Marketing Plan for Eco-Friendly Concrete
Clean Concrete- “Take a ride on the green side“
We want to market Eco –Friendly concrete. Concrete that uses less energy in its production and produces less carbon dioxide than normal concrete is referred as Eco-Friendly concrete or Green Concrete. We have assigned a name to our product as “Clean Concrete”. Since there is a need to move towards a more environmentally safe approach (seeing the pollution and the Greenhouse effect), we have decide to give our product an envirosafe image.
Traditional Concrete is made from a mixture of cement, sand, gravel and water. Cement is an environmentally hazardous material as it is extremely energy intensive and this makes cement the third producer of CO2 emission. And making traditional concrete also harnesses various natural resources which also affect the nature. Whereas Clean concrete is environment friendly and is considerably cheap to produce as it consumes less energy and is more durable. Clean concrete will replace the traditional concrete blocks and will be available in standard size( by their thickness) of “4-inch”, “6-inch”, “8-inch”, and “12-inch”.Through are researches by the R&D department,the expected demand of 6 inch,8 inch and 10 inch is expected to be high in the current market and 4 inch and 12 inch is minimal. So our production line will be producing the in demand blocks and the 4 inch and 12 inch blocks will be order made.
With the existing available machinery our fixed cost will vary on the basis of labour and raw material while the product’s variable cost will vary according to the production.
New Product
1. Product Description
1.1 Product Portrayal
“Clean Concrete” is a product that serves a particular segment of customer. The product is eco friendly concrete, which is unique in the current market. The green/eco friendly concrete will be processed from locally available recycled concrete aggregates, sand, fly ash and Portland cement and sold in solid form(blocks) of different standard sizes. Our Clean concrete will be resource and energy efficient. Our target market will be the small and large real estate builders and the individual home builders. Making the product cost efficient and durable will be the target of the company.
1.2 Product Profile
Name of the Product: Clean Concrete
Type of Product: Eco-friendly concrete block
Raw products used: Recycled concrete aggregates, sand, fly ash and Portland cement
Form- Solid block
Block Size (by thickness): 4 inch, 6 inch, 8 inch, 12 inch
Product Price: 4 inch block for INR 20 per piece
6 inch block for INR 24 per piece
8 inch block for INR 30 per piece
12 inch block for INR 35 per piece
Permeability- Lower permeability and high durability
Strength-Higher strength per kilogram of cement
Brand Slogan: “Take a ride on the green side“
2. Market Research and Analysis
Our company wants to develop and introduce a new Product. So, we have gathered information through in-depth interviews. We made a survey of the market to have a clear idea about our market, our customer demand, needs and wants. This information helps us to know about the current market and prospects of our new product.
2.1 Market Description
India is the second most populated country in the world and to cater the shelter need of such big population, the real estate sector and the cement industry is growing immensely. Cement production is increasing approximately 5% a year and it is the most environmental destructive material. With the increase in population and the need of more eco friendly approach, Clean concrete will be a product which will be more eco friendly, keeping in mind the nature and consumer. Nature lovers and consumers with envirosafe mindset will be attracted more towards Clean concrete. And seeing the current scenario of the world and the demand of more environmentally safe product, we have a growing prospect of consumers of Clean concrete.
2.2 Market Segmentation and Targeting
Market Segments
We have observed and analyzed the market and based on the nature of the market we segmented the market in the following sectors:
Geographic Segmentation:
• Urban and rural areas especially the metro cities
• Booming Institutional areas
• Areas having demand of large occupancy
Demographics:
• Individual home builder
• Real estate builder
Psycho graphics:
• Higher class
• Upper Middle class
• Middle class
Behavioral:
• Environmental friendly people
• Health conscious people who take pollution as health hazard
Target market and projections:
Analyzing all the segments, we decided our target market according to our product category. The target customers of “Clean concrete” are individual home builders, small project contractors, real estate builders, big infrastructure contractors etc. With the onset of environment friendly wind in today’s era, Clean concrete will be appropriate in its domain. The projection of Clean concrete is done keeping in mind its consumers and its substitute available in the market. These substitute needed a more sustainable and practical counterpart like Clean Concrete.
Target Market:
Individual home builders: These are the trade customer or retail customer who purchases cement from cement retail store and build private house for own accommodation.
Industrial customers: A customer who has a registered company and buys large quantities of cement and bricks can buy Clean concrete directly from sales points. Government is an industrial customer. Big builders and promoters fall into this segment.
Generally 5 types of non trade customer segmentation:
[1] Builders and promoters: Are private companies specialized in developing housing or commercial complexes to sell them on the market.
[2] Big infrastructure contractors: are corporate companies that handle main civil construction projects for the government or private customers: poIr plants, water waste, airports, major bridges.
[3] Small projects contractors: are small public or private contractors which work essentially for government infrastructure projects at smaller scale: roads, schools, irrigation etc.
[4] Manufacturers: are industrial manufacturers which use cement as a raw material for their production: ready-mix, AC sheets, or concrete blocks manufacturers.
[5] Expanding companies: Are private companies which are building new industrial units to increase their production. The consume cement for their own purpose
Market Needs:
“Clean concrete” wants to give better performance to its consumer and be eco friendly as well. That’s why it is important to identify the market needs. Our first consideration is to provide the best possible product to our customers. That’s why we assessed the upcoming marketing need of our product and its substitute, which would help us in making a more optimum product both on the basis of performance and cost. Increased dependence on recycled materials and effective use of supplementary cementitious materials makes the product more cost-effective. This can easily help the product to cater the needs of the target market.
2.3 Competitive Analysis
The real estate industry is growing at a large pace to cater the growing population. With this the Cement industry is very much competitive. Many cement companies have acquired a significant portion of the market. But the unique features of “Clean concrete” will be that it will be different from its substitute. It will be a move towards the envirosafe construction taking it far beyond the reach of the competitor. Because, no one has yet thought about selling green concrete in such a way. To evaluate our prospect of “Clean concrete” in the current market, we have analyzed the market situation in various ways. Following are some demonstration of the analysis:
2.3.1 SWOT analysis:
The product existence in the future is depending on its strengths, weakness, opportunities and threats analysis:
Strengths:
1.Eco friendly product
2.Green concrete is economical compared to conventional concrete.
3.Available input materials
4.Strong distribution channel
5.Easy manufacturing process
6.Reasonable price
7.Better workability
8.Sustainable development
9.Requires less maintenance
Weaknesses:
1.Water absorption is high.
2.It is easy to copy the idea by others
3.Demand is needed to be created among the people.
4.High risk is involved
5. Expensive promotional strategy for this product
Opportunities:
1.Large market 2.Might have a chance to get subsidies by Govt. to export.
3.Innovation
4.Excellent opportunities for export
Threats:
1.High competition in future by copying the idea
2.Entrance of a similar product by competitors like Ambuja cement 3.Uncertainty of launching a new product.
4.Increase in cost of promotion
2.3.2 Competitor Analysis
The major cement and concrete companies of current market are:
• Shree cement
• J.K Lakshmi cement
• Ambuja Cement
• Foreign Products etc.
Distinct Competency:
These companies can try to enter our market by launching new product lines to compete us. Yet, we have distinct competitive advantage. That is our product is still brand new. The other companies will take sometimes to enter into the market. Till then we can have a monopoly market condition. The other advantage that we have is lower price. We will sell products in reasonably lower price than other competitors do.
Strategies against competitors:
1. To compete with the major competitors we can adopt the following measures:
2. Providing the best service to create high customer satisfaction
3. Reasonable and acceptable pricing
4. On demand size for large demand
5. Promising and providing top quality product
6. Launching highly effective mass promotional activities
7. Continuous innovation and modification of the products
8. Creating and maintaining long term customer relationship
9. Creating “Brand Loyalty” among the target consumers
3. Market Plan
Pricing Strategies
We have decided to set a reasonable price for our product when we will develop it. We considered many factors in setting the pricing policy. We will describe a five-step procedure:
3.1.1. Setting the pricing objectives:
Our company has decided where it wants to position its market offering. We have chosen our objective to maximize market share. We believe that a higher sales volume will lead to lower unit costs and higher long-run profit. We have set the lower price because we assume that the market is price sensitive. Our overall objective is to capture the maximum market share by setting lower price.
3.1.2. Determining Demand:
Each price will lead to different level of demand and therefore have a different impact on company’s marketing objectives.
3.1.3. Estimating costs:
We have estimated the cost and want to charge a price that covers the cost of production, distribution and selling the product, including a fair return for its effort and risk.
3.1.4. Types of cost and level of production:
There are two types of cost: a) fixed and b) variable. In our new product development project fixed cost is 1,80,00,000 rupees. Fixed cost includes- machinery, monthly bills, and salaries of employees and so on, regardless of output.
There are some variable costs like-cost of manufactured sand, recycled glass aggregate, BFS, fly ash, packaging and so on. These costs tend to be constant per unit production. We have estimated that per unit variable cost is rupees 13500rs for 1000 blocks, 26000 for 2000 blocks, 38500 for 3000 blocks.