to carry on international trade. Being a very bulky item, international

trade is very limited and only between neighboring states. This is amply borne out by the facts


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that cement accounts for not more than 0.20% of total world exports. Having a long coastline,

India is well positioned to export cement to the Middle East and Sri Lanka. However, congestion

at the Indian ports and lack of cement handling facilities restrict the free movement of cement

out of India. Hence, only those companies who have their own jetties are able to export.

M

oreover, currently, prices in the international market too are at un-remunerative levels.Nevertheless, companies like Gujarat Ambuja and L&T are major exporters, who export mainly

to get incentives like duty-free import of high grade coal and oil. This apart, large scale cement

exports are possible only when cement prices in the international market look up.

REASONS FOR THE GROWTH OF CEMENT INDUSTRY

The domestic cement industry is highly insulated from global cement markets. Exports have

been constant at about 6% of total cement demand for past few years. With the Government of

India intervention, making cement duty free, cement is being imported from neighboring

countries. However, due to logistics issues and lack of port handling capabilities imports ofcement will remain negligible and do not pose a threat to domestic industry. Earlier

government sector used to consume over 50% of the total cement sold in India but in the last

decade, its share has come down to 35%.

Demand for cement is linked to the economic activity in any country. Broadly, it can be

categorized into demand for housing construction (homes, offices etc.) and infrastructure

creation (ports, roads, power plants etc). The real driver of cement demand is creation of

infrastructure; hence cement demand in emerging economies is much higher than developed

countries where the demand has reached a plateau. In India too, the demand for cement will

be affected by spending on infrastructure (including housing).


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INDIAN CEMENT INDUSTRY DEMAND DRIVERS

COMMERCIAL/INDUSTRIAL 20%

INFRASTRUCTURE 40%

HOUSING 40%


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MANAGING DIRECTOR- Mr. PUNEET DALMIA

We are committed to creating exceptional value for our customers, employees, Shareholders,

vendors and the communities we operate in, through our core values ofLearning, teamwork,

speed and excellence

Values

Values are beliefs about what is right and wrong and what is important in life. Values are what

drive our conduct every moment. Values are the rich cultural heritage of any society. Values are

the binding force and the guiding principles behind the evolution and prosperity of all

civilizations. Like mankind, companies too with the right set of values, have prospered over along period of time. As an organization which believes in fair conduct, our shared values have

been our means to acherve inclusive and sustainable growth. The aggressive growth trajectory,

we will be guided and governed by our newly adopted values. Binding 3500 people across 15

locations and driving the cumulative energies of one company, one belief and one dream are

our four core values ofLEARNING, TEAMWORK, SPEED and EXCELLENCE.

HISTORY

Founded in 1935 by Jaidayal Dalmia; the cement division ofDCBL was

established in 1939 and enjoys a heritage of 70 years of expertise and

experience. Headquartered in New Delhi with cement, sugar, travel

agency, magnesite, refractory and electronic operations spread across

the country.

The Dalmia Group had established four cement plants in pre-

independence years, two of which were affected by the partition and

Independence. The two remaining plants operate as Dalmia Cement and made strategic

investment in Orissa Cements Limited (OCL). Managed by a professional team, DCBL have

sustained the path to innovation and growth for seven decades.


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Early on in DCBLs history DCBL learnt that a strong business is an amalgamation of strong

relationships. The key to establishing such relationships is to learn from each other, to enjoy a

spirit of camaraderie, and to recognize and identify with their needs of the people we work

with. Today with the rich experience DCBL have been able to broaden the horizons to include a

holistic approach to the best practices in the industry.

DCBL prides itself on having been at the forefront of pioneering and introducing many new

technologies, which exist today, which are followed by others in the industry. DCBL has been

and continues to be an industry leader in the niche market segments.

QUALITY ACCREDITATION

1. ISOCERTIFICATIONS2. LEADERS IN THE PRODUCTIONOF HIGH STRENGTH SPECIALCEMENT- 19763. AUTHORITY TO USEMONOGRAMOF AMERICAN PETROLEUMINSTITUTE.4. LICENCEFOR THE QUALITY MANAGEMENT SYSTEMS CERTIFICATION-1993-BUREAU OF

INDIAN STANDARDS

5. LICENCE FOR THE ENVIRONMENTAL MANAGEMENT SYSTEMS CERTIFICATION-2004-BUREAU OFINDIAN STANDARDS

6. NATIONAL AWARD FOR EXCELLENCE INENERGY MANAGEMENT-2007 CONFERRED BYCII-CONFEDERATIONOFINDIANINDUSTRY

7. NATIONAL AWARDFORCEMENT EFFICIENCY ININDIANCEMENT INDUSTRY-19998. NATIONALENERGY CONSERVATION AWARD-20019. LEADERSHIP ANDEXCELLENCEAWARDIN SAFETY, HEALTH ANDENVIRONMENT-2003


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PRODUCTS AND SOLUTIONS:

CEMENT

Pioneer in cement manufacturing since 1939, DCBL has been synonymous with super

specialty cement. It has got an ISO 9002 certification for its highest quality cements for overseven decades.

What makes DCBL unique is the constant ability to

innovate. The plants are located close to its

source of raw materials, freight and transport cost

is kept low giving it an edge over competition.

Focus areas are TAMIL NADU, KERALA and

ANDHRA PRADESH. DCBL believes in making

relationship strong with the dealers and keeping

the prices on par with the large

consolidated/national players.

SUGAR

The manufacture of sugar started in mid-nineties and set up its unit Ramgarh Chinni mills

(dist sitapur) Uttar Pradesh. The installed capacity then in 1994 was 2500 TCD (tonnes cane

crushing per day) which has now further been expanded to 7500 TCD. The manufacture and

sale of sugar accounts for major part of DCBLs revenue and it aims to build deep

capabilities in these segments.

RESEARCH AND DEVELOPMENT

R & D activities of the organization are done through In-house R&D and an independent

Research Center set up at Salem under Dalmia Institute of Scientific and Industrial Research,a SIRO approved by DISIRGOI.

The areas ofR&D focus are PRODUCT DEVELOPMENT, In particular special cements, energy

efficiency (both power and fuel), optimization of raw material resources, increasing inputs

of blending component particularly Fly Ash in PPC and improving quality of all the products

made by the company to international level.


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Though the R&D activity Dalmia Cement has acherved success in the area of Oil Well

Cement- a product claiming essential import substitution and saving lot of foreign exchange

is attributed to the R & D efforts of this Center. This product was first time developed in the

country. The company also has to its credit development of railway concrete sleepers for

the first time in the country. Besides these productsD

almia cement introduced for the firsttime concept of computerized mine planning, VRM for cement grinding, expert cement for

controlling kiln operation.

At Dalmia Cement, quality is the baseline. Special emphasis is placed on Research &

Development facilities to augment product quality. Each division has a well-equipped R&D

cell, pursuing product and process improvements related to that division. The company has

state-of-the-art manufacturing facilities including an on-line X-ray analyzer, a modern

Stacker Reclaimer, computerized mine planning, environment friendly electrostatic

precipitators and a host of other technological features. Constant control by hi-tech systems

at every step of the manufacturing process ensures that every bag of cement that rolls out

of the factory is of the highest quality.

SYNOPSIS

Dalmia Cement (Dalmia), a member of the Dalmia Sanjay Group is engaged mainly in the

activities of cement production. Besides, the company also produces dead burnt magnesite

and monoliths, iron ore, multi layer ceramic chip capacitors, and sugar. The company also

provides travel-related services and has a total wind energy generation capacity of 11.5

MW.

Dalmia Cement Bharat has arranged funds of over Rs 3,100 crore from a syndicate of

banks to undertake capital expenditure or capex plans. The funds have been raised via

companys 100% subsidiary, Dalmia Cement Ventures as debt.

The company is looking to augment its capacity in Meghalaya, Himachal Pradesh,

Karnataka, Rajasthan and Madhya Pradesh.

The revenue of the company for the quarter ended on Sept 30th increased 24% YoY while

profit increased 34% YoY.

The top line of the company is expected to grow at a CAGR of 19% over 2008A to 2011E.


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Key Concerns

Any change in the existing policies ofGovernment ofIndia and/or State Governments or

new policies, providing or withdrawing support to the industries in which the companyoperates or otherwise affecting these industries, would adversely affect the supply and

demand balance and competition in markets in which the company operate there by

impacting the margins of the company.

The Company's exposure to currency risk arises out of the import of materials like coal for

its cement plants and machinery and equipment for its projects.

FINANCIAL OUTLOOK OF DCBL

At the current market price ofRs.147, the stock trades at a P/E of 5.93 xs and 4.94 xs for

FY10E and FY11E respectively.

On the basis ofEV/EBDITA, the stock trades at 2.23 xs and 2.03 xs for FY10E and FY11E

respectively.

Price to Book Value of the stock is expected to be at 0.85 and 0.72 respectively for FY10E

and FY11E.

The Net sales of the company are expected to grow at a CAGR of 19% over 2008 to 2011E.

Dalmia Cement Bharat has arranged funds of over Rs 3,100 crore from a syndicate of

banks to undertake capital expenditure or capex plans. The funds have been raised via

companys 100% subsidiary, Dalmia Cement Ventures as debt.

The company is looking to augment its capacity in Meghalaya, Himachal Pradesh,

Karnataka, Rajasthan and Madhya Pradesh. Apart from this, it is also eyeing for a pan- India

presence in next ten years by adding around 35 million tonnes of capacity every year.

At present, Dalmia Cement is working on 10 million tonnes capacity addition plan, which islikely to be completed in coming 2-3 years.

The company is focused on becoming a pan-India player over a 10-year period. While the

company is present in the South through Dalmia Cement (Bharat) and in the eastthrough a

sister company OCL, it is planning to deepen its presence in these regions and also establish

its footprint in North India.


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INDUSTRY OVERVIEW

India is the world's second largest producer of cement after China, with cement companies

adding nearly eight million tonnes (MT) capacity in April 2009, taking the total installedcapacity to 219 MT. A few of the leading manufacturers are the UltraTech/Grasim combine,

Dalmia Cements, India Cements, etc. With the boost given by the government to various

infrastructure projects, road networks and housing facilities, growth in the cement

consumption is anticipated in the coming years.

Moreover, cement dispatches were 15.95 MT in July 2009, showing a growth of 9.92 per

cent as compared to 14.51 MT in July 2008. During July 2009, cement production was 16.23

MT, registering a growth of 10.63 per cent as compared to 14.67 MT in July 2008. Between

April-July 2009, cement production totaled 66.38 MT while cement dispatches totaled 65.80

MT.

TECHNOLOGICAL CHANGE

Continuous technological upgrading and assimilation of latest technology has been going on

in the cement industry. Presently, 93 per cent of the total capacity in the industry is based

on modern and environment-friendly dry process technology and only 7 per cent of the

capacity is based on old wet and semi-dry process technology. There is tremendous scope

for waste heat recovery in cement plants and thereby reduction in emission level.

NEW INVESTMENTS

JSW Cement, part of the OP Jindal Group, plans to set up cement units near the groups

steel plants at Kurnool, Andhra Pradesh, and Vijayanagar, Karnataka. The units which will

have a combined capacity of 5.5 MT per annum will be set up at a cost of US$ 393.1 million

Reliance Infrastructure will invest US$ 2.1 billion to set up cement plants with a total

capacity of 20 MT per annum over the next five years.

Reliance Cementation, an Anil Dhirubhai Ambani Group (ADAG) company, plans to set up

a 5 MT integrated cement plant in Yavatmal district ofMaharashtra at a cost of US$ 463.2

million.

Jaiprakash Associates Ltd has inked a MoU with state-owned Assam Mineral Development

Corporation Limited (AMDC) for setting up a 2 MT per annum capacity cement plant at an

estimated cost of US$ 221.36 million.


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Iron ore mining firm Rungta Mines (RML), the flagship company of SRRungta group, plans

to set up a one million tonnes cement plant in Orissa with an investment of around US$ 123

million.

MERGERS AND ACQUISTIONS

Holcim strengthened its position in India by increasing its holding in Ambuja Cement from

22 per cent to 56 per cent through various open market transactions with an open offer for

a total investment of US$ 1.8 billion. Moreover, it also increased its stake in ACCCement

with US$ 486 million, being the single largest acquirer in the cement sector.

Leading foreign funds like Fidelity, ABN Amro, HSBC, and Nomura Asset Management

Fund and Emerging Market Fund have together bought around 7.5 per cent in India's third

largest cement firm, India Cements (ICL), for US$ 124.91 million.

Cimpor, the Portugese cement maker, paid US$ 68.10 million for Grasim Industries' 53.63

per cent stake in Shree Digvijay Cement.

CRH Plc, the world's second biggest maker and distributor of building materials, acquired a

50 per cent stake in My Home Industries Ltd for almost US$ 372.64 million.

Vicat SA, a French cement maker acquired a 6.67 per cent stake in Hyderabad-based Sagar

Cement for US$ 14.35 million.


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GOVERNMENT INTIATIVES

Government initiatives in the infrastructure sector, coupled with the housing sector boom

and urban development, continue being the main drivers of growth for the Indian cementindustry.

Increased infrastructure spending has been a key focus area over the last five year

indicating good times ahead for cement manufacturers.

The government has increased budgetary allocation for roads under National Highways

Development Project (NHDP).

Appointing a coal regulator is looked upon as a positive move as it will facilitate timely and

proper allocation of coal (a key raw material) blocks to the core sectors, cement being oneof them.

Keeping in mind the global meltdown which is impacting the cement companies in India, the

government re-imposed the counter-veiling duty (CVD) and special CVD on imported

cement in January. This is likely to provide a level playing field to domestic companies.

ROAD AHEAD

According to a report by the ICRA Industry Monitor, the installed capacity is expected to

increase to 241 MTPA by FY 2010-end. India's cement industry is likely to record an annual

growth of 10 per cent in the coming years with higher domestic demand resulting in

increased capacity utilization. Moreover, according to the Centre for Monitoring Indian

Economy (CMIE), cement production is expected to grow by 8.1 per cent and demand for

the same is likely to rise by a healthy 7-7.5 per cent in FY 2009-10.

KEY HIGHLIGHTS-MACRO

a) Capacity utilization in South, which was down from 91% to 78% YoY during 1HFY10, is

now marginally improving on the back of strong demand coming from real-estate, rural

housing and government sponsored constructions,


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b) Cement price, which was reduced during 1HFY10 to 250-260/bag in the southern region

are again inching up on the back of firm demand

c) Government sponsored projects to aid the cement demand in South

The Government of Karnataka amongst the top five industrial states in India and whereDCBLs derives 11% of its cement sales is set to unveil infrastructure projects, including

Public Private Partnership projects, worth INR 1000bn over next 12-15 months and increase

the State GDP from 7% to 9%. The Karnataka government is expected to come up with ten

industrial infrastructure projects in the near future. Government of Karnataka is also in the

process of selecting a contractor for executing 35 km high speed rail link project from

Bangalore Airport Davanahalli to the City centre. The cost of the project is estimated at INR

57.67bn for which five consortiums have been short listed and are expected to be

implemented in a PPP mode. The Centre will invest INR 40.1bn in this project as viability gap

funding and the state government will provide the land assets. Some of the majorinfrastructure projects to be taken up using PPP model include:

y 10,000 km of four-lane road projects for KRDCL valued at INR 450bn;y Tadri sea port at Haldipur worth INR 40bn investment;y Davanahally Business Park in a 300 acre land at INR 95bn andy Two mono-rail projects in Bangalore worth INR 60bn

All these lead to good demand in the southern region, where there is concern of excess

cement capacity over demand.

KEY HIGHLIGHTS-MICRO

CEMENT SEGMENT

a) DCBL has availed services ofFLSmidth, a world leader in cement plant designs to erect its

new plant at Ariyalur. The materials handling equipment supplies include a circular

limestone stacker / reclaimer three side scraper stacker / reclaimer systems for raw mill

additives, coal and cement mill additives, respectively. The alternative fuels used in

pyroprocessing include used lubricating oil, greases, sludge from furnace oil and LSHS (Low

Sulphur Heavy Stock), spent carbon, and oil soaked cotton waste.


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b) The benefit of new plant getting commissioned at Ariyalur (taking DCBLs cement

capacity to 9MnT on standalone basis) will lead to volume growth from Q4FY10 and

onwards.

c) Post Ariyalur plant becoming operational, market mix will change in favor of Tamil Nadu

and Kerala market which would be beneficial to DCBL as both these regions has high growth

potential.

d) DCBL is setting up a captive power plant of 27MW at Ariyalur which is expected to be

operational from Q4FY10, making the Ariyalur plant self-reliant for its power requirement.

POWER SEGMENT

DC

BL

has captive power plant of 88.5M

W, of which 16.5M

W is Wind energy farm at TamilNadu (PLF of 23%) and 45MW thermal power plant at Dalmiapuram, Tamilnadu with PLF of

82-85%. From this plant, 10MW is sold to the TNEB through PTC and rest is meant for

captive consumption. At its Ariyalur plant, DCBL is adding 27MW of thermal power plant,

exclusively for captive consumption. DCBL imports coal mainly from South Africa / Indonesia

and also uses alternative fuel like pet coke and lignite. DCBL has a one year contract with

the coal supplier from South Africa and its shipment cost is USD 17-18/tonnes against

current shipment cost of USD23/tonnes. The current cost of imported coal stands at USD

85/tonnes, including shipment.


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SEGMENT WISE REVENUE BREAK UP

cement 69%

sugar 20%

others 7%

power 4%


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BREAK UP OF EXPENDITURE

Depreciation 9%

otherexpenditure 18%

employeecost 11%

powerandcost 31%

consumption ofrawmaterial 14%

freightcharges 16%

purchase oftraded goods 1%


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NET SALES AND PAT (PROFIT AFTER TAX)

NETSALES PAT

Q2FY 09 4548.5 401.9

Q3FY 09 4099.4 237.1

Q4FY 09 4921.4 442.7

Q1 FY 10 5576 585.7

Q2FY 10 5637 538.5


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GEOGRAPHICAL DISTRIBUTION OF CEMENT

TAMILNADU 51%

KERELA 25%

ANDHRA PRADESH 11%

KARNATAKA 9%

OTHERS 4%


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REVENUE BREAK UP FY-09

CEMENT 72%

SUGAR 16%

POWER 6%

OTHERS 6%


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PLANT INFORMATION

The cement manufacturing plant ofDalmia Cement (Bharat) Ltd (DCBL) at Dalmiapuram and

Ariyalyur in the state of Tamil Nadu (representing 72% of its installed capacity of 9 million

tonnes per annum (MnT) to understand its manufacturing technology, assessment of regional

demand-supply and over all plan of the company. Following are the key takeaways from the

management meet.

Company Background

DCBL has business interests in two major segments namely Cement and Sugar with share of

72% and 16% respectively for FY09 and rest coming from Power and others. DCBL has cement

plants in Southern States of Tamil Nadu (Dalmiapuram & Ariyalur) and Andhra Pradesh

(Kadapa), with combined capacity of 9 million tonnes per annum (MnT). With 51% of its cement

getting sold in Tamil Nadu, 25% in Kerala, 11% in Karnataka, 9% in Andhra Pradesh and rest 4%

in eastern and other regions, DCBL enjoys double digit market share in its region. DCBL is a

pioneer in super specialty cements like Oil well, Railway sleeper and Air strip. DCBL also has

three Integrated Sugar Mills in the State of UP with installed capacity of 22,500 tons of cane

crush per day, distillery capacity of 80 kilo litres per day (KLPD) and cogeneration facility. DCBL

also has stake in OCL 21.7% having cement manufacturing capacity of 5.4 MnT

DCBL Cement Plants capacity (MnT)

CEMENT KADDAPA(AP) DALMIAPURAM ARIYALUR ORISSA TOTAL

DCBL 2.50 4.00 2.50 9.00

OCL 5.35 5.35

TOTAL 2.50 4.00 2.50 5.35 14.35

Demand Supply scenario

During H1FY10, as compared to all India consumption growth of 11.6%, the consumption in

southern region grew marginally at 4.5%. The growth in southern region was muted due to

slowdown in construction activities in Andhra Pradesh due to political instability.


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CURRENT SUPPLY SENARIO

INSTALLED

CAPACITY

ATTHEENDOF Q2FY

09

ADDITIONH1 FY10 EXPECTEDH2FY10 E

ALLINDIA 231 12 25

SOUTH 83 5 10EAST 34 3 6

CEMENT DEMAND SENARIO

DEMANDGROWTH %

SOUTH 4

EAST 18

KERALA 7

ORISSA 23TAMILNADU 12

WESTBENGAL 16


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PROJECT PROFILE

INTRODUCTION

This project was undertaken to provide Dalmia Cement (Bharat) Limited with some information

related to the non-trade segment of the cement industry and the perception of the buyers of

brand Dalmia in the market. The report also aims at providing suggestions to the company

regarding positioning of the brand with respect to the competing brands so as to improve sales

in the non-trade segment by studying the prospective buyers. The factors that affect the sales

ofDalmia cement are also studied in this study; the most influential factors that drive the sales

are then segregated from the least important factors. In the end the study aims at providing

suggestions to improve sales in the Hyderabad region and position the brand so as to increase

the market share.

METHODOLGY

The methodology was simple, the sample size was 50 respondents they were asked to fill

questionnaire. The questionnaire had 11 questions based on points, the respondents were

asked to give points to 9 different cement brands from the scale 1 to 9 where 1 being lowest

and 9 being highest. The aggregate was then calculated and the brand getting maximum points

was ranked first on the basis of consumer choice and the brand getting least score was ranked

ninth. The five open ended questions in the questionnaire were also tabulated and calculated

and the data hence collected is used to draw conclusions and inferences. The data is alsoanalyzed to give recommendations and suggestions to the company to improve sales.

LIMITATIONS

1. The scope of the project is limited to only one market segment-that is the non-tradesegments only the builders, construction companies and institutional buyers.

2. We are not providing the respondents with incentives so it may be possible they are nothonest in replying to the questionnaire.

3. The study covers only the Hyderabad region and not any other place so the findingswont be applicable to any other region.

4. Some builders showed preference towards some particular brand, as they might havebeen biased in answering the questionnaire.

5. Lack of cooperation from the builders and construction companies.6. Most of the builders and construction companies were not ready to disclose the data or

provide the relevant information as they feared competition.


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QUESTIONNAIRE

DOCUMENTNUMBER:

NAMEOFTHECOMPANY/FIRM/ESTABLISHMENT:

ADDRESS:

CONCERNED PERSON: CONTACTNUMBER:(mobile)

:(Landline)

1. THESTAGEATWHICHTHE PROJECTIS:

2. NUMBEROF PROJECTSITESCURRENTLYIN PROGRESS:

S.NO LOCATION DISTRICT

3. TYPEOFWORK UNDERTAKEN:4. AVERAGECONSUMPTION(PERMONTH):5. AREYOUAWAREOFDALMIACEMENTS:

y YESy NO

6. HAVEYOUEVERUSEDDALMIACEMENTS:y YESy NO

7. DOYOUHAVETIEUPWITHANYOTHERCEMENTCOMPANY:y YESy NOIFYES,NAMETHECOMPANY:


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QUESTIONNAIRE

Givepoints to the following brands onthe scale 1 to 9,where 1 is thelowest

and9 being thehighest.

1.Givepoints to the following brands onthe basis of quality:

Maha Dalmia Penna Ambuja Ultratech Zuari Priya Coromandel Rassigold

2.Givepoints to the following brands onthe basis of sales promotionalactivities:


3.Givepoints to the following brands onthe basis ofprice flexibilitythey give:


4.Givepoints to the following onthe basis ofprice offered:


5.Givepoints to the following brands onthe basis ofawareness:



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6.Givepoints to the following brands onthe basis oftheirresponseto customercomplaints if

any:


7. Givepoints to the following brands onthe basis ofleadtime:


8.Givepoints to the following brands onthe basis oftransport facilities:


9.Givepoints to the following brands onthe basis of setting time:


10.Givepoints to the following brands onthe basis ofcreditperiodthey give:


11.Givepoints to thecompanies onthe basis ofthenumber of brands they offer:



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12.Wouldyou switchto another brand if:

7. You get better quality8. You getlowerprice9. Goodleadtime10.Increasedcreditperiod11.Any otherreason

13.Does theart ofmaking andmaintaining therelationship ofthemarketing representative

matterto you?

y Yesy No

14.Whatdo companies do tomotivateyou?

y Giveyou desktop itemsy Goldcoinsy Incentivesy Any other

15.Arethereany other governmentpolicies thataffectyourconsumption ofcement?

y Yesy No

Ifyes,namethem:

16.What is themost important factorthataffects yourconsumption out ofthe following?

y Technicalassistancey After sales servicey Promotionalactivitiesy Qualityaccreditation


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y Logistics and supplypattern

Promotion

Sales promotion and incentive schemes are mostly short term and designed to

stimulate quicker or greater purchase of particular product or services by

consumer on the trade. The various sales promotion methods adopted by the

company are:-

1. Advertisement is a way of promotion and making the buyers aware of the product

through television, newspaper, wall paintings, calendar etc.

2. Dealers and retailers meet.3. Training programmes

4. Architect and engineer meet.

5. Incentives schemes to dealers like cash discount, quantity discount, annual discount,

target setting, loyalty discount, annual visits to tourist places, annual gifts.

6. Dealer's relationship programme like best seller award and other award programs.

7. Company visits to dealer's shop.

Technical customer service cell

Backed up with a dedicated team of highly skilled professional and experienced

application Engineers, the cell functions in an advisory capacity. Besides handling their

constructional problems the cell offers all kind of assistance and guidance in the

selection of the right cement for different application to ensure cost-effective, durable

and safe construction.

Product

Special application cement:

Oil well cement-Oil well cement as the name suggests is used for grouting of oil wells,

also known as the cementing of the oil wells. This is done for both, the off shore and on

shore oil wells. As the number of oil wells in India is increasing steadily, the sales of oil

well cement have also increased. This has boosted the Indian cement industry to a large


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extent. Oil well cement is manufactured from the clinker of Portland cement and also

from that has been hydraulically blended.

Railway sleeper cement- used for railway sleepers.

Air strip cement- used for air strips

Sulphate resisting Portland cement-is a Portland cement in which the quantity oftricalcium aluminates is less than 5%. It can be used for purpose wherever Portland

pozzolana cement, slag cement and ordinary Portland cement are used. The use of

sulphate resisting Portland cement has proven beneficial, particularly in conditions

where there is a risk of damage to the concrete from sulphate attack. It is

recommended in places where the concrete is in contact with the soil, ground water,

exposed to sea coast and sea water.

Ordinary Portland cement- Is manufactured in the form of different grades and is

manufactured by burning siliceous materials like limestone at 1400 degree Celsius and

thereafter grinding it with gypsum.

OPC grade 43-is in high demand in India and is largely used for residential, commercial

and other building purposes. It has a compressive strength of 560 kg per square cm.

OPC grade 53-is rich in quality and is highly durable. It is called SUPEROOF. Expert

opinion is required and is used for constructing higher structures.

Portland pozzolana cement-is manufactured by blending pozollanic materials, OPC

clinker and gypsum either grinding them together or separately. Today Portland

pozzolana cement is widely in demand for industrial and residential buildings, roads,

dams and machine foundation. Dalmia has named PPC as VAJRAM.

Place

Two type of distribution network mainly followed by the company are followings

1. Trade- This is available for the distributer, in this type company supply the cement

through deport or directly from the factory.

2. Non Trade- It is basically contract basis, it includes contractors and government. It is

for a fix period at fix rate.

There are two methods which followed by company regarding transportation cost

1. To be billed- In this category company pay freight and transportation cost, it is

applicable in stock transfer only. The company first supply the cement to depot then

supply to the dealer.

2. To Pay- In this category supply cost is given by the stockiest or dealer. Application in

direct sale means from industry to Dealer. 75% transportation is through railway and

rest through from road.


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Price

Price is one of the important elements of marketing mixture. Various factors affecting

pricing policy of company are:-

1. Competitor's price- competitor polices affects DCBLs pricing strategies and needed tobe continuously watched.

2. Market positioning-a company can earn more profit if position of their product

is good Dalmia also consider brand positioning of various brands.

3. Godown stock, market demand and supply also affect the pricing strategies.

4. Transportation cost is one of the major costs which the company is continuously

trying to reduce by transporting right quantity through most suitable mode of

transportation.

5. Brand image-brand image plays important role in pricing policy.

Dalmia cements are continuously trying to reduce the cost without affecting the quality

of product. The study deals with the market survey of prospective buyers of Dalmia

cements. These prospective buyers include the non-trade section of the company

government and non-government (builders, construction companies, institutional

buyers and projects by GHMC (greater Hyderabad municipal corporation).These buyers

are interviewed and given questionnaires to fill and then the data will be analyzed to

see which factors affect the buyers consumption habits. Factor analysis is used as the

technique and is a class of procedures used for reducing and summarizing the data. Each

suggests ways to deal with variable is expressed as a linear combination of the

underlying factors. Like wise, the factors themselves can be expressed as linear

combinations of the underlying factors. Then the study aims at finding the factors that

affect the prospective buyer behavior because some buyers go by mind and some go by

heart. It also studies the factors that affect the buying behavior. The study will also help

us study the brand perception i.e. how our brand is perceived in the market. Building

strong brands is very important because brand sells. The other variant of the study is to

suggest ways to deal with the competition and manage services. Each competitor seeks

its own market some want profits, growth and expansion and some want the market

share. The main focus ofDalmia cements is to enhance the market share by capturing

different markets and market segments. The motive of my study is to do the market

analysis of (4P) in relation to competing brands through data analysis and suggest ways

to promote sales that will in turn help in enhancing the market share of the company.


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Brand loyalty

You learn that creating customer loyalty is neither strategic nor tactic; rather, it is the

ultimate objective and meaning of brand equity. Brand loyalty is brand equity

Brand loyalty implies that consumers bind themselves to products and services as a

result of a deep seated commitment. A repeat purchase behavior Is the actual re-

buying of the brand whereas loyalty includes a reason/fact occurring before the

behavior.

Brand loyalty is of two types spurious and true loyalty:

Spurious loyalty exhibits the following attributes: biased, behavioral response,

expressed overtime, by some decision making unit with the respect to one or more

alternate brands, a function of inertia.True brand loyalty includes the above, but replaces inertia with a psychological process

resulting in brand commitment.

Brand positioning and Brand perception

Organizations seek to develop and project brand perception based on internally driven

needs and goals. Positioning refers to a brands subjective (or) perceived attributes in

relation to competing brands. This perceived image of the brand belongs not to theproduct but rather is the property of the consumers mental perceptions in some

instances, could differ widely from a brands true physical characteristics. Positioning is

the art of selecting, out of number of unique selling propositions, the one which will give

you maximum sales. The most important DECISION WE WILLMAKE HERE AFTER THE

STUDY ON BRAND PERCEPTIONIS DONEIS HOW MY CUSTOMERS PERCEIVEMY BRAND

THAT IS THEIR UNDERSTANDINGOFMY BRAND INRELATION TOOTHERCOMPETING

BRANDS? AND HOW SHOULDI POSITIONMY BRAND TOGET MAXIMUM SALES?

THEOBJECTIVEOF THE STUDY IS TOGIVE SUGGESTIONS ANDMARKETING STRATEGIES

TO THE COMPANY-DALMIA CEMENTS THAT WILL HELP THE COMPANY POSITION ITS

BRAND TODERIVEMAXIMUM SALES AND ALSO FOCUS ON THE FACTORS THAT WILL

HELP ENHANCE THE SALES AND INCREASE MARKET SHARE IN THE NON-TRADE

SEGMENT.


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DATA PRESENTATION AND INTERPRETATION

1.TYPEOFWORK UNDERTAKEN

Commercial 21 37.5

Civil 1 1.785714

Residential 31 55.35714

Retail 1 1.785714

it building 1 1.785714

Independent 1 1.785714

56 100

The data collected shows that the builders, construction companies and institutional buyers

surveyed most of them were into residential and commercial construction. And the rest

were civil, independent, retail etc.

2.AVERAGECONSUMPTION(PERMONTH)

METRICTONNES

0-50 24% 5

51-100 38% 8

101-150 19% 4

37%

2%

55%

2% 2%2%

commercial

civil

residential

retail

it building

independent


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151-200 19% 4

100% 21

BAGS

0-200 2 6.896552

201-400 6 20.

68966401-600 12 41.37931

601-800 8 27.58621

801-1000 1 3.448276

29 100


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This data shows that cement is a highly consumed product and is used for various infrastructureactivities.

3.AREYOUAWAREOFDALMIACEMENTS

YES 50 100%

NO 0 0%

4.HAVEYOUEVERUSEDDALMIACEMENTSYES=20 40%

NO=30 60%

7%

21%

41%

28%

3%

0-200

201-400

401-600

601-800

801-1000


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Theabovedata shows that brandDALMIA is apopular brandas 100% builders,construction

companies and institutional buyers surveyedareaware of the brand.So hence this proves

that brand DALMIA is a strong brand inHyderabad region and brand awareness is not a

problem with this particular brand. The builders, construction companies and institutional

buyers are very wellaware ofthe brand. In fact,most ofthem i.e.60% of themhave used

Dalmiacementearlier.

5.DOYOUHAVETIEUPWITHANYOTHERCEMENTCOMPANY

YES 90% 45

NO 10% 5

40%

60% YES=20

NO=30


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Theabovedata shows thatmost ofthe builders havetie up withdifferent brands i.e.90% of

the sample sizehavetie ups with othercompanies.

IFYES,NAMETHECOMPANY

LandT 6 12.2449

Birlacement 15 30.61224

Grey goldcement 1 2.040816

Ultratech 16 32.65306

Priyacement 3 6.122449Rassi goldcement 1 2.040816

Ramco cement 1 2.040816

Deccancement 2 4.081633

Acccement 2 4.081633

Sagarcement 1 2.040816

Orientcement 1 2.040816

49 100

And if weanalyzetheabovedata,BIRLAcementandULTRATECH,arethetwomostpreferred

brands ofcementamongst the buyers ofnon-trade segment. LandT, PRIYA,DECCANand

ACC follow justafterthat.The leastpreferred brands areGREYGOLDCEMENT,RASSIGOLD

CEMENT,RAMCOCEMENT,SAGARCEMENTAandORIENTCEMENT.

90%

10%

YES

NO


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QUESTIONSFROMTHE QUESTIONNAIRE:

1.WOULDYOUSWITCHTOANOTHERBRANDIF:

You get better quality 12 24%

You getlowerprice 20 40%

Goodleadtime 7 14%

Increasedcreditperiod 10 20%

Any otherreason 1 2%

6, 12%

15, 31%

1, 2%

16, 33%

3, 6%

1, 2%1, 2%

2, 4%2, 4% 1, 2% 1, 2% L and T

Birla cement

Grey gold cement

Ultratech

Priya cement

Rassi gold cement

Ramco cement

Deccan cement

Acc cement

Sagar cement

Orient cement


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Theart ofmaking andmaintaining therelationship ofthemarketing representativedoes

matterto the buyers as 74% are in favor ofthat is theartmatters to them.

3.WHATDOTHECOMPANIESDOTOMOTIVATEYOU:

Givedesktop items 5 10%

Goldcoins 27 54%

Incentives 12 24%

Any other 6 12%

74%

26%

YES=37

NO=13

10%

54%

24%

12%

Give desktop items

Gold coins

Incentives

Any other


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Thecompaniesmotivatethe buyers by giving them incentives and goldcoins with24% and

54% respectively.

4.ARETHEREANYOTHERGOVERNMENT POLICIESTHATAFFECTYOURCONSUMPTION

OFCEMENT?

YES=3 6%

NO=47 94%

5.WHATISTHEMOSTIMPORTANTFACTORTHATAFFECTSYOURCONSUMPTION

OUTOFTHEFOLLOWING?

Technicalassistance 8% 4

After sales service 6% 3

Promotionalactivities 24% 12

Qualityaccreditation 30% 15

Logistics and supplypattern 32% 16

The most important factors that affect the consumption of buyers are quality accreditation and

logistics and supply pattern. The buyers are more concerned about the quality and also the way

6%

94%

YES=3

NO=47


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the cement is transferred and the supply chain pattern. As this industry is highly dependent on

transport for the supply of cement from the plants to the depots and the direct customers; the

supply and chain pattern should be very effective and efficient. As promotional activities dont

score high on the list the above question that says that what companies do to motivate you;

gold coins and incentives dont play a vital role. So the companies rather than investing inpromotional activities can go for improvement in supply chain pattern and quality

improvement.

6.GIVE POINTSTOTHEFOLLOWINGBRANDSONTHEBASISOF QUALITY TOTAL

1. MAHA RANK 8-1412. DALMIA RANK 3-3213. PENNA RANK 4-3154. AMBUJA RANK 2-3275. ULTRATECH RANK 1-3796. ZUARI RANK 6-2337. PRIYA RANK 5-3118. COROMANDEL RANK 7-1459. RASSIGOLD RANK 9-82


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Onthe basis of sales promotionalactivities Ultratechwas ranked 1,Ambuja2andDalmia3

this proves thatallthesethree brands aredoing well in sales promotionalactivities.

8.GIVE POINTS TO THE FOLLOWING BRANDS ON THE BASIS OF PRICE

FLEXIBILITYTHEYGIVE

TOTAL

1. MAHA RANK 6-2252. DALMIA RANK 3-3163. PENNA RANK 4-3104. AMBUJA RANK 1-3835. ULTRATECH RANK 2- 3196. ZUARI RANK 5-2857. PRIYA RANK 7-1718. COROMANDEL RANK 8-1339. RASSIGLD RANK 9-112


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Onthe basis ofprice flexibilityDalmia is againranked3with316points afterAmbujaand

Ultratech.

9.

GIVE POINTSTOTHEFOLLOWINGONTHEBASIS OF PRICEOFFERED TOTAL

1. MAHA RANK 8-1312. DALMIA RANK 3-3253.

PENNA RANK 4-3154. AMBUJA RANK 2-3565. ULTRATECH RANK 1-3666. ZUARI RANK 6-1907. PRIYA RANK 5-3068. COROMANDEL RANK 7-1619. RASSIGOLD RANK 9-114


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Onthe basis ofprice offeredDalmia is ranked3 with325points, withUltratechtaking the

leadwith366points andAmbuja with356points.

10.GIVE POINTSTOTHEFOLLOWINGONTHEBASISOFAWARENESS TOTAL

1. MAHA RANK 8-1372. DALMIA RANK 3- 3333. PENNA RANK 4-3024. AMBUJA RANK 2-3525. ULTRATECH RANK 1-3756. ZUARI RANK 6-1907. PRIYA RANK 5-2968. COROMANDEL RANK 7-1539. RASSIGOLD RANK 9-116

131325

315

356366

190

306

161114 MAHA

DALMIA

PENNA

AMBUJA

ULTRATECH

ZUARI

PRIYA

COROMANDEL

RASSIGOLD


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Onthe basis ofawareness also ultratechranks 1 with375points,Ambuja with352points is

ranked2andDalmia with333points ranked3.This shows that brandawareness is nota

problemwithDALMIKACEMENTS.

11.

GIVE POINTSTOTHEFOLLOWINGBRANDSONTHEBASISOFTHERESPONSETOCUSTOMERCOMPLAINTSIFANY

TOTAL

1. MAHA RANK 6-1922. DALMIA RANK 3-3093. PENNA RANK 4-3014. AMBUJA RANK 2-3405. ULTRATECH RANK 1-3866. ZUARI RANK 5-2897. PRIYA RANK 7-1668. COROMANDEL RANK 8-1469.RASSIGOLD RANK 9-121


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Onthe basis ofcustomercomplaints Dalmia is ranked3with309points.

12.

GIVE POINTSTOTHEFOLLOWINGBRANDSONTHEBASISOFLEADTIME TOTAL

1. MAHA RANK 5-2892. DALMIA RANK 3-3423. PENNA RANK 4-3354. AMBUJA RANK 2-3485. ULTRATECH RANK 1-3806.

ZUARI RANK 8-1307. PRIYA RANK 6-1908. COROMANDEL RANK 7-1399. RASSIGOLD RANK 9-108


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Onthe basis ofleadtimeDalmia is ranked3with342points.

13.

RANK THEFOLLOWINGBRANDSONTHEBASISOFTRANSPORT

FACILITIES

TOTAL


Onthe basis oftransport facilities DALMIA is ranked3with325points.


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14.

GIVE POINTSTOTHEFOLLOWINGBRANDSONTHEBASISOFTHE

SETTINGTIME

TOTAL



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Onthe basis of setting timeDALMIA is ranked3 with319points.

15.

GIVE POINTSTOTHEFOLLOWINGONTHEBASISOFTHECREDIT PERIOD

THEYGIVE

TOTAL

1. MAHA RANK 5-2812. DALMIA RANK 2-3443. PENNA RANK 4-3004. AMBUJA RANK 1-3885.ULTRATECH RANK 3-329

6. ZUARI RANK 7-1527. PRIYA RANK 6-1868. COROMANDEL RANK 8-1469. RASSIGOLD RANK 9-126


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Onthe basis ofcreditperiodthey giveDALMIAranks 2with344points.

16.

GIVE POINTSTOTHECOMPANYONTHEBASISOFTHENUMBEROF

BRANDSTHEYOFFER

TOTAL

1. MAHA RANK 8-1102. DALMIA RANK 3-3323. PENNA RANK 4-3224. AMBUJA RANK 2-3385.ULTRATECH RANK 1-369

6. ZUARI RANK 6-2117. PRIYA RANK 5-3148. COROMANDEL RANK 7-1349. RASSIGOLD RANK 9-110


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Onthe basis of brands they offerDALMIAranks 3with332points.


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FINDINGS

STRENGHTS

1. DALMIA is strong brand name with a strong brand image as perceived by thecustomers inthenon-trade segment.

2. It is a qualityproductand brandawareness is notaproblemwiththis particular brand.WEAKNESS

1. DALMIA faces a strong competition fromULTRATECHandAMBUJAas inalltheabovementionedattributes UltratechandAmbujaranks higherthanDalmia.

2. There is also alack ofadvertisements andmarketing techniques inDALMIACEMENT.3. SUPPLYandLOGISTICS i.e.thetransportation is also anotherproblemas thecement isnotdelivered ontime.

4. Companies dont offer credit period and the lead time offer results in delay inconstructionactivities.

5. Power cut in the plants is also another weakness as power and transportationaccounts formaximumcostto thecompanythat is 31%.

OPPORTUNITIES

1. DALMIAhas a lot ofpotential to grow in thenorthern, westernandeastern region.DALMIAhas a strong hold in the southern regionand setting upplants innorthern,

westernandeasternregions will increaseproductionandhence will improvealot ofsupply relatedproblem.Supply will beable to match thedemandhence solving the

problem ofdelay in supplyas productionwill beabletomeettheexcessivedemand.

2. Improving infrastructure is another opportunity forDALMIAcement,as in setting upanew powerplantto solvetheproblem ofpowercuts inthis region.

3. It has a lot of scope to improve in the commercial areas that is non-governmentinstitutions.

THREATS

1. The biggestthreat is fromthecompetitors likeUltratechandAmbuja who areactuallyeating upthemajorproportion of sales andarethedominantplayers inthecement

industry.

2. Governmentcontrol is also another factoras themajorcementpricecontrollers likecoal,power,tariffs,railways, government freightare inthehands ofthe government.

As this market is price sensitive as seen in the study above a change in price can


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actuallymotivatethe buyerto buyanother brand.So governmentcontrol willplaya

rolehere.

3. High transportation cost is also another threat and the transporters are not verysincere indelivering thecement.

4.Threats from other competitors likeDuncan,Grasim, Lafarge,holcim etc;as few ofthemare international brands.

5. Coalandpoweraretheenergy inputs andcoal is in short supply;thetotalproductioncost ofcement is highlydependent onthesetwomajorenergy inputs coalandpower.


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RECOMMENDATIONS

1. BRAND POSITIONINGOFBRANDDALMIATOSUCCEEDINBRAND POSITIONING,THEFIRSTSTEP ISTO POSITIONORSITUATE

THEBRANDINTHETARGETCONSUMERSMINDINSUCHAWAY,THATINHISOR

HER PERCEPTION OF BRAND IT IS DISTINCTIVE AND OFFERS A PERSUASIVE

CUSTOMERVALUEBETTERTHANITSCOMPETITORS.THATISCALLEDCOMPETITIVE

ADVANTAGE.

2. FINDASTRONG POSITIONANDTHENSITONIT-LIKEIFWECOMPARETHEBRANDDALMIAWITHULTRATECHORAMBUJAWHATULTRATECHISDOINGISTRYINGTO

GETTHATSPACEINTHEMINDSOFCUSTOMERSBYADVERTISINGTHEBRANDAND

CAPTURING THEMINDS OF THE CUSTOMERS. FIND A STRONG POSITION BY

MAKINGONEANDTHENSITONITFIRMLY

3. POSITIONING IS THEBATTLE FORA PLACE IN THE CONSUMERSMIND-(AUTHORERACOMETH)

4. TOFINDAUNIQUE POSITIONYOUMUST LOOK INTOTHE PROPECTSHEADANDTHAT ISWHATWE TRIED DOING WE TRIED LOOKING INTO THE HEADS OF

PROSPECTIVE BUYERS; WHAT WE FOUND OUT WAS THAT ON AN AVERAGE

DALMIARANK 3 INALMOSTALLTHE PARAMETERSANDATTRIBUTES FACINGA

TOUGHCOMPETITIONFROMULTRATECHANDAMBUJA.

5. THEMOST IMPORTANT FACTORS THATAFFECT THEBUYERS BEHAVIOR IN THISINDUSTRYINTHENON-TRADESEGMENTACCORDINGTOMYSTUDYARE:

y QUALITYACCREDITATIONy LOGISTICSANDSUPPLY PATTERNy LOWER PRICEy BETTERQUALITYy CREDIT PERIODy TRANSPORTFACILITIES

6. DALMIA CEMENT CAN IMPROVE ON TRANSPORT FACILITIES, LOGISTICS ANDSUPPLY PATTERNAND PRICE;AS POSITIONINGISTHEARTOFSELECTING,OUTOF

ANUMBEROFUNIQUESELLING PROPOSITIONS,THEONEWHICHWILLGETYOU

MAXIMUM SALES. AS INULTRATECHS CASE THEIR TAGLINE SAYS ENGINEERS

CHOICE WHICH IS DIRECTLY AIMING TO POSTION ITS BRAND ON

QUALITY.POSITIONINGNEEDSTOBESOSTRONGTHAT KEEPSTHECOMPETITORS

OUT.


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7. PRODUCTION COST REDUCTION TOGETAN EFFECTIVEANDREASONABLE PRICEFORTHEMARKET,ANDIMPROVINGONSUPPLYANDLOGISTICS PATTERNCANBE

THEUNIQUESELLING PROPOSITIONFORDALMIACEMENT.THEYCANWORK ON

IMPROVINGTHEDELIVERYTIMEANDFULFILLINGTHECOMMITMENTSONTIME.

BECAUSEIFTHECOMPANYISSUCCESSFULINDOINGSOTHE POSTIONINGOFTHISPARTICULARBRANDINTHEMINDSOFTHECONSUMERSWILLBECOMEFIRMAND

STRONG.

8. THEBUILDERSWANTCREDIT PERIODANDMORE PRICEFLEXIBILITY.ANDASTHEMARKETIS PRICESENSITIVEWORKINGONTHIS PARTICULARAREACANIMPROVE

SALES.


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CONCLUSION

TO ATTAIN THE OBJECTIVE OF THIS PROJECT DETAILED INFORMATION WAS

COLLECTEDFROMTHESAMPLESIZEOF50 RESPONDENTSINHYDERABADREGION.

THEMARKETRESEARCHHASREVEALEDMANYFACTSANDINFORMATIONWHICH

CAN BE HELPFUL TO THE COMPANY IN FURURE SALES AND DITRIBUTION

ACTIVITIES.DALMIA CEMENT ISA STRONGBRAND INHYDERABADREGIONBUT

FACES A TOUGH COMPETITION FROMMAJORNATIONAL PLAYERS ASWELL AS

SOMEREGIONAL PLAYERS,ITHASGOOD QUALITY,ANDBYCONTINUOUSEFFORTS

CAN BUILD A UNIQUE MARKETING PROPOSITION AND IMPROVE ON THE

WEAKNESSESTOOVERTAKEALLTHEOTHERCOMPETITORS.

THEMARKETSURVEYUNDERTAKENSHOWSTHATEFFECTIVEMARKETINGEFFORTS

ARE VERY IMPORTANT FOR POSTIONING OF A BRAND. THE DISTRIBUTION

CHANNEL PLAYSAVITALROLEANDACTSASTHEBACKBONETOTHIS INDUSTRY.

AND THE VARIOUS OTHER FACTORS THAT IS THEMARKETINGMIX OF 4(P) IF

DEVELOPED PROPERLYCANHELP INCREASESALES.


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REFERENCES

1. To produce 2.50 Million tonnes ofDalmia brand OPC and Dalmia Vajram brand (PPC)Cement BY VishalDated:Mar 06, 2009

2. Globalization of cement industry November 13, 20093. First call India equity advisors Pvt Ltd

First call India Equity Advisors Pvt. Ltd focuses on, IPOs, QIPs F.P.Os, Takeover Offers,

Offer for Sale and Buy Back Offerings.

4. "Marketing battles take place in the mind of a consumer or prospect. That's where youwin. That's where you lose. Jack Trout, Big Brands, Big Trouble

5. Unicorn Investment Solutions-unicorn wealth6. www.indiamaps.com7. Cement manufacturing association8. www.dalmiacements.com9. www.accement.com10.You learn that creating customer loyalty is neither strategic nor tactic; rather, it is the

ultimate objective and meaning of brand equity. Brand loyalty is brand equity

-Daryl Travis (emotional branding)

11. "A strong brand position means the brand has a unique, credible, sustainable, and

valued place in the customer's mind. It revolves around a benefit that helps your product or

service stand apart from the competition. Scott Davis, Brand Asset Management

12. Strategies for competitive advantage second edition

-Subroto Sengupta


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13. www.invetopedia.com

14. www.marketing.about.com

15. www.en.wikipedia.org

16. www.dot.gov.in

Documents

Project Report Vyom