MKT382 - Fresh Cement is one of the renowned cement brand in Bangladesh, a subsidiary PDF

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Fresh Cement is one of the renowned cement brand in Bangladesh, a subsidiary of Meghna Group
of Industries, which started its initial operations in 2002. They have been involved in business in
both domestic and international markets through export. In this report, we have carried out a...

Description

International Marketing MKT382 Sec Submitted to:

Riasat Muhammad Amir Marketing & International Business North South University Submitted by: Name 1. 2. 3. 4. 5. 6. 7.

Abrar Shahriar Aleef Ahmed Md. Safa Rabib Rahman MD Zihan Mahmud Md.Musfiqgzaman Nabil Hussain Sohedul Islam Munna

I 1811979030 1620964030 1712778630 1620133030 1511673030 1632256630 1610022030

Contribution Table Name

Abrar Shahriar

ID

Work Contribution

1811979030

Introduction and Contingency Plan

Aleef Ahmed

1620964030

Md. Safa Rabib Rahman

1712778630

SWOT ANALYSIS

Promotion Strategy

MD Zihan Mahmud

1620133030 Product/Service and Branding Strategy

Md.Musfiqgzaman

Nabil Hussain

1511673030

1632256630

Market Entry Strategy

Target Markets Identification and Segmentation Strategy Market Positioning

Sohedul Islam Munna

1610022030

Price Strategy Structure

Acknowledgments Foremost, it is a pleasure for us to undertake this project, which has been a great learning experience for all seven members who were involved in writing this report ‘International Marketing Plan for Fresh Cement’. We would like to express our gratitude to our honorable faculty Mr. Riasat Muhammad Amir, Senior lecturer at North South University. The completion of this report ‘International Marketing Plan for Fresh Cement’ would not be possible without his guidance and support. Besides, all we have accomplished in this small-time frame was credible to the utmost dedication of seven group members who have worked on this report. Lastly, we are thankful to our classmates, group members and friends who have directly or indirectly helped us prepare this report.

Executive Summary Fresh Cement is one of the renowned cement brand in Bangladesh, a subsidiary of Meghna Group of Industries, which started its initial operations in 2002. They have been involved in business in both domestic and international markets through export. In this report, we have carried out a SWOT analysis of Fresh Cements which included an internal analysis of their strengths and weakness along with an external analysis of the opportunities and threats in the market. In addition, to clearly understand and objectify their plan for the Fijian cement market, a STP analysis (Segmentation, Targeting and Positioning) has been carried out. Then, the market entry strategy has been suggested with clear reasoning for why it is the most appropriate method to carry forward with and also why the other alternatives are not appropriate during this period for Fresh Cement considering their capacity and as well as the market scenario. Furthermore, the Marketing Mixes (product, price, place and promotion) has been analyzed and suggested based on the Fijian market. To be specific about the promotions strategy, a well planned IMC (integrated marketing communications) plan has been provided aligned with our suggested market positioning. Lastly, a brief contingency plan has been provided by taking into account that the suggested plans may not work perfectly and may encounter some complications. Hence, this plan can help Fresh Cement to mitigate such inconveniences and solve them to ensure a successful market penetration to Fijian Cement market.

Table of Contents 1.0 Introduction........................................................................................................................................... 1 3.0 SWOT Analysis ..................................................................................................................................... 2 3.1 Internal Company Strengths and Weaknesses .................................................................................... 2 3.2 External Market Opportunities and Threats ........................................................................................ 3 4.0 RECOMMENDED MARKETING STRATEGY (TSP Framework) .............................................. 4 4.1 Target Markets Identification and Segmentation Strategy.................................................................. 4 Segmentation............................................................................................................................................. 4 Targeting ................................................................................................................................................... 5 4.2 Market Positioning .............................................................................................................................. 6 4.3 Market Entry Strategy ......................................................................................................................... 7 5.0 MARKETING MIX STRATEGIES AND TACTICS ....................................................................... 8 5.1 Product/Service and Branding Strategy .............................................................................................. 8 5.2 Place (Distribution) Strategy ............................................................................................................. 10 5.3 Price Strategy Structure Person 5...................................................................................................... 11 5.4 Promotion Strategy ........................................................................................................................... 13 6.0 IMPLEMENTATION AND CONTROL.......................................................................................... 20 6.1 Formal Contingency Plans ................................................................................................................ 20 7.0

BIBLIOGRAPHY/REFERENCES ............................................................................................. 22

1.0 Introduction Meghna Group of Industries, the country’s one of the top three cement producers has their two cement subsidiary brands – of which Fresh Cement being one of their prime contributor to the business vertical. Apart from Fresh cement company, Meghna Group has some other business subsidiaries which include chemical, consumer product, real estate, insurance, securities, utilities etc. This Meghna Group started their journey in 1976 and their initial name was Kamal trading company. Fresh Cement being an achiever of ISO Certification and introduction of innovative technology such as German Polycom Technology, have enabled to expand their production capacity to cater to not only domestic demand but also export to other nearby countries such as Nepal and India. The Fijian Cement market is currently at an Introductory stage but have high prospects of market expansion due to new plans by their government for building new infrastructures e.g. roads, bridges and also has investment opportunities for their tourism industry. In addition, the increase in urbanization shows that there is a rising demand for formal housing and accommodation facilities. Hence, an effective International marketing strategy for Fresh Cement is vital to effectively penetrate in the Fijian Cement market.

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3.0 SWOT Analysis 3.1 Internal Company Strengths and Weaknesses Strengths: •

45 years of unstoppable flow.

•

MGI has been diversified and put steps on a vast array different markets and industries.

•

Fresh Cement is in the 4th position among all other brands. ("FRESH Cement", n.d.)

•

World's best German Polycom technology is being followed to produce Fresh special cement. ("FRESH Cement", n.d.)

•

MGI has won National Export Trophy (Gold Medal) for 2010-2011. "Awards and Achievements: Meghna Group of Industries", n.d.)

•

Fresh Cement is ISO certified.

•

Highly experienced in export market & huge turnover.

Weakness: •

Insufficient investment in research and development.

•

Huge amount of limestone usage to produce Fresh (PCC).

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3.2 External Market Opportunities and Threats Opportunities: •

Fiji’s population is gradually moving towards urbanization.

•

Government is expanding new infrastructures.

•

Free trade policy

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Less competitors in the Fijian market.

•

Removal of tariff duties.

Threats: •

Due to Covid-19 pandemic, sales and market demand decreased.

•

Shaky political landscape.

•

Fiji's current foreign investment act is protectionist.

•

Pacific Cement supplies about 80% of the market in Fiji.

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4.0 RECOMMENDED MARKETING STRATEGY (TSP Framework) 4.1 Target Markets Identification and Segmentation Strategy Segmentation Cement market being a industrial product has a different market scenario than other goods such as e.g. consumer goods which are sold at retail stores and bought by individual consumers. Public In broad context, the Cement industry of Fiji can be segmented into two large groups: public and private consumers. In case of public, the demand comes from the new infrastructures e.g. bridges, roads and housing projects are big drivers of Cement demand. Therefore, in this case the tenderers who receive projects from government housing department and other departments dedicated for infrastructure projects. This segment although small in number however can comprise of a large share of the market due to the scale of projects e.g. entire housing project of a community, roads and bridges. If we geographically segment the public demand, infrastructures and housing projects are likely to be built in both urban areas and rural areas. The public buyers are mainly concerned about both trust and heavily on pricing. Usually, tenderers give option to multiple Cement suppliers to bid the lowest possible price after screening their product quality. Private Under private, it comprises of individual home builders and commercial real estate developers Another segment is hotels and resort builders in tourism industry, as Fiji’s economy’s one of the prime driver being this industry, there is potential for indirect demand for Cement industry. If we geographically segment these consumer groups, it would be mainly Fiji’s urban cities such as Greater Suva Urban Area, Lautoka City and Nadi Town where there is growing demand for housing and tourism sector. For instance, Suva city is likely to have more demand for individual housing due to rise in urbanization and Nadi city is referred as the major spot for tourism where there are likely to be more investment opportunities for building more hotels and resorts to cater the accommodation facilities of tourists, thus increasing demand for Cement indirectly. The individual home builders would have the following demographic characteristics: both men and women but majority men (being the highest labor participation rate affecting their purchasing power to build homes), and aged above 40 years (considering people have a stable income to save and invest in building home). The personal home builders can be very sensitive about trust of the brand, and may compromise to pay a higher price if the brand ensures a better quality product for building their homes. On the other hand, real estate developers can be very specific about their budget thus they can be price sensitive considering they are likely to resell the final product (buildings), keeping in mind that real estate developers need to keep their costs within budget to be able to provide budget friendly houses to their consumers (buyers of buildings). Along with the above mentioned consumers groups, another segment is industrial companies such as the sugar cane processing industries in Fiji’s Lautoka City where there are opportunities for building and construction, although this demand have some limitations in terms of size. 4

Targeting In term of prime target markets, are the one’s which are greater in scale and has potentiality for growth in the near future. Keeping in mind of these factors, Fresh Cement should targe the following segments: government tenders (public segment) and real estate builders. Firstly, government tenderers although a small segment in quantity however this segment has a potential for making sales in volume. With Fiji’s economy progressing towards urbanization (increasing number of infrastructural projects), there is potentiality for Fresh Cement to gain sales from the market. However, they need to ensure right product pricing, and achieve a good network to get orders from government tenderers who will be responsible for building and construction. Another prime segment is the commercial real estate builders, who are greater in number comparatively and there are opportunities for Cement market as the housing market is currently experiencing a shortage, hence there are likely to be more housing facilities being constructed in Fiji, which would drive the demand of Cement market. Hence, this segment not only as a conventional target market is suitable for a brand like Fresh Cement, moreover the current economic scenario shows good prospects for the Cement industry to grow.

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4.2 Market Positioning In order to position Fresh Cement’s brand in Fiji’s market, they would need to analyze the issues encountered by both consumers and indirect consumers. Given that Cement is a product commodity that is not directly consumed or received rather used as a resource for another product, it can be quite tricky to position in this market. One of the issues that the Fijian population faces in terms of housing is affordable and proper housing facilities, as they are gradually progressing towards urbanization there is seen to be shortage in homes and formal housing facilities. Therefore, it is seen that people are having a growing demand for proper housing facilities rather than the informal housing they have. One part of these consumers consists of mainly personal home builders who mainly dream for a better housing facility and doesn’t want to compromise quality by saving on costs. Another issue is regarding real estate developers who seek for Cement companies who maintain adequate standards, good pricing, quality and environmental friendly standards of vendors. In order to pursue the first issue, Fresh Cement’s one of its positioning in Fiji market to address their needs and penetrate would be to portray a sense of trust within consumers of the brand that their Cement can ensure optimum strength for their building foundation, as a part of Quality positioning strategy. Moreover, addressing Fiji’s vulnerability to many natural disasters being close to the sea, they can market their brand as how susceptible their product is and what ingredients are used behind to provide adequate protection against natural disasters. In addition, their brand positioning would be touching emotional appeals and a theme of a better living standard as a consumer who is likely to build their home tend to be very emotional around building their shelter. The positioning statement for this strategy would be “Building your future”. Next, Fresh Cement can position their brand through product feature and Attribute strategy which would speak about the fact that Fresh Cement has ISO certification, innovative technology such as installed German Polycom Technology. Another aspect would be communicating the product’s attributes such as what percentage of ingredients were used to ensure each Cement’s strength and individual attributes such as moisture level, alkali, etc. Since it is likely to be a new brand in Fiji, they should display their portfolio and talk about how many buildings and mega projects were done in Bangladeshi market, what countries they export to; this would serve as a sense of credibility and allow real estate developers to grow brand resilience gradually. Their brand positioning should also speak about how environmentally sustainable their products are through using waste reduction strategies. The positioning statement for this strategy would be “Reliving Fiji”

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4.3 Market Entry Strategy Fiji’s trade policy is Foreign Direct Investment (FDI) friendly. It offers numerous incentives for foreign investors to invest in Fiji. Most lucrative incentives are - tax free land for production facility, import duty exemption for raw materials and equipment. The government of Fiji promotes the country as an emerging trading hub for manufacturing by pointing out the country's geographical proximity to New Zealand and other Southeast Pacific island nations (“Why Fiji? Fiji Trade Commission North America,” 2019). However, opening up a cement factory is a commercially unavailable idea. Fiji is a tiny island nation with a population of less than a million. Fiji’s cement consumption is driven by government spending and corporate buyers. The annual demand for cement in Fiji was 547,500 metric ton per year (“Pacific Cement to acquire new machines to improve production,” 2017) in 2017 whether the production capacity of Fresh Cement stands at 3.60 million metric ton per year (“How many Cement plants are producing in Bangladesh 2020? | Datis Export Group,” 2020) . Very low demand for domestic consumption makes Fiji unviable for FDI. Also Fiji does not have required land mass for scaling up cement production as it’s a string of Island, Fiji does not have other adequate factors of production to support building a manufacturing hub to cater the demand of big economies like Australia and high income nations like New Zealand. So for these reasons we are not choosing FDI. Exporting is the best option for Fresh Cement to enter the Fiji market. It will allow the company to enter the market in the shortest period of time. Fresh cement can make the best use of existing facilities by exporting the surplus bags of cement to the country. Fiji market offers potential for sales for Fresh Cement as there is supply shortage of about 13800 metric tonnes cement per day. Therefore, currently Fiji is engaging in imports of Cement commodity to balance this market shortage. Hence, keeping all these factors in mind, export is the most suitable option for them. Fiji follows a liberal trade policy where custom duty is set as 16% which is relatively low (“Trade Profile - Fiji Islands - Nordea Trade Portal,” 2018) . Exporting is a volatile option, change in political climate dictates export, if Fiji adopts nativist trade policy it will reduce the amount of export. However, being a trade based economy as 78% of Fiji’s GDP comes from trading (“Trade Profile - Fiji Islands - Nordea Trade Portal,” 2018) so Fiji can not sustain nativist trade policy. These circumstances make export as the best market entry strategy for Fiji.

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5.0 MARKETING MIX STRATEGIES AND TACTICS 5.1 Product/Service and Branding Strategy Cement product is considered as an industrial good which is used for manufacturing or construction purposes. The purpose of this product is to act as a ‘binding agent’ with other construction materials to prepare infrastructures e.g. roads, bridges, and buildings for commercial or residential purposes. This type of product commodity is considered a high involvement product, meaning that they are usually bough at volume considering the size of the project and it requires additional level of market search by the buyer and to build preference before finally giving an order for cement from a supplier. The core benefit of cement product is basically act as a binding agent to help act as a foundation for any construction purpose. The actual product includes the physical product cement, which is known as Fresh Portland Pozzolan Cement (PPC), suitable for export purposes. It is packed in 50 kg bags with brand colors used as blue and red logo color. The Fresh Portland Pozzolan Cement (PPC), packed under the ...