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―An In-depth Study into Branding of Cement
& Its Effectiveness on Final Buyer‖
A Thesis
Submitted in Partial Fulfillment of the Requirement
For the Degree of
Doctor of Philosophy IN MANAGEMENT
Submitted to
GANPAT UNIVERSITY
RESEARCH GUIDE:
DR. Mahendra Sharma
Pro-Vice Chancellor
Ganpat University
RESEARCH SCHOLAR:
Kettan S. Karkhanis
Reg No. MM/001/008/08
Ganpat University
V. M. Patel Institute of Management
Ganpat University, Ganpat Vidyanagar
Mehsana-Gozaria Highway, Mehsana-384012
Gujarat, India.
September – 2013
2
PREFACE
Cement is essential for construction activities like building houses, factories, bridges,
roads etc. One of the characteristics of a developed country is its growing
infrastructure, thus, cement is an important element for the development of a country
and its economy.
Cement companies do not have much of application-oriented research and
development efforts but this will become critical for future success. To a large extent,
this is related to creating the application and customer of the future and understanding
customer needs based on the emerging environment. Companies will need to create
niche products and develop the market for such products by providing solution-based
offerings to the customer. Innovation will be very important, to create high-grade and
cheaper quality of cement. Indian companies have been moving from lower grade
cement to higher over the years, and would have to continue to roll out even better
quality to compete with the global players, and local competition. New Cement
products like RMC (Ready Mix Concrete) will help create a company carves out a
niche in the market. With the surge in world population, and continuously increasing
pressure on natural resources, there is a need for using new technologies that make
Cement production Environment friendly. It is imperative for innovators in the
concrete and cement industry to consider a heterogeneous approach to materials and
to integrate knowledge of other fields under a triple bottom-line of economic, social
and environmental criteria. Stakeholder concerns have increased over the years and
there are questions raised as regards sustainable development.
Local cement companies are turning aggressive and innovative on brand promotion
and market penetration braving a recessionary trend triggered by high freight and total
cost, inadequate power and unstable price levels. Indian cement marketers have long
been trying to brand this commodity. Cement companies are now trying to create a
brand pool.
In today's highly competitive business environment together with the global meltdown
of economy, manufacturers of generic commodity products like cement must achieve
some degree of differentiation for their products in order to avoid their product being
viewed as a basic generic commodity. This will help them to develop strong cement
brands in this sector, and move the customers from a low-involvement decision-
3
making process to a medium- or high-involvement decision-making pattern. Hence
this paper attempts to find out the customers' preference pattern and the factors which
influence the customers' preference so that a strong cement brand can be developed by
understanding the values the customers are looking for, and then develop a suitable
branding strategy. This study has been carried out with some of the major market
influencers in the four fastest growing metro cities in India. The results of the survey
shows that the final buyers are not only viewing physical products, but also the
distribution, service, quality, package, durability, price, value for money, company
image and company policy that accompany the product. The study concludes with the
managerial implications and suggestions for cement manufacturers towards
developing suitable branding strategies.
4
ACKNOWLEDGEMENTS
Studying Branding of cement and its effectiveness on final buyer was challenging and
not easy for me. But the support, guidance and encouragement of all who helped me
made this research adventure a ‗Wow!‘ experience. I wish to thank all for their
contribution and support.
I would like to begin by sincerely thanking Prof. (Dr.) Mahendra Sharma for being my
guide and mentor during the entire process of my research work. I consider myself
extremely fortunate to have Dr. Sharma‘s professional and personal support, and
unfaltering encouragement. I can‘t even begin to articulate how much I have learned
from him. Without his connoisseur guidance, support and encouragement, I would
not be able to complete my work successfully.
I owe a debt of gratitude to Dr. L.N.Patel, Vice-Chancellor, Ganpat University, Prof.
P. I. Patel, Hon. Director, M.D.E.F; GanpatVidyanagar, Dr. D.V.Patel, Founder, V.M.
Patel institute of Management, Ganpat University and Management of the Ganpat
University for their moral support and motivation.
I am grateful to prof. (Dr.) H.J. Jani to review my research work continuously and to
provide valuable suggestions to improve my work. And also many thanks to Associate
Professor Shri. Haresh Barot for consistently adding values to my thesis.
I wish to thank Masons, Contractors, Retailers, Architects and IHBs (Individual
House Builders).
I also want to thank, Dr. Rajesh Deshpande, Prof. C.Y. Nimkar, Shakti Patnaik
(Innovative Research Services (India) Pvt. Ltd.), Colleagues from Cement Industry
and all the students who have worked with me, during the research.
Finally, I would like to thank my wife Shraddha, for her continuous and unconditional
support.
At last, I thank one and all, for the divine blessings.
5
CERTIFICATE BY RESEARCH GUIDE
This is to certify that the thesis titled “An In-depth Study into Branding of
Cement & Its Effectiveness on Final Buyer.” submitted by
Kettan S. Karkhanis, is the bonafide work completed under my
supervision and guidance for the award of degree of Doctor of Philosophy
(Ph. D.) in Management.
Research Guide:
Dr. Mahendra Sharma
Pro–Vice Chancellor,
Ganpat University, Ganpat Vidyanagar,
Gujarat – India.
Forwaded Through:
Dr. Mahendra Sharma
Dean, Faculty of Management Studies,
Ganpat University, Ganpat Vidyanagar,
Gujarat – India.
Date:
Place: Ganpat University
6a
DECLARATION BY CANDIDATE
The thesis titled ““An In-depth Study into Branding of Cement & Its
Effectiveness on Final Buyer.” is submitted in fulfillment of the
requirements for the award of the degree of Doctor of Philosophy (Ph.D)
in Management to Ganpat University, Mehsana. I declare that this thesis
is based on my original work except for quotations and citations which
have been duly acknowledged. I also declare that this thesis has not been
previously or concurrently submitted either in whole or in part, for any
other qualification to Ganpat University or other institutions.
Research Scholar:
Kettan S. Karkhanis
Reg. No. MM/001/008/08
Date: 01.09.2013
Place: Ganpat University
CERTIFICATE
This is to certify that the thesis titled “An In-depth Study into Branding of Cement &
Its Effectiveness on Final Buyer” submitted by Kettan S. Karkhanis fulfil the
suggestions given by doctoral committee during pre-doctoral seminar held on 22nd
September 2012, vide Ganpat University letter no. 89/GNU/Ph.D/66/2013 dated 21st
January,2013 are duly incorporated in this thesis.
Research Guide:
Dr. Mahendra Sharma
Pro–Vice Chancellor,
Ganpat University, Ganpat Vidyanagar,
Gujarat – India.
Forwarded Through:
Dr. Mahendra Sharma
Dean, Faculty of Management Studies,
Ganpat University, Ganpat Vidyanagar,
Gujarat – India.
Date:
Place: Ganpat University.
6b
THESIS APPROVAL SHEET
The Ph.D. thesis titled “An In-depth Study into Branding of Cement & Its
Effectiveness on Final Buyer” submitted by Kettan S. Karkhanis has been approved
for the award of the degree of Doctor of Philosophy under the Faculty of
Management, Ganpat University, Gujarat, India.
External Examiner: Research Guide:
Dr. Mahendra Sharma
Date:
Place: Ganpat University
6c
7
List of Tables
Table no. Content Page
no.
1.1 Capacity additions 2008 – 2009 38
1.2 Cement 39
1.3 Clinker 39
1.4 CTotall (MT) 39
1.5 Variety wise cement production 2008 – 2009 (Apr- Nov) 40
1.6 Cement wagon and rail dispatch share 40
1.7 Clinker wagon and rail dispatch share 40
1.8 1.1% growth in cement production 2007 – 2008 / 2008 - 2009 41
1.9 1.2 % growth in cement in cement consumption (Apr-Dec)
(2008 – 2009 / 2007 – 2008) 41
1.9.1 Industry capacity and utilization levels 43
1.10.1 Cement expectation of the industry (All figures in million
tons) 44
1.10.2 Falling demands leads to closure of ACC’s cement plant 45
3.4.1 Sample size 92
4.1.1 Importance to branding – By profession 94
4.1.2 Anova 95
4.1.2.1 Multiple comparison 95
4.1.2.2 Observed and expected frequency 96
4.2.1 Scope of the industry 97
4.2.2 Top 5 triggers in selecting a cement brand 98
4.2.3 Top 5 reasons for rejecting a cement industry 99
4.2.4 Seasonal effect on the cement industry 99
4.2.5 The role of pricing in the cement industry 100
4.2.6 The role of expert in recommending a brand 100
4.2.7 Top 5 major brands 101
4.2.8 Reasons for brand to be major players 101
4.2.9 Top 3 cement brands 102
4.2.10 Rotated Component Matrix 102
4.2.11 Rotated Component Matrix_1 103
4.2.12 Perception about ACC 105
4.2.13 Perception about ultra-tech 105
4.2.14 Perception about Ambuja 106
4.2.15 Importance of brand name while suggesting a cement brand 106
4.2.16 Reasons for the rating 109
4.2.17 Top 3 reasons for recommending national brands 109
4.2.18 Top 3 reasons for recommending local brands 110
8
4.2.19 What should a company do to promote its brand? 110
4.3.1 Who decide the cement brand 111
4.3.2 Factors considered before selecting a cement brand 113
4.3.3 Top cement brands considered 113
4.3.4 Top cement brands used 114
4.3.4.1 Reasons for using ACC 114
4.3.4.2 Reasons for using Ambuja 115
4.3.4.3 Reasons for using coromandal 115
4.3.5 Top 3 cement brands – in general 115
4.3.5.1 Reasons for saying ACC 115
4.3.5.2 Reasons for saying Ambuja 116
4.3.5.3 Reason for saying Ultra-Tech 116
4.3.6 Perception about ACC 116
4.3.7 Perception about Ambuja 117
4.3.8 Perception about Ultra-Tech 119
4.3.9 Importance of branding 120
4.3.9.1 Reasons for rating it to be “important” 120
4.3.10 Perception about branding 122
4.3.11 Relation between perception about branding and method
used to construct house. 124
4.3.12 Top 5 ways to promote a brand 124
4.4.1 Decision maker about the cement brands 125
4.4.2 Factors considered while deciding on a cement brand 126
4.4.3 Top brands – currently using 127
4.4.4 Top 3 brands – not using currently 127
4.4.4.1 Reasons for using Ambuja 128
4.4.4.2 Reasons for using Birla 128
4.4.4.3 Reasons for using ACC 128
4.4.4.3.1 Reasons for not using ACC 129
4.4.4.4 Reasons for not using L & T 129
4.4.4.5 Reasons for not using J.K. Lakshmi 129
4.4.5 Top 5 sources of awareness 129
4.4.6 Importance of brand name 130
4.4.6.1 Chi square Tests 130
4.4.6.2 Top 3 reasons for rating the brand name “Important” 131
4.4.6.3 Reasons for rating the brand name “Not so Important” 131
4.4.7 Brand preferred – National or Local 131
4.4.7.1 Reasons for preferring national brand 132
4.4.7.2 Reasons for preferring local brands 132
4.4.8 Top 3 brands 132
4.4.8.1 Reasons for saying Ambuja 132
9
4.4.8.2 Reasons for saying Birla 132
4.4.8.3 Reasons for saying ACC 133
4.4.9 Perception about Ambuja 133
4.4.10 Perception about Birla 135
4.4.11 Perception about ACC 136
4.4.12 Perception about branding 138
4.4.13 Statement about branding 140
4.5.1 Factors considered before buying a cement brand 140
4.5.2 Top brands stocked 141
4.5.3 Top brands recommended 141
4.5.3.1 Reasons for recommending Ambuja 141
4.5.3.2 Reasons for recommending Ultra-Tech 141
4.5.3.3 Reasons for recommending ACC 142
4.5.4 Top brands not recommended 142
4.5.4.1 Reasons for not recommending – ACC 142
4.5.4.2 Reasons for not recommending – India cement 142
4.5.4.3 Reasons for not recommending – Pragati 142
4.5.5 Top 3 brands 143
4.5.5.1 Reasons for rating ACC. 143
4.5.5.2 Reasons for rating Ambuja 143
4.5.5.3 Reason for rating ultra-Tech 143
4.5.6 Perception about ACC 144
4.5.7 Perception about Ambuja 145
4.5.8 Perception about Ultratech 146
4.5.9 Importance of branding 148
4.5.9.1 Reasons for the rating 148
4.5.10 Perception about branding 148
4.5.11 Perception about branding - By annual income 150
4.5.12 Brand preferred – National / Local / Both 150
4.5.12.1 Reasons for preferring national brands 151
4.5.13 Recommend local brand to 151
4.5.13.1 Reason for recommending local brands 151
4.5.14 Recommend national brand to 151
4.5.14.1 Reasons for recommending national brands 152
4.5.15 How should a company promote its brands??? 152
4.6.1 Who decides 152
4.6.2 Factors considered 154
4.6.3 Sources of awareness 154
4.6.5 Top 3 brands – not using currently 155
4.6.5.1 Reasons for using Ambuja 155
4.6.5.2 Reasons for using Ultra-Tech 155
10
4.6.5.2 Reason for using ACC 155
4.6.6.1 Reasons for not using ACC 155 4.6.6.2 Reasons for not using Birla 156
4.6.6.3 Reason for not using J.K. Lakshmi 156
4.6.7 Top 3 brands – in general 156
4.6.7.1 Reasons for ranking Ambuja 156
4.6.7.2 Reasons for ranking ultra-tech 156 4.6.7.3 Reasons for ranking ACC 157
4.6.8 Perception about Ambuja 157 4.6.9 Perception about ultra-tech 159
4.6.10 Perception about ACC 161
4.6.11 Importance of brand name. 162
4.6.11.1 Reasons for the rating 165
4.6.12 Perception about branding 165
4.6.12.1 opinion on statements – by number of years in business 167
4.6.12.2 Opinion on statements – By type of business 167
4.6.12.3 Opinion on statement – By number of projects done 168
4.6.12.4 Opinion about local brands 168
4.6.13 Brand preferred – national or local? 169
4.6.13.1 Reasons for preferring national brands 169
4.6.14 How should a company promote a cement brand? 169
CONTENTS
Preface 2
Acknowledgments 4
Certificate By Research Guide 5
Declaration by Candidate 6a
Certificate 6b
Thesis Approval Sheet 6c
List of Tables 7
Chapter 1: Introduction 12
Chapter 2: Literature Review 49
Chapter 3: Research Methodology 91
Chapter 4: Data Analysis and Interpretation 95
Chapter 5: Findings and Conclusion 171
Bibliography 218
Annexure 220
Chapter 1
Introduction
12
CHAPTER 1: INTRODUCTION
1.1. Overview
1.2. Cement Industry in India
1.3. History
1.4. Performance of the Industry
1.4.1. Installed Capacity
1.4.2. Production
1.4.3. Capacity Utilization
1.4.4. Export
1.4.5. Per Capita Consumption
1.4.6. Technological Change
1.4.7. Product Differentiation
1.5. Types of Cement in India
1.5.1. Ordinary Portland Cement
1.5.2. Portland Pozzolana Cement
1.5.3. Portland Blast Furnace Slag Cement
1.5.4. Oil Well Cement
1.5.5. Rapid Hardening Portland Cement
1.5.6. Sulphate Resisting Portland Cement
1.5.7. White Cement
1.5.8. Clinker Cement
1.6. Cement Process
1.6.1. Raw Materials
1.6.2. Proportioning
1.6.3. Raw mill
1.6.4. Homo Silos
1.6.5. Preheater
1.6.6. Kiln
1.6.7. Conditioning Tower
1.6.8. Electrostatic Precipitator
1.6.9. ID Fan
1.6.10. Grate Cooler
1.6.11. Finish Mill
13
1.7. Government Initiatives
1.8. Cement Industry – At A Glance
1.8.1. Current Scenario – Financial Year ‟08
1.8.2. Analytical Review
1.9. Cement Sector Outlook – Negative
1.10 Effect of Real Estate on the Cement Industry
14
1.1. OVERVIEW
Cement has come a long way from being the grey powder sold in plastic bags. Today
they have become a brand.Cement is an essential component of infrastructure
development and most important input of construction industry, particularly in the
government‘s infrastructure and housing programs, which are necessary for the
country‘s socio-economic growth and development. It is also the second most
consumed material on the planet. About 2.5 billion tonnes of cement is produced
every year, which amounts to almost 0.3 tonnes for every person on the planet. The
industry employs about 850,000 workers in facilities in 150 countries. It has an
estimated annual turnover of $87 billion and has grown by nearly 4 percent a year
over the past decade.
1.2. CEMENT INDUSTRY IN INDIA In the race to become the next economic superpower, China has generally
outperformed India, and with the exception of Telecom and IT, India has had trouble
slaying the Chinese dragon. But now we can add another sector to the Indian success
story: cement. In last ten years, this sector has recorded a compound annual growth
rate (CAGR) of 8%, against the world cement industry average of 3.5 % and China‘s
cement industry growth rate of 7.2%. Twenty years ago, the Indian cement industry
was outmoded and inefficient. Today the industry not only outshines that of
developed countries such as US and Japan but also has become the second largest
cement producer in the world after China.
1.3. HISTORY The attempt to produce cement in India dates back to 1889 when a Calcutta firm
attempted to produce cement from Argillaceous (kankar). But the first organized
effort on mass scale to manufacture Portland cement commenced in Madras, in 1904,
by South India Industries Limited. The Factory could not succeed. However, it was in
1914 that the first commissioned cement manufacturing unit in India was set up by
India Cement Company Limited at Porbandar, Gujarat, with an installed capacity of
10,000 tons and production of 1,000 tonnes. Subsequently two plants; one at Katni
(M.P.) and another at Lakheri (Rajasthan) were set up.
The problem of supply outstripping demand was significant in early period of the
industry. This was followed by a price war between the producers where they resorted
15
to cutting down of prices and selling below production cost. This situation forced
many companies into liquidation. It was then when the Government of India
intervened into the market and referred the cement industry to the Tariff BTotalrd. All
these events resulted in formation of the Indian Cement Manufacturers' Association in
1925 whose main function was to regulate prices in the industry. In 1927, Concrete
Association of India was formed whose two main objectives were to educate the
public about the use of cement and to play an active role in popularizing Indian
Cement. The next step in the direction of rescuing cement industry was the formation
of Cement Marketing Company of India Limited in 1930 to promote and control the
sale and distribution of cement at regulated prices.
After all these initiatives, the sales increased along with more plants. In 1936, eleven
companies, merged to form Associated Cement Company Limited (ACC). In 1937,
Dalmiya Jain Group setup five factories with installed capacity of 5,75,000tons and
ACC added four more plants. With all these expansions, price war again started off
which resulted into a significant decrease in prices.
Government intervention took place both directly and indirectly. Direct intervention
happened in the form of government control over production, capacity and
distribution of cement, while indirect intervention took the form of price control. In
1977, higher prices were allowed for cement produced by new plants or major
expansions of existing plants. Different prices were assigned to cement produced in
low, medium and high cost plants.
The system of price control was accompanied by a policy of freight pooling. The price
control fixed a uniform price according to estimated production costs at which cement
was required to be sold all over the country. This price contained a freight component
that was averaged over the country as a whole. This freight pooling system promoted
equal industrial development all over the country. Yet, it also implied that producers
had no incentive in locating production such that transportation costs of cement would
be minimized. Market distance became a less important issue. As a result of non-
optimal location of industries, average costs of production as well as demand for
scarce railway capacity for transportation increased.
16
On account of the above-mentioned difficulties in the cement industry the government
of India introduced a system of partial decontrol in 1982. A levy quota of 66.60 % for
sales to government and small house builders was imposed on existing units while for
new and sick units a lower quota at 50% was established. The balance of 33.40%
could be sold in the free open market to general consumers.
A ceiling price was set for sales in the open market in order to protect consumers from
unreasonably high pricing of cement. Although overall profitability increased
substantially immediately after the introduction of partial decontrol, profits obtained
through non-levy sales decreased with greater availability of cement in the market and
continuously rising input costs.
To sustain an accelerating course, the government subsequently introduced changes in
levy obligations and retention prices regularly. As a result, in 1988 the levy quota was
as low as 30% for units established before 1982 and the retention price had increased
substantially. In 1987, the Cement Manufacturers Association and the government
decided that there was no further necessity for a maximum price ceiling.
Finally in 1989, the cement industry was considered to be prepared for free market
competition, and all price and distribution controls on sale of cement were withdrawn.
The system of freight pooling was abandoned. The industry was then de-licensed in
July 1991under the policy of economic liberalization. It was after this decontrol that
the Indian cement industry moved towards globalization, with increasing emphasis on
the exports. Growth was seen from 91 plants and 43 million tonnes of production in
1989-90 boosting to 132 plants and 161.66 million tonnes production in 2006-07.
Total capacity utilization for the industry has also increased from 78% to 91% during
the same period.
Hence, the history of the Indian cement industry indicates the role of government
played in influencing the twists and turns in the industry.
The Indian cement industry, today, is the second largest producer of cement in the
world just behind China, but ahead of the United States and Japan. The demand for
cement, being a derived demand, depends primarily on the industrial activity, real
estate business, construction activity, and investment in the infrastructure
17
development such as state and national highways. India is experiencing growth on all
these fronts and hence the cement market is flourishing like never before.
The Indian cement industry has a total industry capacity of over 200 million tonnes
(MT). The total cement industry is estimated at around Rs. 18,000 crores (US $ 4185
mn). It is consented to be a core sector accounting for approximately 1.3% of GDP
and employing over 0.14 million people. Also the industry is a significant contributor
to the revenue collected by both the central and state governments through excise and
sales taxes.
Indian cement industry is globally competitive because the industry has witnessed
healthy trends such as cost control and continuous technology up gradation.
Production capacity has gone up and top cement companies of the world are vying to
enter the Indian market, thereby sparking off a spate of mergers and acquisitions.
Global rating agency, Fitch Ratings, has commented that cement demand in India is
expected to grow at 10% annually in the medium term buoyed by housing,
infrastructure and corporate capital expenditures.
Presently, 93 per cent of the total capacity in the industry is based on modern and
environment-friendly dry process technology. The induction of advanced technology
has helped the industry immensely to conserve energy and fuel and to save materials
substantially. Indian cement industry has also acquired technical capability to produce
different types of cement like Ordinary Portland Cement (OPC), Portland Pozzolana
Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well Cement, Rapid
Hardening Portland Cement, Sulphate Resisting Portland Cement, White Cement etc.
Some of the major clusters of cement industry in India are: Satna (Madhya Pradesh),
Chandrapur (Maharashtra), Gulbarga (Karnataka), Yerranguntla (Andhra Pradesh),
Nalgonda (Andhra Pradesh), Bilaspur (Chattisgarh), and Chandoria (Rajasthan).
18
1.4. PERFORMANCE OF THE INDUSTRY
Price and distribution controls lifted on 1st march 1989 and licensing abolished since
25th July 1991, gave fresh impetus to the key infrastructure industry. However the
performance of the industry improved all the more after late 1990s guiding it to newer
heights. The process of improvement in key performance indicators of the industry
can be analyzed during changing policy regimes of the government.
1.4.1. Installed capacity The installed capacity of the Indian cement industry has continuously shown an
increase over the period. The industry started with 0.0010 million tonnes (m.t.) of
installed capacity in 1914 and reached 3.28 m.t. in 1950 and 9.30 m.t. in 1960. The
growth in the capacity has been traced from 1970 onwards when the industry fell in
the hands of government control. In the period between 1970-71 and 1988-89, the
installed capacity of the cement industry grew from 17.61 m.t. to 58.97 m.t. at the
Annual Compound Growth Rates (ACGR) of 7.47%. This remarkable growth in the
capacities was due to producers‘ expectation of growing markets. But due to various
controls and lack of adequate demand, the growth of the industry was not noticed on
the desired rates. This resulted in oversupply and low capacity utilizations. Following
this, the period after total decontrol till 2006-07, the capacity addition although
increased at rates approximately equal to previous period at 7.09% annually, it could
hardly match the pace. This was although good for capacity utilizations as production
increased at greater rates. The cement industry in India had a total installed capacity
of 204.29 MT as on August 31, 2008.
Almost all players of the industry, small to medium to large, have added capacity
ranging between a minimum of 2,00,000 tonnes and a maximum of 3 MT in the last
three years (April 2005 to March 2008), effecting a total addition of 45 MT to the
installed capacity by setting up Greenfield projects, and expanding and upgrading the
existing plants. The continuous increase in the infrastructure projects along with the
rise in construction activity has ensured rising demand levels for the cement industry.
19
1.4.2. Production The production figures of the Indian cement industry tell a different story. When the
industry started in 1914, production was mere 0.0001 m.t. of cement. This slowly
increased to 1.5 m.t. in 1940 and 2.2 m.t. in 1950. The following two decades
witnessed enough production making it 14.40 m.t. in 1970-71. The period from 1970-
71 to just before decontrol and deli censing of the industry i.e. till 1988-89, the
production saw ACGR of 6.69%, just below the growth rate in installed capacity. This
indicated oversupply, because of which whole of the industry suffered. The next
period of decontrol compensated for this excess. The ACGR was at 8.09%, well above
the previous rates, which was also more than the growth in installed capacities of
7.09%. The annual growth rate for the total period during 1970-71 to 2006-07 was
7.39%.
1.4.3. Capacity Utilization The trend in capacity utilization of the industry is interesting to analyze, as there are
many fluctuations all through the period. Starting with 10% in the beginning of the
industry, the capacity utilization peaked to around 99% in 1937-38. But this could not
be sustained and the capacity utilization fell sharply to 67% in 1950, improving
marginally in the following two decades. The period of controlled market, as
mentioned before was characterized by oversupply in the industry, which got reflected
in negative ACGR of -0.73%. Whole of the period of 1970-71 to 1988-89 saw
fluctuations, moving utilization levels to as low as around 65% in some years. But
after total decontrol, there was some sort of upturn in this trend due to increased
production levels and the ACGR went up to positive 0.93%. It may be mentioned here
that the capacity utilizations have been at their highest only after 1999-2000 when it
reached 85% and moreover after 2004-05. In January 2007, it even went up to 100%,
highest ever, guiding it to the average of 94% for the financial year. This became
possible only because the installed capacities did not increase as much as production
did, finally leading to closure of gap between supply and demand. The overall period
ACGR was just above the positive mark at 0.10%.
20
1.4.4. Export The export of Indian cement has increased over the years mostly after decontrol,
giving the much-required boost to the industry. The demand for cement is a derived
demand, for it depends on industrial activity, real estate, and construction activity.
Since growth is taking place all over the world in these sectors, Indian export of
cement is also increasing. India has an immense potential to tap cement markets of
countries in the Middle East and South East Asia due to its strengths of location
advantage, large-scale limestone and cTotall deposits, adequate cement capacity and
production of world-class quality of cement with the latest technology. Hence, the
firms in the industry are capitalising on the opportunities, provided by the government
accompanied by favorable economic conditions. The industry had a negative ACGR
of -5.52% in the control period because of highly protected markets. The average
export volume in the period was around only 1.7 lakh tonne (LT) of cement. As the
industry was decontrolled and economy opened up, cement exports started making
rapid strides. The period has seen annual compound exponential growth rate of
35.35%. In volume terms, the exports from Indian cement industry increased from
1.43 LT in 1989-90 to 58.70 LT in 2006-07. The overall ACGR for the period of 37
years (from 1970-71 to 2006-07) however equalized a bit at 13.10%. The Indian
cement industry is technologically very advanced, as a result of which the quality of
Indian cement is now considered the second best in the world.
In 2001-2002, 3.38 million tonnes of cement was exported from India. That figure
stood at 3.47 million tonnes in 2002-03, and 3.36 million tonnes in 2003-04. Export of
Indian cement has been mostly to the West Asian countries.
The major companies exporting Indian cement are:
GujaratAmbuja
Ultra Tech Cement
L&T Limited
Aditya Cement
21
1.4.5. Per Capita Consumption
The per capita consumption of 136 kgs in the year 2006-07, compares poorly with the
world average of over 350 kgs and more than 660 kgs in China. Similarly in Japan it
is 631 kg/capita while in France it is 447 kg/capita. The process of catching up with
international averages emphasizes the tremendous scope for growth in the Indian
cement industry in the long term.
Also, one of the reasons for strong interest shown by the foreign players in India is
due to its lower per capita consumption of cement. The period of 1970-71 to 2006-07
has shown ACGR of 5.15%. When seen under two sub periods of control and
decontrol, it displays much higher growth rates of 9.35% in the decontrol period, as
compared to 1.11% in the period from 1970-71 to 1988-89. The cement consumption
projections by National Council of Applied Economic Research, on a conservative
basis, have placed the cement demand of 225 million tonnes by the year 2010-11. And
if the government goes ahead with infrastructure projects in a big way as planned, the
consumption is pegged to be at much higher levels of 291 million tonnes. This will
surely increase the current per capita consumption of cement in India.
1.4.6. Technological change Modernization and technology up-gradation is a continuous process for any growing
industry and is equally true for the cement industry. At present, the quality of cement
and building materials produced in India meets international standards and
benchmarks and can compete in international markets. The productivity parameters
are now nearing the theoretical bests and alternate means. Substantial technological
improvements have been brought about and today, the industry can legitimately be
proud of its state-of-the-art technology and processes incorporated in most of its
cement plants. This technology up gradation has resulted in increased capacity and
reduced cost of production of cement. Presently 93 per cent of the total capacity in the
industry is based on modern and environment-friendly dry process technology and
only 7 per cent of the capacity is based on old wet and semi-dry process technology.
There is tremendous scope for waste heat recovery in cement plants and thereby
reduction in emission level. The induction of advanced technology has helped the
industry immensely to conserve energy and fuel and to save materials substantially.
22
1.4.7. Product Differentiation
India is producing different variety of cement, based on different compositions
according to specific end uses, like Ordinary Portland Cement (OPC), Portland
Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement (PBFS), Oil Well
Cement, Rapid Hardening Portland Cement, Sulphate Resisting Portland Cement,
White Cement etc. The basic difference lies in the percentage of clinker used. These
different varieties of cement are produced strictly under BIS specifications and the
quality is comparable with the best in the world. The production of Ordinary Portland
Cement has decreased since deregulation, it being 71.28% in 1989-90 slipping to
31.21% now (2006-07). Percentage of production of Portland Pozzolana Cement has
steadily increased from 17.37% in1989-90 to 60.12% in the year 2006-07. This is a
favorable change in the product-mix of Indian cement industry as PPC in more
specialized type of cement.
In an environment of growing competition, one of the major developments has been
the introduction of higher grades of cement. Grade is the 28 days compressive
strength of Ordinary Portland cement, when tested as per Indian Standards under
standard conditions.
Regional Concentration Cement, being a bulk commodity, is freight intensive and transporting cement over
long distances can prove to be uneconomical. This has resulted in cement being
largely a regional play with the industry divided into five main regions, viz., North,
South, West, East and the Central region. Until 1999-2000, India was divided in only
four regions; Centre came up only after that. In terms of capacity historically, the
southern region has always dominated the industry and is excess in capacity owing to
the availability of limestone, but the western and northern regions are the most
lucrative markets. East has most of the consumption of cement as of now due to
growing infrastructure. In 1950-51, the maximum capacity was in Southern region i.e.
34.91% while North had the least of 17.59%. This scenario remained the same in the
following decade and in 1970-71, when south installed 35.24% of capacities, north
deteriorated with 15.60% of capacities. Situation was the same till 1980s. It was only
in 1990s when West grew up to first position in terms of capacity. But as the fifth
geographical division came up, with MP moving to center with a major chunk of
23
capacity, the concentration has reduced. Also earlier capacities were concentrated
around limestone deposits only but market access has become very important
determinant of location of cement plants. In 2006-07, South again dominated the
capacities with 32.22%, which are actually excess, East, West and Centre has more or
less equal capacities of 14%, 18% and 15% respectively whereas North is second
highest at 21%.
Demand Drivers The key drivers for cement demand are:
Infrastructure - It accounts for nearly 20%-25% of the total cement consumption in
India. Investment in this segment is pegged at Rs 1000 billion per annum for the next
5 years. Expected investment in development of national highways, state highways
and rural rTotalds are estimated to be over Rs 3000 billion.
Housing - It accounts for nearly 60%-65% of the total cement consumption in India.
Housing sector is expected to grow at a healthy rate on account of growing
population, economic growth and increased urban migration.
Commercial construction – It accounts for nearly 10%-15% of total cement
consumption in India. Demand in construction sector will be primarily driven by
office spaces which will be used by IT/ITES industry or retail sector. The work force
in IT sector is expected to increase to 4.3 million in 2010-11 from 1.6 million in 2006-
07 which will require around 135 million sq. ft. of area by 2011.
Industrial segments – It accounts for nearly 5%-10% of total cement consumption in
India. This segment is expected to have an investment of Rs 6924 billion over 4 years.
Demand for cement in the country is expected to continue its buoyant ride on the back
of robust economic growth, boom in the construction sector and infrastructure
development.
Demand growth over the past five years at 8.37% was higher than the rate of growth
of supply at 4.84% as also the rate of growth of capacity addition during the same
period.
24
1.5. TYPES OF CEMENT IN INDIA
The types of cement in India have increased over the years with the advancement in
research, development, and technology. The Indian cement industry is witnessing a
boom as a result of which the production of different kinds of cement in India has also
increased.
Some of the various types of cement produced in India are:
Ordinary Portland Cement
Portland Blast Furnace Slag Cement
PortlandPozzolana Cement
Rapid Hardening Portland Cement
Oil Well Cement
White Cement
Sulphate Resisting Portland Cement
Clinker Cement
In India, the different types of cement are manufactured using dry, semi-dry, and wet
processes. In the production of Clinker Cement, a lot of energy is required. It is
produced by using materials such as limestone, iron oxides, aluminium, and silicon
oxides. Among the different kinds of cement produced in India, Portland Pozzolana
Cement, Ordinary Portland Cement, and Portland Blast Furnace Slag Cement are the
most important because they account for around 99% of the total cement production
in India. . The Ordinary Portland cement and Portland Blast Furnace Slag Cement are
used mostly in the construction of airports and bridges. The production of white
cement in the country is very less for it is very expensive in comparison to grey
cement. In India, white cement is usually utilized for decorative purposes, marble
foundation work, and to fill up the gaps between tiles of ceramic and marble.
The different types of cement in India have registered an increase in production in the
last few years. Efforts must be made by the cement industry in India and the
government of India to ensure that the cement industry continues innovation and
research to come up with more and more varieties in the near future.
25
1.5.1. Ordinary Portland Cement Ordinary Portland Cement (OPC) is manufactured in the form of different grades, the
most common in India being Grade-53, Grade-43, and Grade-33. OPC is
manufactured by burning siliceous materials like limestone at 1400 degree Celsius
and thereafter grinding it with gypsum.
The value of each of these grades of cement has been briefly mentioned below:
Ordinary Portland Cement-Grade 43: Having been certified with IS 8112:1989
standards, Grade 43 is in high demand in India and is largely used for residential,
commercial, and other building construction purposes. It has a compressive
strength of 560 kg per square cm. Today OPC 43 is most widely available in
Gujarat through an extensive distribution network.
Ordinary Portland Cement-Grade 53: Having been certified with IS12269:1987
standards, Grade 53 is known for its rich quality and is highly durable. Hence it is
used for constructing bigger structures like building foundations, bridges, tall
buildings, and structures designed to withstand heavy pressure. Expert opinions
and directions from technicians and engineers are a must in this regard. With a
good distribution network this cement is available most abundantly in Gujarat.
Some of the Ordinary Portland applications are in pre-stressed concrete; dry-lean
mixes, durable pre-cast concrete, and ready mixes for general purposes. The chemical
components of Ordinary Portland Cement are Magnesium (MgO), Alumina (AL2O3),
Silica (SiO2), Iron (Fe2O3), and Sulphur trioxide (SO3).
Some of the big names involved in OPC manufacture are Ultratech Cement, and ACC
cement. Ordinary Portland Cement is in great demand in India and will continue to be
used in Indian infrastructural up gradation and other constructions.
1.5.2. Portland Pozzolana Cement Portland Pozzolana Cement is manufactured by blending Pozzolanic materials, OPC
clinker, and gypsum either grinding them together or separately. Today Portland
Pozzolana Cement is widely in demand for industrial and residential buildings,
rTotalds, dams, and machine foundations.
26
Pozzolana is an important ingredient in PPC which is commonly used in the form of:
Fly ash
Volcanic ash
Silica fumes
Calcined clay
PPC is resistant to harsh water attacks and prevents the formation of calcium
hydroxide at the time of cement setting and hydration. It withstands aggressive gases,
thermal cracks, wet cracking, etc. The BIS quality specifications for Pozzolana
materials used in PPC have been mentioned below:
Fly ash - IS 3812:1981
Calcined clay - IS 1344:1981
PPC is used in heavy lTotald infrastructure and constructions such as marine
structures, hydraulic structures, mass concreting works, plastering, masonry mortars,
and all applications of ordinary Portland cement. One of the top Indian brands of
Portland Pozzolana is 'Shudh Cement' manufactured by Tata Chemicals Limited.
Some of the other big names in the Portland Pozzolana manufacture are UltraTech,
Ambuja, ACC cements, Star Cement, and Birla group.
1.5.3. Portland Blast Furnace Slag Cement In recent years, there has been a significant growth in the production of Portland Blast
Furnace Slag Cement. It is a type of cement that is hydraulic and is manufactured in a
blast furnace where iron ore is reduced to iron. The molten slag, which is tapped, is
quickly drenched with water, dried, and then grounded to a fine powder. This fine
powder is commonly known as the Portland Blast Furnace Slag Cement.
The manufacture of Portland Blast Furnace Slag Cement requires 75% less energy
than that needed for the production of the Portland cement. The low cost of
production of Portland Blast Furnace Slag Cement makes it cheaper than Portland
cement.
Portland Blast Furnace Slag Cement has a typical light color and an easier 'finish'
ability. Its concrete workability is better and it has a higher flexural and compressive
strength. It is resistant to chemicals and also has more hardened consistency. This is
27
the reason that Portland Blast Furnace Slag Cement is used in the construction of
dams, bridges, building complexes, and pipes.
The various raw materials required for the production of Portland Blast Furnace Slag
Cement are:
Limestone
IronOre
Iron Scrap
Coke
The major companies producing Portland Blast Furnace Slag Cement in India are:
J K Cement
Grasim Industries and Ultra Tech
ACC
India Cement Ltd
Gujarat Ambuja Cement Ltd
The major countries where Portland Blast Furnace Slag Cement is exported from
India are:
South Africa
UAE
Sri Lanka
Nepal
Bangladesh
Australia
Doha-Qatar
The production and use of Portland Blast Furnace Slag Cement have increased over
the years. The Indian government has undertaken several investments in the
production of the Portland Blast Furnace Slag Cement so that its quality and durability
can be improved.
28
1.5.4. Oil Well Cement Oil Well Cement as the name suggests, is used for the grouting of the oil wells, also
known as the cementing of the oil wells. This is done for both, the off-shore and on-
shore oil wells. As the number of oil wells in India is increasing steadily, the sales of
Oil Well Cement have also increased.
Oil Well Cement is manufactured from the clinker of Portland cement and also from
cements that have been hydraulically blended. Oil Well Cement can resist high
pressure as well as very high temperatures. Oil Well Cement sets very slowly because
it has organic 'retarders' which prevent it from setting too fast. It is due to all these
characteristics that it is used in the building of the oil wells where the pressure is
around 20,000 PSI and the temperature is around 500 degrees Fahrenheit.
There are 3 grades of Oil Well Cements. Grades O, which is ordinary and used
commonly, HSR i.e. high sulphate resistant and MSR i.e. moderate sulphate resistant.
Oil Well Cement has proved to be very beneficial for the petroleum industry due to its
characteristics. For it is due to the Oil Well Cement that the oil wells function
properly.
The various raw materials required for the production of Oil Well Cement are:
Limestone
IronOre
Coke
Iron Scrap
The major companies manufacturing Oil Well Cement in India are:
ACC
GujaratAmbuja
India Cement Ltd.
Grasim Industries and Ultra Tech
J K Cement
29
1.5.5. Rapid Hardening Portland Cement Rapid Hardening Portland Cement (RHPC) is a type of cement that is used for special
purposes when a faster rate of early high strength is required. RHPC has a higher rate
of strength development than the Ordinary Portland Cement (OPC). The Rapid
Hardening Portland Cement's better strength performance is achieved by increasing
the refinement of the product.
Rapid Hardening Portland Cement is manufactured by fusing together limestone
(which has been finely grounded) and shale, at extremely high temperatures to
produce cement clinker. To this cement clinker, gypsum is added in small quantities
and then finely grounded to produce Rapid Hardening Portland Cement. It is usually
manufactured using the dry process technology.
Rapid Hardening Portland Cement is used in concrete masonry manufacture, repair
work which is urgent, concreting in cold weather, and in pre-cast production of
concrete. Rapid Hardening Portland Cement has proved to be a boon in the places
where quick repairs are required such as airfield and highway pavements, marine
structures, and bridge decks. This cement should be stored in a dry place, or else its
quality deteriorates due to premature carbonation and hydration.
The raw materials required for the manufacture of Rapid Hardening Portland Cement
are:
Limestone
Shale
Gypsum
Coke
The major companies producing Rapid Hardening Portland Cement in India are:
ACC
GujaratAmbuja
J K Cement
Grasim Industries
Indian Cement Ltd.
30
1.5.6. Sulphate Resisting Portland Cement Sulphate Resisting Portland Cement (SRC) is a type of Portland cement in which the
quantity of tricalciumalumiante is less than 5%. It can be used for purposes wherever
Portland Pozzolana Cement, Slag Cement, and Ordinary Portland Cement are used.
The use of Portland Sulphate Resisting Cement has proved beneficial, particularly in
conditions where there is a risk of damage to the concrete from sulphate attack. The
use of Sulphate Resisting Portland Cement is recommended in places where the
concrete is in contact with the soil, ground water, exposed to seacTotalst, and sea
water. In all these conditions, the concrete is exposed to attack from sulphates that are
present in excessive amounts, which damage the structure.
The Sulphate Resisting Portland Cement should be kept in a place which is dry
otherwise through premature hydration and carbonation the quality of cement
deteriorates. The Indian cement industry exports cement chiefly to the West Asian
countries.
The various uses of Sulphate Resisting Portland Cement are:
Underground and basements structures
Works in cTotalstal areas
Piles and foundations
Water and sewage treatment plants
Sugar, chemical, and fertilizers factories
Petrochemical and food processing industries
The raw materials required for the production of Sulphate Resisting Portland Cement
are:
Coke
Limestone
IronOre
Iron Scrap
The major companies manufacturing Sulphate Resisting Portland Cement in India are:
ACC
J K Cement
Indian Cement Ltd
Grasim Industries
GujaratAmbuja
31
Sulphate Resisting Portland Cement has proved beneficial for construction purposes
in India due to its climatic conditions. The cement industry in India must take steps in
order to ensure that its quality is improved and to ensure that it is readily available in
the market.
1.5.7. White Cement White Cement has registered growth in production and sale in India in the last few
years. The White Cement sector has been growing at the rate of 11% per year.
White Cement is much like the ordinary grey cement except that it is white in color.
In order to get this colour, its method of production is different from that of the
ordinary cement. However, this modification in its production method makes White
Cement far more expensive than the ordinary cement.
The production of White Cement requires exact standards and so it is a product which
is used for specialized purposes. White Cement is produced at temperatures that hover
around 1450-1500 degrees Celsius. As more energy is required during the
manufacture of White Cement, it goes to make it more expensive than the ordinary
grey cement.
White Cement is used in decorative works and also wherever vibrant colors are
desired. It is used to fill up the gaps between marble and ceramic tiles for a smoother
and more beautiful finish.
The various raw materials required for the production of White Cement are:
Limestone
Sand
IronOre
Nickel
Titanium
Chromium
Vanadium
The major companies producing White Cement in India are:
ACC
J K Cement
Gujarat Ambuja Cement Ltd.
32
India Cement Ltd.
Grasim Industries and Ultra Tech
The major countries where White Cement is exported from India are:
UAE
Australia
South Africa
Sri Lanka
Doha-Qatar
Bangladesh
Nepal
1.5.8. Clinker Cement Clinker Cement has registered a growth over the last few years in India. The cement
industry in India is highly technologically intensive and as a result, the quality of
clinker cement that is produced in India is of a very high grade and often considered
among the best in the world. The production of Clinker Cement requires a lot of
energy because it needs to be manufactured at the temperature of around 1400-1450
degree Celsius.
The various raw materials required for the production of Clinker Cement are:
Iron Ore
Bauxite
Clay
Limestone
Quartz
In 2001- 2002, 1.76 million tonnes of clinker cement were exported. In 2002- 2003,
that figure stood at 3.45 million tonnes, and in 2003- 2004 5.64 million tonnes of
clinker cement was exported from India. This shows that the export of clinker cement
from India has been increasing substantially.
Clinker Cement is usually ground with calcium sulphate which becomes Portland
cement. It is also ground with other ingredients to produce Pozzolanic Cement, Blast
Furnace Slag Cement, and Silica Fume Cement. If Clinker Cement is kept in a dry
condition, it can be stored for a long period of time without deteriorating its quality. It
33
is for this reason that Clinker Cement is preferred in the construction of houses,
bridges, and complexes.
The major companies producing Clinker Cement in India are:
ACC
Gujarat Ambuja Cement Ltd.
JK Cements
Grasim Industries and Ultra Tech
India Cements Ltd.
1.6. CEMENT PROCESS
1.6.1. Raw Materials The hydraulic property of cement originates from its cement minerals (calcium
silicates). The major components in terms of metal oxides are CaO, SiO2, Al22O3,
and Fe2O3. In order to provide a suitable chemical composition for sintering, raw
materials are either quarried or collected from other industrial processes for the
cement manufacturing process. Typically, Calcium (Ca) is provided from limestone,
Silicon (Si) from Sand or Flyash, Aluminum (Al) from Flyash or Clay, and Iron (Fe)
from iron ore or slag.
1.6.2. Proportioning Typically, Limestone 80%, Silica 9%, Flyash 9%, Iron 2% are dosed precisely to a
predefined chemical composition, and are then fed into the process.
1.6.3. Raw Mill The dosed raw materials are dried and finely ground in the Raw Mill to form an
intermediate product, called ―raw meal‖. The grinding provides an increased surface
area to enhance the heat exchange in the downstream heating process.
1.6.4. Homo Silos The ―raw meal‖ is then stored in a homogenizing silo in which the chemical variation
is reduced. This homogenizing process is important to stabilize the downstream
sintering process as well as to provide a uniform quality product. The ―raw meal‖ is
then transferred to the Preheater Tower.
34
1.6.5. Preheater
In the Preheater, the raw meal undergoes a series of concurrent heat exchanges with
the hot exhaust gas from the kiln system. The gas and material stream are separated by
cyclones after each heat exchange process. The raw meal temperature increases from
80oC to 1000oC within 40 seconds. The first chemical reaction also takes place in the
Proclaimer of the Preheater, where limestone CaCO3 is decomposed into lime (CaO).
1.6.6. Kiln
The culminated material entering into the kiln, undergoes a long heating process. The
material temperature rises from 1000oC to 1450oC. Mineral matrixes of raw material
are totally destroyed and cement minerals are formed at the sintering temperatures. A
semi-product called ―clinker‖ is formed. CTotall and other alternative fuels are used
as energy sources for the process. The ash from fuels is absorbed into the clinker
matrix. The residual heat from the clinker leaving the kiln is recovered by a grate
cooler to reduce the energy requirement.
1.6.7. Conditioning Tower The flue gas exiting the preheated is directed to the raw mill for drying. Before it
enters the electrostatic precipitator ("EP") for its final dust removal process, its
temperature and humidity is regulated in a conditioning tower. This process is
essential as it affects the dust collecting efficiency of the electrostatic precipitator
("EP").
1.6.8. Electrostatic Precipitator Electrostatic precipitator is commonly used as the final dust removal device for flue
gases. It consists of chambers each of which contains a series of collection plates and
an overhead framework of suspended rigid high-voltage electrodes. Particles in the
gas stream are charged by a high-voltage, direct current field which is generated from
the discharge electrodes, suspended between the collector plates. Current applied
directly to the discharge electrodes manifests a highly active and visible glow in the
electrode known as the "corona". In the strong electrical field region near the
electrode-emitting surface, large numbers of both positive and negative ions are
formed. As the discharge electrodes have a negative polarity, the positive ions are
35
attracted to them. Both negative and positive ions are formed in equal amounts
directly in the corona region near the discharge electrodes and over 99 percent of the
gas space between the discharge electrodes and the collector plates contain only
negative ions. As the particles entrained in the gas stream pass through the corona
field, they are bombarded by negative ions and become charged in a fraction of a
second. They are then attracted to the grounded collector plates where they are
collected.
Particulate matter on the collecting plates and high voltage electrodes are removed by
the impact of "rapper" mechanisms. Dislodged particles from the high voltage
electrodes and collector plates fall into a hopper directly below each precipitator
chamber.
1.6.9. ID Fan Induced draft fans (ID fan) are installed in the process to drive the gas stream
movements.
1.6.10. Grate Cooler
The residual heat from the clinker leaving the kiln, is recovered by a grate cooler
(consisting of rows of grates). Cooling air is injected from the bottom of the grate, and
is forced into the clinker which is travelling slowly on the grate. The heated air is then
recycled as secondary air for combustion in the kiln, or in the proclaimer.
1.6.11. Finish Mill
The final process of cement making is called finish grinding. Clinker dosed with
controlled amount of gypsum is fed into a finish mill. Typically, a finish mill is a
horizontal steel tube filled with steel balls. As the tube rotates, the steel balls are
lifted, tumble and crush the clinker into a super-fine powder. The particle size is
controlled by a high efficiency air separator. Other additives may be added during the
finish grinding process to produce specially formulated cement
36
1.7. GOVERNMENT INITIATIVES
Government initiatives in the infrastructure sector, coupled with the housing sector
boom and urban development, continue being the main drivers of growth for the
Indian cement industry.
Increased infrastructure spending has been a key focus area over the last five
years indicating good times ahead for cement manufacturers.
The government has increased budgetary allocation for rTotalds under
National Highways Development Project (NHDP). This coupled with
government's initiatives on the infrastructure and housing sector fronts would
continue to remain the key drivers.
Appointing a cTotall regulator is looked upon as a positive move as it will
facilitate timely and proper allocation of cTotall (a key raw material) blocks to
the core sectors, cement being one of them.
Keeping in mind the global meltdown which is impacting the cement
companies in India, the government re-imposed the counter veiling duty
(CVD) and special CVD on imported cement in January. This is likely to
provide a level playing field to domestic companies.
37
1.8. CEMENT INDUSTRY – AT A GLANCE
1.8.1 Current Scenario – Financial Year „08
During FY08 production, consumption and capacity addition clocked 8%YoY
growth. India, owing to its locational advantage, has been catering to the cement
requirements of the Middle East and the South East Asian nations. However, the
exports were curtailed in FY08 in order to satisfy the domestic demand.
While demand growth stood at 8% YoY, average industry cement realizations
(average of price per bag of cement) were higher by about 6% YoY. This was
owing to slowdown in demand as inflationary situation in the economy and the
rising cost of funds led to a lull in the real estate sector and construction activity.
Further, the announced capacities have started coming on stream and the same
have started exerting pressure on realizations.
In the budget, the excise duty on the bulk cement was revised to Rs 400 per tonne
or ad valorem duty of 14% whichever is higher, while that on clinker was hiked by
Rs 100 per tonne to Rs 450 per tonne. While the government refrained from
cutting excise duty and countervailing duties, it increased budgetary allocation
under National Highways Development Project (NHDP). The government has
continued to provide a fillip to the infrastructure sector in the budget.
December 2008
1.8.2. Analytical Review
a) Cement Production and Dispatches During December 08, Cement Production was 15.82 MT, registering a growth of
11.96% as compared to 14.13 MT in December ‗07.
Cement Dispatches were 16.01 MT in December 08, showing a growth of 12.11%
as compared to 14.28 MT in December 07.
b) Cement/Clinker Export During December 08, Cement Export was 0.36 MT., a decline of 5.26% as
compared to 0.38 MT. in December 07. Clinker Export also showed a decline of
25.00% (from 0.20 MT in Dec 07 to 0.15 MT in Dec ‗08).
38
Capacity at the beginning of the year 2008-2009 was 198.30 MT.
Table 1.1 Capacity Additions – 2008-2009 MT.
Name of the Plant
State
Month of
Commissioning
Capacity
Existing
Capacity
Added /
Derated
Total
(a) New
OCL India-Kapilas (G) Orissa May 08 - 0.90 0.90
Rain Comdt. Unit-II Line 2 A.P. Jun 08 - 2.00 2.00
India Cements-Value (G) T.N. Aug 08 - 1.10 1.10
UltraTech-Ginigera (G) KAR Sep 08 - 1.30 1.30
Total – (a) 5.30
(b) Expansion
Madras Céments - R.S. Raja
Nagar TN Apr08 1.20 0.60 1.80
Vasvadatta Cement KAR Apr08 3.65 0.45 4.10
Rain Comdt. Unit-1 A.P. Jun08 1.00 0.40 1.40
Rain Comdt. Unit-II Line 1 A.P. Jun08 0.50 0.10 0.60
My Home Indus. Ltd. A.P. Jun08 2.76 0.44 3.20
Mangalam Cement RAJ Sep08 0.50 0.50 1.00
J.K. Gotan RAJ Sep08 0.10 0.37 0.47
Dalmia Cement T.N. Dec08 3.50 0.50 4.00
Total – (b) 3.36
Total – (a+b) 8.66
39
Capacity as on 31st December 2008 – 206.96 MT.
Cement
Table 1.2 (MT.)
Dec 2008 Nov 2008 Dec 2007 2008-2009 2007-2008
(Apr - Dec)
(a
)
Production 15.82 14.34 14.13 131.20 122.33
(b) Dispatches
(Including Export)
16.01 14.43 14.28 130.69 121.59
(c) Export 0.36 0.32 0.38 2.15 2.92
(d) Closing Stocks 1.29 1.52 1.32
(e) Cap. Uti. (%) 92 83 95 86 93
Clinker
Table 1.3 (MT.)
Dec 2008 Nov 2008 Dec 2007 2008-2009 2007-2008
(Apr - Dec)
(a) Production 12.37 11.91 11.14 101.78 95.81
(b) Sale 0.24 0.28 0.31 2.67 1.99
(c) Export 0.15 0.30 0.20 2.06 1.66
(d) Transfer 1.72 1.59 1.50 13.45 12.15
(e) Closing Stocks 7.36 6.90 6.72
CTotall (MT)
Table – 1.4
Dec 2008 Nov 2008 Dec 2007 2008-2009 2007-2008
(Apr - Dec)
(a) CTotall Receipts (MT.) 1.24 (P) 1.20 (P) 1.12 9.92 11.08
(b) CTotallLTotalding
(FW/Day)
1217 1078 1057
(c) CTotall Production
(CIL & SCCL)(MT.)
43.06 39.49 40.13 308.48 297.92
Variety wise Cement Production – 2008-2009 (Apr - Nov)
40
Table – 1.5 (%)
Region OPC PPC PBFS Others Total
North 23 77 - Neg. 100
East 4 54 41 1 100
South 31 63 6 Neg. 100
West 42 56 2 Neg. 100
Centre 13 87
- Neg. 100
All India 25 67 8 Neg. 100
Cement Wagon & Rail Dispatch Share
Table – 1.6 (Percentage)
Nov 2008 Oct 2008 Nov 2007 2008-2009 2007-2008
(Apr - Nov)
(a) %age LTotalded
to Indent
97 96 91 94 95
(b) %age Rail to
Total Desp.
38 39 40 38 38
Clinker Wagon & Rail Dispatch Share
Table– 1.7 (Percentage) (Percentage)
Nov 2008 Oct 2008 Nov 2007 2008-2009 2007-2008
(Apr - Nov)
(a) %age LTotalded
to Indent
100 100 96 99 98
(b) %age Rail to
Total Desp.
53 55 57 56 57
41
1.1 % Growth in Cement Production – (2008-2009/2007-2008) (Apr - Dec)
Table – 1.8
State %age Change State %age
Change
Northern Region Western Region
Punjab -6 Gujarat -3
Rajasthan 14 Maharashtra -0.34
Himachal Pradesh -9
Northern Region 11 Western Region -2
Eastern Region Central Region
Meghalaya 8 Uttar Pradesh 13
Bihar 17 Madhya Pradesh 2
Jharkhand -0.50
Orissa 25
West Bengal 1
Chhattisgarh 6
Eastern Region 7 Central Region 4
Region
Andhra Pradesh 14
Tamil Nadu 6
Karnataka 11
Southern Region 11
All India 7
Note: Figures only for major cement producing states are given.
1.2% Growth in Cement Consumption – (2008-2009/2007-2008) (Apr -
Dec)
Table – 1.9
State %age Change State %age Change
Northern Region Southern Region
Uttarakhand -3 Andhra Pradesh 25
42
Haryana 4 Tamil Nadu 9
Punjab -12 Karnataka 1
Rajasthan 6 Kerala 13
Himachal Pradesh -8
Delhi 38
Northern Region 2 Southern Region 12
Eastern Region Western Region
Bihar 11 Gujarat 4
Jharkhand 12 Maharashtra 8
Orissa 13
West Bengal 2
Chhattisgarh 10
Eastern Region 9 Western Region 7
Central Region
Uttar Pradesh 5
Madhya Pradesh 9
Central Region 7
All India 8
Note: Figures only for major cement consuming states are given.
1.9. CEMENT SECTOR OUTLOOK – NEGATIVE
Although consolidation has taken place in the Indian cement industry with the top five
players controlling almost 45% of the capacity, the balance capacity still remains
pretty fragmented. Cement, being a bulk commodity, is a freight intensive industry
and transporting cement over long distances becomes very uneconomical. This has
resulted in cement being largely a regional play with the industry divided into five
main regions viz. north, south, west, east and the central region. While the southern
region is excess in capacity owing to abundant availability of limestone, the western
and northern region are the most lucrative markets on account of higher income
levels.
43
However what is of concern to the industry are staggering rise in input costs and
pressures to cap selling prices at the same time. Unless the industry is able to recover
cost increases, through suitable adjustments in selling prices through rational
economic considerations, the cement industry will be under pressure. India‘s cement
industry is expanding capacity to meet increasing demand. The industry plans to
invest around Rs 50,000 crore in order to increase production from 198 MTPA to
about 275 MTPA over next two to three years. These capacities, according to such
announcements, are expected to be commissioned over three-year period and may
create an imbalance in demand and supply, resulting in impact on realization.
Table – 1.9.1. Industry capacity and Utilization Levels
Industry capacity and Utilization Levels
Year Operating Capacity Capacity Utilization (%)
2000 113.7 81.0
2001 129.9 78.8
2002 136.5 81.6
2003 144.1 81.5
2004 153.6 83.6
2005 157.1 90.2
2006 165.6 93.8
2007 171.95 95.0
2008 190+ 95.0
** Source =ICRA Industry Monitor report and Business Line**
1.10. EFFECT OF REAL ESTATE ON THE CEMENT
INDUSTRY
The fall in real estate activities has badly hit the cement industry, which depends on
the realty sector for 60% of its demand. The rise in capacity by many companies has
proved to be an additional burden as most of the companies have to go for output
reduction. The industry is now keenly awaiting the government‘s bailout package and
revived interests in construction activities like infrastructural projects.
44
With the slowdown in the realty sector, many of the associated industries having been
feeling the heat; cement industry is one of the biggest to be hit. The whole year had
been a roller coaster ride for the industry. Beginning with a standoff with the
government at the height of inflationary pressures in the first part of the year, the
industry is now facing problems of falling prices and piling inventories.
The burgeoning construction sector fuelled its growth and the bullish sector was
poised for massive capacity increase in the coming years. The industry was poised to
add 32 million tonnes as new capacity in 2009. But, given delays of 4-6 months due to
land acquisition, equipment supply delay, liquidity crunch and more importantly the
unexpected slow growth rate in demand coupled with squeezed margins and pricing
under pressure, the industry will now reach an overall capacity of 223 million tonnes
against 230 million tonnes as anticipated earlier. According to the latest updates from
the Cement Manufacturers‘ Association (CMA), industry added only 8.16 million
tonnes between April and November. Rain Commodities, India Cements, Madras
Cement, Mangalam Cement are among those who have expanded capacities. This is
one-fourth of the proposed capacity addition for the year at a time when three-fourth
of the year has passed by.
In March, 2008, industry had an installed capacity of 198.3 million tonnes and H M
Bangur, President of CMA had said that industry would add around 32 million tonnes
in FY09 (―Cement firms may miss expansion target by 25%‖, Business Standard, 28
December 2008,).
Table – 1.10.1
PACK-To-PACK GROWTH
Capacity as on March 31 in the last five years
Year Capacity
2004 146.64
2005 154.29
2006 160.24
2007 166.73
2008 198.30
2009* 223.00
45
* Current expectation of the industry (All figures in million tonnes)
Source: CMA
Incidentally, the Working Group on Cement Industry for the 11th
Plan Document had
predicted 11.5% growth rate for the industry, projecting a capacity requirement of
219.46 million tonnes by the end of 2008-09. The current industry output levels will
be higher than that. But what is more worrying is that the growth rate as expected by
the Working Group for the Indian economy has now been derailed by the economic
crisis. At the currently expected rates of growth, there will be a huge mismatch in the
demand and supply of cement and this is going to hit the industry severely.
According to various estimates, the cement industry is expected to add 35-39 million
tonnes (mt) of fresh capacity in FY10, against incremental demand growth of 10-12
mt, assuming annualised demand growth of 5-6 per cent. The latest statistics by
Cement Manufacturers‘ Association (CMA) show that overall consumption growth
has been only 1% in the economy (―Falling demand leads to closure of ACCs cement
plant‖, 19 December 2008, domain-b.com).
Table – 1.10.2
State %age Change State %age
Change
Northern Region Southern Region
Uttarakhand -4 Andhra Pradesh 25
Haryana 4 Tamil Nadu 10
Punjab -14 Karnataka 1
Rajasthan 5 Kerala 14
Himachal Pradesh -10
Delhi 36
Northern Region 1 Southern Region 12
Eastern Region Western Region
Bihar 12 Gujarat 4
Jharkhand 10 Maharashtra 8
Orissa 11
West Bengal -0.06
46
Chhattisgarh 8
Eastern Region 8 Western Region 7
Central Region
Uttar Pradesh 3
Madhya Pradesh 8
Central Region 4
All India 7
(Reprinted from ―Falling demand leads to closure of ACCs cement plant‖, 19
December 2008, domain-b.com)
Out of the six states in the northern region, Uttarakhand, Himachal Pradesh and
Punjab have shown negative growth rate in consumption as high as 14 per cent.
However, Rajasthan and Haryana witnessed a poor consumption growth rate of 5 per
cent and 4 per cent respectively, against the industry's average growth of 7 per cent.
The problem of over capacity has now hit most producers as the industry is
desperately cutting down production. The industry‘s capacity utilisation has dropped
to 85 per cent in April-November period of FY09 against 93 per cent in the year-ago
period. However, in the North, cement players such as Shree has said that the
company will cut the utilisation to as low as 75 per cent. The most obvious reason for
which is piling inventories. In October, the industry reported one of the widest gaps in
production and dispatches with the cement inventory touching as high as 1.64 million
tones (―Cement firms in north India may meet ACC fate‖, Business Standard, 19
December 2008,). One of the biggest news for the sector was ACC‘s announcement of
shutting down its 2.4-million-tonne clinker unit in Himachal Pradesh. Clinker is an
input for cement. Piling inventories of cement had resulted in similar over production
of clinker that forced ACC to shut down its clinker unit at Gagal.
All this is further aggravated by the issue of remunerative prices. The industry has
issued a series of price cuts since October to counter fall in demand. The slowdown of
inflation and subsequent fall in imported cTotall and diesel prices are welcome news,
but the extent of fall in selling prices might outweigh these gains. Recently the
government had announced 4% reduction in excise duty, which was immediately
passed on to the consumers by the producers. But despite that, there is increasing
pressure on prices that is worrying the industry.
47
The government has recently announced the lifting of ban on cement exports to boost
the industry‘s fortunes. This has been a long standing demand of the industry ever
since the ban was imposed in May to counter inflation. However, more than exports,
what is most affecting the industry is cheap imports from Pakistan. "Import from
Pakistan has further hit the domestic industry especially in the northern markets of
Punjab and Haryana," Ambuja Cement Managing Director A L Kapur said. "The
prices will drop further unless the government bans import of low cost cement from
Pakistan" (The Economic Times, 27 December 2008). H M Bangur, President of CMA
and Chairman & Managing Director of Rajasthan-based Shree Cement, also said,
―Cement players specifically in the North are being forced to shut units due to
imported cement from Pakistan‖ (―Cement firms in north India may meet ACC fate‖,
Business Standard, 19 December 2008,).
However, banning imports from Pakistan does not solve the basic problem of falling
demand due to the slowdown in construction. What has added to the problems is that
being bullish till the first quarter of the year the industry had pushed for aggressive
capacity increases, which is now proving to be a burden under piling inventories. The
only possible solution for the industry is a revival of construction activities. With real
estate still battling its own problems, the industry is betting on the government‘s push
for massive infrastructural projects. The fiscal bailout packages are yet to bear fruit
for the economy and the cement industry has to wait for lagged indirect demand rise.
The next years‘ budget is thus proving to be key factor for the industry. As of now,
they are desperately trying to brave out the current slump.
Chapter 2
Literature Review
48
CHAPTER 2: LITERATURE REVIEW
2.1. Introduction: why branding? 2.2. Consumer branding 2.3. Advertising
2.3.1. Sales response model 2.3.2. The persuasion model 2.3.3. The involvement model 2.3.4. The salience model 2.3.5. Ad spend during recession
2.4. Building Brands 2.4.1. Building brand through loyalty 2.4.2. Leveraging on symbolic values and meaning in branding 2.4.3. Using Company’s name to influence consumer’s decision making 2.4.4. Using country of origin in branding 2.4.5. Employee branding
2.5. Building icons 2.5.1. Target national contradictions 2.5.2. Create myths that lead culture 2.5.3. Speak with rebel’s voice 2.5.4. Draw on political authority to rebuild the myth 2.5.5. Draw on cultural knowledge
2.6. Brand crises and brand gremlins 2.6.1. Brand crises 2.6.2. Brand gremlins
2.7. Brand metrics / Brand valuation 2.7.1. Customer based brand equity
2.8. Industrial marketing 2.8.1. Branding research in the B2B arena 2.8.2. Developing an industrial brand 2.8.3. Difficulties in branding commodities 2.8.4. Branding strategies for commodities 2.8.5. The four step apprTotalch to branding commodities 2.8.6. Pricing principles for branded commodities 2.8.7. Managerial implications 2.8.8. Conclusion
49
BRANDING
2.1 Introduction: Why branding?
In the late 1980s, the intangible element ('goodwill') that made up the total market
value of the FTSE 100 companies was an average of around 40percent. Today, it is
more than 70 percent (Clifton 2002). Clearly not all the intangible asset value can be
accounted for by brands by any means, but still most companies would say that their
most important asset is their brand. Today, it can be demonstrated that the brand -
whether in the corporate, service, product or not-for-profit sector is any organization‘s
most important asset.
It is useful to highlight the social contribution of the brands on a broader scale. On a
basic level, strong brands generate customer loyalty; this leads to more security of
income for the company, and so to more reliable earnings. This is reflected in more
security of employment - which is itself an important social contributor. On a more
emotional level, both global product and global media brands have found ways of
uniting people and touching a common nerve (and, indeed, of symbolizing an
optimistic 'one world' view) in a way that brands succeed because people want them.
Far from being 'bullies', they are ultimate accountable institution; if people do not like
your product, service or corporate behavior (or cease to like it), they will stop buying
you - very quickly. In this way, it is absurd to say that brands can be too powerful.
Frankly, if a brand is producing a great product or service, and doing it in a way that
improves people's lives and communities, why should it grow and prosper? If these
'good' brands then become complacent, insensitive or careless, they will soon be cut
down to size again by 'voting' customers and influencers. Brands ofcourse, are the best
incentive for companies to behave well, as it gives them a reputation to protect,
wherever in the world they operate. Whatever be their motivation, any brand - any
company - has to operate within the individual national culture in which it finds itself
either being produced or 'sold'. The complexity of operational decisions and local
working practices that this brings to some global brands does present a potentially
vulnerable area. This issue of 'brand control' and of accountability for, the production
will become even more critical for brands in the future, when the balance between
financial, production and operational flexibility and the need for generating even
greater levels of public trust must be resolved. The challenge of being clear and
50
consistent about what a brand's vision and values are, and how these must be applied
across the full brand experience and behavior everywhere, has never been so acute.
From almost 3000 brand studies world wide the article (Clifton 2002) summarizes the
core characteristics that the world's most valuable brands need - both now, and
looking at what will be required from in the future. From some of these insights, it
is also possible to see ways in which the brand climate can be enhanced for the benefit
of all.
Great brands need to show clarity, consistency and leadership. That is clarity of
vision, and consistency in the way these are applied, wherever in the world, through
whatever channel and whatever category the brand extends into (this is not the
same as predictability, and having to be the same everywhere). But in many ways
leadership will be the most important of these characteristics in the future; in all the
studies it is the most discriminating factor in driving long term brand value.
What do we mean by leadership? Certainly we do not mean just 'brand leadership',
since this is rather old-fashioned, category- based speak. It does, however, mean
trying to be a brand that 'sets the agenda' and shapes markets. Certainly, at the most
basic level, this has to be about leading and exceeding people's expectations at the
level of product, service and creative quality.
Increasingly, though, 'leader' brands need to show this leadership at the level of values
and social contribution. Brands with clear and strong values are able to transcend and
leap categories. A luxury fashion brand like Versace is now also a hotel and
hospitality brand. An established manufacturer/ product brand company like Unilever
has tested service brands. Leader brands know that, and will act first to take more
'share of person' than share of shelf in a complex world that people need to simplify.
Showing leadership at the level of values and social contribution does not
just mean spilling a bit of money into cause- related marketing. It should mean
treating people who work within and for the business well and standing for something
that allows these people to engage their personal and professional energies. The final
element to leadership is about taking more responsibility for explaining and
championing the positive wider role of brands-from people within companies, to
contributing to the success of business, to the wider social and economic benefits to
51
society as a whole. Good brands do have the power to make a positive contribution to
people's lives individually, and indeed to the world at large. Brand owners and
influencers should not be cynical or embarrassed about this; it is not a fanciful notion
but a demonstrable fact.
2.2 CONSUMER BRANDING
A logical point of departure for developing an understanding of industrial branding is
to examine the research on consumer branding. As has been pointed out elsewhere
(Mudambi, Doyle, & Wong, 1997), the depth and extensiveness of consumer branding
research offer industrial branding researchers an extensive background into the
nuances of branding that can be applied in the industrial sector. Some of the better-
known writings in this area are by Aaker (Aaker, Managing Brand Equity, 1991;
Aaker, Building Strong Brands, 1996) who has defined how brand equity generates
value in the following areas: brand loyalty, brand awareness, perceived quality, brand
associations, and other brand assets. Other writings have shown how dominating
brands can create meaningful images in the minds of their customers (Keller K. L.,
1993; Shocker, Srivastava, & Ruekert, 1994), can predict brand preference (Bass &
Wilkie, 1973; Jacoby & Kyner, 1973), and increase brand loyalty (Shocker,
Srivastava & Ruekert, 1994).
The inherent strength of a consumer brand has tradition- ally been thought of as those
parts of the brand that can be vocalized or communicated as well as easily recalled by
the consumer (Kotler, 2002). Keller (Keller K. L., 1993) described brand-name
awareness as the strength in the customers‘ mind that identifies the brand under
consumer (Aaker, Managing Assets and Skills: The Key To a Sustainable Competitive
Advantage, 1989). Other research has shown that strong positive associations can be
developed, which can note uniqueness to the brand, with the success of the brand
depending on a retained understanding of the core meaning of the brand and the
ability of the consumer to maintain a consistent image over a long term (Doyle, 1988).
This retained understanding on the part of consumers will result in them being able to
infer quality, value, reputation, and credibility from an acceptable brand name
(Zeithaml, 1988), which can in turn be linked to these consumers forming an overall
favorable image of the brand (Maathuis, 1993). Drawing on their experience with
studying consumer brands, Prophet (2001) has proposed five steps to building a strong
52
consumer brand: clearly articulate the brand‘s identity, establish a customer value
proposition and use it to guide each department, define the optimal customer
experience, cultivate relationships with customers, and work to strengthen the brand
over time differing conditions as well as the degree of likelihood that the consumer
will recall the brand name. One of the most studied aspects of successful branding
has been name recognition, especially where repurchase decisions rely heavily on the
previous experiences of the.
2.3 ADVERTISING
Advertising is one of the ways in which a company can undertake branding activities.
There are several models of how advertising works. We will be considering the 4
major models (Willmott 2003) of advertising.
The four models of advertising
2.3.1
Sales response model
This is where advertising seeks short-term changes in consumer behavior. It
stimulates direct interest in (and hence sales of) a brand, but does little in terms of
brand building. Advertising in this vein might be price led or involve a special offer; it
might just be reminding people that now is a good time to buy a product. In terms of
chronology this was the first model of advertising.
2.3.2 The persuasion model
Here, the role of advertising is to persuade consumers about the brand‘s functional
superiority. It assumes that people will not buy the brand unless they believe it will
solve a problem or that it performs better than others. A typical ad here would be ‗this
washes whiter‘ or ‗this goes faster‘.
This model evolved as brands and mass consumer markets developed from the 1950s
onwards.
2.3.3 The involvement model
53
The purpose here is to get consumers to buy into the brand values; not because the
product necessarily performs better but because it stands for something that the
consumer wants to be associated with. As Hall notes, these values could be ones
such as pride, male bonding, caring, fun, excitement and contemporary so
the advertising would be about what the brand stands for or who uses it.This model
developed from the mid-1960s onwards.
2.3.4 The salience model
This is the newest and most radical model according to Hall, and dates from the 1980s
and 1990s. The intention here is to get consumers interested in the brand neither
because it performs better, nor because it has complementary values, but because it
stands out: it is radically different, it is big, and it is self-assured.
Even though all the advertising models are still relevant, the balance is moving from
the sales response and persuasion models (the traditional perception of advertising)
towards the ‗newer‘ models of involvement and salience.
2.3.5 Ad spend during recession
Ad spends and other variables only seem to play a part when the three- year sales trend
loses its predictive value? One possible explanation is that during stable market
conditions sales relationships are less volatile and fewer factors influence purchasing
decisions. But recessions and other upheavals like the dot-com boom seem to
create brief ‗windows of opportunity‘ as established relationships are undermined by
changing patterns of consumption or the by introduction of next-generation
technologies on the producer side. It is during these times that advertising appears to
have the greatest beneficial effect on sales (Kamber 2002). This is when purchasing
managers are casting about for new suppliers, better prices and improved
technologies. It is when the role of information in driving purchasing decisions is at
its effective peak. And with advertising as one of the principle means of shaping the
market place of ideas, it is not so surprising that an enhanced effect is found during
these periods.
Recessions, it seems, present corporate brand managers with a difficult dilemma: just
when times are at their most uncertain, when projects are least reliable, ad spend may
54
be at the peak of its effectiveness. For many firms facing diminished profits, falling
stock prices and employee layoffs during these periods, this may not seem like
welcome information. How is a company in financial crisis to justify spending more
on a line item viewed as discretionary in many sectors?
One answer suggested by this study (Kamber 2002) is that increased ad spend during
recessions is associated with a same-year risein sales, a potentially encouraging
indicator for executives struggling to keep firms afloat during a short-term storm.
Even more encouraging is the simple fact that much of the cut in ad spendin 1991
lagged the actual recession, meaning that companies continued to cut spending even
when business indicators were already on the upswing. Most recessions last about a
year, but their psychological impact can last much longer, causing manager to reduce
spending in what they perceive to be non-essential areas even when fortunes are
already reversing. The result reduced sales growth over the short and long term for
firms that treated advertising spending as a low priority.
In conclusion, substantial evidence was found to support the hypothesis that
advertising spending during recessions can contribute to higher rates of sales growth
(Kamber, 2002). The difference in sales growth between companies that cut back and
those that do not is substantial in both the short and long terms, and is independent of
the effect of such variables as company size, stock valuation, and total sales, past
sales growth or stock price volatility.
2.4 BUILDING BRANDS
Marketers have used various aspects to build successful brands. Let us consider some
of the aspects that are relevant to the scope of our study & have found their way in
the literature.
2.4.1 Building brand through loyalty
Brand identity is the total proposition that a company makes to consumers - the
promise it makes. It may consist of features and attributes, benefits, performance,
quality, experience, service support and the values that the brand possesses. The
brand can be viewed as a product, a personality, an experience, a set of values and a
position it occupies in people‘s minds.
55
On introduction, brands compete and are compared on their functionality (Bennett
and Rundle-Thiele 2005). Brands were initially designed to communicate consistency
in quality. Over time, differentiation on the basis of functionality becomes
meaningless as all competing products function beyond the market‘s requirements.
When functionality surpasses market needs, the basis of competition, or the attributes
that provided a meaningful advantage over competitors, tends to shift to reliability
followed by convenience.
Brands should offer symbolic and emotional meaning that enables consumer to
communicate their goals, aspirations, personal attributes and social patterns —when
symbolisms are used effectively, they can transform brands into successful and
profitable icons.
Brand marketers in mature competitive markets should not focus on attributes, nor
should they allow an emphasis on price (Bennettand Rundle-Thiele 2005). Brand
marketers need to connect at a higher level with customers. A brand can offer an
emotional or a symbolic connection. People fall in love with brands; they trust them,
develop strong loyalties, buy them and believe in their superiority.
The brand is shorthand; it should stand for something and it should demonstrate it
every day. Brands need to offer more than quality, reliability or convenience to
differentiate in the market and resonate with modern consumers. The brands that
have achieved higher levels of loyalty than their competitors are those that have
established a clear brand identity. That is, they have differentiated on the basis of
brand meaning.
The key to managing brand identity is evolution, not revolution. Totally changing the
brand visuals can give rise to consumer concerns about changes of ownership, or
possible changes in brand values, or even unjustified extravagance. If there is a
strong brand personality to which consumers are attracted, then substantial changes may
destroy emotional attachments to the brand.
Marketers must understand what brand loyalty is, bearing in mind that brand loyalty
will be different for each brand managed. Research suggests that customers can
demonstrate brand loyalty in a variety of ways. For example, customers can
demonstrate loyalty by purchasing, by being willing to recommend, and by providing
56
advice to the company, and finally, customers could demonstrate brand loyalty
through an intention to repurchase.
Research suggests that ‗brand loyalty is more stable for market leaders than for
others‘ (Bennett and Rundle-Thiele2005). Marketers of brands that do not have
market leadership status are presented with one challenge, and that is to differentiate.
Differentiation requires innovation. Marketers must implement programmes to
encourage ongoing innovation, such as the ongoing implementation of research and
development programmes and programmes that develop an innovative organizational
culture. An innovative organization can gain a sustainable competitive advantage.
To achieve differentiation and hence loyalty, some marketers are focusing on
creating experiences for customers. Experience is a very useful basis for
differentiation that is likely to be difficult to copy.
Organizations seeking to improve brand loyalty should first identify the level at
which their brand is successfully operating (functional, emotional or symbolic), and
then develop marketing programmes designed to resonate with the consumer at that
level in a way that differentiates the brand from the competition. The ultimate goal
for a brand manager would be a brand community, where consumers affiliate with
other consumers around a brand.
There is, however, a tension between maintaining consistency over time and making
changes through innovation. The challenge to differentiate and develop a brand
meaning that resonates with consumers is more difficult for new brands. New brands,
however, have the benefit of not needing to change an existing positioning— rather
they only need to develop a new one. The key for new brands is to adopt a positioning
strategy that clearly demonstrates a point of difference. Brands that do not take risks
and stand out from the others are doomed for mediocrity (and the low levels of brand
loyalty that accompany this).
2.4.2 Leveraging on symbolic values and meanings in branding
Symbolic values and meanings are desirable and useful to consumers for the
construction of their self, whether that is self- enhancement or self-reinforcement
(Tan Tsu Wee and Chua Han Ming 2003). Although marketers should concentrate
their efforts in associating symbolic values and meanings with their brands, they
57
should approach this task with care since it requires much research and planning. At
the ‗brand as personality‘ stage, where marketers start to introduce symbolic values
and meanings to their brands to create the brand personalities, marketers should not
haphazardly associate their brands with just any symbolic values or meanings
available without any regard for consistency with the existing marketing mix
variables. A careful choice of a few symbolic values would be a good start, and
continuous monitoring of consumers‘ reactions to these values would provide useful
information about which symbolic values and meanings to enforce further and which
ones to drop. The values that a redesirable should be reinforced through all forms of
corporate communications, especially advertising and sales promotions (non-price
sales promotions such as gift-with- purchases, product bundling and samples are
preferred overprice promotions). The ‗brand as personality‘ stage marks an important
transition phase since not all brands evolve into consumer icons, especially if the
consumers do not relate to, or believe in, the communications of the brand, or they
sense some in consistencies with the brand‘s communications.
After a brand has reached the icon stage, continued consistent reinforcement would
normally suffice to maintain the status of the brand (Tan Tsu Wee and Chua Han
Ming 2003). However, marketers have to watch out for brand challengers who are
seeking the same positioning, to avoid being overtaken by them. In such situations,
the marketers of the brand would have to steer the brand a head or move in a different
direction from the competitors through new symbolic associations. An observation
worth noting is that society has been continually reinventing new meanings for
symbolic values, such that what was seen as ‗rugged‘ or ‗upper class‘ in the 1980s is
no longer so in the 2000s. Marketers have to keep themselves updated and use the
appropriate images for their symbolic associations.
2.4.3 Using company‟s name to influence consumer‟s decision
making
The paper ―The Influence of Company Name in Consumer Variety Seeking,‖ (Chen
and Paliwoda 2004) helps marketers understand when and how the company name is
used in consumers‘ information processing. Marketers can design proper messages to
enhance the weight attached to the company name in consumers‘ decision making
and increase the possibility of consumer acceptance of brands that they have not
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bought before in their variety seeking.
Factors involved in decision making process:
Perceived risk
Consumers often feel vulnerable if they are not fully informed about the product
attributes and given over-whelming commercial information. Although variety
seeking may mean exposure to novelty and unexpectedness, and the avoidance of the
boredom of repetitive use of the same brand and product, it can involve some degree
of risk, particularly when an unknown brand is to be purchased. A wrong purchase not
only means a financial loss, but may also cause some emotional unease. Therefore, a
higher risk level will inhibit an exploratory tendency. In addition, perceived risk also
affects consumers‘ behavior in terms of the extensiveness of their purchase-
decision process and their processing of information. If consumers perceive a high
level of risk and are very concerned about the consequence of a wrong purchase, they
will process more information, among which is the company information.
Thus the level of perceived risk is positively linked to consumers‘ willingness
to rely on the company name in the decision to purchase an unfamiliar brand.
Perceived brand difference
Perceived brand difference refers to the difference, in terms of a set of core values
that is believed to exist among competing brands in a product market (Chen and
Paliwoda 2004). The core value can take the form of a concrete product attribute
(substantial difference) or an abstract belief (psychological difference) or both.
The perceived brand differences will influence consumers‘ motivation for variety
seeking. If not informed about the different values of other brands, consumers will
not see the point in seeking alternatives to the irregular consumption pattern, and they
will stick to brands that they have been using. When the perceived brand difference is
high, it implies some brands are believed to offer better quality and value than some
others. Therefore, there is potential for the variety seeker to acquire superior value in
trying an unfamiliar Brand, which will reduce the randomness of variety-seeking
behavior. In other words, consumers are cautious about selecting a brand that they
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have not bought before, and will consider more information including the company
name.
Company expertise difference
According to Keller (Keller K.L., 1993), corporate expertise is ‗the extent to which a
company is seen as able to competently make and sell its products or conduct its
services.‘ Consumers often form assumptions about companies and products. These
market beliefs then become the shortcuts that guide their decisions whether or not
they are true. If consumers believe some companies will be more competent to
deliver a certain product than some others, they will be assured in using an unfamiliar
brand by knowing it is coming from this company.
Usually, variety seekers are more likely to try an unfamiliar brand from companies
that they believe possess adequate expertise, because this gives them confidence in
their choice. The importance of corporate expertise in influencing consumers‘ brand
decisions is, however, moderated by some factors such as the difficulty of making the
product. If the product is easy to make and the technology involved in the production
is standardized, consumers tend to assume that there is only a minor difference in
production expertise among the competing companies. As a result, they tend to
downplay the weight of the company name in their purchase decision. Hence if
consumers believe there is a great difference in expertise among the companies
producing a certain product, they tend to attach more weight to the company name in
the decision to purchase an unfamiliar brand.
Company association A company name will be given more attention in consumers‘ purchase decisions if
it has a strong and positive association (Chen and Paliwoda 2004). ‗Strong and
positive association‘ means that, first, consumers easily recognize the company as a
main player in a certain product category, which means the recall of the company–
product relationship is high. Secondly, consumers will accept such a relationship; in
other words, the corporate image will help to promote the product, and consumers
will not feel unease in knowing this company is producing this product. The
company association is affected by a number of factors such as the pioneering effect;
the company‘s most promoted brands and its advertising strategy.
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2.4.4 Using country of origin in branding The findings of the study (Beverl and and Lindgreen 2002) imply a contingency
model of Country of Origin (COO). They also suggest that the use of COO needs to
place within a dynamic framework that views the use of COO from an evolutionary
perspective. It is mentioned that the use of COO is contingent upon the COO-product
category history. Managers, therefore, should assess carefully the history of category
association before they embark on using COO to raise consumer and trade awareness
of their products. If a country has a negative COO product category history it may be
detrimental to use COO in a brand programme. Even when a country has a positive
COO- product category history, the use of COO may make it difficult for small-scale
producers to develop consistent supplies of seasonal products. Managers should also
be thinking about COO programmes in the long term. For example, most agri
businesses have moved away from narrow COO- based strategies and are now
supporting their COO brands with market-based relationships. This is similar to what
most companies do when their products reach the maturity phase, and means that
COO has less importance when consumers become more familiar with the products.
This research (Beverland and Lindgreen 2002) focused on organizations that used
COO at a business-to-business as well as a business-to-consumer level. As such, it
helps fill a gap in the COO literature, where the role of COO at a business-to-
business level remains relatively unexplored. This research concurs with these
authors‘ views that COO is a complex construct, and that its effect is neither
universal nor uniform. COO did influence buyers, but in different ways. In some
cases, positive imagery from New Zealand was used to enhance the buying
experience, possibly alleviating the uncertainty associated with new products or new
suppliers. In other cases, COO was used to enhance perceptions of quality and
environmental integrity. This was used in markets were COO product category
knowledge was high, and where issues such as environmental integrity carried
legitimacy. Organizations moved away from COO when it lacked meaning or
integrity for buyers (traditional German venison consumers), or when changes in the
market meant that COO was no longer a sufficient vehicle for conveying the
complexity of the marketing message (e.g. the emergence of wine regions meant that
COO no longer captured to depth of the industry).
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2.4.5 Employee branding Brands are created and consumed by people. Employees, not advertising agencies,
bring a brand to life (Crosby & Johnson, 2003). The brand comes to life when every
employee understands it and when each employee "lives" the brand promise and
delivers it consistently. Companies must make a concerted effort to give their
employees a clear understanding of what their brands stand for in their market places.
Employees who believe the company values them are more likely to be committed to
the company and to building stronger branded entities at every opportunity in their
jobs."Living the brand "is an attitude and a way of working. This means that human
resources and training and development are vital tools of brand management.
Loyal employees can build a stronger brand (Fram & Mc Carthy, 2003). Some
companies may need to consider investing in or revising their internal marketing
programs to address the needs of this substantial minority who show modest or no
brand loyalty. This investment may be worthwhile because internal marketing not
only increases employee purchases and enhances profits, but also develops "brand
champions" who influence others to buy.
Internal marketing programs have significant potential for firms of all sizes, but
especially for larger firms. In the latter case, the significant proportion of employees
thought to have lower brand loyalty indicates a market potential often of thousands of
people. If nurtured, a substantial proportion may also become brand champions to
family, friends, and neighbors.
Given the potential uncovered by the study (Fram & McCarthy, 2003), it is advisable
for the firms to have a manager dedicated to marketing to employees in general and
to convert lower loyalty employees to higher levels of company brand purchasing
behaviors. One of the responsibilities of this manager might be to develop more
brand champions by providing venues, for those employees who like the company
brand, to become more comfortable in communicating their attitudes to friends and
relatives. Another responsibility might be to develop some differentiated internal
marketing programs for communicating to employees with higher brand loyalty in
order to keep their enthusiasm high. After all, high enthusiasm within the employee
ranks brings impressive dividends.
The findings (Fram & Mc Carthy, 2003) support the concept that investments in
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internal marketing efforts are likely to have a positive "pass-along ―effect on sales
and, hopefully profits, as a result of others coming into contact with a firm's internal
brand champions. While brand championship can be an important source of
additional sales, it also offers the opportunity to increase company good-willing the
communities the firm operates. When employees represent themselves to others as
supporters of their company, others may develop a positive image of the company
without any direct contact. This positive perception can only benefit the company's
community relations and recruiting efforts over time.
2.5 BUILDING ICONS
Every society needs myths-simple stories that help people deal with tensions in their
lives. Today‘s most potent brands succeed by providing them (Holt 2003).
Some brands become icons. Think of Nike, Harley-Davidson, Apple, Absolute,
Volkswagen-they're the brands every marketer regards with awe. Revered by their
core customers, they have the power to maintain a firm holds in the market place for
many years. Few marketers, however, have any notion of how to turn their brands
into icons, and that's because icons are built according to principles entirely different
from those of conventional marketing. These brands win competitive battles not
because they deliver distinctive benefits, trustworthy service, or innovative
technologies (though they may provide all of these). Rather, they succeed because
they forge a deep connection with the culture. In essence, they compete for culture
share.
It's a form of competition that is particularly fierce in what marketers refer to as
"lifestyle" categories, such as food, clothing, alcohol, and automobiles. Here the name
of the game is symbolism: The strategic focus is on what the brand stands for, not
how the Brand performs. And it's the only form of competition that yields icons
(Holt2003).Their impressive market power is based on a kind of customer value we
don't think about very often: Icons are valued because, through them, people get to
experience powerful myths.
People have always needed myths. Simple stories with compelling characters and
resonant plots, myths help us make sense of the world. They provide ideals to live by,
and they work to resolve life's most vexing questions. Icons are encapsulated myths.
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They are powerful because they deliver myths to us in a tangible form, thereby
making them more accessible.
Icons are not just brands, of course. More often, they are people. We find icons
among the most successful politicians- think of Ronald Reagan-artists and
entertainers like Marilyn Monroe, activists like Martin Luther King, and other
celebrity figures, such as Princess Di. People feel compelled to make these icons part
of their lives because, through them, they're able to experience powerful myths
continually. Iconic brands operate similarly.
When a brand creates a myth, most often through advertisements, consumers come to
perceive them that has embodied in the product. So they buy the product to consume
the myth and to forge a relationship with the author: the brand. Anthropologists call
this "ritual action.‖When Nike's core customers laced up their Air Jordan‘s in the
early 1990s, they tapped into Nike's myth of individual achievement through
perseverance. As Apple‘s customers typed away on their keyboards in the late 1990s,
they communed with the Company‘s myth of rebellious, creative, libertarian values
at work in a new economy.
As these examples suggest, iconic brands embody not just any myth but myths that
attempt to resolve acute tensions people feel between their own lives and society's
prevailing ideology. Such tensions are widespread. An ideology, by its nature,
presents challenging moral imperatives; it lays out the vision to which a community
aspires. But, inevitably, many people live at a considerable remove from that
vision. A national ideology may, for example, promote the ideal of a family with two
parents, even though many citizens contend with broken homes. The contradictions
between ideology and individual experience produce intense desires and anxieties,
fuelling the demand for myths.
That demand, in turn, gives rise to what we call ―myth markets." It's in these markets,
not in product markets, that brands compete to become icons (Holt 2003). Think of a
myth market as an implicit national conversation in which a wide variety of cultural
products compete to provide the most compelling myth. The topic of the conversation
is the national ideology, and it is taken up by many contenders. The winners in these
markets become icons; they are the greatest performers of the greatest myths, and
they bask in the kind of glory bestowed on those who have the prophetic and
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charismatic power to provide cultural leadership in times of great need. More often
than not those who win in myth markets are performing a myth of rebellion.
A brand becomes an icon when it is able to do the following five things (Holt 2003).
2.5.1 Target national contradictions Icons don't target consumer segments or psychographic types. They go after veins of
intense anxieties and desires running through society, the psychological consequence of
the national ideology. While market fragmentation is the rule in many sectors of the
economy, icons necessarily speak to a mass audience.
2.5.2 Create myths that lead culture Unlike conventional branding, icons don't mimic pop culture; they lead it. They
create charismatic visions of the world to make sense of confusing societal changes
in much the same way as have Marilyn and Elvis, JFK and Martin Luther King,
Ronald Reagan and Rambo, Steve Jobs and Bart Simpson. Icons earn extraordinary
market power because they deliver myths that "repair" the culture when it's
particularly in need of mending. They put existing cultural materials to new purposes
in order to provoke audiences to think differently about themselves.
2.5.3 Speak with rebel‟s voice Icons don't seek to mirror the thoughts and emotions of their customers. They speak
as rebels. To assemble a credible populist challenge to the national ideology, iconic
brands draw on people who actually live according to alternative ideals. And icons
don't simply borrow the trappings of rebel lifestyles, mimicking their clothing or
language. Rather, they understand the rebel's point of view so well that they can
speak with the rebel's voice.
2.5.4 Draw on political authority to rebuild the myth Unlike conventional brands, icons don't behave as if they have a certain DNA, an
essential truth that must be maintained. Icons must be reincarnated when ideology
ruptures because the value of their myth is erased. What remains intact as an artifact
of the original brand, however, is its political authority. When an icon's myth loses
value, its constituency still looks to the brand to shed light on the kinds of
contradictions it has addressed in the past. Because the brand has been a trustworthy
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and committed advocate, consumers believe that it will speak for them again.
2.5.5 Draw on cultural knowledge Cultural knowledge is critical for building icons yet is sorely lacking in most
managers' arsenals.
When the national ideology crumbles and is then reinvented, new contradictions
form. It's a window of opportunity for would-be icons, but it‘s bad news for existing
ones. For marketers, the central challenge is to divine how best to reinvent a brand's
myth when a cultural disruption hits. And doing that requires knowledge and skills
they may not have. Managers must learn to anticipate new contradictions and to
select the one that best aligns with the brand's political authority. And, as if that
weren't enough, they must then choose to align with the appropriate rebel subculture
and understand the rebel's ethos deeply enough to construct a credible and evocative
new myth.
Such knowledge doesn‘t come from focus groups or ethnography or trend reports-
the marketer‘s usual means for "getting close to the customer." Rather, it comes from
a cultural historian's understanding of ideology as it waxes and wanes, a sociologist's
charting of the topography of contradictions the ideology produces, and a literary
critic's expedition into the culture that engages these contradictions. To create
powerful myths, managers must get close to culture – and that means looking far
beyond consumers as they are known today.
2.6 BRAND CRISES AND BRAND GREMLINS
Marketers want their brands to ‗live long and prosper‘. Although particular products
may come and go, properly managed brands can last for many generations. Yet some
brands seem inexplicably to lose their momentum and profitability; a few even die
prematurely. Many organizations are not even aware their brands are heading for
trouble utilities too late. The critical question is, ‗What needs to be done to keep
brands healthy for the long run?‘
Most perils to brand health can be partitioned into two categories (Farquhar, Uncover
in Brand Gremlins and Other Hidden Perils,2003).The first includes different types of
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brand crises, which are highly visible events that warrant considerable management
attention. The second category of perils consists of brand gremlins, which are
imperceptible in most organizations and therefore receive little management
attention. Brand gremlins are the people and processes responsible for seemingly
small but repetitive mishaps with customers, or for other activities that progressively
undermine a brand.
The effects of brand gremlins on the brand are often hidden and incidental, and May,
therefore, remains undetected for a long time. The underlying problems may surface
only when the brand‘s health succumbs to the cumulative damage (like termite
infestations or viral infections). Top reserve long-term brand health, managers should
make ongoing, concerted efforts to prepare for brand crises and deal with brand
gremlins.
2.6.1 Brand crises
Brand crises usually result from sudden, unexpected, large- scale events that have a
significant impact on the brand, such as substantial shifts in customer demand,
quantum changes in technology, or great natural or man-made disasters (Farquhar,
Uncovering Brand Gremlin sand Other Hidden Perils, 2003).Such events may have
serious and lasting consequences for those brands that cannot absorb the shock or
adapt quickly enough.
Technological advances can precipitate another type of crisis when a brand‘s
products or services become obsolete. Natural and man-made disasters can also
jeopardize brands. The wide spread crises of confidence in brands like Arthur
Andersen, Enron, Firestone, Perrier and Snow Milk have led to steep sales declines
or collapse. Some brands try to escape the past by adopting new names(for example
,ValuJet became Air Trans). Only a few brands like Tylenol survive such
catastrophic events, recover with their reputations intact, and continue to thrive.
A strong brand itself is not always enough to survive when the rules of the game are
about to change. Far-sighted managers prepare and train their organisations to
respond and manage brand crises. But they also use scenario planning and other
exercises to understand their brand‘s weaknesses and identify strategic inflection
points. With such insights and advanced planning, the managers are able to take
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timely actions to pre-empt the crisis and preserve their brand.
The early recognition of strategic inflection points explains why some brands prosper
while others do not fare as well in brand crises.
2.6.2 Brand gremlins
Every day events may be even more harmful to a brand‘s long- term health. Brand
g remlins are those people, processes and other entities that are out of alignment with
the organization‘s overall brand strategy. Brand gremlins frequently lead to brand
deterioration and an erosion of customer goodwill. Like vehicle wheels out of
alignments and in the gears of machinery, bugs in a software program, or other
recurring glitches, the underlying cause of a brand problem may be scarcely
noticeable, but the collective effects can be devastating if not discovered and
corrected early enough.
The following list describes the six common types of brand gremlin Farquhar,
Uncovering Brand Gremlins and Other Hidden Perils, 2003):
• Loss of trust
• Loss of esteem
• Loss of distinctiveness
• Loss of value
• Loss of relevance
• Loss of distribution
These types are neither mutually exclusive nor exhaustive: brand gremlins may
possess multiple traits, and other types of gremlins also exist.
Loss of trust Trust gremlins do not fulfill the brand‘s promise or keep their personal word to
customers. Customers usually blame the brand for such shortcomings and may then
warn others that the brand cannot be trusted. Brand loyalty begins to evaporate
quickly as customers defect and negative word of mouth spreads.
Loss of esteem Esteem gremlins spoil the brand‘s emotional appeal for customers. As customers‘
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admiration and respect for the brand diminishes, they will no longer recommend the
brand to others. At some point, customers might seek other alternatives and regretfully
switch to other brands.
Loss of distinctiveness Distinctiveness gremlins dilute the brand‘s point of difference and thus blur its image
with customers. Confused customers no longer understand the brand‘s meaning and
core benefits. The brand‘s comparative advantages will be diluted if category
extensions do not fit well with the brand or if other marketing actions make
customers‘ decision-making more complicated. Customers may then either switch to
more clearly differentiated brands or put more emphasis on price in choosing among
brands.
Loss of value Value gremlins lower a brand‘s perceived quality and the functional benefits offered
to customers. As perceived quality slips, customers eventually decide the brand does
not offer them fair value. Customers are then reluctant to pay much of a premium for
the brand. If the brand continues to lose value, it becomes a commodity in customers‘
minds and must compete on price to survive.
Loss of relevance Relevance gremlins fail to meet critical changes in customers‘ needs or expectations.
Without a clear understanding of customer expectations or emerging trends in the
market, some organizations are relatively slow in meeting customer needs. Customers
often regard such brands as no longer appropriate and eliminate them from further
consideration in their purchasing decisions.
Loss of distribution Distribution gremlins reduce a brand‘s availability to customers. Customers who
repeatedly discover their preferred brand is not carried, is back-ordered or out of stock
will either find available brands to buy or use alternative ways to satisfy their needs.
A brand‘s power in the marketplace depends on its awareness and availability to
customers.
Marketers‘ blind spots can make it difficult to detect brand gremlins and other hidden
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perils. Blind spots may obscure essential information from an individual or
organisation, which is unaware that anything is missing. The secret to uncovering
blind spots is to use multiple sources of information and find reliable ways
of systematically challenging established beliefs. Resourceful marketers first take
steps to learn about their blind spots before searching for brand gremlins. (Farquhar,
Discover the blind spots in your brand vision, 2003) examines several kinds of blind
spot to improve marketers‘ discovery of various threats to their brand‘s health.
Knowing how to spot, and where to look for brand gremlins is just the start. The next
challenge is to align the organization around a winning brand strategy and turn
gremlins into advocates for the brand. (Porter, 1996) illustrates how to align
operational and other elements in a cohesive brand strategy. By preparing for brand
crises and transforming brand gremlins, organizations are far more likely to see their
brands live long and prosper.
2.7 BRANDMETRICS/ BRANDVALUATION For all the discussion that revolves around the importance of the brand as a driver of
business value and success, surprisingly few businesses have instituted a systematic
programme of analytics that allows them to gauge their brands‘ performance, adjust
brand strategies and, more importantly, link them to business performance measures.
This is as true for business-to-business (B2B) as it is for business-to-consumer (B2C)
marketing, even though B2B organisations have a critical advantage: they have a
better idea of who their customers are and can measure the dynamics of acquisition,
retention and optimisation with considerable precision. The paper ―Brand Metrics:
Gauging and Linking Brands with Business Performance‖ (Munoz, 2004) discusses
the essential components of a brand metrics programme, how it can and should be
linked to business performance, and how one technology company used brand metrics
to help it adjust its brand and business strategy.
Benefits of Brand Measurement The key benefit of a brand measurement system is that it links brand management and
business performance. The system is most powerful when viewed as a strategic
management tool for continuous improvement rather than a static snapshot in time of
the brand‘s performance. Thus, measurement needs to be considered as a continuous
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activity. An effective brand measurement system helps businesses to:
• Understand how the brand is performing against customer expectations
• Determine how the brand is performing against the competitive set
• Identify brand weaknesses before they become business problems
• Establish areas to focus brand building efforts on to create business value
The three classes of measurement Three classes of measurement (Munoz, 2004) allow the marketer to gauge the
effectiveness of brand-building activity from brand investment (inputs) through to
business impact (outputs)
• Perception metrics focus on the range of functional, emotional and latent connections
that combine to form an opinion of a brand. These include awareness, familiarity,
relevance, consideration and preference; combined, they help to gauge the
effectiveness of various brand-building activities across all the points of interaction
with a customer.
• Performance metrics help to assess how the various brand- building activities have
combined to drive overall business results, and range from price premium to loyalty
to lifetime value of a customer.
• Financial metrics represent the economic impact on the business, whether revenue
growth or return on investment.
Guidelines for selecting the right combinations of metrics All three types of metric should be incorporated into a brand measurement programme
(Munoz, 2004), although the challenge to marketers is to not over-measure lest the
exercise becomes overwhelming. Some basic, underlying rules should be used when
deciding which particular combination of metrics to choose. The metrics should
be:
Simple to use: As the metric becomes more complex, more time
is spent on measuring the brand than managing it.
Meaningful: There must be a direct link to brand-building efforts as well as
business results.
Actionable: An apparent business decision should be associated with the
metric, with the focus on ‗need-to-have‘ metrics, not ‗nice-to-have‘ metrics.
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Repeatable: Consistent, repeatable application of a metric is necessary to
deliver valuable information.
Time-bound: Results should be compared, benchmarked and evaluated
against other brands within the portfolio and the competition at regular
intervals.
One of the biggest challenges marketers face is in understanding the causal
relationships between brand perception, brand performance and financial impact.
Causality is derived from understanding the key drivers of demand, knowing at
which touch- points (or moments of customer interaction) perceptions and behaviors
are generated, and assessing the influence of the brand in choosing one product or
service over competitive offerings. Once the causal connections are made a cross
perception, performance and impact, the marketer can tie activities directly to value
creation. The implication here is that marketers, as advocates of shareholder
value, must move considerably beyond their traditional focus on communications
and become involved in operational, financial and strategic planning processes. In
order to ensure that the measurement system arms marketers with the necessary
firepower.
To accomplish this, it needs to be able to do the following 3 things:
• Link brand metrics to business strategy
• Identify the key goals that can be impacted by the brand
• Determine the key constituencies that can be influenced by the
brand
2.7.1 Customer based Brand Equity Brand equity has been defined in a variety of ways, depending on the particular
purpose. The focus of this article is on brand effects on the individual consumer. The
advantage of conceptualizing brand equity from this perspective is that it enables
managers to consider specifically how their marketing program improves the value of
their brands. Though the eventual goal of any marketing program is to increase sales,
it is first necessary to establish knowledge structures for the brand so that consumers
respond favorably to marketing activity for the brand.
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Defining Customer based Brand Equity Customer-based brand equity is defined as the differential effect of brand knowledge
on consumer response to the marketing of the brand (Keller K.L., 1993). Three
important concepts are included in the definition: "differential effect," "brand
knowledge," and "consumer response to marketing."
Differential effect is determined by comparing consumer response to the marketing of
a brand with the response to the same marketing of a fictitiously named or unnamed
version of the product or service.
Brand knowledge is defined in terms of brand awareness and brand image and is
conceptualized according to the characteristics and relationships of brand associations
described previously.
Consumer response to marketing is defined in terms of consumer perceptions,
preferences, and behavior arising from marketing mix activity (e.g., brand choice,
comprehension of copy points from an ad, reactions to a coupon promotion, or
evaluations of a proposed brand extension).
Thus, according to this definition, a brand is said to have positive (negative)
customer-based brand equity if consumers react more (less) favorably to the product,
price, promotion, or distribution of the brand than they do to the same marketing mix
element when it is attributed to a fictitiously named or unnamed version of the product
or service. Favorable consumer response and positive customer-based brand equity, in
turn, can lead to enhanced revenue, lower costs, and greater profits. Brand knowledge
is central to this definition. In particular, the favourability, strength, and uniqueness of
the brand associations play a critical role in determining the differential response. If
the brand is seen by consumers to be the same as a prototypical version of the product
or service in the category, their response should not differ from their response to a
hypothetical product or service; if the brand has some salient, unique associations,
those responses should differ. The actual nature of how the responses differ
depends on consumers' evaluations of these associations, as well as the particular
marketing mix element under consideration. Thus, establishing brand awareness
and a "positive brand image" (i.e., favourable, strong, and unique brand associations)
in consumer memory creates different types of customer-based brand equity,
depending on what marketing mix element is under consideration. A brief discussion
highlighting some relevant considerations for each of these elements follows.
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Fundamentally, high levels of brand awareness and a positive brand image should
increase the probability of brand choice, as well as produce greater consumer (and
retailer) loyally and decrease vulnerability to competitive marketing actions. Thus, the
view of brand loyalty adopted here is that it occurs when favorable beliefs and
attitudes for the brand are manifested in repeat buying behaviour. Some of these
beliefs may reflect the objective reality of the product, in which case no underlying
customer-based brand equity may be present, but in other cases they may reflect
favourable, strong, and unique associations that go beyond the objective reality of the
product.
High levels of brand awareness and a positive brand image also have specific
implications for the pricing, distribution, and promotion activities related to the brand.
First, a positive image should enable the brand to command larger margins and have
more inelastic responses to price increases. The most important aspect of the brand
image that affects consumer responses to prices is probably overall brand attitude.
Consumers with a strong, favourable brand attitude should be more willing to pay
premium prices for the brand. Similarly, a positive image should result in increased
consumer research and a willingness to seek out distribution channels for the product
or service. Finally, high levels of brand awareness and a positive brand image can
increase marketing communication effectiveness. All aspects of the brand image are
relevant in determining consumer response to advertising and promotion. For
example, several authors note that advertising response and decay patterns area
function of consumers" attitudes and behavior toward the brand. They maintain that
consumers who are positively predisposed toward a brand may require fewer ad
exposures to meet communication objectives. Similarly, one could argue that strong
attribute or benefit associations for the brand require less reinforcement through
marketing communications.
In these different ways, customer-based brand equity is enhanced by creating
favourable response to pricing, distribution, advertising, and promotion activity for
the brand. Moreover, a familiar brand with a positive brand image can also yield
licensing Opportunities (i.e., the brand name is used by another firm on one of its
products) and support brand extensions(i.e., a firm uses an existing brand name to
introduce a new product or service),two important growth strategies for firms in
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recent years. Licensing can be a valuable source of royalty income, as evidenced by
the substantial merchandising efforts in recent years, and typically has been employed
when brand associations have strong user imagery or brand personality attributes. A
more substantial investment and risk profile for the company, however, is required
with brand extensions.
Measuring Customer based Brand Equity There are two basic approaches to measuring customer-based brand equity. The
"indirect'' approach attempts to assess potential sources of customer-based brand
equity by measuring brand knowledge (i.e., brand awareness and brand image). The
"direct" approach attempts to measure customer-based brand equity more directly by
assessing the impact of brand knowledge on consumer response to different elements
of the firm's marketing program. The indirect and direct approaches to measuring
customer-based brand equity are complementary and should be used together (Keller
K.L., 1993).The indirect approach is useful in identifying what aspects of Brand
knowledge causes the differential response that creates customer-based brand equity;
the direct approach is useful in determining the nature of the differential response.
Indirect approach
The first approach to measuring customer-based brand equity, measuring brand
knowledge, requires measuring brand awareness and the characteristics and
relationships among brand associations. Because any one measure typically captures
only a particular aspect of brand knowledge, multiple measures must be employed to
capture the multidimensional nature of brand knowledge.
Direct approach
The second approach to measuring customer-based brand equity, directly measuring
the effects of brand knowledge on Consumer response to marketing for the brand,
requires experiments in which one group of consumers responds to an element of the
marketing program when it is attributed to the brand and another group of consumers
responds to that same element when it is attributed to a fictitiously named or unnamed
version of the product or service. By attributing the marketing element to an
unfamiliar or anonymous product, consumers should interpret it with respect to their
general knowledge about the product or service, as well as prototypical product or
service specifications and price, promotion, and distribution strategies. Comparing the
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responses of the two groups thus provides an estimate of the effects due to the specific
knowledge about the brand that goes beyond basic product or service knowledge.
2.8 INDUSTRIAL MARKETING
In today‘s competitive business environment, customers in the business-to-
business(B2B)arena have more information, access to more choices, are more
sophisticated, and as a result have higher expectations than ever before. For the
marketers of industrial products, the end result of this highly competitive environment
is having to put forth a greater effort to create some form of product differentiation to
avoid their products being viewed as commodities. To cope with these challenges and
avoid this commoditization, many B2B marketers are increasingly seeking to brand
their products to differentiate themselves from their competition (Michell, King, &
Reast, 2001; Mudambi, Doyle, & Wong, 1997; Ward, Light,& Goldstine,1999).
Coupled with this desire for differentiation is the fact that an increasing amount of
research has shown that branding of industrial products plays a more important
role in industrial decision making than has been thought previously (Mudambi,
Branding importance in business-to-business markets Three buyer clusters, 2002).
As marketers of consumer products have discovered, the companies that thrive will be
the ones that create the most compelling and consistent brand experience for their
customers (Prophet, 2001). An important component of this brand experience is the
ability to develop a relationship with the customer at key interaction points of that
experience. To develop this relationship, the marketer must understand how the B2B
customer defines the concept of ‗‗value‘‘ and then work to deliver that value
throughout all interactions with the customer. When the product is delivered in a way
the customer understands, desires, and is willing to pay for, the brand has a greater
opportunity of having a higher perceived value for that customer. Having a brand with
high perceived value will set the stage for a long-lasting relationship to develop, and
the depth of the relationship between the brand and its customers will be the
foundation for the ongoing success and sustained competitive advantage despite
disruptions in the marketplace (Schultz, 2001).
While consumer brands have traditionally sought to develop these relationships,
industrial products are increasingly using branding to differentiate their product and
also develop these relationships. Industrial firms that are able to create a viable brand
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identity for their product or line of products can achieve that degree of differentiation
that can be the difference between success and failure in the marketplace (Mudambi,
Branding importance in business-to-business markets three buyer clusters, 2002).
2.8.1 Branding research in the B2B arena Although research on branding industrial products has been limited, a number of
empirical studies have been conducted in recent years that have expanded the body of
knowledge of the subject. In one of the first attempts to examine industrial branding,
Saunders and Watt (Saunders & Watt, 1979) examined the use of brand names for
industrial fibres, which are basically commodity industrial products. While they
concluded that industrial brand names tend to be confusing and not effective, they
surveyed house wives rather than industrial purchasers, somewhat calling their results
into question. Sinclair and Seward (Sinclair &Seward,1988), operating on the general
premise that branding is less effective for industrial products than for consumer
products, looked at branding in the paper board industry. Their results found that the
primary reasons for branding industrial products were to provide some degree of
differentiation, to better identify the product, to emphasize the product as a specialty
product, and to develop a loyal customer base. Another key finding of the Sinclair and
Seward research was that a number of
Manufacturers failed to place enough emphasis on educating the intermediaries and
end users about the uniqueness of the brand, and as a result their middlemen did not
feel as though branding was as important as the manufacturers did.
Shipley and Howard (Shipley &Howard, 1993) found that companies in the United
Kingdom used brand names widely and that brand names and brand naming were
important to manufacturers of industrial products. They also found that industrial
brand names were perceived by these manufacturers to be effective, were important in
establishing industrial marketing positioning, and were especially important for small
firms to overcome what may be perceived as a relative disadvantage. Using the
Shipley and Howard research asa point of departure, Mitchell et al. (Michell, King, &
Reast, 2001) set out to examine to what extent managers in industrial firms (also in
the UK) perceive there to be any unique value to branding their products and whether
or not these branding associations provide any competitive advantage. Their findings
indicate that industrial firms hold very positive views about the benefits of brand
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names and feel that branding is valuable to marketing success and is a major corporate
asset. In addition, industrial firms perceive a number of competitive differential
benefits in the use of manufacturer brands, with quality, reliability, and performance
rated as primary factors by a clear majority of the respondents.
Other research has attempted to examine the construct of brand equity of industrial
products, with one study defining it as buyers‘ willingness to pay a price premium for
a particular brand, recommend the brand to peers, and give special consideration to
another product with the same company brand name (Hutton, 1997). A second study
defined brand equity as the set of associations and behaviours on the part of a brand‘s
customers and channel members which allow a brand greater volume and margins
than it could obtain without the brand name (Gordon, Calantone, & di Benedetto,
1993). In a study in the electrical products in industry, Gordon et al. (Gordon,
Calantone, & di Benedetto, 1993) found that brand equity was highly present in B2B
markets. Among their key findings was because B2B products tend to be branded with
firm names loyalty tends to be more global in nature, extending across all the firm‘s
product lines. Second, because this firm versus brand loyalty exists, efforts to position
new products in a manner different from those existing products may prove to be
difficult if not impossible. Third, loyalty in the B2B sector encompasses not only the
firm and its products, but also the channel members employed to distribute the
product. Finally, they propose that only limited means are possible to change existing
perceptions outside of establishing or acquiring subsidiary operations.
In another study involving industrial brand equity, Hutton (Hutton, 1997) found
brand-building investments in B2B markets to be worthwhile activities to the extent
that these investments will elicit brand–equity behaviors. He also found the presence
of a strong brand to be a positive factor and the potential for brand extensions and
brand synergy across somewhat disparate products categories to be high. However, on
the other hand, the potential of an unsuccessful product harming the reputation of
another product with the same brand name also appears to be high even when the two
products are dissimilar. Another finding was that while the risk of organizational
failure is a concern, the fear of personal failure may be the bigger factor in brand
decisions. Owing somewhat to this finding, Hutton also found that brand appeals tend
to be more effective with the more complex products that require greater service and
support with individuals who are pressed for time or resources or who are concerned
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about the consequences of product failure on themselves and/or their organization
(Hutton,1997). This finding is in keeping with a number of studies that have examined
perceived risk in the organizational buying behavior literature, which has shown
that industrial buyers will choose recognized brand names from established
companies as a way to reduce both corporate and personal risk (Henthorne, La Tour,
& Williams, 1993; Mc Quiston & Dickson, 1991).
While the above research has served as a foundation for developing an understanding
of industrial branding, their samples included either manufacturers or middle men and
provide no evidence as to the effectiveness of branding efforts on industrial customers
(Mudambi, Doyle, & Wong, An Exploration of Branding in Industrial Markets,
1997).In a comprehensive review of the literature, Mudambi et al. (Mudambi, Doyle,
& Wong, An Exploration of Branding in IndustrialMarkets,1997) propose that
intangible factors as well as tangible factors are important in industrial decision
making, and to understand successful brands, each brand attribute must be analyzed
from the perspective of the expected value to the customer. Synthesizing the literature,
they define brand value as having four integral components: product performance,
distribution performance, support services performance, and company performance.
They go on to propose a conceptual model of branding, including the tangible and
intangible elements of each of these components. In another study, Mudambi
(Mudambi, Branding importance in business-to-business markets three buyer clusters,
2002) found that industrial buyers consider three bundles of attributes in their
purchasing process: the product, the augmented services, and the branding. In a study
of the purchasing of ball bearings in the UK, she used cluster analysis to identify three
distinct buyer types: ‗‗highly tangible,‘‘ who value physical product properties and
price; ‗‗branding receptive,‘‘ who perceive the three branding elements of brand name
awareness, brand image or reputation, and brand purchase loyalty to be important; and
‗‗low interest‘‘ who generally did not feel that any of the attributes were more
important than the others.
2.8.2 Developing an industrial brand
The literature on industrial branding clearly indicates that branding is alive and well in
industrial products and when accomplished strategically can serve as a viable
competitive advantage for industrial firms. While branding on both the consumer and
industrial sides basically represents a promise to the customers, the B2B marketer
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must realize and account for the key differences in industrial brands from consumer
brands. On the consumer side, once the product has met the necessary physical
requirements for the consumer, the promise of the brand tends to be more intangible
in nature, offering consumers the emotional security of being able to recall and deal
with a recognized brand name. However, on the industrial side, a brand represents a
multi dimensional promise of value that includes more factors than simply the
performance of the physical product. In addition to the performance of the physical
product, a second factor integral to the success of a brand is the ability of the
manufacturer to deliver the needed products and services in a timely manner, often
through an intermediary. However, intermediaries on their own will not necessarily
understand the manufacturer‘s strategy to differentiate the product or to create a
unique identity for that brand in the desired customer segment and therefore of ten are
unable to communicate the benefits of that product to the end user. The
manufacturer therefore must take special measures to communicate their reasoning
behind the brand strategy and the value created by this brand to ensure that the
intermediaries understand and communicate this value to the end users.
The third factor that is important in industrial branding is company support services.
All members of the organization must realize that their customers may define the
value of the product by the way a company representative responds to their specific
need at a specific point in time. Thus, a pervasive strategy throughout the organization
should be that all members of the organization must respond to customers in a
reliable, timely, and efficient manner, enhancing the promise of the brand‘s value in
the customer‘s mind and endeavouring to deliver this value in key inter- actions with
the customer. Finally, because loyalty is often directed more towards the entire
company rather than a specific brand, the company‘s standing in the industry and their
overall reputation are also considered part of the brand. This is often the intangible or
emotional side of the brand, which recent research has shown to have more of an
impact than was thought previously. This may be due in part to the increased
perceived risk industrial customers feel as a result of dealing with an ever-
increasing number of technically complex product choices. Perceived risk is often a
factor in organizational buying behaviour and the promise of value that the reputation
as supplier company has can serve to reduce this risk. The company then must
endeavour to create that positive intangible image for this brand through pro-motions,
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public relations, and in every interaction with their customers.
2.8.3 Difficulties in branding commodities Past associations: Being already consumed for pasts and availability of
number of suppliers the commodities offer a great difficulty in branding. This
is because consumers have strong past associations and consumption patterns
which are difficult to change.
Promotion of commodity as a category: Certain commodities are
difficult to be promoted as individual brand. Hence, a joint effort from the producer
and distributor side is necessary to motivate any increase in consumption of a
category through branding. This entails joint decision making on advertisement and
promotion strategies, budgeting and Direct sales effort which all get delayed due to
joint decision making. In promotion the cost has to be incurred by thousands of
producers.
2.8.4 Branding strategies for commodities
In case of commodities, branding can take at two levels. First is the Category level
where the entire category is promoted by a consortium of producers to jointly reap the
benefits of branding. Such products are generally produced by a vast number of
producers and their product is jointly marketed by a central processing authority (e.g.
milk and eggs). The other level of branding can beat the individual level where an
individual aims to gain a critical size by branding and differentiating factor (e.g. salt
and flour). Normally such categories don‘t have a central processing structure.
1. Promotion of the category:
Depth and then breadth of brand awareness:
Since the associations with a product categories are well established in the mind of
consumer and it is very difficult to change those brand associations it is important
that those associations are not challenged by a drastic change i n the association of
the commodity. Thus, it is important that the brand depth (ability of consumer to
recall easily) is given more importance (then breadth i.e. range of purchase and usage
situations that come to mind). After the initial promotion of commodity has been
successfully accepted in the marketplace the breadth should be enlarged by
innovating in the product category.
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• Leveraging existing associations:
Many a times commodities are associated with consumption of other commodities.
Due to this join consumption the branding has to be done along with those products.
• Use of Spokespersons:
Often the spokespersons are used to reflect the values represented by the product
category and promote the category.
2. Individual brand Promotion:
• Finding Meaningful differences:
Some of the former commodity categories have been successfully converted to
product categories by use of adequate branding on the basis of existence of
meaningful product differences. In these categories customers was convinced that
the product had appreciable quality differences.
Image or other non-product related considerations:
In case where the product difference is virtually non- existent it is imperative to
differentiate the commodity on non-product related measures.
Companies:
The Company in such cases tries to transfer the brand associated with them to
increase the credibility of the brand.
Country of origin:
Because of specialty of resources or extra-ordinary skills lying in a country certain
favorable characteristics are often associated with a product category and a country.
Co-branding:
Use of other strong brands in the joint consumption stage is often used in case of
commodities.
2.8.5 The four step approach to branding commodities
Sam I. Hill, Jack McGrath and Sandeep Dayal (Hill, McGrath, & Dayal, 1998) have
proposed a four step approach to branding commodities:
• First, carve up the market from every angle—profits, needs, behaviours — to
identify those customers who are responsive to differentiation.
• Second, differentiate your offering in one or more of the six ―generic‖ dimensions
of differentiation.
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• Third, bundle several differentiations in to a brand, and then communicate that
brand consistently and strongly.
• Fourth, align your business capabilities to reinforce and defend the brand and
the underlying sources o differentiation.
Carving up the market Carving up the market is the critical first step. Commodity marketers who know who
will pay for differentiation, how much can be invested in the differentiation processs
and what benefits are of value to their customers can begin to build a brand. Those
who in- stead apply a shotgun approach will likely run out of money before they see
results.
Successful commodity marketers must start by recognizing that no market is truly
homogeneous. Some customers are simply not responsive to marketing and are a
waste of time. We call our process to identify the right set of customers carving up the
market. Carving up the market goes well beyond traditional segmentation. It is a
deliberate process to find those customers who need, appreciate and will pay for
differentiation. The first step is to conduct a disciplined behavioral segmentation of
the market. This is very different from traditional psychographic or demographic
approaches; instead of relating how customers behave to how they purchase, actual
purchase patterns are examined. There are three distinct classes of customers:
Gold Standard Customers
These are the customers whose concerns exceed a narrow fixation with rock-bottom
price. They will pay a premium for offerings that deliver through value in terms of
process enhancements, cost reduction or benefits to end-users. They typically
represent small portion, anywhere from 5 to 25 percent, of the total market. The true
Gold Standard customers will consider long-term, strategic partnerships with multiple
levels of client interaction. These are the customers sought by commodity marketers.
―We are going through a revolution in customers election, spending less time with the
transaction types, and embracing partners,‖said the director of marketing at this
company‘s dry milling division. Ofcourse, even Gold Standard commodity customers
are demanding — sometimes more so than other market segments. However, at least
they are willing to pay for their demands.
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Potentials A larger segment of the market, generally ranging from 30 to 45 percent, places a
higher emphasis on pure price, but is occasionally willing to entertain the notion of
selective relationships involving certain products or services. Customers in this
segment have some degree of interest in partnering although they shy away from
long- term commitments. Because they are concerned with delivered cost, it is
possible on occasion to interest them in opportunities to reduce network costs,
including transportation, delivery and warehousing. Once it is possible to move the
dialogue beyond delivered price, the potential for differentiation exists.
This group sometimes even includes traditional cost managers. Because they are
concerned with delivered cost, it is possible on occasion to interest them in
opportunities to reduce network costs, including transportation, delivery and
warehousing. And supply-risk managers, rather than fixating exclusively on cost, are
primarily concerned about the potential to avoid supply interruptions.
Once it is possible to move the dialogue beyond delivered price, the potential for
differentiation exists.
Incorrigible
No matter what one does, customers are not going to love one. These are not strategic
thinkers. They are tightly focused on a single goal: making the best possible deal on
the transaction at hand. These are the pure price buyers, who treat suppliers as the
enemy and focus exclusively on current delivered price. They will switch suppliers
with lightning speed for even the slightest price differential. Unfortunately, these
incorrigibles constitute half the market, or more, in some commodity businesses.
They are so prevalent that no supplier can seriously think about "firing" all of them.
The behavioral segmentation of the market is just the first step in understanding
customer potential, albeit the most important. Marketers also need to analyze the
extent to which customers truly contribute to their profitability, rather than eating up
profits by failing to pay the true cost-to-serve. The result of these segmentations is a
shortlist of the customers around which real marketing can take place.
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Differentiate
Commodity differentiation must be tangible, robust and capable of withstanding
intense scrutiny. The marketed offering must significantly enhance some element of
the customer‘s value chain in ways other competitors can‘t match. That requires the
development of a unique, tangible source of value — technological and engineering
support, special distribution and delivery, or specific application of the commodity
product to end use. Once in place, that differentiated source of value is difficult for
competitors to duplicate. What‘s more, if the supplier can bundle multiple sources of
differentiation into a single, integrated offering, the challenge facing competitors
becomes immense.
There are always ways to differentiate, through both how you add value and how you
deliver it. Value is created in commodity products through improving the consistency
of the offering, making it more convenient or aggressively customizing it to the
customer‘s operation. This value can be delivered either through the product itself or
through service enhancement.
What results from that combination are the six "generic" ways to differentiate?
1. Quality Control: Value from Product Consistency
2. Reliability: Value from consistent service
3. Packaging: Value from Product Convenience
4. Taking Responsibility: Value from Convenient Service
5. Matching: Value from Product Customization
6. Knowledge-based Applications: Value from Customized Service
Bundle
Defining and delivering a differentiated attribute that provides real value to the
customer is essential, but not necessarily sufficient. Often, a single at- tribute —
consistent quality or service, for example — can be matched, or at least neutralized,
by agile competitors. Differentiation tied to a specific product is the most tenuous
basis for branding. Ideally, commodity branding is associated with an offering — the
basic product or service enhanced by various forms of differentiation —rather than
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with a particular product. The goal is to bundle multiple sources of differentiation —
and then to fight ferociously to prevent competitors from unbundling them.
In the end, the goal is first to build the brand identification with a bundle of integrated
offerings, and then to extend the brand relationship to the institutional level, where it
affords the greatest opportunities for leverage. The people who market Du Pont‘s
chemicals and mineral products understand they have a considerable advantage
because of the company‘s reputation for innovation, reliability and stability. Even if
there is nothing particularly innovative about a specific product they might be selling,
one manager acknowledged, ―people buy from us because we are Du Pont.‖ That is
the essence of commodity branding.
The objective of institutional branding is to create customer relationships that are
broad and deep — broader than the traditional link between a salesman and a
purchasing manager, and deeper than a teenager‘s emotional attachment to a particular
brand of designer jeans. In commodity brand relationships, those emotional bonds are
replaced by shared goals and common values.
Brand marketing requires multiple points of company-to- company contact as both
partners seek mutual ways to create value through aligned processes, applications and
capabilities. It demands an entirely new focus on relationships rather than
transactions, on offerings rather than products, on premiums rather than discounts.
It also requires effective communication of the brand. But years of disappointing
experience, stemming from the costly and inappropriate use of consumer marketing
techniques, have made commodity suppliers leery. Indeed, some have an
almost pathological fear of communication in general, and of advertising in particular.
Well-targeted, sharply focused communication does work well in commodity markets;
it just doesn‘t bear much resemblance to the mass advertising most commodity
suppliers automatically associate with brand marketing. The key is to communicate
the value clearly, using economics rather than emotion.
Deliver
The extraction of a premium for a differentiated offering demands that the supplier
make good on the promise of added value. Execution is critical; the supplier must
have the business systems and processes required to deliver the marketed offering. It
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must also have the business systems to not deliver to customers who don‘t pay for it.
When commodity buyers pay a premium for value, it can‘t be skin deep. The value
has to be real and tangible, because they will constantly measure and re-evaluate it. If
the customer paid for the highest-quality product or the highest level of service, then
that is what the customer has to get. At the same time, business systems must enforce
internal discipline to insure that buyers of the most basic commodities are not over-
served.
2.8.6 Pricing principles for branded commodities
Changes in the business capabilities are not restricted to production and logistics, but
are even more important on the ―soft side‖ — customer management. Employing a
traditional sales force for a branded commodity is wrong.
Brand marketing requires massive re-education, new values and tailored incentives.
Traditionally, commodity salespeople have had two concerns: volume and the
immediate transaction. Their basic tactic is to enhance their personal relationship
with the buyers. To close the deal, they will offer practically anything, culminating in
the pitch: ―I know what the rate card says, but here‘s what I‘ll do for you.‖ And that
approach will spell disaster when applied to brand marketing. With alarming speed,
the salespeople will unbundle your offerings. They will erase your premiums.
They will offer unfathomable discounts. Left to their own devices, they will destroy
your brand faster than any marketing effort can build it back up.
Few issues are more problematic for commodity marketers than pricing. The
traditional commodity pricing mentality dictates that all consumers must pay the same
price, with reasonable adjustments for transportation and volume. That view of the
marketplace is blatantly wrong. The notion that all customers of lowly differentiated
commodities pay essentially the same price is a myth.
Commodity suppliers are accustomed to charging a wide range of prices; the rational
basis underlying those price variations is not always evident. But haphazard pricing
practices will not support a long-term branding strategy. Marketing branded
commodities involves a set of basic pricing principles.
The supplier of branded offerings must be constantly aware of the true cost of
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differentiation. Commodity suppliers, rather than risking the loss of a customer by
demanding a premium, often provide a particular service upon request. Overtime,
they incrementally increase the value of their offering without extracting an
appropriate premium. Ultimately, that can be ruinous. Effective branding requires
an accurate calculation of the true cost of initiating, delivering and supporting the
offering.
• It is essential for suppliers to command value for even small differences.
• Understand the true value of the offering in terms of the customer's operations
and ability to switch.
• Do not allow differentiation to be unbundled, either by competitors of by your
own sales force. The bundled offering is the core of the brand.
• Effective marketers must be prepared to make continuous and complex trade-offs
between volume and price. That means deliberately surrendering market share on
occasion when the tide is running the wrong way, then moving aggressively to regain
share when conditions are right. It requires a dynamic, day-to-day approach known
as "guerrilla marketing" – prowling world markets for opportunities that play to your
strengths, and passing up fights when the cost of victory appears too high.
• Finally, a successful pricing strategy requires the supplier to maintain market
discipline - a deliberate, unemotional approach to outbreaks of price wars. It requires
careful analysis of what competitors are doing, and why, in order to avoid misreading
signals that might actually point to a spot phenomenon or geographical aberration
rather than across- the-border price cuts. It is imperative to avoid getting panicked
into price slashing, which undercuts the long-term strategy.
2.8.7 MANAGERIAL IMPLICATIONS
The implications for industrial marketing managers are clear: the branding of an
industrial product can be successful if the process is carried out in a logical manner
that is focused around the brand being perceived as providing a total solution to the
customer. A more contemporary view of the industrial brand is one of moving from a
product-centric approach to a promise-centric approach and fulfilling this promise
through providing that total solution to the customer. By concentrating on having an
in-depth knowledge of their customers and translating that knowledge into a total
solution based on customer needs a company can carve out a niche for itself even in a
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highly competitive market.
To change to a more ‗‗total solution‘‘ branding approach, industrial marketing
managers should consider taking the following steps:
• Determine exactly what the promise of the brand‘s value, this ‗‗total solution‘‘
should look like. This is certainly no easy task and one that many companies overlook
or assume they know. Here, the company needs to endeavour to discover the answer
to such questions as, what is ‗‗value‘‘ to our customers? Can our brand provide that
value? Do our customers really see the brand as a ‗‗total solution‘‘ or as simply as
another product on the marketplace? The company needs to question, probe, and
most importantly listen to what the customers are looking for in the product and how
these customers really feel about their total experience with the product.
• Realize that value is a multi dimensional construct. Gone are the days when a
customer will purchase a product merely because it is well made and has a reputation
for quality. Value for the industrial customer often has four dimensions: the product
side, the logistics side, the customer support side, and the company reputation side.
There may be other components of the value as well. Managers must define exactly
what the customers are looking for in each of these dimensions and create a brand
that delivers them in reliable, fast, and profitable manner.
• Where does your product fit in the customer‘s consumption or supply chain, and at
what points can your company enter in and create a unique value for them? The more
unique the value created, the better the chances for success. Or, alternatively, are there
any new values that could be created that the customer or a competitor has not thought
of?
• Always seek to understand and continually refine the promise of value. Customer
needs are constantly changing, and the promise of value that a company offers must
change as well. Employing such measures as customer panels, user groups, and the
like can help managers to stay on the leading edge of what values customers are
looking for.
• Realize that the equity created by a brand can extend a cross product categories as
well as channel intermediaries. Thus, educating any employee who will interact with
the customer as well as channel members on the unique value of the brand is critical
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for its success.
• Monitor measures of brand performance. Managers need to monitor how customers
perceive this brand over time. They also need to see if any of the dimensions of the
construct have increased or decreased in value or if they have been replaced by a new
dimension.
2.8.8 Conclusion
An increasing amount of research has espoused the benefits of branding an
industrial product, and has shown how a company can take a basic commodity
product and through an in-depth knowledge of customer needs and employing an
innovative marketing strategy can create a brand for the product that is perceived
as offering a total solution for their customers. Companies who endeavor to
create and effectively manage their brands stand to gain both market share and
profits. Also, when the promise of a brand is articulated across the company, it
becomes much easier for management to allocate resources in a way that they
have faith that these resources will be used in the best manner. Internally,
branding can have the impact of helping people from various functions
understand what values the customer is looking for and provide a common ground
upon which to provide those values. Externally, having a strong brand that
consistently provides a total solution to the customer helps build a strong
relationship between the company and that customer. This is increasingly
important in today‘s environment where the plethora of products has left many
customers confused as to which product is best for which application. Having a
strong brand provides the customer the confidence that they will be making the
right decision and will lessen the risk of a bad decision. Ultimately, customers
want to purchase a product from a supplier they can trust, and a strong
Chapter 3
Research Methodology
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CHAPTER 3: RESEARCH METHODOLOGY
3.1. Research Methodology 3.2. Primary sources 3.3. Target respondents 3.4. Sample size 3.5. Sampling method 3.6. Data collection method 3.7. Data analysis method
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3.1 RESEARCH METHODOLOGY
The project is based on an in-depth combination of secondary and primary sources.
The secondary objectives of the study for architects, masons, IHBs, retailers and
contractors are as follows:
To find out the triggers and barriers in selecting a cement brand for all the five
categories i.e. Masons, Retailers, Contractors, Architects and IHBs (Individual
House Builders)
To find out the perception of brands across the five categories
To find out the impact of branding across all the five categories
To find out the impact of national brands and local brands on all the categories
To find out the perception of national brands and local brands by all the five
categories
In order to achieve the objective, the following areas were covered in research:
Scope of the industry
Triggers and Barriers in selecting a cement brand
Role of pricing
Major brands and reasons
Top cement brands
Perception about the top 3 brands
Importance of brand name and reasons
Difference between National and Local brands
Reasons for recommending National or Local brands
3.2 PRIMARY SOURCES:
The research was quantitative in nature and a structured questionnaire, containing
both open as well as close ended questions, was used.
3.3 TARGET RESPONDENTS:
Target respondents were Masons, Contractors, Retailers, Architects and IHBs
(Individual House Builders).
92
3.4 SAMPLE SIZE:
Following table shows the sample size that was used in survey:
Table 3.4.1
Mumbai Delhi Kolkata Chennai Total
Mason 15 15 15 15 60
Contractors 10 10 10 10 40
Retailers 10 10 10 10 40
Architects 5 5 5 5 20
IHBs 10 10 10 10 40
Total 50 50 50 50 200
3.5 SAMPLING METHOD:
Non-probability sampling method viz. Purposive sampling method was used to ensure
that sample represents different types of masons, contractors, retailers, architects and
IHBs. Our metro towns viz. Mumbai, Delhi, Kolkata and Chennai were considered
since consumption of cement is highest in these cities for construction activities.
Since I have covered major centres of cement consumption non-random sampling will
not bring any bias in estimation population behavior.
3.6 DATA COLLECTION METHOD:
Data was collected by meeting the sampled respondents in person since this is the best
method to collect data. A blank copy of the questionnaires used for collecting data
from five categories of respondents is in the Annexure
3.7 DATA ANALYSIS METHOD:
Since sample size was small I have mostly used non-parametric methods of
hypothesis testing. Though the power of non-parametric methods of hypothesis
testing is less than parametric methods, it assumes that data follows normal
distribution. Since the sample size was small, assumption of normality would be
93
violated. Non-parametric methods do not assume normality in data. Hence I have
preferred to use non-parametric methods.
All the hypothesis selected for testing seek to find relationships. I have used chi-
square test for finding relationship, the most popular method, when both variables are
measured on categorical scale. In order to compare averages of two groups, I have
used parametric method viz. Analysis of variance (ANOVA) when sample size is
more than 30, and Mann-Whitney or Kruskall-Wallis test when sample size is less
than 30.
Chapter 4
Data Analysis and
Interpretation
94
CHAPTER 4 : DATA ANALYSIS
Overall observations: The importance given to branding by architects, contractors and masons was
measured on a 5-point scale where ‗1‘ indicates not least important and ‗5‘ indicates
very important. The average rating comes out to be 4.33 on a scale of 1 to 5 (Table
4.1.1). This shows that everyone sees that branding is very important in selling
cement.
Table 4.1.1: Importance to branding – By profession
Following paragraphs show the gist of the analysis and conclusion
1. Hypothesis on Importance of branding – By profession
I have done comparison of importance given to branding across architects, contractors
and masons by formulating following hypothesis
Ho: Importance given to branding is same by architects, contractors, masons
H1: Importance given to branding is not same by architects, contractors, masons
I have used analysis of variance to check whether average ratings given to importance
to branding by architects, contractors, masons are same. The output is shown in table
4.1.2
Architect 4.70
Contractor 4.48
Mason 4.12
Total 4.33
Importance to Branding
Mean
95
Table 4.1.2
Since p<0.05, it shows that their ratings are not same.Hence comparison of two
average ratings is done to detect the difference. I have formulated following
hypothesis:
Ho: Importance given to branding is same by pair of groups formed by architects,
contractors, masons
H1: Importance given to branding is not same by pair of groups formed by architects,
contractors, masons
I have used Tukey‘s test to test above hypothesis since this is one of the robust tests to
compare two averages
Table 4.1.2.1
Multiple comparison in Table 4.1.3 shows that Architects and Contractors intensity of
importance to branding is same (p = 0.554) but more than Masons (p = .001). Thus
one can conclude that architects, contractors and masons feel that branding is very
important in selling cement, but intensity of importance is found to be more from
architects and contractors compared to masons.
Contractor .554
Mason .001
Architect .554
Mason .015
Architect .001
Contractor .015
Architect
Contractor
Mason
Multiple Comparisons
Importance to Branding
(I) Type of respondent (J) Type of respondent
Sig.
96
Similar analysis is done in IHB and retailers groups. It is shown below.
4.1.2 Hypothesis on Importance of branding – By profession
Importance given by IHB and retailers is measured on categorical scale involving 3
categories viz. important, neither important nor unimportant and unimportant. Since
the response is on categorical scale I have used chi-square test to compare importance
to branding given by IHB and retailers is same. I have formulated following
hypothesis:
Ho: Importance given to branding is same by IHB and retailers
H1: Importance given to branding is not same by IHB and retailers
Table 4.1.2.2 Observed and expected frequencies
Opinion on branding * Category Cross tabulation
Category
Total Retailer IHB
Opinion on branding
Not
important
Count 0 1 1
% within Category .0% 2.5% 1.3%
Can not say Count 3 5 8
% within Category 7.5% 12.5% 10.0%
Important Count 37 34 71
% within Category 92.5% 85.0% 88.8%
Total Count 40 40 80
% within Category 100.0% 100.0% 100.0%
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37 Retailers out of 40 and 34 IHB out of 40 feel that cement branding is important. By
using chi-square test of independence where observed frequency is compared with
expected frequency it is seen that importance given by both of them is same (p =
0.443) (Table 4.1.2.1). Thus it can be concluded that about 90% of Retailers and IHB
consider branding is important.
The subsequent paragraphs show category wise analysis.
4.2 Architects Table 4.2.1 shows opinion about scope of the cement industry as perceived by
architects.
Table 4.2.1 Scope Of The Industry (%)
Mum. Kol. Del. Che. Total
Recession is
prevailing 80 20 100 40 60
Cement industry will
grow in months to
come
20 20 80 20 35
Cement industry is
growing 20 60 20 - 25
Bank lTotalns are not
available 20 - - 60 20
People are not
constructing much - - - 80 20
Base 5 5 5 5 20
60% of the respondents feel that the ―Recession is prevailing in the cement industry‖.
35% of the respondents are of the opinion that ―Cement industry will grow in months
to come‖ while 25% said that ―Cement industry is growing‖. All the respondents in
Delhi are of the view that even though ―Recession is prevailing‖ currently, ―Cement
industry is growing‖ or ―Will grow in months to come‖.
Opinion about economy was compared among types of buildings constructed by
architects viz. build only residential buildings and those who build residential and/or
other buildings. For this purpose following hypothesis were formulated
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H0: Opinion about economy is same among architects categories of architects
based on type of buildings constructed
H1: Opinion about economy is not same among architects categories of
architects based on type of buildings constructed
From chi-square test, it was found that opinion is same (Chi-square = 0.004, p =
0.948).
Similarly opinion about economy was compared among number of years in business.
For this purpose following hypothesis were formulated
H0: Opinion about economy is same among architects categories of architects
based on number of years in business
H1: Opinion about economy is not same among architects categories of
architects based on number of years in business
Chi-square test shows that opinion is same irrespective of number of years in business
(Chi-square = 4.249, p = 0.119). Thus we can conclude that all architects feel that
though industry is going through the recession it will grow in days to come.
Table 4.2.2 Top 5 Triggers in selecting a cement brand (%)
Mum. Kol. Del. Che. Total
Strength 60 - 80 20 40
Grade 40 40 - 20 25
Durability 20 - 60 20 25
Affordable price 20 - 40 20 20
Good Grip - - 80 - 20
Setting time - 40 - 20 15
Brand name - 20 20 - 10
Depend on the type of
work 20 20 - - 10
ISI Mark - 20 - - 5
BASE 5 5 5 5 20
The main factor considered while selecting a cement brand is ―Strength‖ (40%)
followed by ―Grade‖ and ―Durability‖ (25% each) as seen in table 4.2.2. This shows
that ‗quality over a long period‘ is the most important factor for selecting cement
brand.
99
Table 4.2.3 Top 5 Reasons for rejecting a cement brand (%)
Mum. Kol. Del. Che. Total
Bad Strength 40 - 60 - 25
Bad Grip - - 100 - 25
Cement shouldn‘t
clot - 80 - - 20
Bad Durability 60 - - - 15
Poor Quality 40 - - 20 15
No ISI Mark - 40 - - 10
Poor setting time - 20 20 - 10
Doesn‘t set properly - 20 - 20 10
BASE 5 5 5 5 20
The top reasons for rejecting a cement brand are ―Bad strength‖ and ―Bad grip‖ (25%
each). This also correlates with ‗quality over a period of time‘ is the most important
trigger for selecting cement brand.
Table 4.2.4 Seasonal effect on the Cement Industry (%)
Mum. Kol. Del. Che. Total
Cement becomes
difficult to store in
the monsoon season
100 - 60 - 40
Construction work is
less in monsoon - 20 60 60 35
It becomes hard in
monsoon 60 - - 60 30
Lump starts forming - 80 - 20 20
Summer and winter
seasons are good - - 40 - 10
BASE 5 5 5 5 20
The main seasonal effect the cement industry faces is ―Cement becomes difficult to
store in the monsoon season‖ (40%).
100
Table 4.2.5 The Role of Pricing in the Cement Industry (%)
Mum. Kol. Del. Che. Total
Price won‘t matter if
the quality is good - 60 - 40 25
Brand should give
value for money 20 - 40 40 25
Price should be
affordable - - 40 20 15
National brands are
costly but good in
quality
60 - - - 15
Price should be
appropriate with
quality
- - 20 20 10
Low price depicts low
quality - - 40 - 10
Sale is high of low
priced brands - 40 - - 10
BASE 5 5 5 5 20
It shows that if the cement is of good quality then price does not matter. Only
expectation is that price should not be too high that compels the buyer to compromise
on quality.
Table 4.2.6 The Role Of Experts In Recommending A Brand (%)
Mum. Kol. Del. Che. Total
Experts recommend good
cement brands - - 100 40 35
Architects play a major
role in recommending a
cement brand
40 60 - - 25
Architects refer good
quality brands only 20 - - 40 15
Engineers play an
important role in
recommending a brand
- 40 - - 10
Experts prefer good
quality cement brands - - 40 - 10
BASE 5 5 5 5 20
35% of the respondents feel that ―Experts recommend good cement brands‖. Hence
the role of expert is seen as helping customers to offer trusted advice to the customers.
101
Table 4.2.7 Top 5 Major Brands (%)
Mum. Kol. Del. Che. Total
UltraTech 80 100 20 40 60
Ambuja 80 20 80 - 45
ACC 60 100 - - 40
Larfarge - 100 20 - 30
Birla 40 - 40 - 20
Coramandal - - - 40 10
India Cement - - - 40 10
Binani - - 40 - 10
BASE 5 5 5 5 20
Most of the respondents (60%) found ―UltraTech‖ to be a major brand followed by
―Ambuja‖ (45%) and ―ACC‖ (40%).
Table 4.2.8 Reasons For Brands To Be Major Players (%)
Mum. Kol. Del. Che. Total
Demanded by the
customers - - 40 20 15
It is trustworthy - - 40 - 10
It influences the rates - - - 40 10
ISI mark - 40 - - 10
Reputed brand - - 40 - 10
Crack resistance 20 - - - 5
Provides good service 20 - - - 5
It is strong - - 20 - 5
BASE 5 5 5 5 20
―Demanded by customers‖ (15%) is the main reason for a brand to be a major player.
Thus there seems to be a strong value to branding of cement.
102
Table 4.2.9 Top 3 Cement Brands (%)
Mum. Kol. Del. Che. Total
ACC 60 100 20 20 50
UltraTech 60 100 20 20 50
Ambuja 80 - 80 - 40
Birla 40 - 60 20 30
Lafarge - 100 - - 25
Binani 20 - 60 - 20
Coromandal - - - 80 20
Zuari - - - 60 15
BASE 5 5 5 5 20
The top three cement brands considered are ACC (50%), UltraTech (50%) & Ambuja
(40%).
I have used attribute based method to draw perceptual map describing perception of
brands. The rotated component matrix had shown following factor lTotaldings for
reasons to buy the brand (Table 4.2.10)
Table 4.2.10 Rotated Component Matrix
Rotated Component Matrix*
Component
1 2
Q6. Agreement with statement - It is a reputed brand .801 -.068
Q6. Agreement with statement - It is value for money .739 .105
Q6. Agreement with statement - Its quality is best in the
market
.739 .213
Q6. Agreement with statement - It is a trustworthy brand .649 .325
Q6. Agreement with statement - It is cheaper than others .116 .744
Q6. Agreement with statement - It has good loyalty
programs
-.013 .658
Q6. Agreement with statement - It is easily available .313 .582
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 3 iterations.
103
These were used as co-ordinates do draw perceptual map. The distance between
origin and the point that shows the reason for buying indicates the importance of
reason. I have used Euclidean method to calculate the distance. It is shown below in
table 4.2.11
Table 4.2.11 Rotated Component Matrix_1
Rotated Component Matrix
Component Euclidean
Distance
1 2
Q6. Agreement with statement - It is a
reputed brand
.801 -.068 0.8035
Q6. Agreement with statement - It is value
for money
.739 .105 0.7467
Q6. Agreement with statement - Its quality is
best in the market
.739 .213 0.7691
Q6. Agreement with statement - It is a
trustworthy brand
.649 .325 0.7256
Q6. Agreement with statement - It is cheaper
than others
.116 .744 0.7528
Q6. Agreement with statement - It has good
loyalty programs
-.013 .658 0.6585
Q6. Agreement with statement - It is easily
available
.313 .582 0.6605
It is seen that reputation of brand is the most important factor to evaluate any cement
brand. The next criterion is value for money.
The average factor scores calculated by using variam x rotation for brands are used to
show positions of brands in perceptual map. The map is shown below:
104
The above map shows that ACC is the best brand on reputation followed by Ambuja,
Binani, Birla and Ultratech. ACC, Ambuja and Binani have almost same perception
on value for money but perception of Birla and Ultratech is lower.
The detail score for each brand are given below in table 4.2.12
105
Table 4.2.12 Perception about ACC
Total Mum. Kol. Del. Che.
Mean 4.7 5 4.8 4 4
It is value for money
Mean 4.3 5 4.2 3 4
It is cheaper than other
Mean 3.7 3.3 4 4 3
It is easily available
Mean 4.7 4.7 5 5 3
It is a reputed brand
Mean 4.8 4.7 5 5 4
It has good loyalty programmes
Mean 3.4 3.7 3.2 5 2
It is a trustworthy brand
Mean 4.7 5 5 3 4
BASE 20 5 5 5 5
ACC is perceived as a brand that offers quality at a reasonable price
Table 4.2.13 Perception about Ultra-Tech
Total Mum. Kol. Del. Che.
Its quality is best in the market
Mean 4.4 4.7 4 5 5
It is value for money
Mean 4.4 4.3 4.4 5 4
It is cheaper than other
Mean 4.1 3.3 4.8 5 2
It is easily available
Mean 4.5 3.7 5 5 4
It is a reputed brand
Mean 4.1 4.3 3.8 4 5
It has good loyalty programmes
Mean 3.2 3 3.4 3 3
It is a trustworthy brand
Mean 4.4 4.3 4.4 5 4
BASE 10 3 5 1 1
Ultra tech also has a strong perception in terms of offering value to money.
106
Table 4.2.14 Perception about Ambuja
Total Mum. Kol. Del. Che.
Its quality is best in the market
Mean 4.6 4.8 - 4.5 -
It is value for money
Mean 4.1 4.3 - 4 -
It is cheaper than other
Mean 3.8 3.3 - 4.3 -
It is easily available
Mean 4.4 4 - 4.8 -
It is a reputed brand
Mean 4.3 4.8 - 3.8 -
It has good loyalty programmes
Mean 4.1 4 - 4.3 -
It is a trustworthy brand
Mean 4.3 4.8 - 3.8
BASE 8 4 - 4 -
The following table shows importance given to brand name
Table 4.2.15 Importance of Brand Name while suggesting a cement brand
(%)
Total Mum. Kol. Del. Che.
Very
important 70 80 80 100 20
Important 30 20 20 - 80
Okay - - - - -
Not so
important - - - - -
Not at all
important - - - - -
Mean 4.7 4.8 4.8 5 4.2
BASE 20 5 5 5 5
For all the respondents, ―Brand name‖ is ―Important‖ while suggesting a cement
brand and rated it in the Top 2 Box. In Delhi, all the respondents find it to be ―Very
Important‖.
107
I have used Mann-Whitney U test to compare importance given to branding across
type of construction activity undertaken by them. Following hypothesis were
formulated:
H0: Importance given to branding is same across type of construction activities
H1: Importance given to branding is not same across type of construction activities
The test shows that importance given to branding is same irrespective of their
construction types viz. only residential and residential and others (Mann-Whitney U =
16.5, p = 0.358)
Test Statisticsb
Q2. Importance of a brand name
while suggesting a cement brand
Mann-Whitney U 16.500
Wilcoxon W 169.500
Z -1.199
Asymp. Sig. (2-tailed) .231
Exact Sig. [2*(1-tailed Sig.)] .358a
a. Not corrected for ties.
b. Grouping Variable: Coding for que 8
In order to compare importance given to branding across no. of years in construction
business following hypothesis were formulated:
H0: Importance given to branding is same across no. of years in business
H1: Importance given to branding is not same across no. of years in business
Here I have used Kruskall-Wallis test. The test has given following results
Ranks
Q8_1_coded N Mean Rank Sum of Ranks
Q2. Importance of a brand
name while suggesting a
cement brand
Only residential 17 9.97 169.50
Residntial and/or other 3 13.50 40.50
Total 20
108
Ranks
Q7. The number of years you have
been in this business
N Mean Rank
Q2. Importance
of a brand name
while suggesting
a cement brand
dimension1 Less than 5 years 2 13.50
5-10 years 3 10.17
10-15 years 8 9.75
15-20 years 4 8.50
20-25 years 2 13.50
More than 25 years 1 13.50
Total 20
Test Statisticsa,b
Q2. Importance of a brand name while suggesting a
cement brand
Chi-square 2.978
df 5
Asymp. Sig. .703
a. Kruskal Wallis Test
b. Grouping Variable: Q7. The number of years you have been in this business
The test shows that importance given to branding is same irrespective of no. of years
in business (p = 0.703)
109
Following table 4.2.16 shows advantages of branding cement.
Table 4.2.16 Reasons for the Rating
Total Mum. Kol. Del. Che.
Branded
cement has
good
quality
45 80 20 40 40
Branded
cement is
trustworthy
25 40 50 20 -
Branded
cement has
good
strength
10 - - - 40
BASE 20 5 5 5 5
The main reason for stating Brand name is ―Important‖ is ―Branded cement has good
quality‖ (45%).
After knowing advantages of branding I have analyzed reasons for recommending
national brand. Following table shows reasons for recommending national brand
Table 4.2.17 Top 3 reasons for recommending National Brands (%)
Total Mum. Kol. Del. Che.
They have good quality 40 80 - 40 40
National brands are
trustworthy 15 20 - 40 -
National brands have good
setting time 15 - 60 - -
National brands are durable 15 - - 60 -
National brands have a
good grade 15 - 40 - 20
If budget is high, I
recommend national brands 10 20 - - 20
National brands have ISI
mark 10 - 40 - -
National brands have good
grip 10 - - 40 -
BASE 20 5 5 5 5
110
The main reason for recommending ―National brands‖ is that ―National brands have
good quality‖ (40%). This opinion is same in all centres in which survey was
conducted. This is also in concurrence of the main trigger of ‗good quality‘ to select
cement brand.
I have now analysed reasons for recommending local brands. Following table 4.2.18
gives details:
Table 4.2.18 Top 3 reasons for recommending Local Brands (%)
Total Mum. Kol. Del. Che.
Local brands have
low price 30 20 20 - 80
Local brands are
profitable 10 - - - 40
Recommended for
small/local work 5 20 - - -
Local cement is
pure and not
duplicate
5 - 20 - -
Local brands are
easily available 5 20 - - -
Preferred for low
risk areas 5 20 - - -
BASE 20 5 5 5 5
The main reason for recommending ―Local brands‖ is ―Low price‖ (30%). This is also
obvious since the second trigger to select cement brand is ‗reasonable
price‘.Recommendations to promote brand yielded following output
Table 4.2.19 What should a company do to promote its brand (%)
Total Mum. Kol. Del. Che.
Company should
improve the quality 55 40 20 80 80
Company should
undertake more
marketing activities
20 40 - 40 -
Company should
carry out
demonstrations
20 - 80 - -
111
Company should
arrange for
conferences
20 20 60 - -
Price should be
marginal 10 - - 20 40
Should pass various
tests 10 20 20 - -
Should change
according to the
industry
10 - - 40 -
Should charge
affordable price 10 - - 40 -
BASE 20 5 5 5 5
Most of the respondents (55%) are of the opinion that ―Company should improve the
quality‖ in order to promote a brand. This is natural since quality is the most
important trigger in selecting a cement brand.
4.3 IHBs
Table 4.3.1 shows decision maker for selecting brand when individual house builder
wants to buy cement. It is found that house builder himself decides the brand.
Table 4.3.1 Who decided the cement brand (%)
Total Mum. Kol. Del. Che.
I decided which
brand to use 83 80 50 100 100
We decided
mutually which
brand to use
10 10 30 - -
I suggested various
brands but the final
decision was taken
by other party
7 10 20 - -
BASE 40 10 10 10 10
112
Majority of the respondents (83%) ―themselves decided which brand to use‖ followed
by 10% who ―decided mutually with the other party‖.
I have analysed decision to select brand across number of floors built. Hypothesis
developed for this objective was:
H0: Selection procedure is same across number of floors built
H1: Selection procedure is not same across number of floors built
After applying chi-square test following output was available:
Q4. Who decided on the cement brand used for the construction work * Q2B. The number of
floors in house Crosstabulation
Q2B. The number of floors in house Total
1 2 3
I decided which
brand to use
Count 14 15 4 33
% within Q2B. The
number of floors in
house
77.8% 83.3% 100.0% 82.5%
I suggested various
brands but the final
decision is taken by
the other party
Count 2 1 0 3
% within Q2B. The
number of floors in
house
11.1% 5.6% .0% 7.5%
We decided mutually
which brand to use
Count 2 2 0 4
% within Q2B. The
number of floors in
house
11.1% 11.1% .0% 10.0%
Total Count 18 18 4 40
% within Q2B. The
number of floors in
house
100.0% 100.0% 100.0% 100.0%
113
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 1.347a 4 .853
Likelihood Ratio 2.005 4 .735
Linear-by-Linear
Association
.783 1 .376
N of Valid Cases 40
a. 7 cells (77.8%) have expected count less than 5. The minimum expected count is .30.
The pattern of decision making is found same irrespective of no. of floors built (Chi-
square = 1.347, p=0.853).
Table 4.3.2 Factors considered before selecting a cement brand (%)
Total Mum. Kol. Del. Che.
It should be a reputed brand 40 80 20 60 -
Reasonable price 40 40 30 60 30
Quality of Cement 33 50 - - 80
Should set well 28 - 50 20 40
Should be strong 28 10 10 70 20
Should have strong grip 18 - - 70 -
High availability 18 10 20 10 30
Should be durable 15 20 20 10 10
Should be crack resistant 13 30 - - 20
BASE 40 10 10 10 10
The top 2 factors considered before deciding a cement brand were that ―It should be a
reputed brand‖ and ―Reasonable Price‖ (40% each). This shows the importance of
branding cement from IHB‘s perspective. It gives the guarantee of good quality to
IHB.
Table 4.3.3 Top Cement Brands considered (%)
Total Mum. Kol. Del. Che.
ACC 73 90 100 100 -
Ambuja 55 60 90 70 -
Coromandel 20 - - - 80
Birla 18 - 10 60 -
Larsen and Toubro 18 10 10 - 50
UltraTech 18 20 20 30 -
Lafarge 15 - 60 - -
BASE 40 10 10 10 10
114
ACC, Ambuja and Coromondel are the top three brands considered for construction.
Table 4.3.4 Top Cement Brands used (%)
Total Mum. Kol. Del. Che.
ACC 43 70 60 40 -
Ambuja 33 60 40 30 -
Coromandel 18 - - - 70
Lafarge 13 - 50 - -
Larsen and Toubro 10 - - - 40
BASE 40 10 10 10 10
Most of the respondents (43%) used ―ACC‖ followed by ―Ambuja‖ (33%) and
―Coromandel‖ (18%).
The brands used for construction are cross-tabulated with method of construction used
by IHB to construct his house. I have used chi-square test with following hypothesis:
H0: Brands used for construction are same across different methods of construction
H1: Brands used for construction are not same across different methods of
construction
It is observed that selection of brand is not related to method of construction (Chi-
square = 9.862, p = 0.275)
Table 4.3.4.1 Reasons for using ACC (%)
Total Mum. Kol. Del. Che.
Good quality 35 86 - - -
Good strength 24 - - 100 -
Reputed brand 24 43 17 - -
It gives strong grip 18 - 17 50 -
It is affordable 12 - 17 25 -
Finishing is good 12 29 - - -
It is good for
plastering work 12 29 - - -
BASE 17 7 6 4 -
115
Table 4.3.4.2 Reasons for using Ambuja (%)
Total Mum. Kol. Del. Che.
Good
quality 31 33 33 25 -
Good
strength 24 33 - 25 -
Reputed
brand 24 33 33 - -
BASE 13 6 3 4 -
Table 4.3.4.3 Reasons for using Coromandel (%)
Total Mum. Kol. Del. Che.
Good quality 43 - - - 43
There are no
problems with
this brand
29 - - - 29
It is affordable 14 - - - 14
BASE 7 - - - 7
Table 4.3.5 Top 3 Cement Brands – in general (%)
Total Mum. Kol. Del. Che.
ACC 73 90 90 100 10
Ambuja 63 100 80 70 -
UltraTech 28 40 30 30 10
BASE 40 10 10 10 10
73% of the respondents voted for ACC as the top cement brand.
Table 4.3.5.1 Reasons for Saying ACC (%)
Total Mum. Kol. Del. Che.
Quality is
good 24 56 22 - -
Reputed
company 21 11 44 10 -
Durability 21 - 11 50 -
BASE 29 9 9 10 1
116
Table 4.3.5.2 Reasons for Saying Ambuja (%)
Total Mum. Kol. Del. Che.
Reputed
company 28 40 38 - -
It sets
well and
quickly
20 - 50 14 -
Good
strength 20 30 - 29 -
BASE 25 10 8 7 -
Table 4.3.5.3 Reasons for Saying Ultratech (%)
Total Mum. Kol. Del. Che.
Reputed
company 46 75 33 33 -
Good
demand 27 25 - 33 100
Good
strength 9 - - 33 -
BASE 11 4 3 3 1
Table 4.3.6 Perception about ACC
BASE
Total Mum. Kol. Del. Che.
29 9 9 10 1
Figures in %
Its quality is best in the market
Agree 90 78 89 100 100
Neither agree not disagree 10 22 11 - -
Disagree - - - - -
It is value for money
Agree 69 78 67 70 -
Neither agree not disagree 28 11 33 30 100
Disagree 3 11 - - -
It is cheaper than other
Agree 79 67 67 100 100
Neither agree not disagree 21 33 33 - -
Disagree - - - - -
117
BASE
Total Mum. Kol. Del. Che.
29 9 9 10 1
Figures in %
It is easily available
Agree 59 67 44 60 100
Neither agree not disagree 31 33 33 30 -
Disagree 10 - 22 10 -
It is a reputed brand
Agree 76 67 89 80 -
Neither agree not disagree 21 33 11 20 -
Disagree 3 - - - 100
It has good loyalty programmes
Agree 93 78 100 100 100
Neither agree not disagree 4 11 - - -
Disagree 3 11 - - -
It is a trustworthy brand
Agree 93 78 100 100 100
Neither agree not disagree 7 22 - - -
Disagree - - - - -
ACC is considered as a brand with Quality, good loyalty programs and trustworthy
brand
Table 4.3.7 Perception about Ambuja
BASE
Total Mum. Kol. Del. Che.
25 10 8 7 -
Figures in %
Its quality is best in the market
Agree 84 100 50 100 -
Neither agree not disagree 16 - 50 - -
Disagree - - - - -
It is value for money
118
BASE
Total Mum. Kol. Del. Che.
25 10 8 7 -
Figures in %
Agree 68 50 63 100 -
Neither agree not disagree 32 50 37 - -
Disagree - - - - -
It is cheaper than other
Agree 76 60 75 100 -
Neither agree not disagree 20 40 13 - -
Disagree 4 - 12 - -
It is easily available
Agree 52 40 25 100 -
Neither agree not disagree 36 50 50 - -
Disagree 12 10 25 - -
It is a reputed brand
Agree 92 100 75 100 -
Neither agree not disagree 8 - 25 - -
Disagree - - - - -
It has good loyalty programmes
Agree 92 90 88 100 -
Neither agree not disagree 2 10 12 - -
Disagree - - - - -
It is a trustworthy brand
Agree 92 100 75 100 -
Neither agree not disagree 8 - 25 - -
Disagree - - - - -
Ambuja is considered a brand with good quality and good loyalty program
119
Table 4.3.8 Perception about UltraTech
BASE
Total Mum. Kol. Del. Che.
11 4 3 3 1
Figures in %
Its quality is best in the market
Agree 73 75 67 67 100
Neither agree not disagree 27 25 33 33 -
Disagree - - - - -
It is value for money
Agree 55 50 67 67 -
Neither agree not disagree 36 25 33 33 100
Disagree 9 25 - - -
It is cheaper than other
Agree 64 50 100 33 100
Neither agree not disagree 36 50 - 67 -
Disagree - - - - -
It is easily available
Agree 46 50 33 67 -
Neither agree not disagree 18 25 - 33 -
Disagree 36 25 67 - 100
It is a reputed brand
Agree 64 50 67 67 100
Neither agree not disagree 18 - 33 33 -
Disagree 18 50 - - -
It has good loyalty programmes
Agree 82 75 100 67 100
Neither agree not disagree 18 25 - 33 -
Disagree - - - - -
It is a trustworthy brand
Agree 100 100 100 100 100
Neither agree not disagree - - - - -
Disagree - - - - -
120
Ultratechis considers as trustworthy brand with good loyalty programs
Table 4.3.9 Importance of Branding
BASE
Total Mum. Kol. Del. Che.
40 10 10 10 10
Figures in %
Important 85 80 90 100 70
Neither important nor
unimportant
13 20 10 - 20
Unimportant 2 - - - 10
―Brand name‖ is important for majority of the respondents (85%).
Table 4.3.9.1 Reasons for rating it to be “Important”
BASE
Total Mum. Kol. Del. Che.
40 10 10 10 10
Figures in %
Brand name depicts quality of
the cement. 63 50 80 70 50
Branded cement is reliable 15 20 - 40 -
Brand name develops
confidence amongst the
customers
8 10 20 - -
Branded cement has good
demand. 8 30 - - -
Quality is more important than
brand name. 8 - - - 30
For 63% of the respondents, brand name is important as ―It depicts the quality of the
cement‖.
121
These reasons are cross-tabulated with method used for constructing house with
following hypothesis:
H0: Reasons for selecting branded cement are same across different methods used for
constructing house.
H1: Reasons for selecting branded cement are not same across different methods used
for constructing house.
The test gave following output:
Q9. Reasons for the importance rating * Q3. How did you go about constructing your house
Crosstabulation
Q3. How did you go about
constructing your house
Total
I
planned
and
hired
mason
services.
I hired a
contractor
for
constructing
the house.
I
assigned
the
entire
project
to an
architect
.
Brand name depict
the quality of the
cement
Count 8 16 1 25
Expected Count 10.0 14.4 .6 25.0
Brand name bring
confidence among
customer
Count 2 1 0 3
Expected Count 1.2 1.7 .1 3.0
Branded cement are
reliable
Count 3 0 0 3
Expected Count 1.2 1.7 .1 3.0
Quality alone is
important branding
isn't that important
Count 1 2 0 3
Expected Count 1.2 1.7 .1 3.0
122
Without branding no
cement comes
Count 0 2 0 2
Expected Count .8 1.2 .1 2.0
Branded cements
have good sales
Count 2 1 0 3
Expected Count 1.2 1.7 .1 3.0
Branded cements give
good performance in
the market
Count 0 1 0 1
Expected Count .4 .6 .0 1.0
Total Count 16 23 1 40
Expected Count 16.0 23.0 1.0 40.0
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 9.504a 12 .659
Likelihood Ratio 11.748 12 .466
Linear-by-Linear
Association
.116 1 .733
N of Valid Cases 40
a. 19 cells (90.5%) have expected count less than 5. The minimum expected count is .03.
It is seen that reasons are same irrespective of method used for constructing house by
IHB. (Chi-square = 9.504, p = 0.659)
Table 4.3.10 Perception about Branding
BASE
Total Mum. Kol. Del. Che.
40 10 10 10 10
Figures in %
I have very little interest in the brand name
Agree 23 20 10 - 60
Neither agree not disagree 17 20 20 10 20
Disagree 60 60 70 90 20
There are so many brands that I often get confused
123
BASE
Total Mum. Kol. Del. Che.
40 10 10 10 10
Figures in %
Agree 10 20 10 - 10
Neither agree not disagree 52 70 60 50 30
Disagree 38 10 30 50 60
I will only buy established brands
Agree 97 90 100 100 100
Neither agree not disagree 3 10 - - -
Disagree - - - - -
I would wait for others to try a new brand then try it myself
Agree 25 20 10 20 50
Neither agree not disagree 57 70 40 70 50
Disagree 18 10 50 10 -
National brands provide better quality than local brands
Agree 92 100 90 100 80
Neither agree not disagree 5 - 10 - 10
Disagree 3 - - - 10
National brands are available everywhere as compared to local brands
Agree 90 100 70 100 90
Neither agree not disagree 10 - 30 - 10
Disagree - - - - -
Local brands are cheaper than national brands
Agree 77 80 80 60 90
Neither agree not disagree 20 20 10 40 10
Disagree 3 - 10 - -
Opinion on above statements was compared across different methods used by IHBs to
construct house and it is seen that opinions are same irrespective methods used to
construct house since all p values are more than 0.05. This can be seen from following
table:
124
Table 4.3.11: Chi-square table showing relation between perception about
branding and method used to construct house
Statement Chi-square p value
I have very little interest in the brand name 5.182 0.269
There are so many brands that I often get confused 1.080 0.897
I will only buy established brands 0.758 0.689
I would wait for others to try a new brand then try it
myself
1.727 0.786
National brands provide better quality than local brands 1.694 0.793
National brands are available everywhere as compared to
local brands
0.598 0.742
Local brands are cheaper than national brands 2.274 0.686
Table 4.3.12 Top 5 ways to promote a brand
Total Mum. Kol. Del. Che.
Company should advertise
in newspaper 41 10 80 50 22
Company should advertise
in TV 39 20 70 50 11
Company should put more
& more hTotalrding 33 10 90 30 -
Company should advertise
in radio 31 - 80 30 11
Company should give
offers, their customers
loyalty program
26 20 60 20 -
BASE 40 10 10 10 10
The top 2 ways of promoting a cement brand are ―advertise in newspaper‖ (41%) and
―advertise on TV‖ (39%).
4.4 MASON
In selecting brand when mason does masonry work it is seen that once in two
instances he selects the brand. In other cases the selection is done in consultation with
him.
125
Table 4.4.1 Decision maker about the cement brand (%)
Total Mum. Kol. Del. Che.
I decide which brand to
use 47 60 20 33 73
I suggest various brands
but the final decision is
taken by the other party
47 33 67 67 20
We decide mutually
which brand to use 6 7 13 - 7
BASE 60 15 15 15 15
When factors responsible for selecting brand were considered it is seen that the main
factor considered while deciding on a cement brand is ―It should set well‖ (60%)
followed by ―Good Quality‖ (40%). Hence ‗quality‘ of the cement is the main factor
in selecting brand. This emphasizes the need of branding in cement from mason‘s
perspective.
This pattern is compared with number of years mason is in business. Following
hypothesis are formulated:
H0: Pattern of decision making is same across no. of years in business
H1: Pattern of decision making is not same across no. of years in business
Chi-square test gave following output
Q6. Decision maker on the cement brand to be used * Q4. How long you have been working as a
mason Cross tabulation
Q4. How long you have been working as a mason Total
Less
than
5
years
5-10
years
11-15
years
16-20
years
21-
25
yea
rs
More
than
25
years
I decide which
brand to use
Count 2 8 7 3 3 5 28
Expecte 4.7 5.6 5.1 2.8 3.7 6.1 28.0
126
d Count
I suggest various
brands but the final
decision is taken
by
Count 5 4 4 3 5 7 28
Expecte
d Count
4.7 5.6 5.1 2.8 3.7 6.1 28.0
We decide
mutually which
brand to use
Count 3 0 0 0 0 1 4
Expecte
d Count
.7 .8 .7 .4 .5 .9 4.0
Total Count 10 12 11 6 8 13 60
Expecte
d Count
10.0 12.0 11.0 6.0 8.0 13.0 60.0
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 15.550
a
10 .113
Likelihood Ratio 14.480 10 .152
Linear-by-Linear
Association
.015 1 .902
N of Valid Cases 60
a. 12 cells (66.7%) have expected count less than 5. The minimum expected count is .40.
It is observed that pattern remains same irrespective of the number of years in
business (Chi-square = 15.550, p =0.113).
Table 4.4.2 Factors considered while deciding on a cement brand (%)
Total Mum. Kol. Del. Che.
Should set well 60 7 87 87 60
Good quality 40 33 53 7 67
Good strength 30 47 40 13 20
Price (Should not be
expensive) 25 67 7 7 20
Grip should be good 22 7 - 73 7
Finishing should be 18 - 13 60 -
127
good
Should be a reputed
brand 18 27 33 13 -
Should be crack
resistant 17 20 - - 47
Availability 15 27 13 7 13
Should be durable 10 20 7 - 13
BASE 60 15 15 15 15
Out of 10 reasons mentioned above top three reasons were cross-tabulated with
number of years that a mason is in business. Chi-square test shows that reasons
remain same irrespective of number of years of business as p value is more than 0.05
Reason Chi-square p value
Should set well 64.332 0.084
Good quality 108.130 0.094
Good strength 83.155 0.682
Table 4.4.3 Top brands – currently using (%)
Total Mum. Kol. Del. Che.
Ambuja 58 100 80 53 -
Birla 48 67 27 100 -
ACC 38 33 67 47 7
Ultratech 32 60 40 27 -
Larsen & Toubro 22 33 13 - 40
Dalmia 15 - - 7 53
Coromandel 15 - - - 60
Lafarge 13 - 53 - -
BASE 60 15 15 15 15
Table 4.4.4 Top 3 brands – not currently using (%)
Total Mum. Kol. Del. Che.
ACC 28 27 31 27 27
L & T 16 27 15 7 13
J.K. Lakshmi 12 33 - 13 -
Binani 10 13 - 27 -
Birla 10 20 - - 20
Lafarge 10 - 23 20 -
BASE 58 15 13 15 15
128
Table 4.4.4.1 Reasons for using Ambuja (%)
Total Mum. Kol. Del. Che.
Sets well 29 - 67 29 -
Good grip 18 13 - 57 -
Good for ceiling work 18 33 8 - -
It has good strength 12 - 33 - -
Good quality 9 13 - 14 -
More work is done
using less cement 9 13 8 - -
It doesn‘t stick on
hands 9 20 - - -
BASE 34 15 12 7 -
Table 4.4.4.2 Reasons for using Birla (%)
Total Mum. Kol. Del. Che.
Good grip 29 10 - 47 -
Sets well 21 - - 40 -
Reputed brand 14 10 67 7 -
Good quality 11 20 - 7 -
We have to use little
water 11 10 33 7 -
Reliable brand 11 30 - - -
BASE 28 10 3 15 -
Table 4.4.4.3 Reasons for using ACC (%)
Total Mum. Kol. Del. Che.
Good grip 30 20 - 86 -
Sets well 22 - 50 - -
Good finishing 13 - 30 - -
It is good for ceiling
work 13 20 20 - -
Good quality 9 20 - - 100
Reputed brand 9 20 10 - -
It is not very
expensive 9 - 20 - -
It doesn‘t stick on
hands 9 40 - - -
BASE 23 5 10 7 1
129
Table 4.4.4.3.1Reasons for not using ACC (%)
Total Mum. Kol. Del. Che.
Availability is not
good 56 - 25 100 100
Cracks develop
immediately 19 75 - - -
Doesn‘t have good
finishing 13 - 50 - -
It is very costly 13 25 - 25 -
BASE 16 4 4 4 4
Table 4.4.4.4 Reasons for not using L&T (%)
Total Mum. Kol. Del. Che.
Need to put a lot of
water 33 - 100 100 -
Quality is not good 22 50 - - -
Prices are fluctuating 22 - - - 50
BASE 9 4 2 1 2
Table 4.4.4.5 Reasons for not using J.K. Lakshmi (%)
Total Mum. Kol. Del. Che.
Doesn‘t have good
grip 29 20 - 50 -
Cracks are developed 29 40 - - -
Availability is not
good 14 20 - - -
BASE 7 5 - 2 -
Table 4.4.5 Top 5 Sources of Awareness (%)
Total Mum. Kol. Del. Che.
Retailer &
Distributor 70 27 80 80 93
Advertisement 35 20 53 13 53
TVCs 23 67 7 20 -
Associates 22 13 - 67 7
Hoardings/Posters 15 33 7 20 -
BASE 60 15 15 15 15
The top source of awareness is ―Retailers and Distributors‖ (70%) followed by
―Advertisements‖ (35%).
130
Table 4.4.6 Importance of Brand Name (%)
Total Mum. Kol. Del. Che.
Very Important 27 27 73 7 -
Important 63 67 20 93 73
Ok 5 6 7 - 7
Not so
important 5 - - - 20
Not at all
important - - - - -
Mean 4.1 4.2 4.7 4.1 3.5
BASE 60 15 15 15 15
Importance given by mason to brand name is compared with his number of years in
business. For this chi-square test and Kruskal Wallis test was used (Chi-square =
16.513, p = 0.349; Kruskal Wallis test p = 0.561). Both tests show that importance is
same irrespective of number of years mason is in business.
Table 4.4.6.1 Chi Square Test
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
Pearson Chi-Square 16.513a 15 .349
Likelihood Ratio 16.122 15 .374
Linear-by-Linear Association 1.313 1 .252
No. of Valid Cases 60
131
Kruskal Wallis Test
Table 4.4.6.2 Top 3 reasons for rating the brand name “Important” (%)
Total Mum. Kol. Del. Che.
BASE 60 15 15 15 15
Good Quality 60 53 47 87 53
Reliable 15 - 60 - -
Good demand 13 53 - - -
Table 4.4.6.3 Reason for rating the brand name “Not so Important” (%)
Total Mum. Kol. Del. Che.
Quality is
important not
the Brand name
10 7 - - 33
BASE 60 15 15 15 15
Table 4.4.7 Brand preferred – National or Local (%)
Total Mum. Kol. Del. Che.
National
Brands 97 100 100 100 87
Local Brands 3 - - - 13
BASE 60 15 15 15 15
132
Table 4.4.7.1 Reason for preferring National Brands (%)
Total Mum. Kol. Del. Che.
National brands
have good quality 43 47 33 7 92
National brands are
reliable 24 40 53 - -
National brands are
available
everywhere
17 27 33 - 8
BASE 58 15 15 15 13
Table 4.4.7.2 Reason for preferring Local Brands (%)
Total Mum. Kol. Del. Che.
Local brands are
cheaper 100 - - - 100
BASE 2 - - - 2
Table 4.4.8 Top 3 brands (%)
Total Mum. Kol. Del. Che.
Ambuja 57 100 73 53 -
Birla 48 67 20 100 7
ACC 42 33 67 47 20
BASE 60 15 15 15 15
Table 4.4.8.1 Reasons for saying Ambuja (%)
Total Mum. Kol. Del. Che.
Sets well 24 - 46 38 -
Good strength 24 40 9 - -
Good grip 18 20 - 38 -
BASE 34 15 11 8 -
Table 4.4.8.2 Reasons for saying Birla (%)
Total Mum. Kol. Del. Che.
Reputed company 28 50 67 - 100
Strong grip 21 - - 40 -
Sets well 17 - - 33 -
BASE 29 10 3 15 1
133
Table 4.4.8.3 Reasons for saying ACC (%)
Total Mum. Kol. Del. Che.
Reputed company 28 60 30 - 33
Strong grip 24 - - 86 -
Good quality 24 20 30 - 67
BASE 25 5 10 7 3
Table 4.4.9 Perception about Ambuja
BASE
Total Mum. Kol. Del. Che.
34 15 11 8 -
Figures in %
It is very convenient to use
Top 2 Box 91 87 91 100 -
Bottom 2 Box - - - - -
Mean 4.6 4.3 4.6 5.0 -
It mixes well
Top 2 Box 91 80 100 100 -
Bottom 2 Box - - - - -
Mean 4.5 4.0 4.8 4.9 -
Its quality is best in the market
Top 2 Box 97 93 100 100 -
Bottom 2 Box - - - - -
Mean 4.5 4.5 4.3 4.9 -
It is affordable
Top 2 Box 85 80 82 100 -
Bottom 2 Box - - - - -
Mean 4.3 3.9 4.3 5.0 -
It is very smooth
Top 2 Box 91 80 100 100 -
Bottom 2 Box - - - - -
Mean 4.4 4.0 4.6 5.0 -
It spreads well, hence gives a good finishing
Top 2 Box 94 87 100 100 -
Bottom 2 Box - - - - -
134
BASE
Total Mum. Kol. Del. Che.
34 15 11 8 -
Mean 4.6 4.3 4.7 5.0 -
It is value for money
Top 2 Box 94 93 91 100 -
Bottom 2 Box - - - - -
Mean 4.5 4.3 4.3 5.0 -
It is cheaper than others
Top 2 Box 71 87 27 100 -
Bottom 2 Box 12 - 36 - -
Mean 3.9 4.1 2.9 5.0 -
It is easily available
Top 2 Box 94 93 100 88 -
Bottom 2 Box - - - - -
Mean 4.6 4.2 4.9 4.8 -
It is a reputed brand
Top 2 Box 97 93 100 100 -
Bottom 2 Box - - - - -
Mean 4.7 4.6 4.6 5.0 -
It has good loyalty programmes
Top 2 Box 41 80 9 13 -
Bottom 2 Box 6 - 18 - -
Mean 3.4 3.8 2.9 3.3 -
It is a trustworthy brand
Top 2 Box 94 93 91 100 -
Bottom 2 Box 3 - 9 - -
Mean 4.8 4.8 4.6 5.0 -
135
Table 4.4.10 Perception about Birla
BASE
Total Mum. Kol. Del. Che.
29 10 3 15 1
Figures in %
It is very convenient to use
Top 2 Box 79 40 100 100 100
Bottom 2 Box - - - - -
Mean 4.4 3.5 4.7 5.0 4.0
It mixes well
Top 2 Box 97 90 100 100 100
Bottom 2 Box - - - - -
Mean 4.5 4.0 4.3 4.9 4.0
Its quality is best in the market
Top 2 Box 93 80 100 100 100
Bottom 2 Box - - - - -
Mean 4.6 4.1 4.7 4.9 4.0
It is affordable
Top 2 Box 93 90 67 100 100
Bottom 2 Box - - - - -
Mean 4.6 4.2 3.7 5.0 4.0
It is very smooth
Top 2 Box 90 70 100 100 100
Bottom 2 Box - - - - -
Mean 4.5 3.9 4.3 4.9 4.0
It spreads well, hence gives a good finishing
Top 2 Box 93 90 67 100 100
Bottom 2 Box - - - - -
Mean 4.6 4.2 4.3 5.0 4.0
It is value for money
Top 2 Box 83 70 33 100 100
Bottom 2 Box - - - - -
Mean 4.4 3.8 3.3 5.0 5.0
136
BASE
Total Mum. Kol. Del. Che.
29 10 3 15 1
It is cheaper than others
Top 2 Box 72 70 - 93 -
Bottom 2 Box 10 - 100 - -
Mean 4.1 3.9 1.7 4.9 3.0
It is easily available
Top 2 Box 90 80 10 100 -
Bottom 2 Box 3 - - - 100
Mean 4.5 4.2 4.0 4.9 2.0
It is a reputed brand
Top 2 Box 90 70 100 100 100
Bottom 2 Box - - - - -
Mean 4.7 4.0 5.0 5.0 5.0
It has good loyalty programmes
Top 2 Box 38 60 33 20 100
Bottom 2 Box - - - - -
Mean 3.5 3.7 3.7 3.3 4.0
It is a trustworthy brand
Top 2 Box 97 90 100 100 100
Bottom 2 Box - - - - -
Mean 4.6 4.0 4.3 5.0 4.0
Table 4.4.11 Perception about ACC
BASE
Total Mum. Kol. Del. Che.
25 5 10 7 3
Figures in %
It is very convenient to use
Top 2 Box 100 100 100 100 100
Bottom 2 Box - - - - -
Mean 4.8 4.4 5.0 5.0 4.0
It mixes well
137
BASE
Total Mum. Kol. Del. Che.
25 5 10 7 3
Top 2 Box 88 60 90 100 100
Bottom 2 Box - - - - -
Mean 4.6 4.0 4.7 5.0 4.0
Its quality is best in the market
Top 2 Box 92 80 90 100 100
Bottom 2 Box - - - - -
Mean 4.7 4.2 4.8 5.0 4.3
It is affordable
Top 2 Box 88 100 70 100 100
Bottom 2 Box - - - - -
Mean 4.4 4.4 3.9 5.0 4.3
It is very smooth
Top 2 Box 88 60 90 100 100
Bottom 2 Box - - - - -
Mean 4.5 3.6 4.7 5.0 4.0
It spreads well, hence gives a good finishing
Top 2 Box 84 60 90 100 67
Bottom 2 Box - - - - -
Mean 4.5 3.6 4.8 5.0 4.0
It is value for money
Top 2 Box 96 100 90 100 100
Bottom 2 Box - - - - -
Mean 4.6 4.2 4.7 5.0 4.0
It is cheaper than others
Top 2 Box 36 60 30 14 67
Bottom 2 Box - - - - -
Mean 3.5 3.8 3.5 3.1 3.7
It is easily available
Top 2 Box 84 100 90 71 67
Bottom 2 Box - - - - -
138
BASE
Total Mum. Kol. Del. Che.
25 5 10 7 3
Mean 4.5 4.6 4.8 4.3 3.7
It is a reputed brand
Top 2 Box 100 100 100 100 100
Bottom 2 Box - - - - -
Mean 4.8 4.8 4.9 5.0 4.0
It has good loyalty programmes
Top 2 Box 64 80 20 100 100
Bottom 2 Box 8 - 20 - -
Mean 3.9 4.0 3.1 5.0 4.0
It is a trustworthy brand
Top 2 Box 92 80 100 100 67
Bottom 2 Box - - - - -
Mean 4.7 4.2 5.0 5.0 3.7
Table 4.4.12 Perception about Branding
BASE
Total Mum. Kol. Del. Che.
60 15 15 15 15
Figures in %
Even though there are many brands I always buy the same brands
Top 2 Box 50 47 67 40 47
Bottom 2 Box 25 - 20 53 27
Mean 3.4 3.6 3.7 2.8 3.4
I have very little interest in brand name
Top 2 Box 12 - 7 - 40
Bottom 2 Box 67 80 60 100 27
Mean 2.3 2.1 2.1 1.9 3.2
There are so many brands that I often get confused
Top 2 Box 22 60 - - 27
Bottom 2 Box 52 20 27 87 73
139
BASE
Total Mum. Kol. Del. Che.
60 15 15 15 15
Mean 2.6 3.4 2.6 2.1 2.3
I would rather stick with the brand I usually use than try something I am not sure of
Top 2 Box 58 60 20 73 80
Bottom 2 Box 15 - 33 20 7
Mean 3.5 3.7 2.9 3.6 3.9
I will buy only established brands
Top 2 Box 93 100 100 87 87
Bottom 2 Box 5 - - 7 13
Mean 4.2 4.5 4.7 3.8 3.9
I would wait for others to try a new brand then try it myself
Top 2 Box 42 67 - 33 67
Bottom 2 Box 13 - 40 7 7
Mean 3.4 3.9 2.5 3.3 3.7
I like to recommend new brands to others
Top 2 Box 17 53 - 7 7
Bottom 2 Box 45 7 47 73 53
Mean 2.8 3.7 2.5 2.3 2.5
National brands provide better quality than local brands
Top 2 Box 88 100 93 100 60
Bottom 2 Box 3 - - - 13
Mean 4.4 4.5 4.8 4.9 3.5
National brands are available everywhere as compared to local brands
Top 2 Box 87 73 93 100 80
Bottom 2 Box 2 - - - 7
Mean 4.3 3.9 4.8 4.7 3.9
Local brands are cheaper than national brands
Top 2 Box 82 67 80 100 80
Bottom 2 Box 2 - 7 - -
Mean 4.1 3.9 4.5 4.2 3.8
140
When opinion on above statements were compared across number of years that a
mason is in business it is seen that except second statement, perception is same on all
other statements about branding irrespective of no. of years mason is in occupation
( p > 0.05)
Table 4.4.13
Statements Sig.
Even though there are many brands, I always buy the same brand. 0.580
I have very little interest in the brand name. 0.033
There are so many brands that I often get confused. 0.119
I would rather stick with a brand I usually use than try something I am not sure of. 0.470
I will buy only established brands. 0.484
I would wait for others to try a new brand then try it myself. 0.066
I like to recommend new brands to others. 0.540
National brands provide better quality than local brands. 0.069
National brands are available everywhere as compared to local brands. 0.115
Local brands are cheaper than national brands. 0.809
4.5 RETAILERS
In retailer‘s case also, ‗quality‘ is the main factor for selecting a brand. The next
factor, as seen in earlier segments, is also ‗reasonable price‘.
Table 4.5.1 Factors considered before buying a cement brand (%)
Total Mum. Kol. Del. Che.
Quality should be
good 65 70 20 100 70
Reputation of the
brand 60 50 70 100 20
Affordable price 50 50 30 90 30
Should set fast 25 - 50 - 50
Good demand in
the market 10 30 10 - -
BASE 40 10 10 10 10
141
Since ‗quality‘ is of prime importance, national brands stocking is much high across
all towns. And the same brands are recommended to customers because they are
known for quality. In this segment also, branding of cement becomes important since
it assures quality to the user.
The above factors were cross-tabulated across annual income of retailer. Chi-square
test shows that factors remain same irrespective of annual income of the retailer (chi-
square = 8.310, p = 0.76).
Table 4.5.2 Top brands stocked (%)
Total Mum. Kol. Del. Che.
UltraTech 48 80 60 50 -
Ambuja 45 90 90 - -
ACC 40 60 70 30 -
Birla 23 20 40 20 10
Coromandal 20 - - - 80
BASE 40 10 10 10 10
Table 4.5.3 Top brands recommended (%)
Total Mum. Kol. Del. Che.
Ambuja 38 80 70 - -
UltraTech 35 60 30 50 -
ACC 20 10 40 30 -
BASE 40 10 10 10 10
Table 4.5.3.1 Reasons for recommending Ambuja (%)
Total Mum. Kol. Del. Che.
It is of a good
quality 38 56 14 - -
It is a reputed
brand 19 33 - - -
It sets quickly 19 - 43 - -
BASE 16 9 7 - -
Table 4.5.3.2 Reasons for recommending UltraTech (%)
Total Mum. Kol. Del. Che.
It is reputed brand 23 17 - 40 -
It is of a good
quality 23 17 50 20 -
Its availability is
good 23 50 - - -
BASE 13 6 2 5 -
142
Table 4.5.3.3 Reasons for recommending ACC (%)
Total Mum. Kol. Del. Che.
It is a reputed
brand 50 50 25 100 -
It lasts long 38 50 25 50 -
It is of a good
quality 25 - 50 - -
BASE 8 2 4 2 -
Table 4.5.4 Top brands not recommended (%)
Total Mum. Kol. Del. Che.
ACC 22 - 43 10 -
India Cements 17 - - 30 -
Pragati 17 - 43 - -
BASE 18 1 7 10 -
Table 4.5.4.1Reasons for not recommending – ACC (%)
Total Mum. Kol. Del. Che.
Reputed brand so
the profit is less 50 - 67 - -
It is very costly 25 - - 100 -
We do not store it 25 - 33 - -
BASE 6 - 3 3 -
Table 4.5.4.2 Reasons for not recommending – India Cements (%)
Total Mum. Kol. Del. Che.
It is not a reputed
brand 67 - - 67 -
It sets very slowly 33 - - 33 -
BASE 3 - - 3 -
Table 4.5.4.3 Reasons for not recommending – Pragati (%)
Total Mum. Kol. Del. Che.
It is not trustworthy 67 - 67 - -
It is not a reputed
brand 33 - 33 - -
It is not of a good
quality 33 - 33 - -
BASE 3 - 3 - -
143
Table 4.5.5 Top 3 Brands (%)
Total Mum. Kol. Del. Che.
ACC 55 100 80 40 -
Ambuja 50 100 90 10 -
UltraTech 50 90 50 60 -
BASE 40 10 10 10 10
Table 4.5.5.1 Reasons for rating ACC (%)
Total Mum. Kol. Del. Che.
It is a reputed & a
trustworthy brand 52 40 43 100 -
It is of a good
quality 24 30 14 25 -
It is easily
available 14 30 - - -
BASE 21 10 7 4 -
Table 4.5.5.2 Reasons for rating Ambuja (%)
Total Mum. Kol. Del. Che.
It is a reputed & a
trustworthy brand 32 40 11 - -
It has got good
strength 32 20 33 100 -
Customer demand
is more 21 40 - - -
BASE 20 10 9 1 -
Table 4.5.5.3 Reasons for rating UltraTech (%)
Total Mum. Kol. Del. Che.
It is of a good
quality 35 56 20 17 -
It is reputed and
trustworthy
company
15 - 20 33 -
It has got good
strength 15 11 - 40 -
BASE 20 9 5 6 -
144
Table 4.5.6 Perception about ACC
BASE
Total Mum. Kol. Del. Che.
22 10 8 4 -
Figures in %
Its quality is best in the market
Agree 45 10 63 100 -
Neither agree nor disagree 55 90 37 - -
Disagree - - - - -
It is affordable
Agree 46 20 50 100 -
Neither agree nor disagree 45 60 50 - -
Disagree 9 20 - - -
It is value for money
Agree 64 30 88 100 -
Neither agree nor disagree 32 60 13 - -
Disagree 4 10 - - -
It is cheaper than others
Agree 23 30 13 25 -
Neither agree nor disagree 59 70 62 25 -
Disagree 18 - 25 50 -
It is easily available
Agree 55 20 88 75 -
Neither agree nor disagree 27 40 12 25 -
Disagree 18 40 - - -
It is preferred by most of the customers
Agree 64 20 100 100 -
Neither agree nor disagree 27 60 - - -
Disagree 9 20 - - -
It is a reputed brand
Agree 73 40 100 100 -
Neither agree nor disagree 23 50 - - -
Disagree 4 10 - - -
145
BASE
Total Mum. Kol. Del. Che.
22 10 8 4 -
It has good loyalty programs
Agree 32 10 25 100 -
Neither agree nor disagree 41 60 38 - -
Disagree 27 30 37 - -
It is a trustworthy brand
Agree 80 70 89 100 -
Neither agree nor disagree 20 30 11 - -
Disagree - - - - -
Table 4.5.7 Perception about Ambuja
BASE
Total Mum. Kol. Del. Che.
20 10 9 1 -
Figures in %
Its quality is best in the market
Agree 85 90 78 100 -
Neither agree nor disagree 15 10 22 - -
Disagree - - - - -
It is affordable
Agree 55 40 67 100 -
Neither agree nor disagree 40 50 33 - -
Disagree 5 10 - - -
It is value for money
Agree 95 100 89 100 -
Neither agree nor disagree 5 - 11 - -
Disagree - - - - -
It is cheaper than others
Agree 25 30 11 100 -
Neither agree nor disagree 55 60 56 - -
Disagree 20 10 33 - -
It is easily available
146
BASE
Total Mum. Kol. Del. Che.
20 10 9 1 -
Agree 75 70 78 100 -
Neither agree nor disagree 25 30 22 - -
Disagree - - - - -
It is preferred by most of the customers
Agree 75 100 44 100 -
Neither agree nor disagree 25 - 56 - -
Disagree - - - - -
It is a reputed brand
Agree 70 60 78 100 -
Neither agree nor disagree 30 40 22 - -
Disagree - - - - -
It has good loyalty programs
Agree 45 60 22 100 -
Neither agree nor disagree 35 40 33 - -
Disagree 20 - 44 - -
It is a trustworthy brand
Agree 80 70 89 100 -
Neither agree nor disagree 20 30 11 - -
Disagree - - - - -
Table 4.5.8 Perception about UltraTech
BASE
Total Mum. Kol. Del. Che.
20 9 5 6 -
Figures in %
Its quality is best in the market
Agree 65 67 20 100 -
Neither agree nor disagree 30 33 60 - -
Disagree 5 - 20 - -
It is affordable
Agree 70 56 60 100 -
147
BASE
Total Mum. Kol. Del. Che.
20 9 5 6 -
Neither agree nor disagree 25 33 40 - -
Disagree 5 11 - - -
It is value for money
Agree 55 22 60 100 -
Neither agree nor disagree 40 67 40 - -
Disagree 5 11 - - -
It is cheaper than others
Agree 35 22 - 83 -
Neither agree nor disagree 50 67 60 17 -
Disagree 15 11 40 - -
It is easily available
Agree 70 56 60 100 -
Neither agree nor disagree 30 44 40 - -
Disagree - - - - -
It is preferred by most of the customers
Agree 50 44 20 83 -
Neither agree nor disagree 50 56 80 17 -
Disagree - - - - -
It is a reputed brand
Agree 65 56 60 17 -
Neither agree nor disagree 35 44 40 83 -
Disagree - - - - -
It has good loyalty programs
Agree 45 33 - 100 -
Neither agree nor disagree 30 56 20 - -
Disagree 25 11 80 - -
It is a trustworthy brand
Agree 65 44 60 100 -
Neither agree nor disagree 30 44 40 - -
Disagree 5 11 - - -
148
Table 4.5.9 Importance of Branding (%)
Total Mum. Kol. Del. Che.
Important 93 90 80 100 100
Neither important
nor unimportant 7 10 20 - -
Unimportant - - - - -
BASE 40 10 10 10 10
Importance given to branding is cross-tabulated with annual income and it is found
that it is same irrespective of annual income (chi-square = 15.581, p = 0.076)
Table 4.5.9.1 Reason for the rating (%)
Total Mum. Kol. Del. Che.
Branded cement is
preferred by the
customers
43 50 60 60 -
Brand name is
essential for the
sale of the cement
20 30 - 50 -
Branded cements
have good quality 10 20 20 - -
BASE 40 10 10 10 10
Table 4.5.10 Perception about Branding
BASE
Total Mum. Kol. Del. Che.
40 10 10 10 10
Figures in %
Even though there are many brands I always stock the same brands
Agree 75 100 40 80 80
Neither agree nor disagree 13 - 40 - 10
Disagree 12 - 20 20 10
I have very little interest in brand name
Agree 05 - - - 20
Neither agree nor disagree 37 40 60 - 50
Disagree 58 60 40 100 30
There are so many brands that I often get confused
Agree 15 10 20 - 30
149
BASE
Total Mum. Kol. Del. Che.
40 10 10 10 10
Neither agree nor disagree 30 20 60 - 40
Disagree 55 70 20 100 30
I would rather stock brands I usually have than keep something I am not sure of
Agree 40 70 10 10 70
Neither agree nor disagree 55 30 90 80 20
Disagree 05 - - 10 10
I stock only established brands
Agree 85 100 90 90 60
Neither agree nor disagree 15 - 10 10 40
Disagree - - - - -
I wait for others to try a new brand before suggesting it to my customers
Agree 17 20 10 10 30
Neither agree nor disagree 63 60 50 70 70
Disagree 20 20 40 20 -
I like to recommend new brands to customers
Agree 10 20 - 11 10
Neither agree nor disagree 49 60 40 56 40
Disagree 41 20 60 33 50
National brands provide better quality than local brands
Agree 90 90 100 100 70
Neither agree nor disagree 8 10 - - 20
Disagree 2 - - - 10
National brands are everywhere as compared to local brands
Agree 83 60 90 100 80
Neither agree nor disagree 15 40 10 - 10
Disagree 2 - - - 10
Local brands are cheaper than national brands
Agree 78 50 80 100 80
Neither agree nor disagree 20 40 20 - 20
Disagree 2 10 - - -
150
These statements are cross-tabulated across annual income. Chi-square test shows that
Branding perception and Stocking behavior is same across different income groups
except first statement since its p value is less than 0.05. Retailers with low annual
income seem to stock more than one brand.
Table 4.5.11 Perception about Branding – By Annual income
Statements Sig.
Even though there are many brands, I always stock the same brand. 0.022
I have very little interest in the brand name. 0.454
There are so many brands that I often get confused. 0.086
I would rather stock brands that I usually have than keep something I
am not sure of.
0.301
I stock only established brands. 0.108
I wait for others to try a new brand before suggesting it to my
customers.
0.498
I like to recommend new brands to customers. 0.488
National brands provide better quality than local brands. 0.917
National brands are available everywhere as compared to local brands. 0.748
Local brands are cheaper than national brands. 0.186
Table 4.5.12 Brand preferred – National/Local/Both (%)
Total Mum. Kol. Del. Che.
National brands 90 100 100 100 60
Local brands 5 - - - 20
Both 5 - - - 20
BASE 40 10 10 10 10
151
Table 4.5.12.1 Reasons for preferring National brands (%)
Total Mum. Kol. Del. Che.
National brands
have good quality 44 30 70 10 83
National brands are
trustworthy 33 30 60 30 -
National brands are
very strong 19 40 - 30 -
BASE 36 10 10 10 6
Table 4.5.13 Recommend Local brand to… (%)
Total Mum. Kol. Del. Che.
Mason 91 100 83 - 89
Contractor 36 14 33 - 56
IHB 23 14 17 - 33
Architect 14 - - - 33
BASE 22 7 6 - 9
Table 4.5.13.1 Reasons for recommending Local brands (%)
Total Mum. Kol. Del. Che.
Rate wise local
brands are cheaper 64 71 83 - 44
Local brands are
recommended for
small work
18 29 17 - 11
Middle class
people prefer local
brands
14 14 - - 22
BASE 22 7 6 - 9
Table 4.5.14 Recommend National brand to… (%)
Total Mum. Kol. Del. Che.
IHB 95 90 90 100 100
Architect 93 100 70 100 100
Contractors 88 90 80 100 80
Masons 63 30 70 100 50
BASE 40 10 10 10 10
152
Table 4.5.14.1 Reasons for recommending National brands (%)
Total Mum. Kol. Del. Che.
National brands are
of good quality 45 70 60 10 40
National brands are
from a reputed
company
40 20 70 60 10
National brands
have a good grip 10 - - 40 -
BASE 40 10 10 10 10
Table 4.5.15 How should a company promote its brand? (%)
Total Mum. Kol. Del. Che.
Company should
organize promotional
activities.
33 40 40 50 -
Company should reduce
its prices. 25 10 - 20 70
Company should
provide offers. 20 20 40 20 -
Company should put
more hoardings
/banners.
20 - 50 30 -
Company should
conduct seminars for
retailers & distributors.
18 - 20 50 -
BASE 40 10 10 10 10
4.6 Contractors
In the case of contractors also, either he decides the brand to use or suggests to the
user. However, the role of user is seen to be equally important in selecting brand.
Table 4.6.1 Who decides (%)
Total Mum. Kol. Del. Che.
I decide which
brand to use 40 30 70 20 40
I suggest various
brands but the final
decision is taken by
the other party
32 50 - 80 -
We decide
mutually which
brand to use
28 20 30 - 60
BASE 40 10 10 10 10
153
When this pattern is compared with number of years contractor is doing business by
using chi-square test following output is obtained:
Q4. Decision maker on the cement brand to be used * Q2. how long you have been working as a
Contractor Cross Tabulation
Q2. How long you have been working as a
Contractor
Total
Less
than 5
years
5-10
years
11-
15
years
16-
20
years
21-
25
years
More
than
25
years
I decide which
brand to use Count
1 3 2 4 4 2 16
Expected
Count
.4 2.8 2.4 5.2 2.4 2.8 16.0
I suggest various
brands but the final
decision is taken by
Count 0 2 1 5 1 4 13
Expected
Count
.3 2.3 2.0 4.2 2.0 2.3 13.0
We decide
mutually which
brand to use
Count 0 2 3 4 1 1 11
Expected
Count
.3 1.9 1.7 3.6 1.7 1.9 11.0
Total Count 1 7 6 13 6 7 40
Expected
Count
1.0 7.0 6.0 13.0 6.0 7.0 40.0
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 7.421a 10 .685
Likelihood Ratio 7.498 10 .678
Linear-by-Linear
Association
.001 1 .970
No. of Valid Cases 40
a. 17 cells (94.4%) have expected count less than 5. The minimum expected count is
.28.
154
It is seen that pattern remains same irrespective of number of years in business (chi-
square = 7.421, p = 0.685)
Similarly, this pattern is compared across number of projects done by contractor in
one year. In this case also, the pattern remains same (chi-square = 11.139, p = 0.347)
It also remains same irrespective of annual income of the contractor (chi-square =
15.756, p = 0.107)
Table 4.6.2 Factors considered (%)
Total Mum. Kol. Del. Che.
Setting Time 40 20 60 70 10
Strength 38 - 60 70 20
Quality 25 50 - - 50
BASE 40 10 10 10 10
All factors mentioned above relate to ‘quality’. Thus quality of the cement is the main
factor considered in selecting the brand.
Table 4.6.3 Sources of Awareness (%)
Total Mum. Kol. Del. Che.
Retailer &
Distributor 65 10 100 80 70
Advertisement 33 - 40 50 40
TVCs 27 30 40 - 40
Newspaper 23 20 20 40 10
Hoardings &
Posters 23 20 10 60 -
BASE 40 10 10 10 10
Table 4.6.4 Top 3 Brands – currently using (%)
Total Mum. Kol. Del. Che.
Ambuja 68 100 70 100 -
UltraTech 43 50 40 80 -
ACC 30 40 70 10 -
BASE 40 10 10 10 10
155
Table 4.6.5 Top 3 Brands – not using currently (%)
Total Mum. Kol. Del. Che.
ACC 44 40 - 70 44
Birla 27 50 - 40 -
J.K. Lakshmi 18 50 - 10 -
BASE 40 10 10 10 10
Table 4.6.5.1 Reasons for using Ambuja (%)
Total Mum. Kol. Del. Che.
Good demand 26 40 14 20 -
Reputed company 15 - 14 30 -
Sets quickly 15 - 43 10 -
BASE 27 10 7 10 -
Table 4.6.5.2 Reasons for using UltraTech (%)
Total Mum. Kol. Del. Che.
Good strength 24 - 50 25 -
Good demand 18 20 - 25 -
Durability 12 - - 25 -
BASE 17 5 4 8 -
Table 4.6.5.3 Reasons for using ACC (%)
Total Mum. Kol. Del. Che.
Long lasting 25 - 43 - -
Affordable 17 - 29 - -
Good quality 17 25 15 - -
BASE 12 4 7 1 -
Table 4.6.6.1 Reasons for not using ACC (%)
Total Mum. Kol. Del. Che.
Not easily
available 62 50 - 40 100
I doubt its quality 15 25 - 20 -
Out dated brand 8 - - 20 -
BASE 13 4 - 5 4
156
Table 4.6.6.2 Reasons for not using Birla (%)
Total Mum. Kol. Del. Che.
Bad grip 22 - - 50 -
Not accepted by
customers 11 - - 25 -
Not easily
available 11 20 - - -
BASE 9 4 - 5 -
Table 4.6.6.3 Reasons for not using J.K. Lakshmi (%)
Total Mum. Kol. Del. Che.
Customers don’t
like this brand 33 20 - 100 -
Low market value 33 20 - 100 -
Lacks durability 17 20 - - -
BASE 6 5 - 1 -
Table 4.6.7 Top 3 Brands – In General (%)
Total Mum. Kol. Del. Che.
Ambuja 65 100 70 90 -
UltraTech 45 60 30 80 -
ACC 38 40 100 10 -
BASE 40 10 10 10 10
Table 4.6.7.1 Reasons for ranking Ambuja (%)
Total Mum. Kol. Del. Che.
Good quality 35 50 14 33 -
Gives good grip 19 - - 56 -
Settles well 12 - 29 11 -
BASE 26 10 7 9 -
Table 4.6.7.2 Reasons for ranking UltraTech (%)
Total Mum. Kol. Del. Che.
Reputed brand 33 33 25 38 -
Good quality 28 33 25 25 -
Rust-free 17 - - 38 -
BASE 18 6 4 8 -
157
Table 4.6.7.3 Reasons for ranking ACC (%)
Total Mum. Kol. Del. Che.
Long lasting 33 25 40 - -
Reputed brand 33 25 30 100 -
Good strength 13 25 10 - -
BASE 15 4 10 1 -
Table 4.6.8 Perception about Ambuja
BASE
Total Mum. Kol. Del. Che.
26 10 7 9 -
Figures in %
It is very convenient to use
Top 2 Box 100 100 100 100 -
Bottom 2 Box - - - - -
Mean 4.8 4.6 4.7 5 -
It mixes well
Top 2 Box 96 100 85 100 -
Bottom 2 Box - - - - -
Mean 4.7 4.6 4.6 4.9 -
Its quality is best in the market
Top 2 Box 96 100 86 100 -
Bottom 2 Box - - - - -
Mean 4.7 4.5 4.4 5 -
It is affordable
Top 2 Box 84 100 43 100 -
Bottom 2 Box - - - - -
Mean 4.4 4.5 3.7 4.7 -
It is very smooth
Top 2 Box 96 100 86 100 -
Bottom 2 Box - - - - -
Mean 4.8 4.8 4.6 4.9 -
158
BASE
Total Mum. Kol. Del. Che.
26 10 7 9 -
It spreads well, hence gives a good finishing
Top 2 Box 92 90 86 100 -
Bottom 2 Box - - - - -
Mean 4.6 4.6 4.4 4.8 -
It is value for money
Top 2 Box 96 90 100 100 -
Bottom 2 Box - - - - -
Mean 4.6 4.5 4.4 4.8 -
It is cheaper than others
Top 2 Box 77 100 14 100 -
Bottom 2 Box 4 - 14 - -
Mean 4.1 4.3 2.9 4.8 -
It is easily available
Top 2 Box 92 80 100 100 -
Bottom 2 Box - - - - -
Mean 4.4 4.1 4.3 4.7 -
It is a reputed brand
Top 2 Box 96 90 100 100 -
Bottom 2 Box - - - - -
Mean 4.7 4.7 4.6 4.9 -
It has good loyalty programmes
Top 2 Box 69 80 29 89 -
Bottom 2 Box 23 10 71 - -
Mean 3.5 3.7 2.1 4.2 -
It is a trustworthy brand
Top 2 Box 100 100 100 100 -
Bottom 2 Box - - - - -
Mean 4.7 4.9 4.4 4.8 -
159
Table 4.6.9 Perception about UltraTech
BASE
Total Mum. Kol. Del. Che.
18 6 4 8 -
Figures in %
It is very convenient to use
Top 2 Box 89 67 100 100 -
Bottom 2 Box - - - - -
Mean 4.6 3.7 5 5 -
It mixes well
Top 2 Box 88 60 100 100 -
Bottom 2 Box 6 20 - - -
Mean 4.5 3.4 5 4.9 -
Its quality is best in the market
Top 2 Box 89 67 100 100 -
Bottom 2 Box - - - - -
Mean 4.6 4 5 4.8 -
It is affordable
Top 2 Box 78 33 100 100 -
Bottom 2 Box 6 17 - - -
Mean 4.2 3.2 4.8 4.8 -
It is very smooth
Top 2 Box 94 83 100 100 -
Bottom 2 Box 6 17 - - -
Mean 4.5 3.7 4.7 5 -
It spreads well, hence gives a good finishing
Top 2 Box 94 83 100 100 -
Bottom 2 Box - - - - -
Mean 4.7 4.2 4.7 5 -
It is value for money
Top 2 Box 94 83 100 100 -
Bottom 2 Box - - - - -
Mean 4.5 4 4.5 4.9 -
160
BASE
Total Mum. Kol. Del. Che.
18 6 4 8 -
It is cheaper than others
Top 2 Box 78 67 75 88 -
Bottom 2 Box 6 - 25 - -
Mean 4 3.8 3.5 4.4 -
It is easily available
Top 2 Box 83 50 100 100 -
Bottom 2 Box - - - - -
Mean 4.4 3.5 4.8 4.9 -
It is a reputed brand
Top 2 Box 89 67 100 100 -
Bottom 2 Box - - - - -
Mean 4.5 3.7 5 4.9 -
It has good loyalty programmes
Top 2 Box 72 33 75 100 -
Bottom 2 Box 6 - 25 - -
Mean 4.2 3.3 4 5 -
It is a trustworthy brand
Top 2 Box 100 100 100 100 -
Bottom 2 Box - - - - -
Mean 4.7 4.3 5 4.9 -
161
Table 4.6.10 Perception about ACC
BASE
Total Mum. Kol. Del. Che.
15 4 10 1 -
Figures in %
It is very convenient to use
Top 2 Box 100 100 100 100 -
Bottom 2 Box - - - - -
Mean 4.5 4.3 4.5 5 -
It mixes well
Top 2 Box 80 50 90 100 -
Bottom 2 Box - - - - -
Mean 4.2 3.5 4.4 5 -
Its quality is best in the market
Top 2 Box 93 100 90 100 -
Bottom 2 Box - - - - -
Mean 4.4 4 4.6 4 -
It is affordable
Top 2 Box 67 50 70 100 -
Bottom 2 Box - - - - -
Mean 4.3 4 4.3 5 -
It is very smooth
Top 2 Box 93 100 90 100 -
Bottom 2 Box - - - - -
Mean 4.3 4 4.4 5 -
It spreads well, hence gives a good finishing
Top 2 Box 93 100 90 100 -
Bottom 2 Box - - - - -
Mean 4.3 4 4.4 5 -
It is value for money
Top 2 Box 87 75 90 100 -
Bottom 2 Box - - - - -
Mean 4.3 4 4.4 4 -
162
BASE
Total Mum. Kol. Del. Che.
15 4 10 1 -
It is cheaper than others
Top 2 Box 53 50 50 100 -
Bottom 2 Box 20 50 10 - -
Mean 3.5 3 3.6 5 -
It is easily available
Top 2 Box 93 100 90 100 -
Bottom 2 Box - - - - -
Mean 4.5 4.5 4.5 5 -
It is a reputed brand
Top 2 Box 93 75 100 100 -
Bottom 2 Box - - - - -
Mean 4.7 4 4.9 5 -
It has good loyalty programmes
Top 2 Box 53 75 40 100 -
Bottom 2 Box 40 - 60 - -
Mean 3 3.8 2.6 4 -
It is a trustworthy brand
Top 2 Box 100 100 100 100 -
Bottom 2 Box - - - - -
Mean 4.6 4 4.8 5 -
Table 4.6.11 Importance of Brand Name
Total Mum. Kol. Del. Che.
Very important 48 40 60 90 -
Important 52 60 40 10 100
Neither important
nor unimportant - - - - -
Not so important - - - - -
Not at all important - - - - -
Mean 4.5 4.4 4.6 4.9 4
BASE 40 10 10 10 10
163
When importance of brand name is compared across annual income by using chi-
square test, following output was available:
Q19. Annual Income * Q8. Importance of brand name while purchasing cement Cross tabulation
Q8. Importance of
brand name while
purchasing cement
Total
4 -
Important
5 - Very
Importan
t
Q19. Annual
Income
Up to 2 lakhs Count 5 4 9
Expected Count 4.7 4.3 9.0
2,00,001-
4,00,000
Count 4 2 6
Expected Count 3.2 2.9 6.0
4,00,001-
6,00,000
Count 3 9 12
Expected Count 6.3 5.7 12.0
6,00,001-
8,00,000
Count 6 2 8
Expected Count 4.2 3.8 8.0
8,00,001-
10,00,000
Count 2 1 3
Expected Count 1.6 1.4 3.0
More than
10,00,000
Count 1 1 2
Expected Count 1.1 1.0 2.0
Total Count 21 19 40
Expected Count 21.0 19.0 40.0
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 6.026a 5 .304
Likelihood Ratio 6.263 5 .281
Linear-by-Linear
Association
.059 1 .807
N of Valid Cases 40
a. 10 cells (83.3%) have expected count less than 5. The minimum expected
count is .95.
164
Similarly Kruskal Wallis test gave following results:
Ranks
Q19. Annual Income N Mean Rank
Q8. Importance of
brand name while
purchasing cement
Up to 2 lakhs 9 19.89
2,00,001- 4,00,000 6 17.67
4,00,001- 6,00,000 12 26.00
6,00,001- 8,00,000 8 16.00
8,00,001- 10,00,000 3 17.67
More than 10,00,000 2 21.00
Total 40
Test Statisticsa,b
Q8. Importance of brand name while purchasing cement
Chi-square 5.876
df 5
Asymp. Sig. .319
a. Kruskal Wallis Test
b. Grouping Variable: Q19. Annual Income
It is seen in both test importance is same across different income groups (chi-square =
6.0626, p = 0.304, Kruskal Wallis chi-square = 5.876, p = 0.319)
Same results are seen when importance to branding is compared across number of
years the contractor is in business (Chi-square = 3.697, p = 0.594, Kruskal Wallis chi-
square = 3.604, p = 0.608)
When importance to branding is compared with the number of projects the contractor
does in a year it is seen that importance remains same irrespective of number of
projects done in a year (Chi-square = 3.39, p = 0.64, Kruskal Wallis chi-square =
3.306, p = 0.653)
165
Table 4.6.11.1 Reasons for the rating (%)
Total Mum. Kol. Del. Che.
Good Quality 60 50 70 50 70
Trustworthy 30 60 30 30 10
Good Strength 13 - 10 30 10
BASE 40 10 10 10 10
Table 4.6.12 Perception about Branding
BASE
Total Mum. Kol. Del. Che.
40 10 10 10 10
Figures in %
Even though there are many brands, I always buy the same brands
Top 2 Box 93 100 80 90 100
Bottom 2 Box 5 - 10 10 -
Mean 4.3 4.3 4.2 3.9 4.6
I have very little interest in brand name
Top 2 Box 20 - 20 - 60
Bottom 2 Box 73 80 70 100 40
Mean 2.3 1.8 2.6 1.5 3.3
There are so many brands that I often get confused
Top 2 Box 20 30 - - 50
Bottom 2 Box 50 30 60 70 40
Mean 2.8 3.2 2.2 2.3 3.3
I would rather stick with the brand I usually use than try something I am not sure of
Top 2 Box 58 90 10 30 100
Bottom 2 Box 28 - 40 70 -
Mean 3.5 4.3 2.7 2.5 4.3
I will buy only established brands
Top 2 Box 90 100 100 60 100
Bottom 2 Box 5 - - 20 -
Mean 4.3 4.5 4.7 3.4 4.4
I would wait for others to try a new brand then try it myself
Top 2 Box 58 80 - 50 100
Bottom 2 Box 20 - 50 30 -
166
BASE
Total Mum. Kol. Del. Che.
40 10 10 10 10
Mean 3.4 3.9 2.3 3.3 4.2
I like to recommend new brands to others
Top 2 Box 40 70 10 40 40
Bottom 2 Box 40 10 70 40 40
Mean 3 3.6 2.2 3 3.2
National brands provide better quality than local brands
Top 2 Box 98 100 100 100 90
Bottom 2 Box - - - - -
Mean 4.6 4.4 5 4.5 4.3
National brands are everywhere as compared to local brands
Top 2 Box 95 90 100 100 90
Bottom 2 Box - - - - -
Mean 4.6 4.2 4.9 4.8 4.3
Local brands are cheaper than national brands
Top 2 Box 90 80 80 100 100
Bottom 2 Box - - - - -
Mean 4.2 3.8 4.2 4.5 4.3
When opinions on above statements were cross-tabulated across number of years in
business, it was found that opinion remains same across number of years in business
as seen in the following table since sig. > 0.05
167
Table 4.6.12.1: Opinion on statements – By number of years in business
Same is the case when opinion on above statements were compared with type of
business, it remains same as seen in following table since sig. > 0.05
Table 4.6.12.2: Opinion on statements – By type of business
Opinion also does not depend on number of projects done in a year since sig. > 0.05
as can be seen from following table
Statements Chi-square df Asymp.
Sig.
Even though there are many brands, I always buy the same brand. 4.36 5 0.50
I have very little interest in the brand name. 8.03 5 0.15
There are so many brands that I often get confused. 2.71 5 0.74
I would rather stick with a brand I usually use than try something I am not sure of 7.50 5 0.19
I will buy only established brands. 6.53 5 0.26
I would wait for others to try a new brand then try it myself. 4.13 5 0.53
I like to recommend new brands to others. 9.99 5 0.08
National brands provide better quality than local brands. 1.84 5 0.87
National brands are available everywhere as compared to local brands. 2.56 5 0.77
Local brands are cheaper than national brands. 6.69 5 0.24
Statements Chi-square df Asymp.
Sig.
Even though there are many brands, I always buy the same brand. 0.53 2 0.77
I have very little interest in the brand name. 5.70 2 0.06
There are so many brands that I often get confused. 0.42 2 0.81
I would rather stick with a brand I usually use than try something I am not sure of 0.24 2 0.89
I will buy only established brands. 0.49 2 0.78
I would wait for others to try a new brand then try it myself. 0.88 2 0.64
I like to recommend new brands to others. 0.41 2 0.81
National brands provide better quality than local brands. 2.61 2 0.27
National brands are available everywhere as compared to local brands. 1.29 2 0.52
Local brands are cheaper than national brands. 0.65 2 0.72
168
Table 4.6.12.3: Opinion on statements – By number of number of projects
done
As regards annual income opinion is different on statement no. 6 and 10. These
statements relate to trying a newly brand in the market and opinion about local
brands.
Table 4.6.12.4
Statements Chi-square df Asymp.
Sig.
Even though there are many brands, I always buy the same brand. 4.00 5 0.55
I have very little interest in the brand name. 5.74 5 0.33
There are so many brands that I often get confused. 6.98 5 0.22
I would rather stick with a brand I usually use than try something I am not sure of 6.93 5 0.23
I will buy only established brands. 4.90 5 0.43
I would wait for others to try a new brand then try it myself. 4.43 5 0.49
I like to recommend new brands to others. 14.30 5 0.01
National brands provide better quality than local brands. 5.73 5 0.33
National brands are available everywhere as compared to local brands. 3.49 5 0.62
Local brands are cheaper than national brands. 3.83 5 0.57
Statements Chi-square df Asymp.
Sig.
Even though there are many brands, I always buy the same brand. 10.62 5 0.59
I have very little interest in the brand name. 4.57 5 0.47
There are so many brands that I often get confused. 2.00 5 0.85
I would rather stick with a brand I usually use than try something I am not sure of 7.18 5 0.21
I will buy only established brands. 6.00 5 0.31
I would wait for others to try a new brand then try it myself. 11.62 5 0.04
I like to recommend new brands to others. 2.18 5 0.82
National brands provide better quality than local brands. 0.37 5 1.00
National brands are available everywhere as compared to local brands. 6.49 5 0.26
Local brands are cheaper than national brands. 12.34 5 0.03
169
Table 4.6.13 Brand preferred – National or Local (%)
Total Mum. Kol. Del. Che.
National Brands 100 100 100 100 100
Local Brands - - - - -
BASE 40 10 10 10 10
Table 4.6.13.1 Reasons for preferring National Brands (%)
Total Mum. Kol. Del. Che.
National brands
have good quality 38 40 30 30 50
National brands are
durable 15 - - 40 20
Branded cement is
available
everywhere
15 30 20 - 10
BASE 40 10 10 10 10
Table 4.6.14 how a company should promote a cement brand (%)
Total Mum. Kol. Del. Che.
Company should inform
people about the quality of the
cement
28 30 20 60 -
Reduce the price 23 50 10 - 30
Television Commercials 15 30 20 10 -
Advertise through
hTotalrdings/posters/pamphlets 13 - - 50 -
Give free gifts with it 13 10 20 - 20
BASE 40 10 10 10 10
From above table 4.6.14 it is seen that emphasis is on quality available at reasonable
price. Thus higher price cement would be accepted if company produces quality
cement.
Chapter 5
Findings and Conclusion
170
CHAPTER 5 : FINDINGS AND CONCLUSION 5.1 Introduction
Overview
The new mantra in this industry is that ―you have to scream to be heard in a
crowded market that already has over 50 players‖. ‗Branding‘ has started playing an
important role in cement industry too and also covers triggers and barriers they
consider while purchasing Cement. Nothing sells without branding. A perfect
example of this is the increase in sales of Binani cement after roping in Amitabh
Bachchan to endorse it. Thus like all the other categories ―Branding‖ has started
playing an important role in the cement industry too.
5.2 Summary of the study
Consumers and decision makers in the process of buying cement unanimously feel
that branding of cement is important because it creates good image of the product.
Good image of cement is strongly associated with the quality. Quality is associated
with strength.
They are also unanimous in saying that the quality should be offered at reasonable
price. Thus one can conclude that customers and consumers select cement brand
based on quality. The second criterion that is used is price, thus we can say that it is
the value for money that occupies the second important criterion in buying cement.
There is a strong association found between ‗quality‘ perception of brand and
preference towards it.
National brands are perceived as having a better quality than local brands. Thus top
brands preferred are national brands. Local brands are perceived as cheaper but not as
good in quality as national brands.
Thus company selling cement throughout the country should try to improve brand
image on quality and then charge higher price. It could be true that customer is
associating price with quality so that higher the price of cement, better should be the
quality.
171
Customers meaning of quality is strength. Since local brands do not score high on
quality compared to national brands but score high on price, they have scope in
promoting cement in those uses where strength is not the prime requirement. In such
situation the next requirement would be price.
Suggestions given by retailers on promoting brand show that the company should give
good margin. They also expect that quality has to be good. Thus it concurs with the
finding that quality is the first criterion followed by price.
The above findings are uniform across various segments of architects, IHBs, retailers,
masons and contractors based on type of work done, number of years in business,
brands preferred, business location, whether constructing commercial buildings or
residential or both, type of buildings constructed, process of selecting brand and
sources used to finalize brand.
Distribution of cement brand is also important in forming opinion on quality. Since
national brands are considered to be brands with good quality, by total distribution
would help company to create better image of the brand on quality.
5.3 Research Objective
The primary objective of the research was:
To find out the triggers and barriers in selecting a cement brand
To find out the perception of brands
To find out the impact of branding
To find out the impact of national brands and local brands
To find out the perception of national brands and local brands
In order to achieve the objective, the following areas were covered:
Factors considered by customers while buying
Top brands – Stocked, recommended and in general
172
Perception about the top 3 brands
Importance of branding and reasons thereof
Perception about branding
Difference between National and Local brands
Brand preferred – National or Local
5.4 Research Methodology
Research Type
The research was quantitative in nature. A structured questionnaire containing
both open as well as close ended questions was used.
Target Respondents
Architect, IHBs (Individual House Builders), Masons, Retailers of Cement and
Contractors.
Sampling: 20 Architect, 40 IHB‘s, 60 Masons, 40 Retailers and 40 Contractors
173
5.5 DATA ANALYSIS
5.5.1 Architect
174
175
176
177
178
179
180
181
182
5.5.2 IHB
183
184
185
186
187
188
189
5.5.3. Mason
190
191
192
193
194
195
196
5.5.4 Retailers
197
198
199
200
201
5.5.5. Contractors
202
203
204
205
206
207
208
5.6 Research Hypothesis & Major conlusions viz-a-viz findings of study
209
210
211
212
213
214
215
216
217
Bibliography
218
Bibliography
Aaker, David A. (1991), Managing Brand Equity. New York: The Free Press.
Aaker, David A. (1996), ―Measuring Brand Equity Across Products and Markets,‖
California Management Review, 38 (Spring), 102-120.
Aaker, David. A. and Robert Jacobson (2001), ―The Value Relevance of Brand
Attitudein High-Technology Markets,‖ Journal of Marketing Research, 38(4), 485-
93.Reference articlesAaker, David A. and Erich JTotalchimsthaler.(2000), Brand
Leadership: The Next Level ofthe Brand Revolution, New York: Free Press.
Aaker, David A.; Erich Joachimsthaler (2000). Brand Leadership. New York: The Free
Press. pp. 1–6. ISBN 0-684-83924-5
Agarwal, Manoj K. and VithalaRao (1996), ―An Empirical Comparison of Consumer-
Based Measures of Brand Equity,‖ Marketing Letters, 7 (3), 237-47.
Brand Equity,‖ Journal of Marketing, 57 (January), 1-22.
Kapferer, Jean-Noel (1994), Strategic Brand Management, New York: Free Press.
Kaplan, L. B., G. J. Szybillo, and J. Jacoby (1974), ―Components of Perceived Risk in
Keller, Kevin L. (2008), Strategic Brand Management: Building, Measuring, and
Managing Brand Equity, 3rd ed., Upper Saddle River, NJ: Prentice Hall.
Kotler, Philip (1972), Marketing Management, Englewood Cliffs, NJ: Prentice Hall.
"Neil McElroy's Epiphany". P&G Changing the Face of Consumer Marketing.
Harvard Business School. May 2, 2000. Retrieved March 9, 2011.
219
Shocker, Alan D., Rajendra K. Srivastava, and Robert W. Ruekert (1994),
―Challengersand Opportunities Facing Brand Management,‖ Journal of Marketing
Research,31 (2), 149-58.Tauber, Edward M. (1988), ―Brand Leverage: Strategy For
Growth In A Cost-ControlWorld,‖ Journal of Advertising Research, 28 (4), 36-30.
Shamoon, Sumaira, and Saiqa Tehseen. "Brand Management: What Next?"
Interdisciplinary Journal Of Contemporary Research In Business 2.12 (2011): 435–
441. Business Source Complete. Web. October 20, 2012.
Annexure
220
ANNEXURE Questionnaire
PROJECT “CEMENT BRANDING”
Mason
Name of the respondent
Address
Int. Name Date:
Centers Mumbai 1 Delhi 3
Kolkata 2 Chennai 4
Good Morning! ….. I am a research scholar pursuing a Ph.D. My research deals in branding of
cement. This survey is purely an academic survey as part of my Ph. D. research. In this respect I
would like to ask you questions about Cement industry. I assure you that the responses of this
survey will be kept completely confidential and no response will be traced back to an individual.
Section-I
1.Could you please tell me, what is your occupation?
Mason 1 Plumber 3 Electrician 5
Carpenter 2 Painter 4 Others…………..
Continue only if coded1
2. Could you please tell me, are you working independently?
Yes 1 Continue No 2 Terminate Both 3 Continue
3. Could you please tell me, what are the types of masonry work you do?
4.Could you please tell me, how long you have been working as a ………?
Less than 5 years 1 10-15 years 3 20-25 years 5
5-10 years 2 15-20 years 4 More than 25 years 6
221
5.Could you please tell me, how does your industry work? (Probe on the process, how they get
client or how client apprTotalches them, how is awareness created. etc... etc...)
6. Could you please tell me, when you get an assignment of any construction work, who decides
on the cement brand to be used?
Statements Code
I decide which brand to use… 1 Continue
I let the other party decide which brand to use according to their
preference...
2 Termina
te
I suggest various brands but the final decision is taken by the other
party…
3 Continue
We decide mutually which brand to use… 4 Continue
7. Could you please tell me, what are the top 3 factors while deciding on a cement brand?
1. _______________________________________________________________
2. _______________________________________________________________
3. _______________________________________________________________
8. a. Could you please tell me, which are the cement brands that you are currently using?
b. Could you please tell me, which are the cement brands that you had used in the past and not
using currently?
Brands Q.8a Q.8b
ACC 1 1
Ambuja 2 2
Binani 3 3
222
Birla 4 4
Buland (Jaypee) 5 5
Buniyad (Jaypee) 6 6
Century (B.K. Birla) 7 7
Dalmia 8 8
Grasim (Aditya Birla) 9 9
India Cements 10 10
J.K Laxmi 11 11
KCP 12 12
Lafarge 13 13
Larsen & Toubro 14 14
Malabaar 15 15
Orient 16 16
Sanghi 17 17
Ultra Tech (Aditya Birla) 18 18
Others…
Others…
Record brands coded in Q.8a.
c. Could you please tell me, the reason for using ………. brand/brands.
Brands Reasons
Record brands coded in Q8b.
d. Could you please tell me, the reason for not using ……… brand / brands.
Brands Reasons
223
9. Could you please tell me, how do you come to know about new brands?
Section-II (Perception of Brand) 10.Could you please tell me, how important a brand name is for you while purchasing cement?
Please rate on a 5 point scale where 5 means “Very important”&1 means “Not at all
important”
11.Could you please tell me the reasons for the same.
12. Could you please tell me, which brand of cement do you prefer?
Local Brands 1 National Brands 2
13. Could you please tell me, reasons for the same?
14. Could you please tell me, what according to you is the difference between national & local
brands?
15.Could you please tell me, which are the top three cement brands according to you and also give
reasons for the same.
Rank Brands Reasons
1
Very Important Important Ok Not so Important Not at all Important
5 4 3 2 1
224
2
3
16. Could you please rate the above three cement brands on the following statements on a 5-point
scale, where „5‟ is “Strongly agree” and „1‟ is “Strongly disagree” based on your
understanding.
(Write the brands coded in Q.15 under Brand 1, Brand 2 and Brand 3).
Statements Brand 1
Brand 2
Brand3
It is very convenient to use
It mixes very well
Its quality is best in the market
It is affordable
It is very smooth
It spreads well, hence gives a good
finishing
It is value for money
It is cheaper than others
It is easily available
It is a reputed brand
It has good loyalty programs
It is a trustworthy brand
17.Now I am going to read out few statements, please rate your agreement level on a 5 point scale
where 5 means “Strongly agree” and 1 is “Strongly disagree”.
Statements
Strongly
Agree
Agree
Neither
Agree
Nor
Disagree
Disagree
Strongly
Disagree
Even though there are many brands, 5 4 3 2 1
225
I always buy the same brand.
I have very little interest in the brand name. 5 4 3 2 1
There are so many brands that I often get
confused.
5 4 3 2 1
I would rather stick with a brand I
Usually use than try something I am not sure of.
5 4 3 2 1
I will buy only established brands. 5 4 3 2 1
I would wait for others to try a new brand
then try it myself.
5 4 3 2 1
I like to recommend new brands to others. 5 4 3 2 1
National brands provide better quality than
local brands.
5 4 3 2 1
National brands are available everywhere
as compared to local brands.
5 4 3 2 1
Local brands are cheaper than national brands. 5 4 3 2 1
-: Thank You:-
226
PROJECT “CEMENT BRANDING” Contractor
Name of the respondent
Address
Int. Name Date:
Centers Mumbai 1 Delhi 3
Kolkata 2 Chennai 4
Good Morning! ….. I am a research scholar pursuing a Ph.D. My research deals in branding of
cement. This survey is purely an academic survey as part of my Ph. D. research. In this respect I
would like to ask you questions about Cement industry. I assure you that the responses of this
survey will be kept completely confidential and no response will be traced back to an individual.
Section-I
1. Could you please tell me, are you working as a contractor for building material?
Yes 1 Continue No 2 Terminate
2.Could you please tell me, how long you have been working as a ………?
Less than 5 years 1 11-15 years 3 21-25 years 5
5-10 years 2 16-20 years 4 More than 25 years 6
3.Could you please tell me, how does your industry work? (Probe on the process, how they get
client or how client apprTotalches them, how is awareness created. etc... etc...)
4. Could you please tell me, when you get an assignment of any construction work, who decides
on the cement brand to be used?
Statements Code
I decide which brand to use… 1 Continue
I let the other party decide which brand to use according to their
preference…
2 Terminate
I suggest various brands but the final decision is taken by the other 3 Continue
227
party…
We decide mutually which brand to use… 4 Continue
5.Could you please tell me, what are the top 3 factors while deciding on a cement brand?
1. _______________________________________________________________
2. _______________________________________________________________
3. _______________________________________________________________
6a. Could you please tell me, which are the cement brands that you are currently using?
b.Could you please tell me, which are the cement brands that you had used in the past and not
using currently?
Brands Q.6a Q.6b
ACC 1 1
Ambuja 2 2
Binani 3 3
Birla 4 4
Buland (Jaypee) 5 5
Buniyad (Jaypee) 6 6
Century (B.K. Birla) 7 7
Dalmia 8 8
Grasim (Aditya Birla) 9 9
India Cements 10 10
J.K Laxmi 11 11
KCP 12 12
Lafarge 13 13
Larsen & Toubro 14 14
Malabaar 15 15
Orient 16 16
Sanghi 17 17
Ultra Tech (Aditya Birla) 18 18
228
Others…
Others…
Record brands coded in Q.6a.
c. Could you please tell me, the reason using ………. brand/brands.
Brands Reasons
Record brands coded in Q.6b.
d. Could you please tell me, the reason for not using ……… brand / brands.
Brands Reasons
7. Could you please tell me, how do you come to know about new brands?
229
Section-II (Perception of Brand) 8.Could you please tell me, how important a brand name is for you while purchasing cement?
Please rate on a 5 point scale where 5 means “Very important”& 1 means “Not at all
important”
9. Could you please tell me the reasons for the same?
10. Could you please tell me, which brand of cement do you prefer?
Local Brands 1 National Brands 2
11. Could you please tell me, reasons for the same?
12. Could you please tell me, what according to you is the difference between national & local brands?
13.Could you please tell me, which are the top three cement brands according to you and also
give reasons for the same.
Rank Brands Reasons
1
2
3
Very Important Important Ok Not so Important Not at all Important
5 4 3 2 1
230
14. Could you please rate the above three cement brands on the following statements on a 5-
point scale, where „5‟ is “Strongly agree” and „1‟ is “Strongly disagree” based on your
understanding.
(Write the brands coded in Q.13 under Brand 1, Brand 2 and Brand 3).
Statements Brand 1
Brand 2 Brand3
It is very convenient to use
It mixes very well
Its quality is best in the market
It is affordable
It is very smooth
It spreads well, hence gives a good
finishing
It is value for money
It is cheaper than others
It is easily available
It is a reputed brand
It has good loyalty programs
It is a trustworthy brand
15.Now I am going to read out few statements, please rate your agreement level on a 5 point scale
where 5 means “Strongly agree” and 1 is “Strongly disagree”.
Statements
Strongly
Agree
Agree
Neither
Agree
Nor
Disagree
Disagree
Strongly
Disagree
Even though there are many brands,
I always buy the same brand.
5 4 3 2 1
I have very little interest in the brand name.
5 4 3 2 1
There are so many brands that I often get
5 4 3 2 1
231
confused.
I would rather stick with a brand I usually use than
try something I am not sure of.
5 4 3 2 1
I will buy only established brands.
5 4 3 2 1
I would wait for others to try a new brand
then try it myself.
5 4 3 2 1
I like to recommend new brands to others.
5 4 3 2 1
National brands provide better quality
than local brands.
5 4 3 2 1
National brands are available everywhere
as compared to local brands.
5 4 3 2 1
Local brands are cheaper than national
brands.
5 4 3 2 1
16. Could you please tell me, according to you, what should a company do to promote its
brand?
Demographics
17. Could you please tell me, are you working as………?
Individual 1
Partner in a partnership firm 2
Employee of a construction company 3
Other…
18. Could you please tell me, on an average how many projects do you do in a month?
One 1 Four 4
Two 2 Five 5
Three 3 More than five 6
232
19. Could you please tell me, on an average what is your annual income?
Up to 2 lakhs 1 6,00,001- 8,00,000 4
2,00,001- 4,00,000 2 8,00,001- 10,00,000 5
4,00,001- 6,00,000 3 More than 10,00,000 6
20 a. Could you please tell me, do you get any credit facility from …….?
b. Could you please tell me, do you have any association / tie ups with any company/retailers?
Continue only if coded 1 in Q. 20b
c. Could you please tell me, with whom do you have any association/tie ups?
Q.20a
Credit Facility
Q.20b
Association/Tie-ups
Q.20c
Name
Yes No Yes No
x. Retailer 1 2 1 2 XXX
y. Company 1 2 1 2
z. Others… 1 2 1 2 XXX
21. Could you please tell me, what are the benefits from the association/tie-up?
-: Thank You:-
233
Retailer
PROJECT “CEMENT BRANDING”
Name of the respondent
Address
Int. Name Date:
Centers Mumbai 1 Delhi 3
Kolkata 2 Chennai 4
Good Morning! ….. I am a research scholar pursuing a Ph.D. My research deals in branding of
cement. This survey is purely an academic survey as part of my Ph. D. research. In this respect I
would like to ask you questions about Cement industry. I assure you that the responses of this
survey will be kept completely confidential and no response will be traced back to an individual.
Section-I
1. Could you please tell me, do you stock any cement brands in your store?
Yes 1 Continue No 2 Terminate
2. Could you please tell me, what are the top 3 factors that customers consider when purchasing a
cement brand?
1. _______________________________________________________________
2. _______________________________________________________________
3. _______________________________________________________________
3a. Could you please tell me, which brands of cement do you stock?
b.Could you please tell me, which brands of cement you recommend your customers?
c. Could you please tell me, which brands of cement you don‘t recommend your customers?
234
Brands Q. 3a Q. 3b Q. 3c
ACC 1 1 1
Ambuja 2 2 2
Binani 3 3 3
Birla 4 4 4
Buland (Jaypee) 5 5 5
Buniyad (Jaypee) 6 6 6
Century (B.K. Birla) 7 7 7
Dalmia 8 8 8
Grasim (Aditya Birla) 9 9 9
India Cements 10 10 10
J.K Laxmi 11 11 11
KCP 12 12 12
Lafarge 13 13 13
Larsen & Toubro 14 14 14
Malabaar 15 15 15
Orient 16 16 16
Sanghi 17 17 17
Ultra Tech (Aditya Birla) 18 18 18
Others…
Others…
Record brands coded in Q.3b.
d. Could you please tell me, the reason for recommending the following brand/brands.
Brands Reasons
Record brands coded in Q.3c.
235
e. Could you please tell me, the reason for not recommending the following brand /
brands.
Brands Reasons
4.Could you please tell me, according to you which are the top three cement brands and also give
reasons for the same?
Rank Brands Reasons
1
2
3
Section-II (Perception of Brand)
5.Could you please tell me, how important a brand name is for you while stocking cement brands?
Please rate on a 3 point scale where 3 means “Very important”& 1 means “Unimportant”
6. Could you please tell me the reasons for the same?
Important Neither Important
Nor Unimportant
Unimportant
3 2 1
236
7. Could you please tell me, what according to you is the difference between national & local
brands?
8. Could you please tell me, which brands have more demand?
Local Brands 1 National Brands 2
9. Could you please tell me, reasons for the same.
10. a Could you please tell me, whom do you recommend local brands?
b. Could you please tell me, whom do you recommend national brands?
Local
Q. 10 a
National
Q. 10 b
1. Mason 1 1
2. Contractor 2 2
3. Architect 3 3
4. IHB 4 4
c. Could you please tell me, reason for recommending local brands to …….
d. Could you please tell me, reason for recommending national brands to ……..
237
11. Could you please rate the above three cement brands on the following statements on a 3-point
scale, where „3‟ is “Agree” and „1‟ is “Disagree” based on your understanding.
(Write the brands coded in Q.4 under Brand 1, Brand 2 and Brand 3).
Statements Brand 1 Brand 2 Brand3
Its quality is best in the market
It is affordable
It is value for money
It is cheaper than others
It is easily available
It is preferred by most of the customers
It is a reputed brand
It has good loyalty programs
It is a trustworthy brand
12.Now I am going to read out few statements, please rate your agreement level on a 3 point
scale where 3 means “Agree” and 1 is “Disagree”.
Statements Agree
Neither Agree
Nor Disagree
Disagree
Even though there are many brands,
I always stock the same brand.
3 2 1
I have very little interest in the brand name.
3 2 1
There are so many brands that I often get
confused.
3 2 1
I would rather stock brands that I
usually have than keep something I am not sure of.
3 2 1
I stock only established brands.
3 2 1
I wait for others to try a new brand
before suggesting it to my customers.
3 2 1
I like to recommend new brands to customers. 3 2 1
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National brands provide better quality than
local brands.
3 2 1
National brands are available everywhere
as compared to local brands.
3 2 1
Local brands are cheaper than national brands.
3 2 1
13. Could you please tell me, according to you, what should a company do to promote its brand?
Section III
14. Could you please tell me, on an average what is your annual income?
Up to 2 lakhs 1 6,00,001- 8,00,000 4
2,00,001- 4,00,000 2 8,00,001- 10,00,000 5
4,00,001- 6,00,000 3 More than 10,00,000 6
15. Could you please tell me, do you give any credit facilities to your customers?
Yes 1 No 2
16. Could you please tell me, do you get any freebies/special offers from any company?
Yes 1 No 2
Go to Q19. if coded
2
17. Could you please tell me, do these freebies/special offers affect your sales in any way?
Yes 1 No 2
Go to Q19. if coded 2
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18. Could you please tell me, how does it affect your sales?
19. Could you please tell me, out of your total customers, how many (%) are ……..?
Mason
Individuals (End Users)
Contractors
Others…
Total 100
-: Thank You:-
240
Architect
PROJECT “CEMENT BRANDING”
Architect
Name of the respondent
Address
Int. Name Date:
Centers Mumbai 1 Delhi 3
Kolkata 2 Chennai 4
Good Morning! ….. I am a research scholar pursuing a Ph.D. My research deals in branding of
cement. This survey is purely an academic survey as part of my Ph. D. research. In this respect I
would like to ask you questions about Cement industry. I assure you that the responses of this
survey will be kept completely confidential and no response will be traced back to an individual.
Section-I
1. We are doing a study on cement industry and hence would like to understand the influences
(your) role for the same. Could you please give me your valuable comments?
a. Scope of cement industry (Could you please give your inputs on the same,
keeping downfall in real-estate / recession, bank lTotaln refusal etc…. in mind)
b. Major Players (Could you please tell me, who are the major players and why are they known
as major player)
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c. Triggers for selecting a good cement brand….. based on what parameters
d. Barriers in the category due to which you will reject a cement brand
e. Seasonal effect if any….. due to weather condition
f. Role of pricing. (how to define a particular brand as VFM)
g. Influencers/experts role in recommending a cement brand
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Section-II (Perception of Brand)
2.Could you please tell me, how important a brand name is for you while suggesting a cement
brand? Please rate on a 5 point scale where 5 means “Very important”& 1 means “Not at all
important”
3. Could you please tell me, the reasons for the same.
4. Could you please tell me, what according to you is the difference between national & local brands?
5. Could you please tell me, what according to you are the parameters for recommending local
brands & National Brands?
Local :
National :
6. a. Could you please tell me, according to you which are the top three cement brands? (Write
under Brand 1, Brand 2 and Brand 3)
b. Could you please rate the above three cement brands on the following statements on a 5-
point scale, where „5‟ is “Strongly agree” and „1‟ is “Strongly disagree” based on your
understanding.
Statements Brand 1 Brand 2 Brand3
Its quality is best in the market
It is value for money
It is cheaper than others
Very Important Important Ok Not so Important Not at all Important
5 4 3 2 1
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It is easily available
It is a reputed brand
It has good loyalty programs
It is a trustworthy brand
7. Could you please tell me, the number of years you have been in this
business?
Less than 5 years 1 10-15 years 3 20-25 years 5
5-10 years 2 15-20 years 4 More than 25 years 6
8. Could you please tell me, the type of work handled by you?
Residential 1 Corporate 3
Commercial 2 Large projects 4
9. Could you please tell me, who are your major clients?
10. Could you please tell me, what a company should do so that you recommend their brand to
your clients?
-: Thank You:-
244
PROJECT “CEMENT BRANDING” IHB
Name of the respondent
Address
Int. Name Date:
Centers Mumbai 1 Delhi 3
Kolkata 2 Chennai 4
Good Morning! ….. I am a research scholar pursuing a Ph.D. My research deals in branding of
cement. This survey is purely an academic survey as part of my Ph. D. research. In this respect I
would like to ask you questions about Cement industry. I assure you that the responses of this
survey will be kept completely confidential and no response will be traced back to an individual.
Section-I
1. Could you please tell me, when did you construct your house?
1-4 months back 1 9-12 months back 3
5-8 months back 2 More than 12 months back 4
Terminate if coded 4
2. a Could you please tell me, what is the area of the house constructed?
b. Could you please tell me the number of floors in your house?
Q.2a
Area
Q.2b
Number of floors
One 1 Three 3
Two 2 Four 4
Others…
3. Could you please tell me, how did you go about constructing your house?
I planned and hired mason services. 1
I hired a contractor for constructing the house. 2
I assigned the entire project to an architect. 3
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Others…
4. Could you please tell me, who decided on the cement brand used for the construction work?
Statements Code
I decided which brand to use … 1 Continue
I let the other party decide which brand to use according to their
preference…
2 Terminate
I suggested various brands but the final decision was taken by the
other party…
3 Continue
We decided mutually which brand to use… 4 Continue
5.Could you please tell me, according to you, what are the top 3 factors while considering
a cement brand?
1. _______________________________________________________________
2. _______________________________________________________________
3. _______________________________________________________________
6 a. Could you please tell me, which are the cement brands that you considered for constructing
your house?
b. Could you please tell me, which is/are the cement brand/brands that you used for the construction
work?
Brands Q.6a Q.6b
ACC 1 1
Ambuja 2 2
Binani 3 3
Birla 4 4
Buland (Jaypee) 5 5
246
Buniyad (Jaypee) 6 6
Century (B.K. Birla) 7 7
Dalmia 8 8
Grasim (Aditya Birla) 9 9
India Cements 10 10
J.K Laxmi 11 11
KCP 12 12
Lafarge 13 13
Larsen & Toubro 14 14
Malabaar 15 15
Orient 16 16
Sanghi 17 17
Ultra Tech (Aditya Birla) 18 18
Others…
Others…
Record brands coded in Q.6b.
c. Could you please tell me, the reason using ……… brand / brands.
Brands Reasons
7.Could you please tell me, according to you which are the top three cement brands and also give
reasons for the same?
Rank Brands Reasons
1
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2
3
Section-II (Perception of Brand) 8.Could you please tell me, how important a brand name is for you while purchasing cement? Please
rate on a 3 point scale where 3 means “Important”&1 means “Unimportant”
9. Could you please tell me the reasons for the same?
10. Could you please tell me, what according to you is the difference between national & local
brands?
11. Could you please rate the above three cement brands on the following statements on a 3-point
scale, where „3‟ is “Agree” and „1‟ is “Disagree” based on your understanding.
(Write the brands coded in Q.7 under Brand 1, Brand 2 and Brand 3).
Statements Brand 1 Brand 2 Brand 3
Its quality is best in the market
It is affordable
It is value for money
Important Neither Important
Nor Unimportant
Unimportant
3 2 1
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It is cheaper than others
It is easily available
It is a reputed brand
It is a trustworthy brand
12.Now I am going to read out few statements, please rate your agreement level on a 3 point
scale where 3 means “Agree” and 1 is “Disagree”.
Statements Agree Neither Agree
Nor Disagree
Disagree
I have very little interest in the brand name.
3 2 1
There are so many brands that I often get
confused.
3 2 1
I will buy only established brands.
3 2 1
I would wait for others to try a new brand
then try it myself.
3 2 1
National brands provide better quality than
local brands.
3 2 1
National brands are available everywhere
as compared to local brands.
3 2 1
Local brands are cheaper than national
brands.
3 2 1
13. Could you please tell me, according to you, what should a company do to promote its brand?
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Demographics
14. Could you please tell me, what is your as well as the chief wage earners (CWE) occupation
and education?
-: Thank You:-
Occupation Education SEC
Respondents
CWE