A STUDY ON BUYING BEHAVIOUR OF CUSTOMERS,

DEALERS AND RETAILERS IN CEMENT INDUSTRYAND

PROMOTION OF RED OXIDE CEMENT

SIP Project report submitted in partial fulfillment of the requirements for the PGDM
programme

By SAKSHI GOYAL

ROLL NO-201600111

SUPERVISERS

1) COMPANY GUIDE-Mr. ASHISH SHARMA

2) FACULTY GUIDE-Dr VSR VIJAYAKUMAR

Institute of Management Technology, Nagpur

2016-2018

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 ACKNOWLEDGEMENT

I would like to express my gratitude for all the people, who extended unending support at all
stages of the project.

I take this opportunity to thank our Professor for giving me the right direction and being
available every time in resolving the difficulties I faced.

This report is a product of not only my sincere efforts but also the guidance and morale support
given by the management of Institute of Management Technology, Nagpur.

I express my sincere gratitude to my corporate guide Mr. Ashish Sharma for sparing his valuable
time in giving the valuable information and suggestions all through, for the successful
completion of project.

Last but not least, I express my sincere gratitude to all the employees at Shree Cement Ltd.,
Jaipur, who have directly or indirectly contributed to the successful completion of the project.

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 TABLE OF CONTENTS

Introduction 5
Statement of Research Problem 5
Objective of Study 6
Need of Study 6
Research Methodology 7
Sampling Technique 7
Company Profile 8
Industry Analysis 11
Data Analysis and Interpretation 15
Findings 27
Recommendations 28
Bibliography 29

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 INTRODUCTION
ABOUT MARKET SURVEY

A market survey is a tool used to gather information about existing or customers satisfaction in a
certain market or population .Researchers select a sample of customers from the population .The
information from the survey is then used to assess attitudes and beliefs, and in turn predict
market behavior. Marketing is a social process by which dealers builders, architecture,
individuals and consumers obtain what they need and want through creating and offering product
and services of value with other. It is the art and science of choosing target makers and getting
keeping and growing customers through creating delivering and communicating superior
customer value. Consumers have their own way of making purchase decisions.

Today in the market there is a tough competition and the technologies are changing day by day
,to become successful in modern market the business organization have to be customer oriented
,they have to look after for building customers.

The information about the market was gathered by visiting customers in the market .while doing
the project attempt was made to get correct information from the customers in the market. After
collecting the detailed information about the market, analysis has to be done.

STATEMENT OF RESEARCH PROBLEM

Today there is immense competition between the top players of cement industry to acquire major
market share and satisfying their customers with the price and quality of the product. An attempt
has been made by this study to study the consumer behavior of cement so that shree cement can
augment its market share.

So this study will help company to design their offerings more appropriately for their dealers and
retailers. It will also help the company to better understand the need of the customers.

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OBJECTIVES OF STUDY

The project was undertaken to cover two main objectives:

1) To carry out market survey for determining the buying behavior of cement dealers,
customers and retailers in Jaipur, Rajasthan.
2) To study the sales and promotion activities undertaken by cement industry in the market
and promotion of Red Oxide Cement (ROC).

NEED OF THE STUDY

Customer is one for whom you satisfy and or need return for some of payment. The Payment
may be money may be time or may be goodwill but there is some form of payment .Satisfaction
is the level of person felt by comparing products perceive in relations expectations.

Satisfaction level is function of the difference between perceived performance and expectations
.If the performance falls short of expectations, the customer is not satisfied. If the performance
matches ,the customers are highly satisfied . If the performance is beyond his expectations the
customer is thrilled.

Customer satisfaction is customers positive or negative feeling about the value that was
perceived as a result of using particular organization.

To know the perception of the customers.

To find out the effective and ineffective factors of Shree cements.
To know the current position of Shree cement in cement industry.

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RESEARCH METHODOLOGY
The research methodology is the way to systematically solve the research problems. The main
objective of the project is to know the market condition of Shree cement and to study the sales
promotion activities undertaken by various cement companies. For attaining the objectives at the
beginning, the research plan was prepared. This includes all the detail of how to go about the
research work of Shree cement limited.

SAMPLING TECHNIQUE
Sampling Technique of the Research is Convenience Sampling.(when population elements are
selected for inclusion in the sample based on the ease of access, it is called Convenience
Sampling.)

SAMPLING AREA
Research sampling area is Jaipur city.

SAMPLE SIZE
Sample size consists of 100 respondents.

SOURCES OF DATA
The descriptive nature of Research necessitates collection of primary data from dealers, retailers
and customers through market survey. Personal interview technique was used and these
interviews were conducted through structured questionnaire. The questions were asked in pre-
arranged manner. The market research is to be conducted for a period of approx 30 days .data is
to be tabulated, analysed and suggestions and recommendations are to be given.

PRIMARY SOURCE OF DATA

Schedule and Observations

SECONDARY SOURCES OF DATA

Company literature and database

Information available on the internet
Prospectus

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 COMPANY PROFILE
Shree Cement Limited is a rapidly growing organization with its core business in cement and
power.SCL commenced operations with a product unit of 0.6 million tons per annum in 1985 at
Bangur Nagar, Beawar, Rajasthan. Today SCL is among the top three cement groups in India in
terms of production with installed capacity of 25.6 million tons per annum.SCL have significant
footprint across the northern and Eastern regions of India. As on 31 March, 2016 business
operations were supported by 5142 employees.

In the cement industry, Shree Cement Limited has been recognized as one of the most energy
and resource efficient companies. Its corporate governance and performance in the social and
financial sector is lauded and appreciated across the country. This reinforces its culture of
sustainable development and inclusive growth.

At present Shree Cement Limited have 3 integrated plants.7 grinding units and have the highest
market share in Rajasthan, Delhi, Haryana and Bihar and are among the top suppliers in Punjab,
West Utter Pradesh and Uttrakhand.

BRAND AND PRODUCTS

Shree Cement Limited product portfolio consists of three brands namely

Shree Jungrodhak Cement

Bangur cement
Rockstrong Cement

POWER GENERATION

Shree Cement Limited has power generation capacity of 6121 MW including waste heat
recovery (WHR) plants of 111 MW capacity as on 31 March, 2016.Our WHR capacity in world
cement industry except China.

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CREDIT RATINGS

Shree Cement Limited has not defaulted in any payment of its obligations since its inception.
Company has retained its AAA long term credit rating by CARE. The credit rating of short
term debt was also reaffirmed at PR 1+ (highest rating) from CARE enabling us to mobilize
funds at optimum costs.

MARKETING

Markets Classification

Primary: Rajasthan
Secondary:Delhi,Punjab,JK,Haryana,Western UP and Uttaranchal
Tertiary:Gujrat,MP and Central UP
There has been a shift from product centric to consumer centric in last few years and
Shree cement has started marketing all its products very aggressively. It enjoys a market
share of 17 percent in Northern India.

CHALLENGES

Product challenges: Bulky and heavy, therefore difficult to sell over large territories
Pricing Challenge: Low Priced
Transport cost challenges: Higher realizations are neutralized by higher freight charges

The company expects to service the dealer network, enhance volumes, focus on unmapped
areas and reduce costs. It expects to focus on Red Oxide brand through stronger awareness
building.

POLICIES

SUSTAINABILITY POLICY: To produce quality cement in an eco-friendly,

healthy and safe working environment in a socially responsible manner with
continual improvement in performance and profitability to the satisfaction of all stake
holders.

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 QUALITY POLICY: To provide products conforming to national standards and
meeting customers requirements to their total satisfaction.
ENERGY POLICY: To reduce to the maximum extent possible the consumption of
energy without impairing productivity.
HUMAN RESOURCE POLICY: Shree Cement Ltd focuses on empowering the
employees and honoring the individuality of every employee.

LATEST DEVELOPMENTS

There has been a decrease in the profit margins of Shree Cement in the last quarter of 2010-2011
and operating profits (before depreciation) have fallen by 9 percent, with power costs jumping 70
percent. The stock has lost 15 percent of market capitalization in the last three months, but there
have been signs of easing of input costs of cement as well some increase in the cement prices. So
shareholders are holding onto their long position and hope. The company registers some growth
input costs like Crude oil has moved down from $127 per barrel in April 2011 to $111 per barrel
now. Fuel costs, mainly of pet coke (petroleum coke), are likely to follow suit. There is good
news on the realization front as well; the all India average cement price stands at Rs 275/ bag
now, up 15 percent since January. There has been a Rs 5-10/bag correction in price in the current
month and is expected to revive, post monsoon.

AWARDS AND RECOGNITION

Golden peacock award for Business Excellence for the year 2013
FICCI-SEDF CSR appreciation certificate in the large enterprise category-2010-11
National Safety Award for the year 2005 which was awarded this year by the Honorable
President of India Smt. Pratibha Patil.(2008-09)
Shree cement was rated among top 20 best companies to work for in India by Business
Today, Mercer and TNS(2008-09)
Award for good performance in cost management by Institute of Cost and Works
Account of India(ICWAI).(2008-09)
First prize for energy conservation at our mines by Indian Bureau of Mines(2008-09)

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 RCCI Excellence Award Recognition of Overall Best Corporate Governance Practices
and Disclosures in Annual Report20 September 2008.

CEMENT INDUSTRY ANALYSIS

There are five forces driving cement industrial competition. Porter (1979) suggests that when the
forces are weak collectively, there is a major opportunity for superior performance. Therefore,
we can conclude that the cement industry is unattractive in mature markets, but attractive in
emerging markets.

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CEMENT COMPANIES SUPPLY CHAIN STRATEGY

Supply chain (SC) operational objectives can be classified in three groups:

Asset Utilization
Customer response and

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 Efficiency

We believe that the cement industry is concentrated on asset utilization with some level of
efficiency. The main reason for this location is that cement companies are focused in
minimizing cost based on the economies of scale generated by their investments in large
manufacturing plants. This is a given condition for all large cement companies in the
industry. Some cement companies are moving towards the other operational objectives to
gain differentiation in the market. One key success factor is the required supply chain
transformation to support this decision.

SUPPLY CHAIN OPERATING MODEL OF CEMENT (PROCESSOR

ANALYSIS)

Cement industry planning process is centralized and optimization oriented. There is no

constraint in the availability of cement main raw materials with the exception of some
countries where subsoil ownership regulations applied. Cement manufacturing is capital and
energy intensive where cement truck delivery is restricted due to its low value to-weight
ratio.

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SUPPLY CHAIN OPERATING MODEL OF CEMENT (PRODUCT
ANALYSIS)

Cement can be characterized as bulk and bagged as shown below. Bulk cement is dominant
in developed countries and its demand is generated by large construction companies and
government. Bagged cement is dominant in emerging markets and is generated by Do-It-
Yourself (DIY) customers and small contractors. Relatively speaking, bulk cement is
functional while bagged cement is innovative. Functional products should have an efficient
supply chain while innovative products should have a responsive supply chain.

LOGISTIC ISSUE

Besides strong demand, eastern and northern region also witnessed price hike due to wagon
unavailability and logistic issues, while demand in southern and the western region remained
tepid, declining off-take from the government infrastructure spending. The capacity
utilization continued to remain higher as the new capacities that came on stream were not
fully stabilized as it happens we may expect falling capacity utilization levels and consequent
impact on pricing and margins. Cement manufacturing is capital and energy intensive
whereas cement truck delivery is restricted due to its low value-to-weight ratio. Functional
products should have an efficient supply chain while innovative products should have an
efficient supply chain while innovative products should have a responsive supply chain.

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DATA ANALYSIS AND INTERPRETATION
To get a better review from the market, the survey consisted of asking questions to customers,
dealers and retailers involved in the cement industry. It helps get a broader view about the
industry. The questions were revolved around four major parameters, which are:

1) Quality
2) Price
3) Brand Image
4) Supply and Services

There were limited numbers of respondents involved in the survey, which are classified as under:

1) 30 Customers
2) 30 Dealers
3) 40 Retailers

Customers include masons, workers, contractors, builders and owner of the construction
property.

Dealers are those which can sell cement brand in good amount which makes them eligible to
have dealership of the brand they sell. A dealer work both ways. They either sell one brand and
be its dealer or can sell multiple brands, while becoming the dealer of only one brand among
many.

Retailers are those sellers which can sell cement either primarily or secondarily, as they are also
engaged in selling other retail items, which implies that cement is not the only commodity that
they sell. The survey questions are displayed from the next page onwards along with the
interpretation, to get a better grip on the subject on whom the survey is done.

QUESTIONNAIRE FOR DEALERS

1. Which brand are you selling?

a) Shree

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b) Ambuja
c) Lafarge
d) JK
e) Ultratech
f) ACC
g) Wonder

INFERENCE-Among the dealers surveyed, Shree cements dealers were maximum (11
in no) out of 30 dealers, while Ambuja comes a close second (10) and wonder, Ultratech
and Lafarges dealers were lowest, each having 1 dealer surveyed.

2 Which factors influence you to become dealer of above brand?

a) Price
b) Quality
c) Consumer demand
d) Relation with company
e) Supply or availability
f) Other

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 INFERENCE: By studying the pie chart, we can see that cement dealers, mostly (8 in
number out of 30) get influenced by other factors when going for dealership which also
includes recommendation from friends or family members which know about the
business. Relation with company comes second while looking for dealership (6 dealers).

Least preference is given to the supply of cement (by 2 dealers) in area where a dealer is
looking to open the store.
3 What type of promotional activity do you expect from company?

Wall /shop painting

a) Mason /contractor meeting

b) POP
c) Gifts

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INFERENCE-The kind of promotional activity, which most of the dealers (11) expect
from company side, is to put more efforts towards Wall/shop painting. Lesser number of
dealers (7) wants the companies to organize timely meetings with contractors and
masons.So, that the company is aware of their view point.

4 What support you expect from the company to increase sale?

a) Promotional Scheme
b) Sales follow-up
c) Service
d) Credit facilities
e) Others

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INFERENCE-The majority of cement dealers (10 out of 30) believe that more
promotional schemes should be laid out by companies in order to increase sales.
While some (9) believe that companies should come out with some other avenues of
support, which could strengthen the bond in between.

5 Do you consider that red oxide cement is a major factor for selling any cement?
a) Yes
b) No
c) Cant say

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INFERENCE-From the above pie chart it is clear that the majority of dealers (19)
think that the presence of Red Oxide in the cement does not guarantee higher sales
volume. Only few (7) of the respondents consider Red Oxide to be a sales boomer.

QUESTIONNAIRE FOR CUSTOMERS

1) Are you satisfied from the quality of cement you are using?
a) Yes
b) No
c) Cant say

INFERENCE-The majority of the customers (18 out of 30) feel satisfied with
the quality of the cement they have used or have been using, while some of
the customer surveyed(6) believed that the quality of cement could be
improved further.

2) Which mode of Information made you aware about the cement brand?
a) Newspapers
b) Hoardings
c) TV ads

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d) Meeting with dealers
e) Others

INFERENCE-It seems that the other mode of information such as a word of

mouth from family/friends is what a majority of customers (13out of 30),
aware about the cement brand which they have used or have been using. Only
few of the customers are made aware and via Meeting with dealers, reading
newspapers and by hoardings. (3, 3 and 2 respectively)

3) Which factor you consider for quality parameter?

a) Initial setting
b) Colour
c) Advised by contractor
d) Already used by known/popular brand

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 INFERENCE-Most of the customers (12 out of 30) surveyed depends on
contractors review regarding the quality of cement while others rely on
technical details like color and setting time (5 and 8, respectively)

4) Do you consider Red Oxide Cement as a major factor while buying any
cement?

a) Yes
b) No
c) Cant Say

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INFERENCE-Half of the total respondents (15 out of 30) do not consider
Red Oxide in cement when going for purchase. But some are positive (9)
on buying or have already used ROC for the construction purposes.

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 QUESTIONNAIRE FOR RETAILERS

1) Do promotional activities affect your choice of buying cement over profitability?

a) Yes
b) No
c) Cant say

INFERENCE-From the above pie chart we see majority of the respondents (29
out of 40) agree that promotional activities has a positive impact on sales. Only, a
few (8) tend to disagree to it.

2) How often do company representatives visit your shop?

a) Mo9yure than once in a month
b) No
c) Cant say

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 INFERENCE-From the above pie chart we see that majority of the
respondents (29 out of 40) agree that promotional activities has a positive
impact on sales. Only a few (8) tend to disagree to it.
3) Do you receive timely supply of cement bags from the company?
a) Yes
b) No
c) Cant say

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 INFERENCE- Maximum numbers of the retailers (32 out of 40) are
appreciative of the supply of cement in time. Only a handful (2) of does not
get timely delivery from the company.

4) Do you consider that Red Oxide Cement is a major factor for selling any cement?
a) Yes
b) No
c) Cant say

INFERENCE-While many of the retailers (15) does not consider red oxide
cement to be major selling factor, on the other hand an equal number of the
respondents(15) do not know what ROC is and hence are unaware about its
properties. A few (10 out of 40) are affirmative that ROC help increase their
sales.

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 FINDINGS
From Dealers
Majority of the dealers were satisfied with the quality of the cement they
were selling, including Shree Cement dealers.
Wall/shop painting is preferred, when promoting the brand.
Red Oxide is not considered as the major factor for selling cement.
From Customers
More than half of them were satisfied with the quality.
Customers prefer advice/recommendation from the contractor while
purchasing cement and also for the quality they rely on contractor,
including Shree Cement customers.
They consider ROC as a major factor, when buying the cement.

From Retailers

Company representatives visit the shop on regular basis.Shree Cement

retailers wants the company to focus more on visits.
They receive timely supply of cement bags.
They do not think ROC as an important factor while selling cement.

GENERAL FINDINGS
Awareness about Red Oxide Cement (ROC) is very little in the
market.
Distribution of POPs is less prevalent in Shree Cement.
Shree Cement has 3 brands, which creates confusion in the
market.
It has a good image in the market, since its been in the market
for a long time now.

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 It has a decent number of dealers and retailers in the market
without spending much on marketing, when compared with its
competitors.

GENERAL RECOMMENDATIONS
Green adhesives should be researched, to cater to the future needs by
dedicating a research lab.
Brand could be endorsed by an Indian personality of repute, who can be
symbolized for strength and power.
Kick start door to door delivery and construction network where the
supply/availability is meager and a helpline connection which not only
educate customers about the quality, but also provide them the construction
solutions like blueprints, general repairs, services by architects/engineers at
reasonable rates.
Shree can opt for oil-well cement as well, along with producing OPC and
PPC.As in future the construction would be towards underwater
establishments.

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BIBLIOGRAPHY

Journal/Newspapers
Annual journal of Shree Cement
Labour and industrial chronicle
Indian cement review

Web sites:

www.shreecement.in
www.google.com
www.wikipedia.com

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