Marketing Management of Cement Industry in India

Marketing management

INTRODUCTION

Marketing is an essential function performed by each and every organization to promote their goods and services within a targeted market. Marketing management is a process of reaching customers by different ways of advertising, sales and promotions. It helps to share ideas related to products with customers in order to increase their sales and profit. In this present assignment Ambuja cement Ltd. Will be chosen. It is a foremost cement company and was earlier named as Gujarat Ambuja cement Ltd. Organisation has its revenue of around 76,378.1 million. Companies shares are traded on National and Bombay stock exchange. This report will include Background of cement industry, market positioning as well as present unique selling proposition. Furthermore, it will so also include Marketing audit, including both internal and external factors and company's potential for market growth will be described briefly.

Background of industry, market positioning as well as present unique selling proposition

Cement industry places as one of the largest industries of the world. It has the capacity to generate employment and it has contributed in development. Cement is an essential element for construction purpose. It is the second most consumed material in the world. It comes next to steel for construction purpose. Cement is low at value but it is high at bulk. In 1914, India has set its first foot in the cement industry. Indian cement industry produces the best quality cement and placed as second largest quality producer in the world after China. It produces different varieties of cement with around 300 million tonnes of production capacity. Private sector covers around 98% of total Indian industry and remaining 2% is with public sector. Ambuja cement was established in 1986 which was initially named as Gujarat Ambuja Cements Ltd.

Organisation has total cement capacity of around 18.4 million. It has higher technology plant which are very efficient in producing cement. It earns the highest profit in India among entire Indian cement industry. It ranked on 3rd position in India among cement industry. Main basic objective of the company is to manufacture best quality cement for its customers. For the same it has been awarded by prime minister of India. Cement industries are considered to be the biggest polluter of environment. But, Ambuja cement believes in the protection of environment. Since they started their operations, Ambuja Cement have their own unique sustainable development projects and which is eco-friendly for their home-building constructions in a hassle- free manner. Among the top 12 players in cement industry, this company is placed on 3rd number in terms of production capacity and it contributes 13% among overall production of Indian cement industry.

Ambuja Cement is a leading cement industry who is responsible for its natural and man-made resources. To increase sales of the company, it has covered 48000 wholesalers and retailers. It has got the capacity of 29 million tonnes in the complete year. Ambuja cement Ltd. Has five manufacturing units and 8 grinding units in the entire nation. Organisation believes in covering major key locations among the entire country. There are four captive port terminals which are established by the company to distribute properly across the nation. Ambuja cements Ltd. believes in developing its business by way of reaching maximum wholesalers and retailers. End consumer can be targeted through distributors. Sales targets are given to such allocator so that company can achieve its sales objectives. It has got the capacity of 29 million tones in the complete year (Trautman and Ford,2018). They make sure their products arrive at the apparent time to their valuable customers.2. Marketing audit, including both internal and external factors and whether there is the potential for market growth. Market audit is conducted when company plans to check its potential for market growth. To conduct the same firm has to make systematic evaluation of both the internal and external factors. Market audit should cover all the major areas by doing study on strengths and weakness of company. It is carried to know that what opportunities will be found and threats will be faced by business (Karatum,2017).

SWOT analysis

Strengths

Ambuja cement Ltd. is one of the major growing company in cement industry. Strengths are those factors which help the company in growing more and these are the reason behind survival of a company in the market. Every company has some strengths which helps it in achieving its goals and objectives (Husaini, Kusumawati and Mawardi, 2017). Below are the strengths of the cited company. Strong dealer network: Company has very strong network of its dealer which has increased its sales to a great extent and has helped the company to combat competitors. Targets for sales and different awards are given by company on achievement of the same to Wholesalers and retailers. This policy encourages distributors for achieving their targets (Oedl-Wieser, 2017).

Strong financial backing

Ambuja cements is excellent at finance as its revenue increases every year which makes it easy for organisation to expand its business and achieve its goals and objectives. Ambuja cement has its shares listed on national and Bombay stock exchange. It helps the company in growing higher by raising finance from public.

Low cost

Ambuja has the lowest cost of manufacturing among all the companies of cement industry. This is the biggest strength which helps it in expanding its business and allows organisation in knowing that whether it has potential for growing in market or not. Lower cost among all the rivalries makes it easy for taking pricing decisions (Sale, Mesak and Inman, 2017). ‘I CAN’, the spirit. It is the catalytic force behind the success of the company. Ambuja cement is encapsulated by the management philosophy used in the ‘I CAN’ spirit. The signification of the respective catalytic force is to achieve the collective goal of many through the best potential individual contribution. This rationale supports and motivates their employees by sharing their parallel responsibilities.

Weaknesses

Every company has some disadvantages which stop it from becoming more successful. But it is the duty of managers and leaders to analyse weaknesses of organisation and work on them. An establishment can achieve objectives and goals only by way of converting its weakness in to strengths. Following are the weaknesses of Ambuja cement Ltd.

High transport cost

Cement is low at value but it is high at bulk. It takes high transportation charges to send it from one place to another place. So company needs to check the location and its infrastructure facilities before planning any new branch or unit.

Licensing

Ambuja cements needs to have license before starting any new mines. In India, as per the Mines act, 1952 every new establishment is required to take license before starting mining process. It is a time taking process which makes the company dependant on taking license before starting its venture.

High competition

There are many companies in cement industry who has high quality product at reasonable prices. So Ambuja cement Ltd. has to make such policies related to advertising, sales so that it can give tough competition to its competitors such as Ultratech cement, wonder cement (Czernin, 2018).Low at product diversification: Ambuja cement does not have various products for diversifying its market. So it makes the lowest possibility for the company to expand its share in market.

Opportunities

Ambuja cement Ltd. has many opportunities which it can grab and develop its business. Here are some of them which are listed below. GST benefits: Cement industry got many benefits of GST because government has provided many relief by declining tax rate from 25% to 18%. Company can enjoy such taxation benefits and expand its business by opening new ventures (SWOT analysis, 2016).

High growth in cement industry

In the world, India places on second position in terms of cement production. So cement industry is the most growing industry in India. So Ambuja cement can expand its business at higher speed by grabbing the demand in the market.

Mergers and acquisition

Company has excellent financial resources. High demand in the market of cement can make it expand its business by mergers at global level. It will result in high growth and increase profits of company. It will increase exports at global level.

Technological advances

Government has hired new technology from Japan which is environmental friendly and highly efficient. The plant capacity has been increased with the help of technology. In cement industry, From mining to final production every thing is completely dependant on technology (Belghali and Bennafla, 2018). Many changes are being made in the field of energy conservation. This will result in technological up gradation of Ambuja cement Company. Adaptation of higher technology by company will make it easy to expand and grow.

Threats

A threat can be defined as the obstacle to reach the destination. Ambuja cements face so many threats and they are listed below.

High competition

It is the biggest threat in this present world to face strong competition. As many companies are there in the market, it is tough to sale the product at higher prices. This results in the limited market share in the cement industry (Charter,2017).

Higher cost of production

Many raw materials are required to make final cement for sale. Price of such product is very high because of increasing import and excise duty along with that high mining cost is also included which results in higher cost of production.

New distribution channels

Ambuja cement works on the policy of making distributor at every possible location and they reach to end consumer through retailers and wholesalers. But it is very difficult to develop new wholesalers and making them understand about the entire work system. It is the duty of the company to provide maximum possible benefits to their distributors by way of giving different offers.