Understanding brand identity & brand positioning in cement industry a case study

www.mastersungroup.com, Master Sun Consulting, A Master Sun Group Firm.

BackgroundBackground

• Study focusing on a Cement Industry in certain region in Study focusing on a Cement Industry in certain region in

IndiaIndia

• Objectives of the StudyObjectives of the Study

• Determining brand image of four brands : Brand A , Determining brand image of four brands : Brand A ,

Brand B, Brand C and Brand DBrand B, Brand C and Brand D

• Understanding of brand relationshipsUnderstanding of brand relationships

• Study conducted with Influencers (Engineers), Dealers, Study conducted with Influencers (Engineers), Dealers,

Distributors/Promoters & End-Customer (Individual Distributors/Promoters & End-Customer (Individual

House Builders – IHB)House Builders – IHB)


INFLUENCERINFLUENCER’’S POINT OF S POINT OF VIEW ON THE BRANDSVIEW ON THE BRANDS


Decision Making Process of Decision Making Process of InfluencersInfluencers

• Influencers of three categories coveredInfluencers of three categories covered Structural EngineersStructural Engineers Civil EngineersCivil Engineers ArchitectsArchitects

Structural engineers have a biggest & fairly direct influenceStructural engineers have a biggest & fairly direct influence


Cement in Overall Construction Cement in Overall Construction DecisionsDecisions

• Raw material decisions come after Raw material decisions come after ‘‘designingdesigning’’ decisions decisions• Designing decisions includeDesigning decisions include

Aesthetics which is responsibility of architectAesthetics which is responsibility of architect Structural designing responsibility of structural Structural designing responsibility of structural

engineersengineers• Raw materials- construction materials includeRaw materials- construction materials include

cement, steel, wood, sand, metal, finishing items cement, steel, wood, sand, metal, finishing items (plumbing, flooring, plastering, light fittings)(plumbing, flooring, plastering, light fittings)

• Cement and steel considered the most critical input into Cement and steel considered the most critical input into constructionconstruction

Cement is the binding agentCement is the binding agent

Cement, the most critical decisionCement, the most critical decision


Influencers : Key FindingsInfluencers : Key Findings

• Perceived difference in quality between cement from Perceived difference in quality between cement from mini-plants & big brandsmini-plants & big brands

• Surrogate indicators like ISI, ISO used to distinguish one Surrogate indicators like ISI, ISO used to distinguish one mini-plant brand from othermini-plant brand from other ““If mini-plants have ISI mark then it really does not If mini-plants have ISI mark then it really does not

mattermatter””• Quality of the big brands is similarQuality of the big brands is similar

““all are big plantsall are big plants”” ““the q-test would show similar strengththe q-test would show similar strength””

• Decision process different for the two types of clientsDecision process different for the two types of clients IHB for their own house/ bungalowIHB for their own house/ bungalow Big clients- Builders/Contractors for residential Big clients- Builders/Contractors for residential

complexescomplexes


InfluencerInfluencer’’s Interaction with IHB s Interaction with IHB SegmentSegment

• IHB Clients depend more on structural engineer/ IHB Clients depend more on structural engineer/ architect- since do not have technical know-howarchitect- since do not have technical know-how

• IHB want the best without any compromiseIHB want the best without any compromise• Architects/ engineers Architects/ engineers ‘‘play it safeplay it safe’’ suggest 3-4 brands suggest 3-4 brands• Brand B perceived to be salient amongst IHBBrand B perceived to be salient amongst IHB• Change of brand during construction due to lack of Change of brand during construction due to lack of

proper planningproper planning

Influencers recognize brand pull,refuse to take a stand in IHB segmentInfluencers recognize brand pull,refuse to take a stand in IHB segment


• Builders have a technical knowledge, Builders have a technical knowledge, • Not much difference in brandNot much difference in brand’’s qualitys quality• A 2-3 rupee per bag amounts to a considerable saving A 2-3 rupee per bag amounts to a considerable saving

in overall projectin overall project• Will not take kindly non-availability since this would lead Will not take kindly non-availability since this would lead

to delays in projectto delays in project

InfluencerInfluencer’’s Interaction with s Interaction with BuildersBuilders

Price & Availability CriticalPrice & Availability Critical


Brand Personality: Brand CBrand Personality: Brand C

INFLUENCERS•Modern, Confident Celebrity

•UP TO DATE WITH THE LATEST•KNOWS HIS MIND- WILL DEFINITELY PROGRESS

•Doesn’t need us, we don’t need him either•DOES NOT MIX WITH EVERYBODY, DOES NOT LET US IN•PERSONALLY A STRANGER•LIVING IN A FARMHOUSE- ISOLATED

•Self Obsessed :Sonia Gandhi, Shahrukh Khan


Brand Personality: Brand ABrand Personality: Brand A

INFLUENCERS•Friendly

• APPROACHABLE, TAKES EVERYBODY ALONG•MILANSAAR,NO EGO

•Mature, Self Made•SELF- MADE- WORKED HIS WAY UP•HAS EXPERIENCE,MATURE

•Veteran, not the first : L..K. Advani


Brand Personality: Brand BBrand Personality: Brand B

INFLUENCERS•Respected, Trusted

•PRAISEWORTHY•MOST RESPECTED,MOST TRUSTED

•Young & Affluent•IN HIS 30s, RESIDES IN A POSH AREA•RELIABLE,FULFILS A PROMISE

•Not a Bum Chum•SOMEWHAT EGOISTIC


Brand Personality: Brand DBrand Personality: Brand D

INFLUENCERS•Down to Earth

•HUMBLE

•STRAIGHT- NO PRETENSIONS

•Has Potential• PROGRESSIVE•IMPROVING•HAS POTENTIAL


RETAILERRETAILER’’S POINT OF S POINT OF VIEW ON THE BRANDSVIEW ON THE BRANDS


Customer ProfileCustomer Profile

• All classes- 1 bag to 500 bagsAll classes- 1 bag to 500 bags• Come through business/ personal contactsCome through business/ personal contacts• IHB : Small construction workIHB : Small construction work• Contractors :Big work for IHB, BuildersContractors :Big work for IHB, Builders


Stocking PatternStocking Pattern• Cannot over-stock cementCannot over-stock cement

Requires go-down spaceRequires go-down space Unlike bricks/sand, cement needs shelterUnlike bricks/sand, cement needs shelter

• Stock as and when we requireStock as and when we require Big companies can reach us by evening if we order in Big companies can reach us by evening if we order in

the morningthe morning• Purchasing strategy ,key to successPurchasing strategy ,key to success

Route of purchaseRoute of purchase Certain brands allow for diversion of non-trade material into Certain brands allow for diversion of non-trade material into

trade segmenttrade segment

Type of brandsType of brands Mini plant brands allow for credit. The money generated is Mini plant brands allow for credit. The money generated is

used to pay advance for big brandsused to pay advance for big brands

Two companies/sister outfits stocking competitive Two companies/sister outfits stocking competitive brandsbrands

Purchasing Strategy key to ProfitabilityPurchasing Strategy key to Profitability


Brand PullBrand Pull• Most customers know their mind. Most customers know their mind. • If they want a brand that I donIf they want a brand that I don’’t stockt stock

Contact somebody /sister company who stocks the Contact somebody /sister company who stocks the brand demandedbrand demanded

• Demand of brand of cement varies by areaDemand of brand of cement varies by area Pockets existing due to earlier strong network of Pockets existing due to earlier strong network of

dealersdealers• Builder generally perceived to want the cheapest brandBuilder generally perceived to want the cheapest brand

Recognize the criticality of brand pullRecognize the criticality of brand pull


MarginsMargins

• Keeping the investment in mind; canKeeping the investment in mind; can’’t settle for less t settle for less than Rs. 5 as marginthan Rs. 5 as margin

• Actual margins are in other building material; not in Actual margins are in other building material; not in cement cement Cement like a loss leader.Pulls other material along Cement like a loss leader.Pulls other material along

with itwith it Margins in building material up to 25%Margins in building material up to 25%

• Price fluctuationsPrice fluctuations Cannot avail full benefits of any scheme.Price Cannot avail full benefits of any scheme.Price

fluctuations & policies lead to confusion. Feel fluctuations & policies lead to confusion. Feel cheatedcheated


On Distributors/PromotersOn Distributors/Promoters• Brand B stands out, but only justBrand B stands out, but only just

Brand B waala zyaada aate hain….structural Brand B waala zyaada aate hain….structural engineer aate hain…customer impress hota haiengineer aate hain…customer impress hota hai

• No perceived differences in behaviour of distributors of No perceived differences in behaviour of distributors of different brands. different brands.

• Distributor perceived as companyDistributor perceived as company’’s mans man• Cat & Mouse game with distributorCat & Mouse game with distributor

Sometimes they win,sometimes we winSometimes they win,sometimes we win

No love lost for DistributorNo love lost for Distributor


Trade ,Non-TradeTrade ,Non-Trade

• Current system biased towards Non-TradeCurrent system biased towards Non-Trade• Leads to anti-contractor/builder feelingsLeads to anti-contractor/builder feelings

Have no asset, no standing in market; yet get Have no asset, no standing in market; yet get cement at a cheaper ratecement at a cheaper rate

We pay deposit. They may be fly-by-night operatorsWe pay deposit. They may be fly-by-night operators• Feel the pressures of meeting targets leads to these Feel the pressures of meeting targets leads to these

practicespractices

Long term relationship with company not rewardedLong term relationship with company not rewarded


Stocking brandsStocking brands• No brand can pressurize us to stock just theirs except No brand can pressurize us to stock just theirs except

Brand BBrand B We stock others but not on the counterWe stock others but not on the counter If Brand C says, why stocked this… we say…oh this is If Brand C says, why stocked this… we say…oh this is

of our friend…he did not have space…just for todayof our friend…he did not have space…just for today• Exclusive Dealership of a brand is not likedExclusive Dealership of a brand is not liked

Have to chase targetsHave to chase targets Binds us without any benefitsBinds us without any benefits One of the respondents stocking 8 brands- without One of the respondents stocking 8 brands- without

dealership of any one brand. Is very happy. dealership of any one brand. Is very happy. • RAJASTHAN- GUJARAT BRANDSRAJASTHAN- GUJARAT BRANDS

Rajasthan brands are lesser quality,lower pricedRajasthan brands are lesser quality,lower priced Have limited targets in GujaratHave limited targets in Gujarat- not too interfering- not too interfering

Exclusive relationship, a loss making propositionExclusive relationship, a loss making proposition







RETAILERS•Young & Robot Like

• FORMAL, DISTANT, BUSINESS LIKE

•Healthy & Stout•HEALTHY,STOUT EXTERIOR- TIRED INTERIOR

(SURRENDERED TO BIRLA)

•One Sided Relationship•NOT A BENEFICIAL RELATIONSHIP

•HAVE TO SNATCH YOUR RIGHT






•Veteran, never the first : L..K. Advani

RETAILERS•Mature & Elderly

•SAMAJHDAAR,52 YEARS, LIKE AN ELDER FAMILY•CAN RELATE TO HIM LIKE A GRANDSON

•Out of Touch with Times•LISTEN TO HIM BUT DO NOT IMPLEMENT

•IS NOT VALUED ANYMORE (KADAR NAHIN)•HAS LOST TOUCH OF OUR REALITY

•FEEL CANT RELY ON HIM







RETAILERSYoung & Strong

•20-25; EAGERNESS TO WORK IN FUTURE

•Reliable•Beneficial Relationship

•ONE IS LIKELY TO BENEFIT, NEVER LOSE

•Higher Status,Not Easy to Approach•DOMINATES

•ONE NEEDS TO PAY A PRICE FOR MAINTAINING FRIENDSHIP WITH SOMEBODY HIGHER THAN SELF


Brand Personality: Brand DBrand Personality: Brand D


•HUMBLE



RETAILERS•Female, Brand A’s Sibling

•SISTER OF Brand A•HAS COME BACK FROM IN-LAWS PLACE

•A Liability on Brand A•BURDEN ON Brand A

•ALL HER LIFE HAS TAKEN FROM EVERYBODY•NO FUTURE

•WILL AFFECT Brand A NEGATIVELY


IHB POINT OF VIEW ON IHB POINT OF VIEW ON THE BRANDSTHE BRANDS


Views About Views About ‘‘CementCement’’• Construction of house is a high involvement process Construction of house is a high involvement process

and a logistical nightmareand a logistical nightmare ‘‘Pareshaani-bahut kaam; Logon ko, material ko Pareshaani-bahut kaam; Logon ko, material ko

ikaththa karoikaththa karo’’• For a For a ‘‘gharghar’’, main considerations are:, main considerations are:

Economical use of spaceEconomical use of space Should be strong- last more than a lifetimeShould be strong- last more than a lifetime More so after the earthquakeMore so after the earthquake

• Cement, bricks and steel considered the main things for Cement, bricks and steel considered the main things for constructionconstruction


Role of CementRole of Cement• Cement, considered most important because itCement, considered most important because it’’s the s the

binding agentbinding agent ““Pakar banataPakar banata””

• Cement, unlike Bricks & Steel, provides plethora of Cement, unlike Bricks & Steel, provides plethora of choiceschoices Quite a few brands in the marketQuite a few brands in the market Available in gradesAvailable in grades

• No compromise on material No compromise on material • Once in a lifetime decisionOnce in a lifetime decision

No room for compromise. Low Price SensitivityNo room for compromise. Low Price Sensitivity


Decision Process For CementDecision Process For Cement• Cement considered an area where intricacies of how Cement considered an area where intricacies of how

product works not knownproduct works not known This considered a handicapThis considered a handicap Further makes people risk-averseFurther makes people risk-averse

““how do we know how it sets and makes everything strong..how do we know how it sets and makes everything strong.. ’’ ““Just for a house one will not go to a lab to testJust for a house one will not go to a lab to test””

• A lot of consideration- search for informationA lot of consideration- search for information Survey amongst those who have already built a Survey amongst those who have already built a

househouse ““Discussed with a business colleagueDiscussed with a business colleague”” ““Bhai sahab, unhone do mahine pahle hi ghar banaya thaBhai sahab, unhone do mahine pahle hi ghar banaya tha””

Consult the Consult the ‘‘expertsexperts’’ ““Architect ya engineer se bhi poochte hain..Architect ya engineer se bhi poochte hain..””

Little knowledge & high involvement makes people risk averseLittle knowledge & high involvement makes people risk averse


Decision Process For CementDecision Process For Cement

• Most people have already formed an opinion on what is Most people have already formed an opinion on what is the bestthe best Word of mouth, advertising play a key roleWord of mouth, advertising play a key role View of others taken just to confirm self viewView of others taken just to confirm self view

• A little skeptical of A little skeptical of ‘‘expertexpert’’ view view ““Unka to kaam hi yahi hai….Humne to ek baar Unka to kaam hi yahi hai….Humne to ek baar

banana hai..banana hai..”” ““Told us to use different grade for roof…walls…i did Told us to use different grade for roof…walls…i did

notnot”” Few take the expert advice of Few take the expert advice of ‘‘choosing amongst the choosing amongst the

four brandsfour brands’’ seriously seriously• The salient brand winsThe salient brand wins

Own belief about the ‘best cement’ that winsOwn belief about the ‘best cement’ that wins


Decision Process for CementDecision Process for Cement

• Notion of it being a little expensive is all the more Notion of it being a little expensive is all the more assuringassuring ““Abhi chaar- paanch rupaye ke liye samjhauta thori Abhi chaar- paanch rupaye ke liye samjhauta thori

karengekarenge””• Proximity of shop not an issueProximity of shop not an issue

Home deliveryHome delivery Contractor can hunt for the shopContractor can hunt for the shop

• RetailerRetailer’’s influence non-existents influence non-existent

Expensive=Reassuring. Availability & Push, not an issueExpensive=Reassuring. Availability & Push, not an issue


SUMMARY OF BRAND SUMMARY OF BRAND IDENTITY & POSITIONING IDENTITY & POSITIONING







RETAILERS•Young & Robot Like

• FORMAL, DISTANT, BUSINESS LIKE

•Healthy & Stout•HEALTHY,STOUT EXTERIOR- TIRED INTERIOR

(SURRENDERED TO BIRLA)

•One Sided Relationship•NOT A BENEFICIAL RELATIONSHIP

•HAVE TO SNATCH YOUR RIGHT

INDIVIDUAL HOUSE BUILDER•Stands Out,Respected•MATURE•GOOD PERSONALITY•NOT A COMMONER

•Formal Relationship•NOT MUCH FRIENDLY•PURELY PROFESSIONAL•JUST A HI-HELLO FRIEND






•Veteran, never the first : L..K. Advani

RETAILERS•Mature & Elderly

•SAMAJHDAAR,52 YEARS, LIKE AN ELDER FAMILY•CAN RELATE TO HIM LIKE A GRANDSON

•Out of Touch with Times•LISTEN TO HIM BUT DO NOT IMPLEMENT

•IS NOT VALUED ANYMORE (KADAR NAHIN)•HAS LOST TOUCH OF OUR REALITY

•FEEL CANT RELY ON HIM

INDIVIDUAL HOUSE BUILDER•Old,Common Man•Mature,Not Listened to•SPEAKS THE RIGHT THING- PEOPLE ARE NOT TRUSTING HIM

•Stranger•NOT MUCH AFFECTION FOR HIM- DON’T KNOW IF IT ALSO CARES

•Mutually Indifferent Relationship







RETAILERSYoung & Strong

•20-25; EAGERNESS TO WORK IN FUTURE

•Reliable•Beneficial Relationship

•ONE IS LIKELY TO BENEFIT, NEVER LOSE

•Higher Status,Not Easy to Approach•DOMINATES

•ONE NEEDS TO PAY A PRICE FOR MAINTAINING FRIENDSHIP WITH SOMEBODY HIGHER THAN SELF

INDIVIDUAL HOUSE BUILDER• Sumo Wrestler in Thirties•STRONG,FRIENDLY,HEALTHY

•Bodyguard•WILL PROTECT US

•Lasting Relationship, Very Reliable•GIVE ALL TASKS TO HIM; AND BE CAREFREE

•Good Future•WILL BE MOST SUCCESSFUL•BEST WISHES AND AFFECTION


Brand Personality:Brand DBrand Personality:Brand D


•HUMBLE



RETAILERS•Female, Brand A’s Sibling

•SISTER OF Brand A•HAS COME BACK FROM IN-LAWS PLACE

•A Liability on Brand A•BURDEN ON Brand A

•ALL HER LIFE HAS TAKEN FROM EVERYBODY•NO FUTURE

•WILL AFFECT Brand A NEGATIVELY

INDIVIDUAL HOUSE BUILDER• Confusing Imagery•OLD- VERY MATURE•A GIRL –YOUNG, INNOCENT, •A NEWCOMER

•Brand A Association•SAME COMPANY AS Brand A


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Understanding brand identity & brand positioning in cement industry a case study