Cement is seen more as a commodity than a specialised product
Cement is seen more as a commodity than a specialised product

Cement is seen more as a commodity than a specialised product

Rajesh Singh
Asst Vice President - Marketing, Sagar Cements
In a market that sees cement as a commodity it is difficult to create a brand identity. Excerpts from the interview with
Rajesh Singh.
What is the thought process behind the preparation of your media plan?
Cement is still considered a commodity. Brands with nation wide presence are able to create some niche, whereas regional brands, despite huge efforts in branding rely mostly on price and availability as undisputed tools for selling volumes. Choosing which media or type of advertising to use is sometimes tricky for small firms with limited budgets and know-how. The mass-media vehicles like television and newspapers are often too expensive for a company that services only a small area û we are able to strike occasionally by local newspapers.

What are the challenges that you foresee in the market and how have you factored them in your marketing strategy?
Marketing in cement industry lies at the critical intersection between sales, customers and field executives. Products do not sell based on the customer´s pick and feel attitude as the third party players like masons, contractors and builders have the buying authority. Pricing naturally becomes an important criterion in such cases.

But then, how low could the price tag be? With rising input costs, price hike is inevitable. How do you plan to tackle this challenge?
The irony is, cement continues to sell at Rs 285-325 across southwest regions despite tremendous increase in cost of raw materials over the last few years. Of late, when the industry made an attempt to jack up the price band after considering the hike in raw material costs, there was a hue and cry from all segments, including the state governments. Across the country, the price of properties - residential and commercial - has gone up phenomenally, also the cost of sand has gone up by 200 per cent, whereas cement prices continue to reel under pressure and consequently low pricing prevails. The industry has incurred huge losses during the last two financial years, and the trend continues during the first quarter 2014-15 too.

How does one create brand differentiation for a product like cement?
It is a difficult preposition to create a niche for products like cement. Apart from the few players with nationwide presence, this is a highly fragmented industry. Blended cement mostly sells in trade segment and OPC takes the major chunk in direct segment. As trade: non trade ratio for most brands is 30:70 the price takes the driver´s seat. In today´s context, all manufacturers are delivering quality product. Cement is seen more as a commodity than as a specialised product and it is difficult to create brand differentiation and stand apart from the rest.

How do you reach construction professionals at differnt level?
We conduct regular meets with Architects, Builders, Contractors, Dealers & Engineers (ABCDE) followed by area wise mason meets. This helps us keep in touch with the key influencers in our business.

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