SUMMER TRAINING REPORT

Shree Cement Limited

Market perception of shree Cement In terms of marketing mix

Submitted in partial fulfillment for the Award of Degree of Master of Business Administration

Submitted By :SANAT KUMAR NIMBARK MBA PART- II SESSION-2008-10

Submitted To :MR. MUKESH MACHARA HEAD OF DEPARTMENT

Institute of Information & Management Sciences

7-A, RIICO Institutional Complex, Sitapura, Jaipur- 302 022

PREFACE
The summer training project of management course plays an important role for a management student to develop him into a well groomed professional. It provides him the theoretical concepts and practical exposure in the field of application. Summer training project also provides him an idea of dynamic and versatile professional world as well as an exposure to the intricacies and complexities of the corporate world.

My summer training in SHREE CEMENT LIMITED Jaipur was an eye opening experience to see the level of customer satisfaction among people of the jaipur city & local area

During MBA program I was taught about two dozen subjects which if not applied properly are a simple waste of time. At SHREE CEMENT LMITED I got a

chance to apply management theories to the latest competitive and marketing oriented environment.

In two months of market exposure, I learned a lot of various aspects of organizational structure, departments, sales, communication and their impact. Now I can say one thing that the best way to learn is at work. It was a real interesting experience and I enjoyed every part of it and hope that it would be helpful in my future.

ACKNOWLEDGEMENTS

Successfully accomplished project work and the completion of this report have been made possible by the significant contributions of many people. I would like to express my sincere gratitude towards Mr.Naveen Sharma my organizational guide for giving me the support and encouragement that I needed, and providing many valuable suggestions and insights for my work. I would also like to thank my institutional guide Mr. Mukesh Machra for his support.

Finally, Im grateful to the entire Shree Cement family, for co-operating with me during my work here.

SANAT KUMAR NIMBARK

MBA, Session of 2008-2010 Institute of information & management sciences Jaipur

-: CONTENTS :1 1.1 1.2 1.3 1.3.1 1.4 1.4.1 1.5 1.6 1.6.1 1.7 1.8 1.9 1.10 1.11 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 3 3.1 3.1.1 3.2 3.2.1 3.2.2 3.2.3 3.2.4 4 Industry overview Cement industry in India Major Players in Indian Cement Industry Process Technology Raw Materials for Cement Production Process Stages of Cement Production Types of Cement Scale of Operations Industrial production Exports Policy Initiatives Future Outlook Significant Consolidations Competitor & Environment Analysis PART-2 Company Overview Shree Cement Limited Introduction Vision of SCL Philosophy of SCL Mission of SCL SCL manufacturing units Business & Managerial Challenges for SCL Market of SCL SCLs Brands & Products Strengths of SCL SCLs Manpower profile Key Operational Highlights Recognition and Awards SCL vis--vis Competitors Information Technology at SCL Bangur Cement SCLs Premium Brand Comparison between various cement brands PART-3 Marketing research Classification marketing research Process of marketing research Research methodology Data collection Area covered Data analysis Findings PART-4 Questionnaire Performa of Questionnaire 9 9 10 11 11 11 12 15 17 17 20 22 22 22 24 25 25 26 26 27 27 30 31 32 32 35 36 42 42 46 48 50 53 54 55 56 57 59 60 69 70 71

5.1 5.2 5.3 2.1 2.2 2.3 2.4 2.5 2.6 2.7

Dealer /sub dealer report PART-5 Conclusion Recommendation Bibliography & webliography List of tables Shree- Market Share Market Classification for Shree Cements Ltd. SCL Key Figures SCL figures vis--vis competitors SCLs Variable Cost Comparison with others Power Cost Comparison EBITDA Margin Comparison

72 78 79 81 26 32 42 43 44 45 45

EXECUTIVE SUMMARY
Cement is a key infrastructure industry. It has been decontrolled from price and distribution on 1st March, 1989 and delicensed on 25thJuly, 1991 Moreover it is the material which plays an important role in building not only the colossal structures but also our dreams in the form of our houses, keeping us protected against the changing climate. Our country takes the pride of being the second largest manufacturer of cement in the world preceded by only China. We have constantly been exercising one of the best practices of cement production, giving rise to productivity, quality and efficiency. The cement industry in India is experiencing a boom on account of the overall growth of the Indian economy. The demand for cement, being a derived demand, depends primarily on the industrial activity, real estate business, construction activity, and investment in the infrastructure sector. India is experiencing growth on all these fronts and hence the cement market is flourishing like never before. Indian cement industry is globally competitive because the industry has witnessed healthy trends such as cost control and continuous technology up gradation. It is believed that cement demand in India is expected to grow at 10% annually in the medium term buoyed by housing, infrastructure and corporate capital expenditures.

As mentioned above, the Indian cement industry is the second largest producer of quality cement, which meets global standards. The cement industry comprises more than 50 cement companies with 130 large cement plants with an installed capacity of 156.26 million tonnes and more than 300 mini cement plants with an estimated capacity of 11.10 million tonnes making a total installed capacity of 167.36 million tonnes. Continuous technological upgradation and assimilation of latest technology has been going on in the cement industry. Indian cement industry is modern and uses the latest technology. India is also producing different varieties of cement like Ordinary Portland cement (OPC), Portland Pozzolana cement (PPC), Portland Blast furnace Slag Cement (PBFS), Oil Well Cement, Sulphate Resisting Portland Cement, White Cement, etc. Future growth of the industry is belief to be driven by expected GDP growth of more than 8 percent, growth of the housing sector and the development of roads, ports, airports and other infrastructure. This project is pertaining to explore the market perception of Shree cements brand vis--vis competitors by taking care of all the components of marketing mix. Keeping main objective of the study in mind the survey has been done in jaipur city & local area The methodology of the study contains interacting with distributors and dealers, questioning them around the various attributes of the market to collect the facts about the market scenario of the region and eventually exploring their role in marketing of companys brand For past two months, I have been working as a summer trainee on this project assigned to me . The idea was to study the importance and role of various

factors of the marketing mix in the cement industry in terms of Quality (Product), Price, Promotional activities, Services to the dealer and Dealers profitability. The report also throws light on dealers opinions and preferences when it comes to discounts and benefits offered to them and promotional support provided by company to help dealers. This information is vital to the company in forming its strategy and schemes to increase its market share. To start with an attempt was made to understand and diagnose the prevailing situation of Shrees cement. Carrying out the industry analysis, competitors analysis, channel analysis and SWOT analysis did it. To get the real market scenario, a survey of dealers was conducted to get their perception about the prevailing situation and to find their expectations. According to dealers feedback Quality, Availability and Profit margin are the factors on which Bangur is rated high. A positive relationship was seen between Brand image and Quality of the cement. Along with this there was no significant relationship between the Profit margin and the sales. Survey results confirm that SCL has been able to make a mark in market and perceived to have good quality and also there is a great demand of cement in market. But survey results also shows that despite of above mentioned positive factors it has not been able to make a breakthrough in building its brand name the reason come out to be its low brand awareness (lack of dealer motivation/ meetings/ advertising) and cut-throat in-house brand competition. To increase the brand awareness aggressive promotion need to be carried out ensuring its effectiveness in making a mark, also as survey results confirm that its the dealer/mason/contractor who is the ultimate decision maker in choosing a brand so efforts need to be made to build long term relationship with all these 7

people. Meetings, gifts, and kit distribution are the best tool to ensure masons understanding and satisfaction. As dealer play a prominent role in sale of a brand every possible effort (like training/ plant visit/ additional margin/ sufficient POP material distribution/ grace period of three days for payment) need to be made a strong dealer network.

PART 1 INDUSTRY OVERVIEW

1.1 CEMENT INDUSTRY IN INDIA Cement industry is a capital intensive and cyclical industry. The demand for cement is linked to economic activity, can be categorized into two segments, household construction and infrastructure creation. The Indian Cement Industry today is the second largest in capacity and production with an installed capacity of around 157 mtpa after China. The Indian Industry charted a fast track growth of around 10% per year on an average during the last decade. Demand has shown an upward surge in recent times buoyed by housing sector, infrastructure development, and increase in capital expenditure by corporate and growing retail sector. The cement demand in the country is expected to grow at an annual rate of 8% for the next five years. The Indian cement industry is a mixture of mini and large capacity cement plants, ranging in unit capacity per kiln as low as 10 tonnes per day (tpd) to as high as

7500 tpd. Majority of the production of cement in the country (94%) is by large plants, which are defined as plants having capacity of more than 600 tpd. The Industry faces several bottlenecks in high cost of inputs like fuel and power, high taxes and duties and transportation cost. More than 70% of the input cost in cement manufacture is beyond the control of the industry and is administered by regulatory authorities. These include royalties and cess on limestone, tariff for coal, rail transport and power, duties on finished goods, namely, central excise, local sales tax, octroi, etc. The only areas where industry can induce cost controls and economy are reduction in consumption of inputs like fuel and power through energy efficiency, improved productivity through planned maintenance and reduction of stoppages, etc. The continuous efforts by the industry in these areas have brought in good results. It is noteworthy that the energy consumption by the most efficient cement plants in India at the level of 665 Kcal per kg of clinker and 69 kWh per tonne of cement are comparable with the best achieved in the world.

1.2 Major Players in Indian Cement Industry:

Domestic players: 1.) ACC Limited 2.) Ambuja Cements Limited 3.) Birla Corporation Limited 4.) UltraTech Cement 5.) Binani Cement 6.) Shree Cements Limited 7.) India Cements 8.) J K Cement 9.) Grasim 10.) Jaypee Group 9

11.) Madras Cements 12.) Century Textiles Major foreign players: 1.) Holcim 2.) Lafarge 3.) Italcementi

1.3 PROCESS TECHNOLOGY 1.3.1 Raw Materials for Cement Production

Cement is usually used in mortar or concrete. Here it is mixed with inert material (called aggregate), like sand and coarse rock. Portland cement consists of compounds of lime mixed with oxides like silica, alumina and iron oxide. There are three major raw materials for cement: 1.) Limestone Limestone is the main raw material and is the source of calcium carbonate. Calcium carbonate is burnt to obtain calcium oxide (CaO). The other sources of calcium carbonate are marl, chalk, seashell and coral reef. Limestone is the most abundant source of CaO. The other user industries for limestone are iron & steel, fertilizer and chemicals. Cement is the biggest limestone user in India accounting for over 75-80% of limestone produced in India. The composition of limestone used by the various sectors varies. For cement, the CaO content of limestone should be a minimum of 44%. Typically, 1.4-1.5 tonnes of limestone are required per tonne of clinker. Thus, for a 1 million tonne cement plant, assured availability of cement grade limestone reserves of the order of 5060 mt in the close vicinity is important. 10

2.) Gypsum Gypsum is used as a retarding agent. Ground clinker, on contact with water, tends to set instantaneously because of the very fast reaction between tricalcium aluminates and water. In the presence of gypsum, the desired setting time can be achieved. Gypsum is added to the extent of 5% during the clinker grinding stage. Gypsum is naturally available in abundance in Rajasthan, Gujarat and Tamilnadu. 3.) Granulated Blast Furnace Slag (GBFS) and Fly Ash The other raw materials that are also used in the manufacture of cement are blast furnace slag (a waste product obtained from iron-smelting furnaces) and fly ash (leftover ash from a thermal power station). Limestone contains about 52% of lime and about 80% of this lime is lost during ignition of the raw materials. Similarly, Clay contributes about 57% silica of which about 25% is lost during ignition. GBFS is obtained by granulation of slag obtained as a by-product during the manufacture of steel. It is a complex calcium aluminium silicate and has latent hydraulic properties. That is why it is used in the manufacture of Portland blast furnace slag cement.

1.4 PROCESS 1.4.1 Stag es of Cement Production

There are seven stages of cement production at a cement plant: 1. Procurement of raw materials 2. Raw Milling - preparation of raw materials for the pyroprocessing system 3. Pyroprocessing - pyroprocessing raw materials to form cement clinker 4. Cooling of cement clinker 11

5. Storage of cement clinker 6. Finish Milling 7. Packing and loading

Figure 1.1: Cement manufacturing from the quarrying of limestone to the bagging of cement

While adding fresh capacities, the cement manufacturers are very conscious of the technology used. In cement production, raw materials preparation involves primary and secondary crushing of the quarried material, drying the material (for use in the dry process) or undertaking a further raw grinding through either wet or dry processes, and blending the materials. Clinker production is the most energy-intensive step, accounting for about 80% of the energy used in cement production. Produced by burning a mixture of 12

materials, mainly limestone, silicon oxides, aluminium, and iron oxides, clinker is made by one of two production processes: wet or dry; these terms refer to the grinding processes although other configurations and mixed forms (semi-wet, semi-dry) exist for both types. In the dry process, the raw materials are ground, mixed, and fed into the kiln in their dry state. In the wet process, the crushed and proportioned materials are ground with water, mixed, and fed into the kiln in the form of slurry. The choice among different processes is dictated by the characteristics and availability of raw materials. For example, a wet process may be necessary for raw materials with high moisture content (greater than 15%) or for certain chalks and alloys that can best be processed as a slurry. The dry process is the more modern and energy-efficient configuration. In general, the dry process is much more energy efficient than the wet process, and the semi-wet somewhat more energy efficient than the semi-dry process. The semi-dry process has never played an important role in Indian cement production and accounts for less than 0.2% of total production. In 1960, around 94% of the cement plants in India used wet process kilns. These kilns have been phased out over the past 46 years and at present, 96.3% of the kilns are dry process, 3% are wet, and only 1% are semidry process. Dry process kilns are typically larger, with capacities in India ranging from 300- 8,000 tonnes per day or tpd (average of 2,880 tpd). While capacities in semi-dry kilns do range from 600-1,200 tpd (average 521 tpd), capacities in wet process kilns range from 200-750 tpd (average 425 tpd). Over the last decade, increased preference is being given to the energy efficient dry process technology so as to obtain a cost advantage in a competitive market. Moreover, since the initiation of the decontrol process, many manufactures have switched over from the wet technology to the dry technology by making suitable 13

modifications in their plants. Due to new, even more efficient technologies, the wet process is expected to be completely phased out in the near future. Due to the dominant use of carbon intensive fuels such as coal in clinker making, the cement industry has been a major source of carbon dioxide (CO2) emissions. Besides energy consumption, the clinker making process also emits CO2 due to the calcining process.

1.5 TYPES OF CEMENT

There are different varieties of cement based on different compositions according to specific end uses, namely, Ordinary Portland Cement, Portland Pozzolana Cement, White Cement, Portland Blast Furnace Slag Cement and Specialised Cement. The basic difference lies in the percentage of clinker used. 1.) Ordinary Portland Cement (OPC): OPC, popularly known as grey cement, has 95 per cent clinker and 5 per cent gypsum and other materials. It accounts for 70 per cent of the total consumption. 2.) Portland Pozzolana Cement (PPC): PPC has 80 per cent clinker, 15 per cent Pozzolana and 5 per cent gypsum and accounts for 18 per cent of the total cement consumption. It is manufactured because it uses fly ash/burnt clay/coal waste as the main ingredient. 3.) White Cement: White cement is basically OPC - clinker using fuel oil (instead of coal) with iron oxide content below 0.4 per cent to ensure whiteness. A special cooling technique is used in its production. It is used to enhance aesthetic value in tiles and flooring. White cement is much more expensive than grey cement. 14

4.) Portland Blast Furnace Slag Cement (PBFSC): PBFSC consists of 45 per cent clinker, 50 per cent blast furnace slag and 5 per cent gypsum and accounts for 10 per cent of the total cement consumed. It has a heat of hydration even lower than PPC and is generally used in the construction of dams and similar massive constructions.

5.) Specialised Cement: Oil Well Cement is made from clinker with special additives to prevent any porosity. 6.) Rapid Hardening Portland cement: Rapid Hardening Portland Cement is similar to OPC, except that it is ground much finer, so that on casting, the compressible strength increases rapidly. 7.) Water Proof Cement: Water Proof Cement is similar to OPC, with a small portion of calcium stearate or non- saponifiable oil to impart waterproofing properties. 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 Portland variety of cement is the most common one among the types of cement in India and is produced from gypsum and clinker. 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 15

country is very less for it is very expensive in comparison to grey cement. In India, while 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.

1.6 SCALE OF OPERATIONS

The cement industry has witnessed a significant change in the scale of operations. In 1961, the largest kiln in operation had a capacity of 750 tpd. In 1970, of the total 119 kilns, 1 had over 1,000 tpd capacity, with 55 having less than 400 tpd capacity. In 1980, 11 of the total 141 kilns were over the 1000 tpd mark, with 1 kiln having a capacity larger than 3,000 tpd (roughly 1 mtpa). The 1990s saw still higher capacity 4500-5000 tpd (or 1.5 mtpa) kilns. The recent practice for a large size plant is to have 6,500-7,000 tpd (or 2.5 mtpa) capacity.

1.6.1 Industrial production:

The cement industry is enhancing its production levels as new homes and offices are being built, and in keeping with the economys annual growth rate. According to the Cement Manufacturers Association, the overall cement production rose by 8.11 per cent during 2007-08 to 168.29 million tonnes (mt) as against 155.66 mt in 2006-07.

Table 1.1 : Statistics

Cement 2006-07 (Apr-Mar) (million tonnes) 2007-2008

16

(a) (b) (c) (d)

Production Dispatches (Including Export) Export Cap. Uti. (%)

155.66 155.26 3.65 96

168.31 167.67 5.89 94

Source: Cement Manufacturers Association

PRODUCTION CEMENT

SITES

OF

VARIOUS

BRANDS

OF

BRAND NAME
Shree Bangur Cemento Ambuja Binani Ultra Tack Birla Chetak Birla Uttam J.K. Laxmi

PRODUCTION SITE
Beawer Distt. Ajmer Rass Distt. Pali. Jetaran Rass Distt. Pali. Jetaran Rabriyawas Distt. Pali. Jeteran Pindwada Distt. Sirohi Shambhupura Distt. Chittorgarh Chittorgarh Modak Distt. Kota Banas Distt.Sirohi
17

J.K. Super ACC

Nimbaheda Distt. Chittorgarh Lakheri, Distt. Bundi

Table 1.2: Production and growth rates

Month

CEMENT PRODUCTION Production (Thousand Tonnes) 2005-06 12240 12630 12010 11160 11160 10845 12218 11599 12968 13571 12757 14650 2006-07 13730 13490 13410 12720 11480 12630 13370 12970 14010 14550 13500 15450 2007-08 14520 14820 14220 13910 13400 13310 14370 13650 14630 15360 15230 16890

April May June July August September October November December January February March Cumulative Total (AprMar) 147808 161310 174310 Source : Department of Industrial Policy & Promotion

Weight: 1.99% Growth Rates (%) 05-06 to 06-07 to 06-07 07-08 12.2 5.8 6.8 9.9 11.7 6.0 14.0 9.4 2.9 16.7 16.5 5.4 9.4 7.5 11.8 5.2 8.0 4.4 7.2 5.6 5.8 12.8 5.5 9.3 9.1 8.1

18

Figure 1.2: Growth rate (%) in Cement Production

1.7 EXPORTS

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The export of Indian cement has increased over the years, giving a boost to the Indian cement industry. The demand for cement in the foreign countries is a derived demand, for it depends on industrial activity, real estate, and construction activity. The cement industry in India has around 300 mini cement plants and 130 large cement plants. The total production capacity of these plants is around 167.36 million tons. The India 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. This has given a major boost to the Indian export of cement. The production of cement in India is not only able to meet the domestic demand, but large amounts are also exported. A fair amount of clinker and cement byproducts are also exported by India. As the quality of Indian cement is very good, its demand in the international market is always high. In 2001-2002, 3.38 million tons of cement was exported from India. That figure stood at 3.47 million tons in 2002-03, and 3.36 million tons in 2003-04. In 20012002, 1.76 million tons of clinker was exported from India. In 2002- 2003 clinker exports amounted to 3.45 million tons, and in 2003- 2004 the figure stood at 5.64 million tons. This shows that the export of Indian cement has been increasing at a steady pace over the years. Export of India cement has been mostly to the West Asian countries. The major companies exporting Indian cement are: Gujarat Ambuja Ultra Tech Cement Aditya Cement

Export of Indian cement has registered growth a fair amount of growth, giving a boost to the Indian economy. That it continues to rise, more efforts must be made by the cement industry in India and the government of India.

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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. By a fair estimate, there are around 11 different types of cement that are being produced in India. The production of all these cement varieties is according to the specifications of the BIS.

1.8 POLICY INITIATIVES

FDI Policy: the cement sector has been gradually liberalized. 100 per cent FDI is now permitted in the cement industry.

1.9 FUTURE OUTLOOK

Considering an expected production and consumption growth of 9 to 10 per cent, the demand-supply position of the cement industry is expected to improve from 2008-09 onwards, resulting in an expected price stabilization. The cement industry is poised to add 111 million tones of annual capacity by the end of 200910 (FY 10), riding on the back of an estimated 141 outstanding cement projects.

1.10 SIGNIFICANT CONSOLIDATIONS

As discussed earlier in this report, the cement industry is witnessing a number of Mergers & Acquisitions (M&As). The extent of concentration in the industry has increased over the years.

21

This concentration is mainly because of the focus of the larger and the more efficient units to consolidate their operations by restructuring their business and taking over relatively weaker units. The relatively smaller and weaker units are finding it difficult to withstand the cyclical pressure of the cement industry. Some of the key benefits accruing to the acquiring companies from these acquisition deals include: Economies of scale resulting from the larger size of operations Savings in the time and cost required to set up a new unit Access to new markets Access to special facilities / features of the acquired company Benefits of tax shelter.

The relative market share of large players in the cement industry has changed significantly over the years. Consolidation of capacities has seen UltraTech, Grasim, India Cement and Gujarat Ambuja emerging as the leading players in India apart from ACC, which has been the market leader during all the years excepting FY2001. All the players have resorted to a combination of Greenfield capacities as well as takeover of existing capacities for growth. Some examples of the consolidation witnessed among domestic players in the recent past include: Gujarat Ambuja taking a stake of 14 per cent in ACC Gujarat Ambuja taking over DLF Cements and Modi Cement. ACC taking over IDCOL India Cement taking over Raasi Cement and Sri Vishnu Cement Grasim's acquisition of the cement business of L&T Grasim taking over Indian Rayon's cement division. Grasim taking over Sri Digvijay Cements. L&T taking over Narmada Cements 22

1.11 Competitor & Environment Analysis PORTERS MODEL

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Figure 1.3: Porters model

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PART 2 COMPANY OVERVIEW Shree Cement Limited

2.1 INTRODUCTION
Being among the top ten cement producers in the country Shree Cement Limited (SCL) enjoys a market share of about 16 per cent in Northern region of India. Over the years, Shree Cement has built an identity as one of the worlds most efficient cement manufacturers. First of all, its production has been consistently in excess of its rated capacity. Secondly companys per tonne energy consumption is one of the lowest in the world. And also it has a unique distinction of operating both its cement as well as captive power plant on alternative fuel.

Table 2.1: Shree- Market Share

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The BG Bangur family is the principal promoter of Shree Cement. Mr. H. M. Bangur is the Managing Director while Mr. M. K. Singhi is the current executive director of Shree Cement. It is located at Beawar, in Ajmer district 185 Kms. from Jaipur off the Delhi-Ahmedabad highway.

2.2 Vision of SCL

To register a strong consumer surplus through a superior cement quality at affordable prices.

2.3 Philosophy of SCL

Shree Cement is guided by the philosophy that productivity will lead to profitability which ultimately will lead to the prosperity of the region and all concerned with SCL.

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2.4 Mission of SCL

The mission of the organization is highlighted by the following. To sustain its reputation as the most efficient cement manufacture in the world. To strengthen realizations through intelligent brand building. To drive down cost through innovative plant practices. To increase the awareness of superior product quality through a realistic and convincing communications process with consumers.

2.5 SCL manufacturing units

Presently Shree Cements has three units. Two units are at Beawer (incorporated in 1979 and1997) and third unit is at Ras (Started in 2005). Fourth unit at Ras has been started in March 2007 and another two units at Ras and Khushkhera near Alwar are also started to enhance the capacity of the company to 10 mtpa from the present figure of 6 mtpa by the year 2010. The proximity to Delhi, Jaipur and Haryana, which are the most lucrative markets in the region, makes it a strategic location.

UNIT-1 Incorporated in 1979. Put up in 1985. Cement Production (Expected Production) 1.20 million tonnes

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UNIT-2 Put up in 1997. Cement Production (Expected Production) 2.10 million tonnes UNIT 3 Incorporated in 2005 Cement Production (Expected Production) 1.50 million tonnes UNIT 4 Incorporated in March 2007 Cement Production (Expected Production) 1.50 million tonnes UNIT - 5 Started in Ras, Unit 6 Grinding unit at Kuskhera in Rajasthan.

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Figure 2.1: SCL Production vis--vis Market Share in Northern Region

The growth of companys market share is going hand in and with its production, supporting its cyclical business model of produce more-sell more-reinvestment more. Capacity enhancement at SCL has also been considerable from its 0.6 mtpa in 1985 growing 10 times to 6 mtpa presently and is projected to touch a figure of 10 mtpa by 2010.

29

Figure 2.2: Per Annum Capacity Enhancement at SCL.

2.6 Business & Managerial Challenges for SCL

Cement market for SCL is highly competitive with major competitors having advantage of brand equity, capacity and early movers. The major competitors are Binani, Birla (with products like Birla Super and Birla Chetak), Grasim (with products like Vikram and Birla Plus), Gujarat Ambuja, JK (with products like JK Nimbahera), Laxmi, Mangalam (with products like Mangalam and Birla Uttam), ACC, DCM Shriram, L & T and Kamdhenu. Each of these players has their dominance across whole Rajasthan in addition to their respective regional dominance.

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Another issue is that the product (cement) cannot be differentiated clearly on the basis of quality and hence, cost plays one of the most important roles in this industry. If the company can control cost of manufacturing & distribution, then only would profitability of the company increase. Logistics is the most important cost associated with cement industry. This is the single most important reason for strong dominance of all cement companies in the regions around their factory. But if this system can be improved upon, and costs can be managed, then Shree Cements Ltd. can strengthen their hold in present states of distribution as well as look forward to gaining foothold in newer and farther regions.

2.7 Market of SCL

Each cement manufacturer has a primary and secondary market. The former is one, which is the closest to the production centre where it fetches the best realizations while the latter is usually at a distance where realizations are lower. Table 2.2: Market Classification for Shree Cements Ltd.

SCL with a market share of 16% has the second largest market presence in the northern region, next only to the Gujarat Ambuja Cement and ACC combined. SCL positioning within Rajasthan (in the north of the state) makes it the closest among all Rajasthan manufacturers to the lucrative markets of Delhi, Haryana 31

and some parts of Punjab, giving it a significant edge in transport costs. The other cement units are located further down, at distances ranging from 150- 200 kilometres. Shree Cements is one of the largest cement companies in North region having existing capacity of 5.5mn tonnes of cement per annum located in central Rajasthan. The company primarily caters to Rajasthan, Punjab, Haryana, Delhi and Uttranchal in the Northern region and Uttar Pradesh in Central region. Rajasthan accounts for approximately 30% of the company's sales while Delhi and Haryana together account for approximately 40% of sales.

2.8 SCLs Brands & Products

Shree manufactures: Ordinary Portland Cement (OPC) Red Oxide Cement (ROC) Its output is marketed under the Shree Ultra Ordinary Portland Cement and Shree Ultra Red Oxide Cement brand names. The product today constitutes almost 37% of SCLs sales. Under its premium products category, SCL has launched Bangur Cement Dec. 2005 and a new brand Tuff Cemento 3556 has been introduced in the market in April 2007. The company positioned its brands around longer life (durability), emphasizing product longevity.

2.9 Strengths of SCL

1.) Low Cost Producer: SCL is one of the lowest cost producers of cement in India. The prime reasons behind this are captive power plants, use of pet coke in both captive power plant and kiln and proximity to the markets. 32

2.) Limestone Reserve: SCL has a total of 700 mn tones of limestone reserve which would be sufficient to meet its requirements for the next 40 years. Shree Cement's third unit is located at the pithead of limestone reserve unlike the other two units in Beawar, Rajasthan. Unit IV, which is expected to be commissioned in FY08, would also be located at the pithead of company's limestone reserve. As the new plants are located at the pithead of limestone reserve, the raw material cost per ton of cement is expected to go down as the company would be saving in cost of transportation. 3.) Captive Power Plants: During FY05, the company sourced 99% of power requirement from its captive power plant. The company has existing power plant capacity of 42 MW. The company is installing additional power plant of 18 MW capacities, which would supply power to its new cement units, thereby ensuring continuation of self sufficiency in terms of power requirement. Shree Cement's power usages per ton of cement at 75 Kwh is amongst the lowest in the industry. The company uses low cost pet coke in both its power plants and kiln. Pet coke is not only cheaper compared to the imported coke but also has high calorific values thereby reducing the overall cost. 4.) Strong sales network of 28 sales offices, 1200 dealers and 4000 retailers. 5.) Progressive Management: Shree Cement supplemented its attractively low capital investment per tonne with one of the lowest manufacturing costs in the Indian cement industry. The path of sustainable growth has been made possible because of management strategy of taking triple bottom-line approach of Economic, Environmental and Social performance listed below:

33

Figure 2.3: Progressive Management

6.) Mining: Limestone being the predominant raw material, Shree Cement plants are situated near limestone quarry fields. To minimize the transportation cost, Shree Cements has leased two mines one at Beawer and other at Ras with reserves that will last for a long time. The Ras mines give a limestone of very good quality which is easier to process.

34

Figure 2.4: SCL Captive Power Generation

2.10 SCLs Manpower profile

Well experienced and skilled manpower resources capable of handling both project implementation and operations. The skill enhancement is a regular exercise under a well defined training manual. 35

Company imparts more than 20,000 hours of in-house training to its employees every year

Figure 2.5: Manpower profile at SCL

2.11 Key Operational Highlights

The cost of production of the Company is one of the lowest in India Operating profit margin is highest in World Cement Industry 100% self sufficiency in meeting power requirement 100% self dependent on limestone sourcing Consistent dividend paying company (2005-06: 50%) Recognized as one of the most Energy Efficient units in India Fastest growing cement company in India (capacity more than trebling in 3 years from 26 LTPA in 2004-05 to 95 LTPA in 2008-09) Strong brand image Bangur Cement, Shree Ultra Red Oxide Cement and Shree Ultra Ordinary Portland Cement have high consumer recall.

36

New super premium brand Tuff Cemento produced with German technology has a lot of expectations.

Initiatives for global warming reduction Pioneered in the application of innovative Electro static precipitator technology in Dg power generation to save fuel and combat pollution, and replaced HSD by LDO. Achieved unity power factor In electrical distribution system to reduce maximum demand, and transmission / distribution losses Partial utilization of waste heat For 3 MW power generation. Initiator in the use of pet coke for power generation in India 36 MW captive thermal power plant under commissioning to generate quality power for the plant, avoid transmission and distribution losses, and provide surplus power to Rajas than. SAVINGS: Rs 496.46 Million pa Development of DD cones In house development of deduiling cones cyclones resulting in reduction in pressure drop, higher outputs and lower energy consumption.

Single roller press for tow Ball Mills

Capacity enhancement & utilization of CM 2 Roller press for capacity increase and energy saving increase CM 1, Energy saving 2.02 KWH / The Objective, CSI (Cement sustainability initiative) 37

1. The purpose of the Cement Sustainability Initiative is to: 2. Explore what sustainable development means for the participating companies and the cement industry. 3. Identify and facilitate actions that companies can take as a group and individually to accelerate the move towards sustainable development. 4. Provide a framework through which other cement companies can participate, and 5. Provide a framework for engaging external stakeholders. Agenda, CSI The 10 companies involved in the CSI have chosen to develop an agenda for three reasons: To prepare for a sustainable future by making a more efficient use of natural resources and energy, and engaging with lock issues increase emerging market To meet the expectations of stakeholders and maintain their license to operate increase communities across the world through a greater transparency of operations effective engagement with society and initiating action, which lead to sustained positive changes, and To individually understand and build new market opportunities through process innovation, which achieve greater resource/ energy efficiency and long term coos savings; product and service innovation to reduce environment impacts and work with other industries on novel uses of product and waste material in cement production. The companies have identified six key areas where they believe that the CSI can make a significant contribution towards a more sustainable society: Climate protection. Fuels and raw materials. Employee health and safety. Emissions reduction. Local impacts. Internal business processes.

38

Productivity
Shree Cement supplemented its attractively low capital investment per tonne with one of the lowest manufacturing costs in the Indian cement industry. Timely execution of Unit-III along with better price realization and cost optimization measures made the year a hallmark for the Company:-

The turnover of the Company has more than doubled during the year. The operating profit margin of the Company at 44.84% is highest in the Indian cement industry. The proportion of blended cement in the total production has increased to 76% in the current year against 54% in the previous year. Company started use of wet fly ash for producing blended cement which is economical and environment friendly. The capacity utilization level of the Company further improved during the year from 114% to 116% with Unit-III recording 99% in its very first full year of operation. This compares well with the all India average of 94%. Continued thrust on improving energy consumption levels has brought down power and fuel consumption as under:

39

Although Power consumption for the year indicates marginal increase during the year, the unit-wise consumption has gone down from last year. The

Reduction in energy consumption with increasing production base has significantly contributed to cost efficiency of the Company.

Dynamic and efficient logistic management practices have enabled Company to contain increase in freight cost in spite of rising diesel prices and loading restrictions on trucks. Company has made optimal use of its in-house railway sidings facility with appropriate route plan to limit freight cost. The Company's marketing strategy of maintaining multiple brands competing with each other with a view to garner increased market share has yield good returns. As a result,

Company has retained market leadership status in Rajasthan and Delhi.

40

Jung Rodhak brand has further strengthened its presence in its segment in the North India market.

Bangur Cement launched last year in the premium quality segment, has been well received in the market and has been improving its market share. Its marketing strategy of appointment of Business associates and Business partners has enabled the Company to keep its debtors levels at zero and minimizing the Working Capital requirement.

Company has introduced another premium quality brand Tuff Cemento 3556. The new brand has started attracting customers attention and is getting good response.

The proportion of trade sale to total sale increased during the year from 66% to 74% showing higher customer recall and satisfaction. The Company continued with its highest credit rating of PR1+ for its short-term debt and AA for its long-term debt enabling containment of its cost of funds despite large borrowing requirements for its capital expenditure programme The interest cost has been kept at a low level in the rising interest rate environment through optimal utilization of funds and judicious mix of rupee and fully hedged foreign currency borrowings.

Timely execution of projects is a hallmark of the Company. The 1.5 MTPA capacity expansion with captive power plant of 18 x 3 MW completed in Feb 08 has been achieved well within the targets both time and budget.

During the year Company has undertaken implementation of an Enterprise Resource Planning (ERP) Project with Oracle E-Business Suite to manage its expanding business operations. ERP Project shall help it in improving its business matrices by process optimization, improving logistics and integration across disciplines. The project is expected to be operational in FY 2008-09.

41

Table 2.3: SCL Key Figures

2.12 Recognition and Awards

Whitehopleman UK - International Cement Consultants have consistently maintained 4 star rating for Shree since 2000 (No one in the world has been assigned a 5 star rating!!) Excellence in Energy Management Award 2006 from Confederation of Indian Industry for the second time National Awards for Energy Conservation and Best Thermal and Electrical Energy from Ministry of Power, Govt of India National Safety Awards by Ministry of Labour, Govt. of India ICWAI National award 2005 for excellence in cost management Golden Peacock Award-2006 &2008 in recognition of its excellent Environment Management practices

2.13 SCL vis--vis Competitors

SCL has been omnipresent in the performance with various achievements within a short period of time. Following figures suggests that it has been doing the best job among its peers in terms of high capacity utilization, low power consumption, low power generation cost, and low fuel consumption ratio.

42

Table 2.4: SCL figures vis--vis competitors

It has also been encountering the lowest Variable Cost in its peer group because of its constant efforts in saving cost of power and fuel consumption which is not only the lowest but is approx. 75% of the average of other players. Freight and selling expenses of for SCL is also the lowest amongst all.

43

Table 2.5: SCLs Variable Cost Comparison with others

SCLs ability to produce cement with lowest power consumption and other low costs of production and raw material procurement has resulted into the top EBITDA Margin figures for SCL amongst all its competitors.

44

Figure 2.6: Power Cost Comparison

Figure 2.7: EBITDA Margin Comparison

45

2.14 Information Technology at SCL SCL has embraced Information Technology in a big manner and made investments to establish strong IT infrastructure: IT Policy & Quality Standards: SCL has clearly defined IT policy. Backup and Disaster Recovery Policy, SCL Internet/Network Access Policy and Business Continuity Plans have been endorsed and religiously implemented. SUMriddhi - Shree Enterprise Resource Planning: The Shree ERP programme, christened SUMriddhi, was developed deploying Oracle 9i RDBMS and Developer 2000 platform. A comprehensive ERP program was designed to integrate all functional modules, namely Financial Accounting & Costing (FA), Material Management (MM), Personnel and Payroll (PP), Laboratory and Quality Control, Integrated Management System (IMS) and Raw Material Procurement (RMP) with the objective to make operations online. The company expects to implement ERP live across the organisation in 2004-05. Online operations of Sales and Distribution: Company successfully implemented the computerization of its sales and distribution functions by integrating all branches/dealers through a secured connectivity with the plant for online order processing. In the second phase, necessary enhancements will make the system work in a centralized manner using dedicated and secure Virtual Private Network (VPN) across its branch/dealer network. SCLs IT Infrastructure: The Company has a scalable, state-of-the-art IT network infrastructure, with optic fibre cable-based gigabit backbone, high-end layer 3 switches, Cisco routers and IBM corporate-computing servers. Shree has a secure network across its corporate and site locations with e-trust firewall 46

supplemented with intrusion detection system and Active Virus Defense Solution from Network Associates. The organisation is provided with the latest computing tools in hardware and software. SCLs corporate website: The Company launched its content-exhaustive corporate website shreecement.com on 1 August 2003. The portal is dynamic, informative and user-friendly with a menu-driven interface. The website contains the latest information about the company with news flashes and a photo gallery. The website is e-commerce enabled, which provides access to customers on their latest account statement and vendors/ suppliers on order positions for the eprocurement program. E-Procurement: Shree implemented an e-procurement programme to facilitate purchases through the reverse auction process to maximize price benefits and transparency. Paperless office: Shree is moving towards the ultimate goal of achieving a paperless office environment through a widespread use of e-mails and instant messaging for daily communication across all its offices. A program was undertaken for storing and cataloguing the huge archive of blueprints of technical drawings in a digitised form for instant accessibility. Raw material procurement: The entire raw material procurement operation was integrated with SUMriddhi - Shree ERP, to increase efficiency and control. Training: Shree is committed to enhance the IT skills of not only employees across all functions but their family members as well. As a result, training is an ongoing process and more than 200 personnel were imparted training across departments.

47

 Online Knowledge management: Shree has launched a platform for sharing knowledge across the enterprise. A knowledge management tool was developed and implemented through which people across all levels can contribute and share achievements, domain expertise, social and cultural ideas. This also provides a public folder for up-to-date information on the cement industry and the company. Network Security: SCL network is protected by the high end e-Trust Firewall from Computer Associates and Network Associates Intrusion Detection System (IDS). SCL has implemented Network Associates Active Virus Defence for virus protection and SPAM control. All network resources are protected by adopting strong password policies. SCL has enforced three-layer security for all data and information systems.

2.15 Bangur Cement SCLs Premium Brand

Bangur cement started with a vision to be the most effective and efficient cement brand of the country. As in Bangur cement, SCL aimed at providing the best quality cement that ensures customer satisfaction. The Bangur cement is advertised with a tagline saying The best, not inexpensive. To serve the fast growing National Capital Region (NCR) with immediate and prompt services, Bangur cement is establishing a grinding capacity at Khuskhera in Alwar District of Rajasthan, which is just 80 kms away from the capital. Excelling in the quality, price, availability and packaging of the product, SCL aspires to be the first choice of the consumers. The Bangur cement plant is one

48

of the most modern and sophisticated plants in the India equipped with state-ofthe-art German Technology.

Following factors makes Bangur cement, the SCLs premium brand: Best Quality of Lime Stone: The Ras belt is among the finest quality limestone deposits in India. Importantly, it is a single source of limestone belt where all necessary ingredients of cement are available in limestone and there is no dependency on outside sources, thus enabling consistency in quality. Better Quality Control, Clinkerisation and superior cement grinding makes the quality of the brand one of the best in the industry. State-of-the-art technology: The plant has been set up in the technical collaboration with internationally acclaimed German cement manufacturer. In line with its marketing strategy, Bangur cement realized sales predominantly in the trade segment. The brand contribution to more then 40% of the trade sale of the company, registering 14.20 Lac MT sales out of the total of 35.92 Lac MT .In fact , trade sales accounted for 95% of total sales of BANGUR CEMENT while non trade sales was just 5%. BANGUR CEMENT registered its 55% sales of its total sales in its home market, Rajasthan. By selling within a smaller radius, the company was able to notch higher net realization because of lower logistics.

MARKET SHARES: - Rajasthan-9%, Haryana-6%, Delhi-4%.

49

2.16 COMPARISON OF POTENTIALITY

OF VARIOUS CEMENT BRANDS

COMPARISON OF POTENTIALITY OF VARIOUS CEMENT BRANDS IN RAJASTHAN

BRAND NAME AMBUJA ULTRA-TACH BINANI BANGUR SHREE ULTRA TUFF CEMENTO J.K.LAXMI ACC MANGLAM BIRLA CHETAK J.K.SUPER SHREE RAM

SALES (IN MATRIC TONES) 121000 145000 103000 55000 100000 40000 83000 17000 40000 81000 65000 6000

50

COMPARISON OF POTENTIALITY OF VARIOUS CEMENT BRANDS IN RAJASTHAN (IN TRADE)

BRAND NAME SALES (IN MATRIC TONES) JAIPUR DISTRICT AMBUJA ULTRA-TACH BINANI BANGUR SHREE ULTRA TUFF CEMENTO J.K.LAXMI ACC BIRLA UTTAM BIRLA CHETAK J.K.SUPER 25000 26000 12000 6500 8500 4500 7500 4500 4000 5000 6500 JAIPUR LOCAL 17000 14000 10000 4000 7500 3000 5500 3000 3000 3000 5000

51

Figure 2.8 COMPARISON OF POTENTIALITY OF VARIOUS CEMENT BRANDS IN RAJASTHAN (IN TRADE)

30000 25000 20000 15000 10000 5000 0

A U MB LT U J R A- A TA C H BI N BA AN SH I N G R TU EE UR FF UL T C EM RA EN TO J. K. LA XM I BI AC R L BI A U C R LA TT C AM H ET J. K. AK SU PE R

JAIPUR DISTRICT

JAIPUR LOCAL

52

PART-3 MARKET RESEARCH

3 MARKETING RESEARCH
Marketing research in the systematic gathering, recording and analyzing of data about problems connected with the market place i.e. H.Ps in order to find justified solutions for the problem.

IMPORTANCE
Consumer oriented marketing. Effective managerial decision. Identification of opportunities. Reduces risk. Stimulates sales. Assessment of real image of company. Integrating the company and consumer interest.

53

3.1 CLASSIFICATION OF MARKETING REASEARCH

1. Research on consumer Studying consumer tastes, reactions and brand preference. Customer satisfaction study. 2. Research on market Study on market size / potential / market growth. Study on market segment. Detailed market surveys. 3. Research on distribution: Measuring dealer reaction to the company and its products and services. Distribution cost Analysis. 4. Research on advertising effectiveness. Studies on advertising effectiveness. Studies on media. Assessing and effectiveness and ad impact. Studies on sales promotion effectiveness.

54

3.1.1 PROCESS OF MARKETING RESEARCH

PROBLEM FORMULATION

DETERMINATION OF RESEARCH OBJECTIVE

PLANNING AND CONDUCT FORMAL INVESTIGATION

COLLECTION OF PRIMARY DATA

DATA PROCESSING ANALYSIS AND INTERPRETATION

REPORT WRITING

FOLLOW UP

55

3.2 RESEARCH METHODOLOGY

3.2 RESEARCH METHODOLOGY

Research definition: Research is a process of systematic and in depth study or search for any particular topic, subject by collection, compilation, presentation and interpretation of relevant details or data. Research refers to a search of knowledge. It is a scientific and systematic search for pertinent information on a specific topic. It is an art of scientific investigation. Movement from known to unknown. Voyage of discovery.

Original contribution to the existing socks of knowledge making for its advancement. The main aim of the project was to find out the market share of SCL and its customers with respect to Jaipur (Rajasthan). The opinions of the customers were taken by visiting various places and information was collected from the customers.

3.2.1 DATA COLLECTION:

56

Data collection is the heart of all marketing research. It is an elaborate process through which the researcher makes a planned search for all relevant data and gathers the entire data required for the assignment.

Primary data source:

1. Observation 2. Interview: 3. Questionnaire: The project was started from the questionnaire. The questions are asked to respondents about their experiences towards SCLS Brands and other competitors. The survey was conducted to know the market potential and market share for two-wheeler segment. Questionnaire contains both open ended and close-ended question.

Secondary data source:

1. Internet: For this purpose different web sites have been used some of those are: www.google.com www.shreecement.com 2. Newspapers 3. Reference book-

Sampling method: 57

1. Probability / random sampling method 2. Non-probability sampling method For research purpose of project researcher selected the probability sampling. The population for our project was very large; it was not possible to meet every one so researcher select simple random sampling. Researcher had covered the Jaipur city.

Sample size: As considering the coverage of researcher takes the sample size as about 150 dealers and divided this sample in equal strength to give same weight age for all area

Statistical technique used: Here I have used Bar chart & pie chart

Scaling technique used: For this purpose I have used different response of the customers like excellent, satisfied, Not Satisfied. Other response is Good, Poor, Cant say.

Excellent Very Good

Good

Poor

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3.2.2 AREAS COVERED

Any study that is conducted has a scope. The scope here signifies the geographical limits within which the study will be carried discrepancies in the study due to a large number of extraneous variables in the area. The market survey was conducted on the dealers, sub-dealers of cement brands to measure the most potential brand in jaipur territory. The study was under SCLS BRANDS jaipur. The geographical scope of my study was limited to the area of jaipur territory where by different area were covered. Mansarovar Jagatpura Pratap Nagar Prithviraj Nagar C-scheme Vidhyadhar Nagar Sirsi road

59

3.2.3 DATA ANALYSIS

Q.1 Name the current cement brands you are aware of? AWARENESS

100 80 60 40 20 0

90 85 85 80 80 65 40 40 30 30 30

AWARENESS ULTRA-TECH SHREE ULTRA ACC J.K.SUPER BINANI TUFF CEMENTO BIRLA UTTAM

AMBUJA BANGUR J.K.LAXMI BIRLA CHETAK

During the period of survey we interviewed 140 entrepreneurs doing small and big business in respect to cement, we come to know that out of the total 140: 90% of the people are highly aware of Ambuja. 85% of the people are aware of Ultra-tech & Binani. 80% of the people are aware of Bangur & Shree Ultra. 65% of the people are aware of Tuff Cemento. 40% of the people are aware of ACC & J.K.Laxmi. 30% of the people are aware of Birla Uttam & Birla Chetak & J.K.Super.

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Q.2 Name of the company of the brand you are aware of?

80 60 40 20 0

80 70

80 60 55 50 40 40 20 20 20 AWARENESS

AMBUJA ULTRA-TECH BINANI BANGUR SHREE ULTRA TUFF CEMENTO J.K.LAXMI ACC BIRLA UTTAM BIRLA CHETAK J.K.SUPER -

AMBUJA ADITYA BIRLA GROUP BRAJ BINANI GROUP SHREE CEMENT LTD. SHREE CEMENT LTD. SHREE CEMENT LTD. J.K.GROUP ACC B.K.BIRLA GROUP M.P.BIRLA GROUP J.K.GROUP

During the period of survey we interviewed 140 entrepreneurs doing small and big business in respect to cement, we come to know that out of the total 140: 80% of the people are highly aware of Ambuja Ambuja & Shree Ultra Shree Cement Ltd. 70% of the people are aware of Ultra-tech Aditya Birla Group. 60% of the people are aware of Bangur - Shree Cement Ltd. 50% of the people are aware of Tuff Cemento Shree Cement Ltd. 40% of the people are aware of ACC - ACC & J.K. LaxmI -J.K.Group. 30% of the people are aware of Birla Uttam B. K. Birla Group & Birla Chetak M.P. Birla Group & J.K. Super J.K. Group.

Q.3 Name the brands you deal with? 61

DEALING 50 40 30 20 10 0 AMBUJA BANGUR J.K.LAXMI BIRLA CHETAK 50 40 40 30 20 10 10 DEALING ULTRA-TECH SHREE ULTRA ACC J.K.SUPER BINANI TUFF CEMENTO BIRLA UTTAM 5 5 5 5

In respect of dealing with cement brand, we found that out of the total 140 respondents: 50%of the people are dealing with ultra-tech. 40%of the people are dealing with Ambuja & Binani 30%of the people are dealing with Bangur. 20%of the people are dealing with Shree Ultra 10%of the people are dealing with Tuff cemento & J.K. Laxmi. 5%of the people are dealing with ACC, Birla Uttam, and Birla Chetak, J.K. super.

62

Q.4 You are authorized dealer of ? AUTHORISED DEALER 25 15 15 10 10 5 5 4 2 2 2

25 20 15 10 5 0

AUTHORIZED DEALER ULTRA-TECH SHREE ULTRA ACC J.K.SUPER BINANI TUFF CEMENTO BIRLA UTTAM

AMBUJA BANGUR J.K.LAXMI BIRLA CHETAK

From the following 140 respondents, it was analyzed that authorized dealer pertaining to various cement brands have been distributed as follows: 25 Authorized dealer of Ultra-tech. 15 Authorized dealers of Ambuja & Binani. 10 Authorized dealer of Shree Ultra & Tuff Cemento. 5 Authorized dealer of Bangur & J.K. Laxmi. 4 Authorized dealer of ACC. 2 Authorized dealer of Birla Uttam, Birla Chetak & J.K. Supers.

Q.5 Rank the following brands in quality terms: 63

TWO CATEGERY IN THE QWALITY (A & B) CATEGEY (A)

60 50 40 30 20 10 0

55 45 45

20 10 10 QUALITY ULTRA-TECH SHREE ULTRA ACC J.K.SUPER BINANI TUFF CEMENTO BIRLA UTTAM 5 4 4 4 4

AMBUJA BANGUR J.K.LAXMI BIRLA CHETAK

Also. In respect of quality of products it was observed that: According to 55% people, of Ambuja is excellent. Around 45% People told that quality of Ultra-tech & Binani is very good. Around 20% of people told that quality of Bangur is very good. 10% people told that quality of Shree Ultra & Tuff Cemento is good. 5&4% J.K. Laxmi, ACC, Birla Uttam, Birla Chetak & J.K. Super is average.

CATEGORY (B)

64

50 40 30 20 10 0 30 30

50 50 40 40 40

10 10 10 10 QUALITY CATEGERY (B) ULTRA-TECH SHREE ULTRA ACC J.K.SUPER BINANI TUFF CEMENTO BIRLA UTTAM

AMBUJA BANGUR J.K.LAXMI BIRLA CHETAK

Also. In respect of Second quality of products it was observed that: According to 30% people, of Ambuja & Ultra-tech is second-class quality. Around 50% People told that quality of Binani & Bangur is second-class quality. Around 40% of people told that quality of Shree Ultra, Tuff Cemento & J.K. Laxmi is Second class quality. 10% J.K. Laxmi, ACC, Birla Uttam, Birla Chetak & J.K. Super is average quality of this product.

Q.6 Have you seen the TV advertisement of cement brands? TV ADVERTISMENT 65

100 80 60 40 20 0 AMBUJA BANGUR

90 70 45 45 20 30 20 5 5 5 5

TV (ADVERTISEMENT) ULTRA-TECH SHREE ULTRA ACC J.K.SUPER BINANI TUFF CEMENTO BIRLA UTTAM

J.K.LAXMI BIRLA CHETAK

90% of the people had seen the TV advertisement of Ambuja. 70% of the people had seen the TV advertisement of Ultra-tech. 45% of the people had seen the TV advertisement of Bangur & Binani. 20% of the people had seen the TV advertisement of Shree Ultra & J.K. Laxmi. 30% of the people had seen the TV advertisement of Tuff Cemento. 5% of the people had seen the TV advertisement of Birla Uttam & Birla Chetak, J.K.Super & ACC.

Q.7 Rank the following brands in price terms: Two category A & B 66

CATEGORY A

80 60 40 20 0

70 35 35 7 7 7 7 2 2 2 2

PRICE 'A' ULTRA-TECH SHREE ULTRA ACC J.K.SUPER BINANI TUFF CEMENTO BIRLA UTTAM

AMBUJA BANGUR J.K.LAXMI BIRLA CHETAK

Also. In respect of PRICE of products it was observed that: According to 70% people told that price of Ambuja is very high price than other brands. Around 35% People told that price of Ultra-tech & Binani is very high. Around 7% of people told that price of Bangur Shree Ultra & Tuff Cemento, J.K. Laxmi is high. 2% of the people told that price of ACC, Birla Uttam, and Birla Chetak & J.K. Super is high.

CATEGORY B

67

60 45 40 20 0 30

60 60 45 45 30 10 10 10 10 PRICE 'B' ULTRA-TECH SHREE ULTRA ACC J.K.SUPER BINANI TUFF CEMENTO BIRLA UTTAM

AMBUJA BANGUR J.K.LAXMI BIRLA CHETAK

Also. In respect of PRICE of products (in B Category) it was observed that: According to 60% people told that price of Binani & Bangur are include in second price than other brands. Around 45% People told that price of Ultra-tech & Shree Ultra & Tuff Cemento price are normal than other brands. Around 30% of people told that price of Ambuja, J.K. Laxmi is average. 10% of the people told that price of ACC, Birla Uttam, Birla Chetak & J.K. Super price are low.

3.2.4 FINDINGS
AWARENESS

68

 Ambuja, Ultra-Tech, Binani, Bangur & Shree Ultra are highly aware brand in jaipur city. Tuff Cemento, J.K. Laxmi, Birla Uttam Birla chetak, J.K. Super & ACC are also reasonable awared. AWARENESS OF COMPANY WITH BRANDS Ambuja, Ultra-Tech, Binani, Bangur & Shree Ultra & Tuff Cemento are highly aware of brand with company in jaipur city. J.K. Laxmi, Birla Uttam Birla chetak, J.K. Super & ACC are also reasonable awared. DEALING Maximum dealers are dealing with Ambuja, Ultra-Tech, and Binani & Bangur. Mainly dealers are dealing with multiple brands. Retailers having good sale are authorized dealer of a company. QUALITY Ambuja, Ultra-Tech & Binani are considered to be best quality product. Shree Ultra, Bangur, Tuff Cemento, J.K. Laxmi, Birla Uttam Birla chetak, J.K. Super & ACC are also among good perception about quality. PRICE Ambuja, Ultra-Tech & Binani are considered to be best price product in the market (higher price than other product). Shree Ultra, Bangur, Tuff Cemento, J.K. Laxmi, Birla Uttam Birla chetak, J.K. Super & ACC are also normal price in the market.

PART-4 QUESTIONNAIRE

69

QUESTIONNAIRE Name of shop _____________________________ Owner of Shop ____________________________ Address Dealership ______________________________ _______________________________

Q.1 Name the current cement brands you are aware of? (A) Ambuja (B) Ultra-tech (C) Binani (D) Bangur (E) Shree Ultra (F) Tuff Cemento (G) J.K.Laxmi (H) ACC (I) Birla Uttam Q.2 Name of the company of the brand you are aware of? (A) Ambuja (Ambuja) (B) Aditya Birla Group (Ultra-tech) (C) Barj Binani Group (Binani) (D) Shree Cement Ltd (Bangur) (E) Shree Cement Ltd (Shree Ultra) (F) Shree Cement Ltd (Tuff Cemento) (G) J.K. Group (J.K.Laxmi) (H) ACC (ACC) (I) B.K. Birla Group (Birla Uttam) (J) M.P. Birla Group (Birla Chetak) (K) J.K. Group (J.K. Super) Q.3 Name the brands you deal with? (A) Ambuja (B) Ultra-tech (C) Binani (D) Bangur (E) Shree Ultra (F) Tuff Cemento (G) J.K.Laxmi (H) ACC (I) Birla Uttam Q.4 You are authorized dealer of? (A) Ambuja (B) (C) Binani (D)

Ultra-tech Bangur 70

(E) (G) (I) (K)

Shree Ultra J.K.Laxmi Birla Uttam J.K.Super

(F) (H) (J)

Tuff Cemento ACC Birla Chetak

Q.5 Rank the following brands in quality terms: Two category A & B (A) Ambuja (B) Ultra-tech (C) Binani (D) Bangur (E) Shree Ultra (F) Tuff Cemento (G) J.K.Laxmi (H) ACC (I) Birla Uttam (J) Birla Chetak (K) J.K.Super Q.6 Have you seen the TV advertisement of cement brands? (A) Ambuja (B) Ultra-tech (C) Binani (D) Bangur (E) Shree Ultra (F) Tuff Cemento (G) J.K.Laxmi (H) ACC (I) Birla Uttam (J) Birla Chetak (K) J.K.Super Q.7 Rank the following brands in price terms: Two Category A & B (A) Ambuja (B) Ultra-tech (C) Binani (D) Bangur (E) Shree Ultra (F) Tuff Cemento (G) J.K.Laxmi (H) ACC (I) Birla Uttam (J) Birla Chetak (K) J.K.Super

DEALERS / SUBDEALERS REPORT

71

S NO. 1

NAME OF FIRM WITH ADDRESS MAIHTA BUILDING MATERIAL & SUPPLAIR (SHIRSHI ROAD) RAKESH BUILDING MATERIAL & SUPPLAIR (MEENA WALA SHIRSHI ROAD) JANU SALES CORPORATION (MEENA WALA SHIRSHI ROAD)

NAME OF OWNER

DEALER SALE (P/M) /SUBDEALE R

BRAND

MAHESH JI SUBDEALER 2000BAGE

TUFF CEMENTO & JK LAXMI BIRLA UTTAM

RAKESH JI

DEALER

3000BAGE

JADGISH JI

DEALER

3000BAGE JK LAXMI

CHANDN BULDING GYARASHI SUBDEALER 800 BAGE MATERIAL & SUPPLAIR LAL SHARMA (MEENA WALA SHIRSHI ROAD) 5 SHARMA BUILDING RAKESH JI SUBDEALER 900BAGE MATERIAL (MEENA WALA SHIRSHI ROAD) 6 BAGDA BUILDING MATERIAL (PACHAWALA SHIRSHI ROAD) GAYATRI BUILDAING MATERIAL & SUPPLAIR (PACHAWALA SHIRSHI ROAD) BALAJI SALES CORPORATION (PACHAWALA SHIRSHI ROAD) PARBHU JI SUBDEALER 1000BAGE BAGDA

ULTRATECH & AMBUJA ULTRATECH ULTRATECH

YOGESH JI SUBDEALER 2000BAGE BANGUR & GUPTA AMBUJA & BINANI PRALAD JI SHARAMA SUBDEALER 1000BAGE

BIRLA UTTAM &ULTRATECH &SHREE ULTRA 9 BAGDA BUILDING RAMGOPAL JI SUBDEALER 2000BAGE ULTRAMATERIAL (PACHAWALA BAGDA TECH& SHIRSHI ROAD) BANGUR& BINANI 10 KATAREYA BUILDING RAM KARAN SUBDEALER 900BAGE ULTRAMATERIAL (PACHAWALA JI KATAREYA TECH SHIRSHI ROAD)

72

11 KHANDELWAL TRADERS SHYAM (NIWARU ROAD 200 BY KHANDLAWA PASS) L 12 ANIL TRADERS (LAXMI NAGAR NIWARU ROAD JHOTWARA) SHREE MAHA LAXMI TRADERS (NEAR BY PASS KALWAR ROAD KANTA) PUJA BUILDING MATERIAL (NIWARU ROAD NETA JI KI CHKAKI) ANIL JI

DEALER

3000BAGE AMBUJA

DEALER

9000BAGE

ULTRATECH TUFF CEMENTO JK LAXMI & AMBUJA ULTRATECH AMBUJA

13

SUBHAS JI AGRAWAL PAPU JI

DEALER

1000BAGE

14

SUBDEALER 300BAGE

15 AGRAWAL TRADERS (A 26 HEERA BADI NIWARU ROAD JHOTWARA) 16

KISHAN KUMAR SHARMA

SUBDEALER 2500BAGE

RAJDHANI BUILDING SHYAM LAL SUBDEALER 700BAGE MATERIAL (SUDAMA SHENI MARG BHRAMPURI ROAD)

17 LAXMI CEMENT AGENCY RAMKISHOR SUBDEALER 3500BAGE AMBUJA (SUDAMA MARG SHENI &ULTRABHRAMPURI ROAD NEAR TECH& JK KHURA) 18 TRILOK BUILDING BABULAL SUBDEALER 800BAGE AMBUJA & MATERIAL SUPPLAIR SHENI JK (SHOP NO.132 133 SUDAMA MAREG) 19 LAXMI BUILDING ANIL GOYAL DEALER 8000BAGE AMBUJA MATERIAL SUPPLAIR (279 SHIVAJI CHOK BHRAMPURI ROAD) 20 SHENI SALES GOVIND RAM DEALER 2000BAGE BINANI & CORPORATION (SHOP JK WHITE NO.24 BHRAMPURI ROAD) 21 MUNA TRADERS (BAGRU WALO KA RASTA) 22 GARIB TRADERS (BAGRU WALO KA RASTA AAKRI CHOORAHA) MUNA BHAI DEALER 400BAGE AMBUJA

MUNA BHAI SUBDEALER 500BAGE

AMBUJA

73

23 GOVIND STONE BUILDING (SUDAMA MARG BHRAMPURI KHURA KAI NECHAI) 24 BALAJI TRADERS (VIDHYADHER NAGAR NEAR SARKIL)

LALU LAL &GOVIND BHAWATI PARSAD

SUBDEALER 2500BAGE AMBUJA

SUBDEALER 3000BAGE

ACC & ULTRATECH

25 CHANTAHARAN BUILDING SHIV KUMAR SUBDEALER 2000BAGE AMBUJA MATERIAL (VIDHYADHER BIRLA NAGAR) WHITE 26 GOVIND TRADERS (SHOP NO.7, 8 VIDHYADHER NAGAR) DINESH KUMAR SUBDEALER 1800BAGE ULTRATECH & AMBUJA

27 SHREE SHYAM TRADING SUNILGUPTA COMPANY (JAMES COLONI VIDHYADHER NAGAR) 28 SHREE RAM TRADERS (NEYA KHIDA VIDHYADHER NAGAR) VINEY SHARMA

3000BAGE BANGUR & ULTRATECH & SHREE ULTRA SUBDEALER 2000BAGE BANGUR &AMBUJA DEALER 4000BAGE ULTRATECH

DEALER

29 MACHIWAL AGENCYS (L S JUGAL NAGAR NEYA KHIDA KISHOR VIDHYADHER NAGAR) MACHIWAL 30 VINAYAK CEMENT (NEYA KHADA VIDHYADHER NAGAR) 31 JAIN TRADERS (A5 LS NAGAR NEYA KHADA VIDHYADHER NAGAR) DEEPAK

SUBDEALER 2000BAGE BANGUR &AMBUJA DEALER 1700BAGE TUFF CEMENTO ULTRATECH ULTRATECH

DOLAT SINGH

32 JOYTI TRADING COMPANY GOPAL SUBDEALER 1000BAGE (VIDHYADHER NAGAR CHODHYRI NEAR SARAKIL) 33 BALAJI TRADERS (L S NAGAR VIDHYADHER NAGAR) SHREE LAXMI CEMENT AGENCY (SIKAR ROAD NEAR 200 FIT BY PASS) MAHANDRA SINGH RAM LAL KUMAWAT DEALER 2000BAGE

34

DEALER

7000BAGE AMBUJA

74

35

BHARAT TRADING COMPANY (SIKAR ROAD)

HARPHOOL SINGH

DEALER

2000BAGE

AAC

36

SHREE LAXMI CEMENT LAXMI BUIED PLAZA (SIKAR NARAYAN ROAD NEAR 200 FIT BY PASS) 37 SHREE LAXMI CEMENT SAGAR MAL SUPPLAIRS (SIKAR ROAD OPP. AOTOPAL) 38 SHREE RAM CEMENT AGENCY (SIKAR ROAD DER KA BALAJI)

DEALER

7000BAGE

ULTRATECH SHREE ULTRA ULTRATECH & J.K.LAXMI ULTRATECH & BINANI

DEALER

2000BAGE

OM PRAKASH SUBDEALER 2000BAGE

39 AASIWAL AGENCY (SIKAR ROAD KHATHAN HOSPETAL) 40 SHIV TRADERS (SIKAR ROAD KHATHAN HOSPETAL) RAJENDER TRADERS (SIKAR ROAD) PARDEEP TRADERS (SIKAR ROAD)

RAJESH

SUBDEALER 1500BAGE

RAKESH JI

DEALER

2500BAGE J.K.LAXMI

41

RAJENDER JI

DEALER

3000BAGE

ULTRATECH

42

JUGAL KISHOR GERIRAJ SINGH ASHOK NIRANIYA

SUBDEALER 1500BAGE AMBUJA & ULTRATECH DEALER 4000BAGE ULTRATECH

43

SAKHAWAT BUILDING MATERIAL (123 BANDU NAGAR MURLIPURA SIKAR ROAD) 44 NIRANIYA TRADERS (MURLIPURA)

ULTRATECH & J.K.LAXMI & AMBUJA 45 NAVEEN TRADING RAJ KUMAR SUBDEALER 1700BAGE ULTRACOMPANY (MURLIPURA) TECH & J.K.LAXMI & AMBUJA 46 RAMA AGENCY (D43 AII VINOD SINGH SUBDEALER 2000BAGE AMBUJA & BANDU NAGAR ULTRAMURLIPURA) TECH

SUBDEALER 2000BAGE

75

47

GODEALA TRADING COMPANY (ROAD NO.2 MURLIPURA) DEEPAK MARBALS (KALWAR ROAD 200FIT BY PASS) KIRAN SUPPLAIRS (KALWAR ROAD KATA PHANKA) SEAKAWATY CEMENT UDAEG (KALWAR ROAD KATA PHANKA)

BADRI PARSAD DEEPAK

DEALER

6000BAGE

BINANI

48

DEALER

1000BAGE AMBUJA

49

SANGRAM SINGH JAY SINGH

DEALER

3000BAGE

ACC ULTRATECH ULTRATECH ULTRATECH ULTRATECH

50

DEALER

2000BAGE

51 R.K. TRADERS (KALWAR ROAD KATA PHANKA) 52 ANKIT TRADING COMPANY (KALWAR ROAD KATA PHANKA)

RAM KUMAR

DEALER

2000BAGE

AHKASH

SUBDEALER 1000BAGE

53 GNAESH STONECOMPANY (KALWAR ROAD KATA PHANKA) 54

OM JI

SUBDEALER 800BAGE J.K.LAXMI

HS HANUMAN DEALER 2500BAGE CORPORATION&BUILDING SHAYE MATERIAL (KALWAR ROAD KATA PHANKA) 55 MANISH TRADERS SITA RAM JI DEALER 2100BAGE (SUBIKISHA MOBILE STORE KALWAR ROAD JHOTWARA) 56 MAHALAXMI SALES P.K.SINGH DEALER 3000BAGE CORPORATION (MEDICALCENTER KALWAR ROADJHOTWARA) 57 BAJARNG BUILDING BAJARNG SUBDEALER 700BAGE MATERIAL (KEARDHANI LAL NAGAR KALWAR ROAD) 58 JAGDAMBA TRADING COMPANY (SUBIKISHA MOBILE STORE KALWAR ROAD) MOHAN LAL DEALER 2000BAGE

SHREE ULTRA ULTRATECH ULTRATECH

ULTRATECH ULTRATECH

76

59

KUMAWAT TRADING S.N.KUMAWA COMPANY (KALWAR ROAD T KATA PHANKA) VESAVEKARMASTON CHOOTMAL SUPPLAIRS (GOVINDPURA KALWAR ROAD) VIJAYBUILDING MATERIAL (RAVANGAT KALWAR ROAD) SURESH

DEALER

2000BAGE

ULTRATECH ULTRATECH

60

DEALER

1700BAGE

61

DEALER

3000BAGE

ULTRATECH

62 KARDANI CEMENT UDUGH BASIDHAR (SURJEET NAGAR KUMAWAT KALWAR ROAD) 63 YADAV SALES CORPORATION (KEARDHANI NAGAR KALWAR ROAD) SANGEETA STONE (KEARDHANI NAGAR KALWAR ROAD) GANAGARAM JI SANJAY

DEALER

2000BAGE AMBUJA

DEALER

2500BAGE

BINANI

64

DEALER

1500BAGE J.K.LAXMI

65

MARWAL STONE HANUMAN JI SUPPLAIRS (CHANDR NAGAR KEARDHANI KALWAR ROAD) 66 GOVIND BUILDING GOVINDRAM MATERIAL (TAKYA KI CHOOKI BAJARNG DAWAR KALWAR ROAD) 67 GURU KRIPA BUILDING LAXMI MATERIAL (KEARDHANI NARAYAN NAGAR KALWAR ROAD) 68 SIANI BUILDING MATERIAL (MAN BAGH RAMGADH ROAD DEHLI BY PASS) JAGDISH PARSAD

DEALER

2000BAGE

ACC

DEALER

2000BAGE

ULTRATECH

DEALER

2000BAGE AMBUJA

SUBDEALER 500BAGE J.K.LAXMI

PART 5 5.1 CONCLUSIONS

Quality and Brand image of the cement brands are having a significant relationship with one another. This is an important factor because good 77

quality helps in building the loyal customers due to which demand of that brand increases and dealers have to go with the brand whose demand is more. There is no significant relationship between the profit margin and sales. As reputed brands are giving high sales even they are providing fewer profit margins. In other terms, in Volume based market dealers go with the brand which has high demand.

They say that if the sales are high then automatically we will be able to make a profit out of it and are able to earn the monetary benefits which companies gives on achieving the target sales.

RECOMMENDATION

To build the strong brand image, SCL has to adopt aggressive marketing strategies. You should have a proper control on all the factors of 78

marketing mix. Even a single factor missed out will give your competitors an edge upon you. Some of the recommendations I want to give to improve the present positioning of the brand: First of all, SCL has to show its presence in the market not in the terms of dealers but should also reach to the customers via different means. Mason meets and Dealer meets should be organized in every six months (stress should be laid in rural areas, where brand visibility is very low). Along with mason and dealer meets, company can also go for customer meets, telling about the quality of the product and explaining them why they should choose SCLS Brands. Advertisement is another medium to reach to the customers; effective medium should be adopted for the same. Company can adopt the strategy of making exclusive dealers, by providing them extra benefits. This will help them to reduce competition. As in the case of multi brand dealers, dealer tend to sale only those brand which gives high profit margin. There should be control on the price variation. Due to this, image of being a premium brand is diluted and we no longer are considered as premium brand. One of the main reasons of price variation is the secondary freight benefit being provided to the dealers. Companies carry the Trolla Movement to give benefit to their dealers. Also, other two brands of Shree Cement Limited give the same benefit. Therefore, Bangur has also started giving the same benefit to counter the competitors move.

79

It is good to give more benefits to the dealers but it should be seen equally from both sides. Company carries the Trolla Movement to give benefit to the dealers, but dealer do not look it in this way. They think they are getting more profit margin, due to which if they are getting sec. freight benefit as Rs 3 to Rs 4 then they use it to reduce the price and sell the brand in lesser price and gaining Rs 1 or Rs 2 out of it. Their main aim is to achieve high sales and get annual benefit.

I strongly support this type of benefits should not be there which adversely affects the brand image. Instead we can give other benefits to the dealers may be in form of Gold schemes or more margin in achieving target sales.

Another threat is from in-house competition. Company management should take adequate steps to reduce this competition and should aim to build the brand image, rather than to have high collective sales.

5.3 BIBLIOGRAPHY
Following are sources, which helped me during my summer training: BOOKS: KOTHARI C.R.: Research methodology management, 3rd Edition 80

KOTLER PHILIP: Marketing management 12th edition, 2007 S.P.GUPTA: - Statistical Methods Thirteen Revised Edition, 2001 MAGZINES: INDIA TODAY BUSINESS WORLD

REFERENCES

WEBLIOGRAPHY

www.shreecementltd.com www.ibef.org www.marketresearch.com www.indianinfoline.com www.busineessconnect.com www.indiancementindustry.com

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