term paper jaypee cements

7/29/2019 Term Paper Jaypee Cements

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Jaypee Cements

Term Paper on Business Marketing

By

Akhil.k

Marketing 1

Roll No-6

USN-1PI11MBA12
http://en.wikipedia.org/wiki/File:Jaypee_Group_Logo.svg


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Table of Contents

Figure number Content Page

number

1.1 The production and sale of Cement/ Clinker 7

1.2 Competitors 7

1.3 Business to business distribution channel 10

1.4 Business to customer distribution channel 10

1.5 Undifferentiated Market Selection 14

1.6 Differentiated Market Selection 14

1.7 Concentrated Market Selection 15

1.8 Product Life Cycle 16

1.9 Business to business distribution channel 17

2.0 Business to customer distribution channel 18

2.1 Print Advertisement 23


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CEMENT-

Cement is a mixture of compounds, consisting mainly of silicates and aluminates of

calcium, formed out of calcium oxide, silica, aluminium oxide and iron oxide. Cement is

manufactured by burning a mixture of limestone and clay at high temperatures in a kiln, and thenfinely grinding the resulting clinker along with gypsum. The end product thus obtained is called

Ordinary Portland Cement (OPC). In India, OPC is manufactured in three grades, viz. 33 grade,

43 grade and 53 grade, the numbers indicating the compressive strength obtained after 28 days,

when tested as per the stipulated procedure. Apart from OPC, there are several other types of

cement, most of them meant for special purposes, e.g. sulphate resistant cement, colored cement,

oil well cement, etc. However, there are some general purpose cements, the commonest one

being Portland Pozzolana Cement (PPC).

INTRODUCTION-

The first cement unit was set up at Porbandar in 1914 with a capacity of 1,000 tons perannum.

India ranks second in world cement producing countries In India there are around 365 small and 140 large cement plants, combined production

capacity of which is approximately 234 Million Tons (MT).

There is a low per capita consumption of cement in the country (156 kgs/year ascompared to world average of 260 kgs) there is an enormous potential for growth of the

industry.

Furthermore, it is expected that production will grow at a compound annual growth rate(CAGR) of around 12 per cent during 2011-12 - 2013-14 to reach 303 Million Metric

Tons.

According to Indian Cement Industry Forecast to 2012. Cement ManufacturingAssociation (CMA) is targeting to achieve 550 MT capacities by 2020.

A large number of oversea players are also expected to enter the industry in the comingyears as 100 per cent FDI is permitted in the cement industry


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JAYPEE GROUP

Jaypee group is the 3rd largest cement producer in the country. The Jaypee Group is a diversified industrial conglomerate with a turnover of over

Rs.7000 Crores.

The group is the leader Engineering &Construction sector with substantial interests inCement, Hydropower, Thermal Power, Wind Power, Expressways & Highways,

Hospitality & Tourism, Real Estate, Hospitals, Minerals & Mining, Transmission,

Information Technology and Education.

Professionally managed and with a work force of over 50,000 people, the group hasoperations spread across the country.

Largest exporter of Cement from India to Nepal during the last 11 years. More than 750 Kms of national Highways being reconstructed with more than 1.6 million

tonnes of Jaypee Cement likely to be consumed in the same.

A leader in Engineering and Construction of Hydropower projects in India, the Group hasthe largest market share in the Indian Hydropower, E&C and EPC sector having

participated in 54% of Hydropower projects developed in 10th 5-Year Plan in different

capacities.

The key non-EPC projects completed across India by jaypee cements-

1450 MW Sardar Sarovar Project, the largest water resource project in India, 1000 MW Tehri Dam, Asia's highest rockfill dam. 1000 MW Indira Sagar Power House, second largest surface power house in the country. 1500 MW Nathpa Jhakri Power House, the largest underground surface power house in

the country.

JAYPEE CEMENTS

Jaypee group is the 3rd largest cement producer in the country. The groups cementfacilities are located in the Satna Cluster (M.P.), which has one of the highest cement

production growth rates in India.

Its cement division currently operates modern, computerized process control cementplants with an aggregate installed capacity of 28 MnTPA.

The company is in the midst of capacity expansion of its cement business and is slated tobe a 35.90 MnTPA by FY13 (expected) with Captive Thermal Power plants totaling 672

MW.


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More than 750 Kms of national Highways being reconstructed with more than 1.6 milliontonnes of Jaypee Cement likely to be consumed in the same.

Keeping pace with the advancements in the IT industry, all the 260 cement dumps arenetworked using TDM/TDMA VSATs along with a dedicated hub to provide 24/7

connectivity between the plants and all the 120 points of cement distribution in order to

ensure track thetruck initiative and provide seamless integration. This initiative isthe first of its kind in the cement industry in India.

Creation of large multi location Technical cells to support & educate consumers on usageof cement in various types of construction.

Awarded with "National Safety Award" by the national Safety Council of India fordeveloping and implementing very effective management systems and procedures andattaining very high performance levels in occupational safety and health.

For optimizing cost of power, 100% of the power requirement of cement plants are beingsourced through captive thermal power plants.(MP-123MW, UP-65 MW, HP-30 MWand Gujrat-85 MW )

One of the first cement companies in India to be awarded a coal block for captive miningto meet the requirement of cement plants and captive power plants.

The closest competitors in the cement industry for Jaypee cements Binani cement,Ambuja cement, ACC, Grasim, Utratech cement, Lafarge cement.

The production and sale of Cement/ Clinker during the year, as compared to the previous

year, are as under

(fig 1.1)

13,341,389

9,808,903

14675679

11,529,728

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

Cement Production Clinker Production

2011-12(MT)

2010-11(MT)


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Competitors-

(fig 1.2)


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Chapter 1

Dimension Of jaypee Cements Marketing

Jaypee produces a wide variety of cements, which are specifically designed to cater to thecustomers requirements for different types of cements in each of its markets.

All the brands, which the Company produces, are so evolved in their characteristics and

properties that they will surpass BIS Standards. For each brand, the relevant BIS standards are

mentioned in enclosed table along with a comparison with the BIS requirement.

The state-of-the-art cement plants operated by the Jaypee Group are equipped with the most

modern technology from the globally leading technology providers. Extensive Instrumentation &

fully automatic and computerized process control system, custom designed Quality Controlsoftware like QSO Expert and CADES in the Mines, Cross Belt Expert Analyzer using the

Prompt Gamma Neutron Activation Analysis - for the first time in India, X-Ray Fluorescenceand X-Ray Diffraction analyzers and optical microscope, enable production of cement of thehighest quality consistently on a sustained basis.

Jaypee cement produces -

ordinary Portland cement 43 grade conforming to is: 8112-1989. 53 grade conforming to is: 12269-1987. 53 s grade conforming to irst-40(53 s). jaypee cement (opc-43 grade). J jaypee cement (opc-43 grade).All the above verities produced from enriched limestone most suited to make high quality

clinker, which on grinding gives a cement with characteristics surpassing those specified in is:

8112 1989. Jaypee cement (opc-43 grade) is available in 50 kgs hdpe bags of a distinctive design

and cover. Jaypee cement (opc-43 grade), has emerged as the top choice of engineers andengineering companies engaged in construction of mega projects such as national highways,

bridges, transmission lines, power plants, industrial and residential structures.

Demand

Demand for cements are cross elastic in nature. Demand varies on the basis of economic improvements and slowdown. Due to the general economic slowdown, from 2008-2011 financial institutions tightened

their credit norms. This led to a credit crunch and impacted upcoming real estate,infrastructure and other projects.


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During FY2011, jaypee cements demand grew by moderate 2.7% Y-o-Y, the lowest inthe past several years. Demand in the southern region was worst affected, reporting a

decline of 3.4%.

Demand scenario has worsened further in 1st HFY 2012 companys demand and growthslumped to 3%.

Price

In Cement industry price is used only as a differentiator between the various Competitors

brands. The prices of different brands in the same segment remain more or less similar, with just

a difference of 2-5 rupee per bag. Sometimes price also varies with the order placed by the

customer i.e order placed by him is in trade or in non- trade. Pricing decisions in the cement

industry largely depend on the price of the inputs like clinker, other raw materials, excise duties

and taxes and the general operating profits. Generally increase or decrease of prices is affected

across all brands in the market.

Distribution Channels

Distribution Network Jaypee cement has around 156 cement dumps and all are networked

using State-of-the-art TDM/TDMA VSATs along with a dedicated hub to provide 24x7

connectivity between the plants and all the 156 points of cement distribution in order to ensure

track thetruck initiative and provide seamless integration.

Jaypee group follows both direct and indirect methods of distribution. B2B-Direct Selling is done by supplying the product directly to the customer from the

manufacturing unit. Mode of transportation used is Railways, trucks and Ships in case of

exports.

(fig 1.3)

Manufacturin Plant

Distributor

Customer


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B2C- Jaypee cements have three tier distribution channels. They include sales promotersin their distribution channel to promote their sales. Company invariably hires c & f agents

to transport cements to own or government warehouses. Domestically from c & f agents

or warehouses cement is transported to distributers and in turn to sub dealers who finally

sell it to end users.

(fig 1.4)

Government Initiative

With a goal of speed up and sustaining growth in the cement industry the governmenthas taken a range of steps in the Union budget 2011-12.

The infrastructure sector has received an momentum in the form of improved fundsand tax related incentives offered to magnetize investors for tapping the infrastructure

opportunities across the country.

Introduction of tax free bonds, formation of infrastructure debt funds and formulating a

comprehensive policy for developing public private partnership projects (PPPs) are some

of the steps that will provide required stimulus for growth of the cement industry in India.

Manufacturing Unit Warehouse Dealers/Distributers

Sub dealers

Customers


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Chapter 2

Nature Of Industrial Buying

With the advances in manufacturing technology and construction techniques, theproduction of cement is getting more and more sophisticated, while the use of cement is

becoming more versatile. Indeed Indian cement industry produces today a range of six (main)

varieties and three grades of cement, besides a host of special cements earmarked for use for

specific purposes. So much so, it has now become imperative for the consumer, in his own

interest, to avoid confusion and mistake, to have an overall knowledge of these cements

including their properties and application and also some basic idea about cement manufacture.

This will help the consumer to make an informed choice both from functional utility and

economic point of view. This site is an attempt at enabling the consumer with the essential

guidance in selecting the right type of cement suiting his purpose, its proper storing and handling

and check-testing of cement for quality reliability. Our primary objective is that the customershould get the value for the money spent in using cement and should get the maximum

performance out of it.

Buying Situation

1) New Task RebuyIn cement industry new task rebuy happens only with construction industries were they

will be having contracts in different projects like roads, dams, railway. For the type of

strength needed for a dam or road the specification will be manufactured. Jaypee

construction group itself is its biggest B2B customer. They supply different grade of

cements for different projects based on the requirement.

2) Modified RebuyModified rebuy is adding different specification according to the needs. In cement

markets grade changes based on the type of projects they are into. In housing segments as

well as in major project specifications and grades changes accordingly.

3) Straight RebuyPower and fuel costs have a strong influence on the operating expenditure of the

company as they would account for about 32 % of total production costs. The overall

costs are also determined by the economies of scale. So Large buyers of cement would

align with cement producers for a long-term supply relationship; pricing will be

determined by market and expected off take during a given period.


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Factors influencing buyers strategy

1. ) Economic FactorsEconomic Slowdown influences the industry in a large way. When bank rates increases majorprojects will be postponed and this impacts the market.

2. ) TechnologyUse of technology in marketing will assume more changes with increase in both communication

and information technological changes. Concepts will emerge such as phone-acement, or

portraying a 3-D animation of the house prior to its construction in a library, providing responses

to customers through mobile technology. Increasing customer expectations of adding greater

value will ensure greater attention to this aspect. Necessary enhancement in using mobile and

communication technologies will also be introduced.

3. ) Cement EconomicsCosts have a significant bearing on the performance of an industry and cement is no exception.

The uptrend in costs is likely to continue, although the increase in input costs is expected to be

neutralized by rise in prices owing to higher demand. Power and fuel costs have a strong

influence on the operating expenditure of the company as they would account for about 32 % of

total production costs. The overall costs are also determined by the economies of scale. So Large

buyers of cement would align with cement producers for a long-term supply relationship pricing

will be determined by market and expected off take during a given period.

4. ) R&D and InnovationCompanies do not have much of application-oriented research and development efforts but this

will become critical for future success. To a large extent, this is related to creating the application

and customer of the future and understanding customer needs based on the emerging

environment. Companies will need to create niche products and develop the market for such

products by providing solution-based offerings to the customer. Innovation will be very

important, to create high-grade and cheaper quality of cement. Indian companies have been

moving from lower grade cement to higher over the years, and would have to continue to roll out

even better quality to compete with the global players and local competition. New cementproducts like RMC (Ready Mix Concrete) will help create a company carves out a niche in the

market.


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Chapter 3

Segmentation

Region-wise strategy is likely to continue for cement companies, unless stategovernments in surplus states along with business create a different growth strategy to

boost infrastructure development. Cement delivery will be made off city limits where the

growth is expected to happen. The stocking points will be larger and fewer.

Jaypee cements has huge presence in north India than in south. It is because most of itsmanufacturing plants are in north India such as in Gujarath, Himachal Pradesh etc.

Northern regions had many huge projects such as dams for hydro power generation and

restructuring of national highways and jaypee cements is the major exporter to Nepal.

The company is in the midst of capacity expansion of its cement business in Northern,Southern, Central, Eastern and Western parts of the country and is slated to be 37.55

MnTPA by FY12 (expected) with Captive Thermal Power plants totaling 672 MW.

JayPee is the largest Cement producer in the state of Uttar Pradesh. For optimizing costof power, 100% of the power requirement of cement plants are being sourced through

captive thermal power plants.(MP-123MW, UP-65 MW, HP-30 MW and Gujrat-85 MW

Jaypee Cement being used in the construction of large dams and hydro electric powerprojects like the TehriDam in Uttarakhand, Dul Hasti and Baglihar projects in J&K, Indra

sagar dam in M.P, Teesta-Vproject in Sikkim, Baspa-ll, Nathpa Jhakri and Chamera-ll

projects in H.P, Tala project in Bhutan,Karcham-Wangtoo Project in H.P, Sardar Sarovar

Project in Gujrat, Omkareshwar Hydro Electric Project in M.P and Vishnuprayag Project

in Uttarakhand. List of prestigious clients include Reliance Energy, NTPC, NHPC,GAIL, DMRC, IOC, NFL, Indian Railways, DIAL, L&T, Gammon,HCC, Som Datt

Builders. IRCON, UPSBC, Hindalco, GMR, OSEL, RIL to name a few.

Selecting market segments by jaypee cements

a) Undifferentiated Market SelectionJaypee cements manufacture ordinary 'Portland' cement which is used maximum in the

country. It is more suitable cement for masonry and general concrete works where the

members are not taken to very high stresses. It is standardised cement for common

market. (fig 1.5)

33 Grade

Ordinary Portland

Cement

General Concrete

Works


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b) Differentiated Market SelectionJaypee cements manufacture 43 Grade Ordinary Portland cement for RCC works and 53

Grade special Ordinary Portland cement for RCC work where high early strength in 1 to

28 days range is required. Type III is a high-early strength portland cement that provides

high strengths at an early period, usually a week or less. It is used when forms are to beremoved as soon as possible, or when the structure must be put into service quickly. Used

mainly for road construction and dam construction.(fig 1.6)

c) Concentrated Market selection

(fig 1.7)

Jaypee produces a wide variety of cements, which are specifically designed to cater to thecustomers requirements for different types of cements in each of its markets. All thebrands, which the Company produces, are so evolved in their characteristics and

properties that they will surpass BIS Standards. For each brand, the relevant BIS

standards are mentioned in enclosed table along with a comparison with the BIS

requirement. The state-of-the-art cement plants operated by the Jaypee Group are

equipped with the most modern technology from the globally leading technology

providers. Extensive Instrumentation& fully automatic and computerized process control

43 Grade ordinary

Portland cement

53 Grade Special

ordinary Portland

cement

Type 3 cements

high early strength

Portland cement

RCC Works

RCC Works

Roads and Dams

33 Grade Portland

ordinary cement

General Concrete

RCC Works/Drainage

works


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system, custom designed Quality Control software like QSO Expert and CADES in the

Mines, Cross Belt Expert Analyzer using the Prompt Gamma Neutron Activation

Analysis - for the first time in India, X-Ray Fluorescence and X-Ray Diffraction

analysers and optical microscope, enable production of cement of the highest quality

consistentlyon a sustained basis

Positioning-

Advertisement Jay pee Cement launches a new campaign to redefine the concept ofsolidity and trust with an emotional connect that the Jaypee Group has come to be known

for Andar se onal Solid as the tagline to consolidate the brands core values of Trust,

Resilience & Stability and the brands core promise of superior strength, durability and

withstanding the test of time. Campaign would reinforce and further build on the brandsvirtues of strength, endurance and fortitudevalues that shall propel Jaypee Cement to a

capacity of 25 million tonnes by 2010 and then 35 million tonnes per annum by 2011Jaypee Cement is Indias 3rd largest cement player and To communicate the companysleadership stature and premium positioning, an aggressive multimedia campaign has been

drawn up New Delhi, April 14, 2009 The Master Blaster, Sachin Tendulkar To EndorseJaypee Cement.


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Chapter 4

Formulating product Planning

The cement plants of Jaypee cements are located in various regions of thecountry in number of states. The gadgets and equipments are of high standards and comply with

the international standards. Presently, there are around 8 cement plants of Jaypee cements

which cater to the different mar ket segments of the country.

RESOURCE ALLOCATIONAll the jaypee cement Plants use the cutting edge technologies and services which in turn

produces high quality cement brands. It has always worked dedicatedly to produce some of thebest brands of cement and its business strategy is based on providing the best of products to the

changing consumer market in the country and the world.

STRUCTURAL IMPLEMENTATIONThe cement plants of jaypee cements are located in various regions of the country in a number of

states. The gadgets and equipments are of high standards and comply with the international

standards. Presently, there are around 8 cement plants of jaypee cements which cater to thedifferent market segments of the country. The cement plants work in coordination with each

other and also independently to increase the share in the market.

FUNCTIONAL IMPLEMENTATIONThe high quality cement that is manufactured and exported by jaypee cements is produced in thejaypee Cement Plants. It has a significant market share in the segments of housing, real estate,

infrastructure and other development projects. With more and more developmental projects

coming up, the profit and the market share of the company is expected to rise at a considerablerate.

PRODUCT LIFECYCLE

(fig 1.8)

0

2000

4000

6000

8000

10000

12000

14000

16000

FY06 FY07 FY08 FY09 FY10 FY11 FY12

Turnover(Rs Crores)

Profit(Rs Crores)


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MATURITY STAGEThe Gray cement brands of Jaypee Cements is in Maturity stage of the product lifecycle. As the

products already enters the maturity stage, the number of competitors entering the market

increase resulting in the decline in the growth of profits comparing to the increasing turnover.

The marketing strategy when a product is in maturity stage of Jaypee Cements is:

i. Enter new marketsii. Keep the existing customers satisfied

iii. Cut marketing, production and other costs to maintain profit margins.It is applicable for all the products of Gray cements manufactured by Jaypee Cements, as it has

long existence in the steel market.

Life Cycle Analysis

In recent years concern for the environment has grown among national governments, industry

and the general public.

In consequence, there is pressure to improve manufacturing systems and change consumer

behaviour to progress towards sustainable development. Life Cycle Assessment (LCA) has

emerged as a leading tool for quantitative analysis of environmental impacts of products and

processes, which are often very complex. LCA measures the impact on the environment over the

course of a products lifetime, from the parts and materials that are used in its manufacturethrough to its assembly, shipment, use, and ultimate disposal.


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Chapter 5

Formulating Channel Strategy

Distribution Channels Jaypee cements invariably hire c & f agents or transport cements to own or government

warehouses either via roadway or railways. In case of exports, cement reaches the nearestport via roadways or railways and is then transferred to the importing country.

Domestically, from c & f agents or warehouses the cement is transported to the

dealers/distributors and in turn to sub dealers who finally sell it to the end users. Theremay or may not be physical ownership of goods. In the second case, dealers and sub

dealers take order from buyers and place it to the companies, co ordinate and monitor the

timely dispatch of said orders, transportation of goods and final delivery.

Distributor network in cement industry is highly dominating and companies arecompelled to hire as they do not really have that rapport and touch with the endconsumer of their product. Apart, from this, the distributors have storage facilities as well

which help control well in the entire supply chain as they are the ones who bring ordersand therefore are directly responsible for the business that a manufacturer would do.

Industry dynamics in Cement Industry do not favour entry of MNCs into the Indian

market.

Jaypee group follows both direct and indirect methods of distribution.

B2B-Direct Selling is done by supplying the product directly to the customer from themanufacturing unit. Mode of transportation used is Railways, trucks and Ships in case of

exports.

(Fig 1.9)

Manufacturing Plant

customer


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B2C- Jaypee cements have three tier distribution channels. They include sales promotersin their distribution channel to promote their sales. Company invariably hires c & f agents

to transport cements to own or government warehouses. Domestically from c & f agents

or warehouses cement is transported to distributers and in turn to sub dealers who finallysell it to end users.

(fig 2.0)

Distribution Network Jaypee cement has around 156 cement dumps and all arenetworked using State-of-the-art TDM/TDMA VSATs along with a dedicated hub to

provide 24x7 connectivity between the plants and all the 156 points of cement

distribution in order to ensure track the truck initiative and provide seamless

integration.

Distribution has Numerous Challenges Cement has a useful shelf life of approximately 6months. Customers also have a bias towards fresh cement ( Garam Cement ) forcing

manufacturers to predict accurate amount of inventory. In India construction activities

slows down during rainy season that is why cement demand is cyclic in nature. A fine

balance needs to be achieved between inventory cost and capacity utilization. Since

railway route is the cheapest mode of transport, availability of railway wagon is a big

constraint in present scenario. Since companies put multiple plants to save on

transportation cost, which market should be served from which plant is big challenge

Value added services such as Ready Mix Concrete ( RMX) has now become a industry

trend. It is putting pressure on lead-time and vehicle TAT.

Private & Confidential. Cement companies offer a lot of discounts like cash discounts,volume discounts, seasonal discounts, foreign tours and allowances to dealers for

promoting healthy sales. The dealers take advantage of these discounts to gather morebusiness.

Manufacturing Unit C & f/Warehouse Dealers/Distributer

Sub dealers

Customers


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Chapter 6

Pricing Strategies

Pricing Strategies Price in Cement industry is used only as a differentiator between the various Competitors

brands. The prices of different brands in the same segment remain more or less similar,

with just a difference of 2-5 rupee per bag. Sometimes price also varies with the order

placed by the customer i.e order placed by him is in trade or in non- trade. Pricing

decisions in the cement industry largely depend on the price of the inputs like clinker,

other raw materials, excise duties and taxes and the general operating profits.

Generally increase or decrease of prices is affected across all brands in the market. Mostof the Cement companies offer a 5-10% margin to the dealer and particular amount of

money against per Mt. of the sales to the Sales Organizer for promoting the sales in his

region.

Due to internal competition, the dealers pass on this advantage to the customers byreducing their own margins to 2- 3%. This is a cause of concern for the cement

companies because they have to keep a constant check on the prices offered in the

market. The dealers offer more of discounts and the companies are not able to firm up the

prices.

Cement companies offer a lot of discounts like cash discounts, volume discounts,seasonal discounts, foreign tours and allowances to dealers for promoting healthy sales.

The dealers take advantage of these discounts to gather more business.

Jaypee produces a wide variety of cements, which are specifically designed to cater to thecustomers requirements for different types of cements in each of its markets. All the

brands, which the Company produces, are so evolved in their characteristics and

properties that they will surpass BIS Standards.

Thus basics prices for different brands of JAYPEE CEMENT from the dealer of MadhyaPradesh(Indore) are given below: JAYPEE CEMENT (PPC) PPC stands for portland

pozzolana cement Price of Jaypee Cement (PPC) contains 50 kgs is INR 300 per bag.

Jaypee Cement (OPC-43 Grade) Jaypee Cement (OPC-53 Grade)OPC stands for

Ordinary Portland Cement Price of Jaypee Cement (OPC-43 Grade) INR 290 Per bag

contains 50 kgs is INR 285 per bag.


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Future Pricing Strategies

The continuous rise in input costs, which eats into the profits of company, may forcejaypee cements to re-work pricing strategy. Further, the fuel price hike could act as a

trigger for an immediate hike. There has been no definite industry report on the price restructuring. Companies

comments as The situation is uncertain and anything can happen in near future as aresult of increasing fuel price

A month ago, several cement firms had taken a non-uniform stand on pricing, after beingpressurised by the government. Jaypee cements opted for freezing rates at the current

levels, whereas others went ahead with cuts of Rs 2-7 on a 50 kg bag of cement.

So far, the government has not taken any measures on the industry's demands, whichinclude reducing excise duties, abatement on cement and removing import duty on coal -the major contributor to the firms' input cost concerns.

Jaypee cements spoke person recently said that after two-three months, the companywould look at the scenario and decide about the prices. The company had chosen in Mayto freeze the prices for the period. However, it had added that this would erode margins.

On an average, the cost pressure on a bag of cement has risen by Rs 14 in the last year.

However, the actual rate increase has been in the range of Rs 5-8 a bag.

Currently, the average prices across the country is around Rs 220-230 a bag of cement. InMumbai, it is Rs 255, Delhi Rs 235, Kolkata Rs 240, Chennai Rs 255 and Hyderabad Rs

216


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Chapter 7

Promotion

Promotion ofJaypee Cements advertising has created brand awareness, highlighted whatthe brand has to offer and has consistently brought all of it top-of-the-mind for the

customer. But the outreach effort does not end there. Jaypee Cement has recognized the

importance of communicating to and involving key players who influence the final brandchoice. These include channel partners, contractors and masons, on whom Jaypee cement

focuses by initiating and developing innovative activities and promotions. This helps

build the Jaypee cement family so that customers get a high degree of personalized

service and professional guidance to facilitate their final decision.

Packaging-

Jaypee cements moto is Work for Quality, Safety, Health & Environment Jaypee

produces a wide variety of cements, which are specifically designed to cater to thecustomers requirements for different types of cements in each of its markets. All brands

are marketed in attractive HDPE bags, containing 50 Kgs of quality cement from Jaypee.Bags are identified with a conspicuous Jaypee Logo, which also over the years has come

to be regarded as a Hallmark of quality.

Advertisement and Positioning-Advertisement Jay pee Cement launches a new campaign to redefine the concept of

solidity and trust with an emotional connect that the Jaypee Group has come to be known

for Andar se onal Solid as the tagline to consolidate the brands core values of Trust,

Resilience & Stability and the brands core promise of superior strength, durability and

withstanding the test of time. Campaign would reinforce and further build on the brandsvirtues of strength, endurance and fortitudevalues that shall propel Jaypee Cement to a

capacity of 25 million tonnes by 2010 and then 35 million tonnes per annum by 2011

Jaypee Cement is Indias 3rd largest cement player and To communicate the companysleadership stature and premium positioning, an aggressive multimedia campaign has been

drawn up New Delhi, April 14, 2009 The Master Blaster, Sachin Tendulkar To Endorse

Jaypee Cement.

The new campaign looks to redefine the concept of solidity and trust with an emotionalconnect that has come to be associated with all Jaypee Group campaigns. jaypee cementone of associate companies of jaypee group, endorsed famous lycrist javed akhtar as

brand ambassador for newspaper print.

(fig 2.1)


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Human resources/industrial relations

The core of achieving business excellence lies in a committed, talented and focussed

workforce. Under the exemplary leadership of its Founder Chairman, the Company has

created a highly motivated pool of professionals and skilled workforce that share a

passion and vision of the Company. The resultant power of HR pool gets reflected in the

phenomenal growth of the Company in the recent past.

The Company adopts latest techniques in evaluating the potential and training needs of

the employees at all levels. Designing of tailor-made training programmes that fill the

knowledge/skill gap and imparting in-house training in addition to utilising external

programmes are significant functions of HR. As at 31.03.2012, the Company had a total

workforce of approx. 20,000 persons, including managers, staff and regular/casual

workers. Industrial relations in the organization continued to be cordial and progressive.

Suggestions

Large number of players in cement industry makes it more competitive for JAYPEECEMENT to carefully price its product and at the same time satisfy its dealers and

customers.

The emergence of small players in this market may increase the competition and start themalpractices, and heavy discounts to retailers. They can also influence many retailers by

giving better profit margin, and other Benefits.

People are opting for more stable structures and intensive use of cement is taking place,even government is spending heavily on infrastructure projects. Thus, this is the right

time to fully tap these markets.

Foreign direct investment in infrastructure sector going to increase in coming years,which will increase the demand of cement. Therefore JAYPEE CEMENT should try to

create a goodwill through advertisements and better services in the market so that they

can attract more customers Group.


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Using sophisticated technology and optimum utilization of resources helps reduce thecost and increase margin rate.

Concentrating on all the geographical areas such as southern India will help jaypeecements increase its market share and thus curb competition.

Conclusion

Cement consumption and demand in India has been growing during the last few years.

However, due to market conditions, the selling price had been under pressure during the

year under review and for the present as well. To meet the challenge, the Company keeps

taking steps to improve economy in operations on continuous basis. The pan India

presence of the Company for manufacturing and marketing of Cement will give theCompany inherent location advantages and economies of scale.

term paper jaypee cements

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