All the major players are jumping on to the bandwagon of "Premium Brands" in order to reap benefits they offer viz. pricing power and profitability.
Unless cement companies show value in their products or services, cement will be continued to be looked upon as a commodity and it will not enjoy any premium or preference. So, a lot of cement companies have launched premium brands under their umbrella to tap premium clientele, which imparts them better pricing power and boost profitability.
The three basic characteristics of premium brands of cement are consistency and superior quality and technology. Thus, premium brands command customer attention through breakthrough technologies that improves the performance of cement, and offer additional benefits of higher initial strength, better workability and spread, increased durability, corrosion resistance and low heat of hydration properties.
Premium brands promise to deliver better value over and above normal cement. In cement, the first attribute of a premium brand is "consistency", which plays a very important role in branding. The next is "superior quality", which is guaranteed throughout the year and in every bag. It is followed by technical services on the ground. Cement being a highly-technical product, there is a lot of technology and standard procedures to be followed in case of premium or value added products, on which masons and others users should be appraised of. These are the benchmarks followed by Bharati Cement since inception, with the catch line "Three times better".
"While most brands choose to focus primarily on (clichTd) product features like strength and trust; each brand in the Nuvoco portfolio is clearly distinguished on either product propositions or unique consumer benefits," says Madhumita Basu, Chief Strategy and Marketing Officer, Nuvoco Vistas. She has cited the example of Void Reduction Technology (VRT), which strengthens a structure from within and increases its longevity, is a differentiating factor for Duraguard.
Nuvoco started its brand building journey since its inception in 1999. Concreto, today, is a "Gold Standard" for slag cement in the markets where it is available, consistently delivering the highest brand equity in the category over the last decade. Concreto has its "5 Star Advantage" that translates into unique consumer benefits, and enables the users to construct "good homes" that reflect their value system in life, the company claims.
Dalmia Cement, the country's fourth largest producer of cement, launched its first premium brand, Dalmia DSP Cement in the year 2016. "Dalmia DSP is a specialised, one-of-its-kind offering specifically engineered for concreting or "Dhalai",' says Ujjwal Batria, COO, Dalmia Cement (Bharat). As claimed by the company, the advantages that the product offers include - Gives durable construction, optimizes setting time, anti-corrosive denser cement, better coverage and high yield of concrete, and finally, it comes in an innovative BOPP tamper proof and shower resistant packaging.
Bharathi has launched a value added product Bharati Ultrafast in the blended cement category. Technically, blended cements are far superior because of low heat of hydration, leading to dense concrete, with a fast setting ability.
JK Cement has recently added a premium grey cement product to its portfolio - JK Super Strong - that is manufactured with MPET - a new breakthrough technology in cement production that improves the performance of cement.
Establishing a brand is a matter of building, communicating and delivering on a promise to consumers. This can take many years whether product is Cement or in any other product category. The costs of creating a premium brand is typically high in the initial years, mainly in the form of launch expenses and sustained marketing communication.
"Our premium products meet the discerning needs of the customer and delivers on a set of customer benefits which lead to customer satisfaction, loyalty and advocacy of the brand. This in turn propels growth and increase in market share," says Batria.
Strength is the cement category truth and many brands have tried communicating strength in various ways."However, at Nuvoco, we have focussed on product attributes which helps the consumers to view our product offering uniquely. For instance, the PPC category has less molecular gaps as compared to other types of cement. In sharing this insight with our customers; we communicate that our Duraguard cement has VRT, which strengthens structures from within and increases their longevity by making concrete impenetrable. This works as a Reason to Believe (RTB)," says Basu. "We do not look at a range in terms of "Premium Brands". Our endeavour is to understand customer needs and develop the right value added products and solutions for him. We refer to this range as Value Added Products (VAP) and Expert Care Solution (ECS)," Basu adds.
There are several mergers and acquisitions that have taken place in the cement industry over the years leading to transition or assimilation of brands into the acquirer company, the major examples being UltraTech Cement, Dalmia Cement and Nuvoco. UltraTech embarked on a branding journey after the acquisition of L&T Cement in 2004 and have ever since integrated new acquisitions under a single brand. Its recent acquisition is Binani Cement, through NCLT process.
"We had a strong brand in Tamil Nadu and Kerala by the name of"Vajram". We have successfully transitioned this brand to Dalmia Cement in the recent past, without disrupting the market at all. This has been possible due to proper communication to channel partners, influencers and end consumers," says Batria.
Nuvoco underwent a transition from Lafarge a couple of years ago. The name Lafarge had a brand equity that had been built over a period of time. "During our transition, we were careful to ensure that the values and goodwill that was associated with our legacy name continued to the new organisation. A well defined four step process was chalked out - embrace change, scenario building and planning, deconstructing the brand DNA, and D-Day Planning and Execution," says Basu. The names of the cement products did not change, which helped in maintaining the continuity.
Despite arguments that cement is a "commodity" getting louder, the industry veterans still feel that the argument was only a myth and that branding will remain a reality in the industry going ahead whether it is in case of bagged cement or bulk cement, including ready mix concrete (RMC).