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VOLUME 04 BEACON Mar 2016 i ISSUE 03

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VOLUME 04BEACONMar 2016

i ISSUE 03

VOLUME 04BEACON ISSUE 02FEB 2016

ContentsABOUT US

OUR TEAM

INDUSTRY ANALYSIS

BRAND ANALYSIS

CASE ANALYSIS

CONCEPT OF THE MONTH:SEO

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OUR PRESENCE

ABOUT US

VISION

The SIMCON - SIMSREE consulting club is an initiative started in 2012 for those students in pursuit of excellence in management consulting and strategic management. Aimed at creating awareness among the students about consultancy as a discipline, the club strives to maintain strong relations with top consultancy firms and provide platform to craft highly skilled & competent consultants from SIMSREE. The club is a resource for information about consulting and a place for students to obtain real-world consulting experience.

SIMCON provides an avenue of interaction among faculty, students and alumni through competitions, live projects, guest lectures, and conclaves. For this purpose the club has also been publishing its monthly newsletter – BEACON (BE A CONSULTANT) and maintains a FACEBOOK PAGE where latest news and development in the consulting industry are posted.

MISSIONTo create awareness amongst the students about consulting industry & its latest trends.

To maintain strong relations with top consultancy firms.

To provide platform to craft highly skilled & competent consultants from SIMSREE.

To provide exposure to students via competitions, live projects, guest lectures & conclaves.

Contributions invited:To make this feature a successful effort, we seek continued involvement and contribution from our readers, that is YOU. We invite articles, research papers, and trivia on themes related to consulting. Be it industry news, consulting trends, a joke, a cartoon or feedback, we are eager to hear from you. So go ahead, do your research, pen down your thoughts and mail your entries to [email protected].

Best Regards,SIMCON - SIMSREE CONSULTING CLUB

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OUR TEAM

ARPIT agrawal

ASHAY DHURI

HUZEFA BODABHAIWALA

KARAN CHOPRA

NAMAN CHANDAK

praCHI KORE

SARANG KULKARNI

YOGESH MOHATA

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CEMENTINDUSTRY ANALYSIS

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CEMENTINDUSTRY ANALYSIS

IntroductionIndia is the second largest producer of cement in the world. India's cement industry is a vital part of its economy, providing employment to more than a million people, directly or indirectly. Ever since it was deregulated in 1982, the Indian cement industry has attracted huge investments, both from Indian as well as foreign investors.

India has a lot of potential for development in the infrastructure and construction sector and the cement sector is expected to largely benefit from it. Some of the recent major government initiatives such as development of smart cities are expected to provide a major boost to the sector.

Expecting such developments in the country and aided by suitable government foreign policies, several foreign players have invested in the country in the recent past. A significant factor which aids the growth of this sector is the ready availability of the raw materials for making cement, such as limestone and coal.

Market Size

Cement demand in India is expected to increase due to government’s push for large infrastructure projects, leading to 45 million tonnes of cement needed in the next three to four years.India's cement demand is expected to reach 550-600 million tonnes per annum by 2025. To meet the rise in demand, cement companies are expected to add 56 million tonnes (MT) capacity over the next three years. The cement capacity in India may register a growth of eight per cent by next year end to 395 MT from the current level of 366 MT. It may increase further to 421 MT by the end of 2017. The country's per capita consumption stands at around 190 kg.The Indian cement industry is dominated by a few companies. The top 20 cement companies account for almost 70 per cent of the total cement production of the country. A total of 188 large cement plants together account for 97 per cent of the total installed capacity in the country, with 365 small plants account for the rest.

Overview

Major Players

1. OCL India Ltd.2. Orient Cement3. Heidelberg Cement4. Rain Industries Ltd5. Prism Cement Ltd.6. India Cements Ltd.7. Birla Corporation Ltd.8. Madras Cements Ltd.9. ACC Ltd.10.JK Cement11.Jaypee Group12.Binani Cement13.Ambuja Cement14.UltraTech Cement

Cement Production In India

Cement production increased at a CAGR of 6.7 per cent to 270.32 million tonnes over FY07–15. As per the 12th Five Year Plan, production is expected to reach 407 million tonnes by FY17. Availability of fly-ash (from thermal power plants) and use of advance technology has increased production of blended cement.Cement Plants In India

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Currently, India has 209 large cement plants across states and is among the top ten exporters both by value and volume Andhra Pradesh is the leading state with 40 large cement plants, followed by Tamil Nadu and Rajasthan having 21 and 20 plants, respectively Major cement clusters include - Satna (Madhya Pradesh), Gulbarga (Karnataka), Yerranguntla (Andhra Pradesh), Nalgonda (Andhra Pradesh) and Chandoria (Rajasthan).

Notable Trends

1. Increasing presence of cement players • Presence of small and mid-size cement

players across regions is increasing, which helps to diminish market concentration of industry leaders

• A large number of foreign players have also entered the market owing to the profit margins, constant demand and right valuation.

• Cement companies will go for the global listings either through the FCCB route or the GDR route

2. Tie – up with overseas • India has joined hands with Switzerland

to reduce energy consumption and develop newer methods in the country for more efficient cement production, which would help India meet its rising demand for cement in the infrastructure sector

3. Housing for All • As per the Union Budget 2015 – 16,

there has been a boost for low – cost housing

• Thrust on infrastructure development and Housing for All with 2 crore houses in Urban areas and 4 Rural areas is likely to revive the demand for cement sector

• Housing sector is considered to drive the cement industries in India to a great extent, which held nearly 67 per cent of the total cement consumption in India.

Major Demand Drivers For The Sector

1. Housing Growth - The Housing segment accounts for a major portion of the total domestic demand for cement in India

• Real estate market is expected to grow at a CAGR of 17.2 per cent over 2011–15 to USD126 billion

• Growing urbanisation, an increasing number of households and higher employment are primarily driving the demand for housing, accounting for 67 per cent of the total consumption

• Initiatives by the government are expected to provide an impetus to construction activity in rural and semi-urban areas through large infrastructure and housing development projects respectively

2. Infrastructure Growth - The government is strongly focused on infrastructure development to boost economic growth and is aiming for 100 smart cities

• It plans to increase investment in infrastructure to USD1 trillion in the 12th Five Year Plan (2012–17), compared with USD514 billion under the 11th Five Year Plan (2007–12)

• Infrastructure projects such as Dedicated Freight Corridors as well as new and upgraded airports and ports are expected to further drive construction activity

• The government intends to expand the capacity of the railways and the facilities for handling and storage to ease the transportation of cement and reduce transportation costs

3. Government Initiatives towards New Schemes - Initiatives by the new government such as housing for all, smart cities, Swachh Bharat campaign, infrastructure spending, concrete roads initiative and an increase in allocation of funds to states are likely to see a positive impact on the industry in the next three-six months.

• The government’s recent focus on road projects and an increase in state allocations will drive infrastructure and housing demand which will indeed drive the market for cement industry

• Projects like smart cities and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is expected to lead a surge in the demand for cement.

4. Development in Metro, Roads, Airports - The metro rail projects in Mumbai, Bangalore and Hyderabad and the expansion phase in Delhi

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drives cement demand • Airports modernization across major cities will also expand demand for cement industry

• The latest development in the Ahmedabad Metro Rail Project has also driven the cement demand to a large extent.

5. Urbanisation and industrialisation development in the country - The new urban development mission will focus on development of 500 cities having population of more than 100,000 and some cities of religious and tourist importance. Infrastructure is a priority for the government’s economic policy; funding from private as well as public sectors is set to increase sharply in the near term which would anticipate the demand of cement industry in India.

Porter’s Five Force Analysis

References

IBEF,Business maps of India

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WALMARTBRAND ANALYSIS

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IntroductionToday, Walton’s 5&10 has become Walmart Museum. At that time, no one would have thought that this store would be the seed point for World’s biggest re-tail store. Here, visitors step into the past with infor-mation, images and items from the past, learn about history and Mr. Sam Walton’s life which paved the way for Walmart’s formation. After completing army service in 1945, Mr. Sam Wal-ton received retail experience. He opened a store named Walton’s 5 & 10 on the downtown square of Bentonville. He had a great success in it and journey for Walmart started. He opened his 1st Walmart store in 1962 in Rogers, Arkansas. The idea of Walmart was based upon providing great customer service and of-fering low prices. Nobody at that time believed this would work. Also, at the time of opening of store Mr. Sam Walton faced problems. But as we know, in the end it had success more than anyone could imagine. It went national and by 1970 it got listed on NY stock exchange. Today Walmart has more than 11,000 stores in 27 countries and has 2.2 million associates. When Mr. Sam Walton received Medal of Freedom in 1992, he opined his thoughts. This has propelled Walmart into action so that they can save people’s money and help them live better life. Mr. Walton made his associates partners. He believed that partnership would make them care for the com-pany and they would give better service to customers. This was another reason behind Walmart’s success. Walmart History video: https://www.youtube.com/watch?v=q_hqa25bsYo

As the Walmart grew it had different store formats. These are as follows:

Walmart LogoWalmart logo has undergone a lot of changes since its inception. Walmart was launched without a logo, but within 2 years company had its logo. Along with its first official logo they developed one Discount City mark. It showed what Walmart cared for i.e. selling at low price and customer satisfaction. This Discount City mark was never used in annual reports. Around 20 years after that Walmart had fresh logo. After that they replaced hyphen with star and changed the co-lour to blue.

In 2008, Walmart launched this logo. It made it look friendlier, softer and warmer. The yellow sun-shape is called “the Spark”. It indicates inspiration, innova-tion and people trying to bring prices down which can benefit the customers. STP AnalysisSegmentation Geographical segmentation- It is segmentation based on locations. Walmart has stores in 27 countries. In U.S., it has stores in 50 states , Washington D.C. and Puerto Rico. So, in different areas, people need differ-ent products. Also, within one country one can divide regions by big cities, small cities and towns. Demographic Segmentation Based on income group, higher, middle and poor in-come class are roughly 3 types. Based on age, children, moms, middle-aged and old people are the different age groups. Behavioural segmentation- It is based on occasions,

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benefits provided, user status and usage rate. Targeting Since, its inception its strategy was to focus on low prices to cater to middle class and poor people. This strategy succeeded in U.S. Though in 2007, it changed its slogan to “Save money. Live better.” to widen the target market. For children, they focus on sales of toys. They sold more toys than Toy R Us in late 1990s. With the big supermarkets they can cater to all age groups. It basically targets the whole family.

Walmart offers different types of sales to attract cus-tomers. Its customers are repeat customer. So, the us-age rate is high, as it serves more than 200 million cus-tomers per week and also, grocery shopping generally has high usage rate.

Positioning

If you look at all Walmart ads, it focuses more on pric-es of the merchandise rather than quality, features, etc. It shows that since the beginning they focused on ‘great value and great service’. It positioned itself as a one stop platform for all the products. It really followed the concept of ‘Everything under one roof ’. Walmart initially had slogan “Always Low prices” which indicated that Walmart will provide everything at low prices. It was in line with the Mr. Walton’s goals. But, in 1994 Walmart faced charges due to this slogan, as this slogan could be misleading. Also, few thought that low prices meant low wages for employees, safety issues, etc.

To give it a positive look they came up with the new slogan in September, 2007 “Save money. Live better.” It clearly indicates that these low prices help people live better. Along with this slogan, few commercials were launched in which they asked “What people can do with the $2500 a year, or so, they saved by shopping at Walmart?” It clearly hit the target. Also, during recession in 2007-08 people moved to-wards low cost supermarkets which could be the rea-son behind increase in sales of Walmart at that time. Customer service is another front on which they try to gain market share. They believe in providing great shopping experience to customers.

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Business StrategyWalmart receives more than 50% of its revenue from grocery. Walmart doesn’t focus on diversity. Grocery was always its priority. Walmart sells at low prices. So, they have less profit margin but they focus on volume sales. To reduce the cost their supply chain management plays an import-ant role. Walmart has maintained its place in Gartner’s top 20 supply chains for almost 5 years.Walmart with its big stores purchases in large volumes which reduces the cost for them and also gives them power to negotiate. Walmart works in key areas: inventory, distribution, own transportation, technology. Walmart maintains very less inventory at store level which allows employees to operate more efficiently, also it allows them to provide more variety and high sales. They can order more products as per demand. Also, when online buyer orders something, delivery from distribution center is easier rather than from store. Cross-Docking- It means without storing the prod-ucts, it directly unloads products from Suppliers’

truck trailers and loads into outbound truck trailers. This happens at Walmart distribution centers. It re-duces the storage cost, carrying cost and time required for the product to reach to the shelf. This has reduced the cost significantly which can be passed on to cus-tomers.

Walmart has fewer intermediaries. It directly deals with manufacturers and farmers which helps them cut the costs further. Also, they have VMI (Vendor Man-aged Inventory) which makes vendors responsible for managing their own inventory at warehouses. E.g. P&GTechnology- It helps them to predict demand, track inventory levels. Continuous analysis of data at cash counter helps them understand the sales of products, its pattern etc. So, the products which don’t sale much can be removed. Walmart shares information with their suppliers so they can supply accordingly.Walmart first started use of bar codes then RFID technique to track the inventory and sales. RFID also helped them in tracking the item when it was on move. This efficiency in supply chain management has helped Walmart to succeed in their strategy.

ReferenceWalmart,Reuters

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MTVBRAND ANALYSIS

JOHNSON & JOHNSONCASE STUDY ANALYSIS

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MTVBRAND ANALYSIS

Introduction To The Case Johnson & Johnson which was founded in 1886, is an American multinational involved in manufacturing medical devices, consumer packaged goods and phar-maceutical products. Headquartered in New Jersey, the company has about 250 subsidiary companies and operates in over 57 countries while its products are sold in 175 countries. Some of its well-known brands include Band-Aid, Clean & Clear, Acuvue, Benadryl, Listerine and Neutrogena.

The company had been performing very well since its foundation. But suddenly, in the fall of 1982, somehow (most likely because of tampering), cyanide- laced Ty-lenol capsules were put on the shelves of pharmacies in the Chicago area. Seven unsuspecting consumers died after consuming the cyanide- laced capsules. In fact, Johnson & Johnson itself came to know about the cyanide-laced capsules only when a news reporter from the Chicago area called the company requesting its comments.

BackgroundIn 1982, Tylenol, an over- the- counter painkiller mar-keted by McNeil Consumer Products, a division of Johnson & Johnson, was exhibiting excellent perfor-mance. The following points explain the importance of the product for the company

1. It accounted for 19 percent of Johnson & Johnson’s corporate profits during the first three quarters of 1982, 13 percent of Johnson & Johnson’s year- to- year sales growth, and 33 percent of the company’s year- to- year profit growth.

2. With a 37 percent market share, Tylenol was, by far, the leader among painkillers. In fact, its share was greater than the combined market shares of the next four leading painkillers combined.

3. Had Tylenol been an independent corporate enti-ty, its profits would have placed it in the top half of the Fortune 500.

Problems FacedThe events made for sensational headlines, especially given the high level of trust enjoyed by Tylenol from the American public. The US newspapers ran as many as 100,000 separate news stories over the duration of the crisis. A post- crisis study by Johnson & Johnson found that within the first week of the crisis, over 90 percent of the American population was aware of the deaths in Chicago. One of the news clipping services claimed that the Tylenol crisis story had been given the widest US news coverage since the assassination of President John F. Kennedy. The story was carried by all three television networks, and CBS’ coverage, which focused on the death of a 12-year-old girl from consuming the contaminated Tylenol, evoked strong emotions.

Soon after the eruption of the crisis, Tylenol’s share of the US$1.2 billion painkiller market fell to 7 percent. Joseph Riccardo of Bear Stearns investment bank said, “The consensus among shrewd advertising executives on Madison Avenue was that the brand name would never recover.” In a consumer poll, a majority of Ty-lenol users said they probably would never return to the capsules. Advertising guru Jerry Della Femina told the New York Times in the first few days following the crisis, “I don’t think they can ever sell another product under that name. There may be an advertising person who thinks he can solve this and if they find him, I want to hire him, because then I want him to turn our water cooler into a wine cooler.”

Recovery StrategyFaced with this unprecedented crisis, Johnson & John-son’s CEO, Jim Burke, acted decisively. He formed a seven-member strategy team and tasked them with addressing two key questions

1. How do we protect the people?

2. How do we save this product?

To address the first question, the company undertook a variety of steps:

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• It immediately alerted consumers across the na-tion, via the media, not to consume Tylenol. The company also instructed the consumers not to resume using the product until the extent of the tampering could be determined.

• It stopped all production and advertising of Tyle-nol.

• It withdrew all Tylenol capsules from the store shelves in Chicago and surrounding areas.

• Though it found only two more contaminated bot-tles, in the interest of protecting the customers, the company ordered a national withdrawal of every capsule. By undertaking this withdrawal, the com-pany was effectively signaling to the customers that their safety was paramount even if it cost the company hundreds of millions of dollars.

Johnson & Johnson successfully used the media, both PR and paid advertising, to communicate informa-tion about its response as well as its evolving strategy through the duration of the crisis. Generally, before the crisis, Johnson & Johnson did not actively seek press coverage, but despite this inexperience, it recog-nized the importance of open communication during a crisis, especially if Tylenol was to be “saved.”First it issued a national alert to tell the public not to use the Tylenol product. It also established a toll-free ho-tline to respond to inquiries from customers concern-ing the safety of Tylenol. Second, it also established a toll-free line for news organizations to call and receive prerecorded daily messages with updated statements about the crisis. Next, several major press conferences were held at corporate headquarters. Within hours of the first reports, an internal video staff team set up a live television feed via satellite to the New York metro area. This allowed all press conferences to go national.

Fourth, rather than shying away from media, Jim Burke confronted the issue by going on 60 Minutes (a popular, longstanding news show) and the Dona-hue Show (a popular talk show) and informing the public of his company’s initiatives. And fifth, the com-pany cooperated fully with the government. Tyrone Fahner, the Illinois Attorney General in charge of the investigation, was impressed that not only did he get whatever he requested from Johnson & Johnson, but the company was also proactive in proposing a large reward of US$100,000 for catching the perpetrator.With regard to Johnson & Johnson’s PR strategy, Dieu-donnee Ten Berge had the following comment: “The Tylenol crisis is without a doubt the most exemplary

case ever known in the history of crisis communica-tions. Any business executive, who has ever stumbled into a public relations ambush, ought to appreciate the way Johnson & Johnson responded to the Tylenol poisonings. They have effectively demonstrated how major business has to handle a disaster.”Johnson & Johnson also provided the victims’ families with counseling and financial assistance even though it was not responsible for the product tampering. It further developed a tamper- proof triple seal packag-ing (a glued box, a plastic seal over the neck of the bottle, and a foil seal over the mouth of the bottle)—a first for the industry—within six months of the crisis to prevent any similar future incidents. It also devel-oped new random inspection procedures before ship-ments of Tylenol to retailers. To encourage purchases in the short term, customers were given US$2.50 off for purchasing the re- launched Tylenol (or, in fact, any Johnson & Johnson product).Many of Johnson & Johnson’s actions received extensive coverage in the media, which ensured that people were well informed about the concrete steps the company was taking; the constant media coverage also earned sympathy for the company as a victim of a criminal tampering. Within a year, Tylenol’s share had climbed back to 29 percent.Many analysts attributed Johnson & Johnson’s quick response to the fact that it had a credo that was well communicated and shared among company employ-ees. David R. Clare, president of Johnson & Johnson at the time, acknowledged this when he said, “It was the credo that prompted the decisions that enabled us to make the right early decisions that eventually led to the comeback phase.” In the credo, Robert Wood Johnson had stated that the company’s responsibilities were to the consumers and medical professionals us-ing its products, to its employees, to the communities where its people work and live, and to its stockholders. Thanks to the credo, in the time of crisis there was little doubt among either the management or the employ-ees that public/customer safety should be paramount regardless of short- term costs to the company. This commitment was reflected in its actions and proved to be an effective public relations tool as well the key fac-tor behind the resurgence of the Tylenol brand which had been written off by many analysts and observers.Current Situation Johnson & Johnson is facing a similar situation right now where it has been ordered to pay $72 million to the family of the woman, aged 62, from Alabama who died from ovarian cancer.She had used Johnson & Johnson Baby Powder for many years. This has placed the company in a similar crisis that it had witnessed in 1982. It would be interesting to see how they tackle this new problem.m

Referenceindependent,pbs,cbsnews

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SEOCONCEPT OF THE MONTH

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Introduction

All the major search engines such as Google, Yahoo and Bing  have primary search results, where web pages, images, videos or local listings are ranked and shown based on what the search engine considers most relevant to its users.

SEO(Search engine optimization  ) is the process of affecting the visibility of a web page or a  website  in search engine's unpaid results, it is often referred to as "organic", "natural" or "earned" results. In general, the earlier and more frequently a website appears in the search results list, the higher number of visitors it will receive from the users. SEO may be used to target different kinds of search, including local search, image search,  video search, news search,  academic search and industry-specific vertical search engines.

White Hat Versus Black Hat Techniques

SEO techniques can be majorly classified into two broad categories: techniques that search engines ap-prove & recommend as part of good design, and those techniques of which search engines don’t approve. In-dustry commentators have classified these methods, as either white hat, or black hat. White hats tends to gen-erate results that last a long time, whereas black hats anticipate that their sites may eventually be banned either temporarily or permanently once the search en-gines discover what they are doing.SEO techniques are considered to be white hat if it con-forms to the search engines' guidelines and includes no deception. Just following guidelines does not mean white hat SEO, but it is about ensuring that the content a search engine subsequently ranks and indexes is the

same content any user will see. White hat technique can be summed up as creating content not for search engines, but for users.Black hat technique attempts to improve rankings of the website in ways that involve deception or are disapproved of by the search engines. Some black hat technique uses text that is hidden, either as text having colour similar to the background, in an invisible div, or positioning it off screen. Another method gives a different page depending on whether the page is being requested by a search engine or a human visitor, this is known as cloaking.There is also grey hat SEO. This is in between white hat and black hat approaches where the methods em-ployed avoid the site being penalised however those are entirely focused on improving search engine rank-ing and not on producing the best content for users. Sites using black hat methods may be penalized by search engines, either by eliminating their listings from their databases or by reducing their rankings. Such penalties can be applied either by a manual site review or automatically by the search engines' algo-rithms. One example was the February 2006 Google removal of both Ricoh Germany and BMW Germa-ny for use of deceptive practices. Both the companies, however, quickly apologized and fixed their offending pages, and were restored by Google.

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SEO As A Marketing Strategy

SEO may generate an adequate return on investment. However, search engines are not paid for organic search traffic, their algorithms change, and there are no guarantees of continued referrals. Due to this lack of guarantees and certainty, a business that relies heav-ily on search engine traffic can suffer major losses if the search engines stop sending visitors.  Search en-gines can change their algorithms, impacting a web-site's placement, possibly resulting in a serious loss of traffic.SEO is not an appropriate strategy for every web-site, and other Internet marketing strategies can be more effective like paid advertising through pay per click (PPC) campaigns, depending on the site opera-tor's goals. A successful Internet marketing campaign may also depend upon building high quality web pag-es to engage and persuade, setting up  analytics  pro-grams to enable site owners to measure results, and improving a site's conversion rate.

Benefits Of SEO

Increased Traffic Top positions on the search engine result pages receive a majority of the impressions and clicks, so ranking in these top positions can result in significant traffic increases for your website.

ROI SEO provides trackable and quantifiable results, regardless of whether you are an ecommerce or non-ecommerce site so there are no qualms when it comes to ROI. SEO agencies are able to track nearly every aspect of their strategy, like increases in rank-ings, traffic and conversions.

Cost Effectiveness SEO is one of the most cost-effective marketing strat-egies because it targets users who are actively looking for your products and services online. SEO's inbound nature helps businesses save money as opposed to out-bound strategies like cold-calling.

Brand Awareness Being on the first page for your targeted keywords not only helps users to associate your brand with those keywords, but it instils trust, since companies on the first page are generally perceived to be more trust-worthy.

ReferencesSEO