Chapter - 2

Review Of Literature

2.1: Marketing Strategy

2.2: Role of Marketing Strategy
2.3: The Strategy Marketing
Performance Link
2.4: Marketing Strategy in Cement
Industry
2.5: Marketing Strategy Contributing
to Firm Performance
2.6: Factors Affecting the Marketing
Strategy
2.7: Marketing environment of cement
industry in Madhya Pradesh
2.8: Marketing Strategy of Cement
Companies in Madhya Pradesh
2.9: Research Gap
 CHAPTER - 2

REVIEW OF LITERATURE

2.1 Marketing Strategy

Marketing is defined as the expectation, management and satisfaction of

customers’ demand through the exchange process of goods and money.
Strategy is comes from a Greek word strategos was used by military to define
the art of the general. The meaning of it was to plan in such a way with the goal
to defeat the army of enemy.

Strategy is a plan of action to attain a predefined long term goal. In the same
way marketing strategy is the goal of increasing sales or profit and achieving a
sustainable competitive advantage. Marketing strategy always plays an
important role in the growth of a company or industry as a whole. Marketing
strategy also decides the future position of the company in the market as well
as in the industry. Drucker (1973) defined marketing strategy as a process of
environmental analysis, competition factors affecting the business of
corporation. Further it helped it in defining and developing the marketing
objectives, implemen:ation and control of marketing program and positioning
strategies to meet the needs of target market/customer segment.

Marketing fits in the strategy when company needs the input of the marketing
department on the following marketing issues as below:

• Competitive threats to the company

• Profitable opportunities
• Opportunities for market growth, maturity and decline
• Needs of the customers
• Distribution and pricing ideas

The more important part of marketing strategy is that it answers the question,
why should our customers buy our products or service and not those of our

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competitors? This helps company to include it in the marketing plan to
concentrate on the offerings of the company. The marketing strategy also
explain the different ssues related with marketing to have a clear cut idea of
the target market, positioning of the product in the market, the branding of the
product and the ways to brand it. It also considers the external environment and
the various factors which may affect the company’s position in the market.
These factors are size and demographic characteristics of the target market,
consumer behavior, and customers’ opinion towards the product offered by the
company, estimated sales, market share and profitability in selling the product
for next few years. These are the few concerns which every marketer must
consider in preparing marketing strategy for the success.

Bradly (1991) definec marketing strategy as: “The strategic marketing process,
therefore implies deciding the marketing strategy based on a set of objectives,
target market segments, positioning and policies"

According to Bovee and Thill (1992) marketing culture oriented companies are
unlike production and sales oriented companies. Companies having marketing
culture develop marketing strategies as an overall plan to target customer and
market segment through product, price, place and promotional activities.

Kotler (1997) definec marketing strategy as: “The selection of target markets,
the marketing mix and the marketing expenditure levels. The marketing
strategy is the way in which the marketing function organizes its activities to
achieve a profitable growth in sales at a marketing mix leveF

A marketing strategy in general sets a target market and a marketing mix. It is a

"big picture" of what a company will do in some market in order to gain a
marketing strategy can then be formulated by using the information you
gathered in your market research. Marketing strategy should be based on the
following points:

• Probable offering of the marketing mix

25
 Target market

• Duration of continuing with the target market

• Resources and budget needed

• The expected results in terms of profit and sales

Marketing strategy comprises of few valuable plans that incorporate an

organization's marketing objectives. The Proper arrangement of objectives,
policies, and action sequences makes the marketing strategies effective. The
main aim of marketing strategy is to increase the sales and profits of any
organization or company.

Marketing strategy is developed by keeping in mind the following factors:

2.1.1 Environment analysts and marketing research:

The observation of external factors that promote success or failure of a

company is most important for marketing strategy. The external factors include
the factors like economy, competition, atmosphere, transport system and
solicitation of data to resolve special marketing issue.

2.1.1.1 Market selection:

Right market selection is very important for the better product sales. The total
sales volume of a product depends on the market location, whether the market
is located in urban or rural areas; whether the market place is certainly
accessible for people.

2.1.1.2 Consumer analysis:

The characteristics of consumer like taste, selection and preference affect the
product marketing. The characteristic of consumers differs from person to
person and location to location. So assessment of consumer characteristics,
wants and purchase processes is also very important.

26
 2.1.1.3 Product planning:

Product planning contains the growth of existing product by changing of the

composition, packaging system, positioning of product, brands and deletion of
the non-performing products.

2.1.1.4 Distribution planning:

The delivery system of the product to several markets, including shopping

malls is also considered for marketing strategy. The distance from the
production place to whole or retail seller, transportation system, physical
distribution, allocation of goods, wholesaling detailing, inventory management
and channel relations are reasonable factors for distribution planning.

2.1.1.5 Price planning:

Price of a product should be kept in acceptable range for all classes of people
so that they can easily pay for the product. If the price of the product becomes
very high, the consumer will not buy the product.

2.1.1.6 Communication Planning:

The communication planning might include the advertising about the product
through different mass media, such as the television, radio, newspaper. The
more a company publishes, the more it sells. At the recent time, online
advertising is another media of publicity. By advertising the companies or
organizations gets the chance of focusing their product's good quality and
urging the customers :o buy their products.

2.1.1.7 Brand name:

Brand name of a company has a large effect on the consumer to make them buy
their product. A company should select a nice and attractive family brand for
its better publicity.

27
Wind and Robertson (1983) proposed a new direction for theory and practice
in marketing strategy. The suggested new direction would help in overcoming
the limitations of present theory in practice and direct the future action of the
company. It emphasizes on to study the competitors, customers and other
environmental factors affecting the company’s performance.

Baker (1984) defined marketing strategy as a goal setting and achievement

activity. It further explained the marketing strategy as a marketing function
important for any strategic business unit to achieve its goal in a systematic way.

Cravens (1986) each and every company faces a problem in business

environment. Marketing strategy comes into the scene when a company starts
understanding its strategic position in the business and to solve the problem in
a strategic manner.

Dickson and Ginter (1987) have discussed the importance to understand the
actual meaning and use of market segmentation and product differentiation in
preparing the marketing strategy. In their research they emphasized to
understand and apply the theory into practice and not to get confused with the
differentiated and undifferentiated marketing strategies. In this research it has
been revealed that sixteen books on marketing strategy were not clear with the
market segmentation and product differentiation marketing strategies.

Jain (1989) suggested a conceptual framework for marketing strategy to fill the
gap in between concepts and quantitative researches. There are very few
researches have been done m international marketing strategy but there is still a
huge gap in between theory and practice. It further discussed about the issue of
standardization and customization of the international marketing strategy to
help both practitioners and academicians. It provides a conceptual framework
to the global companies to prepare their international marketing strategy.

Sharp (1991) discussed the three competitive marketing strategies of Porter:

low cost strategy or cost advantage, differentiation strategy and focus strategy
used in marketing irrespective of any industry. It further suggested that if a

28
company has ability and resources can strive for more than one strategic benefit
at a time. Also it proposed further to reach such a level that it can affect the
structure of the market through its actions.

Gronroos (1996) discussed the importance of relationship marketing for the

company as a whole It further illustrated that relationship marketing is not
limited to direct marketing or creating relationship with the key channel
members in the business but it is more than that. If company needs to adopt
relationship marketing it also required making change in the company’s present
philosophy.

Firat and Shultz (1997) discussed in their conceptual research that change in
the market conditions in the era of postmodernism must reflect in preparing the
marketing strategies. It suggested that if proper attention and emphasis should
be given to marketing strategies by the managers and companies they would
get desired results in business. This research provided a framework to the
marketers to get maximum benefit through marketing strategy.

Menon and Menon (1997) discussed in their paper concern about the business
environment and competitive environment of the company for a firm
competing at global level. It further reveals that previously external
environment considered as external factors influences the decision making of
managers but today :t is of utmost importance and considered as the major
factor in taking marketing decisions and preparing marketing strategy. In this
research three types of environmental marketing strategies has been identified
to overcome from the environmental problems and steps needed to find out the
gaps in future research.

Varadarajan and Jayachandran (1999) found that there is a need to focus

more on the marketing strategies for a firm to survive and grow in dynamic and
ever changing business environment. With this changing business environment
marketing would play an important role in deciding the strategic direction of
the company. In accordance with increasing focus of the firms on the brand

29
equity and customer equity, marketing strategies would play a major role in
present and future.

Jain (2000) defined marketing strategies as an effort of the company to

differentiate itself from the competitors’ offerings in a positive manner by
utilizing company’s strength to better satisfy the target customer/market
segment. It suggested before deciding marketing strategies to work upon three
C’s i.e. 1. Where to compete? 2. How to compete? 3. When to compete? It
further discussed the three important components of marketing strategy i.e.
customer, company and competition required to prepare marketing strategy.

Heskett (2003) suggested that marketing strategy got convert into marketing
productivity when company started listening to the expectations of its
customers and actually start implementation on it. It is required to focus more
on sales than on adve~tising to get in touch with the customers directly to know
about their needs and expectations.

Mitchell, Wooliscroft and Higham (2010) proposed a new approach

Sustainable Market Orientation (SMO) to govern marketing strategy of the
firm. Orientation towards market is the prime requirement of any corporate
marketing strategy which needs extending towards sustainability of the market
orientation. The three objectives of sustainable market orientation of any
marketing strategy are economic, social and ecological sustainability.

Wensley (2010) explained marketing strategy as one of the solution and

framework to understand the market environment, competition and ways to
achieve competitive advantage which ensure long term profits. Marketing
strategy is not restricted to formulate strategy and its implementation
strategically but also analysis of the outcome to again prepare the marketing
strategy. The three important factors of marketing strategy suggested were
customers, competitors and channels.

Shaw (2012) conduced a secondary research to propose a marketing strategy

framework to suit the today’s business environment. The research is based on

30
the secondary data mainly referred from the three streams of research mainly
managerial economics, marketing management and corporate management to
prepare a more logical and working model for companies to prepare their
distinct and suitable marketing strategies to compete in the market.

2.2 Role of Marketing Strategy

Role of marketing strategy is very phenomenal for the successful organization.

It helps an organization to survive and grow in today's very dynamic business
environment. In the beginning marketing strategy clubbed with the
management strategy and focused on the issues of product or market selection.
The involvement of marketing department in these was negligible in the
beginning as it was considered as the matter of management strategy.

With increase in the competition, ever changing customer behavior and

increase in the expectations of both customers and channel partners
involvement of marketing department becomes inevitable. Till the last 80’s
marketing strategy was considered as a part of business strategy. Considering
the analysis over the last thirty five years reveals that marketing strategy
emerged as one of the mast important function of the company and plays a
significant role in understanding of market environment.

Few decades back logistics function and competition were given less
importance in prepar ng the marketing plan and business strategy. In today’s
dynamic business environment logistics becomes a management of supply-
chain considered to be one of the most important function of the company.
Competitive analysis is one of the most important functions of the marketing
function in the company and all the activities of the company revolve around
the customers. Company considers the 3 C’s very important in preparing the
marketing strategies are customers, competitors and company. (Wensley, 2010)
defined 3 C’s as customers, competitors and channels, management of which is
very important for the company to sustain its position in the complex and
dynamic market environment.

31
The role of marketing strategy is much wider and important in today’s complex
market environment. Marketing strategy analyzed in terms of three strategies,
four contexts and five forces. The three generic strategies were suggested by
Porter, cost leadership, differentiation and focus strategy considerably framed
and reframed by the industry people in preparing their marketing strategy. The
four boxes or contexts related to the portfolio matrix suggested by Boston
Consultancy Group (BCG) during 1960’s to define market share and market
growth matrix under Bruce Henderson. The five forces analysis was again
introduced by Porter to understand the external business environment to
prepare the strategy for marketing. The five forces mainly consider the
situation where external factors of the company get empowered and how
company can overcome from it. These five factors which are external to the
company are:

1. Suppliers

2. Customers

3. New entry/New competitor

4. Substitute product

5. Existing competitors in the market

The role of marketing strategy is to help company to focus on the important

market segment by utilizing its present strength to overcome from the
weaknesses and exploring the opportunities while facing the potential threats in
the external environment. There are few important literature reviewed to
understand the roles of marketing strategy are as follows:

McDonald et. al (1987) suggested that role of marketing strategy is to utilize

the resources and skills available to the company in achieving the profit by
catering the needs of the markets. The marketing strategies play a major role in
achieving the marketing goals by using four P’s effectively and efficiently.

32
 Barney (1991) found that the prime objective of any marketing strategy to
improve the long term financial performance of the company and improve the
financial health of the company too. Sustainable competitive advantage created
through marketing strategy helps company to improve its financial position as
compare to its competitors.

Walker (1992) suggested that the primary role of any marketing strategy is to
attain organizational objectives by utilizing existing marketing resources with
effectiveness and efficiency. Marketing strategy also includes catering the
target market segment of the organization to decide the specific product
offering to the customer segment by creating competitive advantage.

Bharadwaj (1993) suggested that role of any marketing strategy is to support

organization to achieve long term sustainable competitive advantage, which in
turn help company to enhance its business performance.

Sudarshan (1995) further reported that a company’s competitive advantage

based on the three factors 1. Marketing strategy of the company, 2.
Implementation of the strategy and 3. Context of the industry (Five forces of
Porter) in which it is managing its business. Further it’s suggested that
relationship with customers and channel partners is one of the most important
component of the marketing strategy.

Porter (1996) discussed the three role of marketing strategy in the business
mainly:

1 Overall cost leadership

2. Differentiation
3. Focus

Through these three options a firm can adopt any of the strategy to do its
business. Company can target the general market and penetrate it by offering
cost effective products to become a market leader. When company starts
concentrating to be a different among the competitors it can be done through

33
adopting differentiation strategy by communicating the uniqueness of the
product exclusively available with the company’ product. The last but not the
least is focus strategy which focuses on the particular market or customer
segment and catering their needs by satisfying their needs by being different.

Kotler (1997) explained the role of marketing strategy is to define the target
market segment and prepare a marketing mix according to the selected market
segment along managing the marketing activities to make profits and
controlling the marketing expenditures. Marketing strategy further play a role
in recognize the needs of the customer or market preparing the product which
fulfill the needs and manage the resources allocated to marketing to achieve
maximum customer satisfaction level and increase the sales and profit of the
organization.

Bradly (2003) suggested that marketing strategy involves very concentrated

approach towards the defined customer segment in a very competitive market
to satisfy their needs in a very productive manner.

Rajagopal (2005) suggested that the role of marketing strategy plays an

important role in expanding the business setup of the company for growth. The
company must prepare the strategies to plan and act accordingly at the time of
problems and difficulties. Company can fill the gap in three ways: firstly by
recognizing the opportunities for growth and then prepare a strategy to
penetrate the market or by introducing a new product in the market or by
developing a new market. Second marketing strategy is to expand the present
business by acquiring related business or by integration of it business activities.
Business integration can be forward or backward or horizontal integration.
Finally the company must focus on diversification of business by introducing a
new business unit in a related business or unrelated business to exploit the
business opportunities.

Saxena (2010) discussed that the role of marketing strategy is to create a

competitive edge for the company to decide the future of the company. The

34
role of marketing strategies is to understand the markets which needed to be
covered, finding the niche markets among the various market choices, planning
for product and service offered by the companies, distribution strategies to
place the product well in the market and management of the outcome of the
adopted marketing strategies. The focus of marketing strategies must be the
customers and countering the strategies of competitors to not only sustain in the
market but also strive for making the profits for growth. It further states that a
company must create value to become competitive in the market and to
differentiate its offerings from the competitors.

2.3 The Strategy Marketing Performance Link

Organizations prepare and apply strategies with the aim to improve its business
performance. It is very important to study the relationships between strategies
and performance with the purpose to know about the effectiveness of strategies.
It is very important to know which strategies under which conditions may
improve to what level the performance of the company.

The relationship between competitive strategy and its performance is very

much predominant topic to conduct a research since last three decades. During
this time, however, most published work considered firms and industries in the
US and other developed nations.

Many theorists and practicing managers have resisted for many years to
understand and define the role of marketing in explaining business performance
differences between firms. Most of the theory base for any such attempts has to
be informed by strategic management pursues to answer is why some firms
outperform others over time.

The role of marketing in enlightening the business performance of the firm has
acknowledged substantial consideration all the way through the history of the
marketing subject. The need to link marketing strategy with the performance of
firm has become more prominent as well as need of the hour as marketers have

35
been required to protect the value of their activities and budgets during the
current global recession.

Frederick and Webster (1992) suggested the changing role of marketing in

the dynamic business environment and importance of customer centric
approach for the companies to survive in the market. The change taken place
from simple market orientation to marketing orientation of the companies and a
huge change had been taken place from bureaucratic structure of the
organization to become more flexible and marketing oriented organizations.
Managerial focus shifted from production and market to marketing and
customers. Marketing becomes more strategic and customer oriented function
of the company converted it into a social and economic process.

Hooley, Lynch and Jobber (1992) conducted a primary research and

discussed the importance of generic marketing strategies in the industry in UK.
Constituents of marketing strategy like marketing objectives, strategic focus,
market targeting, quality and price positioning were discussed in the paper.
There were five generic marketing strategies were recognized and analyzed by
corporate attitude, market type and performance using discriminant analysis.
Primary tools used to conduct the research provided in depth understandings of
marketing strategies and its performance in the UK industries.

Cavusgil and Zou (1994) in this research marketing strategies and its link with
the performance of the organization with respect a product division has been
discussed in details with reference to export marketing strategy. Previous
researches shows that ample researches has been undertaken on the
performance linked marketing strategies in domestic market but lacks in export
marketing context. The research has been undertaken to define the various
factors linked with performance of export marketing. It has been found out that
firm’s international competence and managerial commitment are the two
factors contributing in the export performance linked with marketing strategy.

36
 Manu and Sriram (1996) discussed in their research about the role of
innovation in the survival and growth of the company, but introduction of that
innovative product in the market depends upon the marketing function and also
marketing strategy plays an important role in the performance of the product
introduced. The success of marketing strategy also depends upon the entry of
the product in the market. Late entry of the product in the market often leads to
produc: failure. Success of product in the market depends on the success of
marketing strategy but the time of product introduction in the market also affect
the performance.

Kumar and Peterson (2005) suggested that to formulate marketing strategy,

marketers need information about their customers. It further developed a
customer oriented framework that a company needed to apply to get the desired
financial gains. From the implementation of marketing strategy based on the
same customer oriented framework.

Koksal and Ozgul (2007) discussed about the need of changes in marketing
strategies at the time of crisis. In their research they found that those companies
which stick to their present marketing strategies during economic crisis unable
to survive. Those companies which made changes in their marketing strategies
during economic crisis not only survive but also sustain their position. In this
quantitative and primary data based study researchers included the twenty one
marketing strategies and elements related to the marketing mix and general
marketing strategies. Performance of the companies related with the marketing
strategies adopted and changed by decision makers during crisis.

Morgan (2010) discussed the three main theories in strategic management with
the empirical and theoretical literature on strategic marketing to develop an
integrative theory-based conceptual framework linking marketing with firms’
business performance. The outcome of the research shows that there is a huge
correlation in between marketing strategies on the performance of the firm.

37
 2.4 Marketing Strategy in Cement Industry

Indian cement industry growing and demand for cement is increasing day by
day due to economic boom. This economic growth and increase in the demand
for cement helped India to become the second largest cement producer in the
world.

The cement market is prospering all over the world. Since last twenty years, an
annual average growth is at five percent, it is equal to the hundred million extra
tons being consumed every year. Regardless of the financial and economic
problems, demand for cement increased by approximately five percent in 2013.

Growth in cement industry is robust in emerging economic countries, mainly

China, Brazil, India and Sub Saharan Africa, because of increasing
urbanization generates demand for housing and infrastructure. This helped
world’s biggest cement group of companies “Lafarge group” to increase in
sales by fifty eight percent in 2013.

Ruyter and Semeijin (2002) discussed the case of European cement industry
in regard to relationship marketing as a long term marketing strategy for the
firms to sustain business. It has been argued in the research that commitment in
the relationship marketing is one the prime factor for the success of long term
business relationships especially in the cement industry.

Paliwal (2003) discussed the issues related with the strategic pricing issues in
the cement industry in India. Research undertaken was based on the primary
data based on the interview of cement marketing professionals and distributors
of the cement companies. Pricing plays an important in the competition and in
the cement industry the effect of pricing strategies is significant. This research
further elaborated about the significance of right pricing strategy to implement
overall marketing strategy and proposed a conceptual model of marketing
strategy in cement industry to provide an opportunity for researchers to conduct
further research in future.

38
Burange and Yamini (2008) found in their study that sales and marketing
strategy is the most important factor in the cement industry for many
companies. They found that sales and marketing strategy got more weightage
than any other factor for the companies to become more competitive in the
industry. There is an extreme need to focus on sales and marketing strategy for
cement companies to take competitive advantage to grow in the dynamic
business environment of the cement industry.

Singh (2012) discussed the history of cement industry in India and problems
faced by cement industry in marketing their cement products since beginning to
present. It has been argued that in the beginning cement industry was facing
problem of underutilization of the production units and price control in
marketing. Today cement companies facing a tough competition and struggling
for their positioning in the competitive environment with the help of
competitive marketing strategies.

Kumar and Bansal (2013) conducted an exploratory research to gain insight

into the marketing mix strategies adopted by selected cement companies in
India. Research tools questionnaire and interview has been usedW in order to
collect the primary data. Interviews of cement marketing professionals and
executives have been conducted to gain more insights into marketing strategies
and marketing policies of the selected cement companies.

Kumar, John and Senith (2013) discussed the progress of Indian cement
industry in recent years. In their investigative research designed to know about
the growth of cement industry in India since 1991. The parameters taken into
the research were production capacity, production, exports and value addition
in the cement products. The study was completely based on the secondary data
to evaluate the performance of the Indian cement industry.

Shaik, Balkrishn and Banana (2014) discussed the future marketing trends in
the cement industry which will focus on the emerging economies markets,
improving production technology to minimize the cost to achieve cost

39
leadership, branding and innovation to provide better cement products to the
targeted customers. The future lies with those companies which provide the
best quality cement product at affordable prices and most of the companies in
the cement industry is focusing on producing the best quality cement by
introducing upgraded technology.

2.5 Marketing Strategy Contributing to Firm Performance

Each and every organization required to develop its own marketing strategy
based on the various factors. It is nothing like one size fits all marketing
strategy but there are many factors which required including in the marketing
strategy to contribute in the firm’s overall performance.

Huizingh and Zengerink (2001) discussed the importance of measuring the

marketing performance from both academicians and practitioner’s point of
view. It proposes a new conceptual model called Hierarchical Marketing
Performance (HMP) to measure and assess any kind of marketing strategy.
This study tries to include all the factors which are going beyond the financial
performance.

Jaakkola, Parvinen and Koller (2004) discussed the strategic marketing and
its impact on the business performance in three European engineering
countries. This study discovers empirically how diverse marketing resources
and business directions effect on firms’ financial performance through
competitive advantages and market performance. For better performance a
better strategic marke:er required to plan and executes the marketing strategies.

Akinyele (2011) conducted a research in the oil and gas industry in Nigeria to
know about the impact of strategic marketing on firm’s performance. It has
been found that companies equipped with marketing strategies gained a
comparative edge in the industry. This study shows that strategic marketing
have a significant impact on performance variables and that they interact with
the different components to facilitate performance. It also indicates that
different performance factors moderate strategic marketing practice.

40
Morgan (2012) conducted a research to develop a comprehensive
understanding of how marketing is linked with the business performance which
is important for both marketing theorists and practitioners. It further suggested
a conceptual framework linking marketing strategies with the performance of
the business. The conceptual framework suggested that marketing and
marketing strategies decisions and its implementation keeping competition in
check by taking advantage of proper positioning contribute to the business
performance in terms of financial and market performance.

2.6 Factors Affecting the Marketing Strategy

There are several factors which affects the marketing strategy of the firm. A
marketer must consider these internal and external factors while preparing
marketing strategies for the firm. Apart from internal and external factors there
are some other factors which need consideration which affects the marketing
strategies of the firm are:

1. Position of the company in market: The situation of the company’s market

share and sales figure must be considered and analyzed with respect to the
strength of competitors and customers’ response. These two situations of
the company must be recognized considering the factor of company’s
position in the market.

2. Company’s mission, policies, objectives and resources: It is very important

to align the strategies with the mission, objectives, policies and resources of
the company for the smooth functioning. While preparing marketing
strategies it is very important for decision makers to frame the strategies
considering the mission, objectives, policies and resources available with
the company.

3. Competitors marketing strategies: In this open economy and dynamic

business environment it is very important to know about own company as
well as the strategies adopted by competitors. A good marketing strategist
must consider studying the strategies adopted by its competitors, their

41
 strength and weaknesses to achieve the company’s goal. While
concentrating on the target market segment it is equally important to know
who the existing players in the same market are and what they are doing to
attract customers. It helps company to include or exclude the customer or
market segment while preparing the marketing strategies.

4. Consumer opinion: While preparing marketing strategies, considering the

opinion of consumers is very important to fulfill the customers’
expectations. If company does not produce what customer want there will
be no sale. It is one of the most important factors to know about the
customer need, preference and opinion about the offerings of the company
while preparing marketing strategies to avoid consumer dissonance. To get
knowledge about the purchasing behaviors, motivations and perceptions of
those who are the direct responsible of our products it will also be key when
making strategic decisions in marketing. Most of the companies got failed
in marketing and more specifically in the formulation and implementation
of the strategy due to a lack of data about the consumers. All business
activities today revolve around the customers and taking their opinion is a
very important activity.

5. Product life cycle stage: While preparing the marketing strategies it is very
important to cons der the life stage of the product. There are different life
stages a product faces just like life of a human being. It starts wit

6. h an introduction stage when product introduced in the market required

different strategy, when it goes through growth stage required different
strategy and when it is in maturity stage required a different strategy and
when it goes through decline stage when sales volume start decreasing
required a different set of strategies. Because of the different situation a
product faces required different treatment as far as marketing strategies are
concerned. Marketers cannot apply similar marketing strategies for a
product across all the product life cycle stages.

42
7. Economic condition and market situation: To know about the economic
conditions of the consumers and consumer segments and situation of the
market are very important factors while preparing the marketing strategies.
It helps to understand the paying capacity of the consumers and to prepare
the pricing strategies according to it.

The timely planning is very important to avoid decreasing in the set targets
which are expected. Also it a required marketing activity does not implement
on time may be the reason behind unable to achieve the targets. The time is a
key to define the degree of execution of the strategic plan of marketing.
Marketing strategies must control performance. (Are the proper steps being
taken to achieve the objective?), they must allocate resources directly or
indirectly; (Do we have sufficient resources to accomplish our objectives0).

Neill and Rose (2002 1 proposed a model to understand the link among strategic
complexities, marketing strategies and organizational performance. This model
further describes the process of marketing strategy and organizational
performance. Marketing strategy includes both strategy formation and its
implementation.

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 Fig.: 2.1: Effect of Strategic Complexity Marketing strategy process and
organizational performance

Source: Neill and Rose (2002)

Strategic Complexity: To familiarize to an environment, an organization’s

internal diversity must match or go beyond that of its environment. An
organization consist diversity and combination of information (e.g., ideas,
roles, skills, knowledge) are able to take further decisions. Strategic complexity

44
has a direct relationship with the marketing strategy processes and
organizational performance. By analyzing the marketing strategy processes and
organizational performance helps an organization to take better decisions for
greater performance which is directly related to the strategic complexities.

Marketing Strategy Process: Formulation of marketing strategy comprises of

processes involving both strategy development and its execution. The model
(Fig. 1) describes the two aspects of marketing strategy i.e. multiple
perspective consideration and improvisation. While formulating marketing
strategy multiple perspective consideration provide a variety of options and
solution to the problems. Improvisation of the situation provides a wide variety
of thinking and ideas to solve the problem.

Organizational Performance: The performance of the organization based on

the three perspectives. These three perspectives are customer based
performance, efficiency based performance and financial based performance.
These criteria decide the future of an organization in a strategic complex
environment. If any organization concentrates on a single component of the
organizational performance can have a strategic benefit in only one area. For an
example if organization only concentrates on customer based performance it
loses the chance to become more successful and also affect the performance of
the organization drastically. If organization consider all the three components
in strategically complex environment chances of greater performance
automatically increases.

Marketing Strategy and Performance

Marketing performance term is gaining its importance day by day in the era of
dynamic business environment. Marketing performance is the outcome of all
the marketing activities and strategies adopted by an organization to satisfy
customers’ needs. Marketing performance of any company judged on the basis
of its effectiveness from the customer’s point of view. Jeffery and Mishra
defined, “Marketing performance management as the combination of tools.

45
 processes, and methods used to develop, monitor, measure, and control
marketing campaigns and programs to increase the return on both individual
and aggregate marketing investments. Marketing campaigns are defined to
include all direct and indirect organizational marketing endeavors indirect
organizational marketing endeavors initiatives etc

Marketing performance can be judged on the basis of various factors and their
outcomes like sales turnover of the company, new customer acquisition, brand
awareness, return on marketing investments and competitiveness in the market.
With the help of marketing performance metrics an organization can improve
its performance. Ambler and Kokkinaki (1997) conducted a research focusing
on the different variable responsible for the marketing performance of the firm
contrary to the previous researches done in this field which were focused on the
drivers of marketing performance. Clark (1999) mentioned in his article based
on the review of literature to review the marketing performance based on the
points which measures financial to non-fmancial output. The growth of the
organization to assess only marketing outputs by measuring marketing inputs,
and the growth from one-dimensional to multidimensional measures of
presentation. Again Clark (2000) conducted an empirical study to find out the
measures of marketing performance against the marketing strategies of the
managers in the organizations. The outcome of the study reveals that managers
evaluate the marketing performance on the basis of efficiency, adaptability to
the environment and effectiveness (outcomes versus expectations). Julian and
O Cass (2002) discussed the firm’s internal and environmental factors affecting
the marketing performance of the organizations. Market orientation of the firm
to attain the marketing goal affected by both internal and external business
environmental factors

Clark (2002) discussed that for managers and stakeholders of the company
marketing performance assessment is a very important task. It further discussed
that internal factors such as accounting, research and development,
manufacturing process and finance are the internal measures which affect the

46
marketing performance but most important factor are external to the firm which
are competitors and customers on whom firm has no control. Vorhies and
Morgan (2003) found that there is a strong relationship in between business
strategy linked with marketing performance in the selected marketing
organization. It further suggested that when marketing actions of the marketing
organizations fit into the overall implementations of business strategy increase
the marketing performance. Ambler, Kokkinaki and Puntoni (2004) analyzed
the two existing thoughts on the marketing performance and various factors
affecting it. It has been found that one thought considers key metrics like
consumer, competitors, channel partners innovation and accounting are the
most important factors. Other thought indicates that organizational orientation
like direction of top management and role of brand equity are important factors
in the marketing performance. This study reveals that the uniformity in
between orientation and metrics and found nineteen metrics to evaluate the
marketing performance. Gronholdt and Martensen (2006) created a conceptual
model to know about the different marketing actions contributed in the
marketing performance in terms of financial outcomes. The research was based
on the extensive literature review to understand the different marketing factors
playing an important role in the marketing performance. Lamberti and Noci
(2010) conducted a research based on the multiple case studies on the
relationship in between marketing strategy and marketing performance of the
organizations.

2.7 Marketing environment of cement industry in Madhya Pradesh

Cement market of Madhya Pradesh is having quite good number of major

players and various small players competing with each other. Major players
along with their installed capacity are mentioned below:

47
 Table 2.1: Company unit wise production capacity in Madhya Pradesh
(2012)

1 Birla Corp. Ltd. - Birla Vikas & Satna Satna 1.55

Cement

2 Century Textiles & Industries Ltd. Maihar 3.80

3 UltraTech Cement Ltd. - Vikram Jawad 3.00

Road

4 Heidelberg Cement India Ltd. - Damoh 1.03

Diamond Cements

5 CCI Ltd. Neemuch 0.40

6 Jaiprakash Associates Ltd. Rewa 3.00

7 Jaiprakash Associates Ltd. Bela 2.40

8 Jaiprakash Associates Ltd. Sidhi 1.50

9 Prism Cement Ltd. Satna 5.60

Source: Cement Manufacturer’s Association

48
 Indian cement market is divided into geographical segments based on East,

West, North, Central and South zones. Madhya Pradesh and Uttar Pradesh

come under the central zone of cement industry in India. Singh (2012)

mentioned that top three companies Ultra tech cement, Jaiprakash associates

ltd., and Century textiles and industries were producing around 70% of the total

cement production in the central zone during the year 2011.

Figure 2.2: Cement Production Statistics in Central Zone (2011)

Ultratech
cement, 13.02

Others, 29.88

Jaiprakash
Century textiles
Associates Ltd
and Industries,
41.54
15.56

Source: CM IE data

Demand for cement is increasing day by day in Madhya Pradesh and

companies also increasing their production capacity within installed capacity.

During last five years there was a slight fluctuation in cement production

figures in Madhya Pradesh but consumption pattern is increasing year on year

basis.

This is a good sign for the companies operating their business in Madhya

Pradesh. Demand among the consumers in every segment it is increasing and

future trends shows that it will increase in coming years because of various

housing, infrastructure, road and commercial projects are coming up in the

state. Table 2 shows the cement production and consumption pattern in

Madhya Pradesh.

49
 Table 2.2: Cement Production & Consumption in Madhya Pradesh

Year Capacity Cement Cement Cement &

Production Consumption Clinker
Export

2011-12 22.28 (9.13) 20.54 (11.42) 9.76 0.85

2010-11 22.28 (9.35) 19.19 (11.34) 8.91 0.97

2009-10 18.18 (8.17) 19.21 (11.95) 8.12 0.83

2008-09 19.37 (8.75) 20.02 (11.02) 8.38 0.66

2007-08 19.37 (9.78) 19.72 (11.72) 7.48 0.65

Source: Cement Manufacturer’s Association

Product Portfolio managed by the various companies having their marketing

operations in Madhya Pradesh is as follows:

50
Table 2.3: Product portfolio of cement companies in Madhya Pradesh

s. Name of Product Portfolio Brand Name

No. Cement
Company

1 UltraTech • PPC (Portland “Ultra tech

Cement Ltd. Pozzolana Cement”
(Birla Corp. Ltd.) Cement)
• OPC (Ordinary “Birla White
Portland Cement) Cement”
• Portland blast­
furnace slag
cement
• White cement

2 Century Textiles • Composite cement “Birla Gold”

& Industries Ltd.

3 Heidelberg • PPC (Portland “mycem”

Cement India Pozzolana
Ltd. - Diamond Cement)
Cements • PSC (Portland
Slag cement)

4 CCI Ltd. • PPC (Portland “CCI Cement”

Pozzolana
Cement)
• OPC (Ordinary
Portland Cement)

51
5 Jaiprakash • PPC (Portland “Jaypee Cement”
Associates Ltd. Pozzolana
Cement)
• OPC (Ordinary
Portland Cement)

6 Prism Cement • PPC (Portland Champion

Ltd. Pozzolana
Cement)
• OPC (Ordinary
Portland Cement)

Source: Website of companies

2.8 Marketing Strategy of Cement Companies in Madhya Pradesh

2.8.1 Market/Customer Segment: Market or customer in Madhya Pradesh is

divided into two categories:

i. Trade segment
ii. Non-trade segment
i) Trade segment: Retail customers involved in the construction of their
own home and small contractors come under the trade segment for
cement companies. The demand or need of this trade segment is fulfilled
through an extensive network of retailers and dealers.
ii) Non-trade segment: This segment includes bulk purchasers of cement
mainly government projects, semi-government projects, big commercial
set-up and big contractors. This segment directly managed by the
companies and taken care by the dedicated department.

Marketing strategies plays an important role not only in the survival of the
company but also in the growth. With increasing in the number of cement
companies, India cement industry is getting competitive day by day. Some of

52
the common marketing mix strategies most of the cement companies have
adopted or working upon discussed below:

2.8.2 Product Strategy: Generally cement is made up of easily available

materials lime stone and gypsum without using any complex production
process. The biggest challenge for any company is to convert a basic product
into a branded product. Image building for the product among the target
market/customer segment is one of the major activities done by the cement
companies. There are two types of quality in the industry are: a) Product with
actual quality b) Perceived quality by customers. Most of the companies deals
in two types of cement products:

i. PPC (Portland Pozzolana C

ii. OPC (Ordinary Portland Ce

ACC cement, Prism cement, Gujarat Ambuja cement and India cement are few
cement manufacturing companies focuses more on quality products rather than
producing low cost cement products. £ ^ t"* '
Cement companies also played product differentiation strategjf totter the

different customer/market segments and produce different variety of cements

Ordinary portland cement, Portland pozzolana cement, Portland blast furnace
slag cement, Oil well cement, Rapid hardening portland cement, Sulphate
resisting portland cement and White cement etc. difference in all these cement
products is based on the use of clinker.

2.8.3 Pricing Strategy:

Price in cement industry is dependent on the demand. Basic pricing strategy

adopted by every cement company is to earn high profits during demand
increases for the cement. Due to fix cost involved in the production of cement,
company produces it throughout the year. During off-season or no demand in
the market companies adopt discounted pricing or low price to attract the
customers to buy cement. On the other hand during high demand for cement in

53
the market company charge higher pricing to compensate the losses during less
demand in the market

Apart from general pricing practices some of the companies branded

themselves as high quality cement manufacturing companies charge premium
price for their cement. These companies adopted premium pricing strategy to
sell their products in the market.

2.8.4 Distribution/Place Strategy:

Cement companies have adopted “Network” strategy which includes

appointing of retailers, distributors or dealers at the right place. Creating
network of distributors and retailers is one of the most successful place strategy
adopted by cement companies in general. To keep channel partners motivated
and active company launches various loyalty buying offers, discount schemes
and foreign touring offers for its distributors and retailers.

One of the biggest challenges for any cement company is to minimize the
transportation cost, providing pre and post sales service and relationship
building with valued customers for long term.

2.8.5 Advertising/Promotion Strategy: To promote and establish a company,

it requires promotional or advertising strategy to reach the target customer or
market segment. Cement companies also adopted general practices to advertise
their product through various communication instruments are:

• Electronic media
• Radio
• Print media
• Outdoor advertising through hoardings
• POP activities
• Events like prcperty fairs, Grahak mela and others

One of the most common and cost effective advertising strategy adopted by
many of the cement companies is wall painting to reach the mass market at a

54
very low cost. Apart from different advertising tools now cement companies
concentrating onsite demonstration through a team of engineers to gain the
confidence of customers at large. Team of qualified engineers provides mobile
lab facility to check the quality of concrete to the customers during
construction and also provide technical guidance.

Few of the premium and big cement brands have adopted celebrity
endorsement strategy to promote their products. It means promoting their
brands through making a famous personality as their brand ambassadors.

• Binani Cement (Amitabh Bacchan)

• JP Cement (Sachin Tendulkar)
• India Cement (Mahendra Singh Dhoni)
• JK Lakshmi (Om Puri)

During low demand to attract more customers cement companies launch lucky
draw coupon schemes by providing exciting offers like car, bike, home utensils
and many other prizes.

2.9 Research Gap

Previous researches show that marketing and marketing strategy is one of the
most important elements for any firm. Marketing strategy provides a direction
to the firm to achieve its goals and objectives within a stipulated time. There
are numerous factors both internal and external to the organization affects the
performance of the firm in a big way and it requires proper attention of
decision makers to consider them while preparing marketing strategy. It has
been found that marketing strategy plays a very important role in the growth of
the organizations. Both competitors and customers are very important external
factors which can’t be controlled by the organizations but affect their business
in a big way. Every marketing strategy prepared without these two important
factors may get failed during implementation. Many research conducted in
different industries focusing on the marketing strategies but very few research
has been undertaken globally focusing on marketing and marketing strategies

55
in the cement industry. The research gaps with reference to marketing and
marketing strategy in the cement industry are as follows:

1. No extensive study has been undertaken in the cement sector focusing

on the developing a model to prepare a model for marketing decisions
and prepare marketing strategy.

2. A very few primary researches has been undertaken in the cement

industry and focusing on the marketing strategy and its impact on the
marketing performance is negligible.

3. Organization structure and marketing environment are very important

factor while preparing marketing strategy and there is not a single study
has been undertaken considering these factors.

4. There is a scope to conduct a study seeking competitiveness of the

different firms in the cement industry with reference to competitor
analysis.

While considering the review of literature and available industry data cement
sector is getting more and more competitive due to entry of various competitors
and new players in ths cement industry. It is required to focus the study on the
competitors and customer preference while conducting the primary research.

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