MARKET ANALYSIS AND STUDY OF PRICE

PREMIUM OF ACC VS. IT’S COMPETITORS

BYSHEKHAR ANAND

15BSP2532

ABOUT ACC

• ACC (ACC LIMITED) IS INDIA'S FOREMOST MANUFACTURER OF CEMENT AND CONCRETE. • ACC'S OPERATIONS ARE SPREAD THROUGHOUT THE COUNTRY WITH 17 MODERN CEMENT

FACTORIES, MORE THAN 50 READY MIX CONCRETE PLANTS, 21 SALES OFFICES, AND SEVERAL ZONAL OFFICES.

• IT HAS A WORKFORCE OF ABOUT 9,000 PERSONS AND A COUNTRYWIDE DISTRIBUTION NETWORK OF OVER 9,000 DEALERS.

• SINCE INCEPTION IN 1936, THE COMPANY HAS BEEN A TRENDSETTER AND IMPORTANT BENCHMARK FOR THE CEMENT INDUSTRY IN MANY AREAS OF CEMENT AND CONCRETE TECHNOLOGY.

• ACC HAS A UNIQUE TRACK RECORD OF INNOVATIVE RESEARCH, PRODUCT DEVELOPMENT AND SPECIALIZED CONSULTANCY SERVICES.

• ACC’S BRAND NAME IS SYNONYMOUS WITH CEMENT AND ENJOYS A HIGH LEVEL OF EQUITY IN THE INDIAN MARKET. IT WAS THE FIRST CEMENT COMPANY TO FIGURE IN THE LIST OF CONSUMER SUPER BRANDS OF INDIA.

OBJECTIVE OF THE PROJECT• PRODUCT ANALYSIS –TO UNDERSTAND THE PRODUCT OFFERING BY VARIOUS COMPANIES

AND IDENTIFY THE PRODUCT QUALITY GAP ACROSS VARIOUS BRANDS.• PRICE ANALYSIS – TO UNDERSTAND THE VARIOUS PRICING STRATEGY OF THE OTHER

CEMENT COMPANIES ESPECIALLY THE ONE LEADING THE MARKET.• SCHEMES ANALYSIS – OBSERVING THE SCHEMES AND OFFERING OFFERED TO THE DEALERS

BY THE OTHER COMPETITORS IN THE MARKET.• SLAB STRUCTURE – KEEPING CHECK THAT EQUAL MARGIN GIVEN BY THE COMPANY

WHOLESALERS TO THE RETAILERS.• CUSTOMER SERVICE – PROVIDING CUSTOMER WITH THE ENGINEERING ASSISTANCE AND

FURTHER IMPROVISING THIS CONNECTIVITY.• BRAND EQUITY – TO UNDERSTAND THE FOLLOWING GAPS *BRAND AWARENESS *BRAND LOYALTY

METHODOLOGY

DATA COLLECTION• BY COLLECTING THE PRIMARY DATA FROM THE RETAILERS AS WELL AS THE

CONSUMERS, BY CARRYING OUT A SURVEY OVER A SPECIFIED PERIOD OF TIME.DATA ANALYSIS• ANALYZING THE DATA COLLECTED FROM THE SURVEY ON VARIOUS STRONG POINTS

NECESSARY FOR THE ANALYSIS.INTERPRETING THE RESULTS• INTERPRET THE RESULT OF THE SURVEY ON THE BASIS OF THE ANALYSIS AND

SUGGEST WAY FORWARD AND FORMULATE A STRATEGY THAT WOULD HELP ESTABLISH ACC PRODUCTS AS A STRONG PLAYER IN THE PATNA MARKET.

PRODUCT ANALYSIS

• 43GRADE OPC ORDINARY PORTLAND CEMENTACC CEMENT IS THE MOST COMMONLY USED CEMENT IN ALL CONSTRUCTIONS INCLUDING PLAIN AND REINFORCED CEMENT CONCRETE, BRICK AND STONE MASONRY, FLOORS AND PLASTERING. IT’S IS ALSO USED IN THE FINISHING OF ALL TYPES OF BUILDING , ROADS , BRIDGES , CULVERTS , ROADS , WATER RETAINING STRUCTURE ETC.• 53 GRADE OPC

PRODUCED FROM HIGH STRENGTH AND DURABILITY TO STRUCTURE BECAUSE OF ITS OPTIMUM PARTICLE SIZE DISTRIBUTION, SUPERIOR CRYSTALLINE STRUCTURE AND BALANCE PHASE COMPOSITION.• PPC

FLY ASH BASED PORTLAND POZZOLANA CEMENT .THIS IS A SPECIAL BLENDED CEMENT PRODUCED BY INTER GRINDING HIGHER STRENGTH OPC CLINKER WITH HIGH QUALITY PROCESSED FLY ASH – BASED ON NORMS SET BY THE COMPANY R&D.

PRODUCT ANALYSIS(CONTD.)

• PSC

THIS IS A SLAG BASED BLENDED CEMENT THAT IMPARTS STRENGTH AND DURABILITY TO ALL STRUCTURES. IT IS MANUFACTURED BY BLENDING AND INTER - GRINDING OPC CLINKER AND GRANULATED SLAG IN SUITABLE PROPORTIONS AS PER OUR NORMS OF CONSISTENT QUALITY. PSC HAS MANY SUPERIOR PERFORMANCE CHARACTERISTICS WHICH GIVE IT CERTAIN EXTRA ADVANTAGE WHEN COMPARED TO ORDINARY PORTLAND CEMENT.

PRODUCTION DEMAND (Y O Y)

2006 2007 2008 2009 2010 2011 2012 2013 2014 20150

50

100

150

200

250

300

350

400

MILLION TON PER ANNUM DEMAND

MILLION TON PER ANNUM DEMAND

DISTRIBUTION OF STATEWISE INSTALLED CAPACITY CEMENT PLANTS IN INDIA

ANDHRA PRADESHASSAMBIHAR

CHHATISGARHGUJRAT

HARYANAH.P.

JHARKHANDKARNATAKA

M.P.MAHARASTRA

MEGHALAYAODISHAPUNJAB

RAJASTHANTAMIL NADU

UTTAR PRADESHUTTARAKHAND

21.330.670.67

5.337.33

1.333.33

25.33

7.336

0.672.67

1.3312

11.335.33

1.33

% STATE SHARE OF PRODUCTION % STATE SHARE OF PRODUCTION

ACC PRODUCTS IN THE BIHAR MARKET

PRICE ANALYSISCOMPANY /BRAND PRICE of cement per 50kg bag.(Rs.)

ACC F2R/PSC 360-375/350

LAFARGE CONCRETO/ PSC

 

350-365/280-310

ULTRA TECH SUPER 355

BIRLA GOLD/ BIRLA SAMRATH 270-290

JAYPEE BUNIYAD 270-290

SHREE ULTRA 250-280

K.C SUPER(KONARK CEMENT) 280-310

MARKET ANALYSIS ON PRICING

02468

ARE YOU SATISFIED WITH THE HIGH PRICE OF ACC

MARKET RESEARCH ON PRICING

REGION1

REGION2

REGION3

REGION4

REGION5

REGION6

0

5

10

HOW WOULD YOU RATE THE QUALITY VS PRICE OF ACC PRODUCTSQUALITY PRICE

SCHEME ANALYSIS

LAFARGE ULTRA TECH JAYPEE BIRLA CORPS

SHREE CEMENT

KONARK CEMENT

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GIFTS AND HAMPERS

FAMILY TOUR

Chart Title

GIFTS AND HAMPERS CASH AND OTHER DISCOUNTS FAMILY TOUR

CUSTOMER SERVICE

CUSTOMER FACILITIES(RMX OR RMC)

BRAND EQUITY

ACCULTRA TECH

LAFARGEBIRLA CORPS

AMBUJASHREE

KONARKKALYANPUR

OTHERS

0 0.5 1 1.5 2 2.5 32.5

1.52

10.1

0.40.8

0.21.5

Cement brand which first comes to your mind

MARKET SHARE OF COMPANIES IN THE INDIAN CEMENT INDUSTRY

22%

15%

13%10%

7%

6%

5%

5%

5%4%

4% 4%

% SHAREULTRA TECHACCAMBUJAJAI PRAKASHTHE INDIA CEMENTSHREE CEMENTCENTURY TEXTILESMADRAS CEMENTSLAFARGE CEMENTBIRLA CEMENTBINANI CEMENTOTHERS

MARKET ANALYSIS

HIGH PRICE LACK OF AWARNESS WEAK SALES & DISTRIBUTION NETWORK

LACK OF SCHEMES AND OFFERS LACK OF ADVERTISING0

1

2

3

4

5

6

7

8

BARRIER FOR ACC PRODUCT TO BE SOLD

MARKET ANALYSIS

• .

Individual construction

Roof casting

Repair work

plaster purpose

0 1 2 3 4 5 6 7 8 9

Primary purpose for the consumption of premium grade cement

MARKET ANALYSIS

• .

PURCHASE ANOTHER BRAND

MOVE TO OTHER RETAILER WAIT FOR IT TO BE AVAILABLE

BUY WHAT IS OFFERED BY THE RETAILER

0

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2

3

4

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6

7

8

IF YOUR BRAND IS NOT AVAILABLE IN THE OUTLET,WHAT WOULD YOU DO?

SWOT ANALYSISSTRENGTH-• ACC BEING OLDEST BRAND IN THE MARKET APPROX. 8 DECADES OLD, HAVING PAN INDIA PRESENCE.• TRUST OF OLD GENERATION HAVE INFLUENTIAL ROLE ON THE FOLLOWING GENERATION ABOUT IT • THERE IS NO MATCH FOR CONSISTENT QUALITY, DURABILITY AND VARIABILITY OF ACC PRODUCT INTO THE

MARKET.• ACC IS HAVING VERY OLD AND DEDICATED NETWORK OF DEALERS, WHOLESALERS AND DECADE RELATIONSHIP.WEAKNESS-• DUE TO MAXIMUM EVACUATION OF LIME IN LAST FEW DECADES HAS RESULTED INTO LOW QUALITY OF LINE THUS

HAVING COLOR VARIATION IN PRODUCT.• (QUANTITY DISCOUNTS AND OTHER DISCOUNTS). HOWEVER THE COMMUNICATION OF DISCOUNT BY THE

COMPETITORS IS FASTER THAN ACC.• HIGH PRICING OF ACC IS ITS MAIN CONCERN. • MAINTENANCE OF OLD ACC COLONIES .

SWOT ANALYSIS(CONTD.)OPPORTUNITY• EXIT OF LAFARGE FROM THE EXISTING MARKET ESPECIALLY IN THE EASTER INDIA WHERE IT HAS GOT HUGE

PRESENCE.• ACC BEING OLDEST BRAND IN THE MARKET APPROX. 8 DECADES OLD, HAVING PAN INDIA PRESENCE. WHICH IS THE

GREAT ADVANTAGE IT HAS TO COMPETE WITH THE NEW PLAYERS COMING IN TO THE MARKET.THREAT

• IN THE STATE OF BIHAR THE COMPETITORS LIKE SHREE, KALYANPUR HAS ESTABLISHED IT’S GRINDING UNIT HAVING ADVANTAGE OF EX- FACTORY SALE THROUGH ROAD MOVEMENT.

• NO A DAY’S GAP BETWEEN LAUNCHING PREMIUM PRODUCT HAS NARROWED TO GREAT EXTENT.• UNFAIR TRADE PRACTICES OF COMPETITORS IN COMPARISON TO ETHICAL APPROACH OF ACC.• ACC URBAN MARKET SHARE IS DECLINING BECAUSE OF THE FACT THAT TREND OF PEOPLE SHIFTING

FROM RURAL TO URBAN AREA IN WAIT OF EDUCATION ETC.

RECOMMENDATIONS AND STRATEGY

THE 4 P’S STRATEGY

• PRODUCT (OR SERVICE)• PRICE • PLACE• PROMOTION

MAJOR RECOMMENDATIONS

• STRENGTHENING THE SALES NETWORK.

• STRATEGIC SPONSORSHIP THAT APPEALS TO THE ASPIRATIONAL NEEDS.

• SPONSORING A CAMPAIGN TO EMOTIONALLY CONNECT WITH THE TARGET MARKET.

• PREMIUM SHOULD BE EXPLAINED TO CUSTOMERS THROUGH CSR ACTIVITIES.

OTHER RECOMMENDATIONS

• THE DEMAND AND SUPPLY RATIO NEED TO BE MATCH.

•  ACC IS STILL CONSIDERED AS A BRAND OF TRUST BUT SOMEWHERE THE RISING INFLATION IS DECAYING ITS MARKET SHARE.

• PROPER & STRATEGIC ADVERTISEMENT.

• SUGGESTIONS RECEIVED BY MOST OF THE RETAILERS WAS TO IMPROVE THE SALES NETWORK BETWEEN THE COMPANY AND THE RETAILERS

CONCLUSION

IT IS CLEAR THAT ACC HAS STRATEGIC ADVANTAGE OVER THE OTHER COMPETITORS IN NAMELY LAFARGE, ULTRA TECH, BIRLA CORPS AND ETC.ITS PRESENCE IN THE DOMESTIC MARKET FOR MORE THAN 75 YEARS AND THE QUALITY PREMIUM PRODUCT ALONG WITH THE PRODUCTION CAPACITY OF ITS EFFICIENT PERFORMING PLANT HAS GIVEN IT A SWEET SECOND SPOT IN THE INDIAN MARKET BEHIND THE MARKET LEADER ULTRA TECH WHICH IS CONTINUOUSLY FOCUSING ON INCREASING ITS PRODUCTION CAPACITY ACC HAS GOT A GREAT OPPORTUNITY TO ACQUIRE THE MARKET SHARE OF LAFARGE WHICH HAS GOT STRONG MARKET IN THE EASTER PARTS OF INDIA. AS LAFARGE HAPPENS TO EXIT FROM THE INDIAN MARKET BY THE END OF THE YEAR.AFTER THE CONTROLLING STAKES OF ACC GOING TO HOLCEM THERE WAS CHANGE IN THE COMPANY MANAGEMENT STRUCTURE THUS FOCUSING ON MAINTAINING THE QUALITY OF THE PRODUCT

THANKYOU GENTLEMEN'S FOR YOU TIME