PK Ahluwalia, Managing Director, KJS Cement.
KJS, on the occasion of Founder’s day Celebrations, announced a capacity expansion from 2.5 mtpa to 5 mtpa by the end of 2015. The company has a goal to become the top national player in the cement industry with its KJS Cement Vision-2020. KJS is in the process of erecting two grinding units of 1 million tonnes per annum each in Bihar and Jharsuguda, Odisha along with additional clinkerisation capacity of 2.5 million tonnes; this will raise the capacity of KJS Cement to 5 million tonnes p.a. and make them one of the largest plants in the country. They have already applied for additional mines. Complementing the capacity growth, the marketing network too has been growing wider and stronger. PK Ahluwalia, Managing Director, KJS Cement, talks about an approach that nurtures the company associates and fuels growth, too. Excerpts from the interview.
What was the thought process behind the preparation of your media plan?
Our media plan was developed using typical insights from the cement trade; most importantly, we put our money where the return in terms of recall is optimum. Television and print media form key components of our media plan, as we have set a target of becoming a brand to reckon with in the next year. Apart from the mass media build-up, we strongly believe in tactical visibility which helps the KJS brand to connect with its customers in rural areas. Our media plan is inspired by the vision to make KJS a premium brand.
What are the challenges you foresee in the market and how have you factored them into your marketing strategy?
We know the capacity to be well matched with demand, which will encourage companies to move towards better brand marketing rather than commodity selling.
Till that happens, cement remains in the grey zone of being a commodity as well as a brand. Buying will be driven by both brand recall and pricing. The challenge lies in assimilating KJS’ capacity in the market and then graduating to develop a premium brand. The idea is to maintain volume and simultaneously build value for the KJS cement brand. KJS Cement will strive to gain a share in the lucrative trade segment and become a preferred brand. Of course, we understand that it will take time and much effort.
Soaring raw material prices have forced cement prices up. How can one persuade consumers to shell out extra for your product?
Yes, raw material prices have pushed up the costs. It is clear that the consumer will shell out at a premium only if he sees value in the brand and does not see cement merely as a product. We believe in the creation of value through superior services like civil engineers educating the masons on how to improve the construction practices and also advising concrete consultants on the scientific and effective use of cement. Cement is an intermediate product, which in conjunction with the right construction practices, leads to building stronger homes for the middle class in the nation. The construction expertise in the nation must evolve to be on par with those in the developed nations. At KJS, our QC team visits the market and draws samples of other brands for comparative testing in the presence of actual consumers. These services distinguish us from other brands. Premium creation, we believe, will come from premium management and processes.
Which is the better strategy, distributing through few large dealers or routing it via an extensive network of small dealer outlets?
The design and shape of the network is immaterial, the objective is to distribute enough material to every city, tehsil centre, rural mandis, and ensure that we price the brand on par or higher than the competition. Though initially, during the launch phase, we have go with few large dealers, eventually, after one- and-a- half years of operations and crossing 1.12 lakh tonnes per month, we are beginning to focus on an extensive and deep network of smaller dealers who will co-exist with the larger dealers. In fact, we envision our network to be like a close- knit and a growing family.
Cement is seen more as a commodity than a specialised product. How do you create brand differentiation and stand apart?
We believe in converting the commodity into a consumer brand through an effective advertising strategy driven by a techno-marketing team of civil engineers who will reach out to the consumers/ users, adding value through knowledge and world class construction practices. The trick is to execute the strategy effectively at the ground level and build brand differentiation. Our key differentiators are brand quality and market services which conform to BIS and are of world class cement industry standards.
How do you reach construction professionals at different levels, ranging from civil engineers and consultants to contractors and masons?
The KJS team maintains a close interaction with leading civil engineers across the country and also actively participates in the government initiatives for rural construction. We associate with contractors who are working for the Gram Sadak Paryojana in MP and with the Mandi Parishad Samiti in UP. We reach them through our extensive network of dealers and civil engineers.
Quality perception of cement varies from customer to customer. How do you factor this into your marketing plans?
Quality perceptions are built with time and experience of the consumers. KJS Cement has built up a high reputation for its quality in a short time. A-grade quality always creates A-grade quality perception, which in turn leads to brand perception. We follow an uncompromising approach towards quality in everything from product to the management of company and services. This approach gives us the edge in quality perception.
Other than price and quality, which other factors influence buying decisions?
Word-of-mouth or the referrals from the peer group is the single biggest influencer of consumer decisions in every industry, including cement.
What are your current and future marketing plans / initiatives for promoting your products at different levels?
At KJS, our marketing initiatives will include creating market share consolidation in the core market and expanding our network in long-lead lucrative markets.
The plan will include careful identification of such markets, with a viewpoint of upcoming capacities in the area.
Over and above all this, we will continue to remain committed to inclusive growth and will ensure that our business associates continue to grow and flourish with the company. KJS will strive to make its dealers market leaders.
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