Cement selling gets imaginative

For a construction material like cement, selling was rarely a problem in the pre-liberalisation era. The concept of a two-tier distribution chain comprising of manufacturers and dealers functioned very well. It was a perfect and simple set-up, in the sense that manufacturers sold cement to dealers. From there on, the onus was on the dealers who established contact with/industry/Cement/images (8359 bytes) builders, government and institutional buyers, and sold to retailers.

However, with the mushrooming of large plants engaging in cut-throat competition to grab a bite of the market pie, Indian cement companies are now beginning to adopt innovative strategies that have revolutionised the way cement is sold in India. What was predominantly sold in bags is now being sold in bulk, albeit in different quantities. Also, with a view to adding value to their products, manufacturers have now started selling concrete instead of cement.

Bags and bags of it
At the retail level, an innovation in product packing is also a trend that conforms to international practice. The 106-million tonne Indian cement industry, which ranks third after China and the US, sells cement mainly in 50-kg bags -- the most preferred product package.

Says Ashok Kumar Jain, president marketing, of India's largest cement company, Associated Cement Companies, "Cement is an intermediate product -- it either goes to a builder, or a concrete manufacturer, or small contractors for repairs and renovations. Even today the most preferred medium is bags, and this trend will continue. Only the dimensions will change."

Jain has already substantiated his stance. Some six months ago, he surprised the Mumbai market by introducing high-strength cement in 25-kg bags -- the first time anybody did that in India. Focused on product quality and with a strong selling point of easy-to-carry and consume, the product was immediately accepted by the market. Branded as ACC Samrat 53-grade cement, it has captured a significant portion of the retail market.

The company has already sold well over lakh bags in select pockets of Mumbai. More than this, it fetches ACC a premium of Rs 2 for a 25 kg bag (Rs 4 per 50-kg bag) over cement supplied by other frontline players, such as Larsen & Toubro, Gujarat Ambuja Cements and Indian Rayon.