Cement is seen more as a commodity than a specialised product
Asst Vice President - Marketing, Sagar Cements
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.