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Assessing the Role of Branding

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ICR looks at differentiating factors that influence the branding decisions for cement companies and the impact of messaging and brand positioning on the customer’s mindset.

Branding gurus will say that the purpose and intentionality of branding is to create an image in the minds of the consumers and the connected community at large, which could be much more than the mere product on offer (with its features and characteristics). The image, once firmly entrenched in the minds of the interested people, would augur well to create a sense of trust and loyalty, the hallmark of connectedness with the ‘idea’ that exceeds the sum total of what the product offers. This trust, loyalty or the bond establishment is at the core of creation of a brand as an asset that would provide cash flows many years into the future. If one wants to measure the value of a brand, one would need to look at the net present value of future cash flows that the brand-asset would end up coalescing, which could only happen when the right actions are directed to ward off competition and a stability is provided to the continuing engagement with the final consumer, either directly or in conjunction with various intermediaries.
Some of this would simply flow from the community to which the customer is part of. In the case of cement, this starts from the building and construction engineers, the architects, masons, builders, dealers, channel partners, partners in the community, which could include the government and regulatory agencies as well, where the product in question is being used. The place could eventually become part of the greater whole, the region or the country, if the product is integrated into a large bundle of choices put into one that transcends the locale.
Product positioning If we want to direct our attention into cement branding, we can hardly ignore the fact that cement remains a commodity, which by definition means that differentiation possibilities are minimal.
Harold Hotelling’s paper, Similarities in Competition (1929) for products that are commodities, gave us the mathematical proof that in markets for selling such products, one would see them being sold as close to each other as possible. This explains why in local markets you have commodity sellers like vegetable sellers or fish-sellers selling in the same place, sitting next to each other, side by side and not far apart from each other. This is because the customers would want to minimise the cost of logistics (the cost of connecting becomes the only differentiating factor, which the customers want to minimise).
The exact opposite of this would be when two dis-similar items are to be sold that are highly differentiated. The proof of this is provided in Jean Tirole’s seminal book, Industrial Organization, the ‘position’ of these two selling items will be as far apart from each other as possible. Here, the cost of connecting is where the maximum differentiation will lie and that is going to be the pivotal factor in making the two items dis-similar from each other.
Thus, creating a unique value proposition in a commodity would be to make that commodity appear as a different identity when compared with a similar commodity. This identity cannot be simply the product features, attributes or specification, but an identity built on an idea that makes a unique connection with the consumer.

Leading by example
How on earth could we create a unique value proposition through branding of this commodity? That is where cement branding has been the most successful model among almost all commodities.
But cement is lucky in some respects as it can be packaged and once you package it, what is inside loses its meaning and what you end up seeing is the package that can be used to replace the product inside. The package assumes the identity of the product, no matter how similar or dissimilar what is inside, one could end up creating an image of what you want the ‘interested party’ to believe it to be. This could be a way of initiating the branding exercise in cement, or what we call the ‘tip of the iceberg’, which is in the packaging of the product. But we will see that it is a very small part of what the total brand is all about.
Furthermore, trust can only be established over not one but many transactions that look at the value that stems from painstakingly creating the ever-expanding pie of the future. This is no splash in the pan, but a continued engagement that must rely on all signals that the people on both sides would be happy to be a part of.

Making the message work
Cement brands, no matter how different they are, have been able to create their unique value proposition or niche in the market. You have some leaders in the Indian market that built their brand on the appeal it creates on the engineers, architects, masons and the builders; they are the community who will influence the bulk of the buying of cement. With taglines ranging from the ‘Engineer’s Choice’ and ‘Giant Compressive Strength’ to ‘Cementing Relationships,’ and with the central idea of trust as a theme, the brands have evolved to dominate their own individual space. The continuity of the messaging and complementing such themes with actions on the ground, building partnerships that resonate on these themes is where these brands have progressed and prospered.
Messaging to the consumer on the product quality, durability and strength have been the dominant theme among the local communities. These have remained the final conversation that cannot be avoided when the eventual buyer, the individual house owner and the builder combine to make the final choice with the influencers of all kinds. Consistent messaging that lives up to the expectation and stays with the combine when the product is in use for many more years, would be the foundation to build on. But these may not be the only messaging, as prices could become the bone of contention, sparking messaging like ‘Not Cheap’, stating that the perception could be wrong about the value of the product.
Some brands have got rebranded, for example Grasim got merged with L&T Cement and came up with their overarching value proposition to be the ‘Engineer’s Choice’, a path-breaking branding that has catapulted them to the top of the league. But making the company and its values be aligned to the messaging is where the actual scoring happens. The customer’s trust stems from the overall experience of buying that is weighed against the sum total of promises made and the actual experience tallied against them. It would be wrong to appeal to some specific attributes while strengthening your brand, you could dilute the attention required on every other aspect that you hold the promise to.

Influencing the customer
The economic impact of a brand, simply summarised, would be the effect of the brand in the customer’s buying decision. The customer in this case is just not the buyer, which could be different in different cases, but a whole lot of influencers – from institutions, government, community, the common home buyer, builder, architect or the engineer or the dealers, the effect of the brand must be looked at in all these constituencies. Building trust on such a wide group of people cannot be made with just messaging alone. It can only be built through long hard work on all the aspects we just discussed, where quality of product and service, packaging, price, tradition, delivery on promise, all could play a
vital role.

-Procyon Mukherjee

Concrete

True north seeks exit from shree digvijay cement

True north seeks exit from shree digvijay cement

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Private equity firm True North is reportedly exploring an exit from its investment in Shree Digvijay Cement. The firm is considering divesting its entire stake in the cement manufacturer and is in talks with several strategic investors and private equity players for the sale. True North has held its stake in Shree Digvijay Cement since acquiring a majority share in 2019. The exit is part of the firm’s strategy to unlock value after growing the company’s business. Potential buyers may view this as an opportunity to enter the rapidly growing cement sector, driven by India’s booming infrastructure and real estate markets. Shree Digvijay Cement, known for its steady operational performance, could attract considerable interest as the industry faces increased demand.

The sale process is expected to generate significant attention, especially from industry players looking to expand their market share or investors seeking strong returns. As the cement sector plays a vital role in India’s development, the transaction could also lead to consolidation in the industry, further enhancing the competitiveness of large players.

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Concrete

JSW cement expands vijayanagar plant capacity

JSW cement expands vijayanagar plant capacity

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JSW Cement has successfully increased production capacity at its Vijayanagar plant in Karnataka by 2 million tonnes per annum (MTPA). With this addition, the plant’s total production capacity now stands at 6 MTPA. This expansion is a crucial part of JSW Cement’s broader strategy to increase its overall capacity to 25 MTPA by the financial year 2025, strengthening its presence in India’s growing cement market.

The Vijayanagar plant, located near JSW Steel’s facility, benefits from operational synergies, such as efficient raw material procurement and energy use. The expansion will enhance the supply of high-quality cement to meet the increasing demand in Karnataka and the surrounding regions. Additionally, this move aligns with JSW Cement’s focus on sustainability and innovation, as the company continues to adopt eco-friendly practices in cement production.

JSW Cement’s increased capacity is expected to support infrastructure projects in southern and western India, contributing to the country’s booming construction and real estate sectors. As India accelerates its development in urbanization, infrastructure, and housing, the demand for high-performance cement continues to rise, and JSW Cement is positioning itself to cater to this growing need.

This capacity addition at Vijayanagar also emphasizes the company’s commitment to strengthening its supply chain and ensuring timely product delivery while maintaining sustainable practices.

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Concrete

Shree cement signs mou with dpiit

Shree cement signs mou with dpiit

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Shree Cement has signed a Memorandum of Understanding (MoU) with the Department for Promotion of Industry and Internal Trade (DPIIT) to support startups in India’s manufacturing sector. This collaboration is a strategic initiative aimed at fostering innovation, growth, and sustainable development within the industry. The MoU reflects Shree Cement’s commitment to driving forward the country’s manufacturing capabilities by providing guidance, financial support, and industry expertise to emerging startups.

The initiative aligns with the government’s “Make in India” vision, which encourages domestic manufacturing and aims to build a self-reliant economy. Through this partnership, startups will have access to Shree Cement’s vast industry experience, network, and resources, enabling them to scale their operations and develop innovative solutions. This move is expected to generate new job opportunities, enhance local production, and reduce dependency on imports, strengthening the nation’s industrial ecosystem.

Shree Cement will focus on key areas such as process improvement, technology adoption, and sustainable practices, encouraging startups to introduce eco-friendly and efficient manufacturing solutions. The partnership is also designed to facilitate the use of emerging technologies like artificial intelligence (AI) and machine learning (ML) in manufacturing operations, driving modernization across the sector.

This MoU marks a significant step toward encouraging innovation in the Indian manufacturing landscape, providing a boost to startups while enhancing industry capabilities. With Shree Cement’s support, aspiring entrepreneurs will gain the necessary tools to overcome challenges and contribute meaningfully to the sector’s growth.

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