submitted in partial fulfillment of the requirement for...

―An In-depth Study into Branding of Cement

& Its Effectiveness on Final Buyer‖

A Thesis

Submitted in Partial Fulfillment of the Requirement

For the Degree of

Doctor of Philosophy IN MANAGEMENT

Submitted to

GANPAT UNIVERSITY

RESEARCH GUIDE:

DR. Mahendra Sharma

Pro-Vice Chancellor

Ganpat University

RESEARCH SCHOLAR:

Kettan S. Karkhanis

Reg No. MM/001/008/08

Ganpat University

V. M. Patel Institute of Management

Ganpat University, Ganpat Vidyanagar

Mehsana-Gozaria Highway, Mehsana-384012

Gujarat, India.

September – 2013

2

PREFACE

Cement is essential for construction activities like building houses, factories, bridges,

roads etc. One of the characteristics of a developed country is its growing

infrastructure, thus, cement is an important element for the development of a country

and its economy.

Cement companies do not have much of application-oriented research and

development efforts but this will become critical for future success. To a large extent,

this is related to creating the application and customer of the future and understanding

customer needs based on the emerging environment. Companies will need to create

niche products and develop the market for such products by providing solution-based

offerings to the customer. Innovation will be very important, to create high-grade and

cheaper quality of cement. Indian companies have been moving from lower grade

cement to higher over the years, and would have to continue to roll out even better

quality to compete with the global players, and local competition. New Cement

products like RMC (Ready Mix Concrete) will help create a company carves out a

niche in the market. With the surge in world population, and continuously increasing

pressure on natural resources, there is a need for using new technologies that make

Cement production Environment friendly. It is imperative for innovators in the

concrete and cement industry to consider a heterogeneous approach to materials and

to integrate knowledge of other fields under a triple bottom-line of economic, social

and environmental criteria. Stakeholder concerns have increased over the years and

there are questions raised as regards sustainable development.

Local cement companies are turning aggressive and innovative on brand promotion

and market penetration braving a recessionary trend triggered by high freight and total

cost, inadequate power and unstable price levels. Indian cement marketers have long

been trying to brand this commodity. Cement companies are now trying to create a

brand pool.

In today's highly competitive business environment together with the global meltdown

of economy, manufacturers of generic commodity products like cement must achieve

some degree of differentiation for their products in order to avoid their product being

viewed as a basic generic commodity. This will help them to develop strong cement

brands in this sector, and move the customers from a low-involvement decision-

3

making process to a medium- or high-involvement decision-making pattern. Hence

this paper attempts to find out the customers' preference pattern and the factors which

influence the customers' preference so that a strong cement brand can be developed by

understanding the values the customers are looking for, and then develop a suitable

branding strategy. This study has been carried out with some of the major market

influencers in the four fastest growing metro cities in India. The results of the survey

shows that the final buyers are not only viewing physical products, but also the

distribution, service, quality, package, durability, price, value for money, company

image and company policy that accompany the product. The study concludes with the

managerial implications and suggestions for cement manufacturers towards

developing suitable branding strategies.

4

ACKNOWLEDGEMENTS

Studying Branding of cement and its effectiveness on final buyer was challenging and

not easy for me. But the support, guidance and encouragement of all who helped me

made this research adventure a ‗Wow!‘ experience. I wish to thank all for their

contribution and support.

I would like to begin by sincerely thanking Prof. (Dr.) Mahendra Sharma for being my

guide and mentor during the entire process of my research work. I consider myself

extremely fortunate to have Dr. Sharma‘s professional and personal support, and

unfaltering encouragement. I can‘t even begin to articulate how much I have learned

from him. Without his connoisseur guidance, support and encouragement, I would

not be able to complete my work successfully.

I owe a debt of gratitude to Dr. L.N.Patel, Vice-Chancellor, Ganpat University, Prof.

P. I. Patel, Hon. Director, M.D.E.F; GanpatVidyanagar, Dr. D.V.Patel, Founder, V.M.

Patel institute of Management, Ganpat University and Management of the Ganpat

University for their moral support and motivation.

I am grateful to prof. (Dr.) H.J. Jani to review my research work continuously and to

provide valuable suggestions to improve my work. And also many thanks to Associate

Professor Shri. Haresh Barot for consistently adding values to my thesis.

I wish to thank Masons, Contractors, Retailers, Architects and IHBs (Individual

House Builders).

I also want to thank, Dr. Rajesh Deshpande, Prof. C.Y. Nimkar, Shakti Patnaik

(Innovative Research Services (India) Pvt. Ltd.), Colleagues from Cement Industry

and all the students who have worked with me, during the research.

Finally, I would like to thank my wife Shraddha, for her continuous and unconditional

support.

At last, I thank one and all, for the divine blessings.

5

CERTIFICATE BY RESEARCH GUIDE

This is to certify that the thesis titled “An In-depth Study into Branding of

Cement & Its Effectiveness on Final Buyer.” submitted by

Kettan S. Karkhanis, is the bonafide work completed under my

supervision and guidance for the award of degree of Doctor of Philosophy

(Ph. D.) in Management.

Research Guide:

Dr. Mahendra Sharma

Pro–Vice Chancellor,

Ganpat University, Ganpat Vidyanagar,

Gujarat – India.

Forwaded Through:

Dr. Mahendra Sharma

Dean, Faculty of Management Studies,


Gujarat – India.

Date:

Place: Ganpat University

6a

DECLARATION BY CANDIDATE

The thesis titled ““An In-depth Study into Branding of Cement & Its

Effectiveness on Final Buyer.” is submitted in fulfillment of the

requirements for the award of the degree of Doctor of Philosophy (Ph.D)

in Management to Ganpat University, Mehsana. I declare that this thesis

is based on my original work except for quotations and citations which

have been duly acknowledged. I also declare that this thesis has not been

previously or concurrently submitted either in whole or in part, for any

other qualification to Ganpat University or other institutions.

Research Scholar:

Kettan S. Karkhanis

Reg. No. MM/001/008/08

Date: 01.09.2013


CERTIFICATE

This is to certify that the thesis titled “An In-depth Study into Branding of Cement &

Its Effectiveness on Final Buyer” submitted by Kettan S. Karkhanis fulfil the

suggestions given by doctoral committee during pre-doctoral seminar held on 22nd

September 2012, vide Ganpat University letter no. 89/GNU/Ph.D/66/2013 dated 21st

January,2013 are duly incorporated in this thesis.

Research Guide:

Dr. Mahendra Sharma

Pro–Vice Chancellor,


Gujarat – India.

Forwarded Through:

Dr. Mahendra Sharma

Dean, Faculty of Management Studies,


Gujarat – India.

Date:

Place: Ganpat University.

6b

THESIS APPROVAL SHEET

The Ph.D. thesis titled “An In-depth Study into Branding of Cement & Its

Effectiveness on Final Buyer” submitted by Kettan S. Karkhanis has been approved

for the award of the degree of Doctor of Philosophy under the Faculty of

Management, Ganpat University, Gujarat, India.

External Examiner: Research Guide:

Dr. Mahendra Sharma

Date:


6c

7

List of Tables

Table no. Content Page

no.

1.1 Capacity additions 2008 – 2009 38

1.2 Cement 39

1.3 Clinker 39

1.4 CTotall (MT) 39

1.5 Variety wise cement production 2008 – 2009 (Apr- Nov) 40

1.6 Cement wagon and rail dispatch share 40

1.7 Clinker wagon and rail dispatch share 40

1.8 1.1% growth in cement production 2007 – 2008 / 2008 - 2009 41

1.9 1.2 % growth in cement in cement consumption (Apr-Dec)

(2008 – 2009 / 2007 – 2008) 41

1.9.1 Industry capacity and utilization levels 43

1.10.1 Cement expectation of the industry (All figures in million

tons) 44

1.10.2 Falling demands leads to closure of ACC’s cement plant 45

3.4.1 Sample size 92

4.1.1 Importance to branding – By profession 94

4.1.2 Anova 95

4.1.2.1 Multiple comparison 95

4.1.2.2 Observed and expected frequency 96

4.2.1 Scope of the industry 97

4.2.2 Top 5 triggers in selecting a cement brand 98

4.2.3 Top 5 reasons for rejecting a cement industry 99

4.2.4 Seasonal effect on the cement industry 99

4.2.5 The role of pricing in the cement industry 100

4.2.6 The role of expert in recommending a brand 100

4.2.7 Top 5 major brands 101

4.2.8 Reasons for brand to be major players 101

4.2.9 Top 3 cement brands 102

4.2.10 Rotated Component Matrix 102

4.2.11 Rotated Component Matrix_1 103

4.2.12 Perception about ACC 105

4.2.13 Perception about ultra-tech 105

4.2.14 Perception about Ambuja 106

4.2.15 Importance of brand name while suggesting a cement brand 106

4.2.16 Reasons for the rating 109

4.2.17 Top 3 reasons for recommending national brands 109

4.2.18 Top 3 reasons for recommending local brands 110

8

4.2.19 What should a company do to promote its brand? 110

4.3.1 Who decide the cement brand 111

4.3.2 Factors considered before selecting a cement brand 113

4.3.3 Top cement brands considered 113

4.3.4 Top cement brands used 114

4.3.4.1 Reasons for using ACC 114

4.3.4.2 Reasons for using Ambuja 115

4.3.4.3 Reasons for using coromandal 115

4.3.5 Top 3 cement brands – in general 115

4.3.5.1 Reasons for saying ACC 115

4.3.5.2 Reasons for saying Ambuja 116

4.3.5.3 Reason for saying Ultra-Tech 116



4.3.8 Perception about Ultra-Tech 119

4.3.9 Importance of branding 120

4.3.9.1 Reasons for rating it to be “important” 120

4.3.10 Perception about branding 122

4.3.11 Relation between perception about branding and method

used to construct house. 124

4.3.12 Top 5 ways to promote a brand 124

4.4.1 Decision maker about the cement brands 125

4.4.2 Factors considered while deciding on a cement brand 126

4.4.3 Top brands – currently using 127

4.4.4 Top 3 brands – not using currently 127


4.4.4.2 Reasons for using Birla 128

4.4.4.3 Reasons for using ACC 128

4.4.4.3.1 Reasons for not using ACC 129

4.4.4.4 Reasons for not using L & T 129

4.4.4.5 Reasons for not using J.K. Lakshmi 129

4.4.5 Top 5 sources of awareness 129

4.4.6 Importance of brand name 130

4.4.6.1 Chi square Tests 130

4.4.6.2 Top 3 reasons for rating the brand name “Important” 131

4.4.6.3 Reasons for rating the brand name “Not so Important” 131

4.4.7 Brand preferred – National or Local 131

4.4.7.1 Reasons for preferring national brand 132

4.4.7.2 Reasons for preferring local brands 132

4.4.8 Top 3 brands 132

4.4.8.1 Reasons for saying Ambuja 132

9

4.4.8.2 Reasons for saying Birla 132

4.4.8.3 Reasons for saying ACC 133


4.4.10 Perception about Birla 135



4.4.13 Statement about branding 140

4.5.1 Factors considered before buying a cement brand 140

4.5.2 Top brands stocked 141

4.5.3 Top brands recommended 141

4.5.3.1 Reasons for recommending Ambuja 141

4.5.3.2 Reasons for recommending Ultra-Tech 141

4.5.3.3 Reasons for recommending ACC 142

4.5.4 Top brands not recommended 142

4.5.4.1 Reasons for not recommending – ACC 142

4.5.4.2 Reasons for not recommending – India cement 142

4.5.4.3 Reasons for not recommending – Pragati 142

4.5.5 Top 3 brands 143

4.5.5.1 Reasons for rating ACC. 143

4.5.5.2 Reasons for rating Ambuja 143

4.5.5.3 Reason for rating ultra-Tech 143



4.5.8 Perception about Ultratech 146

4.5.9 Importance of branding 148

4.5.9.1 Reasons for the rating 148


4.5.11 Perception about branding - By annual income 150

4.5.12 Brand preferred – National / Local / Both 150

4.5.12.1 Reasons for preferring national brands 151

4.5.13 Recommend local brand to 151

4.5.13.1 Reason for recommending local brands 151

4.5.14 Recommend national brand to 151

4.5.14.1 Reasons for recommending national brands 152

4.5.15 How should a company promote its brands??? 152

4.6.1 Who decides 152

4.6.2 Factors considered 154

4.6.3 Sources of awareness 154

4.6.5 Top 3 brands – not using currently 155


4.6.5.2 Reasons for using Ultra-Tech 155

10

4.6.5.2 Reason for using ACC 155

4.6.6.1 Reasons for not using ACC 155 4.6.6.2 Reasons for not using Birla 156

4.6.6.3 Reason for not using J.K. Lakshmi 156

4.6.7 Top 3 brands – in general 156

4.6.7.1 Reasons for ranking Ambuja 156

4.6.7.2 Reasons for ranking ultra-tech 156 4.6.7.3 Reasons for ranking ACC 157

4.6.8 Perception about Ambuja 157 4.6.9 Perception about ultra-tech 159


4.6.11 Importance of brand name. 162

4.6.11.1 Reasons for the rating 165


4.6.12.1 opinion on statements – by number of years in business 167

4.6.12.2 Opinion on statements – By type of business 167

4.6.12.3 Opinion on statement – By number of projects done 168

4.6.12.4 Opinion about local brands 168

4.6.13 Brand preferred – national or local? 169

4.6.13.1 Reasons for preferring national brands 169

4.6.14 How should a company promote a cement brand? 169

CONTENTS

Preface 2

Acknowledgments 4

Certificate By Research Guide 5

Declaration by Candidate 6a

Certificate 6b

Thesis Approval Sheet 6c

List of Tables 7

Chapter 1: Introduction 12

Chapter 2: Literature Review 49

Chapter 3: Research Methodology 91

Chapter 4: Data Analysis and Interpretation 95

Chapter 5: Findings and Conclusion 171

Bibliography 218

Annexure 220

Chapter 1

Introduction

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CHAPTER 1: INTRODUCTION

1.1. Overview

1.2. Cement Industry in India

1.3. History

1.4. Performance of the Industry

1.4.1. Installed Capacity

1.4.2. Production

1.4.3. Capacity Utilization

1.4.4. Export

1.4.5. Per Capita Consumption

1.4.6. Technological Change

1.4.7. Product Differentiation

1.5. Types of Cement in India

1.5.1. Ordinary Portland Cement

1.5.2. Portland Pozzolana Cement

1.5.3. Portland Blast Furnace Slag Cement

1.5.4. Oil Well Cement

1.5.5. Rapid Hardening Portland Cement

1.5.6. Sulphate Resisting Portland Cement

1.5.7. White Cement

1.5.8. Clinker Cement

1.6. Cement Process

1.6.1. Raw Materials

1.6.2. Proportioning

1.6.3. Raw mill

1.6.4. Homo Silos

1.6.5. Preheater

1.6.6. Kiln

1.6.7. Conditioning Tower

1.6.8. Electrostatic Precipitator

1.6.9. ID Fan

1.6.10. Grate Cooler

1.6.11. Finish Mill

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1.7. Government Initiatives

1.8. Cement Industry – At A Glance

1.8.1. Current Scenario – Financial Year ‟08

1.8.2. Analytical Review

1.9. Cement Sector Outlook – Negative

1.10 Effect of Real Estate on the Cement Industry

14

1.1. OVERVIEW

Cement has come a long way from being the grey powder sold in plastic bags. Today

they have become a brand.Cement is an essential component of infrastructure

development and most important input of construction industry, particularly in the

government‘s infrastructure and housing programs, which are necessary for the

country‘s socio-economic growth and development. It is also the second most

consumed material on the planet. About 2.5 billion tonnes of cement is produced

every year, which amounts to almost 0.3 tonnes for every person on the planet. The

industry employs about 850,000 workers in facilities in 150 countries. It has an

estimated annual turnover of $87 billion and has grown by nearly 4 percent a year

over the past decade.

1.2. CEMENT INDUSTRY IN INDIA In the race to become the next economic superpower, China has generally

outperformed India, and with the exception of Telecom and IT, India has had trouble

slaying the Chinese dragon. But now we can add another sector to the Indian success

story: cement. In last ten years, this sector has recorded a compound annual growth

rate (CAGR) of 8%, against the world cement industry average of 3.5 % and China‘s

cement industry growth rate of 7.2%. Twenty years ago, the Indian cement industry

was outmoded and inefficient. Today the industry not only outshines that of

developed countries such as US and Japan but also has become the second largest

cement producer in the world after China.

1.3. HISTORY The attempt to produce cement in India dates back to 1889 when a Calcutta firm

attempted to produce cement from Argillaceous (kankar). But the first organized

effort on mass scale to manufacture Portland cement commenced in Madras, in 1904,

by South India Industries Limited. The Factory could not succeed. However, it was in

1914 that the first commissioned cement manufacturing unit in India was set up by

India Cement Company Limited at Porbandar, Gujarat, with an installed capacity of

10,000 tons and production of 1,000 tonnes. Subsequently two plants; one at Katni

(M.P.) and another at Lakheri (Rajasthan) were set up.

The problem of supply outstripping demand was significant in early period of the

industry. This was followed by a price war between the producers where they resorted

15

to cutting down of prices and selling below production cost. This situation forced

many companies into liquidation. It was then when the Government of India

intervened into the market and referred the cement industry to the Tariff BTotalrd. All

these events resulted in formation of the Indian Cement Manufacturers' Association in

1925 whose main function was to regulate prices in the industry. In 1927, Concrete

Association of India was formed whose two main objectives were to educate the

public about the use of cement and to play an active role in popularizing Indian

Cement. The next step in the direction of rescuing cement industry was the formation

of Cement Marketing Company of India Limited in 1930 to promote and control the

sale and distribution of cement at regulated prices.

After all these initiatives, the sales increased along with more plants. In 1936, eleven

companies, merged to form Associated Cement Company Limited (ACC). In 1937,

Dalmiya Jain Group setup five factories with installed capacity of 5,75,000tons and

ACC added four more plants. With all these expansions, price war again started off

which resulted into a significant decrease in prices.

Government intervention took place both directly and indirectly. Direct intervention

happened in the form of government control over production, capacity and

distribution of cement, while indirect intervention took the form of price control. In

1977, higher prices were allowed for cement produced by new plants or major

expansions of existing plants. Different prices were assigned to cement produced in

low, medium and high cost plants.

The system of price control was accompanied by a policy of freight pooling. The price

control fixed a uniform price according to estimated production costs at which cement

was required to be sold all over the country. This price contained a freight component

that was averaged over the country as a whole. This freight pooling system promoted

equal industrial development all over the country. Yet, it also implied that producers

had no incentive in locating production such that transportation costs of cement would

be minimized. Market distance became a less important issue. As a result of non-

optimal location of industries, average costs of production as well as demand for

scarce railway capacity for transportation increased.

16

On account of the above-mentioned difficulties in the cement industry the government

of India introduced a system of partial decontrol in 1982. A levy quota of 66.60 % for

sales to government and small house builders was imposed on existing units while for

new and sick units a lower quota at 50% was established. The balance of 33.40%

could be sold in the free open market to general consumers.

A ceiling price was set for sales in the open market in order to protect consumers from

unreasonably high pricing of cement. Although overall profitability increased

substantially immediately after the introduction of partial decontrol, profits obtained

through non-levy sales decreased with greater availability of cement in the market and

continuously rising input costs.

To sustain an accelerating course, the government subsequently introduced changes in

levy obligations and retention prices regularly. As a result, in 1988 the levy quota was

as low as 30% for units established before 1982 and the retention price had increased

substantially. In 1987, the Cement Manufacturers Association and the government

decided that there was no further necessity for a maximum price ceiling.

Finally in 1989, the cement industry was considered to be prepared for free market

competition, and all price and distribution controls on sale of cement were withdrawn.

The system of freight pooling was abandoned. The industry was then de-licensed in

July 1991under the policy of economic liberalization. It was after this decontrol that

the Indian cement industry moved towards globalization, with increasing emphasis on

the exports. Growth was seen from 91 plants and 43 million tonnes of production in

1989-90 boosting to 132 plants and 161.66 million tonnes production in 2006-07.

Total capacity utilization for the industry has also increased from 78% to 91% during

the same period.

Hence, the history of the Indian cement industry indicates the role of government

played in influencing the twists and turns in the industry.

The Indian cement industry, today, is the second largest producer of cement in the

world just behind China, but ahead of the United States and Japan. The demand for

cement, being a derived demand, depends primarily on the industrial activity, real

estate business, construction activity, and investment in the infrastructure

17

development such as state and national highways. India is experiencing growth on all

these fronts and hence the cement market is flourishing like never before.

The Indian cement industry has a total industry capacity of over 200 million tonnes

(MT). The total cement industry is estimated at around Rs. 18,000 crores (US $ 4185

mn). It is consented to be a core sector accounting for approximately 1.3% of GDP

and employing over 0.14 million people. Also the industry is a significant contributor

to the revenue collected by both the central and state governments through excise and

sales taxes.

Indian cement industry is globally competitive because the industry has witnessed

healthy trends such as cost control and continuous technology up gradation.

Production capacity has gone up and top cement companies of the world are vying to

enter the Indian market, thereby sparking off a spate of mergers and acquisitions.

Global rating agency, Fitch Ratings, has commented that cement demand in India is

expected to grow at 10% annually in the medium term buoyed by housing,

infrastructure and corporate capital expenditures.

Presently, 93 per cent of the total capacity in the industry is based on modern and

environment-friendly dry process technology. The induction of advanced technology

has helped the industry immensely to conserve energy and fuel and to save materials

substantially. Indian cement industry has also acquired technical capability to produce

different types of cement like Ordinary Portland Cement (OPC), Portland Pozzolana

Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid

Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement etc.

Some of the major clusters of cement industry in India are: Satna (Madhya Pradesh),

Chandrapur (Maharashtra), Gulbarga (Karnataka), Yerranguntla (Andhra Pradesh),

Nalgonda (Andhra Pradesh), Bilaspur (Chattisgarh), and Chandoria (Rajasthan).

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1.4. PERFORMANCE OF THE INDUSTRY

Price and distribution controls lifted on 1st march 1989 and licensing abolished since

25th July 1991, gave fresh impetus to the key infrastructure industry. However the

performance of the industry improved all the more after late 1990s guiding it to newer

heights. The process of improvement in key performance indicators of the industry

can be analyzed during changing policy regimes of the government.

1.4.1. Installed capacity The installed capacity of the Indian cement industry has continuously shown an

increase over the period. The industry started with 0.0010 million tonnes (m.t.) of

installed capacity in 1914 and reached 3.28 m.t. in 1950 and 9.30 m.t. in 1960. The

growth in the capacity has been traced from 1970 onwards when the industry fell in

the hands of government control. In the period between 1970-71 and 1988-89, the

installed capacity of the cement industry grew from 17.61 m.t. to 58.97 m.t. at the

Annual Compound Growth Rates (ACGR) of 7.47%. This remarkable growth in the

capacities was due to producers‘ expectation of growing markets. But due to various

controls and lack of adequate demand, the growth of the industry was not noticed on

the desired rates. This resulted in oversupply and low capacity utilizations. Following

this, the period after total decontrol till 2006-07, the capacity addition although

increased at rates approximately equal to previous period at 7.09% annually, it could

hardly match the pace. This was although good for capacity utilizations as production

increased at greater rates. The cement industry in India had a total installed capacity

of 204.29 MT as on August 31, 2008.

Almost all players of the industry, small to medium to large, have added capacity

ranging between a minimum of 2,00,000 tonnes and a maximum of 3 MT in the last

three years (April 2005 to March 2008), effecting a total addition of 45 MT to the

installed capacity by setting up Greenfield projects, and expanding and upgrading the

existing plants. The continuous increase in the infrastructure projects along with the

rise in construction activity has ensured rising demand levels for the cement industry.

19

1.4.2. Production The production figures of the Indian cement industry tell a different story. When the

industry started in 1914, production was mere 0.0001 m.t. of cement. This slowly

increased to 1.5 m.t. in 1940 and 2.2 m.t. in 1950. The following two decades

witnessed enough production making it 14.40 m.t. in 1970-71. The period from 1970-

71 to just before decontrol and deli censing of the industry i.e. till 1988-89, the

production saw ACGR of 6.69%, just below the growth rate in installed capacity. This

indicated oversupply, because of which whole of the industry suffered. The next

period of decontrol compensated for this excess. The ACGR was at 8.09%, well above

the previous rates, which was also more than the growth in installed capacities of

7.09%. The annual growth rate for the total period during 1970-71 to 2006-07 was

7.39%.

1.4.3. Capacity Utilization The trend in capacity utilization of the industry is interesting to analyze, as there are

many fluctuations all through the period. Starting with 10% in the beginning of the

industry, the capacity utilization peaked to around 99% in 1937-38. But this could not

be sustained and the capacity utilization fell sharply to 67% in 1950, improving

marginally in the following two decades. The period of controlled market, as

mentioned before was characterized by oversupply in the industry, which got reflected

in negative ACGR of -0.73%. Whole of the period of 1970-71 to 1988-89 saw

fluctuations, moving utilization levels to as low as around 65% in some years. But

after total decontrol, there was some sort of upturn in this trend due to increased

production levels and the ACGR went up to positive 0.93%. It may be mentioned here

that the capacity utilizations have been at their highest only after 1999-2000 when it

reached 85% and moreover after 2004-05. In January 2007, it even went up to 100%,

highest ever, guiding it to the average of 94% for the financial year. This became

possible only because the installed capacities did not increase as much as production

did, finally leading to closure of gap between supply and demand. The overall period

ACGR was just above the positive mark at 0.10%.

20

1.4.4. Export The export of Indian cement has increased over the years mostly after decontrol,

giving the much-required boost to the industry. The demand for cement is a derived

demand, for it depends on industrial activity, real estate, and construction activity.

Since growth is taking place all over the world in these sectors, Indian export of

cement is also increasing. India has an immense potential to tap cement markets of

countries in the Middle East and South East Asia due to its strengths of location

advantage, large-scale limestone and cTotall deposits, adequate cement capacity and

production of world-class quality of cement with the latest technology. Hence, the

firms in the industry are capitalising on the opportunities, provided by the government

accompanied by favorable economic conditions. The industry had a negative ACGR

of -5.52% in the control period because of highly protected markets. The average

export volume in the period was around only 1.7 lakh tonne (LT) of cement. As the

industry was decontrolled and economy opened up, cement exports started making

rapid strides. The period has seen annual compound exponential growth rate of

35.35%. In volume terms, the exports from Indian cement industry increased from

1.43 LT in 1989-90 to 58.70 LT in 2006-07. The overall ACGR for the period of 37

years (from 1970-71 to 2006-07) however equalized a bit at 13.10%. The Indian

cement industry is technologically very advanced, as a result of which the quality of

Indian cement is now considered the second best in the world.

In 2001-2002, 3.38 million tonnes of cement was exported from India. That figure

stood at 3.47 million tonnes in 2002-03, and 3.36 million tonnes in 2003-04. Export of

Indian cement has been mostly to the West Asian countries.

The major companies exporting Indian cement are:

GujaratAmbuja

Ultra Tech Cement

L&T Limited

Aditya Cement

21

1.4.5. Per Capita Consumption

The per capita consumption of 136 kgs in the year 2006-07, compares poorly with the

world average of over 350 kgs and more than 660 kgs in China. Similarly in Japan it

is 631 kg/capita while in France it is 447 kg/capita. The process of catching up with

international averages emphasizes the tremendous scope for growth in the Indian

cement industry in the long term.

Also, one of the reasons for strong interest shown by the foreign players in India is

due to its lower per capita consumption of cement. The period of 1970-71 to 2006-07

has shown ACGR of 5.15%. When seen under two sub periods of control and

decontrol, it displays much higher growth rates of 9.35% in the decontrol period, as

compared to 1.11% in the period from 1970-71 to 1988-89. The cement consumption

projections by National Council of Applied Economic Research, on a conservative

basis, have placed the cement demand of 225 million tonnes by the year 2010-11. And

if the government goes ahead with infrastructure projects in a big way as planned, the

consumption is pegged to be at much higher levels of 291 million tonnes. This will

surely increase the current per capita consumption of cement in India.

1.4.6. Technological change Modernization and technology up-gradation is a continuous process for any growing

industry and is equally true for the cement industry. At present, the quality of cement

and building materials produced in India meets international standards and

benchmarks and can compete in international markets. The productivity parameters

are now nearing the theoretical bests and alternate means. Substantial technological

improvements have been brought about and today, the industry can legitimately be

proud of its state-of-the-art technology and processes incorporated in most of its

cement plants. This technology up gradation has resulted in increased capacity and

reduced cost of production of cement. 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. The induction of advanced technology has helped the

industry immensely to conserve energy and fuel and to save materials substantially.

22

1.4.7. Product Differentiation

India is producing different variety of cement, based on different compositions

according to specific end uses, like Ordinary Portland Cement (OPC), Portland

Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well

Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement,

White Cement etc. The basic difference lies in the percentage of clinker used. These

different varieties of cement are produced strictly under BIS specifications and the

quality is comparable with the best in the world. The production of Ordinary Portland

Cement has decreased since deregulation, it being 71.28% in 1989-90 slipping to

31.21% now (2006-07). Percentage of production of Portland Pozzolana Cement has

steadily increased from 17.37% in1989-90 to 60.12% in the year 2006-07. This is a

favorable change in the product-mix of Indian cement industry as PPC in more

specialized type of cement.

In an environment of growing competition, one of the major developments has been

the introduction of higher grades of cement. Grade is the 28 days compressive

strength of Ordinary Portland cement, when tested as per Indian Standards under

standard conditions.

Regional Concentration Cement, being a bulk commodity, is freight intensive and transporting cement over

long distances can prove to be uneconomical. This has resulted in cement being

largely a regional play with the industry divided into five main regions, viz., North,

South, West, East and the Central region. Until 1999-2000, India was divided in only

four regions; Centre came up only after that. In terms of capacity historically, the

southern region has always dominated the industry and is excess in capacity owing to

the availability of limestone, but the western and northern regions are the most

lucrative markets. East has most of the consumption of cement as of now due to

growing infrastructure. In 1950-51, the maximum capacity was in Southern region i.e.

34.91% while North had the least of 17.59%. This scenario remained the same in the

following decade and in 1970-71, when south installed 35.24% of capacities, north

deteriorated with 15.60% of capacities. Situation was the same till 1980s. It was only

in 1990s when West grew up to first position in terms of capacity. But as the fifth

geographical division came up, with MP moving to center with a major chunk of

23

capacity, the concentration has reduced. Also earlier capacities were concentrated

around limestone deposits only but market access has become very important

determinant of location of cement plants. In 2006-07, South again dominated the

capacities with 32.22%, which are actually excess, East, West and Centre has more or

less equal capacities of 14%, 18% and 15% respectively whereas North is second

highest at 21%.

Demand Drivers The key drivers for cement demand are:

Infrastructure - It accounts for nearly 20%-25% of the total cement consumption in

India. Investment in this segment is pegged at Rs 1000 billion per annum for the next

5 years. Expected investment in development of national highways, state highways

and rural rTotalds are estimated to be over Rs 3000 billion.

Housing - It accounts for nearly 60%-65% of the total cement consumption in India.

Housing sector is expected to grow at a healthy rate on account of growing

population, economic growth and increased urban migration.

Commercial construction – It accounts for nearly 10%-15% of total cement

consumption in India. Demand in construction sector will be primarily driven by

office spaces which will be used by IT/ITES industry or retail sector. The work force

in IT sector is expected to increase to 4.3 million in 2010-11 from 1.6 million in 2006-

07 which will require around 135 million sq. ft. of area by 2011.

Industrial segments – It accounts for nearly 5%-10% of total cement consumption in

India. This segment is expected to have an investment of Rs 6924 billion over 4 years.

Demand for cement in the country is expected to continue its buoyant ride on the back

of robust economic growth, boom in the construction sector and infrastructure

development.

Demand growth over the past five years at 8.37% was higher than the rate of growth

of supply at 4.84% as also the rate of growth of capacity addition during the same

period.

24

1.5. TYPES OF CEMENT IN INDIA

The types of cement in India have increased over the years with the advancement in

research, development, and technology. The Indian cement industry is witnessing a

boom as a result of which the production of different kinds of cement in India has also

increased.

Some of the various types of cement produced in India are:

Ordinary Portland Cement

Portland Blast Furnace Slag Cement

PortlandPozzolana Cement

Rapid Hardening Portland Cement

Oil Well Cement

White Cement

Sulphate Resisting Portland Cement

Clinker Cement

In India, the different types of cement are manufactured using dry, semi-dry, and wet

processes. In the production of Clinker Cement, a lot of energy is required. It is

produced by using materials such as limestone, iron oxides, aluminium, and silicon

oxides. Among the different kinds of cement produced in India, Portland Pozzolana

Cement, Ordinary Portland Cement, and Portland Blast Furnace Slag Cement are the

most important because they account for around 99% of the total cement production

in India. . The Ordinary Portland cement and Portland Blast Furnace Slag Cement are

used mostly in the construction of airports and bridges. The production of white

cement in the country is very less for it is very expensive in comparison to grey

cement. In India, white cement is usually utilized for decorative purposes, marble

foundation work, and to fill up the gaps between tiles of ceramic and marble.

The different types of cement in India have registered an increase in production in the

last few years. Efforts must be made by the cement industry in India and the

government of India to ensure that the cement industry continues innovation and

research to come up with more and more varieties in the near future.

25

1.5.1. Ordinary Portland Cement Ordinary Portland Cement (OPC) is manufactured in the form of different grades, the

most common in India being Grade-53, Grade-43, and Grade-33. OPC is

manufactured by burning siliceous materials like limestone at 1400 degree Celsius

and thereafter grinding it with gypsum.

The value of each of these grades of cement has been briefly mentioned below:

Ordinary Portland Cement-Grade 43: Having been certified with IS 8112:1989

standards, Grade 43 is in high demand in India and is largely used for residential,

commercial, and other building construction purposes. It has a compressive

strength of 560 kg per square cm. Today OPC 43 is most widely available in

Gujarat through an extensive distribution network.

Ordinary Portland Cement-Grade 53: Having been certified with IS12269:1987

standards, Grade 53 is known for its rich quality and is highly durable. Hence it is

used for constructing bigger structures like building foundations, bridges, tall

buildings, and structures designed to withstand heavy pressure. Expert opinions

and directions from technicians and engineers are a must in this regard. With a

good distribution network this cement is available most abundantly in Gujarat.

Some of the Ordinary Portland applications are in pre-stressed concrete; dry-lean

mixes, durable pre-cast concrete, and ready mixes for general purposes. The chemical

components of Ordinary Portland Cement are Magnesium (MgO), Alumina (AL2O3),

Silica (SiO2), Iron (Fe2O3), and Sulphur trioxide (SO3).

Some of the big names involved in OPC manufacture are Ultratech Cement, and ACC

cement. Ordinary Portland Cement is in great demand in India and will continue to be

used in Indian infrastructural up gradation and other constructions.

1.5.2. Portland Pozzolana Cement Portland Pozzolana Cement is manufactured by blending Pozzolanic materials, OPC

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

Pozzolana Cement is widely in demand for industrial and residential buildings,

rTotalds, dams, and machine foundations.

26

Pozzolana is an important ingredient in PPC which is commonly used in the form of:

Fly ash

Volcanic ash

Silica fumes

Calcined clay

PPC is resistant to harsh water attacks and prevents the formation of calcium

hydroxide at the time of cement setting and hydration. It withstands aggressive gases,

thermal cracks, wet cracking, etc. The BIS quality specifications for Pozzolana

materials used in PPC have been mentioned below:

Fly ash - IS 3812:1981

Calcined clay - IS 1344:1981

PPC is used in heavy lTotald infrastructure and constructions such as marine

structures, hydraulic structures, mass concreting works, plastering, masonry mortars,

and all applications of ordinary Portland cement. One of the top Indian brands of

Portland Pozzolana is 'Shudh Cement' manufactured by Tata Chemicals Limited.

Some of the other big names in the Portland Pozzolana manufacture are UltraTech,

Ambuja, ACC cements, Star Cement, and Birla group.

1.5.3. Portland Blast Furnace Slag Cement In recent years, there has been a significant growth in the production of Portland Blast

Furnace Slag Cement. It is a type of cement that is hydraulic and is manufactured in a

blast furnace where iron ore is reduced to iron. The molten slag, which is tapped, is

quickly drenched with water, dried, and then grounded to a fine powder. This fine

powder is commonly known as the Portland Blast Furnace Slag Cement.

The manufacture of Portland Blast Furnace Slag Cement requires 75% less energy

than that needed for the production of the Portland cement. The low cost of

production of Portland Blast Furnace Slag Cement makes it cheaper than Portland

cement.

Portland Blast Furnace Slag Cement has a typical light color and an easier 'finish'

ability. Its concrete workability is better and it has a higher flexural and compressive

strength. It is resistant to chemicals and also has more hardened consistency. This is

27

the reason that Portland Blast Furnace Slag Cement is used in the construction of

dams, bridges, building complexes, and pipes.

The various raw materials required for the production of Portland Blast Furnace Slag

Cement are:

Limestone

IronOre

Iron Scrap

Coke

The major companies producing Portland Blast Furnace Slag Cement in India are:

J K Cement

Grasim Industries and Ultra Tech

ACC

India Cement Ltd

Gujarat Ambuja Cement Ltd

The major countries where Portland Blast Furnace Slag Cement is exported from

India are:

South Africa

UAE

Sri Lanka

Nepal

Bangladesh

Australia

Doha-Qatar

The production and use of Portland Blast Furnace Slag Cement have increased over

the years. The Indian government has undertaken several investments in the

production of the Portland Blast Furnace Slag Cement so that its quality and durability

can be improved.

28

1.5.4. Oil Well Cement Oil Well Cement as the name suggests, is used for the grouting of the 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.

Oil Well Cement is manufactured from the clinker of Portland cement and also from

cements that have been hydraulically blended. Oil Well Cement can resist high

pressure as well as very high temperatures. Oil Well Cement sets very slowly because

it has organic 'retarders' which prevent it from setting too fast. It is due to all these

characteristics that it is used in the building of the oil wells where the pressure is

around 20,000 PSI and the temperature is around 500 degrees Fahrenheit.

There are 3 grades of Oil Well Cements. Grades O, which is ordinary and used

commonly, HSR i.e. high sulphate resistant and MSR i.e. moderate sulphate resistant.

Oil Well Cement has proved to be very beneficial for the petroleum industry due to its

characteristics. For it is due to the Oil Well Cement that the oil wells function

properly.

The various raw materials required for the production of Oil Well Cement are:

Limestone

IronOre

Coke

Iron Scrap

The major companies manufacturing Oil Well Cement in India are:

ACC

GujaratAmbuja

India Cement Ltd.


J K Cement

29

1.5.5. Rapid Hardening Portland Cement Rapid Hardening Portland Cement (RHPC) is a type of cement that is used for special

purposes when a faster rate of early high strength is required. RHPC has a higher rate

of strength development than the Ordinary Portland Cement (OPC). The Rapid

Hardening Portland Cement's better strength performance is achieved by increasing

the refinement of the product.

Rapid Hardening Portland Cement is manufactured by fusing together limestone

(which has been finely grounded) and shale, at extremely high temperatures to

produce cement clinker. To this cement clinker, gypsum is added in small quantities

and then finely grounded to produce Rapid Hardening Portland Cement. It is usually

manufactured using the dry process technology.

Rapid Hardening Portland Cement is used in concrete masonry manufacture, repair

work which is urgent, concreting in cold weather, and in pre-cast production of

concrete. Rapid Hardening Portland Cement has proved to be a boon in the places

where quick repairs are required such as airfield and highway pavements, marine

structures, and bridge decks. This cement should be stored in a dry place, or else its

quality deteriorates due to premature carbonation and hydration.

The raw materials required for the manufacture of Rapid Hardening Portland Cement

are:

Limestone

Shale

Gypsum

Coke

The major companies producing Rapid Hardening Portland Cement in India are:

ACC

GujaratAmbuja

J K Cement

Grasim Industries

Indian Cement Ltd.

30

1.5.6. Sulphate Resisting Portland Cement Sulphate Resisting Portland Cement (SRC) is a type of Portland cement in which the

quantity of tricalciumalumiante is less than 5%. It can be used for purposes wherever

Portland Pozzolana Cement, Slag Cement, and Ordinary Portland Cement are used.

The use of Portland Sulphate Resisting Cement has proved beneficial, particularly in

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

use of Sulphate Resisting Portland Cement is recommended in places where the

concrete is in contact with the soil, ground water, exposed to seacTotalst, and sea

water. In all these conditions, the concrete is exposed to attack from sulphates that are

present in excessive amounts, which damage the structure.

The Sulphate Resisting Portland Cement should be kept in a place which is dry

otherwise through premature hydration and carbonation the quality of cement

deteriorates. The Indian cement industry exports cement chiefly to the West Asian

countries.

The various uses of Sulphate Resisting Portland Cement are:

Underground and basements structures

Works in cTotalstal areas

Piles and foundations

Water and sewage treatment plants

Sugar, chemical, and fertilizers factories

Petrochemical and food processing industries

The raw materials required for the production of Sulphate Resisting Portland Cement

are:

Coke

Limestone

IronOre

Iron Scrap

The major companies manufacturing Sulphate Resisting Portland Cement in India are:

ACC

J K Cement

Indian Cement Ltd

Grasim Industries

GujaratAmbuja

31

Sulphate Resisting Portland Cement has proved beneficial for construction purposes

in India due to its climatic conditions. The cement industry in India must take steps in

order to ensure that its quality is improved and to ensure that it is readily available in

the market.

1.5.7. White Cement White Cement has registered growth in production and sale in India in the last few

years. The White Cement sector has been growing at the rate of 11% per year.

White Cement is much like the ordinary grey cement except that it is white in color.

In order to get this colour, its method of production is different from that of the

ordinary cement. However, this modification in its production method makes White

Cement far more expensive than the ordinary cement.

The production of White Cement requires exact standards and so it is a product which

is used for specialized purposes. White Cement is produced at temperatures that hover

around 1450-1500 degrees Celsius. As more energy is required during the

manufacture of White Cement, it goes to make it more expensive than the ordinary

grey cement.

White Cement is used in decorative works and also wherever vibrant colors are

desired. It is used to fill up the gaps between marble and ceramic tiles for a smoother

and more beautiful finish.

The various raw materials required for the production of White Cement are:

Limestone

Sand

IronOre

Nickel

Titanium

Chromium

Vanadium

The major companies producing White Cement in India are:

ACC

J K Cement

Gujarat Ambuja Cement Ltd.

32

India Cement Ltd.


The major countries where White Cement is exported from India are:

UAE

Australia

South Africa

Sri Lanka

Doha-Qatar

Bangladesh

Nepal

1.5.8. Clinker Cement Clinker Cement has registered a growth over the last few years in India. The cement

industry in India is highly technologically intensive and as a result, the quality of

clinker cement that is produced in India is of a very high grade and often considered

among the best in the world. The production of Clinker Cement requires a lot of

energy because it needs to be manufactured at the temperature of around 1400-1450

degree Celsius.

The various raw materials required for the production of Clinker Cement are:

Iron Ore

Bauxite

Clay

Limestone

Quartz

In 2001- 2002, 1.76 million tonnes of clinker cement were exported. In 2002- 2003,

that figure stood at 3.45 million tonnes, and in 2003- 2004 5.64 million tonnes of

clinker cement was exported from India. This shows that the export of clinker cement

from India has been increasing substantially.

Clinker Cement is usually ground with calcium sulphate which becomes Portland

cement. It is also ground with other ingredients to produce Pozzolanic Cement, Blast

Furnace Slag Cement, and Silica Fume Cement. If Clinker Cement is kept in a dry

condition, it can be stored for a long period of time without deteriorating its quality. It

33

is for this reason that Clinker Cement is preferred in the construction of houses,

bridges, and complexes.

The major companies producing Clinker Cement in India are:

ACC

Gujarat Ambuja Cement Ltd.

JK Cements


India Cements Ltd.

1.6. CEMENT PROCESS

1.6.1. Raw Materials The hydraulic property of cement originates from its cement minerals (calcium

silicates). The major components in terms of metal oxides are CaO, SiO2, Al22O3,

and Fe2O3. In order to provide a suitable chemical composition for sintering, raw

materials are either quarried or collected from other industrial processes for the

cement manufacturing process. Typically, Calcium (Ca) is provided from limestone,

Silicon (Si) from Sand or Flyash, Aluminum (Al) from Flyash or Clay, and Iron (Fe)

from iron ore or slag.

1.6.2. Proportioning Typically, Limestone 80%, Silica 9%, Flyash 9%, Iron 2% are dosed precisely to a

predefined chemical composition, and are then fed into the process.

1.6.3. Raw Mill The dosed raw materials are dried and finely ground in the Raw Mill to form an

intermediate product, called ―raw meal‖. The grinding provides an increased surface

area to enhance the heat exchange in the downstream heating process.

1.6.4. Homo Silos The ―raw meal‖ is then stored in a homogenizing silo in which the chemical variation

is reduced. This homogenizing process is important to stabilize the downstream

sintering process as well as to provide a uniform quality product. The ―raw meal‖ is

then transferred to the Preheater Tower.

34

1.6.5. Preheater

In the Preheater, the raw meal undergoes a series of concurrent heat exchanges with

the hot exhaust gas from the kiln system. The gas and material stream are separated by

cyclones after each heat exchange process. The raw meal temperature increases from

80oC to 1000oC within 40 seconds. The first chemical reaction also takes place in the

Proclaimer of the Preheater, where limestone CaCO3 is decomposed into lime (CaO).

1.6.6. Kiln

The culminated material entering into the kiln, undergoes a long heating process. The

material temperature rises from 1000oC to 1450oC. Mineral matrixes of raw material

are totally destroyed and cement minerals are formed at the sintering temperatures. A

semi-product called ―clinker‖ is formed. CTotall and other alternative fuels are used

as energy sources for the process. The ash from fuels is absorbed into the clinker

matrix. The residual heat from the clinker leaving the kiln is recovered by a grate

cooler to reduce the energy requirement.

1.6.7. Conditioning Tower The flue gas exiting the preheated is directed to the raw mill for drying. Before it

enters the electrostatic precipitator ("EP") for its final dust removal process, its

temperature and humidity is regulated in a conditioning tower. This process is

essential as it affects the dust collecting efficiency of the electrostatic precipitator

("EP").

1.6.8. Electrostatic Precipitator Electrostatic precipitator is commonly used as the final dust removal device for flue

gases. It consists of chambers each of which contains a series of collection plates and

an overhead framework of suspended rigid high-voltage electrodes. Particles in the

gas stream are charged by a high-voltage, direct current field which is generated from

the discharge electrodes, suspended between the collector plates. Current applied

directly to the discharge electrodes manifests a highly active and visible glow in the

electrode known as the "corona". In the strong electrical field region near the

electrode-emitting surface, large numbers of both positive and negative ions are

formed. As the discharge electrodes have a negative polarity, the positive ions are

35

attracted to them. Both negative and positive ions are formed in equal amounts

directly in the corona region near the discharge electrodes and over 99 percent of the

gas space between the discharge electrodes and the collector plates contain only

negative ions. As the particles entrained in the gas stream pass through the corona

field, they are bombarded by negative ions and become charged in a fraction of a

second. They are then attracted to the grounded collector plates where they are

collected.

Particulate matter on the collecting plates and high voltage electrodes are removed by

the impact of "rapper" mechanisms. Dislodged particles from the high voltage

electrodes and collector plates fall into a hopper directly below each precipitator

chamber.

1.6.9. ID Fan Induced draft fans (ID fan) are installed in the process to drive the gas stream

movements.

1.6.10. Grate Cooler

The residual heat from the clinker leaving the kiln, is recovered by a grate cooler

(consisting of rows of grates). Cooling air is injected from the bottom of the grate, and

is forced into the clinker which is travelling slowly on the grate. The heated air is then

recycled as secondary air for combustion in the kiln, or in the proclaimer.

1.6.11. Finish Mill

The final process of cement making is called finish grinding. Clinker dosed with

controlled amount of gypsum is fed into a finish mill. Typically, a finish mill is a

horizontal steel tube filled with steel balls. As the tube rotates, the steel balls are

lifted, tumble and crush the clinker into a super-fine powder. The particle size is

controlled by a high efficiency air separator. Other additives may be added during the

finish grinding process to produce specially formulated cement

36

1.7. GOVERNMENT INITIATIVES

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 cement industry.

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

years indicating good times ahead for cement manufacturers.

The government has increased budgetary allocation for rTotalds under

National Highways Development Project (NHDP). This coupled with

government's initiatives on the infrastructure and housing sector fronts would

continue to remain the key drivers.

Appointing a cTotall regulator is looked upon as a positive move as it will

facilitate timely and proper allocation of cTotall (a key raw material) blocks to

the core sectors, cement being one of 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.

37

1.8. CEMENT INDUSTRY – AT A GLANCE

1.8.1 Current Scenario – Financial Year „08

During FY08 production, consumption and capacity addition clocked 8%YoY

growth. India, owing to its locational advantage, has been catering to the cement

requirements of the Middle East and the South East Asian nations. However, the

exports were curtailed in FY08 in order to satisfy the domestic demand.

While demand growth stood at 8% YoY, average industry cement realizations

(average of price per bag of cement) were higher by about 6% YoY. This was

owing to slowdown in demand as inflationary situation in the economy and the

rising cost of funds led to a lull in the real estate sector and construction activity.

Further, the announced capacities have started coming on stream and the same

have started exerting pressure on realizations.

In the budget, the excise duty on the bulk cement was revised to Rs 400 per tonne

or ad valorem duty of 14% whichever is higher, while that on clinker was hiked by

Rs 100 per tonne to Rs 450 per tonne. While the government refrained from

cutting excise duty and countervailing duties, it increased budgetary allocation

under National Highways Development Project (NHDP). The government has

continued to provide a fillip to the infrastructure sector in the budget.

December 2008

1.8.2. Analytical Review

a) Cement Production and Dispatches During December 08, Cement Production was 15.82 MT, registering a growth of

11.96% as compared to 14.13 MT in December ‗07.

Cement Dispatches were 16.01 MT in December 08, showing a growth of 12.11%

as compared to 14.28 MT in December 07.

b) Cement/Clinker Export During December 08, Cement Export was 0.36 MT., a decline of 5.26% as

compared to 0.38 MT. in December 07. Clinker Export also showed a decline of

25.00% (from 0.20 MT in Dec 07 to 0.15 MT in Dec ‗08).

38

Capacity at the beginning of the year 2008-2009 was 198.30 MT.

Table 1.1 Capacity Additions – 2008-2009 MT.

Name of the Plant

State

Month of

Commissioning

Capacity

Existing

Capacity

Added /

Derated

Total

(a) New

OCL India-Kapilas (G) Orissa May 08 - 0.90 0.90

Rain Comdt. Unit-II Line 2 A.P. Jun 08 - 2.00 2.00

India Cements-Value (G) T.N. Aug 08 - 1.10 1.10

UltraTech-Ginigera (G) KAR Sep 08 - 1.30 1.30

Total – (a) 5.30

(b) Expansion

Madras Céments - R.S. Raja

Nagar TN Apr08 1.20 0.60 1.80

Vasvadatta Cement KAR Apr08 3.65 0.45 4.10

Rain Comdt. Unit-1 A.P. Jun08 1.00 0.40 1.40

Rain Comdt. Unit-II Line 1 A.P. Jun08 0.50 0.10 0.60

My Home Indus. Ltd. A.P. Jun08 2.76 0.44 3.20

Mangalam Cement RAJ Sep08 0.50 0.50 1.00

J.K. Gotan RAJ Sep08 0.10 0.37 0.47

Dalmia Cement T.N. Dec08 3.50 0.50 4.00

Total – (b) 3.36

Total – (a+b) 8.66

39

Capacity as on 31st December 2008 – 206.96 MT.

Cement

Table 1.2 (MT.)

Dec 2008 Nov 2008 Dec 2007 2008-2009 2007-2008

(Apr - Dec)

(a

)

Production 15.82 14.34 14.13 131.20 122.33

(b) Dispatches

(Including Export)

16.01 14.43 14.28 130.69 121.59

(c) Export 0.36 0.32 0.38 2.15 2.92

(d) Closing Stocks 1.29 1.52 1.32

(e) Cap. Uti. (%) 92 83 95 86 93

Clinker

Table 1.3 (MT.)

Dec 2008 Nov 2008 Dec 2007 2008-2009 2007-2008

(Apr - Dec)

(a) Production 12.37 11.91 11.14 101.78 95.81

(b) Sale 0.24 0.28 0.31 2.67 1.99

(c) Export 0.15 0.30 0.20 2.06 1.66

(d) Transfer 1.72 1.59 1.50 13.45 12.15

(e) Closing Stocks 7.36 6.90 6.72

CTotall (MT)

Table – 1.4

Dec 2008 Nov 2008 Dec 2007 2008-2009 2007-2008

(Apr - Dec)

(a) CTotall Receipts (MT.) 1.24 (P) 1.20 (P) 1.12 9.92 11.08

(b) CTotallLTotalding

(FW/Day)

1217 1078 1057

(c) CTotall Production

(CIL & SCCL)(MT.)

43.06 39.49 40.13 308.48 297.92

Variety wise Cement Production – 2008-2009 (Apr - Nov)

40

Table – 1.5 (%)

Region OPC PPC PBFS Others Total

North 23 77 - Neg. 100

East 4 54 41 1 100

South 31 63 6 Neg. 100

West 42 56 2 Neg. 100

Centre 13 87

- Neg. 100

All India 25 67 8 Neg. 100

Cement Wagon & Rail Dispatch Share

Table – 1.6 (Percentage)

Nov 2008 Oct 2008 Nov 2007 2008-2009 2007-2008

(Apr - Nov)

(a) %age LTotalded

to Indent

97 96 91 94 95

(b) %age Rail to

Total Desp.

38 39 40 38 38

Clinker Wagon & Rail Dispatch Share

Table– 1.7 (Percentage) (Percentage)

Nov 2008 Oct 2008 Nov 2007 2008-2009 2007-2008

(Apr - Nov)

(a) %age LTotalded

to Indent

100 100 96 99 98

(b) %age Rail to

Total Desp.

53 55 57 56 57

41

1.1 % Growth in Cement Production – (2008-2009/2007-2008) (Apr - Dec)

Table – 1.8

State %age Change State %age

Change

Northern Region Western Region

Punjab -6 Gujarat -3

Rajasthan 14 Maharashtra -0.34

Himachal Pradesh -9

Northern Region 11 Western Region -2

Eastern Region Central Region

Meghalaya 8 Uttar Pradesh 13

Bihar 17 Madhya Pradesh 2

Jharkhand -0.50

Orissa 25

West Bengal 1

Chhattisgarh 6

Eastern Region 7 Central Region 4

Region

Andhra Pradesh 14

Tamil Nadu 6

Karnataka 11

Southern Region 11

All India 7

Note: Figures only for major cement producing states are given.

1.2% Growth in Cement Consumption – (2008-2009/2007-2008) (Apr -

Dec)

Table – 1.9

State %age Change State %age Change

Northern Region Southern Region

Uttarakhand -3 Andhra Pradesh 25

42

Haryana 4 Tamil Nadu 9

Punjab -12 Karnataka 1

Rajasthan 6 Kerala 13

Himachal Pradesh -8

Delhi 38

Northern Region 2 Southern Region 12

Eastern Region Western Region

Bihar 11 Gujarat 4

Jharkhand 12 Maharashtra 8

Orissa 13

West Bengal 2

Chhattisgarh 10

Eastern Region 9 Western Region 7

Central Region

Uttar Pradesh 5

Madhya Pradesh 9

Central Region 7

All India 8

Note: Figures only for major cement consuming states are given.

1.9. CEMENT SECTOR OUTLOOK – NEGATIVE

Although consolidation has taken place in the Indian cement industry with the top five

players controlling almost 45% of the capacity, the balance capacity still remains

pretty fragmented. Cement, being a bulk commodity, is a freight intensive industry

and transporting cement over long distances becomes very uneconomical. This has

resulted in cement being largely a regional play with the industry divided into five

main regions viz. north, south, west, east and the central region. While the southern

region is excess in capacity owing to abundant availability of limestone, the western

and northern region are the most lucrative markets on account of higher income

levels.

43

However what is of concern to the industry are staggering rise in input costs and

pressures to cap selling prices at the same time. Unless the industry is able to recover

cost increases, through suitable adjustments in selling prices through rational

economic considerations, the cement industry will be under pressure. India‘s cement

industry is expanding capacity to meet increasing demand. The industry plans to

invest around Rs 50,000 crore in order to increase production from 198 MTPA to

about 275 MTPA over next two to three years. These capacities, according to such

announcements, are expected to be commissioned over three-year period and may

create an imbalance in demand and supply, resulting in impact on realization.

Table – 1.9.1. Industry capacity and Utilization Levels

Industry capacity and Utilization Levels

Year Operating Capacity Capacity Utilization (%)

2000 113.7 81.0

2001 129.9 78.8

2002 136.5 81.6

2003 144.1 81.5

2004 153.6 83.6

2005 157.1 90.2

2006 165.6 93.8

2007 171.95 95.0

2008 190+ 95.0

** Source =ICRA Industry Monitor report and Business Line**

1.10. EFFECT OF REAL ESTATE ON THE CEMENT

INDUSTRY

The fall in real estate activities has badly hit the cement industry, which depends on

the realty sector for 60% of its demand. The rise in capacity by many companies has

proved to be an additional burden as most of the companies have to go for output

reduction. The industry is now keenly awaiting the government‘s bailout package and

revived interests in construction activities like infrastructural projects.

44

With the slowdown in the realty sector, many of the associated industries having been

feeling the heat; cement industry is one of the biggest to be hit. The whole year had

been a roller coaster ride for the industry. Beginning with a standoff with the

government at the height of inflationary pressures in the first part of the year, the

industry is now facing problems of falling prices and piling inventories.

The burgeoning construction sector fuelled its growth and the bullish sector was

poised for massive capacity increase in the coming years. The industry was poised to

add 32 million tonnes as new capacity in 2009. But, given delays of 4-6 months due to

land acquisition, equipment supply delay, liquidity crunch and more importantly the

unexpected slow growth rate in demand coupled with squeezed margins and pricing

under pressure, the industry will now reach an overall capacity of 223 million tonnes

against 230 million tonnes as anticipated earlier. According to the latest updates from

the Cement Manufacturers‘ Association (CMA), industry added only 8.16 million

tonnes between April and November. Rain Commodities, India Cements, Madras

Cement, Mangalam Cement are among those who have expanded capacities. This is

one-fourth of the proposed capacity addition for the year at a time when three-fourth

of the year has passed by.

In March, 2008, industry had an installed capacity of 198.3 million tonnes and H M

Bangur, President of CMA had said that industry would add around 32 million tonnes

in FY09 (―Cement firms may miss expansion target by 25%‖, Business Standard, 28

December 2008,).

Table – 1.10.1

PACK-To-PACK GROWTH

Capacity as on March 31 in the last five years

Year Capacity

2004 146.64

2005 154.29

2006 160.24

2007 166.73

2008 198.30

2009* 223.00

45

* Current expectation of the industry (All figures in million tonnes)

Source: CMA

Incidentally, the Working Group on Cement Industry for the 11th

Plan Document had

predicted 11.5% growth rate for the industry, projecting a capacity requirement of

219.46 million tonnes by the end of 2008-09. The current industry output levels will

be higher than that. But what is more worrying is that the growth rate as expected by

the Working Group for the Indian economy has now been derailed by the economic

crisis. At the currently expected rates of growth, there will be a huge mismatch in the

demand and supply of cement and this is going to hit the industry severely.

According to various estimates, the cement industry is expected to add 35-39 million

tonnes (mt) of fresh capacity in FY10, against incremental demand growth of 10-12

mt, assuming annualised demand growth of 5-6 per cent. The latest statistics by

Cement Manufacturers‘ Association (CMA) show that overall consumption growth

has been only 1% in the economy (―Falling demand leads to closure of ACCs cement

plant‖, 19 December 2008, domain-b.com).

Table – 1.10.2

State %age Change State %age

Change

Northern Region Southern Region

Uttarakhand -4 Andhra Pradesh 25

Haryana 4 Tamil Nadu 10

Punjab -14 Karnataka 1

Rajasthan 5 Kerala 14

Himachal Pradesh -10

Delhi 36

Northern Region 1 Southern Region 12

Eastern Region Western Region

Bihar 12 Gujarat 4

Jharkhand 10 Maharashtra 8

Orissa 11

West Bengal -0.06

46

Chhattisgarh 8

Eastern Region 8 Western Region 7

Central Region

Uttar Pradesh 3

Madhya Pradesh 8

Central Region 4

All India 7

(Reprinted from ―Falling demand leads to closure of ACCs cement plant‖, 19

December 2008, domain-b.com)

Out of the six states in the northern region, Uttarakhand, Himachal Pradesh and

Punjab have shown negative growth rate in consumption as high as 14 per cent.

However, Rajasthan and Haryana witnessed a poor consumption growth rate of 5 per

cent and 4 per cent respectively, against the industry's average growth of 7 per cent.

The problem of over capacity has now hit most producers as the industry is

desperately cutting down production. The industry‘s capacity utilisation has dropped

to 85 per cent in April-November period of FY09 against 93 per cent in the year-ago

period. However, in the North, cement players such as Shree has said that the

company will cut the utilisation to as low as 75 per cent. The most obvious reason for

which is piling inventories. In October, the industry reported one of the widest gaps in

production and dispatches with the cement inventory touching as high as 1.64 million

tones (―Cement firms in north India may meet ACC fate‖, Business Standard, 19

December 2008,). One of the biggest news for the sector was ACC‘s announcement of

shutting down its 2.4-million-tonne clinker unit in Himachal Pradesh. Clinker is an

input for cement. Piling inventories of cement had resulted in similar over production

of clinker that forced ACC to shut down its clinker unit at Gagal.

All this is further aggravated by the issue of remunerative prices. The industry has

issued a series of price cuts since October to counter fall in demand. The slowdown of

inflation and subsequent fall in imported cTotall and diesel prices are welcome news,

but the extent of fall in selling prices might outweigh these gains. Recently the

government had announced 4% reduction in excise duty, which was immediately

passed on to the consumers by the producers. But despite that, there is increasing

pressure on prices that is worrying the industry.

47

The government has recently announced the lifting of ban on cement exports to boost

the industry‘s fortunes. This has been a long standing demand of the industry ever

since the ban was imposed in May to counter inflation. However, more than exports,

what is most affecting the industry is cheap imports from Pakistan. "Import from

Pakistan has further hit the domestic industry especially in the northern markets of

Punjab and Haryana," Ambuja Cement Managing Director A L Kapur said. "The

prices will drop further unless the government bans import of low cost cement from

Pakistan" (The Economic Times, 27 December 2008). H M Bangur, President of CMA

and Chairman & Managing Director of Rajasthan-based Shree Cement, also said,

―Cement players specifically in the North are being forced to shut units due to

imported cement from Pakistan‖ (―Cement firms in north India may meet ACC fate‖,

Business Standard, 19 December 2008,).

However, banning imports from Pakistan does not solve the basic problem of falling

demand due to the slowdown in construction. What has added to the problems is that

being bullish till the first quarter of the year the industry had pushed for aggressive

capacity increases, which is now proving to be a burden under piling inventories. The

only possible solution for the industry is a revival of construction activities. With real

estate still battling its own problems, the industry is betting on the government‘s push

for massive infrastructural projects. The fiscal bailout packages are yet to bear fruit

for the economy and the cement industry has to wait for lagged indirect demand rise.

The next years‘ budget is thus proving to be key factor for the industry. As of now,

they are desperately trying to brave out the current slump.

Chapter 2

Literature Review

48

CHAPTER 2: LITERATURE REVIEW

2.1. Introduction: why branding? 2.2. Consumer branding 2.3. Advertising

2.3.1. Sales response model 2.3.2. The persuasion model 2.3.3. The involvement model 2.3.4. The salience model 2.3.5. Ad spend during recession

2.4. Building Brands 2.4.1. Building brand through loyalty 2.4.2. Leveraging on symbolic values and meaning in branding 2.4.3. Using Company’s name to influence consumer’s decision making 2.4.4. Using country of origin in branding 2.4.5. Employee branding

2.5. Building icons 2.5.1. Target national contradictions 2.5.2. Create myths that lead culture 2.5.3. Speak with rebel’s voice 2.5.4. Draw on political authority to rebuild the myth 2.5.5. Draw on cultural knowledge

2.6. Brand crises and brand gremlins 2.6.1. Brand crises 2.6.2. Brand gremlins

2.7. Brand metrics / Brand valuation 2.7.1. Customer based brand equity

2.8. Industrial marketing 2.8.1. Branding research in the B2B arena 2.8.2. Developing an industrial brand 2.8.3. Difficulties in branding commodities 2.8.4. Branding strategies for commodities 2.8.5. The four step apprTotalch to branding commodities 2.8.6. Pricing principles for branded commodities 2.8.7. Managerial implications 2.8.8. Conclusion

49

BRANDING

2.1 Introduction: Why branding?

In the late 1980s, the intangible element ('goodwill') that made up the total market

value of the FTSE 100 companies was an average of around 40percent. Today, it is

more than 70 percent (Clifton 2002). Clearly not all the intangible asset value can be

accounted for by brands by any means, but still most companies would say that their

most important asset is their brand. Today, it can be demonstrated that the brand -

whether in the corporate, service, product or not-for-profit sector is any organization‘s

most important asset.

It is useful to highlight the social contribution of the brands on a broader scale. On a

basic level, strong brands generate customer loyalty; this leads to more security of

income for the company, and so to more reliable earnings. This is reflected in more

security of employment - which is itself an important social contributor. On a more

emotional level, both global product and global media brands have found ways of

uniting people and touching a common nerve (and, indeed, of symbolizing an

optimistic 'one world' view) in a way that brands succeed because people want them.

Far from being 'bullies', they are ultimate accountable institution; if people do not like

your product, service or corporate behavior (or cease to like it), they will stop buying

you - very quickly. In this way, it is absurd to say that brands can be too powerful.

Frankly, if a brand is producing a great product or service, and doing it in a way that

improves people's lives and communities, why should it grow and prosper? If these

'good' brands then become complacent, insensitive or careless, they will soon be cut

down to size again by 'voting' customers and influencers. Brands ofcourse, are the best

incentive for companies to behave well, as it gives them a reputation to protect,

wherever in the world they operate. Whatever be their motivation, any brand - any

company - has to operate within the individual national culture in which it finds itself

either being produced or 'sold'. The complexity of operational decisions and local

working practices that this brings to some global brands does present a potentially

vulnerable area. This issue of 'brand control' and of accountability for, the production

will become even more critical for brands in the future, when the balance between

financial, production and operational flexibility and the need for generating even

greater levels of public trust must be resolved. The challenge of being clear and

50

consistent about what a brand's vision and values are, and how these must be applied

across the full brand experience and behavior everywhere, has never been so acute.

From almost 3000 brand studies world wide the article (Clifton 2002) summarizes the

core characteristics that the world's most valuable brands need - both now, and

looking at what will be required from in the future. From some of these insights, it

is also possible to see ways in which the brand climate can be enhanced for the benefit

of all.

Great brands need to show clarity, consistency and leadership. That is clarity of

vision, and consistency in the way these are applied, wherever in the world, through

whatever channel and whatever category the brand extends into (this is not the

same as predictability, and having to be the same everywhere). But in many ways

leadership will be the most important of these characteristics in the future; in all the

studies it is the most discriminating factor in driving long term brand value.

What do we mean by leadership? Certainly we do not mean just 'brand leadership',

since this is rather old-fashioned, category- based speak. It does, however, mean

trying to be a brand that 'sets the agenda' and shapes markets. Certainly, at the most

basic level, this has to be about leading and exceeding people's expectations at the

level of product, service and creative quality.

Increasingly, though, 'leader' brands need to show this leadership at the level of values

and social contribution. Brands with clear and strong values are able to transcend and

leap categories. A luxury fashion brand like Versace is now also a hotel and

hospitality brand. An established manufacturer/ product brand company like Unilever

has tested service brands. Leader brands know that, and will act first to take more

'share of person' than share of shelf in a complex world that people need to simplify.

Showing leadership at the level of values and social contribution does not

just mean spilling a bit of money into cause- related marketing. It should mean

treating people who work within and for the business well and standing for something

that allows these people to engage their personal and professional energies. The final

element to leadership is about taking more responsibility for explaining and

championing the positive wider role of brands-from people within companies, to

contributing to the success of business, to the wider social and economic benefits to

51

society as a whole. Good brands do have the power to make a positive contribution to

people's lives individually, and indeed to the world at large. Brand owners and

influencers should not be cynical or embarrassed about this; it is not a fanciful notion

but a demonstrable fact.

2.2 CONSUMER BRANDING

A logical point of departure for developing an understanding of industrial branding is

to examine the research on consumer branding. As has been pointed out elsewhere

(Mudambi, Doyle, & Wong, 1997), the depth and extensiveness of consumer branding

research offer industrial branding researchers an extensive background into the

nuances of branding that can be applied in the industrial sector. Some of the better-

known writings in this area are by Aaker (Aaker, Managing Brand Equity, 1991;

Aaker, Building Strong Brands, 1996) who has defined how brand equity generates

value in the following areas: brand loyalty, brand awareness, perceived quality, brand

associations, and other brand assets. Other writings have shown how dominating

brands can create meaningful images in the minds of their customers (Keller K. L.,

1993; Shocker, Srivastava, & Ruekert, 1994), can predict brand preference (Bass &

Wilkie, 1973; Jacoby & Kyner, 1973), and increase brand loyalty (Shocker,

Srivastava & Ruekert, 1994).

The inherent strength of a consumer brand has traditionally been thought of as those

parts of the brand that can be vocalized or communicated as well as easily recalled by

the consumer (Kotler, 2002). Keller (Keller K. L., 1993) described brand-name

awareness as the strength in the customers‘ mind that identifies the brand under

consumer (Aaker, Managing Assets and Skills: The Key To a Sustainable Competitive

Advantage, 1989). Other research has shown that strong positive associations can be

developed, which can note uniqueness to the brand, with the success of the brand

depending on a retained understanding of the core meaning of the brand and the

ability of the consumer to maintain a consistent image over a long term (Doyle, 1988).

This retained understanding on the part of consumers will result in them being able to

infer quality, value, reputation, and credibility from an acceptable brand name

(Zeithaml, 1988), which can in turn be linked to these consumers forming an overall

favorable image of the brand (Maathuis, 1993). Drawing on their experience with

studying consumer brands, Prophet (2001) has proposed five steps to building a strong

52

consumer brand: clearly articulate the brand‘s identity, establish a customer value

proposition and use it to guide each department, define the optimal customer

experience, cultivate relationships with customers, and work to strengthen the brand

over time differing conditions as well as the degree of likelihood that the consumer

will recall the brand name. One of the most studied aspects of successful branding

has been name recognition, especially where repurchase decisions rely heavily on the

previous experiences of the.

2.3 ADVERTISING

Advertising is one of the ways in which a company can undertake branding activities.

There are several models of how advertising works. We will be considering the 4

major models (Willmott 2003) of advertising.

The four models of advertising

2.3.1

Sales response model

This is where advertising seeks short-term changes in consumer behavior. It

stimulates direct interest in (and hence sales of) a brand, but does little in terms of

brand building. Advertising in this vein might be price led or involve a special offer; it

might just be reminding people that now is a good time to buy a product. In terms of

chronology this was the first model of advertising.

2.3.2 The persuasion model

Here, the role of advertising is to persuade consumers about the brand‘s functional

superiority. It assumes that people will not buy the brand unless they believe it will

solve a problem or that it performs better than others. A typical ad here would be ‗this

washes whiter‘ or ‗this goes faster‘.

This model evolved as brands and mass consumer markets developed from the 1950s

onwards.

2.3.3 The involvement model

53

The purpose here is to get consumers to buy into the brand values; not because the

product necessarily performs better but because it stands for something that the

consumer wants to be associated with. As Hall notes, these values could be ones

such as pride, male bonding, caring, fun, excitement and contemporary so

the advertising would be about what the brand stands for or who uses it.This model

developed from the mid-1960s onwards.

2.3.4 The salience model

This is the newest and most radical model according to Hall, and dates from the 1980s

and 1990s. The intention here is to get consumers interested in the brand neither

because it performs better, nor because it has complementary values, but because it

stands out: it is radically different, it is big, and it is self-assured.

Even though all the advertising models are still relevant, the balance is moving from

the sales response and persuasion models (the traditional perception of advertising)

towards the ‗newer‘ models of involvement and salience.

2.3.5 Ad spend during recession

Ad spends and other variables only seem to play a part when the three- year sales trend

loses its predictive value? One possible explanation is that during stable market

conditions sales relationships are less volatile and fewer factors influence purchasing

decisions. But recessions and other upheavals like the dot-com boom seem to

create brief ‗windows of opportunity‘ as established relationships are undermined by

changing patterns of consumption or the by introduction of next-generation

technologies on the producer side. It is during these times that advertising appears to

have the greatest beneficial effect on sales (Kamber 2002). This is when purchasing

managers are casting about for new suppliers, better prices and improved

technologies. It is when the role of information in driving purchasing decisions is at

its effective peak. And with advertising as one of the principle means of shaping the

market place of ideas, it is not so surprising that an enhanced effect is found during

these periods.

Recessions, it seems, present corporate brand managers with a difficult dilemma: just

when times are at their most uncertain, when projects are least reliable, ad spend may

54

be at the peak of its effectiveness. For many firms facing diminished profits, falling

stock prices and employee layoffs during these periods, this may not seem like

welcome information. How is a company in financial crisis to justify spending more

on a line item viewed as discretionary in many sectors?

One answer suggested by this study (Kamber 2002) is that increased ad spend during

recessions is associated with a same-year risein sales, a potentially encouraging

indicator for executives struggling to keep firms afloat during a short-term storm.

Even more encouraging is the simple fact that much of the cut in ad spendin 1991

lagged the actual recession, meaning that companies continued to cut spending even

when business indicators were already on the upswing. Most recessions last about a

year, but their psychological impact can last much longer, causing manager to reduce

spending in what they perceive to be non-essential areas even when fortunes are

already reversing. The result reduced sales growth over the short and long term for

firms that treated advertising spending as a low priority.

In conclusion, substantial evidence was found to support the hypothesis that

advertising spending during recessions can contribute to higher rates of sales growth

(Kamber, 2002). The difference in sales growth between companies that cut back and

those that do not is substantial in both the short and long terms, and is independent of

the effect of such variables as company size, stock valuation, and total sales, past

sales growth or stock price volatility.

2.4 BUILDING BRANDS

Marketers have used various aspects to build successful brands. Let us consider some

of the aspects that are relevant to the scope of our study & have found their way in

the literature.

2.4.1 Building brand through loyalty

Brand identity is the total proposition that a company makes to consumers - the

promise it makes. It may consist of features and attributes, benefits, performance,

quality, experience, service support and the values that the brand possesses. The

brand can be viewed as a product, a personality, an experience, a set of values and a

position it occupies in people‘s minds.

55

On introduction, brands compete and are compared on their functionality (Bennett

and Rundle-Thiele 2005). Brands were initially designed to communicate consistency

in quality. Over time, differentiation on the basis of functionality becomes

meaningless as all competing products function beyond the market‘s requirements.

When functionality surpasses market needs, the basis of competition, or the attributes

that provided a meaningful advantage over competitors, tends to shift to reliability

followed by convenience.

Brands should offer symbolic and emotional meaning that enables consumer to

communicate their goals, aspirations, personal attributes and social patterns —when

symbolisms are used effectively, they can transform brands into successful and

profitable icons.

Brand marketers in mature competitive markets should not focus on attributes, nor

should they allow an emphasis on price (Bennettand Rundle-Thiele 2005). Brand

marketers need to connect at a higher level with customers. A brand can offer an

emotional or a symbolic connection. People fall in love with brands; they trust them,

develop strong loyalties, buy them and believe in their superiority.

The brand is shorthand; it should stand for something and it should demonstrate it

every day. Brands need to offer more than quality, reliability or convenience to

differentiate in the market and resonate with modern consumers. The brands that

have achieved higher levels of loyalty than their competitors are those that have

established a clear brand identity. That is, they have differentiated on the basis of

brand meaning.

The key to managing brand identity is evolution, not revolution. Totally changing the

brand visuals can give rise to consumer concerns about changes of ownership, or

possible changes in brand values, or even unjustified extravagance. If there is a

strong brand personality to which consumers are attracted, then substantial changes may

destroy emotional attachments to the brand.

Marketers must understand what brand loyalty is, bearing in mind that brand loyalty

will be different for each brand managed. Research suggests that customers can

demonstrate brand loyalty in a variety of ways. For example, customers can

demonstrate loyalty by purchasing, by being willing to recommend, and by providing

56

advice to the company, and finally, customers could demonstrate brand loyalty

through an intention to repurchase.

Research suggests that ‗brand loyalty is more stable for market leaders than for

others‘ (Bennett and Rundle-Thiele2005). Marketers of brands that do not have

market leadership status are presented with one challenge, and that is to differentiate.

Differentiation requires innovation. Marketers must implement programmes to

encourage ongoing innovation, such as the ongoing implementation of research and

development programmes and programmes that develop an innovative organizational

culture. An innovative organization can gain a sustainable competitive advantage.

To achieve differentiation and hence loyalty, some marketers are focusing on

creating experiences for customers. Experience is a very useful basis for

differentiation that is likely to be difficult to copy.

Organizations seeking to improve brand loyalty should first identify the level at

which their brand is successfully operating (functional, emotional or symbolic), and

then develop marketing programmes designed to resonate with the consumer at that

level in a way that differentiates the brand from the competition. The ultimate goal

for a brand manager would be a brand community, where consumers affiliate with

other consumers around a brand.

There is, however, a tension between maintaining consistency over time and making

changes through innovation. The challenge to differentiate and develop a brand

meaning that resonates with consumers is more difficult for new brands. New brands,

however, have the benefit of not needing to change an existing positioning— rather

they only need to develop a new one. The key for new brands is to adopt a positioning

strategy that clearly demonstrates a point of difference. Brands that do not take risks

and stand out from the others are doomed for mediocrity (and the low levels of brand

loyalty that accompany this).

2.4.2 Leveraging on symbolic values and meanings in branding

Symbolic values and meanings are desirable and useful to consumers for the

construction of their self, whether that is self- enhancement or self-reinforcement

(Tan Tsu Wee and Chua Han Ming 2003). Although marketers should concentrate

their efforts in associating symbolic values and meanings with their brands, they

57

should approach this task with care since it requires much research and planning. At

the ‗brand as personality‘ stage, where marketers start to introduce symbolic values

and meanings to their brands to create the brand personalities, marketers should not

haphazardly associate their brands with just any symbolic values or meanings

available without any regard for consistency with the existing marketing mix

variables. A careful choice of a few symbolic values would be a good start, and

continuous monitoring of consumers‘ reactions to these values would provide useful

information about which symbolic values and meanings to enforce further and which

ones to drop. The values that a redesirable should be reinforced through all forms of

corporate communications, especially advertising and sales promotions (non-price

sales promotions such as gift-with- purchases, product bundling and samples are

preferred overprice promotions). The ‗brand as personality‘ stage marks an important

transition phase since not all brands evolve into consumer icons, especially if the

consumers do not relate to, or believe in, the communications of the brand, or they

sense some in consistencies with the brand‘s communications.

After a brand has reached the icon stage, continued consistent reinforcement would

normally suffice to maintain the status of the brand (Tan Tsu Wee and Chua Han

Ming 2003). However, marketers have to watch out for brand challengers who are

seeking the same positioning, to avoid being overtaken by them. In such situations,

the marketers of the brand would have to steer the brand a head or move in a different

direction from the competitors through new symbolic associations. An observation

worth noting is that society has been continually reinventing new meanings for

symbolic values, such that what was seen as ‗rugged‘ or ‗upper class‘ in the 1980s is

no longer so in the 2000s. Marketers have to keep themselves updated and use the

appropriate images for their symbolic associations.

2.4.3 Using company‟s name to influence consumer‟s decision

making

The paper ―The Influence of Company Name in Consumer Variety Seeking,‖ (Chen

and Paliwoda 2004) helps marketers understand when and how the company name is

used in consumers‘ information processing. Marketers can design proper messages to

enhance the weight attached to the company name in consumers‘ decision making

and increase the possibility of consumer acceptance of brands that they have not

58

bought before in their variety seeking.

Factors involved in decision making process:

Perceived risk

Consumers often feel vulnerable if they are not fully informed about the product

attributes and given over-whelming commercial information. Although variety

seeking may mean exposure to novelty and unexpectedness, and the avoidance of the

boredom of repetitive use of the same brand and product, it can involve some degree

of risk, particularly when an unknown brand is to be purchased. A wrong purchase not

only means a financial loss, but may also cause some emotional unease. Therefore, a

higher risk level will inhibit an exploratory tendency. In addition, perceived risk also

affects consumers‘ behavior in terms of the extensiveness of their purchase-

decision process and their processing of information. If consumers perceive a high

level of risk and are very concerned about the consequence of a wrong purchase, they

will process more information, among which is the company information.

Thus the level of perceived risk is positively linked to consumers‘ willingness

to rely on the company name in the decision to purchase an unfamiliar brand.

Perceived brand difference

Perceived brand difference refers to the difference, in terms of a set of core values

that is believed to exist among competing brands in a product market (Chen and

Paliwoda 2004). The core value can take the form of a concrete product attribute

(substantial difference) or an abstract belief (psychological difference) or both.

The perceived brand differences will influence consumers‘ motivation for variety

seeking. If not informed about the different values of other brands, consumers will

not see the point in seeking alternatives to the irregular consumption pattern, and they

will stick to brands that they have been using. When the perceived brand difference is

high, it implies some brands are believed to offer better quality and value than some

others. Therefore, there is potential for the variety seeker to acquire superior value in

trying an unfamiliar Brand, which will reduce the randomness of variety-seeking

behavior. In other words, consumers are cautious about selecting a brand that they

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have not bought before, and will consider more information including the company

name.

Company expertise difference

According to Keller (Keller K.L., 1993), corporate expertise is ‗the extent to which a

company is seen as able to competently make and sell its products or conduct its

services.‘ Consumers often form assumptions about companies and products. These

market beliefs then become the shortcuts that guide their decisions whether or not

they are true. If consumers believe some companies will be more competent to

deliver a certain product than some others, they will be assured in using an unfamiliar

brand by knowing it is coming from this company.

Usually, variety seekers are more likely to try an unfamiliar brand from companies

that they believe possess adequate expertise, because this gives them confidence in

their choice. The importance of corporate expertise in influencing consumers‘ brand

decisions is, however, moderated by some factors such as the difficulty of making the

product. If the product is easy to make and the technology involved in the production

is standardized, consumers tend to assume that there is only a minor difference in

production expertise among the competing companies. As a result, they tend to

downplay the weight of the company name in their purchase decision. Hence if

consumers believe there is a great difference in expertise among the companies

producing a certain product, they tend to attach more weight to the company name in

the decision to purchase an unfamiliar brand.

Company association A company name will be given more attention in consumers‘ purchase decisions if

it has a strong and positive association (Chen and Paliwoda 2004). ‗Strong and

positive association‘ means that, first, consumers easily recognize the company as a

main player in a certain product category, which means the recall of the company–

product relationship is high. Secondly, consumers will accept such a relationship; in

other words, the corporate image will help to promote the product, and consumers

will not feel unease in knowing this company is producing this product. The

company association is affected by a number of factors such as the pioneering effect;

the company‘s most promoted brands and its advertising strategy.

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2.4.4 Using country of origin in branding The findings of the study (Beverl and and Lindgreen 2002) imply a contingency

model of Country of Origin (COO). They also suggest that the use of COO needs to

place within a dynamic framework that views the use of COO from an evolutionary

perspective. It is mentioned that the use of COO is contingent upon the COO-product

category history. Managers, therefore, should assess carefully the history of category

association before they embark on using COO to raise consumer and trade awareness

of their products. If a country has a negative COO product category history it may be

detrimental to use COO in a brand programme. Even when a country has a positive

COO- product category history, the use of COO may make it difficult for small-scale

producers to develop consistent supplies of seasonal products. Managers should also

be thinking about COO programmes in the long term. For example, most agri

businesses have moved away from narrow COO- based strategies and are now

supporting their COO brands with market-based relationships. This is similar to what

most companies do when their products reach the maturity phase, and means that

COO has less importance when consumers become more familiar with the products.

This research (Beverland and Lindgreen 2002) focused on organizations that used

COO at a business-to-business as well as a business-to-consumer level. As such, it

helps fill a gap in the COO literature, where the role of COO at a business-to-

business level remains relatively unexplored. This research concurs with these

authors‘ views that COO is a complex construct, and that its effect is neither

universal nor uniform. COO did influence buyers, but in different ways. In some

cases, positive imagery from New Zealand was used to enhance the buying

experience, possibly alleviating the uncertainty associated with new products or new

suppliers. In other cases, COO was used to enhance perceptions of quality and

environmental integrity. This was used in markets were COO product category

knowledge was high, and where issues such as environmental integrity carried

legitimacy. Organizations moved away from COO when it lacked meaning or

integrity for buyers (traditional German venison consumers), or when changes in the

market meant that COO was no longer a sufficient vehicle for conveying the

complexity of the marketing message (e.g. the emergence of wine regions meant that

COO no longer captured to depth of the industry).

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2.4.5 Employee branding Brands are created and consumed by people. Employees, not advertising agencies,

bring a brand to life (Crosby & Johnson, 2003). The brand comes to life when every

employee understands it and when each employee "lives" the brand promise and

delivers it consistently. Companies must make a concerted effort to give their

employees a clear understanding of what their brands stand for in their market places.

Employees who believe the company values them are more likely to be committed to

the company and to building stronger branded entities at every opportunity in their

jobs."Living the brand "is an attitude and a way of working. This means that human

resources and training and development are vital tools of brand management.

Loyal employees can build a stronger brand (Fram & Mc Carthy, 2003). Some

companies may need to consider investing in or revising their internal marketing

programs to address the needs of this substantial minority who show modest or no

brand loyalty. This investment may be worthwhile because internal marketing not

only increases employee purchases and enhances profits, but also develops "brand

champions" who influence others to buy.

Internal marketing programs have significant potential for firms of all sizes, but

especially for larger firms. In the latter case, the significant proportion of employees

thought to have lower brand loyalty indicates a market potential often of thousands of

people. If nurtured, a substantial proportion may also become brand champions to

family, friends, and neighbors.

Given the potential uncovered by the study (Fram & McCarthy, 2003), it is advisable

for the firms to have a manager dedicated to marketing to employees in general and

to convert lower loyalty employees to higher levels of company brand purchasing

behaviors. One of the responsibilities of this manager might be to develop more

brand champions by providing venues, for those employees who like the company

brand, to become more comfortable in communicating their attitudes to friends and

relatives. Another responsibility might be to develop some differentiated internal

marketing programs for communicating to employees with higher brand loyalty in

order to keep their enthusiasm high. After all, high enthusiasm within the employee

ranks brings impressive dividends.

The findings (Fram & Mc Carthy, 2003) support the concept that investments in

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internal marketing efforts are likely to have a positive "pass-along ―effect on sales

and, hopefully profits, as a result of others coming into contact with a firm's internal

brand champions. While brand championship can be an important source of

additional sales, it also offers the opportunity to increase company good-willing the

communities the firm operates. When employees represent themselves to others as

supporters of their company, others may develop a positive image of the company

without any direct contact. This positive perception can only benefit the company's

community relations and recruiting efforts over time.

2.5 BUILDING ICONS

Every society needs myths-simple stories that help people deal with tensions in their

lives. Today‘s most potent brands succeed by providing them (Holt 2003).

Some brands become icons. Think of Nike, Harley-Davidson, Apple, Absolute,

Volkswagen-they're the brands every marketer regards with awe. Revered by their

core customers, they have the power to maintain a firm holds in the market place for

many years. Few marketers, however, have any notion of how to turn their brands

into icons, and that's because icons are built according to principles entirely different

from those of conventional marketing. These brands win competitive battles not

because they deliver distinctive benefits, trustworthy service, or innovative

technologies (though they may provide all of these). Rather, they succeed because

they forge a deep connection with the culture. In essence, they compete for culture

share.

It's a form of competition that is particularly fierce in what marketers refer to as

"lifestyle" categories, such as food, clothing, alcohol, and automobiles. Here the name

of the game is symbolism: The strategic focus is on what the brand stands for, not

how the Brand performs. And it's the only form of competition that yields icons

(Holt2003).Their impressive market power is based on a kind of customer value we

don't think about very often: Icons are valued because, through them, people get to

experience powerful myths.

People have always needed myths. Simple stories with compelling characters and

resonant plots, myths help us make sense of the world. They provide ideals to live by,

and they work to resolve life's most vexing questions. Icons are encapsulated myths.

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They are powerful because they deliver myths to us in a tangible form, thereby

making them more accessible.

Icons are not just brands, of course. More often, they are people. We find icons

among the most successful politicians- think of Ronald Reagan-artists and

entertainers like Marilyn Monroe, activists like Martin Luther King, and other

celebrity figures, such as Princess Di. People feel compelled to make these icons part

of their lives because, through them, they're able to experience powerful myths

continually. Iconic brands operate similarly.

When a brand creates a myth, most often through advertisements, consumers come to

perceive them that has embodied in the product. So they buy the product to consume

the myth and to forge a relationship with the author: the brand. Anthropologists call

this "ritual action.‖When Nike's core customers laced up their Air Jordan‘s in the

early 1990s, they tapped into Nike's myth of individual achievement through

perseverance. As Apple‘s customers typed away on their keyboards in the late 1990s,

they communed with the Company‘s myth of rebellious, creative, libertarian values

at work in a new economy.

As these examples suggest, iconic brands embody not just any myth but myths that

attempt to resolve acute tensions people feel between their own lives and society's

prevailing ideology. Such tensions are widespread. An ideology, by its nature,

presents challenging moral imperatives; it lays out the vision to which a community

aspires. But, inevitably, many people live at a considerable remove from that

vision. A national ideology may, for example, promote the ideal of a family with two

parents, even though many citizens contend with broken homes. The contradictions

between ideology and individual experience produce intense desires and anxieties,

fuelling the demand for myths.

That demand, in turn, gives rise to what we call ―myth markets." It's in these markets,

not in product markets, that brands compete to become icons (Holt 2003). Think of a

myth market as an implicit national conversation in which a wide variety of cultural

products compete to provide the most compelling myth. The topic of the conversation

is the national ideology, and it is taken up by many contenders. The winners in these

markets become icons; they are the greatest performers of the greatest myths, and

they bask in the kind of glory bestowed on those who have the prophetic and

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charismatic power to provide cultural leadership in times of great need. More often

than not those who win in myth markets are performing a myth of rebellion.

A brand becomes an icon when it is able to do the following five things (Holt 2003).

2.5.1 Target national contradictions Icons don't target consumer segments or psychographic types. They go after veins of

intense anxieties and desires running through society, the psychological consequence of

the national ideology. While market fragmentation is the rule in many sectors of the

economy, icons necessarily speak to a mass audience.

2.5.2 Create myths that lead culture Unlike conventional branding, icons don't mimic pop culture; they lead it. They

create charismatic visions of the world to make sense of confusing societal changes

in much the same way as have Marilyn and Elvis, JFK and Martin Luther King,

Ronald Reagan and Rambo, Steve Jobs and Bart Simpson. Icons earn extraordinary

market power because they deliver myths that "repair" the culture when it's

particularly in need of mending. They put existing cultural materials to new purposes

in order to provoke audiences to think differently about themselves.

2.5.3 Speak with rebel‟s voice Icons don't seek to mirror the thoughts and emotions of their customers. They speak

as rebels. To assemble a credible populist challenge to the national ideology, iconic

brands draw on people who actually live according to alternative ideals. And icons

don't simply borrow the trappings of rebel lifestyles, mimicking their clothing or

language. Rather, they understand the rebel's point of view so well that they can

speak with the rebel's voice.

2.5.4 Draw on political authority to rebuild the myth Unlike conventional brands, icons don't behave as if they have a certain DNA, an

essential truth that must be maintained. Icons must be reincarnated when ideology

ruptures because the value of their myth is erased. What remains intact as an artifact

of the original brand, however, is its political authority. When an icon's myth loses

value, its constituency still looks to the brand to shed light on the kinds of

contradictions it has addressed in the past. Because the brand has been a trustworthy

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and committed advocate, consumers believe that it will speak for them again.

2.5.5 Draw on cultural knowledge Cultural knowledge is critical for building icons yet is sorely lacking in most

managers' arsenals.

When the national ideology crumbles and is then reinvented, new contradictions

form. It's a window of opportunity for would-be icons, but it‘s bad news for existing

ones. For marketers, the central challenge is to divine how best to reinvent a brand's

myth when a cultural disruption hits. And doing that requires knowledge and skills

they may not have. Managers must learn to anticipate new contradictions and to

select the one that best aligns with the brand's political authority. And, as if that

weren't enough, they must then choose to align with the appropriate rebel subculture

and understand the rebel's ethos deeply enough to construct a credible and evocative

new myth.

Such knowledge doesn‘t come from focus groups or ethnography or trend reports-

the marketer‘s usual means for "getting close to the customer." Rather, it comes from

a cultural historian's understanding of ideology as it waxes and wanes, a sociologist's

charting of the topography of contradictions the ideology produces, and a literary

critic's expedition into the culture that engages these contradictions. To create

powerful myths, managers must get close to culture – and that means looking far

beyond consumers as they are known today.

2.6 BRAND CRISES AND BRAND GREMLINS

Marketers want their brands to ‗live long and prosper‘. Although particular products

may come and go, properly managed brands can last for many generations. Yet some

brands seem inexplicably to lose their momentum and profitability; a few even die

prematurely. Many organizations are not even aware their brands are heading for

trouble utilities too late. The critical question is, ‗What needs to be done to keep

brands healthy for the long run?‘

Most perils to brand health can be partitioned into two categories (Farquhar, Uncover

in Brand Gremlins and Other Hidden Perils,2003).The first includes different types of

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brand crises, which are highly visible events that warrant considerable management

attention. The second category of perils consists of brand gremlins, which are

imperceptible in most organizations and therefore receive little management

attention. Brand gremlins are the people and processes responsible for seemingly

small but repetitive mishaps with customers, or for other activities that progressively

undermine a brand.

The effects of brand gremlins on the brand are often hidden and incidental, and May,

therefore, remains undetected for a long time. The underlying problems may surface

only when the brand‘s health succumbs to the cumulative damage (like termite

infestations or viral infections). Top reserve long-term brand health, managers should

make ongoing, concerted efforts to prepare for brand crises and deal with brand

gremlins.

2.6.1 Brand crises

Brand crises usually result from sudden, unexpected, large- scale events that have a

significant impact on the brand, such as substantial shifts in customer demand,

quantum changes in technology, or great natural or man-made disasters (Farquhar,

Uncovering Brand Gremlin sand Other Hidden Perils, 2003).Such events may have

serious and lasting consequences for those brands that cannot absorb the shock or

adapt quickly enough.

Technological advances can precipitate another type of crisis when a brand‘s

products or services become obsolete. Natural and man-made disasters can also

jeopardize brands. The wide spread crises of confidence in brands like Arthur

Andersen, Enron, Firestone, Perrier and Snow Milk have led to steep sales declines

or collapse. Some brands try to escape the past by adopting new names(for example

,ValuJet became Air Trans). Only a few brands like Tylenol survive such

catastrophic events, recover with their reputations intact, and continue to thrive.

A strong brand itself is not always enough to survive when the rules of the game are

about to change. Far-sighted managers prepare and train their organisations to

respond and manage brand crises. But they also use scenario planning and other

exercises to understand their brand‘s weaknesses and identify strategic inflection

points. With such insights and advanced planning, the managers are able to take

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timely actions to pre-empt the crisis and preserve their brand.

The early recognition of strategic inflection points explains why some brands prosper

while others do not fare as well in brand crises.

2.6.2 Brand gremlins

Every day events may be even more harmful to a brand‘s long- term health. Brand

g remlins are those people, processes and other entities that are out of alignment with

the organization‘s overall brand strategy. Brand gremlins frequently lead to brand

deterioration and an erosion of customer goodwill. Like vehicle wheels out of

alignments and in the gears of machinery, bugs in a software program, or other

recurring glitches, the underlying cause of a brand problem may be scarcely

noticeable, but the collective effects can be devastating if not discovered and

corrected early enough.

The following list describes the six common types of brand gremlin Farquhar,

Uncovering Brand Gremlins and Other Hidden Perils, 2003):

• Loss of trust

• Loss of esteem

• Loss of distinctiveness

• Loss of value

• Loss of relevance

• Loss of distribution

These types are neither mutually exclusive nor exhaustive: brand gremlins may

possess multiple traits, and other types of gremlins also exist.

Loss of trust Trust gremlins do not fulfill the brand‘s promise or keep their personal word to

customers. Customers usually blame the brand for such shortcomings and may then

warn others that the brand cannot be trusted. Brand loyalty begins to evaporate

quickly as customers defect and negative word of mouth spreads.

Loss of esteem Esteem gremlins spoil the brand‘s emotional appeal for customers. As customers‘

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admiration and respect for the brand diminishes, they will no longer recommend the

brand to others. At some point, customers might seek other alternatives and regretfully

switch to other brands.

Loss of distinctiveness Distinctiveness gremlins dilute the brand‘s point of difference and thus blur its image

with customers. Confused customers no longer understand the brand‘s meaning and

core benefits. The brand‘s comparative advantages will be diluted if category

extensions do not fit well with the brand or if other marketing actions make

customers‘ decision-making more complicated. Customers may then either switch to

more clearly differentiated brands or put more emphasis on price in choosing among

brands.

Loss of value Value gremlins lower a brand‘s perceived quality and the functional benefits offered

to customers. As perceived quality slips, customers eventually decide the brand does

not offer them fair value. Customers are then reluctant to pay much of a premium for

the brand. If the brand continues to lose value, it becomes a commodity in customers‘

minds and must compete on price to survive.

Loss of relevance Relevance gremlins fail to meet critical changes in customers‘ needs or expectations.

Without a clear understanding of customer expectations or emerging trends in the

market, some organizations are relatively slow in meeting customer needs. Customers

often regard such brands as no longer appropriate and eliminate them from further

consideration in their purchasing decisions.

Loss of distribution Distribution gremlins reduce a brand‘s availability to customers. Customers who

repeatedly discover their preferred brand is not carried, is back-ordered or out of stock

will either find available brands to buy or use alternative ways to satisfy their needs.

A brand‘s power in the marketplace depends on its awareness and availability to

customers.

Marketers‘ blind spots can make it difficult to detect brand gremlins and other hidden

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perils. Blind spots may obscure essential information from an individual or

organisation, which is unaware that anything is missing. The secret to uncovering

blind spots is to use multiple sources of information and find reliable ways

of systematically challenging established beliefs. Resourceful marketers first take

steps to learn about their blind spots before searching for brand gremlins. (Farquhar,

Discover the blind spots in your brand vision, 2003) examines several kinds of blind

spot to improve marketers‘ discovery of various threats to their brand‘s health.

Knowing how to spot, and where to look for brand gremlins is just the start. The next

challenge is to align the organization around a winning brand strategy and turn

gremlins into advocates for the brand. (Porter, 1996) illustrates how to align

operational and other elements in a cohesive brand strategy. By preparing for brand

crises and transforming brand gremlins, organizations are far more likely to see their

brands live long and prosper.

2.7 BRANDMETRICS/ BRANDVALUATION For all the discussion that revolves around the importance of the brand as a driver of

business value and success, surprisingly few businesses have instituted a systematic

programme of analytics that allows them to gauge their brands‘ performance, adjust

brand strategies and, more importantly, link them to business performance measures.

This is as true for business-to-business (B2B) as it is for business-to-consumer (B2C)

marketing, even though B2B organisations have a critical advantage: they have a

better idea of who their customers are and can measure the dynamics of acquisition,

retention and optimisation with considerable precision. The paper ―Brand Metrics:

Gauging and Linking Brands with Business Performance‖ (Munoz, 2004) discusses

the essential components of a brand metrics programme, how it can and should be

linked to business performance, and how one technology company used brand metrics

to help it adjust its brand and business strategy.

Benefits of Brand Measurement The key benefit of a brand measurement system is that it links brand management and

business performance. The system is most powerful when viewed as a strategic

management tool for continuous improvement rather than a static snapshot in time of

the brand‘s performance. Thus, measurement needs to be considered as a continuous

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activity. An effective brand measurement system helps businesses to:

• Understand how the brand is performing against customer expectations

• Determine how the brand is performing against the competitive set

• Identify brand weaknesses before they become business problems

• Establish areas to focus brand building efforts on to create business value

The three classes of measurement Three classes of measurement (Munoz, 2004) allow the marketer to gauge the

effectiveness of brand-building activity from brand investment (inputs) through to

business impact (outputs)

• Perception metrics focus on the range of functional, emotional and latent connections

that combine to form an opinion of a brand. These include awareness, familiarity,

relevance, consideration and preference; combined, they help to gauge the

effectiveness of various brand-building activities across all the points of interaction

with a customer.

• Performance metrics help to assess how the various brand- building activities have

combined to drive overall business results, and range from price premium to loyalty

to lifetime value of a customer.

• Financial metrics represent the economic impact on the business, whether revenue

growth or return on investment.

Guidelines for selecting the right combinations of metrics All three types of metric should be incorporated into a brand measurement programme

(Munoz, 2004), although the challenge to marketers is to not over-measure lest the

exercise becomes overwhelming. Some basic, underlying rules should be used when

deciding which particular combination of metrics to choose. The metrics should

be:

Simple to use: As the metric becomes more complex, more time

is spent on measuring the brand than managing it.

Meaningful: There must be a direct link to brand-building efforts as well as

business results.

Actionable: An apparent business decision should be associated with the

metric, with the focus on ‗need-to-have‘ metrics, not ‗nice-to-have‘ metrics.

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Repeatable: Consistent, repeatable application of a metric is necessary to

deliver valuable information.

Time-bound: Results should be compared, benchmarked and evaluated

against other brands within the portfolio and the competition at regular

intervals.

One of the biggest challenges marketers face is in understanding the causal

relationships between brand perception, brand performance and financial impact.

Causality is derived from understanding the key drivers of demand, knowing at

which touch- points (or moments of customer interaction) perceptions and behaviors

are generated, and assessing the influence of the brand in choosing one product or

service over competitive offerings. Once the causal connections are made a cross

perception, performance and impact, the marketer can tie activities directly to value

creation. The implication here is that marketers, as advocates of shareholder

value, must move considerably beyond their traditional focus on communications

and become involved in operational, financial and strategic planning processes. In

order to ensure that the measurement system arms marketers with the necessary

firepower.

To accomplish this, it needs to be able to do the following 3 things:

• Link brand metrics to business strategy

• Identify the key goals that can be impacted by the brand

• Determine the key constituencies that can be influenced by the

brand

2.7.1 Customer based Brand Equity Brand equity has been defined in a variety of ways, depending on the particular

purpose. The focus of this article is on brand effects on the individual consumer. The

advantage of conceptualizing brand equity from this perspective is that it enables

managers to consider specifically how their marketing program improves the value of

their brands. Though the eventual goal of any marketing program is to increase sales,

it is first necessary to establish knowledge structures for the brand so that consumers

respond favorably to marketing activity for the brand.

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Defining Customer based Brand Equity Customer-based brand equity is defined as the differential effect of brand knowledge

on consumer response to the marketing of the brand (Keller K.L., 1993). Three

important concepts are included in the definition: "differential effect," "brand

knowledge," and "consumer response to marketing."

Differential effect is determined by comparing consumer response to the marketing of

a brand with the response to the same marketing of a fictitiously named or unnamed

version of the product or service.

Brand knowledge is defined in terms of brand awareness and brand image and is

conceptualized according to the characteristics and relationships of brand associations

described previously.

Consumer response to marketing is defined in terms of consumer perceptions,

preferences, and behavior arising from marketing mix activity (e.g., brand choice,

comprehension of copy points from an ad, reactions to a coupon promotion, or

evaluations of a proposed brand extension).

Thus, according to this definition, a brand is said to have positive (negative)

customer-based brand equity if consumers react more (less) favorably to the product,

price, promotion, or distribution of the brand than they do to the same marketing mix

element when it is attributed to a fictitiously named or unnamed version of the product

or service. Favorable consumer response and positive customer-based brand equity, in

turn, can lead to enhanced revenue, lower costs, and greater profits. Brand knowledge

is central to this definition. In particular, the favourability, strength, and uniqueness of

the brand associations play a critical role in determining the differential response. If

the brand is seen by consumers to be the same as a prototypical version of the product

or service in the category, their response should not differ from their response to a

hypothetical product or service; if the brand has some salient, unique associations,

those responses should differ. The actual nature of how the responses differ

depends on consumers' evaluations of these associations, as well as the particular

marketing mix element under consideration. Thus, establishing brand awareness

and a "positive brand image" (i.e., favourable, strong, and unique brand associations)

in consumer memory creates different types of customer-based brand equity,

depending on what marketing mix element is under consideration. A brief discussion

highlighting some relevant considerations for each of these elements follows.

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Fundamentally, high levels of brand awareness and a positive brand image should

increase the probability of brand choice, as well as produce greater consumer (and

retailer) loyally and decrease vulnerability to competitive marketing actions. Thus, the

view of brand loyalty adopted here is that it occurs when favorable beliefs and

attitudes for the brand are manifested in repeat buying behaviour. Some of these

beliefs may reflect the objective reality of the product, in which case no underlying

customer-based brand equity may be present, but in other cases they may reflect

favourable, strong, and unique associations that go beyond the objective reality of the

product.

High levels of brand awareness and a positive brand image also have specific

implications for the pricing, distribution, and promotion activities related to the brand.

First, a positive image should enable the brand to command larger margins and have

more inelastic responses to price increases. The most important aspect of the brand

image that affects consumer responses to prices is probably overall brand attitude.

Consumers with a strong, favourable brand attitude should be more willing to pay

premium prices for the brand. Similarly, a positive image should result in increased

consumer research and a willingness to seek out distribution channels for the product

or service. Finally, high levels of brand awareness and a positive brand image can

increase marketing communication effectiveness. All aspects of the brand image are

relevant in determining consumer response to advertising and promotion. For

example, several authors note that advertising response and decay patterns area

function of consumers" attitudes and behavior toward the brand. They maintain that

consumers who are positively predisposed toward a brand may require fewer ad

exposures to meet communication objectives. Similarly, one could argue that strong

attribute or benefit associations for the brand require less reinforcement through

marketing communications.

In these different ways, customer-based brand equity is enhanced by creating

favourable response to pricing, distribution, advertising, and promotion activity for

the brand. Moreover, a familiar brand with a positive brand image can also yield

licensing Opportunities (i.e., the brand name is used by another firm on one of its

products) and support brand extensions(i.e., a firm uses an existing brand name to

introduce a new product or service),two important growth strategies for firms in

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recent years. Licensing can be a valuable source of royalty income, as evidenced by

the substantial merchandising efforts in recent years, and typically has been employed

when brand associations have strong user imagery or brand personality attributes. A

more substantial investment and risk profile for the company, however, is required

with brand extensions.

Measuring Customer based Brand Equity There are two basic approaches to measuring customer-based brand equity. The

"indirect'' approach attempts to assess potential sources of customer-based brand

equity by measuring brand knowledge (i.e., brand awareness and brand image). The

"direct" approach attempts to measure customer-based brand equity more directly by

assessing the impact of brand knowledge on consumer response to different elements

of the firm's marketing program. The indirect and direct approaches to measuring

customer-based brand equity are complementary and should be used together (Keller

K.L., 1993).The indirect approach is useful in identifying what aspects of Brand

knowledge causes the differential response that creates customer-based brand equity;

the direct approach is useful in determining the nature of the differential response.

Indirect approach

The first approach to measuring customer-based brand equity, measuring brand

knowledge, requires measuring brand awareness and the characteristics and

relationships among brand associations. Because any one measure typically captures

only a particular aspect of brand knowledge, multiple measures must be employed to

capture the multidimensional nature of brand knowledge.

Direct approach

The second approach to measuring customer-based brand equity, directly measuring

the effects of brand knowledge on Consumer response to marketing for the brand,

requires experiments in which one group of consumers responds to an element of the

marketing program when it is attributed to the brand and another group of consumers

responds to that same element when it is attributed to a fictitiously named or unnamed

version of the product or service. By attributing the marketing element to an

unfamiliar or anonymous product, consumers should interpret it with respect to their

general knowledge about the product or service, as well as prototypical product or

service specifications and price, promotion, and distribution strategies. Comparing the

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responses of the two groups thus provides an estimate of the effects due to the specific

knowledge about the brand that goes beyond basic product or service knowledge.

2.8 INDUSTRIAL MARKETING

In today‘s competitive business environment, customers in the business-to-

business(B2B)arena have more information, access to more choices, are more

sophisticated, and as a result have higher expectations than ever before. For the

marketers of industrial products, the end result of this highly competitive environment

is having to put forth a greater effort to create some form of product differentiation to

avoid their products being viewed as commodities. To cope with these challenges and

avoid this commoditization, many B2B marketers are increasingly seeking to brand

their products to differentiate themselves from their competition (Michell, King, &

Reast, 2001; Mudambi, Doyle, & Wong, 1997; Ward, Light,& Goldstine,1999).

Coupled with this desire for differentiation is the fact that an increasing amount of

research has shown that branding of industrial products plays a more important

role in industrial decision making than has been thought previously (Mudambi,

Branding importance in business-to-business markets Three buyer clusters, 2002).

As marketers of consumer products have discovered, the companies that thrive will be

the ones that create the most compelling and consistent brand experience for their

customers (Prophet, 2001). An important component of this brand experience is the

ability to develop a relationship with the customer at key interaction points of that

experience. To develop this relationship, the marketer must understand how the B2B

customer defines the concept of ‗‗value‘‘ and then work to deliver that value

throughout all interactions with the customer. When the product is delivered in a way

the customer understands, desires, and is willing to pay for, the brand has a greater

opportunity of having a higher perceived value for that customer. Having a brand with

high perceived value will set the stage for a long-lasting relationship to develop, and

the depth of the relationship between the brand and its customers will be the

foundation for the ongoing success and sustained competitive advantage despite

disruptions in the marketplace (Schultz, 2001).

While consumer brands have traditionally sought to develop these relationships,

industrial products are increasingly using branding to differentiate their product and

also develop these relationships. Industrial firms that are able to create a viable brand

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identity for their product or line of products can achieve that degree of differentiation

that can be the difference between success and failure in the marketplace (Mudambi,

Branding importance in business-to-business markets three buyer clusters, 2002).

2.8.1 Branding research in the B2B arena Although research on branding industrial products has been limited, a number of

empirical studies have been conducted in recent years that have expanded the body of

knowledge of the subject. In one of the first attempts to examine industrial branding,

Saunders and Watt (Saunders & Watt, 1979) examined the use of brand names for

industrial fibres, which are basically commodity industrial products. While they

concluded that industrial brand names tend to be confusing and not effective, they

surveyed house wives rather than industrial purchasers, somewhat calling their results

into question. Sinclair and Seward (Sinclair &Seward,1988), operating on the general

premise that branding is less effective for industrial products than for consumer

products, looked at branding in the paper board industry. Their results found that the

primary reasons for branding industrial products were to provide some degree of

differentiation, to better identify the product, to emphasize the product as a specialty

product, and to develop a loyal customer base. Another key finding of the Sinclair and

Seward research was that a number of

Manufacturers failed to place enough emphasis on educating the intermediaries and

end users about the uniqueness of the brand, and as a result their middlemen did not

feel as though branding was as important as the manufacturers did.

Shipley and Howard (Shipley &Howard, 1993) found that companies in the United

Kingdom used brand names widely and that brand names and brand naming were

important to manufacturers of industrial products. They also found that industrial

brand names were perceived by these manufacturers to be effective, were important in

establishing industrial marketing positioning, and were especially important for small

firms to overcome what may be perceived as a relative disadvantage. Using the

Shipley and Howard research asa point of departure, Mitchell et al. (Michell, King, &

Reast, 2001) set out to examine to what extent managers in industrial firms (also in

the UK) perceive there to be any unique value to branding their products and whether

or not these branding associations provide any competitive advantage. Their findings

indicate that industrial firms hold very positive views about the benefits of brand

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names and feel that branding is valuable to marketing success and is a major corporate

asset. In addition, industrial firms perceive a number of competitive differential

benefits in the use of manufacturer brands, with quality, reliability, and performance

rated as primary factors by a clear majority of the respondents.

Other research has attempted to examine the construct of brand equity of industrial

products, with one study defining it as buyers‘ willingness to pay a price premium for

a particular brand, recommend the brand to peers, and give special consideration to

another product with the same company brand name (Hutton, 1997). A second study

defined brand equity as the set of associations and behaviours on the part of a brand‘s

customers and channel members which allow a brand greater volume and margins

than it could obtain without the brand name (Gordon, Calantone, & di Benedetto,

1993). In a study in the electrical products in industry, Gordon et al. (Gordon,

Calantone, & di Benedetto, 1993) found that brand equity was highly present in B2B

markets. Among their key findings was because B2B products tend to be branded with

firm names loyalty tends to be more global in nature, extending across all the firm‘s

product lines. Second, because this firm versus brand loyalty exists, efforts to position

new products in a manner different from those existing products may prove to be

difficult if not impossible. Third, loyalty in the B2B sector encompasses not only the

firm and its products, but also the channel members employed to distribute the

product. Finally, they propose that only limited means are possible to change existing

perceptions outside of establishing or acquiring subsidiary operations.

In another study involving industrial brand equity, Hutton (Hutton, 1997) found

brand-building investments in B2B markets to be worthwhile activities to the extent

that these investments will elicit brand–equity behaviors. He also found the presence

of a strong brand to be a positive factor and the potential for brand extensions and

brand synergy across somewhat disparate products categories to be high. However, on

the other hand, the potential of an unsuccessful product harming the reputation of

another product with the same brand name also appears to be high even when the two

products are dissimilar. Another finding was that while the risk of organizational

failure is a concern, the fear of personal failure may be the bigger factor in brand

decisions. Owing somewhat to this finding, Hutton also found that brand appeals tend

to be more effective with the more complex products that require greater service and

support with individuals who are pressed for time or resources or who are concerned

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about the consequences of product failure on themselves and/or their organization

(Hutton,1997). This finding is in keeping with a number of studies that have examined

perceived risk in the organizational buying behavior literature, which has shown

that industrial buyers will choose recognized brand names from established

companies as a way to reduce both corporate and personal risk (Henthorne, La Tour,

& Williams, 1993; Mc Quiston & Dickson, 1991).

While the above research has served as a foundation for developing an understanding

of industrial branding, their samples included either manufacturers or middle men and

provide no evidence as to the effectiveness of branding efforts on industrial customers

(Mudambi, Doyle, & Wong, An Exploration of Branding in Industrial Markets,

1997).In a comprehensive review of the literature, Mudambi et al. (Mudambi, Doyle,

& Wong, An Exploration of Branding in IndustrialMarkets,1997) propose that

intangible factors as well as tangible factors are important in industrial decision

making, and to understand successful brands, each brand attribute must be analyzed

from the perspective of the expected value to the customer. Synthesizing the literature,

they define brand value as having four integral components: product performance,

distribution performance, support services performance, and company performance.

They go on to propose a conceptual model of branding, including the tangible and

intangible elements of each of these components. In another study, Mudambi

(Mudambi, Branding importance in business-to-business markets three buyer clusters,

2002) found that industrial buyers consider three bundles of attributes in their

purchasing process: the product, the augmented services, and the branding. In a study

of the purchasing of ball bearings in the UK, she used cluster analysis to identify three

distinct buyer types: ‗‗highly tangible,‘‘ who value physical product properties and

price; ‗‗branding receptive,‘‘ who perceive the three branding elements of brand name

awareness, brand image or reputation, and brand purchase loyalty to be important; and

‗‗low interest‘‘ who generally did not feel that any of the attributes were more

important than the others.

2.8.2 Developing an industrial brand

The literature on industrial branding clearly indicates that branding is alive and well in

industrial products and when accomplished strategically can serve as a viable

competitive advantage for industrial firms. While branding on both the consumer and

industrial sides basically represents a promise to the customers, the B2B marketer

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must realize and account for the key differences in industrial brands from consumer

brands. On the consumer side, once the product has met the necessary physical

requirements for the consumer, the promise of the brand tends to be more intangible

in nature, offering consumers the emotional security of being able to recall and deal

with a recognized brand name. However, on the industrial side, a brand represents a

multi dimensional promise of value that includes more factors than simply the

performance of the physical product. In addition to the performance of the physical

product, a second factor integral to the success of a brand is the ability of the

manufacturer to deliver the needed products and services in a timely manner, often

through an intermediary. However, intermediaries on their own will not necessarily

understand the manufacturer‘s strategy to differentiate the product or to create a

unique identity for that brand in the desired customer segment and therefore of ten are

unable to communicate the benefits of that product to the end user. The

manufacturer therefore must take special measures to communicate their reasoning

behind the brand strategy and the value created by this brand to ensure that the

intermediaries understand and communicate this value to the end users.

The third factor that is important in industrial branding is company support services.

All members of the organization must realize that their customers may define the

value of the product by the way a company representative responds to their specific

need at a specific point in time. Thus, a pervasive strategy throughout the organization

should be that all members of the organization must respond to customers in a

reliable, timely, and efficient manner, enhancing the promise of the brand‘s value in

the customer‘s mind and endeavouring to deliver this value in key interactions with

the customer. Finally, because loyalty is often directed more towards the entire

company rather than a specific brand, the company‘s standing in the industry and their

overall reputation are also considered part of the brand. This is often the intangible or

emotional side of the brand, which recent research has shown to have more of an

impact than was thought previously. This may be due in part to the increased

perceived risk industrial customers feel as a result of dealing with an ever-

increasing number of technically complex product choices. Perceived risk is often a

factor in organizational buying behaviour and the promise of value that the reputation

as supplier company has can serve to reduce this risk. The company then must

endeavour to create that positive intangible image for this brand through pro-motions,

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public relations, and in every interaction with their customers.

2.8.3 Difficulties in branding commodities Past associations: Being already consumed for pasts and availability of

number of suppliers the commodities offer a great difficulty in branding. This

is because consumers have strong past associations and consumption patterns

which are difficult to change.

Promotion of commodity as a category: Certain commodities are

difficult to be promoted as individual brand. Hence, a joint effort from the producer

and distributor side is necessary to motivate any increase in consumption of a

category through branding. This entails joint decision making on advertisement and

promotion strategies, budgeting and Direct sales effort which all get delayed due to

joint decision making. In promotion the cost has to be incurred by thousands of

producers.

2.8.4 Branding strategies for commodities

In case of commodities, branding can take at two levels. First is the Category level

where the entire category is promoted by a consortium of producers to jointly reap the

benefits of branding. Such products are generally produced by a vast number of

producers and their product is jointly marketed by a central processing authority (e.g.

milk and eggs). The other level of branding can beat the individual level where an

individual aims to gain a critical size by branding and differentiating factor (e.g. salt

and flour). Normally such categories don‘t have a central processing structure.

1. Promotion of the category:

Depth and then breadth of brand awareness:

Since the associations with a product categories are well established in the mind of

consumer and it is very difficult to change those brand associations it is important

that those associations are not challenged by a drastic change i n the association of

the commodity. Thus, it is important that the brand depth (ability of consumer to

recall easily) is given more importance (then breadth i.e. range of purchase and usage

situations that come to mind). After the initial promotion of commodity has been

successfully accepted in the marketplace the breadth should be enlarged by

innovating in the product category.

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• Leveraging existing associations:

Many a times commodities are associated with consumption of other commodities.

Due to this join consumption the branding has to be done along with those products.

• Use of Spokespersons:

Often the spokespersons are used to reflect the values represented by the product

category and promote the category.

2. Individual brand Promotion:

• Finding Meaningful differences:

Some of the former commodity categories have been successfully converted to

product categories by use of adequate branding on the basis of existence of

meaningful product differences. In these categories customers was convinced that

the product had appreciable quality differences.

Image or other non-product related considerations:

In case where the product difference is virtually non- existent it is imperative to

differentiate the commodity on non-product related measures.

Companies:

The Company in such cases tries to transfer the brand associated with them to

increase the credibility of the brand.

Country of origin:

Because of specialty of resources or extra-ordinary skills lying in a country certain

favorable characteristics are often associated with a product category and a country.

Co-branding:

Use of other strong brands in the joint consumption stage is often used in case of

commodities.

2.8.5 The four step approach to branding commodities

Sam I. Hill, Jack McGrath and Sandeep Dayal (Hill, McGrath, & Dayal, 1998) have

proposed a four step approach to branding commodities:

• First, carve up the market from every angle—profits, needs, behaviours — to

identify those customers who are responsive to differentiation.

• Second, differentiate your offering in one or more of the six ―generic‖ dimensions

of differentiation.

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• Third, bundle several differentiations in to a brand, and then communicate that

brand consistently and strongly.

• Fourth, align your business capabilities to reinforce and defend the brand and

the underlying sources o differentiation.

Carving up the market Carving up the market is the critical first step. Commodity marketers who know who

will pay for differentiation, how much can be invested in the differentiation processs

and what benefits are of value to their customers can begin to build a brand. Those

who instead apply a shotgun approach will likely run out of money before they see

results.

Successful commodity marketers must start by recognizing that no market is truly

homogeneous. Some customers are simply not responsive to marketing and are a

waste of time. We call our process to identify the right set of customers carving up the

market. Carving up the market goes well beyond traditional segmentation. It is a

deliberate process to find those customers who need, appreciate and will pay for

differentiation. The first step is to conduct a disciplined behavioral segmentation of

the market. This is very different from traditional psychographic or demographic

approaches; instead of relating how customers behave to how they purchase, actual

purchase patterns are examined. There are three distinct classes of customers:

Gold Standard Customers

These are the customers whose concerns exceed a narrow fixation with rock-bottom

price. They will pay a premium for offerings that deliver through value in terms of

process enhancements, cost reduction or benefits to end-users. They typically

represent small portion, anywhere from 5 to 25 percent, of the total market. The true

Gold Standard customers will consider long-term, strategic partnerships with multiple

levels of client interaction. These are the customers sought by commodity marketers.

―We are going through a revolution in customers election, spending less time with the

transaction types, and embracing partners,‖said the director of marketing at this

company‘s dry milling division. Ofcourse, even Gold Standard commodity customers

are demanding — sometimes more so than other market segments. However, at least

they are willing to pay for their demands.

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Potentials A larger segment of the market, generally ranging from 30 to 45 percent, places a

higher emphasis on pure price, but is occasionally willing to entertain the notion of

selective relationships involving certain products or services. Customers in this

segment have some degree of interest in partnering although they shy away from

long- term commitments. Because they are concerned with delivered cost, it is

possible on occasion to interest them in opportunities to reduce network costs,

including transportation, delivery and warehousing. Once it is possible to move the

dialogue beyond delivered price, the potential for differentiation exists.

This group sometimes even includes traditional cost managers. Because they are

concerned with delivered cost, it is possible on occasion to interest them in

opportunities to reduce network costs, including transportation, delivery and

warehousing. And supply-risk managers, rather than fixating exclusively on cost, are

primarily concerned about the potential to avoid supply interruptions.

Once it is possible to move the dialogue beyond delivered price, the potential for

differentiation exists.

Incorrigible

No matter what one does, customers are not going to love one. These are not strategic

thinkers. They are tightly focused on a single goal: making the best possible deal on

the transaction at hand. These are the pure price buyers, who treat suppliers as the

enemy and focus exclusively on current delivered price. They will switch suppliers

with lightning speed for even the slightest price differential. Unfortunately, these

incorrigibles constitute half the market, or more, in some commodity businesses.

They are so prevalent that no supplier can seriously think about "firing" all of them.

The behavioral segmentation of the market is just the first step in understanding

customer potential, albeit the most important. Marketers also need to analyze the

extent to which customers truly contribute to their profitability, rather than eating up

profits by failing to pay the true cost-to-serve. The result of these segmentations is a

shortlist of the customers around which real marketing can take place.

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Differentiate

Commodity differentiation must be tangible, robust and capable of withstanding

intense scrutiny. The marketed offering must significantly enhance some element of

the customer‘s value chain in ways other competitors can‘t match. That requires the

development of a unique, tangible source of value — technological and engineering

support, special distribution and delivery, or specific application of the commodity

product to end use. Once in place, that differentiated source of value is difficult for

competitors to duplicate. What‘s more, if the supplier can bundle multiple sources of

differentiation into a single, integrated offering, the challenge facing competitors

becomes immense.

There are always ways to differentiate, through both how you add value and how you

deliver it. Value is created in commodity products through improving the consistency

of the offering, making it more convenient or aggressively customizing it to the

customer‘s operation. This value can be delivered either through the product itself or

through service enhancement.

What results from that combination are the six "generic" ways to differentiate?

1. Quality Control: Value from Product Consistency

2. Reliability: Value from consistent service

3. Packaging: Value from Product Convenience

4. Taking Responsibility: Value from Convenient Service

5. Matching: Value from Product Customization

6. Knowledge-based Applications: Value from Customized Service

Bundle

Defining and delivering a differentiated attribute that provides real value to the

customer is essential, but not necessarily sufficient. Often, a single attribute —

consistent quality or service, for example — can be matched, or at least neutralized,

by agile competitors. Differentiation tied to a specific product is the most tenuous

basis for branding. Ideally, commodity branding is associated with an offering — the

basic product or service enhanced by various forms of differentiation —rather than

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with a particular product. The goal is to bundle multiple sources of differentiation —

and then to fight ferociously to prevent competitors from unbundling them.

In the end, the goal is first to build the brand identification with a bundle of integrated

offerings, and then to extend the brand relationship to the institutional level, where it

affords the greatest opportunities for leverage. The people who market Du Pont‘s

chemicals and mineral products understand they have a considerable advantage

because of the company‘s reputation for innovation, reliability and stability. Even if

there is nothing particularly innovative about a specific product they might be selling,

one manager acknowledged, ―people buy from us because we are Du Pont.‖ That is

the essence of commodity branding.

The objective of institutional branding is to create customer relationships that are

broad and deep — broader than the traditional link between a salesman and a

purchasing manager, and deeper than a teenager‘s emotional attachment to a particular

brand of designer jeans. In commodity brand relationships, those emotional bonds are

replaced by shared goals and common values.

Brand marketing requires multiple points of company-to- company contact as both

partners seek mutual ways to create value through aligned processes, applications and

capabilities. It demands an entirely new focus on relationships rather than

transactions, on offerings rather than products, on premiums rather than discounts.

It also requires effective communication of the brand. But years of disappointing

experience, stemming from the costly and inappropriate use of consumer marketing

techniques, have made commodity suppliers leery. Indeed, some have an

almost pathological fear of communication in general, and of advertising in particular.

Well-targeted, sharply focused communication does work well in commodity markets;

it just doesn‘t bear much resemblance to the mass advertising most commodity

suppliers automatically associate with brand marketing. The key is to communicate

the value clearly, using economics rather than emotion.

Deliver

The extraction of a premium for a differentiated offering demands that the supplier

make good on the promise of added value. Execution is critical; the supplier must

have the business systems and processes required to deliver the marketed offering. It

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must also have the business systems to not deliver to customers who don‘t pay for it.

When commodity buyers pay a premium for value, it can‘t be skin deep. The value

has to be real and tangible, because they will constantly measure and re-evaluate it. If

the customer paid for the highest-quality product or the highest level of service, then

that is what the customer has to get. At the same time, business systems must enforce

internal discipline to insure that buyers of the most basic commodities are not over-

served.

2.8.6 Pricing principles for branded commodities

Changes in the business capabilities are not restricted to production and logistics, but

are even more important on the ―soft side‖ — customer management. Employing a

traditional sales force for a branded commodity is wrong.

Brand marketing requires massive re-education, new values and tailored incentives.

Traditionally, commodity salespeople have had two concerns: volume and the

immediate transaction. Their basic tactic is to enhance their personal relationship

with the buyers. To close the deal, they will offer practically anything, culminating in

the pitch: ―I know what the rate card says, but here‘s what I‘ll do for you.‖ And that

approach will spell disaster when applied to brand marketing. With alarming speed,

the salespeople will unbundle your offerings. They will erase your premiums.

They will offer unfathomable discounts. Left to their own devices, they will destroy

your brand faster than any marketing effort can build it back up.

Few issues are more problematic for commodity marketers than pricing. The

traditional commodity pricing mentality dictates that all consumers must pay the same

price, with reasonable adjustments for transportation and volume. That view of the

marketplace is blatantly wrong. The notion that all customers of lowly differentiated

commodities pay essentially the same price is a myth.

Commodity suppliers are accustomed to charging a wide range of prices; the rational

basis underlying those price variations is not always evident. But haphazard pricing

practices will not support a long-term branding strategy. Marketing branded

commodities involves a set of basic pricing principles.

The supplier of branded offerings must be constantly aware of the true cost of

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differentiation. Commodity suppliers, rather than risking the loss of a customer by

demanding a premium, often provide a particular service upon request. Overtime,

they incrementally increase the value of their offering without extracting an

appropriate premium. Ultimately, that can be ruinous. Effective branding requires

an accurate calculation of the true cost of initiating, delivering and supporting the

offering.

• It is essential for suppliers to command value for even small differences.

• Understand the true value of the offering in terms of the customer's operations

and ability to switch.

• Do not allow differentiation to be unbundled, either by competitors of by your

own sales force. The bundled offering is the core of the brand.

• Effective marketers must be prepared to make continuous and complex trade-offs

between volume and price. That means deliberately surrendering market share on

occasion when the tide is running the wrong way, then moving aggressively to regain

share when conditions are right. It requires a dynamic, day-to-day approach known

as "guerrilla marketing" – prowling world markets for opportunities that play to your

strengths, and passing up fights when the cost of victory appears too high.

• Finally, a successful pricing strategy requires the supplier to maintain market

discipline - a deliberate, unemotional approach to outbreaks of price wars. It requires

careful analysis of what competitors are doing, and why, in order to avoid misreading

signals that might actually point to a spot phenomenon or geographical aberration

rather than across- the-border price cuts. It is imperative to avoid getting panicked

into price slashing, which undercuts the long-term strategy.

2.8.7 MANAGERIAL IMPLICATIONS

The implications for industrial marketing managers are clear: the branding of an

industrial product can be successful if the process is carried out in a logical manner

that is focused around the brand being perceived as providing a total solution to the

customer. A more contemporary view of the industrial brand is one of moving from a

product-centric approach to a promise-centric approach and fulfilling this promise

through providing that total solution to the customer. By concentrating on having an

in-depth knowledge of their customers and translating that knowledge into a total

solution based on customer needs a company can carve out a niche for itself even in a

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highly competitive market.

To change to a more ‗‗total solution‘‘ branding approach, industrial marketing

managers should consider taking the following steps:

• Determine exactly what the promise of the brand‘s value, this ‗‗total solution‘‘

should look like. This is certainly no easy task and one that many companies overlook

or assume they know. Here, the company needs to endeavour to discover the answer

to such questions as, what is ‗‗value‘‘ to our customers? Can our brand provide that

value? Do our customers really see the brand as a ‗‗total solution‘‘ or as simply as

another product on the marketplace? The company needs to question, probe, and

most importantly listen to what the customers are looking for in the product and how

these customers really feel about their total experience with the product.

• Realize that value is a multi dimensional construct. Gone are the days when a

customer will purchase a product merely because it is well made and has a reputation

for quality. Value for the industrial customer often has four dimensions: the product

side, the logistics side, the customer support side, and the company reputation side.

There may be other components of the value as well. Managers must define exactly

what the customers are looking for in each of these dimensions and create a brand

that delivers them in reliable, fast, and profitable manner.

• Where does your product fit in the customer‘s consumption or supply chain, and at

what points can your company enter in and create a unique value for them? The more

unique the value created, the better the chances for success. Or, alternatively, are there

any new values that could be created that the customer or a competitor has not thought

of?

• Always seek to understand and continually refine the promise of value. Customer

needs are constantly changing, and the promise of value that a company offers must

change as well. Employing such measures as customer panels, user groups, and the

like can help managers to stay on the leading edge of what values customers are

looking for.

• Realize that the equity created by a brand can extend a cross product categories as

well as channel intermediaries. Thus, educating any employee who will interact with

the customer as well as channel members on the unique value of the brand is critical

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for its success.

• Monitor measures of brand performance. Managers need to monitor how customers

perceive this brand over time. They also need to see if any of the dimensions of the

construct have increased or decreased in value or if they have been replaced by a new

dimension.

2.8.8 Conclusion

An increasing amount of research has espoused the benefits of branding an

industrial product, and has shown how a company can take a basic commodity

product and through an in-depth knowledge of customer needs and employing an

innovative marketing strategy can create a brand for the product that is perceived

as offering a total solution for their customers. Companies who endeavor to

create and effectively manage their brands stand to gain both market share and

profits. Also, when the promise of a brand is articulated across the company, it

becomes much easier for management to allocate resources in a way that they

have faith that these resources will be used in the best manner. Internally,

branding can have the impact of helping people from various functions

understand what values the customer is looking for and provide a common ground

upon which to provide those values. Externally, having a strong brand that

consistently provides a total solution to the customer helps build a strong

relationship between the company and that customer. This is increasingly

important in today‘s environment where the plethora of products has left many

customers confused as to which product is best for which application. Having a

strong brand provides the customer the confidence that they will be making the

right decision and will lessen the risk of a bad decision. Ultimately, customers

want to purchase a product from a supplier they can trust, and a strong

Chapter 3

Research Methodology

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CHAPTER 3: RESEARCH METHODOLOGY

3.1. Research Methodology 3.2. Primary sources 3.3. Target respondents 3.4. Sample size 3.5. Sampling method 3.6. Data collection method 3.7. Data analysis method

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3.1 RESEARCH METHODOLOGY

The project is based on an in-depth combination of secondary and primary sources.

The secondary objectives of the study for architects, masons, IHBs, retailers and

contractors are as follows:

To find out the triggers and barriers in selecting a cement brand for all the five

categories i.e. Masons, Retailers, Contractors, Architects and IHBs (Individual

House Builders)

To find out the perception of brands across the five categories

To find out the impact of branding across all the five categories

To find out the impact of national brands and local brands on all the categories

To find out the perception of national brands and local brands by all the five

categories

In order to achieve the objective, the following areas were covered in research:

Scope of the industry

Triggers and Barriers in selecting a cement brand

Role of pricing

Major brands and reasons

Top cement brands

Perception about the top 3 brands

Importance of brand name and reasons

Difference between National and Local brands

Reasons for recommending National or Local brands

3.2 PRIMARY SOURCES:

The research was quantitative in nature and a structured questionnaire, containing

both open as well as close ended questions, was used.

3.3 TARGET RESPONDENTS:

Target respondents were Masons, Contractors, Retailers, Architects and IHBs

(Individual House Builders).

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3.4 SAMPLE SIZE:

Following table shows the sample size that was used in survey:

Table 3.4.1

Mumbai Delhi Kolkata Chennai Total

Mason 15 15 15 15 60

Contractors 10 10 10 10 40

Retailers 10 10 10 10 40

Architects 5 5 5 5 20

IHBs 10 10 10 10 40

Total 50 50 50 50 200

3.5 SAMPLING METHOD:

Non-probability sampling method viz. Purposive sampling method was used to ensure

that sample represents different types of masons, contractors, retailers, architects and

IHBs. Our metro towns viz. Mumbai, Delhi, Kolkata and Chennai were considered

since consumption of cement is highest in these cities for construction activities.

Since I have covered major centres of cement consumption non-random sampling will

not bring any bias in estimation population behavior.

3.6 DATA COLLECTION METHOD:

Data was collected by meeting the sampled respondents in person since this is the best

method to collect data. A blank copy of the questionnaires used for collecting data

from five categories of respondents is in the Annexure

3.7 DATA ANALYSIS METHOD:

Since sample size was small I have mostly used non-parametric methods of

hypothesis testing. Though the power of non-parametric methods of hypothesis

testing is less than parametric methods, it assumes that data follows normal

distribution. Since the sample size was small, assumption of normality would be

93

violated. Non-parametric methods do not assume normality in data. Hence I have

preferred to use non-parametric methods.

All the hypothesis selected for testing seek to find relationships. I have used chi-

square test for finding relationship, the most popular method, when both variables are

measured on categorical scale. In order to compare averages of two groups, I have

used parametric method viz. Analysis of variance (ANOVA) when sample size is

more than 30, and Mann-Whitney or Kruskall-Wallis test when sample size is less

than 30.

Chapter 4

Data Analysis and

Interpretation

94

CHAPTER 4 : DATA ANALYSIS

Overall observations: The importance given to branding by architects, contractors and masons was

measured on a 5-point scale where ‗1‘ indicates not least important and ‗5‘ indicates

very important. The average rating comes out to be 4.33 on a scale of 1 to 5 (Table

4.1.1). This shows that everyone sees that branding is very important in selling

cement.

Table 4.1.1: Importance to branding – By profession

Following paragraphs show the gist of the analysis and conclusion

1. Hypothesis on Importance of branding – By profession

I have done comparison of importance given to branding across architects, contractors

and masons by formulating following hypothesis

Ho: Importance given to branding is same by architects, contractors, masons

H1: Importance given to branding is not same by architects, contractors, masons

I have used analysis of variance to check whether average ratings given to importance

to branding by architects, contractors, masons are same. The output is shown in table

4.1.2

Architect 4.70

Contractor 4.48

Mason 4.12

Total 4.33

Importance to Branding

Mean

95

Table 4.1.2

Since p<0.05, it shows that their ratings are not same.Hence comparison of two

average ratings is done to detect the difference. I have formulated following

hypothesis:

Ho: Importance given to branding is same by pair of groups formed by architects,

contractors, masons

H1: Importance given to branding is not same by pair of groups formed by architects,

contractors, masons

I have used Tukey‘s test to test above hypothesis since this is one of the robust tests to

compare two averages

Table 4.1.2.1

Multiple comparison in Table 4.1.3 shows that Architects and Contractors intensity of

importance to branding is same (p = 0.554) but more than Masons (p = .001). Thus

one can conclude that architects, contractors and masons feel that branding is very

important in selling cement, but intensity of importance is found to be more from

architects and contractors compared to masons.

Contractor .554

Mason .001

Architect .554

Mason .015

Architect .001

Contractor .015

Architect

Contractor

Mason

Multiple Comparisons

Importance to Branding

(I) Type of respondent (J) Type of respondent

Sig.

96

Similar analysis is done in IHB and retailers groups. It is shown below.

4.1.2 Hypothesis on Importance of branding – By profession

Importance given by IHB and retailers is measured on categorical scale involving 3

categories viz. important, neither important nor unimportant and unimportant. Since

the response is on categorical scale I have used chi-square test to compare importance

to branding given by IHB and retailers is same. I have formulated following

hypothesis:

Ho: Importance given to branding is same by IHB and retailers

H1: Importance given to branding is not same by IHB and retailers

Table 4.1.2.2 Observed and expected frequencies

Opinion on branding * Category Cross tabulation

Category

Total Retailer IHB

Opinion on branding

Not

important

Count 0 1 1

% within Category .0% 2.5% 1.3%

Can not say Count 3 5 8

% within Category 7.5% 12.5% 10.0%

Important Count 37 34 71

% within Category 92.5% 85.0% 88.8%

Total Count 40 40 80

% within Category 100.0% 100.0% 100.0%

97

37 Retailers out of 40 and 34 IHB out of 40 feel that cement branding is important. By

using chi-square test of independence where observed frequency is compared with

expected frequency it is seen that importance given by both of them is same (p =

0.443) (Table 4.1.2.1). Thus it can be concluded that about 90% of Retailers and IHB

consider branding is important.

The subsequent paragraphs show category wise analysis.

4.2 Architects Table 4.2.1 shows opinion about scope of the cement industry as perceived by

architects.

Table 4.2.1 Scope Of The Industry (%)

Mum. Kol. Del. Che. Total

Recession is

prevailing 80 20 100 40 60

Cement industry will

grow in months to

come

20 20 80 20 35

Cement industry is

growing 20 60 20 - 25

Bank lTotalns are not

available 20 - - 60 20

People are not

constructing much - - - 80 20

Base 5 5 5 5 20

60% of the respondents feel that the ―Recession is prevailing in the cement industry‖.

35% of the respondents are of the opinion that ―Cement industry will grow in months

to come‖ while 25% said that ―Cement industry is growing‖. All the respondents in

Delhi are of the view that even though ―Recession is prevailing‖ currently, ―Cement

industry is growing‖ or ―Will grow in months to come‖.

Opinion about economy was compared among types of buildings constructed by

architects viz. build only residential buildings and those who build residential and/or

other buildings. For this purpose following hypothesis were formulated

98

H0: Opinion about economy is same among architects categories of architects

based on type of buildings constructed

H1: Opinion about economy is not same among architects categories of

architects based on type of buildings constructed

From chi-square test, it was found that opinion is same (Chi-square = 0.004, p =

0.948).

Similarly opinion about economy was compared among number of years in business.

For this purpose following hypothesis were formulated

H0: Opinion about economy is same among architects categories of architects

based on number of years in business

H1: Opinion about economy is not same among architects categories of

architects based on number of years in business

Chi-square test shows that opinion is same irrespective of number of years in business

(Chi-square = 4.249, p = 0.119). Thus we can conclude that all architects feel that

though industry is going through the recession it will grow in days to come.

Table 4.2.2 Top 5 Triggers in selecting a cement brand (%)


Strength 60 - 80 20 40

Grade 40 40 - 20 25

Durability 20 - 60 20 25

Affordable price 20 - 40 20 20

Good Grip - - 80 - 20

Setting time - 40 - 20 15

Brand name - 20 20 - 10

Depend on the type of

work 20 20 - - 10

ISI Mark - 20 - - 5

BASE 5 5 5 5 20

The main factor considered while selecting a cement brand is ―Strength‖ (40%)

followed by ―Grade‖ and ―Durability‖ (25% each) as seen in table 4.2.2. This shows

that ‗quality over a long period‘ is the most important factor for selecting cement

brand.

99

Table 4.2.3 Top 5 Reasons for rejecting a cement brand (%)


Bad Strength 40 - 60 - 25

Bad Grip - - 100 - 25

Cement shouldn‘t

clot - 80 - - 20

Bad Durability 60 - - - 15

Poor Quality 40 - - 20 15

No ISI Mark - 40 - - 10

Poor setting time - 20 20 - 10

Doesn‘t set properly - 20 - 20 10

BASE 5 5 5 5 20

The top reasons for rejecting a cement brand are ―Bad strength‖ and ―Bad grip‖ (25%

each). This also correlates with ‗quality over a period of time‘ is the most important

trigger for selecting cement brand.

Table 4.2.4 Seasonal effect on the Cement Industry (%)


Cement becomes

difficult to store in

the monsoon season

100 - 60 - 40

Construction work is

less in monsoon - 20 60 60 35

It becomes hard in

monsoon 60 - - 60 30

Lump starts forming - 80 - 20 20

Summer and winter

seasons are good - - 40 - 10

BASE 5 5 5 5 20

The main seasonal effect the cement industry faces is ―Cement becomes difficult to

store in the monsoon season‖ (40%).

100

Table 4.2.5 The Role of Pricing in the Cement Industry (%)


Price won‘t matter if

the quality is good - 60 - 40 25

Brand should give

value for money 20 - 40 40 25

Price should be

affordable - - 40 20 15

National brands are

costly but good in

quality

60 - - - 15

Price should be

appropriate with

quality

- - 20 20 10

Low price depicts low

quality - - 40 - 10

Sale is high of low

priced brands - 40 - - 10

BASE 5 5 5 5 20

It shows that if the cement is of good quality then price does not matter. Only

expectation is that price should not be too high that compels the buyer to compromise

on quality.

Table 4.2.6 The Role Of Experts In Recommending A Brand (%)


Experts recommend good

cement brands - - 100 40 35

Architects play a major

role in recommending a

cement brand

40 60 - - 25

Architects refer good

quality brands only 20 - - 40 15

Engineers play an

important role in

recommending a brand

- 40 - - 10

Experts prefer good

quality cement brands - - 40 - 10

BASE 5 5 5 5 20

35% of the respondents feel that ―Experts recommend good cement brands‖. Hence

the role of expert is seen as helping customers to offer trusted advice to the customers.

101

Table 4.2.7 Top 5 Major Brands (%)


UltraTech 80 100 20 40 60

Ambuja 80 20 80 - 45

ACC 60 100 - - 40

Larfarge - 100 20 - 30

Birla 40 - 40 - 20

Coramandal - - - 40 10

India Cement - - - 40 10

Binani - - 40 - 10

BASE 5 5 5 5 20

Most of the respondents (60%) found ―UltraTech‖ to be a major brand followed by

―Ambuja‖ (45%) and ―ACC‖ (40%).

Table 4.2.8 Reasons For Brands To Be Major Players (%)


Demanded by the

customers - - 40 20 15

It is trustworthy - - 40 - 10

It influences the rates - - - 40 10

ISI mark - 40 - - 10

Reputed brand - - 40 - 10

Crack resistance 20 - - - 5

Provides good service 20 - - - 5

It is strong - - 20 - 5

BASE 5 5 5 5 20

―Demanded by customers‖ (15%) is the main reason for a brand to be a major player.

Thus there seems to be a strong value to branding of cement.

102

Table 4.2.9 Top 3 Cement Brands (%)


ACC 60 100 20 20 50

UltraTech 60 100 20 20 50

Ambuja 80 - 80 - 40

Birla 40 - 60 20 30

Lafarge - 100 - - 25

Binani 20 - 60 - 20

Coromandal - - - 80 20

Zuari - - - 60 15

BASE 5 5 5 5 20

The top three cement brands considered are ACC (50%), UltraTech (50%) & Ambuja

(40%).

I have used attribute based method to draw perceptual map describing perception of

brands. The rotated component matrix had shown following factor lTotaldings for

reasons to buy the brand (Table 4.2.10)

Table 4.2.10 Rotated Component Matrix

Rotated Component Matrix*

Component

1 2

Q6. Agreement with statement - It is a reputed brand .801 -.068

Q6. Agreement with statement - It is value for money .739 .105

Q6. Agreement with statement - Its quality is best in the

market

.739 .213

Q6. Agreement with statement - It is a trustworthy brand .649 .325

Q6. Agreement with statement - It is cheaper than others .116 .744

Q6. Agreement with statement - It has good loyalty

programs

-.013 .658

Q6. Agreement with statement - It is easily available .313 .582

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 3 iterations.

103

These were used as co-ordinates do draw perceptual map. The distance between

origin and the point that shows the reason for buying indicates the importance of

reason. I have used Euclidean method to calculate the distance. It is shown below in

table 4.2.11

Table 4.2.11 Rotated Component Matrix_1

Rotated Component Matrix

Component Euclidean

Distance

1 2

Q6. Agreement with statement - It is a

reputed brand

.801 -.068 0.8035

Q6. Agreement with statement - It is value

for money

.739 .105 0.7467

Q6. Agreement with statement - Its quality is

best in the market

.739 .213 0.7691

Q6. Agreement with statement - It is a

trustworthy brand

.649 .325 0.7256

Q6. Agreement with statement - It is cheaper

than others

.116 .744 0.7528

Q6. Agreement with statement - It has good

loyalty programs

-.013 .658 0.6585

Q6. Agreement with statement - It is easily

available

.313 .582 0.6605

It is seen that reputation of brand is the most important factor to evaluate any cement

brand. The next criterion is value for money.

The average factor scores calculated by using variam x rotation for brands are used to

show positions of brands in perceptual map. The map is shown below:

104

The above map shows that ACC is the best brand on reputation followed by Ambuja,

Binani, Birla and Ultratech. ACC, Ambuja and Binani have almost same perception

on value for money but perception of Birla and Ultratech is lower.

The detail score for each brand are given below in table 4.2.12

105

Table 4.2.12 Perception about ACC

Total Mum. Kol. Del. Che.

Mean 4.7 5 4.8 4 4

It is value for money

Mean 4.3 5 4.2 3 4

It is cheaper than other

Mean 3.7 3.3 4 4 3

It is easily available

Mean 4.7 4.7 5 5 3

It is a reputed brand

Mean 4.8 4.7 5 5 4

It has good loyalty programmes

Mean 3.4 3.7 3.2 5 2

It is a trustworthy brand

Mean 4.7 5 5 3 4

BASE 20 5 5 5 5

ACC is perceived as a brand that offers quality at a reasonable price

Table 4.2.13 Perception about Ultra-Tech


Its quality is best in the market

Mean 4.4 4.7 4 5 5


Mean 4.4 4.3 4.4 5 4


Mean 4.1 3.3 4.8 5 2


Mean 4.5 3.7 5 5 4


Mean 4.1 4.3 3.8 4 5


Mean 3.2 3 3.4 3 3


Mean 4.4 4.3 4.4 5 4

BASE 10 3 5 1 1

Ultra tech also has a strong perception in terms of offering value to money.

106

Table 4.2.14 Perception about Ambuja



Mean 4.6 4.8 - 4.5 -


Mean 4.1 4.3 - 4 -


Mean 3.8 3.3 - 4.3 -


Mean 4.4 4 - 4.8 -


Mean 4.3 4.8 - 3.8 -


Mean 4.1 4 - 4.3 -


Mean 4.3 4.8 - 3.8

BASE 8 4 - 4 -

The following table shows importance given to brand name

Table 4.2.15 Importance of Brand Name while suggesting a cement brand

(%)


Very

important 70 80 80 100 20

Important 30 20 20 - 80

Okay - - - - -

Not so

important - - - - -

Not at all

important - - - - -

Mean 4.7 4.8 4.8 5 4.2

BASE 20 5 5 5 5

For all the respondents, ―Brand name‖ is ―Important‖ while suggesting a cement

brand and rated it in the Top 2 Box. In Delhi, all the respondents find it to be ―Very

Important‖.

107

I have used Mann-Whitney U test to compare importance given to branding across

type of construction activity undertaken by them. Following hypothesis were

formulated:

H0: Importance given to branding is same across type of construction activities

H1: Importance given to branding is not same across type of construction activities

The test shows that importance given to branding is same irrespective of their

construction types viz. only residential and residential and others (Mann-Whitney U =

16.5, p = 0.358)

Test Statisticsb

Q2. Importance of a brand name

while suggesting a cement brand

Mann-Whitney U 16.500

Wilcoxon W 169.500

Z -1.199

Asymp. Sig. (2-tailed) .231

Exact Sig. [2*(1-tailed Sig.)] .358a

a. Not corrected for ties.

b. Grouping Variable: Coding for que 8

In order to compare importance given to branding across no. of years in construction

business following hypothesis were formulated:

H0: Importance given to branding is same across no. of years in business

H1: Importance given to branding is not same across no. of years in business

Here I have used Kruskall-Wallis test. The test has given following results

Ranks

Q8_1_coded N Mean Rank Sum of Ranks

Q2. Importance of a brand

name while suggesting a

cement brand

Only residential 17 9.97 169.50

Residntial and/or other 3 13.50 40.50

Total 20

108

Ranks

Q7. The number of years you have

been in this business

N Mean Rank

Q2. Importance

of a brand name

while suggesting

a cement brand

dimension1 Less than 5 years 2 13.50

5-10 years 3 10.17

10-15 years 8 9.75

15-20 years 4 8.50

20-25 years 2 13.50

More than 25 years 1 13.50

Total 20

Test Statisticsa,b

Q2. Importance of a brand name while suggesting a

cement brand

Chi-square 2.978

df 5

Asymp. Sig. .703

a. Kruskal Wallis Test

b. Grouping Variable: Q7. The number of years you have been in this business

The test shows that importance given to branding is same irrespective of no. of years

in business (p = 0.703)

109

Following table 4.2.16 shows advantages of branding cement.

Table 4.2.16 Reasons for the Rating


Branded

cement has

good

quality

45 80 20 40 40

Branded

cement is

trustworthy

25 40 50 20 -

Branded

cement has

good

strength

10 - - - 40

BASE 20 5 5 5 5

The main reason for stating Brand name is ―Important‖ is ―Branded cement has good

quality‖ (45%).

After knowing advantages of branding I have analyzed reasons for recommending

national brand. Following table shows reasons for recommending national brand

Table 4.2.17 Top 3 reasons for recommending National Brands (%)


They have good quality 40 80 - 40 40

National brands are

trustworthy 15 20 - 40 -

National brands have good

setting time 15 - 60 - -

National brands are durable 15 - - 60 -

National brands have a

good grade 15 - 40 - 20

If budget is high, I

recommend national brands 10 20 - - 20

National brands have ISI

mark 10 - 40 - -

National brands have good

grip 10 - - 40 -

BASE 20 5 5 5 5

110

The main reason for recommending ―National brands‖ is that ―National brands have

good quality‖ (40%). This opinion is same in all centres in which survey was

conducted. This is also in concurrence of the main trigger of ‗good quality‘ to select

cement brand.

I have now analysed reasons for recommending local brands. Following table 4.2.18

gives details:

Table 4.2.18 Top 3 reasons for recommending Local Brands (%)


Local brands have

low price 30 20 20 - 80

Local brands are

profitable 10 - - - 40

Recommended for

small/local work 5 20 - - -

Local cement is

pure and not

duplicate

5 - 20 - -

Local brands are

easily available 5 20 - - -

Preferred for low

risk areas 5 20 - - -

BASE 20 5 5 5 5

The main reason for recommending ―Local brands‖ is ―Low price‖ (30%). This is also

obvious since the second trigger to select cement brand is ‗reasonable

price‘.Recommendations to promote brand yielded following output

Table 4.2.19 What should a company do to promote its brand (%)


Company should

improve the quality 55 40 20 80 80

Company should

undertake more

marketing activities

20 40 - 40 -

Company should

carry out

demonstrations

20 - 80 - -

111

Company should

arrange for

conferences

20 20 60 - -

Price should be

marginal 10 - - 20 40

Should pass various

tests 10 20 20 - -

Should change

according to the

industry

10 - - 40 -

Should charge

affordable price 10 - - 40 -

BASE 20 5 5 5 5

Most of the respondents (55%) are of the opinion that ―Company should improve the

quality‖ in order to promote a brand. This is natural since quality is the most

important trigger in selecting a cement brand.

4.3 IHBs

Table 4.3.1 shows decision maker for selecting brand when individual house builder

wants to buy cement. It is found that house builder himself decides the brand.

Table 4.3.1 Who decided the cement brand (%)


I decided which

brand to use 83 80 50 100 100

We decided

mutually which

brand to use

10 10 30 - -

I suggested various

brands but the final

decision was taken

by other party

7 10 20 - -

BASE 40 10 10 10 10

112

Majority of the respondents (83%) ―themselves decided which brand to use‖ followed

by 10% who ―decided mutually with the other party‖.

I have analysed decision to select brand across number of floors built. Hypothesis

developed for this objective was:

H0: Selection procedure is same across number of floors built

H1: Selection procedure is not same across number of floors built

After applying chi-square test following output was available:

Q4. Who decided on the cement brand used for the construction work * Q2B. The number of

floors in house Crosstabulation

Q2B. The number of floors in house Total

1 2 3

I decided which

brand to use

Count 14 15 4 33

% within Q2B. The

number of floors in

house

77.8% 83.3% 100.0% 82.5%

I suggested various


decision is taken by

the other party

Count 2 1 0 3

% within Q2B. The

number of floors in

house

11.1% 5.6% .0% 7.5%

We decided mutually

which brand to use

Count 2 2 0 4

% within Q2B. The

number of floors in

house

11.1% 11.1% .0% 10.0%

Total Count 18 18 4 40

% within Q2B. The

number of floors in

house

100.0% 100.0% 100.0% 100.0%

113

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 1.347a 4 .853

Likelihood Ratio 2.005 4 .735

Linear-by-Linear

Association

.783 1 .376

N of Valid Cases 40

a. 7 cells (77.8%) have expected count less than 5. The minimum expected count is .30.

The pattern of decision making is found same irrespective of no. of floors built (Chi-

square = 1.347, p=0.853).

Table 4.3.2 Factors considered before selecting a cement brand (%)


It should be a reputed brand 40 80 20 60 -

Reasonable price 40 40 30 60 30

Quality of Cement 33 50 - - 80

Should set well 28 - 50 20 40

Should be strong 28 10 10 70 20

Should have strong grip 18 - - 70 -

High availability 18 10 20 10 30

Should be durable 15 20 20 10 10

Should be crack resistant 13 30 - - 20

BASE 40 10 10 10 10

The top 2 factors considered before deciding a cement brand were that ―It should be a

reputed brand‖ and ―Reasonable Price‖ (40% each). This shows the importance of

branding cement from IHB‘s perspective. It gives the guarantee of good quality to

IHB.

Table 4.3.3 Top Cement Brands considered (%)


ACC 73 90 100 100 -

Ambuja 55 60 90 70 -

Coromandel 20 - - - 80

Birla 18 - 10 60 -

Larsen and Toubro 18 10 10 - 50

UltraTech 18 20 20 30 -

Lafarge 15 - 60 - -

BASE 40 10 10 10 10

114

ACC, Ambuja and Coromondel are the top three brands considered for construction.

Table 4.3.4 Top Cement Brands used (%)


ACC 43 70 60 40 -

Ambuja 33 60 40 30 -


Lafarge 13 - 50 - -

Larsen and Toubro 10 - - - 40

BASE 40 10 10 10 10

Most of the respondents (43%) used ―ACC‖ followed by ―Ambuja‖ (33%) and

―Coromandel‖ (18%).

The brands used for construction are cross-tabulated with method of construction used

by IHB to construct his house. I have used chi-square test with following hypothesis:

H0: Brands used for construction are same across different methods of construction

H1: Brands used for construction are not same across different methods of

construction

It is observed that selection of brand is not related to method of construction (Chi-

square = 9.862, p = 0.275)

Table 4.3.4.1 Reasons for using ACC (%)


Good quality 35 86 - - -

Good strength 24 - - 100 -

Reputed brand 24 43 17 - -

It gives strong grip 18 - 17 50 -

It is affordable 12 - 17 25 -

Finishing is good 12 29 - - -

It is good for

plastering work 12 29 - - -

BASE 17 7 6 4 -

115

Table 4.3.4.2 Reasons for using Ambuja (%)


Good

quality 31 33 33 25 -

Good

strength 24 33 - 25 -

Reputed

brand 24 33 33 - -

BASE 13 6 3 4 -

Table 4.3.4.3 Reasons for using Coromandel (%)


Good quality 43 - - - 43

There are no

problems with

this brand

29 - - - 29

It is affordable 14 - - - 14

BASE 7 - - - 7

Table 4.3.5 Top 3 Cement Brands – in general (%)


ACC 73 90 90 100 10

Ambuja 63 100 80 70 -

UltraTech 28 40 30 30 10

BASE 40 10 10 10 10

73% of the respondents voted for ACC as the top cement brand.

Table 4.3.5.1 Reasons for Saying ACC (%)


Quality is

good 24 56 22 - -

Reputed

company 21 11 44 10 -

Durability 21 - 11 50 -

BASE 29 9 9 10 1

116

Table 4.3.5.2 Reasons for Saying Ambuja (%)


Reputed

company 28 40 38 - -

It sets

well and

quickly

20 - 50 14 -

Good

strength 20 30 - 29 -

BASE 25 10 8 7 -

Table 4.3.5.3 Reasons for Saying Ultratech (%)


Reputed

company 46 75 33 33 -

Good

demand 27 25 - 33 100

Good

strength 9 - - 33 -

BASE 11 4 3 3 1


BASE


29 9 9 10 1

Figures in %


Agree 90 78 89 100 100

Neither agree not disagree 10 22 11 - -

Disagree - - - - -


Agree 69 78 67 70 -

Neither agree not disagree 28 11 33 30 100

Disagree 3 11 - - -


Agree 79 67 67 100 100


Disagree - - - - -

117

BASE


29 9 9 10 1

Figures in %


Agree 59 67 44 60 100

Neither agree not disagree 31 33 33 30 -

Disagree 10 - 22 10 -


Agree 76 67 89 80 -


Disagree 3 - - - 100


Agree 93 78 100 100 100

Neither agree not disagree 4 11 - - -

Disagree 3 11 - - -


Agree 93 78 100 100 100


Disagree - - - - -

ACC is considered as a brand with Quality, good loyalty programs and trustworthy

brand


BASE


25 10 8 7 -

Figures in %


Agree 84 100 50 100 -

Neither agree not disagree 16 - 50 - -

Disagree - - - - -


118

BASE


25 10 8 7 -

Figures in %

Agree 68 50 63 100 -


Disagree - - - - -


Agree 76 60 75 100 -


Disagree 4 - 12 - -


Agree 52 40 25 100 -


Disagree 12 10 25 - -


Agree 92 100 75 100 -


Disagree - - - - -


Agree 92 90 88 100 -


Disagree - - - - -


Agree 92 100 75 100 -


Disagree - - - - -

Ambuja is considered a brand with good quality and good loyalty program

119

Table 4.3.8 Perception about UltraTech

BASE


11 4 3 3 1

Figures in %


Agree 73 75 67 67 100


Disagree - - - - -


Agree 55 50 67 67 -


Disagree 9 25 - - -


Agree 64 50 100 33 100

Neither agree not disagree 36 50 - 67 -

Disagree - - - - -


Agree 46 50 33 67 -


Disagree 36 25 67 - 100


Agree 64 50 67 67 100

Neither agree not disagree 18 - 33 33 -

Disagree 18 50 - - -


Agree 82 75 100 67 100


Disagree - - - - -


Agree 100 100 100 100 100

Neither agree not disagree - - - - -

Disagree - - - - -

120

Ultratechis considers as trustworthy brand with good loyalty programs

Table 4.3.9 Importance of Branding

BASE


40 10 10 10 10

Figures in %

Important 85 80 90 100 70

Neither important nor

unimportant

13 20 10 - 20

Unimportant 2 - - - 10

―Brand name‖ is important for majority of the respondents (85%).

Table 4.3.9.1 Reasons for rating it to be “Important”

BASE


40 10 10 10 10

Figures in %

Brand name depicts quality of

the cement. 63 50 80 70 50

Branded cement is reliable 15 20 - 40 -

Brand name develops

confidence amongst the

customers

8 10 20 - -

Branded cement has good

demand. 8 30 - - -

Quality is more important than

brand name. 8 - - - 30

For 63% of the respondents, brand name is important as ―It depicts the quality of the

cement‖.

121

These reasons are cross-tabulated with method used for constructing house with

following hypothesis:

H0: Reasons for selecting branded cement are same across different methods used for

constructing house.

H1: Reasons for selecting branded cement are not same across different methods used

for constructing house.

The test gave following output:

Q9. Reasons for the importance rating * Q3. How did you go about constructing your house

Crosstabulation

Q3. How did you go about

constructing your house

Total

I

planned

and

hired

mason

services.

I hired a

contractor

for

constructing

the house.

I

assigned

the

entire

project

to an

architect

.

Brand name depict

the quality of the

cement

Count 8 16 1 25

Expected Count 10.0 14.4 .6 25.0

Brand name bring

confidence among

customer

Count 2 1 0 3


Branded cement are

reliable

Count 3 0 0 3


Quality alone is

important branding

isn't that important

Count 1 2 0 3


122

Without branding no

cement comes

Count 0 2 0 2

Expected Count .8 1.2 .1 2.0

Branded cements

have good sales

Count 2 1 0 3


Branded cements give

good performance in

the market

Count 0 1 0 1

Expected Count .4 .6 .0 1.0

Total Count 16 23 1 40

Expected Count 16.0 23.0 1.0 40.0

Chi-Square Tests




Linear-by-Linear

Association

.116 1 .733

N of Valid Cases 40


It is seen that reasons are same irrespective of method used for constructing house by

IHB. (Chi-square = 9.504, p = 0.659)

Table 4.3.10 Perception about Branding

BASE


40 10 10 10 10

Figures in %

I have very little interest in the brand name

Agree 23 20 10 - 60


Disagree 60 60 70 90 20

There are so many brands that I often get confused

123

BASE


40 10 10 10 10

Figures in %

Agree 10 20 10 - 10


Disagree 38 10 30 50 60

I will only buy established brands

Agree 97 90 100 100 100


Disagree - - - - -

I would wait for others to try a new brand then try it myself

Agree 25 20 10 20 50


Disagree 18 10 50 10 -

National brands provide better quality than local brands

Agree 92 100 90 100 80

Neither agree not disagree 5 - 10 - 10

Disagree 3 - - - 10

National brands are available everywhere as compared to local brands

Agree 90 100 70 100 90

Neither agree not disagree 10 - 30 - 10

Disagree - - - - -

Local brands are cheaper than national brands

Agree 77 80 80 60 90


Disagree 3 - 10 - -

Opinion on above statements was compared across different methods used by IHBs to

construct house and it is seen that opinions are same irrespective methods used to

construct house since all p values are more than 0.05. This can be seen from following

table:

124

Table 4.3.11: Chi-square table showing relation between perception about

branding and method used to construct house

Statement Chi-square p value

I have very little interest in the brand name 5.182 0.269

There are so many brands that I often get confused 1.080 0.897

I will only buy established brands 0.758 0.689

I would wait for others to try a new brand then try it

myself

1.727 0.786

National brands provide better quality than local brands 1.694 0.793

National brands are available everywhere as compared to

local brands

0.598 0.742

Local brands are cheaper than national brands 2.274 0.686

Table 4.3.12 Top 5 ways to promote a brand


Company should advertise

in newspaper 41 10 80 50 22


in TV 39 20 70 50 11

Company should put more

& more hTotalrding 33 10 90 30 -


in radio 31 - 80 30 11

Company should give

offers, their customers

loyalty program

26 20 60 20 -

BASE 40 10 10 10 10

The top 2 ways of promoting a cement brand are ―advertise in newspaper‖ (41%) and

―advertise on TV‖ (39%).

4.4 MASON

In selecting brand when mason does masonry work it is seen that once in two

instances he selects the brand. In other cases the selection is done in consultation with

him.

125

Table 4.4.1 Decision maker about the cement brand (%)


I decide which brand to

use 47 60 20 33 73

I suggest various brands

but the final decision is

taken by the other party

47 33 67 67 20

We decide mutually

which brand to use 6 7 13 - 7

BASE 60 15 15 15 15

When factors responsible for selecting brand were considered it is seen that the main

factor considered while deciding on a cement brand is ―It should set well‖ (60%)

followed by ―Good Quality‖ (40%). Hence ‗quality‘ of the cement is the main factor

in selecting brand. This emphasizes the need of branding in cement from mason‘s

perspective.

This pattern is compared with number of years mason is in business. Following

hypothesis are formulated:

H0: Pattern of decision making is same across no. of years in business

H1: Pattern of decision making is not same across no. of years in business

Chi-square test gave following output

Q6. Decision maker on the cement brand to be used * Q4. How long you have been working as a

mason Cross tabulation

Q4. How long you have been working as a mason Total

Less

than

5

years

5-10

years

11-15

years

16-20

years

21-

25

yea

rs

More

than

25

years

I decide which

brand to use

Count 2 8 7 3 3 5 28

Expecte 4.7 5.6 5.1 2.8 3.7 6.1 28.0

126

d Count

I suggest various


decision is taken

by

Count 5 4 4 3 5 7 28

Expecte

d Count

4.7 5.6 5.1 2.8 3.7 6.1 28.0

We decide

mutually which

brand to use

Count 3 0 0 0 0 1 4

Expecte

d Count

.7 .8 .7 .4 .5 .9 4.0

Total Count 10 12 11 6 8 13 60

Expecte

d Count

10.0 12.0 11.0 6.0 8.0 13.0 60.0

Chi-Square Tests


Pearson Chi-Square 15.550

a

10 .113


Linear-by-Linear

Association

.015 1 .902

N of Valid Cases 60


It is observed that pattern remains same irrespective of the number of years in

business (Chi-square = 15.550, p =0.113).

Table 4.4.2 Factors considered while deciding on a cement brand (%)


Should set well 60 7 87 87 60

Good quality 40 33 53 7 67

Good strength 30 47 40 13 20

Price (Should not be

expensive) 25 67 7 7 20

Grip should be good 22 7 - 73 7

Finishing should be 18 - 13 60 -

127

good

Should be a reputed

brand 18 27 33 13 -

Should be crack

resistant 17 20 - - 47

Availability 15 27 13 7 13

Should be durable 10 20 7 - 13

BASE 60 15 15 15 15

Out of 10 reasons mentioned above top three reasons were cross-tabulated with

number of years that a mason is in business. Chi-square test shows that reasons

remain same irrespective of number of years of business as p value is more than 0.05

Reason Chi-square p value

Should set well 64.332 0.084

Good quality 108.130 0.094

Good strength 83.155 0.682

Table 4.4.3 Top brands – currently using (%)


Ambuja 58 100 80 53 -

Birla 48 67 27 100 -

ACC 38 33 67 47 7

Ultratech 32 60 40 27 -

Larsen & Toubro 22 33 13 - 40

Dalmia 15 - - 7 53


Lafarge 13 - 53 - -

BASE 60 15 15 15 15

Table 4.4.4 Top 3 brands – not currently using (%)


ACC 28 27 31 27 27

L & T 16 27 15 7 13

J.K. Lakshmi 12 33 - 13 -

Binani 10 13 - 27 -

Birla 10 20 - - 20

Lafarge 10 - 23 20 -

BASE 58 15 13 15 15

128



Sets well 29 - 67 29 -

Good grip 18 13 - 57 -

Good for ceiling work 18 33 8 - -

It has good strength 12 - 33 - -

Good quality 9 13 - 14 -

More work is done

using less cement 9 13 8 - -

It doesn‘t stick on

hands 9 20 - - -

BASE 34 15 12 7 -

Table 4.4.4.2 Reasons for using Birla (%)


Good grip 29 10 - 47 -

Sets well 21 - - 40 -

Reputed brand 14 10 67 7 -

Good quality 11 20 - 7 -

We have to use little

water 11 10 33 7 -

Reliable brand 11 30 - - -

BASE 28 10 3 15 -



Good grip 30 20 - 86 -

Sets well 22 - 50 - -

Good finishing 13 - 30 - -

It is good for ceiling

work 13 20 20 - -

Good quality 9 20 - - 100

Reputed brand 9 20 10 - -

It is not very

expensive 9 - 20 - -

It doesn‘t stick on

hands 9 40 - - -

BASE 23 5 10 7 1

129

Table 4.4.4.3.1Reasons for not using ACC (%)


Availability is not

good 56 - 25 100 100

Cracks develop

immediately 19 75 - - -

Doesn‘t have good

finishing 13 - 50 - -

It is very costly 13 25 - 25 -

BASE 16 4 4 4 4

Table 4.4.4.4 Reasons for not using L&T (%)


Need to put a lot of

water 33 - 100 100 -

Quality is not good 22 50 - - -

Prices are fluctuating 22 - - - 50

BASE 9 4 2 1 2

Table 4.4.4.5 Reasons for not using J.K. Lakshmi (%)


Doesn‘t have good

grip 29 20 - 50 -

Cracks are developed 29 40 - - -

Availability is not

good 14 20 - - -

BASE 7 5 - 2 -

Table 4.4.5 Top 5 Sources of Awareness (%)


Retailer &

Distributor 70 27 80 80 93

Advertisement 35 20 53 13 53

TVCs 23 67 7 20 -

Associates 22 13 - 67 7

Hoardings/Posters 15 33 7 20 -

BASE 60 15 15 15 15

The top source of awareness is ―Retailers and Distributors‖ (70%) followed by

―Advertisements‖ (35%).

130

Table 4.4.6 Importance of Brand Name (%)


Very Important 27 27 73 7 -

Important 63 67 20 93 73

Ok 5 6 7 - 7

Not so

important 5 - - - 20

Not at all

important - - - - -

Mean 4.1 4.2 4.7 4.1 3.5

BASE 60 15 15 15 15

Importance given by mason to brand name is compared with his number of years in

business. For this chi-square test and Kruskal Wallis test was used (Chi-square =

16.513, p = 0.349; Kruskal Wallis test p = 0.561). Both tests show that importance is

same irrespective of number of years mason is in business.

Table 4.4.6.1 Chi Square Test

Chi-Square Tests

Value df Asymp. Sig. (2-

sided)



Linear-by-Linear Association 1.313 1 .252

No. of Valid Cases 60

131

Kruskal Wallis Test

Table 4.4.6.2 Top 3 reasons for rating the brand name “Important” (%)


BASE 60 15 15 15 15

Good Quality 60 53 47 87 53

Reliable 15 - 60 - -

Good demand 13 53 - - -

Table 4.4.6.3 Reason for rating the brand name “Not so Important” (%)


Quality is

important not

the Brand name

10 7 - - 33

BASE 60 15 15 15 15

Table 4.4.7 Brand preferred – National or Local (%)


National

Brands 97 100 100 100 87

Local Brands 3 - - - 13

BASE 60 15 15 15 15

132

Table 4.4.7.1 Reason for preferring National Brands (%)


National brands

have good quality 43 47 33 7 92

National brands are

reliable 24 40 53 - -

National brands are

available

everywhere

17 27 33 - 8

BASE 58 15 15 15 13

Table 4.4.7.2 Reason for preferring Local Brands (%)


Local brands are

cheaper 100 - - - 100

BASE 2 - - - 2

Table 4.4.8 Top 3 brands (%)


Ambuja 57 100 73 53 -

Birla 48 67 20 100 7

ACC 42 33 67 47 20

BASE 60 15 15 15 15

Table 4.4.8.1 Reasons for saying Ambuja (%)


Sets well 24 - 46 38 -

Good strength 24 40 9 - -

Good grip 18 20 - 38 -

BASE 34 15 11 8 -

Table 4.4.8.2 Reasons for saying Birla (%)


Reputed company 28 50 67 - 100

Strong grip 21 - - 40 -

Sets well 17 - - 33 -

BASE 29 10 3 15 1

133

Table 4.4.8.3 Reasons for saying ACC (%)


Reputed company 28 60 30 - 33

Strong grip 24 - - 86 -

Good quality 24 20 30 - 67

BASE 25 5 10 7 3


BASE


34 15 11 8 -

Figures in %

It is very convenient to use

Top 2 Box 91 87 91 100 -

Bottom 2 Box - - - - -

Mean 4.6 4.3 4.6 5.0 -

It mixes well

Top 2 Box 91 80 100 100 -


Mean 4.5 4.0 4.8 4.9 -


Top 2 Box 97 93 100 100 -


Mean 4.5 4.5 4.3 4.9 -

It is affordable

Top 2 Box 85 80 82 100 -


Mean 4.3 3.9 4.3 5.0 -

It is very smooth

Top 2 Box 91 80 100 100 -


Mean 4.4 4.0 4.6 5.0 -

It spreads well, hence gives a good finishing

Top 2 Box 94 87 100 100 -


134

BASE


34 15 11 8 -

Mean 4.6 4.3 4.7 5.0 -


Top 2 Box 94 93 91 100 -


Mean 4.5 4.3 4.3 5.0 -

It is cheaper than others

Top 2 Box 71 87 27 100 -

Bottom 2 Box 12 - 36 - -

Mean 3.9 4.1 2.9 5.0 -


Top 2 Box 94 93 100 88 -


Mean 4.6 4.2 4.9 4.8 -


Top 2 Box 97 93 100 100 -


Mean 4.7 4.6 4.6 5.0 -


Top 2 Box 41 80 9 13 -

Bottom 2 Box 6 - 18 - -

Mean 3.4 3.8 2.9 3.3 -


Top 2 Box 94 93 91 100 -

Bottom 2 Box 3 - 9 - -

Mean 4.8 4.8 4.6 5.0 -

135

Table 4.4.10 Perception about Birla

BASE


29 10 3 15 1

Figures in %


Top 2 Box 79 40 100 100 100


Mean 4.4 3.5 4.7 5.0 4.0

It mixes well

Top 2 Box 97 90 100 100 100


Mean 4.5 4.0 4.3 4.9 4.0


Top 2 Box 93 80 100 100 100


Mean 4.6 4.1 4.7 4.9 4.0

It is affordable

Top 2 Box 93 90 67 100 100


Mean 4.6 4.2 3.7 5.0 4.0

It is very smooth

Top 2 Box 90 70 100 100 100


Mean 4.5 3.9 4.3 4.9 4.0


Top 2 Box 93 90 67 100 100


Mean 4.6 4.2 4.3 5.0 4.0


Top 2 Box 83 70 33 100 100


Mean 4.4 3.8 3.3 5.0 5.0

136

BASE


29 10 3 15 1


Top 2 Box 72 70 - 93 -

Bottom 2 Box 10 - 100 - -

Mean 4.1 3.9 1.7 4.9 3.0


Top 2 Box 90 80 10 100 -

Bottom 2 Box 3 - - - 100

Mean 4.5 4.2 4.0 4.9 2.0


Top 2 Box 90 70 100 100 100


Mean 4.7 4.0 5.0 5.0 5.0


Top 2 Box 38 60 33 20 100


Mean 3.5 3.7 3.7 3.3 4.0


Top 2 Box 97 90 100 100 100


Mean 4.6 4.0 4.3 5.0 4.0


BASE


25 5 10 7 3

Figures in %


Top 2 Box 100 100 100 100 100


Mean 4.8 4.4 5.0 5.0 4.0

It mixes well

137

BASE


25 5 10 7 3

Top 2 Box 88 60 90 100 100


Mean 4.6 4.0 4.7 5.0 4.0


Top 2 Box 92 80 90 100 100


Mean 4.7 4.2 4.8 5.0 4.3

It is affordable

Top 2 Box 88 100 70 100 100


Mean 4.4 4.4 3.9 5.0 4.3

It is very smooth

Top 2 Box 88 60 90 100 100


Mean 4.5 3.6 4.7 5.0 4.0


Top 2 Box 84 60 90 100 67


Mean 4.5 3.6 4.8 5.0 4.0


Top 2 Box 96 100 90 100 100


Mean 4.6 4.2 4.7 5.0 4.0


Top 2 Box 36 60 30 14 67


Mean 3.5 3.8 3.5 3.1 3.7


Top 2 Box 84 100 90 71 67


138

BASE


25 5 10 7 3

Mean 4.5 4.6 4.8 4.3 3.7


Top 2 Box 100 100 100 100 100


Mean 4.8 4.8 4.9 5.0 4.0


Top 2 Box 64 80 20 100 100

Bottom 2 Box 8 - 20 - -

Mean 3.9 4.0 3.1 5.0 4.0


Top 2 Box 92 80 100 100 67


Mean 4.7 4.2 5.0 5.0 3.7


BASE


60 15 15 15 15

Figures in %

Even though there are many brands I always buy the same brands

Top 2 Box 50 47 67 40 47

Bottom 2 Box 25 - 20 53 27

Mean 3.4 3.6 3.7 2.8 3.4

I have very little interest in brand name

Top 2 Box 12 - 7 - 40

Bottom 2 Box 67 80 60 100 27

Mean 2.3 2.1 2.1 1.9 3.2


Top 2 Box 22 60 - - 27

Bottom 2 Box 52 20 27 87 73

139

BASE


60 15 15 15 15

Mean 2.6 3.4 2.6 2.1 2.3

I would rather stick with the brand I usually use than try something I am not sure of

Top 2 Box 58 60 20 73 80

Bottom 2 Box 15 - 33 20 7

Mean 3.5 3.7 2.9 3.6 3.9

I will buy only established brands

Top 2 Box 93 100 100 87 87

Bottom 2 Box 5 - - 7 13

Mean 4.2 4.5 4.7 3.8 3.9


Top 2 Box 42 67 - 33 67

Bottom 2 Box 13 - 40 7 7

Mean 3.4 3.9 2.5 3.3 3.7

I like to recommend new brands to others

Top 2 Box 17 53 - 7 7

Bottom 2 Box 45 7 47 73 53

Mean 2.8 3.7 2.5 2.3 2.5


Top 2 Box 88 100 93 100 60

Bottom 2 Box 3 - - - 13

Mean 4.4 4.5 4.8 4.9 3.5

National brands are available everywhere as compared to local brands

Top 2 Box 87 73 93 100 80

Bottom 2 Box 2 - - - 7

Mean 4.3 3.9 4.8 4.7 3.9


Top 2 Box 82 67 80 100 80

Bottom 2 Box 2 - 7 - -

Mean 4.1 3.9 4.5 4.2 3.8

140

When opinion on above statements were compared across number of years that a

mason is in business it is seen that except second statement, perception is same on all

other statements about branding irrespective of no. of years mason is in occupation

( p > 0.05)

Table 4.4.13

Statements Sig.

Even though there are many brands, I always buy the same brand. 0.580

I have very little interest in the brand name. 0.033

There are so many brands that I often get confused. 0.119

I would rather stick with a brand I usually use than try something I am not sure of. 0.470

I will buy only established brands. 0.484

I would wait for others to try a new brand then try it myself. 0.066

I like to recommend new brands to others. 0.540

National brands provide better quality than local brands. 0.069

National brands are available everywhere as compared to local brands. 0.115

Local brands are cheaper than national brands. 0.809

4.5 RETAILERS

In retailer‘s case also, ‗quality‘ is the main factor for selecting a brand. The next

factor, as seen in earlier segments, is also ‗reasonable price‘.

Table 4.5.1 Factors considered before buying a cement brand (%)


Quality should be

good 65 70 20 100 70

Reputation of the

brand 60 50 70 100 20

Affordable price 50 50 30 90 30

Should set fast 25 - 50 - 50

Good demand in

the market 10 30 10 - -

BASE 40 10 10 10 10

141

Since ‗quality‘ is of prime importance, national brands stocking is much high across

all towns. And the same brands are recommended to customers because they are

known for quality. In this segment also, branding of cement becomes important since

it assures quality to the user.

The above factors were cross-tabulated across annual income of retailer. Chi-square

test shows that factors remain same irrespective of annual income of the retailer (chi-

square = 8.310, p = 0.76).

Table 4.5.2 Top brands stocked (%)


UltraTech 48 80 60 50 -

Ambuja 45 90 90 - -

ACC 40 60 70 30 -

Birla 23 20 40 20 10

Coromandal 20 - - - 80

BASE 40 10 10 10 10

Table 4.5.3 Top brands recommended (%)


Ambuja 38 80 70 - -

UltraTech 35 60 30 50 -

ACC 20 10 40 30 -

BASE 40 10 10 10 10

Table 4.5.3.1 Reasons for recommending Ambuja (%)


It is of a good

quality 38 56 14 - -

It is a reputed

brand 19 33 - - -

It sets quickly 19 - 43 - -

BASE 16 9 7 - -

Table 4.5.3.2 Reasons for recommending UltraTech (%)


It is reputed brand 23 17 - 40 -

It is of a good

quality 23 17 50 20 -

Its availability is

good 23 50 - - -

BASE 13 6 2 5 -

142

Table 4.5.3.3 Reasons for recommending ACC (%)


It is a reputed

brand 50 50 25 100 -

It lasts long 38 50 25 50 -

It is of a good

quality 25 - 50 - -

BASE 8 2 4 2 -

Table 4.5.4 Top brands not recommended (%)


ACC 22 - 43 10 -

India Cements 17 - - 30 -

Pragati 17 - 43 - -

BASE 18 1 7 10 -

Table 4.5.4.1Reasons for not recommending – ACC (%)


Reputed brand so

the profit is less 50 - 67 - -

It is very costly 25 - - 100 -

We do not store it 25 - 33 - -

BASE 6 - 3 3 -

Table 4.5.4.2 Reasons for not recommending – India Cements (%)


It is not a reputed

brand 67 - - 67 -

It sets very slowly 33 - - 33 -

BASE 3 - - 3 -

Table 4.5.4.3 Reasons for not recommending – Pragati (%)


It is not trustworthy 67 - 67 - -

It is not a reputed

brand 33 - 33 - -

It is not of a good

quality 33 - 33 - -

BASE 3 - 3 - -

143

Table 4.5.5 Top 3 Brands (%)


ACC 55 100 80 40 -

Ambuja 50 100 90 10 -

UltraTech 50 90 50 60 -

BASE 40 10 10 10 10

Table 4.5.5.1 Reasons for rating ACC (%)


It is a reputed & a

trustworthy brand 52 40 43 100 -

It is of a good

quality 24 30 14 25 -

It is easily

available 14 30 - - -

BASE 21 10 7 4 -

Table 4.5.5.2 Reasons for rating Ambuja (%)


It is a reputed & a

trustworthy brand 32 40 11 - -

It has got good

strength 32 20 33 100 -

Customer demand

is more 21 40 - - -

BASE 20 10 9 1 -

Table 4.5.5.3 Reasons for rating UltraTech (%)


It is of a good

quality 35 56 20 17 -

It is reputed and

trustworthy

company

15 - 20 33 -

It has got good

strength 15 11 - 40 -

BASE 20 9 5 6 -

144


BASE


22 10 8 4 -

Figures in %


Agree 45 10 63 100 -

Neither agree nor disagree 55 90 37 - -

Disagree - - - - -

It is affordable

Agree 46 20 50 100 -


Disagree 9 20 - - -


Agree 64 30 88 100 -


Disagree 4 10 - - -


Agree 23 30 13 25 -

Neither agree nor disagree 59 70 62 25 -

Disagree 18 - 25 50 -


Agree 55 20 88 75 -


Disagree 18 40 - - -

It is preferred by most of the customers

Agree 64 20 100 100 -

Neither agree nor disagree 27 60 - - -

Disagree 9 20 - - -


Agree 73 40 100 100 -

Neither agree nor disagree 23 50 - - -

Disagree 4 10 - - -

145

BASE


22 10 8 4 -

It has good loyalty programs

Agree 32 10 25 100 -


Disagree 27 30 37 - -


Agree 80 70 89 100 -


Disagree - - - - -


BASE


20 10 9 1 -

Figures in %


Agree 85 90 78 100 -


Disagree - - - - -

It is affordable

Agree 55 40 67 100 -


Disagree 5 10 - - -


Agree 95 100 89 100 -

Neither agree nor disagree 5 - 11 - -

Disagree - - - - -


Agree 25 30 11 100 -


Disagree 20 10 33 - -


146

BASE


20 10 9 1 -

Agree 75 70 78 100 -


Disagree - - - - -


Agree 75 100 44 100 -

Neither agree nor disagree 25 - 56 - -

Disagree - - - - -


Agree 70 60 78 100 -


Disagree - - - - -


Agree 45 60 22 100 -


Disagree 20 - 44 - -


Agree 80 70 89 100 -


Disagree - - - - -


BASE


20 9 5 6 -

Figures in %


Agree 65 67 20 100 -


Disagree 5 - 20 - -

It is affordable

Agree 70 56 60 100 -

147

BASE


20 9 5 6 -


Disagree 5 11 - - -


Agree 55 22 60 100 -


Disagree 5 11 - - -


Agree 35 22 - 83 -


Disagree 15 11 40 - -


Agree 70 56 60 100 -


Disagree - - - - -


Agree 50 44 20 83 -


Disagree - - - - -


Agree 65 56 60 17 -


Disagree - - - - -


Agree 45 33 - 100 -


Disagree 25 11 80 - -


Agree 65 44 60 100 -


Disagree 5 11 - - -

148

Table 4.5.9 Importance of Branding (%)


Important 93 90 80 100 100

Neither important

nor unimportant 7 10 20 - -

Unimportant - - - - -

BASE 40 10 10 10 10

Importance given to branding is cross-tabulated with annual income and it is found

that it is same irrespective of annual income (chi-square = 15.581, p = 0.076)

Table 4.5.9.1 Reason for the rating (%)


Branded cement is

preferred by the

customers

43 50 60 60 -

Brand name is

essential for the

sale of the cement

20 30 - 50 -

Branded cements

have good quality 10 20 20 - -

BASE 40 10 10 10 10


BASE


40 10 10 10 10

Figures in %

Even though there are many brands I always stock the same brands

Agree 75 100 40 80 80

Neither agree nor disagree 13 - 40 - 10

Disagree 12 - 20 20 10


Agree 05 - - - 20

Neither agree nor disagree 37 40 60 - 50

Disagree 58 60 40 100 30


Agree 15 10 20 - 30

149

BASE


40 10 10 10 10


Disagree 55 70 20 100 30

I would rather stock brands I usually have than keep something I am not sure of

Agree 40 70 10 10 70

Neither agree nor disagree 55 30 90 80 20

Disagree 05 - - 10 10

I stock only established brands

Agree 85 100 90 90 60

Neither agree nor disagree 15 - 10 10 40

Disagree - - - - -

I wait for others to try a new brand before suggesting it to my customers

Agree 17 20 10 10 30


Disagree 20 20 40 20 -

I like to recommend new brands to customers

Agree 10 20 - 11 10


Disagree 41 20 60 33 50


Agree 90 90 100 100 70

Neither agree nor disagree 8 10 - - 20

Disagree 2 - - - 10

National brands are everywhere as compared to local brands

Agree 83 60 90 100 80


Disagree 2 - - - 10


Agree 78 50 80 100 80


Disagree 2 10 - - -

150

These statements are cross-tabulated across annual income. Chi-square test shows that

Branding perception and Stocking behavior is same across different income groups

except first statement since its p value is less than 0.05. Retailers with low annual

income seem to stock more than one brand.

Table 4.5.11 Perception about Branding – By Annual income

Statements Sig.

Even though there are many brands, I always stock the same brand. 0.022

I have very little interest in the brand name. 0.454

There are so many brands that I often get confused. 0.086

I would rather stock brands that I usually have than keep something I

am not sure of.

0.301

I stock only established brands. 0.108

I wait for others to try a new brand before suggesting it to my

customers.

0.498

I like to recommend new brands to customers. 0.488

National brands provide better quality than local brands. 0.917

National brands are available everywhere as compared to local brands. 0.748

Local brands are cheaper than national brands. 0.186

Table 4.5.12 Brand preferred – National/Local/Both (%)


National brands 90 100 100 100 60

Local brands 5 - - - 20

Both 5 - - - 20

BASE 40 10 10 10 10

151

Table 4.5.12.1 Reasons for preferring National brands (%)


National brands


National brands are

trustworthy 33 30 60 30 -

National brands are

very strong 19 40 - 30 -

BASE 36 10 10 10 6

Table 4.5.13 Recommend Local brand to… (%)


Mason 91 100 83 - 89

Contractor 36 14 33 - 56

IHB 23 14 17 - 33

Architect 14 - - - 33

BASE 22 7 6 - 9

Table 4.5.13.1 Reasons for recommending Local brands (%)


Rate wise local

brands are cheaper 64 71 83 - 44

Local brands are

recommended for

small work

18 29 17 - 11

Middle class

people prefer local

brands

14 14 - - 22

BASE 22 7 6 - 9

Table 4.5.14 Recommend National brand to… (%)


IHB 95 90 90 100 100

Architect 93 100 70 100 100

Contractors 88 90 80 100 80

Masons 63 30 70 100 50

BASE 40 10 10 10 10

152

Table 4.5.14.1 Reasons for recommending National brands (%)


National brands are

of good quality 45 70 60 10 40

National brands are

from a reputed

company

40 20 70 60 10

National brands

have a good grip 10 - - 40 -

BASE 40 10 10 10 10

Table 4.5.15 How should a company promote its brand? (%)


Company should

organize promotional

activities.

33 40 40 50 -

Company should reduce

its prices. 25 10 - 20 70

Company should

provide offers. 20 20 40 20 -

Company should put

more hoardings

/banners.

20 - 50 30 -

Company should

conduct seminars for

retailers & distributors.

18 - 20 50 -

BASE 40 10 10 10 10

4.6 Contractors

In the case of contractors also, either he decides the brand to use or suggests to the

user. However, the role of user is seen to be equally important in selecting brand.

Table 4.6.1 Who decides (%)


I decide which

brand to use 40 30 70 20 40

I suggest various



the other party

32 50 - 80 -

We decide

mutually which

brand to use

28 20 30 - 60

BASE 40 10 10 10 10

153

When this pattern is compared with number of years contractor is doing business by

using chi-square test following output is obtained:

Q4. Decision maker on the cement brand to be used * Q2. how long you have been working as a

Contractor Cross Tabulation

Q2. How long you have been working as a

Contractor

Total

Less

than 5

years

5-10

years

11-

15

years

16-

20

years

21-

25

years

More

than

25

years

I decide which

brand to use Count

1 3 2 4 4 2 16

Expected

Count

.4 2.8 2.4 5.2 2.4 2.8 16.0

I suggest various



Count 0 2 1 5 1 4 13

Expected

Count

.3 2.3 2.0 4.2 2.0 2.3 13.0

We decide

mutually which

brand to use

Count 0 2 3 4 1 1 11

Expected

Count

.3 1.9 1.7 3.6 1.7 1.9 11.0

Total Count 1 7 6 13 6 7 40

Expected

Count

1.0 7.0 6.0 13.0 6.0 7.0 40.0

Chi-Square Tests




Linear-by-Linear

Association

.001 1 .970

No. of Valid Cases 40

a. 17 cells (94.4%) have expected count less than 5. The minimum expected count is

.28.

154

It is seen that pattern remains same irrespective of number of years in business (chi-

square = 7.421, p = 0.685)

Similarly, this pattern is compared across number of projects done by contractor in

one year. In this case also, the pattern remains same (chi-square = 11.139, p = 0.347)

It also remains same irrespective of annual income of the contractor (chi-square =

15.756, p = 0.107)

Table 4.6.2 Factors considered (%)


Setting Time 40 20 60 70 10

Strength 38 - 60 70 20

Quality 25 50 - - 50

BASE 40 10 10 10 10

All factors mentioned above relate to ‘quality’. Thus quality of the cement is the main

factor considered in selecting the brand.

Table 4.6.3 Sources of Awareness (%)


Retailer &

Distributor 65 10 100 80 70

Advertisement 33 - 40 50 40

TVCs 27 30 40 - 40

Newspaper 23 20 20 40 10

Hoardings &

Posters 23 20 10 60 -

BASE 40 10 10 10 10

Table 4.6.4 Top 3 Brands – currently using (%)


Ambuja 68 100 70 100 -

UltraTech 43 50 40 80 -

ACC 30 40 70 10 -

BASE 40 10 10 10 10

155

Table 4.6.5 Top 3 Brands – not using currently (%)


ACC 44 40 - 70 44

Birla 27 50 - 40 -

J.K. Lakshmi 18 50 - 10 -

BASE 40 10 10 10 10



Good demand 26 40 14 20 -

Reputed company 15 - 14 30 -

Sets quickly 15 - 43 10 -

BASE 27 10 7 10 -

Table 4.6.5.2 Reasons for using UltraTech (%)


Good strength 24 - 50 25 -

Good demand 18 20 - 25 -

Durability 12 - - 25 -

BASE 17 5 4 8 -



Long lasting 25 - 43 - -

Affordable 17 - 29 - -

Good quality 17 25 15 - -

BASE 12 4 7 1 -

Table 4.6.6.1 Reasons for not using ACC (%)


Not easily

available 62 50 - 40 100

I doubt its quality 15 25 - 20 -

Out dated brand 8 - - 20 -

BASE 13 4 - 5 4

156

Table 4.6.6.2 Reasons for not using Birla (%)


Bad grip 22 - - 50 -

Not accepted by

customers 11 - - 25 -

Not easily

available 11 20 - - -

BASE 9 4 - 5 -

Table 4.6.6.3 Reasons for not using J.K. Lakshmi (%)


Customers don’t

like this brand 33 20 - 100 -

Low market value 33 20 - 100 -

Lacks durability 17 20 - - -

BASE 6 5 - 1 -

Table 4.6.7 Top 3 Brands – In General (%)


Ambuja 65 100 70 90 -

UltraTech 45 60 30 80 -

ACC 38 40 100 10 -

BASE 40 10 10 10 10

Table 4.6.7.1 Reasons for ranking Ambuja (%)


Good quality 35 50 14 33 -

Gives good grip 19 - - 56 -

Settles well 12 - 29 11 -

BASE 26 10 7 9 -

Table 4.6.7.2 Reasons for ranking UltraTech (%)



Good quality 28 33 25 25 -

Rust-free 17 - - 38 -

BASE 18 6 4 8 -

157

Table 4.6.7.3 Reasons for ranking ACC (%)


Long lasting 33 25 40 - -


Good strength 13 25 10 - -

BASE 15 4 10 1 -


BASE


26 10 7 9 -

Figures in %


Top 2 Box 100 100 100 100 -


Mean 4.8 4.6 4.7 5 -

It mixes well

Top 2 Box 96 100 85 100 -


Mean 4.7 4.6 4.6 4.9 -


Top 2 Box 96 100 86 100 -


Mean 4.7 4.5 4.4 5 -

It is affordable

Top 2 Box 84 100 43 100 -


Mean 4.4 4.5 3.7 4.7 -

It is very smooth

Top 2 Box 96 100 86 100 -


Mean 4.8 4.8 4.6 4.9 -

158

BASE


26 10 7 9 -


Top 2 Box 92 90 86 100 -


Mean 4.6 4.6 4.4 4.8 -


Top 2 Box 96 90 100 100 -


Mean 4.6 4.5 4.4 4.8 -


Top 2 Box 77 100 14 100 -

Bottom 2 Box 4 - 14 - -

Mean 4.1 4.3 2.9 4.8 -


Top 2 Box 92 80 100 100 -


Mean 4.4 4.1 4.3 4.7 -


Top 2 Box 96 90 100 100 -


Mean 4.7 4.7 4.6 4.9 -


Top 2 Box 69 80 29 89 -

Bottom 2 Box 23 10 71 - -

Mean 3.5 3.7 2.1 4.2 -


Top 2 Box 100 100 100 100 -


Mean 4.7 4.9 4.4 4.8 -

159


BASE


18 6 4 8 -

Figures in %


Top 2 Box 89 67 100 100 -


Mean 4.6 3.7 5 5 -

It mixes well

Top 2 Box 88 60 100 100 -

Bottom 2 Box 6 20 - - -

Mean 4.5 3.4 5 4.9 -


Top 2 Box 89 67 100 100 -


Mean 4.6 4 5 4.8 -

It is affordable

Top 2 Box 78 33 100 100 -

Bottom 2 Box 6 17 - - -

Mean 4.2 3.2 4.8 4.8 -

It is very smooth

Top 2 Box 94 83 100 100 -

Bottom 2 Box 6 17 - - -

Mean 4.5 3.7 4.7 5 -


Top 2 Box 94 83 100 100 -


Mean 4.7 4.2 4.7 5 -


Top 2 Box 94 83 100 100 -


Mean 4.5 4 4.5 4.9 -

160

BASE


18 6 4 8 -


Top 2 Box 78 67 75 88 -

Bottom 2 Box 6 - 25 - -

Mean 4 3.8 3.5 4.4 -


Top 2 Box 83 50 100 100 -


Mean 4.4 3.5 4.8 4.9 -


Top 2 Box 89 67 100 100 -


Mean 4.5 3.7 5 4.9 -


Top 2 Box 72 33 75 100 -

Bottom 2 Box 6 - 25 - -

Mean 4.2 3.3 4 5 -


Top 2 Box 100 100 100 100 -


Mean 4.7 4.3 5 4.9 -

161


BASE


15 4 10 1 -

Figures in %


Top 2 Box 100 100 100 100 -


Mean 4.5 4.3 4.5 5 -

It mixes well

Top 2 Box 80 50 90 100 -


Mean 4.2 3.5 4.4 5 -


Top 2 Box 93 100 90 100 -


Mean 4.4 4 4.6 4 -

It is affordable

Top 2 Box 67 50 70 100 -


Mean 4.3 4 4.3 5 -

It is very smooth

Top 2 Box 93 100 90 100 -


Mean 4.3 4 4.4 5 -


Top 2 Box 93 100 90 100 -


Mean 4.3 4 4.4 5 -


Top 2 Box 87 75 90 100 -


Mean 4.3 4 4.4 4 -

162

BASE


15 4 10 1 -


Top 2 Box 53 50 50 100 -

Bottom 2 Box 20 50 10 - -

Mean 3.5 3 3.6 5 -


Top 2 Box 93 100 90 100 -


Mean 4.5 4.5 4.5 5 -


Top 2 Box 93 75 100 100 -


Mean 4.7 4 4.9 5 -


Top 2 Box 53 75 40 100 -

Bottom 2 Box 40 - 60 - -

Mean 3 3.8 2.6 4 -


Top 2 Box 100 100 100 100 -


Mean 4.6 4 4.8 5 -

Table 4.6.11 Importance of Brand Name


Very important 48 40 60 90 -

Important 52 60 40 10 100

Neither important

nor unimportant - - - - -

Not so important - - - - -

Not at all important - - - - -

Mean 4.5 4.4 4.6 4.9 4

BASE 40 10 10 10 10

163

When importance of brand name is compared across annual income by using chi-

square test, following output was available:

Q19. Annual Income * Q8. Importance of brand name while purchasing cement Cross tabulation

Q8. Importance of

brand name while

purchasing cement

Total

4 -

Important

5 - Very

Importan

t

Q19. Annual

Income

Up to 2 lakhs Count 5 4 9

Expected Count 4.7 4.3 9.0

2,00,001-

4,00,000

Count 4 2 6


4,00,001-

6,00,000

Count 3 9 12


6,00,001-

8,00,000

Count 6 2 8


8,00,001-

10,00,000

Count 2 1 3


More than

10,00,000

Count 1 1 2


Total Count 21 19 40


Chi-Square Tests




Linear-by-Linear

Association

.059 1 .807

N of Valid Cases 40

a. 10 cells (83.3%) have expected count less than 5. The minimum expected

count is .95.

164

Similarly Kruskal Wallis test gave following results:

Ranks

Q19. Annual Income N Mean Rank

Q8. Importance of

brand name while

purchasing cement

Up to 2 lakhs 9 19.89

2,00,001- 4,00,000 6 17.67

4,00,001- 6,00,000 12 26.00

6,00,001- 8,00,000 8 16.00

8,00,001- 10,00,000 3 17.67

More than 10,00,000 2 21.00

Total 40

Test Statisticsa,b

Q8. Importance of brand name while purchasing cement

Chi-square 5.876

df 5

Asymp. Sig. .319

a. Kruskal Wallis Test

b. Grouping Variable: Q19. Annual Income

It is seen in both test importance is same across different income groups (chi-square =

6.0626, p = 0.304, Kruskal Wallis chi-square = 5.876, p = 0.319)

Same results are seen when importance to branding is compared across number of

years the contractor is in business (Chi-square = 3.697, p = 0.594, Kruskal Wallis chi-

square = 3.604, p = 0.608)

When importance to branding is compared with the number of projects the contractor

does in a year it is seen that importance remains same irrespective of number of

projects done in a year (Chi-square = 3.39, p = 0.64, Kruskal Wallis chi-square =

3.306, p = 0.653)

165

Table 4.6.11.1 Reasons for the rating (%)


Good Quality 60 50 70 50 70

Trustworthy 30 60 30 30 10

Good Strength 13 - 10 30 10

BASE 40 10 10 10 10


BASE


40 10 10 10 10

Figures in %

Even though there are many brands, I always buy the same brands

Top 2 Box 93 100 80 90 100

Bottom 2 Box 5 - 10 10 -

Mean 4.3 4.3 4.2 3.9 4.6


Top 2 Box 20 - 20 - 60

Bottom 2 Box 73 80 70 100 40

Mean 2.3 1.8 2.6 1.5 3.3


Top 2 Box 20 30 - - 50

Bottom 2 Box 50 30 60 70 40

Mean 2.8 3.2 2.2 2.3 3.3

I would rather stick with the brand I usually use than try something I am not sure of

Top 2 Box 58 90 10 30 100

Bottom 2 Box 28 - 40 70 -

Mean 3.5 4.3 2.7 2.5 4.3

I will buy only established brands

Top 2 Box 90 100 100 60 100

Bottom 2 Box 5 - - 20 -

Mean 4.3 4.5 4.7 3.4 4.4


Top 2 Box 58 80 - 50 100

Bottom 2 Box 20 - 50 30 -

166

BASE


40 10 10 10 10

Mean 3.4 3.9 2.3 3.3 4.2

I like to recommend new brands to others

Top 2 Box 40 70 10 40 40

Bottom 2 Box 40 10 70 40 40

Mean 3 3.6 2.2 3 3.2


Top 2 Box 98 100 100 100 90


Mean 4.6 4.4 5 4.5 4.3

National brands are everywhere as compared to local brands

Top 2 Box 95 90 100 100 90


Mean 4.6 4.2 4.9 4.8 4.3


Top 2 Box 90 80 80 100 100


Mean 4.2 3.8 4.2 4.5 4.3

When opinions on above statements were cross-tabulated across number of years in

business, it was found that opinion remains same across number of years in business

as seen in the following table since sig. > 0.05

167

Table 4.6.12.1: Opinion on statements – By number of years in business

Same is the case when opinion on above statements were compared with type of

business, it remains same as seen in following table since sig. > 0.05

Table 4.6.12.2: Opinion on statements – By type of business

Opinion also does not depend on number of projects done in a year since sig. > 0.05

as can be seen from following table

Statements Chi-square df Asymp.

Sig.

Even though there are many brands, I always buy the same brand. 4.36 5 0.50

I have very little interest in the brand name. 8.03 5 0.15

There are so many brands that I often get confused. 2.71 5 0.74

I would rather stick with a brand I usually use than try something I am not sure of 7.50 5 0.19

I will buy only established brands. 6.53 5 0.26

I would wait for others to try a new brand then try it myself. 4.13 5 0.53

I like to recommend new brands to others. 9.99 5 0.08

National brands provide better quality than local brands. 1.84 5 0.87

National brands are available everywhere as compared to local brands. 2.56 5 0.77

Local brands are cheaper than national brands. 6.69 5 0.24


Sig.











168

Table 4.6.12.3: Opinion on statements – By number of number of projects

done

As regards annual income opinion is different on statement no. 6 and 10. These

statements relate to trying a newly brand in the market and opinion about local

brands.

Table 4.6.12.4


Sig.












Sig.











169

Table 4.6.13 Brand preferred – National or Local (%)


National Brands 100 100 100 100 100

Local Brands - - - - -

BASE 40 10 10 10 10

Table 4.6.13.1 Reasons for preferring National Brands (%)


National brands


National brands are

durable 15 - - 40 20

Branded cement is

available

everywhere

15 30 20 - 10

BASE 40 10 10 10 10

Table 4.6.14 how a company should promote a cement brand (%)


Company should inform

people about the quality of the

cement

28 30 20 60 -

Reduce the price 23 50 10 - 30

Television Commercials 15 30 20 10 -

Advertise through

hTotalrdings/posters/pamphlets 13 - - 50 -

Give free gifts with it 13 10 20 - 20

BASE 40 10 10 10 10

From above table 4.6.14 it is seen that emphasis is on quality available at reasonable

price. Thus higher price cement would be accepted if company produces quality

cement.

Chapter 5

Findings and Conclusion

170

CHAPTER 5 : FINDINGS AND CONCLUSION 5.1 Introduction

Overview

The new mantra in this industry is that ―you have to scream to be heard in a

crowded market that already has over 50 players‖. ‗Branding‘ has started playing an

important role in cement industry too and also covers triggers and barriers they

consider while purchasing Cement. Nothing sells without branding. A perfect

example of this is the increase in sales of Binani cement after roping in Amitabh

Bachchan to endorse it. Thus like all the other categories ―Branding‖ has started

playing an important role in the cement industry too.

5.2 Summary of the study

Consumers and decision makers in the process of buying cement unanimously feel

that branding of cement is important because it creates good image of the product.

Good image of cement is strongly associated with the quality. Quality is associated

with strength.

They are also unanimous in saying that the quality should be offered at reasonable

price. Thus one can conclude that customers and consumers select cement brand

based on quality. The second criterion that is used is price, thus we can say that it is

the value for money that occupies the second important criterion in buying cement.

There is a strong association found between ‗quality‘ perception of brand and

preference towards it.

National brands are perceived as having a better quality than local brands. Thus top

brands preferred are national brands. Local brands are perceived as cheaper but not as

good in quality as national brands.

Thus company selling cement throughout the country should try to improve brand

image on quality and then charge higher price. It could be true that customer is

associating price with quality so that higher the price of cement, better should be the

quality.

171

Customers meaning of quality is strength. Since local brands do not score high on

quality compared to national brands but score high on price, they have scope in

promoting cement in those uses where strength is not the prime requirement. In such

situation the next requirement would be price.

Suggestions given by retailers on promoting brand show that the company should give

good margin. They also expect that quality has to be good. Thus it concurs with the

finding that quality is the first criterion followed by price.

The above findings are uniform across various segments of architects, IHBs, retailers,

masons and contractors based on type of work done, number of years in business,

brands preferred, business location, whether constructing commercial buildings or

residential or both, type of buildings constructed, process of selecting brand and

sources used to finalize brand.

Distribution of cement brand is also important in forming opinion on quality. Since

national brands are considered to be brands with good quality, by total distribution

would help company to create better image of the brand on quality.

5.3 Research Objective

The primary objective of the research was:

To find out the triggers and barriers in selecting a cement brand

To find out the perception of brands

To find out the impact of branding

To find out the impact of national brands and local brands

To find out the perception of national brands and local brands

In order to achieve the objective, the following areas were covered:

Factors considered by customers while buying

Top brands – Stocked, recommended and in general

172

Perception about the top 3 brands

Importance of branding and reasons thereof

Perception about branding

Difference between National and Local brands

Brand preferred – National or Local

5.4 Research Methodology

Research Type

The research was quantitative in nature. A structured questionnaire containing

both open as well as close ended questions was used.

Target Respondents

Architect, IHBs (Individual House Builders), Masons, Retailers of Cement and

Contractors.

Sampling: 20 Architect, 40 IHB‘s, 60 Masons, 40 Retailers and 40 Contractors

173

5.5 DATA ANALYSIS

5.5.1 Architect

182

5.5.2 IHB

189

5.5.3. Mason

196

5.5.4 Retailers

201

5.5.5. Contractors

208

5.6 Research Hypothesis & Major conlusions viz-a-viz findings of study

Bibliography

218

Bibliography

Aaker, David A. (1991), Managing Brand Equity. New York: The Free Press.

Aaker, David A. (1996), ―Measuring Brand Equity Across Products and Markets,‖

California Management Review, 38 (Spring), 102-120.

Aaker, David. A. and Robert Jacobson (2001), ―The Value Relevance of Brand

Attitudein High-Technology Markets,‖ Journal of Marketing Research, 38(4), 485-

93.Reference articlesAaker, David A. and Erich JTotalchimsthaler.(2000), Brand

Leadership: The Next Level ofthe Brand Revolution, New York: Free Press.

Aaker, David A.; Erich Joachimsthaler (2000). Brand Leadership. New York: The Free

Press. pp. 1–6. ISBN 0-684-83924-5

Agarwal, Manoj K. and VithalaRao (1996), ―An Empirical Comparison of Consumer-

Based Measures of Brand Equity,‖ Marketing Letters, 7 (3), 237-47.

Brand Equity,‖ Journal of Marketing, 57 (January), 1-22.

Kapferer, Jean-Noel (1994), Strategic Brand Management, New York: Free Press.

Kaplan, L. B., G. J. Szybillo, and J. Jacoby (1974), ―Components of Perceived Risk in

Keller, Kevin L. (2008), Strategic Brand Management: Building, Measuring, and

Managing Brand Equity, 3rd ed., Upper Saddle River, NJ: Prentice Hall.

Kotler, Philip (1972), Marketing Management, Englewood Cliffs, NJ: Prentice Hall.

"Neil McElroy's Epiphany". P&G Changing the Face of Consumer Marketing.

Harvard Business School. May 2, 2000. Retrieved March 9, 2011.

http://en.wikipedia.org/wiki/David_A._Aaker

http://en.wikipedia.org/wiki/Erich_Joachimsthaler

http://en.wikipedia.org/wiki/International_Standard_Book_Number

http://en.wikipedia.org/wiki/Special:BookSources/0-684-83924-5

http://hbswk.hbs.edu/archive/1476.html

219

Shocker, Alan D., Rajendra K. Srivastava, and Robert W. Ruekert (1994),

―Challengersand Opportunities Facing Brand Management,‖ Journal of Marketing

Research,31 (2), 149-58.Tauber, Edward M. (1988), ―Brand Leverage: Strategy For

Growth In A Cost-ControlWorld,‖ Journal of Advertising Research, 28 (4), 36-30.

Shamoon, Sumaira, and Saiqa Tehseen. "Brand Management: What Next?"

Interdisciplinary Journal Of Contemporary Research In Business 2.12 (2011): 435–

441. Business Source Complete. Web. October 20, 2012.

Annexure

220

ANNEXURE Questionnaire

PROJECT “CEMENT BRANDING”

Mason

Name of the respondent

Address

Int. Name Date:

Centers Mumbai 1 Delhi 3

Kolkata 2 Chennai 4

Good Morning! ….. I am a research scholar pursuing a Ph.D. My research deals in branding of

cement. This survey is purely an academic survey as part of my Ph. D. research. In this respect I

would like to ask you questions about Cement industry. I assure you that the responses of this

survey will be kept completely confidential and no response will be traced back to an individual.

Section-I

1.Could you please tell me, what is your occupation?

Mason 1 Plumber 3 Electrician 5

Carpenter 2 Painter 4 Others…………..

Continue only if coded1

2. Could you please tell me, are you working independently?

Yes 1 Continue No 2 Terminate Both 3 Continue

3. Could you please tell me, what are the types of masonry work you do?

4.Could you please tell me, how long you have been working as a ………?

Less than 5 years 1 10-15 years 3 20-25 years 5

5-10 years 2 15-20 years 4 More than 25 years 6

221

5.Could you please tell me, how does your industry work? (Probe on the process, how they get

client or how client apprTotalches them, how is awareness created. etc... etc...)

6. Could you please tell me, when you get an assignment of any construction work, who decides

on the cement brand to be used?

Statements Code

I decide which brand to use… 1 Continue

I let the other party decide which brand to use according to their

preference...

2 Termina

te

I suggest various brands but the final decision is taken by the other

party…

3 Continue

We decide mutually which brand to use… 4 Continue

7. Could you please tell me, what are the top 3 factors while deciding on a cement brand?

1. _______________________________________________________________

2. _______________________________________________________________

3. _______________________________________________________________

8. a. Could you please tell me, which are the cement brands that you are currently using?

b. Could you please tell me, which are the cement brands that you had used in the past and not

using currently?

Brands Q.8a Q.8b

ACC 1 1

Ambuja 2 2

Binani 3 3

222

Birla 4 4

Buland (Jaypee) 5 5

Buniyad (Jaypee) 6 6

Century (B.K. Birla) 7 7

Dalmia 8 8

Grasim (Aditya Birla) 9 9

India Cements 10 10

J.K Laxmi 11 11

KCP 12 12

Lafarge 13 13

Larsen & Toubro 14 14

Malabaar 15 15

Orient 16 16

Sanghi 17 17

Ultra Tech (Aditya Birla) 18 18

Others…

Others…

Record brands coded in Q.8a.

c. Could you please tell me, the reason for using ………. brand/brands.

Brands Reasons

Record brands coded in Q8b.

d. Could you please tell me, the reason for not using ……… brand / brands.

Brands Reasons

223

9. Could you please tell me, how do you come to know about new brands?

Section-II (Perception of Brand) 10.Could you please tell me, how important a brand name is for you while purchasing cement?

Please rate on a 5 point scale where 5 means “Very important”&1 means “Not at all

important”

11.Could you please tell me the reasons for the same.

12. Could you please tell me, which brand of cement do you prefer?

Local Brands 1 National Brands 2

13. Could you please tell me, reasons for the same?

14. Could you please tell me, what according to you is the difference between national & local

brands?

15.Could you please tell me, which are the top three cement brands according to you and also give

reasons for the same.

Rank Brands Reasons

1

Very Important Important Ok Not so Important Not at all Important

5 4 3 2 1

224

2

3

16. Could you please rate the above three cement brands on the following statements on a 5-point

scale, where „5‟ is “Strongly agree” and „1‟ is “Strongly disagree” based on your

understanding.

(Write the brands coded in Q.15 under Brand 1, Brand 2 and Brand 3).

Statements Brand 1

Brand 2

Brand3


It mixes very well


It is affordable

It is very smooth

It spreads well, hence gives a good

finishing







17.Now I am going to read out few statements, please rate your agreement level on a 5 point scale

where 5 means “Strongly agree” and 1 is “Strongly disagree”.

Statements

Strongly

Agree

Agree

Neither

Agree

Nor

Disagree

Disagree

Strongly

Disagree

Even though there are many brands, 5 4 3 2 1

225

I always buy the same brand.

I have very little interest in the brand name. 5 4 3 2 1

There are so many brands that I often get

confused.

5 4 3 2 1

I would rather stick with a brand I

Usually use than try something I am not sure of.

5 4 3 2 1

I will buy only established brands. 5 4 3 2 1

I would wait for others to try a new brand

then try it myself.

5 4 3 2 1

I like to recommend new brands to others. 5 4 3 2 1

National brands provide better quality than

local brands.

5 4 3 2 1

National brands are available everywhere

as compared to local brands.

5 4 3 2 1

Local brands are cheaper than national brands. 5 4 3 2 1

-: Thank You:-

226

PROJECT “CEMENT BRANDING” Contractor


Address

Int. Name Date:


Kolkata 2 Chennai 4





Section-I

1. Could you please tell me, are you working as a contractor for building material?

Yes 1 Continue No 2 Terminate

2.Could you please tell me, how long you have been working as a ………?



3.Could you please tell me, how does your industry work? (Probe on the process, how they get

client or how client apprTotalches them, how is awareness created. etc... etc...)

4. Could you please tell me, when you get an assignment of any construction work, who decides

on the cement brand to be used?

Statements Code

I decide which brand to use… 1 Continue


preference…

2 Terminate

I suggest various brands but the final decision is taken by the other 3 Continue

227

party…

We decide mutually which brand to use… 4 Continue

5.Could you please tell me, what are the top 3 factors while deciding on a cement brand?

1. _______________________________________________________________

2. _______________________________________________________________

3. _______________________________________________________________

6a. Could you please tell me, which are the cement brands that you are currently using?

b.Could you please tell me, which are the cement brands that you had used in the past and not

using currently?

Brands Q.6a Q.6b

ACC 1 1

Ambuja 2 2

Binani 3 3

Birla 4 4

Buland (Jaypee) 5 5



Dalmia 8 8


India Cements 10 10

J.K Laxmi 11 11

KCP 12 12

Lafarge 13 13


Malabaar 15 15

Orient 16 16

Sanghi 17 17


228

Others…

Others…

Record brands coded in Q.6a.

c. Could you please tell me, the reason using ………. brand/brands.

Brands Reasons

Record brands coded in Q.6b.

d. Could you please tell me, the reason for not using ……… brand / brands.

Brands Reasons

7. Could you please tell me, how do you come to know about new brands?

229

Section-II (Perception of Brand) 8.Could you please tell me, how important a brand name is for you while purchasing cement?

Please rate on a 5 point scale where 5 means “Very important”& 1 means “Not at all

important”

9. Could you please tell me the reasons for the same?

10. Could you please tell me, which brand of cement do you prefer?


11. Could you please tell me, reasons for the same?

12. Could you please tell me, what according to you is the difference between national & local brands?

13.Could you please tell me, which are the top three cement brands according to you and also

give reasons for the same.

Rank Brands Reasons

1

2

3


5 4 3 2 1

230

14. Could you please rate the above three cement brands on the following statements on a 5-

point scale, where „5‟ is “Strongly agree” and „1‟ is “Strongly disagree” based on your

understanding.


Statements Brand 1

Brand 2 Brand3


It mixes very well


It is affordable

It is very smooth

It spreads well, hence gives a good

finishing







15.Now I am going to read out few statements, please rate your agreement level on a 5 point scale

where 5 means “Strongly agree” and 1 is “Strongly disagree”.

Statements

Strongly

Agree

Agree

Neither

Agree

Nor

Disagree

Disagree

Strongly

Disagree

Even though there are many brands,

I always buy the same brand.

5 4 3 2 1

I have very little interest in the brand name.

5 4 3 2 1


5 4 3 2 1

231

confused.

I would rather stick with a brand I usually use than

try something I am not sure of.

5 4 3 2 1

I will buy only established brands.

5 4 3 2 1


then try it myself.

5 4 3 2 1

I like to recommend new brands to others.

5 4 3 2 1

National brands provide better quality

than local brands.

5 4 3 2 1



5 4 3 2 1

Local brands are cheaper than national

brands.

5 4 3 2 1

16. Could you please tell me, according to you, what should a company do to promote its

brand?

Demographics

17. Could you please tell me, are you working as………?

Individual 1

Partner in a partnership firm 2

Employee of a construction company 3

Other…

18. Could you please tell me, on an average how many projects do you do in a month?

One 1 Four 4

Two 2 Five 5

Three 3 More than five 6

232

19. Could you please tell me, on an average what is your annual income?

Up to 2 lakhs 1 6,00,001- 8,00,000 4

2,00,001- 4,00,000 2 8,00,001- 10,00,000 5

4,00,001- 6,00,000 3 More than 10,00,000 6

20 a. Could you please tell me, do you get any credit facility from …….?

b. Could you please tell me, do you have any association / tie ups with any company/retailers?

Continue only if coded 1 in Q. 20b

c. Could you please tell me, with whom do you have any association/tie ups?

Q.20a

Credit Facility

Q.20b

Association/Tie-ups

Q.20c

Name

Yes No Yes No

x. Retailer 1 2 1 2 XXX

y. Company 1 2 1 2

z. Others… 1 2 1 2 XXX

21. Could you please tell me, what are the benefits from the association/tie-up?

-: Thank You:-

233

Retailer



Address

Int. Name Date:


Kolkata 2 Chennai 4





Section-I

1. Could you please tell me, do you stock any cement brands in your store?

Yes 1 Continue No 2 Terminate

2. Could you please tell me, what are the top 3 factors that customers consider when purchasing a

cement brand?

1. _______________________________________________________________

2. _______________________________________________________________

3. _______________________________________________________________

3a. Could you please tell me, which brands of cement do you stock?

b.Could you please tell me, which brands of cement you recommend your customers?

c. Could you please tell me, which brands of cement you don‘t recommend your customers?

234

Brands Q. 3a Q. 3b Q. 3c

ACC 1 1 1

Ambuja 2 2 2

Binani 3 3 3

Birla 4 4 4

Buland (Jaypee) 5 5 5

Buniyad (Jaypee) 6 6 6

Century (B.K. Birla) 7 7 7

Dalmia 8 8 8

Grasim (Aditya Birla) 9 9 9

India Cements 10 10 10

J.K Laxmi 11 11 11

KCP 12 12 12

Lafarge 13 13 13

Larsen & Toubro 14 14 14

Malabaar 15 15 15

Orient 16 16 16

Sanghi 17 17 17

Ultra Tech (Aditya Birla) 18 18 18

Others…

Others…


d. Could you please tell me, the reason for recommending the following brand/brands.

Brands Reasons

Record brands coded in Q.3c.

235

e. Could you please tell me, the reason for not recommending the following brand /

brands.

Brands Reasons

4.Could you please tell me, according to you which are the top three cement brands and also give

reasons for the same?

Rank Brands Reasons

1

2

3

Section-II (Perception of Brand)

5.Could you please tell me, how important a brand name is for you while stocking cement brands?

Please rate on a 3 point scale where 3 means “Very important”& 1 means “Unimportant”


Important Neither Important

Nor Unimportant

Unimportant

3 2 1

236


brands?

8. Could you please tell me, which brands have more demand?


9. Could you please tell me, reasons for the same.

10. a Could you please tell me, whom do you recommend local brands?

b. Could you please tell me, whom do you recommend national brands?

Local

Q. 10 a

National

Q. 10 b

1. Mason 1 1

2. Contractor 2 2

3. Architect 3 3

4. IHB 4 4

c. Could you please tell me, reason for recommending local brands to …….

d. Could you please tell me, reason for recommending national brands to ……..

237


scale, where „3‟ is “Agree” and „1‟ is “Disagree” based on your understanding.


Statements Brand 1 Brand 2 Brand3


It is affordable








12.Now I am going to read out few statements, please rate your agreement level on a 3 point

scale where 3 means “Agree” and 1 is “Disagree”.

Statements Agree

Neither Agree

Nor Disagree

Disagree

Even though there are many brands,

I always stock the same brand.

3 2 1


3 2 1


confused.

3 2 1

I would rather stock brands that I

usually have than keep something I am not sure of.

3 2 1

I stock only established brands.

3 2 1

I wait for others to try a new brand

before suggesting it to my customers.

3 2 1

I like to recommend new brands to customers. 3 2 1

238


local brands.

3 2 1



3 2 1

Local brands are cheaper than national brands.

3 2 1

13. Could you please tell me, according to you, what should a company do to promote its brand?

Section III

14. Could you please tell me, on an average what is your annual income?

Up to 2 lakhs 1 6,00,001- 8,00,000 4

2,00,001- 4,00,000 2 8,00,001- 10,00,000 5

4,00,001- 6,00,000 3 More than 10,00,000 6

15. Could you please tell me, do you give any credit facilities to your customers?

Yes 1 No 2

16. Could you please tell me, do you get any freebies/special offers from any company?

Yes 1 No 2

Go to Q19. if coded

2

17. Could you please tell me, do these freebies/special offers affect your sales in any way?

Yes 1 No 2

Go to Q19. if coded 2

239

18. Could you please tell me, how does it affect your sales?

19. Could you please tell me, out of your total customers, how many (%) are ……..?

Mason

Individuals (End Users)

Contractors

Others…

Total 100

-: Thank You:-

240

Architect


Architect


Address

Int. Name Date:


Kolkata 2 Chennai 4





Section-I

1. We are doing a study on cement industry and hence would like to understand the influences

(your) role for the same. Could you please give me your valuable comments?

a. Scope of cement industry (Could you please give your inputs on the same,

keeping downfall in real-estate / recession, bank lTotaln refusal etc…. in mind)

b. Major Players (Could you please tell me, who are the major players and why are they known

as major player)

241

c. Triggers for selecting a good cement brand….. based on what parameters

d. Barriers in the category due to which you will reject a cement brand

e. Seasonal effect if any….. due to weather condition

f. Role of pricing. (how to define a particular brand as VFM)

g. Influencers/experts role in recommending a cement brand

242

Section-II (Perception of Brand)

2.Could you please tell me, how important a brand name is for you while suggesting a cement

brand? Please rate on a 5 point scale where 5 means “Very important”& 1 means “Not at all

important”

3. Could you please tell me, the reasons for the same.

4. Could you please tell me, what according to you is the difference between national & local brands?

5. Could you please tell me, what according to you are the parameters for recommending local

brands & National Brands?

Local :

National :

6. a. Could you please tell me, according to you which are the top three cement brands? (Write

under Brand 1, Brand 2 and Brand 3)

b. Could you please rate the above three cement brands on the following statements on a 5-

point scale, where „5‟ is “Strongly agree” and „1‟ is “Strongly disagree” based on your

understanding.

Statements Brand 1 Brand 2 Brand3





5 4 3 2 1

243





7. Could you please tell me, the number of years you have been in this

business?



8. Could you please tell me, the type of work handled by you?

Residential 1 Corporate 3

Commercial 2 Large projects 4

9. Could you please tell me, who are your major clients?

10. Could you please tell me, what a company should do so that you recommend their brand to

your clients?

-: Thank You:-

244

PROJECT “CEMENT BRANDING” IHB


Address

Int. Name Date:


Kolkata 2 Chennai 4





Section-I

1. Could you please tell me, when did you construct your house?

1-4 months back 1 9-12 months back 3

5-8 months back 2 More than 12 months back 4

Terminate if coded 4

2. a Could you please tell me, what is the area of the house constructed?

b. Could you please tell me the number of floors in your house?

Q.2a

Area

Q.2b

Number of floors

One 1 Three 3

Two 2 Four 4

Others…

3. Could you please tell me, how did you go about constructing your house?

I planned and hired mason services. 1

I hired a contractor for constructing the house. 2

I assigned the entire project to an architect. 3

245

Others…

4. Could you please tell me, who decided on the cement brand used for the construction work?

Statements Code

I decided which brand to use … 1 Continue


preference…

2 Terminate

I suggested various brands but the final decision was taken by the

other party…

3 Continue

We decided mutually which brand to use… 4 Continue

5.Could you please tell me, according to you, what are the top 3 factors while considering

a cement brand?

1. _______________________________________________________________

2. _______________________________________________________________

3. _______________________________________________________________

6 a. Could you please tell me, which are the cement brands that you considered for constructing

your house?

b. Could you please tell me, which is/are the cement brand/brands that you used for the construction

work?

Brands Q.6a Q.6b

ACC 1 1

Ambuja 2 2

Binani 3 3

Birla 4 4

Buland (Jaypee) 5 5

246



Dalmia 8 8


India Cements 10 10

J.K Laxmi 11 11

KCP 12 12

Lafarge 13 13


Malabaar 15 15

Orient 16 16

Sanghi 17 17


Others…

Others…


c. Could you please tell me, the reason using ……… brand / brands.

Brands Reasons

7.Could you please tell me, according to you which are the top three cement brands and also give

reasons for the same?

Rank Brands Reasons

1

247

2

3

Section-II (Perception of Brand) 8.Could you please tell me, how important a brand name is for you while purchasing cement? Please

rate on a 3 point scale where 3 means “Important”&1 means “Unimportant”



brands?


scale, where „3‟ is “Agree” and „1‟ is “Disagree” based on your understanding.


Statements Brand 1 Brand 2 Brand 3


It is affordable


Important Neither Important

Nor Unimportant

Unimportant

3 2 1

248





12.Now I am going to read out few statements, please rate your agreement level on a 3 point

scale where 3 means “Agree” and 1 is “Disagree”.

Statements Agree Neither Agree

Nor Disagree

Disagree


3 2 1


confused.

3 2 1

I will buy only established brands.

3 2 1


then try it myself.

3 2 1


local brands.

3 2 1



3 2 1

Local brands are cheaper than national

brands.

3 2 1

13. Could you please tell me, according to you, what should a company do to promote its brand?

249

Demographics

14. Could you please tell me, what is your as well as the chief wage earners (CWE) occupation

and education?

-: Thank You:-

Occupation Education SEC

Respondents

CWE

submitted in partial fulfillment of the requirement for...

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