SUMMER INTERNSHIP PROJECT REPORT

ON

“Comparing ROI (Return on investment) at dealer and retailer level in Aggregates, Sanitary and Cement business in NCR Region.”

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT

OF

POST GRADUATE DIPLOMA IN MANAGEMENT

Faculty Supervisor: Company Supervisor:

Professor R.srinivasan Mr.Vikas Kumar Soni

Asst. Professor, JKPS Sales Manager

Regional office, North

SUBMITTED BY:

Prateek Saini

PGDM 2010-12

JKPS INSTİTUTE OF MANAGEMENT AND TECHNOLOGY, (APPROVED BY AICTE, MİN. OF HRD, GOVT. OF INDİA)

DAMDAMA LAKE ROAD, BHONDSI

GURGAON, INDIA (122102)

DECLARATION

I, Prateek Saini, declare that the Project Work entitled “Comparing ROI (Return

on investment) at dealer and retailer level in Aggregates, Sanitary and Cement

business in NCR Region” is my own work and conducted under the supervision

of Mr.R.SRINIVASAN, Asst Professor, JKPS.

I further declare that to the best of my knowledge, the Project does not contain

any part of any work which has been submitted for the award of any degree

either in this College/ University/ Deemed University without proper citation.

Date: Prateek Saini

JKPS/PGDM/10/14

CERTIFICATE OF THE FACULTY SUPERVISOR

2

Mr. R.srinivasan

Asst. Professor

JKPS-IMT

Damdama Lake Road, Bhondsi

Gurgaon, Haryana

0124-2266473

This is to certify that the work entitled “Comparing ROI (Return on

investment) at dealer and retailer level in Aggregates, Sanitary and

Cement business in NCR Region.” is a piece of summer internship work

done by Prateek Saini under my guidance and supervision, for the partial

fulfillment of award of PGDM of JK PADAMPAT SINGHANIA INSTITUTE

OF MANAGEMENT,GURGAON. To the best of my knowledge and belief the

Project work --

(1) Embodies the work of candidates himself.

(2) Has duly being completed.

(3) Fulfills the requirement of the ordinance relating to the PGDM in

Management of the College/ university.

(4) Is up to the standard both in respect of contents and language for

being referred to the examiner.

Date: Signature of Faculty Supervisor

ACKNOWLEDGEMENT

3

Some works are so typical that are impossible for a person to complete it alone.

Final Project is one of them. I would not be enabling to complete my work

without the help of my respected Company Guide, Faculty Guide, my college

and workplace colleagues and my family members. So it is my obligation to

thank all of them.

I have had the honour of having been associated & working under the able &

stimulating guidance of (Mr. Vikas Soni, Sales Head North office, ACC, and

Mr.R.srinivasan, Professor, JKPS-IMT, Gurgaon. The Project work was

undertaken under their keen supervision and the Project has been prepared by

me. I express sincere feeling of gratitude and respect for their inspiring help

throughout the work. Without his esteemed and valuable help and guidance it

would not have been possible for me to accomplish my job. I am gratefully

indebted to them.

And finally I would like to offer my heartiest prayer to the almighty god who

has given me mental and spiritual strength to complete this research work.

Name of Candidate

Signature

TABLE OF CONTENTS

4

EXECUTIVE SUMMARY

5

Sr. No.

Contents

1. Executive Summary

2. Introduction

3. Theoretical Framework

4. Objectives of Study

5. Research Design and Methodology

6. Company and Industry Profile

7. Data analysis and Interpretation

8. Findings and Recommendations

9. Limitations

10. Bibliography

ROI is a performance measure used to evaluate the efficiency of an investment or to compare

the efficiency of a number of different investments. ROI or return on investment could be

applied in all types of business, no matter how big or small it is. In fact, it is actually used as

a basis of business owners to determine whether or not they should continue on investing

their time and money on a certain project.

The scope of study help in exploring the mindset of retailers and dealers in Delhi NCR that

inspired them for dealership for a particular sector and study will also help in describing the

risk and return of the respected sectors in Delhi NCR.

The main objective of the study is to find out sector (aggregates, sanitary and cement) yields

maximum returns to dealer and retailers. And also to find out the factors which attract dealers

and retailers to make sale of particular brand more. And to identify the interest of switch for

dealership in respect of Aggregates, Sanitary and Cement.

This opportunity provided to me by ACC cement also helped me to study the activities of the

Marketing department and gain an useful insight into their work standards.

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INTRODUCTION

Comparing ROI (Return on investment) at dealer and retailer level in Aggregates, Sanitary and Cement business in NCR Region.

ROI (Return on Investment)

Most forms of ROI analysis compare investment returns and costs by constructing a ratio, or percentage. In most ROI methods, an ROI ratio greater than 0.00 (or a percentage greater than 0%) means the investment returns more than its cost. When potential investments compete for funds, and when other factors between the choices are truly equal, the investment—or action, or business case scenario—with the higher ROI is considered the better choice, or the better business decision.

ROI is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

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Mathematical formulae-

ROI = Net Income / Value of Assets

RO I= Income / Value of Assets

ROI = Net Income+Interest (1-Tax Rate) / Book value οf Assets

The degree to which Return On Investment (ROI) overstates tһе economic value depends οn at Ɩеаѕt 5 factors:

1. Length of life (the longer, the Ɩаrɡеr the overstatement)

2. Capitalization policy (the smaller the fraction of total investment capitalized in the books, the greater wіƖƖ be tһе overstatement)

3. The rate at which depreciation іѕ taken in tһе books (the depreciation rate drops nearer than straight-line аnԁ wіƖƖ result in a higher ROI)

4. The time between the date of the investment and the payback of tһе investment from cash inflows (the greater the time, the greater the degree of overstatement).

5. Companies that grow tοο quісk wіƖƖ more than ƖіkеƖу have a lower Return on Investment

With all these said, ROI or return on investment could be applied in all types of business, no matter how big or small it is. In fact, it is actually used as a basis of business owners to determine whether or not they should continue on investing their time and money on a certain project. Loaning institutions uses the ROI model to estimate their profits they would gain on financing another person's or a company's monetary requirement. And on a small business's point of view, the computation for ROI can be used in analyzing whether buying goods for inventory purposes will give them an income in the form of sales in the next year.

Nowadays, ROI is also widely utilized in online marketing. In fact, the ROI rule is best applied on pay per click advertising that most website owners integrate in their respective websites to make them more profitable. Some webmasters adapt the ROI model in deciding whether or not they should participate in such types of advertising strategy to promote their online stores.

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And so it is a must for every businessperson to determine a project's ROI before they involve themselves in it. This ensures them of a smooth business operation, with the end goal of generating income from it. If ROI is not rightfully considered, the whole business deal becomes a risk, and it could very well be big risk at that. It also pays to know the need or the frequency by which you need to recalculate and work something out to protect the project's projected ROI.

OBJECTIVES:

To find out sector (Cement, Sanitary and Aggregates) yields maximum returns to dealer and

retailers.

To find out the factors which attract dealers and retailers to make sale of particular brand

more.

To identify the interest of switch for dealership in respect of Cement, Sanitary and

Aggregates.

SCOPE OF THE STUDY:

This study will explore the mindset of retailers and dealers in Delhi NCR that inspired them for dealership for a particular sector.

The study will describe the risk and return of the respected sectors in Delhi NCR.

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RESEARCH DESIGN AND METHODOLOGY

(a)Research Methodology:

The research methodology is the way to systematically solve the research problems. For

this, right at the beginning the research plan was prepared. This includes all the detail of

how to go about research work of ACC cement.

The methodology adopted for this project was completely based on primary information.

The locale of the study was NCR Market. The first stage included gathering information

about the general Cement, Sanitary and Aggregates market.

The second stage comprised determining the objective of the study and drafting the

questionnaire. The questionnaire was designed keeping in mind the objective of the study. It

was designed with due guidance of the company guide. It was assured that the questionnaire

didn’t exceed more than 20 questions. Keeping in mind the education level of the

respondents who were mainly dealers/retailers, the questionnaire was kept.

(b) Data Sources:

The descriptive nature of research necessitates collection of primary data from retailers

and dealers through market survey, personal interview technique was used and interview

were conducted through structured and unstructured questionnaire . Data was tabulated,

analyzed and suggestion and recommendation were given.

(d)Research Instrument:

1. Personally administered questionnaire

2. Structured interview

3. Unstructured interview

For the purpose of this project, a questionnaire was designed to collect data that consisted of

close ended questions & open ended questions. A survey technique is being used to collect

the data. During the project a survey of customers using personal interview was done at

random locations in NCR Market (Includes Ghaziabad and Noida, Both) and a

predetermined structured questionnaire was administered to them. The areas covered were as

following:

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(e) Sample Unit

Gurgaon

Faridabad

Delhi

Sample Size

The sample size taken for the purpose of study was around 70 respondents from Entire NCR

Market. All the respondents were chosen randomly. Although every effort was made to cover

all the retailers and dealers.

(g) Contact Method

I personally visited most of the Retailers and Dealers. Few shopkeepers due to their busy

schedule or loyalty for their brand refused to respond at all.

(h) Analytical tools

The data, which was collected, was summarized and tabulated on MS-excel for further

analysis. The analysis performed was mainly comparative analysis using statistical analytical

tools. The tools that have been used are as follows:

Pie Chart

Bar graph

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Introduction to Cement Industry

The cement industry is one of the main beneficiaries of the infrastructure boom. With robust demand and adequate supply, the industry has bright future. The Indian Cement Industry with total capacity of 250 million ton(2010) is the second largest after China.

Cement consumption in India has increased by over 22% in 2009-10 from 2007- 08.Among the states, Maharashtra has the highest share in consumption at 12.18%,followed by Uttar Pradesh, In production terms, Andhra Pradesh is leading with 14.72% of total production followed by Rajasthan.

Cement industry has contributed around 8% to the economic development of India. Cement industry has a long way to go as Indian economy is poised to grow because of being on verge of development.

The company continues to emphasize on reduction of costs through enhanced productivity, reduction in energy costs and logistics expenses.As per the Working Group report on Cement Industry for the formulation of the 11th Plan, the cement demand is likely to grow at 11.5 per cent per annum during the 11th Plan and cement production and capacity by the end of the 11th Plan are estimated to be 269 million tones and 298 million tones, respectively, with capacity utilization of 90 per cent.Foreign cement companies are also picking up stakes in large Indian cement companies. Swiss cement major Holcim has picked up 14.8 per cent of the promoters' stake in Gujarat Ambuja Cements (GACL). Holcim's acquisition has led to the emergence of two major groups in the Indian cement industry, the Holcim-ACC-Gujarat Ambuja Cements combine and the Aditya Birla group through Grasim Industries and Ultratech Cement.

During January 2011, the cement production touched 14.52 MT, while the cement despatches quantity was 14.47 MT during the month. The total cement production for April-January 2010-11 reached 136.51 MT as compared to 130.85 MT over the corresponding period last fiscal. Further, cement despatches also witnessed an upsurge from 130.09 MT during April-January 2009-10 to 135.56 MT during April-January 2010-11.

According to latest research report “Indian Cement Industry Forecast to 2012”, produced by RNCOS, cement production in India has grown at a brisk pace during the last few years. Despite recession, Indian cement industry performed incredibly well amid recent boom in the infrastructure and housing markets. In view of the upcoming massive infrastructure projects, manufacturers are aggressively increasing their production capacities and the study foresees a 10.5 per cent CAGR growth in cement production during FY 2010-FY 2014.

According to a press release, the push in cement demand during the last fiscal was attributed to revival of infrastructure and real estate projects, especially in rural areas.

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New Investments

Cement and gypsum products have received cumulative foreign direct investment (FDI) of US$ 2,315.58 million between April 2000 and January 2011, according to the Department of Industrial Policy and Promotion (DIPP).

BK Birla Group outfit, Kesoram Industries, is setting up a 2,000-tonne a day packaging unit in Medak district of Andhra Pradesh at a cost of Rs 8 crore (US$ 1.76 million), according to a filing by the company to the stock exchanges. The proposed unit would cater to the packing needs of its cement manufacturing unit at Sedam in Karnataka.

Birla Corporation, Flagship Company of the M. P. Birla Group, is planning to set up a 1 MT cement plant in Assam at an investment of around Rs.450 crore (US$ 99 million). The company has signed a memorandum of understanding (MoU) with the Assam Mineral Development Corporation to this effect.

Madras Cements Ltd is planning to invest US$ 178.4 million to increase the manufacturing capacity of its Ariyalur plant in Tamil Nadu to 4.5 MT from 2 MT by April 2011.

My Home Industries Limited (MHI), a 50:50 joint venture (JV) between the Hyderabad-based My Home Group and Ireland's building material major CRH Plc, plans to scale up its cement production capacity from the existing 5 million tonne per annum (mtpa) to 15 mtpa by 2016. The company would undertake this capacity expansion at a cost of US$ 1 billion.

To cater to the growing demands, Everest Industries is planning to set up a new manufacturing facility in East India. The company is looking at acquiring about 22 acres for the facility that will start with the production of roofing materials and other products will be rolled out in a phased manner. Besides, the company is likely to consider setting up a new factory for the fibre cement boards as it is at present utilizing almost 100 per cent of its 90,000 tonne of installed capacity across different plants.

Swiss cement company Holcim plans to invest US$ 1 billion in setting up 2-3 Greenfield manufacturing plants in the country in the next five years to serve the rising domestic demand. Holcim is present in the country through ACC and Ambuja Cements and holds around 46 per cent stake in each company. While ACC operates 16 cement plants, Ambuja Cements controls five plants in India. The Aditya Birla group is the largest cement-making group by capacity in the country and controls Grasim Industries and Ultratech Cement.

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Government Initiatives

The cement industry is pushing for increased use of cement in highway and road construction. The Ministry of Road Transport and Highways has planned to invest US$ 354 billion in road infrastructure by 2012. Housing, infrastructure projects and the nascent trend of concrete roads would continue to accelerate the consumption of cement.

Increased infrastructure spending has been a key focus area. Finance Minister Pranab Mujherjee has proposed to earmark US$ 47 billion for infrastructure development during fiscal 2011-12.

The infrastructure sector has received an impetus in the form of increased funds and tax related incentives offered to attract investors for tapping the infrastructure opportunities around the country. Introduction of tax free bonds, creation of infrastructure debt funds, formulating a comprehensive policy for developing public private partnership projects are some announcements which will give a fillip to the infrastructure sector which is the backbone of any economy.

World Cement Consumption:

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Source : Independent Economic survey report

 The two fastest growing economies viz. China and India have a 7x difference amongst them in per capita consumption. The fixed capital formation rate is almost same at 40% for china and 39% for India.

Though the fastest growing economy in BRIC, India has lowest per capita cement consumption.

Demand Supply Equilibrium:

Cement is a mixture of limestone, Clay, Silica and Gypsum. It is a fine powder which when mixed with water sets to a hard mass as a result of hydration of the constituent compounds. It is the most commonly used construction material. Cement is manufactured by burning a mixture of limestone and Clay at high temperatures in a kiln, and then finely grinding the resulting clinker along with Gypsum. The end product thus obtained is called Ordinary Portland Cement (OPC).

Different Types of Cement

There are different varieties of cement based on different compositions according to specific end uses, namely Ordinary Portland Cement, Portland Pozolona Cement, Portland Blast Furnace Slag Cement, White Cement and Specialized Cement. The basic difference lies in the percentage of clinker used.

1. Ordinary Portland cement (OPC):

OPC, popularly known as grey cement, has 95% clinker and 5% of Gypsum and other materials. It accounts for 70% of the total consumption n. White cement is a variation of OPC and is used for decorative purposes like rendering of walls, flooring

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The two fastestgrowing economies

viz. China and India

have a 7x difference

amongst them in percapita consumption

The fixed capital

formation rate isalmost same at 40%

for China and 39% for

India

Thought the second

fastest growing

economy in BRIC,

India has lowest per

capita cementconsumption

capita cementconsumption

The two fastestgrowing economies

viz. China and India

have a 7x difference

amongst them in percapita consumption

The fixed capital

formation rate isalmost same at 40%

for China and 39% for

India

Thought the second

fastest growing

economy in BRIC,

India has lowest per

capita cementconsumption

The two fastestgrowing economies

viz. China and India

have a 7x difference

amongst them in percapita consumption

The fixed capital

formation rate isalmost same at 40%

for China and 39% for

India

Thought the second

fastest growing

economy in BRIC,

India has lowest per

capita cementconsumption

etc. It contains a very low proportion of iron oxide. Ordinary Portland cement is the most commonly used cement for a wide range of applications.

2. Portland Pozolona Cement (PPC):

Portland pozolona cement is Ordinary Portland Cement blended with Pozzolanic materials (power-station fly ash, burnt clays, ash from burnt plant material or Siliceous earths), either together or separately. Portland clinker is ground with Gypsum and Pozzolanic materials which, though they do not have cementing properties in themselves, combine chemically with Portland cement in the presence of water to form extra strong cementing material which resists wet cracking, thermal cracking and has a high degree of cohesion and workability in concrete. PPC has 80% clinker, 15% pozolona and 5% gypsum and accounts for 18% of the total cement consumption. It is cheaply manufactured because it uses fly ash/burnt clay/coal waste as the main ingredient.

3. Portland Blast Furnace Slag Cement (PBFSC):

PBFSC consists of 45% clinker, 50% blast furnace slag and 5% Gypsum and accounts for 10% of the total cement consumed. It has a heat of hydration even lower than PPC and is generally used in construction of dams and similar massive constructions. Portland blast-furnace slag cement contains up to 70 per cent of finely ground, granulated blast-furnace slag, a nonmetallic product consisting essentially of Silicates and Aluminum-silicates of Calcium. Slag brings with it the advantage of the energy invested in the slag making. Grinding slag for cement replacement takes only 25 per cent of the energy needed to manufacture Portland cement. Using slag cement to replace a portion of Portland cement in a concrete mixture is a useful method to make concrete better and more consistent.

4. White Cement:

White Portland cement has essentially the same properties as gray cement, except for color, which is a very important quality control issue in the industry. It is manufactured using fuel oil (instead of coal) and with iron oxide content below 0.4% to ensure whiteness. Special cooling technique is used. It is used to enhance aesthetic value, in tiles and for flooring. White cement is much more expensive than grey cement.

5. Specialized Cement:

Oil Well Cement: is made from clinker with special additives to prevent any porosity. Rapid Hardening Portland cement: It is similar to OPC, except that it is ground much

finer, so that on casting, the compressible strength increases rapidly. Water Proof Cement: OPC, with small portion of calcium stearate or non-saponifibale

oil to impart waterproofing properties.

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COMPANIES PROFILE:

ACC CEMENT LTD.

“Build with confidence”

ACC cement ltd.is one of the leading cement manufacturing companies current capacity is about 30 million tonne, which was established in 1 August,1936 by F.E. Dinshaw through the historic merger of ten companies to form a cement giant. These companies belonged to four prominent business groups - Tata’s, Khataus, Kellick Nixon and F E Dinshaw groups.

ACC Limited is India's foremost manufacturer of cement and concrete. ACC's operations are spread throughout the country with 16 modern cement factories, more than 40 Ready mix concrete plants,19 sale units,20 sales offices, 54 area offices,194 warehouses and several zonal offices. It has a workforce of about 9,000 persons and a countrywide distribution network of over 9,000 dealers with their sub dealers.

ACC Concrete Limited ,ACC Mineral Resources Limited .Bulk Cement Corporation (India) Limited ,Lucky Minmat ,National Limestone Company Private Limited ,Encore Cement &

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Additives Private Limited are the subsidiaries of the ACC Limited.Holcim group holds 50.1% equity in ACC Ltd.

ULTRATECH

“Har Nirman Ki Jaan”

Founded in 1979, Ultratech, Inc. has an annual capacity of 52 mtpa. It manufactures and markets Ordinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozolona Cement. It also manufactures ready mix concrete (RMC).The company has 11 integrated plants, one white cement plant, one clinkerisation plant in UAE, 15 grinding units – 11 in India, 2 in UAE, one in Bahrain and Bangladesh each and and five terminals — four in India and one in Sri Lanka.

Ultratech, Inc. is a leader in both of its major technology markets—advanced packaging and laser processing.  The company’s advanced packaging lithography systems deliver compelling yield gains and superior packaging performance at the industry’s lowest overall cost of ownership.  Equally impressive is Ultratech laser processing technology which increases chip performance while reducing energy consumption.

AMBUJA CEMENT LTD.“Ye Dewar tut ti kyon nahin”

Ambuja Cements Ltd. (ACL) is thied largest cement manufacturing company in India. The Company, initially called Gujarat Ambuja Cements Ltd., was founded by Narotam Sekhsaria in 1983 with a partner, Suresh Neotia. Sekhsaria’s business acumen and leadership skills put the company on a fast track to growth. The Company commenced cement production in 1986. The global cement major Holcim acquired management control of ACL in 2006. Holcim today holds 50.002% equity in ACL. The Company is currently known as Ambuja Cements Ltd.

ACL has grown dynamically over the past decade. Its current cement capacity is about 25 mtpa. The Company has five integrated cement manufacturing plants and eight cement grinding units across the country. ACL enjoys a reputation of being one of the most efficient cement manufacturers in the world. Its environment protection measures are on par with the finest in the country. It is one of the most profitable and innovative cement companies in India.

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JK GROUP

“Vishwas Hai, Isme Kuch Khaas Hai”

JK Lakshmi, JK Supper Cement & JK Cement are the three cement companies of the JK organization current capacities about 6 mtpa. The story of JK Lakshmi Cement Limited thus began and as it has completed more than 25 years of its glorious existence, the company is renowned for strength, quality and excellent performance.

One of the established names in the cement industry, JK Lakshmi Cement Ltd has state-of-the-art plant at Jaykaypuram, dist. Sirohi, Rajasthan. With the capacity expansion and further commissioning of a split location grinding unit at Motibhoyan, Kalol (Gujarat), the combined capacity of the Company today stands at 4.75 Mn. MT per annum. With the use of the latest technology from M/s Blue Circle Industries and modern equipments from M/s Fuller International of USA, the Company is going from strength to strength. JK Lakshmi is the major cement manufacturer of the JK group which have wide network of 70 cement dumps and over 2200 dealers spread across the states of Rajasthan, Gujarat, Delhi, Haryana, U.P., Uttaranchal, Punjab, J&K, Mumbai & Pune and the vast pool of highly trained & dedicated marketing and technical service team helps the Company to service it's customers at their doorstep.

JAYPEE ASSOCIATE Jaypee group is the fast growing cement producer in the country. The groups cement facilities are located in the Satna Cluster (U.P), which has one of the highest cement production growth rates in India.

The group produces special blend of Portland Pozolona Cement under the brand name ‘Jaypee Cement’ (PPC). Its Cement Division currently operates modern, computerized process control cement plants with an aggregate capacity of 21.30 mtpa(2.2 mtpa capacity in Joint Venture with SAIL). It is in the midst of capacity expansion of its cement business in Northern, Southern, Central, Eastern and Western parts of the country.

SHREE GROUP Shree Cement is the largest cement manufacturer in North India and among the top five cement manufacturing groups in the country. The company is being professionally managed by its promoters Shri B. G. Bangur, Chairman and Shri H. M. Bangur, Managing Director. Turnover of the company for 2009-10 was Rs. 3632 Crores and Net profit was Rs. 676 Crores, while in 2008-09 the company posted a turnover of Rs. 2715 crore and generated operating profit of nearly Rs. 1034 crore .

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It has more than quadrupled its capacity in the last 5 years to reach present cement capacity of 13.512 million tons p.a. with manufacturing plants at Beawar, Ras, Khushkhera, and Suratgarh and Jaipur in Rajasthan and Laksar (Roorkee) in Uttrakhand. The Company follows a multi-brand strategy and sells cement under the highly recognized brands of Shree Ultra, Bangur and Rockstrong. Which together enjoy largest market share in high value markets of Rajasthan, Delhi & Haryana.

OTHERS CEMENT COMPANIES:

1. Andhra Cements Ltd.2. Barak Valley Cements Ltd.3. Bheema Cements Ltd.4. Binani Cement Ltd.5. Birla Corporation Limited6. Burnpur Cement Ltd.7. Chettinad Cement Corporation Limited8. Dalmia Cement (Bharat) Limited9. Deccan Cements Ltd.10. Everest Industries Ltd.11. Gujarat Sidhee Cement Ltd.12. Heidelberg Cement India Ltd.13. Hyderabad Industries Ltd.14. Indian Hume Pipe Company Ltd.15. Kalyanpur Cements Ltd.

SANITARY SECTOR:

India is expected to be one of the world's fastest growing countries for sanitaryware consumption. The comparative penetration levels in neighboring countries are as follows: Pakistan: 50%, Sri Lanka: 65%, Malaysia: 94% and Thailand: 96%.

The government impetus to improve hygiene and sanitation is likely to increase the demand for sanitary ware in India. Moreover the increasing urbanization of India and the consequent requirement for residential and commercial buildings will be a major driver for growth of sanitary ware. Along with this the focus of the central and state governments to provide housing facilities to the poor, is also expected to generate demand.

The National Housing Policy formulation that envisages "Housing for all" by the end of Ninth Plan period is a big step towards this. Indira Awaas Yojana, Samgra Awaas Yojana are programs for providing housing to the rural poor is a key step taken by the government in this area. The housing development organizations like HUDCO, State Housing Development Boards and Rajiv Gandhi Rural Housing Corporation Ltd. are also playing a large role in this initiative.

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It is estimated that there is currently a demand for 20 million housing units in India. Further, a significant number of the 115 million housing units across the country will need reconstruction for improvement. Therefore a replacement market will emerge, though currently original equipment sanitary ware market accounts for nearly 90% of the market.

Sanitary ware industry statistics

World production : 187 Million pieces

India’s Share : 6.7 Million pieces

World ranking : not in the top 10 (India a/c for 3.33%)

(In production)

Global industry growth rate : 5-7%

Growth rate (Indian domestic market) : 10%

HindwareIt was the year 1960 when Mr. Rajendra K. Somany established Hindustan Twyfords, in collaboration with Twyfords Ltd. of UK.  With a bent towards innovation coupled with the intention to introduce vitreous china ceramics in India, he identified the sanitary ware market as the segment of interest.  Hindustan Twyfords was the first in the country to make available vitreous china ceramics, offering significant improvement from the prevalent earthenware sanitary products.  Aware and focused towards the burning need for sanitation across the country, this opportunity well extended his desire for social welfare, and bringing a much needed service to the nation. 

Their institutional partners include the respectable business houses India – DLF, The Taj Hotels, GMR, Unitech, ITC Hotels, Mahindra, Infosys, Coca Cola, Pepsi, Dr. Reddy’s Laboratories, Hindustan Unilever, Peron Ricard, Pfizer, Sab Miller, Dabur, Nestle,etc.

Some Interesting Facts:

Hind ware brand has been recognized as a Super brand consecutively for the last four years.

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Hind ware manufactures ten sanitary ware pieces every two minutes; 310 every hour and 2.7 million each year.

Possesses the largest distribution network in India's building products industry.

Jaguar:

The Jaguar saga began in 1960, when a determined Mr. NL Mehra decided to start a bath fittings business. However, this industry was still at a very nascent stage in India and the technology to make high quality bath fittings did not exist in the country. But he simply followed his instincts and took the plunge with an entrepreneurial spirit and a passion to excel as his only resources.

Little did he know that some day, he would not only be hailed as a pioneer in the field but would continue to give it future direction in the decades to come.

Today, the Jaguar Group as a whole has emerged the undisputed market leader in the field of bath fittings in India. Heralded as a torchbearer of change through its policy of continuous innovation and up gradation of technology, Jaguar has completely revolutionized the way the bath fittings industry used to function in India.

The Manufacturing Units A most modern manufacturing unit and one of the biggest in Asia Spread over a total area of 21,500 sq. meters, and a current average production of

30,000 units per day, with scope for further enhancement. An almost completed, second manufacturing unit, to take the daily average production

even higher.

Cera : One of the leading business house from India and we are engaged into wide spectrum of activities related to manufacturing Ceramic Sanitaryware, import and export of various bathroom related products like Tiles, C.P Fittings etc. Company manufactures a wide range of Sanitarywares under the brand name of "CERA", which enjoys a good reputation in the market. We are in fact the first Indian company to have ISO 9001: 2000 and 14001 certification for its products ensuring you internationally acceptable product quality at all times.

Parry ware Established in the year 1788, Parry is presently engaged in a wide galaxy of diversified activities. It became a member of the Murugappa group in the year 1981 and thereafter the story has been one of turnaround and of steady growth. 

Currently, E. I. D. Parry has evolved into one of the largest business groups in the country. It is engaged in the manufacture and marketing of a wide-range of products, that can be broadly divided into the following groups:

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Sugar – comprising of Sugar, Alcohol, Co-generation etc

Bio Products

Nutraceuticals

A strong sense of commitment and adherence to business ethics has helped E.I.D. Parry succeed in bringing to life the larger picture and to ‘Go Beyond’ in all their ventures. 

EID Parry has always been a pioneer- be it in developing and introducing quality products in the market or conforming to environmental standards even before they become mandatory. Given below are some of the prestigious awards and achievements won by the company: 

SUGAR DIVISION:Nellikuppam has been recognized as a Zero-waste plant with a strict adherence to quality and high productivity. They have been the recipients of several awards and certifications with the course of time. Some of the most significant achievements by the company are: 

ISO 14001 certification in Pudukottai & Nellikuppam The recipients of the Green Tech Award on Safety  Instrumental in organizing a SHE event at the Murugappa Group level 

NUTRACEUTICALS:The Company is among the very few Nutraceuticals manufacturers to have the highest number of international certifications.

Data Analysis and Interpretation

Q1.Product do you deal

Cement 12Aggregates 0Sanitary 14Cement and Aggregates 19Cement, Sanitary & Aggregates

2

23

26%

30%

40%

4%

cementaggregatessanitarycement and aggregatesCement,Sanitary & aggaregates

Pie chart clearly shows that out of 70 samples there is maximum dealers engaged in business

of cement and aggregates (i.e. 19), followed by sanitary ware business in which there is 14

dealers who are doing business of sanitary ware only and 12 dealers who are engaged in

cement business only.

It represents that maximum of cement dealers are also doing business of aggregates all

together there is no as such specific counter which is doing business of aggregates only.

Q2.Employee employed by dealer regular.

cement Sanitaryware

collection 0 0helper 92 40sales staff 16 7shop manager 36 14others 0 0

24

64%11%

25%

cement

collection helpersales staffshop managerothers

66%

11%

23%

sanitaryware

collection helpersales staffshop managerothers

These above pie charts Cleary indicates that maximum of helpers and sales staff people

employed by dealers who are doing cement and aggregates business as compare to

sanitaryware business.

Q3.Dealer having home delivery system from counter / godown

yes 38no 32

25

54%

46% yesno

This pie char represents that 38 out of 70 dealers have home delivery system from

counter/godown.

Q4.Mode of delivery used from counter or godown to site or location

Truck 25Thela 23Rickshaw 323-wheelers 20Van/ Auto 9Others (pl specify) 13

20%

19%

26%

16%

7%

11%

TruckThelaRickshaw3-wheelersVan/ AutoOthers (pl specify)

This char represents that rickshaw (32) is the mode of delivery maximally used by dealers to

transport material from godown to location and then followed by truck (25) and Thela (23).

This represents that maximum of dealer are supply their material in local market or near

locations to them.

Q5.Other construction material in which dealer is dealing.

Bricks 15Sand 18

26

Hardware 4Steel 10Tiles 9Paint 3Aggregates 20Fertilizer / Pesticides 1Others, Please Specify 0

19%

23%

5%13%

11%

4%

25%

1%

BricksSandHardwareSteelTilesPaintAggregatesFertilizer / PesticidesOthers, Please Specify

This pie chart represents that in other construction materials dealer are doing maximally of

sand (18) and bricks (15) business as compare to others like hardware,steel,tiles,paints and

fertilizers.

Q9.Authorised dealer of cement,sanitary and aggregates.

ACC-1 7BIRLA PLUS-2 2

27

GRASIM-3 5AMBUJA-4 11

SHREE/bangur-5 8JK-6 7

CENTURY-7 0JP-8 3

JK LAXMI-9 1CERA-10 14

HINDWARE-11 6LAURET-12 2OTHERS-13 15

ACC(CRUSER)-14 1ULTRATECH(CRUSER)-15 0

JAMMU SAND-16 1OTHERS-17 11

7%2%

5%

12%

9%

7%

3%

1%

15%

6%

2%

16%

1%

1%

12%

ACC-1

BIRLA PLUS-2

GRASIM-3

AMBUJA-4

SHREE/bangur-5

JK-6

CENTURY-7

JP-8

JK LAXMI-9

CERA-10

HINDWARE-11

LAURET-12

OTHERS-13

ACC(CRUSER)-14

ULTRATECH(CRUSER)-15

JAMMU SAND-16

OTHERS-17

This pie chart represents that out of collected 70 samples and out of them 33 samples of

cement in which Ambuja is leading have maximum authorized dealers followed by

Shree,ACC and JK in cement sector while in sanitary out 16 samples CERA Sanitaryware

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who is having maximum no. of dealers whereas in aggregates there is no as such dealer of

it’s all a local and blind business completely depends on demand.

Q10.Type of end customer to which basically dealer is dealing.

Sub-dealers 16Projects 13IHB 47Others 2

21%

17%

60%

3%

Sub-dealersProjectsIHBOthers

This pie chart represents that maximally dealer supplying their maximum material for

household builders and there is maximum of counter sale which is 80% combine of

IHB,Project and Others (in others basically they supply to big project builders).

Q12.Ratings:-For reason to give preference to do more sales in a particular product.

Factors Cement(scale1to5)profit margin 2.54

29

promotional activities 3.96customer demand 4.09credit facility 2.06logistics support 4.63other(pl specify) 0.15

profit m

argin

promotional

activiti

es

custo

mer dem

and

credit f

acility

logistics

support

other(pl sp

ecify)

012345

2.54

3.96 4.09

2.06

4.63

0.15

Cement(scale1to5)

Cement(scale1to5)

This pie chart shows rating for cement only in which the output comes from responses

reflects that factor which motivates maximum to dealers and retailers to do business of

cement is logistics support and customer demand and then followed by promotional activity,

profit margin and credit facility.

Factors Sanitary(scale1 to5)profit margin 1.87promotional activities 3.25customer demand 3.81

30

credit facility 2.12logistics support 3.75other(pl specify) 0

profit m

argin

promotional

activiti

es

custo

mer dem

and

credit f

acility

logistics

support

other(pl sp

ecify)

00.5

11.5

22.5

33.5

44.5

1.87

3.253.81

2.12

3.75

0

Sanitary(scale1 to5)

Sanitary(scale1 to5)

This pie chart represents that mostly all factors are equally important to dealers and retailers

which motivate them to do business of sanitary ware but among them customer demand,

logistics support and promotional activities are the key reasons.

Factors Aggregates(scale1 to5)profit margin 4.83promotional activities

1

customer demand 4

31

credit facility 3.6logistics support 3.6other(pl specify) 0

profit m

argin

promotional

activiti

es

custo

mer dem

and

credit f

acility

logistics

support

other(pl sp

ecify)

0123456 4.83

1

4 3.6 3.6

0

Aggregates(scale1 to5)

Aggregates(scale1 to5)

In this chart it shows that it is profit margin, customer demand and [credit facility&logistics

support] demand which motivates dealer of any business to do business of aggregates also all

together.

Q14.Facilities from company or dealer side.

30%

34%

25%

11%

Qunatity discountTour packagesAnnual discountspecial discountOthers (pl specify)

According to this pie chart maximum of dealer getting facility of tour

packages(34%),quantity discount(30%) and annual discount(25%) from company side

whereas exclusive discount is very low which shows there is very less number of exclusive

dealers in NCR region.

Q16.Rating:-Factors in terms of importance to dealers/retailers.

Factors Ratings(scale 1 to

32

5)Brand pull/ prestige 3.61Cash incentives 2.97Non-cash incentives 3Access to credit/ financing

3.53

Supply dependability & logistics support

3.51

Network discipline & management

3.53

Company sales force support

3.27

Marketing & Promotional Initiatives

4.14

01234 3.61

2.97 33.53 3.51 3.53 3.27

4.14Ratings(scale 1 to 5)

Ratings(scale 1 to 5)

This pie chart represents ratings according to dealer and retailer on a scale of 1 to 5 which

reflects that maximum dealers rated that it’s marketing and promotional initiatives as key

reason then followed by brand pull/prestige, access to credit financing, network and discipline

and supply dependability.

Q17.Ratings:- According to dealer the key success strategies

33

Elements Ratings Competitive pricing 1.74Influencer benefits (by dealer)

1.82

Local marketing 2.55Active market development

2.04

Non-price incentives 2.12Logistics support 2.46Quality of 2.53

Competitive

pricing

Influencer

benefi

ts (by d

ealer

)

Local

mark

eting

Active

mark

et dev

elopmen

t

Non-price i

ncentive

s

Logis

tics su

pport

Quality

of Cem

ent

00.5

11.5

22.5

3

1.74 1.82

2.552.04 2.12

2.46 2.53

Ratings scale(1 to 3)

Ratings scale(1 to 3)

This pie chart represents that according to dealer and retailer it’s local marketing, quality of

goods and logistics support are the key success strategies and then followed by rests.

Q20.Preference of dealers want to switch from one product to another.

34

yes 21No 49

30%

70%

yes no

According to this pie chart there is maximum of dealers don’t want to switch from one

product to another (49).

FINDINGS :

35

The overall ROI various product category is as follows.

In Cement it is ranging from 20% to 40%

In sanitaryware it is between 36% to even 120%

In aggregates it is.60% to 140%

ACC is poor in ATL & BTL Specially in Gurgaon & Faridabad. Dealers are not satisfied with company sales force support & Whereas they feel

competitors doing better on the same parameters which include UTCL & ACL Retailers of JK Cement & shree cement are of the opinion that company’s schemes &

benefits are not passed to them fully by their dealers/wholesalers. In Cement , UTCL’s ATL & BTL is best among all players, specially their hoarding & TV

Commercials Ambuja is very strong in advertising, they regularly organise meetings for their masons &

Contractors and their also arrange for dealers’ get together & distribute gifts to them

ACC is currently focusing mainly on urban areas, where as there is good scope in rural &

semi-urban areas of Delhi ( Shani market, Sangam vihar, Ratiya marg, Magal Market)

There are many local brands in sanitary ware business who are selling very good qty

because of their high margins.

Dealers from Sanitary ware are less likely to shift to other product category such as cement

& aggregates as profit margin is more in sanitaryware.

Positive points of ACC

36

There is customer pull for ACC in Ghaziabad & Noida region

Better quality cement compared to other brands

Service is good.

High on quality, customer value and customer care.

High supply in market.

Problems Faced By:-

1. Dealers:

Dealers were partially satisfied with their respective company’s Service, price, transport etc.

Dealers want more participation in mason meets and dealers meetings.

Dealers say that company pressurize them to buy more and sell more and do not easily heed

to their demand of providing paint and boards.

Dealers say that companies do not provide them cheques and benefits on time as promised.

2. Retailers:

Retailers say that some dealers are selling to customers at lower price than they give to

retailers e.g. if a dealer sells stock to a retailer at 256/bag, he (dealer) sells to customer at

254, so nobody will buy from retailer, this affects retailer’s sale.

Retailers say that dealers do not provide them gift or benefits like promotional material like

pen, pads etc.

Retailers say that dealers men do not make frequent visits to the retail shops, they make

regular visits 2-3 times /day when they have to take payments.

Retailers also want more participation in mason meets.

No promotional schemes for retailers.

37

RECOMMENDATIONS

ACC should deliver gifts and cheques as per the time limit or as promised by the company

officers.

To provide better value to customers packaging should be done with utmost care to minimize

the leakage.

ACC should provide coupon scheme which was earlier provided by ACC & which was a

huge hit.

More aggressive marketing methods should be used to push the sales and should anticipate

the market fluctuations to respond in timely manner before competitors take any action or

make announcements.

The reach to the semi-urban and semi-rural market needs to be strengthened.

More effective distribution channels to be applied to make logistics and supply chain better

and robust.

Dealers and Retailers should be informed about the price through SMS.

Company should more of wall & Shop painting to increase brand visibility

Most of the dealers are not aware of the coming or ongoing schemes of the company, so

schemes awareness should be increased to boost up sales.

While visiting the construction sites company engineers should take along with them the

retailers who represent the area, this will increase their loyalty towards company.

ACC can introduce a 25kg bag so as to increase sale in market because it has been find

during survey time that mostly dealer supply at least 10 bags for household repairing

purposes & it has been found that customer buy other brand then ACC for repairing purpose

because those brands costs them less, if a small bag is been launched in market with some gift

in bag for worker like some repairing tool this will bring brand loyalty and awareness.

38

LIMITATIONS OF THE STUDY

Dealers and retailers were reluctant in giving information as they feared that competitors

might take advantage.

The research was done within a limited duration, so a detailed and comprehensive study

could not be made.

Most of the dealers were illiterate, so it was difficult to convince them about the importance

of the project.

Sometimes it was seen dealers were biased towards some brands.

39

BIBLIOGRAPHY

BOOKS:

Zikmund, William G, “Business Research Methods” Cengage Learning, India Edition (2009)

p. 50-99.

Kotler, Philip, “Marketing Management” Prentice- hall of India Pvt. Ltd.

New Delhi-110001 8th Edition -1995

WEBSITES:

www.cmaindia.com

www.rncos.com

www.researchandmarkets.com/reports/1084309

www.cementcorporation.co.in/

business.mapsofindia.com/cement/

www.researchandmarkets.com/reports/368302/india_cement

www.google.com

www.wikipedia.com

www.hindwarehomes.com

www.cera-india.com

www.jaquar.com

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