ACC Cement is the largest manufacturer of cement in India. The registered office is in Mumbai and is called the Cement House. LafargeHolcim controls the management of the company. ACC is the product of the merger of 10 cement companies, owned by Tatas, Dinshaw group, Nixon, Khataus. The infrastructure industry is always in demand. However, the economic slowdown affects the cement industry.
In this case study, we discuss the ACC Cement marketing strategy, competitive analysis, SWOT analysis, and also some marketing campaigns carried out by them. In its marketing mix, advancements in all the sectors like the Product, price, place, promotions, etc have been carried out.
So let us begin with learning more about ACC.
ACC Limited (also formerly known as Associated Cement Companies Ltd.) was founded by Framroze Edulji Dinshaw along with a group of other visionary entrepreneurs of India in the year 1936. The company was the result of an amalgamation of ten cement companies of pre-independent India when the respective owners and stakeholders decided to pool their resources to create a premier force in the country’s then-nascent cement industry.
Currently, ACC Limited is one of the biggest cement manufacturers in India earning over 1.6 billion dollars yearly revenue. It has over 17 cement factories and 75 concrete mixing plants and employs over 6,700 people from all over the world. In 2005, the company became a part of the Switzerland-based Holcim Group which in turn has merged with Lafarge Cement to form LafargeHolcim and is considered a leader of the world’s building materials industry.
Now that we have a brief overview of ACC. Let’s dig in deeper and know about its marketing mix.
Marketing Mix of ACC
A framework of a combination of factors to define the marketing strategies is a marketing mix. ACC has a diversified range of products. Its marketing mix is as follows:
ACC plays a pivotal role in the infrastructure development and cement industry. In the past decades, they have contributed to various ventures in collaboration with the government and other private companies. Being the leading company and with a strong market share, it pleases its customer with quality cement. Some of the are:
- Portland cement
- Ready-mix cement
- Bulk cement
- Premium cement
To provide maximum benefits to the consumers, ACC tries to bring innovative products and procurement techniques. All varieties of cement are doing great in the market. They leveraged the world by impressing their customers and investors with their quality products.
Ready-mixed products are priced more due to their ease of use. Likewise, the basic material Portland cement is priced lowest. Another premium category cement is priced accordingly because of the durability they offer.
As cement is ordered in bulk, pricing is done at minimal margins so that the cost can be recovered by supplying multiple units. Besides, a little less price attracts customers. It helps to build relationships with the builders who can offer various diversified projects through word of mouth.
A pack of cement varies somewhere between 280 INR to 350 INR. There are varied packaging sizes, which are designed to fit everyone’s needs. ACC is very open to customer feedback and they take those suggestions very seriously as it will help them develop and improve their performance.
Since the inception, ACC has established strong bases all across the country. The headquarter of ACC Cements is in Mumbai with manufacturing locations i.e around 20 cities. The headquarter is called a ‘cement house’ The cement serves the projects for India and wherever else the cement is exported.
A huge chunk of ACC cement supplies come from Jamul, Kymore, Sindri, Vizag, Wadi, New Wadi Plants. It reaches out to customers directly through outlets and by franchisee methods. Consumers can now buy cement online as they have improved their digital presence in the recent past. The enterprise aims to be easily accessible by everyone. Hence, they are making themselves available on almost every front.
ACC Cement uses many media channels to market itself. Due to history and brand status, customers are pulled rather than sales being pushed. Also, relations with builders help gain a lot of promotion for the brand. Customers buy cement only if they have full trust in the brand as cement is a safety factor. Word of Mouth has been an important promotional factor for ACC.
ACC has that very powerful TV Ad, where the slogans ‘Cementing Relationships’ attract eyes and make people trust the brand. The qualitative approach of serving customers has helped this company to keep it floating.
Now that we have a comprehensive understanding of the marketing mix. Let’s move forward and look into the marketing strategy of ACC.
ACC Cement Marketing Strategy
Segmentation, Targeting, Positioning in the Marketing Strategy
ACC Cement uses a combination of the geographical division of mind and concept to understand the changing needs of the sector and to eliminate customers.
As its products are targeted at a different segment of customers and are designed for a variety of uses in the meta market, therefore, it uses differentiating targeting techniques.
It uses a mix of product categories, set up strategies, and customer-based benefit strategies to enter the market by targeting different segments of customers.
Reaching each segment of the nation ACC Cement binds builders, government agencies and works in partnership with its subsidiaries such as ACC Mineral Resources Limited (AMRL), Bulk Cement Corporation (India) Limited (BCCI), Lucky Minmat Limited, National Limestone Company Private Limited and Singhania Minerals Private Limited.
It has a network of more than 10,000 sales points supported by 8000+ company employees to pioneer the distribution of R Ready Mix Concrete and Bulk Cement in the industry.
ACC instrument customers are retailers, builders, distributors, and retail customers in the 25-60 age group. ACC cement plays a very important role in the penetration of rural areas in India through a wide distribution network.
In a highly competitive market, it competes with companies such as Ultra tech cement, Dalmia, Shree cement, prism cement, Ambuja Cement, and many more.
Synergies in real estate sales, a strong parent company (Holcim), and easy access to products are what help a company compete in the industry.
The ACC cement market is highly competitive due to the presence of a large number of local/international and international players and faces various challenges such as changing people’s livelihoods, rising labor costs, declining employment, political stability, increasing supplier and customer negotiation barriers, procurement barriers, etc.
Measures to accelerate infrastructure development, Macroeconomic growth, and increase consumer confidence are helping the industry primarily.
The company has rich mining experience (a large user of limestone). It is among the largest customers of domestic coal, Indian and Central railways, and outside the freight industry. One of India’s largest cement manufacturers/producers plays a key role in transforming the country’s infrastructure.
They are the leading runner in CSR and being part of the Lafargeholcim team has helped the brand increase its visibility and awareness in the country.
With its 17 state-of-the-art factories and 50 refurbished plants and a network of 10000+ retailers supplied by 21 sales offices, ACC cement reaches every community structure.
To compete with its competition and stay on the top of the leaderboard, they must be aware of the internal and external factors of the company. Let’s take a deeper dive into the company with a SWOT analysis.
SWOT Analysis explores the relationship between the environmental influences and the strategic capabilities of an organization compared to its competitors. The importance of SWOT is revealed by the value of the strategies it generates. A SWOT item that generates no strategies is not important.
Strengths of ACC
- It is having a good image and brand loyalty among consumers.
- Service is good
- “Dhalai Karne Ke Liye” people ask for ACC
- Perceived to be of very superior quality cement when compared to others
- Selling from the very first day the shop came in to being & sells easily
- They have the same price prevailing for wholesale at dealers/stockiest retailers end
Weaknesses of ACC
- The competitors are doing much promotional activity rather than ACC Limited that’s why it is facing more problems in the selling of a product in the market.
- Lack of awareness program for consumers.
Opportunities for ACC
- People are opting for more stable structures and intensive use of cement is taking place, even the government is spending heavily on infrastructure projects. Thus, this is the right time to fully tap these markets.
- As the Indian core industry is also growing at a rate of nearly 10% per annum, it is having a good future.
- Foreign direct investment in the infrastructure sector going to increase in the coming years, which will increase the demand for cement.
- Roads are undergoing the transformation process through which the traditional method of road building will be replaced by modern concrete roads.
Threats to ACC
- A large number of players in the cement industry makes it more competitive for ACC to carefully price its product and at the same time satisfy its dealers and customers.
- Players such as Jaypee Cement, Prism Cement, and Birla Samrat are eating up considerable market share.
- Due to India’s exponential growth, many new international cement companies are expected in the coming years which will bring a tide of change and can start a price war.
- The emergence of small players in this market may increase the competition and start malpractices, and heavy discounts to retailers. They can also influence many retailers by giving better profit margin, and other Benefits.
A company needs to analyze its internal factors to turn its weakness into strengths. Also, opportunities to plan. Let’s take a look at its marketing campaigns and see how it markets itself.
Marketing Campaigns of ACC
Marketing campaigns promote products through different types of media, such as television, radio, print, and online platforms. It not only promotes the product but also sends a meaningful message to connect with the customer. Marketing campaigns by ACC are quite relatable which helps it to build a strong bond with the consumers.
Kare Kuch Kamaal
Cement and home-building are central to our lives. The ACC campaign has elevated them to the joyful celebration they deserve to be.
The TVC shows the emotions of a young couple as they think about building their own house, and how ACC’s expertise transforms that process from stressing to one of happiness, and optimism.
Paani Se No Haani
As construction gradually resumes, ACC has rolled out a new digital campaign for its product – Gold Water Shield, a water-repellent cement.
The Gold Water Shield ad satirizes typical ads that present ‘drama’ to sell products. In this ad, a smart ACC presenter signs off ‘ACC hai to drama Kyon?’.A group of homebuilders shoos away an entertainer who made an appearance only to convince them that using Gold Water Shield means ‘Paani se no haani’ for their homes.
The market is dynamic. Companies need to adapt and be alert about the changes. After understanding ACC and its marketing efforts from multiple angles, let us now look at a summary of all the issues faced by the organization, according to our research. Focusing on the pain points could help the firm, switch gears and drive on the right track.
ACC is highly focused on its future objectives & expansion plans, but at the same time, it has to maintain a balance between the present plan & the future one. Based on strategic analysis following recommendations will help in achieving its future goals effectively & efficiently:-
- ACC must focus on its Vision & Mission to attain its objective.
- It should focus on expanding its market to grab market shares.
- It should also try to maximize the shareholders’ wealth.
- ACC should not choose those projects which may dilute the brand name just for the sake of gaining market shares.
- It should focus on converting itself from Question Marks to Stars.
- It has high growth potentials, so it should try to raise funds timely to meet its target.
- It should not over-promise as it will deteriorate its goodwill.
- ACC must focus on its competitors’ strategy to gain a competitive edge
- They should work on their digital marketing activities as it is equivalent to nil
Being one of the oldest companies in the industry, ACC has faced numerous challenges during its journey. Yet, it is one of the most trusted brands in the country. They are adapting to new trends and executing new schemes for consumers to sustain.
Keeping pace with changing times and an ever-growing need for specialized services, ACC has begun offering its marketing expertise and distributaries facilities to other producers in cement and related areas. However, a precondition of all such agreements is quality control supervision to be carried out by an ACC expert located at the franchisee’s plant.
ACC Cement focuses on offering a lot of offline marketing support to its customers. Thus to conclude it can be said that ACC cement has its branches spread all over India ACC Limited company products are profitable not only in India but also in the whole world. While talking about digital marketing, the social media presence of ACC is nearly equal to null. They have not taken much effort to market their services and products so that it reaches the audience.
Digital Marketing is the future. Brands need to explore the wide spectrum of Digital media and be more conscious of their branding, advertising, and also their engagement on social media platforms. The brand’s social media platform forms its identity in the minds of customers.
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