India is witnessing a glut of brands in the cement industry. In this scenario, it is important to be a recognised brand and have a fair voice. With a sizeable increase in multi-brand outlets, branding is gradually emerging as a powerful tool that can drive sales. ICR tracks the trends in branding.
Branding speaks volumes about the quality of a product. It builds credibility for a product. A brand with top of mind recall will have a competitive edge. As the competition space has drastically changed with the entry of global players in the cement industry, innovative branding and marketing exercise has become an imperative. No wonder, many major cement companies have started aligning their selling strategies with branding campaigns and celebrity endorsements with a clear cut objective of not only differentiating the product, but rather creating different sets of values. They too have realised that in order to retain customer loyalty, they need to create their distinct brand identity.
Media plays a very pivotal role in building a brand image. It has to be structured properly to suit the marketing goal. It should depend on targeted geography, the quantum of product to be sold, the target customers and the budget. ´Brand plays an important role,´ says Ashutosh Rampal, VP-Marketing, KJS Cement. According to him, branding has a bearing on the buying patterns of a customer depending on the psychographic matrix that guides customers to pick up a product in a particular geographical area. He says, ´Not all customers in all regions buy the product in the same way. For example: In Delhi, people want a product that is easily available and reasonably reliable. They like to make a call and order the material to the site overnight. Availability is the deciding factor here, so logistics efficiency alone can make your brand in metros. On the other hand, in Uttar Pradesh, customers prefer a well reputed product that has high visibility in the market. Brand plays an important role, price is not a big factor. This need become even more acute in Bihar, where the price gap between the ´A´ category and the ´B´ category product is around Rs 40-50 per bag. Institutional segment, on the other hand, is totally different, where most customer decisions are driven by price tag which matters a lot to customers here. Brand value is of lesser importance.´
Siraj-ul-Hassan, Proprietor of a Delhi-based Peringhat Agencies, has same view as of Rampal. According to him, pricing plays an important role in driving sales volume. He says, ´For a product to pick up, the quality should be good. Even the cost should be reasonable. JSW´s product pricing is very competitive and has become hot favourite for several customers. On the other hand, another well-known company had launched a similar product around the same time. But they classified their product as a ´A´ class material and priced it a bit higher than other brands. Their product has not picked up well in the market.´
Says Jacob Mathew, Head-Image & Communication, Zuari Cement, ´Cement being a commodity, it is very important to build a strong brand image. The truly differentiating factor in cement is only the brand. This is where an effective branding and marketing exercise plays a vital role.´
Kerala-based businessman Pawan Khandelwal, Proprietor of Khandelwal Steel & Timber, had this to say. ´We feel that advertisement definitely helps boost sales. Many of our customers are brand conscious and ask for a specific product only. Apart from regular advertising, efforts of sales executive also come into play for promoting a particular brand. Often the company´s sales executive helps us in getting sales lead and closing it. If the brand is reputed then the customers are ready to shell out even more. They know that they are buying a product for longer life and trouble-free operation. Cement and steel is no different. This is the time when we should transcend from the commoditised selling of cement to brand selling.´
Different channels
According to HL Jain, Advisor-Marketing & Sales, Hi-Bond Cement (India), televisions and radios are better channels for promoting a brand. He says ´The choice of media depends on the size of market that you want to capture and also on the production capacity of the company. For a plant with a capacity of more than 2 mt per year, all the available channels become important. Looking at wide reach and the involved costs, I feel that television and radio are better channels for brand propagation than newspapers.´
Says Rampal, ´Branding is very important in today´s market where customers are so brand conscious. Initially it requires some investment, but the pay offs are really good. A branded product draws a premium of Rs 30-40 more than other generic products on the shelf.´ He further adds, ´The inherent objective of a branding exercise is creation of strong trust in the psyche of customers. So the channel or the means resorted to for branding must be able to do that. Today, there are several options available for mass communication such as televisions, press, outdoor hoardings, etc. But they have limited utility helping to develop a strong one-to-one relationship.´
From time to time most of the players in the industry also organise engineers´ meets, contactors´ meets and masons´ meet that is targeted for product sale. These meets share technical presentations that educate these professionals about the characteristics of their product. Says RK Tak, Chairman, Cement Corporation of India, ´Today the sector is driven largely by retail players. And so advertising and brand building plays an important role in market development´ He adds,´ We have also initiated interactions with villagers in the rural market through ´Choupals´ and ´Panchayats.´ Dealers and masons meet are another aspect that we have explored to develop our network.
Creating USPs
From a product´s characteristic-specific branding to concepts like ´enduring relations´, ´trust´ and ´reliability´; from the so-called dry commercials to humorous TVCs, from stagnant frames to animated 3D frames; and from general concepts to niche concepts like green and sustainable development, branding in cement industry has come a long way.
Branding based on the different characteristics of a product is nothing new in the market. In the cement industry, two of the most focused USPs are strength and durability. Strength as a quality still dominates the consumers´ psyche, whereas durability as a concept is a bit abstract, which found its expression in branding as ´enduring relation´. Ambuja Cement has always projected ´strength´ as its major USP. Vivek Deshpande, Joint President – Brands & Marketing Strategies, Ambuja Cement says, ´It is the result of our extensive consumer research campaign; across segments, strength is perceived and has emerged as the most important attribute of cement.´ According to Deshpande the cement industry, where the supply is more than the demand and the competition is too intense in the prevailing scenario, only brands can help survive.
However, Gujarat-based Kalyanpur Cement brought out-of-the-box concept of ´freshness´ as a major USP with its promo of ´garma garam´ cement. Says Faisal Alam, President-Sales & Marketing, Kalyanpur Cement, ´Freshness of cement is technically a very important feature. Customers always prefer to buy the freshest cement available to them. Our plant is very close to the market where we deliver our product. Our material is delivered so fresh that it is hot when it reaches many destinations. We are highlighting this characteristic of cement.´
Alam adds, ´However, creating a USP is also becoming more challenging as the quality perception varies from brand to brand, application to application, and at times, from customer to customer. The requirement of a precast or a prefabricated product, customer is different from construction contractors, or from an individual buyer. Here the success lies in creating a proper connect with the customer to increase brand recall supported by good visibility. A good brand has a strong consumer pull and gains the acceptance of the trade as he needs to put in less effort in selling the same. A powerful brand increases customer loyalty and also gets recommended to others. The brand becomes the preferred brand resulting in increase in sales volume. This combined with the premium helps in an increase in turnover.´
Celebrity endorsement
As a part of their marketing strategy, cement companies have roped in various celebrities as brand ambassadors. It makes sense for a celebrity to endorse a cement brand when it is new in a particular market and needs a credible vehicle to build confidence in the minds of consumers and channel partners. Celebrity endorsement does have its merits and it does affect the brand value of the product. However, this channel is very costly and must be sought only for brands that need to be sold in huge volumes in widespread markets comprising of at least 5-7 states. Says Rampal, ´Celebrities like Amitabh Bachchan, MS Dhoni and Sachin Tendulkar evoke feelings of comfort, reliability, dependability of long-term performance. When a product is endorsed by a celebrity like him, the customers [naturally] associate his characteristic to the product. But while selecting a celebrity, one thing must be kept in mind is that the celebrity must not be involved in any kind of controversy. When a celebrity gets a bad publicity, the brand represented by him/her also gets affected [to some extent].´
Green note
Today, there is greater focus not only on optimising fuel/energy efficiency during various processes of cement manufacturing, storage and its distribution, but also there is renewed focus on making the cement industry greener and more sustainable. But has this concept of ´green and sustainable´ ever got the due recognition in branding exercises? When ICR spoke to most of the experts, their reactions were somewhat negative. Says Jain of Hi-Bond Cement, ´It is not more than a mere slogan for consumers today and they don´t bother much about it. They are more concerned about the price, the quality and the availability of the product. This awareness must be developed and the responsibility of creating it is on the entire industry as well as on the government.´ Alam says, ´Most people do not know the meaning of green, while a sizeable chunk who do know about it, do not even care as it is not immediately affecting their lives. However, I think, the government can make a huge difference by backing such valuable issues.´
Rampal sums up. ´Every company wants to move up the brand ladder, but it also faces pressures of maintaining cash flows, getting money from the market, etc. In such situations, branding exercise gets sidelined. It is very important to stay focused in such situations and have patience. One must realise that branding pays, and pays well and it is worth the efforts. Branding is like building character. It takes long term effort and is tested over a period of time.´
Branding Pays
Branding pays, and pays well and it is worth the efforts.
A differentiating factor in cement
Builds credibility for a product.
A brand with top of mind recall gives a competitive edge
Customers are becoming more brand conscious.
Strength, durability and freshness major USPs
Celerity endorsements is a credible vehicle to build confidence. Amitabh Bachchan, MS Dhoni and Sachin Tendulkar evoke feelings of comfort, reliability, dependability of long-term performance.
Concepts of ´Green and sustainable´ yet to find recognition in branding exercises.
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