Marketing Plan for Cold Bitumen in India
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Marketing Plan for Cold Bitumen in India

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  • Tiki Tar Industries is India's largest private sector asphalt & bitumen manufacturing company operating since 1964. We manufacture & supply top grade bitumen membranes & emulsions, modified bitumen, bitumen 10/20, crumb rubber, cprx compound, providing waterproofing solutions to some of the premier global infrastructure projects. For more details Visit our website: http://www.tikitar.com/
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Marketing Plan for Cold Bitumen in India Marketing Plan for Cold Bitumen in India Document Transcript

  • 2011Marketing Plan for Cold Bitumen in India ABHIK TUSHAR DAS 20104001 SANDEEP PRASAD 20104005 VISHAL SHUKLA 20104009 EMBA10’ 11/2/2011
  • EMBA10: B2B Marketing; Group-8 Project ReportContents:1. Historical Glance a. Company perspective b. Business perspective2. Situational Analysis a. Overview of Global business of Bitumen b. Competitor Analysis c. SWOT analysis of Market d. PESTEL Analysis e. Porter’s 5-forces analysis3. Marketing Strategy a. Segmentation of the Market b. Demand Analysis c. 4P’s d. Product Strategy e. Pricing Strategy f. Promotion Strategy g. Customer Relationship Management (CRM)4. Sales Strategy a. Channel Strategy b. Sales Force Management c. Supply Chain Management (SCM) d. E-Commerce5. Marketing Budget a. Cost-Benefit Analysis b. Balance Score Card c. Value-chain-analysis d. ANSOFF Matrix6. Key Assumptions a. Limitations of study b. Homogenous demand in Market7. BibliographyAbhik (20104001) Sandeep (20104005) Vishal (20104009) Page 2
  • EMBA10: B2B Marketing; Group-8 Project ReportExecutive Summary:Bitumen is the essence of Infrastructure development, roads being the lifeline of an economy. Thedemand of Bitumen was of 4.1 MMTPA as against a supply of 3.7 MMTPA due to the emphasis byNational Governments to induct infrastructure development as constituent of long term plans.India has focussed on Infrastructure development through building of road network in its EleventhFive-Year Plan (2007–2012) where projects like Golden Quadrilateral, NHDP (National HighwayDevelopment Project), Bharat Nirman and PMGSY (Pradhan Mantri Gram Sadak Yojana) have beenenvisaged. The Union Budget for 2011-12 proposed an allocation of ` 214000 crore forinfrastructure sector, which is 23.3% higher than previous year and amounts to 48.5% of the GrossBudgetary support to plan expenditure. This provides business houses with an immense potentialfor growth and hence major players can leverage their marketing expertise to procure, brand anddistribute Bitumen. The study involves developing a Marketing Plan for Company India for creatinga marketing channel involving Government agencies, Infrastructure companies and contractors.Company Bitumen in India also supplies ready to use instant road repair premix under brand nameCompany MAC PR (Micro-surfacing using Cold Bitumen Emulsions). This allows road to be openedto traffic within 10-15 minutes and imparts good strength to repaired area. Company Bitumenproduct differentiation rests in basic product knowledge, understanding of its complete chemistry,Quality Control and the technology around it along with its performance on the ground, backed byglobal Company bitumen expertise. Company India is more of a solution provider, supplying tailor-made, fit-for-application and treatment of road products based on customer needs. Companytypically works with the contractor, design and supervision consultant and the owner of airportrunways/ major highways and even with rural roads to provide the most suitable and best productsuited to their application, product needs and local conditions.The cold in-place recycling (CIPR) is a process where the existing bituminous pavement is recycledwithout application of heat. In CIPR process the scarified material from the existing pavement iscrushed to the required gradation and binder in cold form (emulsion or cutback or foamedbitumen) is added. Externally acquired Reclaimed Bituminous Pavement (RBP) or fresh aggregatesare also added depending on the requirement. The material is mixed in-situ, compacted, and leftfor curing. During this process additive like, cement, quick lime, fly ash is also used.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 3
  • EMBA10: B2B Marketing; Group-8 Project Report 1. Situational Analysis: a. Overview of Global business of Bitumen Naturally occurring bitumen has been around for many thousands of years; a recording of abituminous substance is found in the Bible. From the late nineteenth century onwards demand forbitumen has been increasing, Company began major bitumen production in the UK in 1920 withthe opening of the Company Haven refinery. Company Bitumen operates for more than 85 yearswith global experience and local knowledge and offers dedicated account management, seeking toprovide cost-effective bitumen solutions to meet business needs - be it industrial, professional,trade or domestic consumption. Also known as Asphalt, bitumen is a sticky, black and highlyviscous liquid or semi-solid that is present in most crude petroleum and in some natural deposits, itis a substance classed as a pitch, and is used in road construction, where it is used as the glue orbinder mixed with aggregate particles to create asphalt concrete. Its other main uses are forbituminous waterproofing products, including production of roofing felt and for sealing flat roofs.Global asphalt producers such as BP Plc, Exxon Mobil Corporation, Petroleos de Venezuela SA,Royal Dutch Company plc, Akzo Nobel, Anglo American, Atlas Roofing Corporation, AggregateIndustries Limited, CEMEX UK Operations Limited, CertainTeed Corporation, Colas Denmark A/S,CRH PLC, Dehtochema, GAF Materials Corporation, Hanson, Husky, Lafarge SA, Nynas AB, OldcastleMaterials, Inc., Owens Corning, Paramo, SemGroup Corporation, Sinopec, and Skanska AB. World demand for asphalt is forecast to expand 2.1 percent annually from a weak 2008base to 108 million metric tons in 2013, equivalent to 655 million barrels of primary asphalt. Theworld’s most developed asphalt markets (North America, Western Europe and Japan) will postmoderate gains in demand. In China and India, growth in demand will remain well above the worldaverage, although gains will decelerate. For the rest of the Asia/Pacific region, gains will be aboutaverage but will outpace the mature West European and North American markets. In Latin Americaand the Africa/Mideast region, decelerating growth in road building activity and constructionspending will lead to reduced opportunities for asphalt. Paving products accounted for more than80 percent of total asphalt demand the remaining 20 percent is attributed to water-proofingproducts. b. SWOT analysis of Bitumen Market Strength: Inelastic Weakness: Low product Demand (universal) differentiation SWOT Opportunities: Growing Threats: Monopolies Markets (India & China) (National Oil Companies)Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 4
  • EMBA10: B2B Marketing; Group-8 Project Report Strengths: Demand for Bitumen as a product is universal in nature due to unavailability ofproduct substitutes as a Road Paving Medium. Apart from construction of cement roads which iscostlier than Asphalt, no other medium is used for road construction. This leads to an inelasticmarket demand wherein consumption volumes are seldom affected by economic imbalances. Mostinfrastructure development projects are funded by Sovereign National Governments orinternational funding agencies like World Bank and hence market demand is stable. Weakness: As a product, Bitumen is differentiated by its grades determined by“Penetration Test”. Penetration @ (25°C; 0.1 mm 100 gm, 5 sec) BIS 1203: 1. 30 to40 milli-meter 2. 60 to 70 milli-meter 3. 80 to 100 milli-meterAs Bitumen is a residual by-product of Petroleum Refining, it is available in all the refineries acrossthe globe. Bitumen when processed further develops properties which can be graded based on itssoftness. Specifications of materials and road are governed by BIS, IRC. Opportunities: Asian economy has been growing at a stealthy pace, India and China beingits economic drivers. The economic growth is supplemented by a need for infrastructure growthand hence the enormous market potential for the product. The Chinese government rolled out aseries of stimulus packages to boost domestic demand in both infrastructure investment andconsumption in a bid to bolster economic growth.China Road Projects Indian Road ProjectsRegion Kilometres Open to traffic (kms) Region Kilometres Open to traffic (kms) 1. Northeast China: Liaoning, Jilin, 1. Golden Quadrilateral - Connecting Heilongjiang 6,127 kms Delhi-Kolkata-Chennai-Mumbai 5,846 2. North China: Beijing, Tianjin, Kms Hebei, Shanxi, Henan, Inner 2. North-South and East-West Corridors Mongolia 10,257 kms connecting Kashmir to Kanyakumari 3. Northwest China: Xinjiang, including Salem to Cochin Spur and Qinghai, Gansu, Ningxia, Shaanxi Silchar to Porbandar 7,300 Kms 6,496 kms 3. 4-laning of (NHDP Phase- III) 4. Southwest China: Chongqing, accelerated road development Yunnan, Guizhou, Sichuan, Tibet programme for the North Eastern 7,929 kms region 10,000 km 5. Central China: Jiangxi, Anhui, 4. 2-laning with paved shoulders of Hunan, Hubei 10,103 kms National Highways under NHDP Phase- 6. South China: Guangdong, IV 20,000 km Guangxi, Fujian, Hainan 7,056 5. 6-laning of GQ and some other selected kms stretches under NHDP Phase-V 6,500 7. East China: Shanghai, Zhejiang, km Jiangsu, Shandong 2,309 kms 6. Development of express ways under NHDP Phase-VI 1,000 km 7. Development of ring roads, bypasses, grade separators, service roads, etc. under NHDP Phase-VIIAbhik (20104001) Sandeep (20104005) Vishal (20104009) Page 5
  • EMBA10: B2B Marketing; Group-8 Project Report Threats: In the Indian scenario, refining of petroleum products were controlled by stateowned Public Sector Undertakings (PSU) till late 1900’s. However post liberalization, the sector wasopened up for private participation and thereafter during 1998-2002, the Administered PricingMechanism (APM) was finally dismantled allowing a fair remuneration for private marketers.Though private Oil and Gas majors have made significant investments in Oil Marketing thedominance of National Oil Companies still gives the PSU’s an advantage in the market.Country Annual Tonage BIT. Emulsion Bitumen PercentageUSA 3,166,000 26,000,000 12.2%France 1,200,000 2,800,000 42.9%Spain 440,000 1,600,000 27.5%Germany 168,000 2,780,000 6.0%Japan 334,996 4,418,000 7.6%Sweden 69,000 492,000 14.0%Australia 80,000 607,000 13.2%Austria 21,000 386,000 5.4%Brazil 420,000 1,330,000 31.6%South Africa 120,000 300,000 40.0%Mexico 45,000 266,360 16.9%Saudi Arabia 12,000 89,000 13.5%Turkey 20,000 600,000 3.3%Romania 30,000 200,000 15.0%India 30,000 2,500,000 1.2%Ex-Refinery prices exclusive of taxes (Rs. /Metric tonne) Applicable from: November 01, 2011BITUMEN GRADES VG-10 VG-30 VG-40PORT REF(Mumbai/Manglore/Kochi) 33660 34460 36830KOYALI 33660 34460 36830MATHURA 34860 35660 38030PANIPAT 35160 35960 38330PORT REF (Haldia/Vizag/Chennai) 33760 34560 36930BARAUNI 34790 35590BITUMEN (PACKED)PORT REF(Mumbai/Manglore/Kochi) 36660 37460 39830KOYALI 36660 37460 39830MATHURA 37860 38660 41030PANIPAT 38160 38960 41330PORT REF (Haldia/Vizag/Chennai) 36760 37560 39930Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 6
  • EMBA10: B2B Marketing; Group-8 Project Report c. Political, Economic, Social, and Technological, Environmental and Legal analysis (PESTEL)Factors which influence business decisions:  Political factors: Thrust by Central Govt. on development of roads. Many State Governments also giving thrust on road developments  Economic factors: The GDP is planned to grow at rate of 7-8% in future. The interest rates are increasing; Government has allowed Private Sector Participation. There is huge requirement of funds. Government is trying to generate resources by innovative methods. The Rupee has weakened.  Social factors: The citizen of the country has started realizing benefits of good roads. Even roads are canvassed for votes. There will be pressure from the citizens for good quality roads  Technological factors: Automated Plants for value added bituminous products. Refineries updating technology of Bitumen Production.SAP being used by Oil Companies Customers using advanced technology.  Environmental factors: The Bitumen market will expand and the demand of value added Bitumen will grow. Quality Bituminous products will be available. The market for generic product may continue. The customers will demand quality and services and will prefer from using value added Bitumen  Legal factors: Contract enforcement, legal recourse, appellate body, civil rules.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 7
  • EMBA10: B2B Marketing; Group-8 Project Report d. Porter’s 5-forces analysis Supplier Bargaining Power Threat of Threat of Competitive Substitute New Market Rivalary Product Entrant Customer Bargaining Power Applying Michael Porter’s 5-forces Model to the Cold Bitumen Markets in India, we cananalyse the following points;  SUPPLIER BARGAINING POWER a. Supplier concentration: Low b. Importance of volume to supplier: High c. Differentiation of inputs: Low d. Impact of inputs on cost or differentiation: Low e. Switching costs of firms in the industry: Low f. Presence of substitute inputs: Low g. Threat of forward integration: High h. Cost relative to total purchases in industry: LowAbhik (20104001) Sandeep (20104005) Vishal (20104009) Page 8
  • EMBA10: B2B Marketing; Group-8 Project Report  BUYER BARGAINING POWER a. Bargaining leverage: High b. Buyer volume: High c. Buyer information: High d. Brand identity: High e. Price sensitivity: High f. Threat of backward integration: Low g. Product differentiation: High h. Buyer concentration vs. Industry: Low i. Substitutes available: High j. Buyers incentives: High  THREAT OF NEW ENTRANTS a. Absolute cost advantages: Low b. Proprietary learning curve: High c. Access to inputs: Low d. Asset specificity: Medium-High e. Government policy: Low-Medium f. Economies of scale: Medium-High g. Capital requirements: Medium-High h. Brand identity: High i. Switching costs: Low j. Access to distribution: Low k. Expected retaliation: High l. Proprietary products: High  THREAT OF PRODUCT SUBSTITUTES a. Switching costs: Low b. Buyer inclination to substitute: High c. Price-performance trade-off of substitutes: High  DEGREE OF RIVALRY a. Exit barriers: Medium-High b. Industry concentration: High c. Fixed costs/Value added: High d. Industry growth: Medium-High e. Product differences: High f. Switching costs: Low g. Brand identity: Low-Medium h. Diversity of rivals: Low-MediumAbhik (20104001) Sandeep (20104005) Vishal (20104009) Page 9
  • EMBA10: B2B Marketing; Group-8 Project Report Summarizing Michael Porter’s 5-Forces model of pure competition in seeking to develop anedge over rival firms by understanding the industry context in which the firm operates we observethat; a. Supplier bargaining power is low on account of low concentration ratio of suppliers as Bitumen is a residual product of Petroleum refining and is thus available across different suppliers. b. Buyer bargaining power is high as Bitumen as an end product is used for Paving Roads where purchase tenders are floated by large infrastructure contractors or Government agencies and the volumes traded are high with long term purchase agreement. c. Threat of New Entrant is high as Bitumen handling involves moderate fixed investments where the business switching cost is high. As Bitumen is classified as a Class-C Petroleum Product with Flash point >95 degree Celsius; petroleum storage license is not necessary from The Petroleum and Explosives Safety Organisation (PESO). d. Threat of Product Substitutes is high as Cold Bitumen as a product for Road Paving can be substitutable with Conventional Bitumen which is a low cost affair. Also there is low product differentiation within Bitumen as a product. e. The Degree of Rivalry in the Bitumen Market is high as the market concentration is low owing to large number of players in the market. Low entry barriers, low technological complexity and high bargaining power of the buyer have contributed to the high market dynamics.2. Marketing Strategy: a. Segmentation of the Market Whereas earlier roads were built with the primary aim of moving passenger traffic only,roads today need to take care of extensive movement of goods through heavy load axles on theroad due to explosive economic growth. Thus the road designs need to be suitably upgraded totake care of present load and traffic intensity conditions on the roads. Also, certain parts of thecountry are subjected to heavy rainfall or heavy snowfall. India’s legacy road infrastructure as wellas paving modern Highways and Airports of tomorrow needs application of High end products andtechnologies as there is a massive legacy road network that has weak base and cannot be upgradedovernight but need to be maintained using maintenance applications. Also remote roads do nothave the facility of transporting and using conventional Bitumen thereby creating a demand forCold Bitumen.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 10
  • EMBA10: B2B Marketing; Group-8 Project Report Segmentation of the Market;  Main Roads: Paving solutions to withstand the demands of high volume inter-city road networks and highways  Urban Roads: Pavement solutions to withstand the needs of busy urban areas.  Rural Roads: Road network for rural areas, particularly in developing countries.  Heavy Duty Roads: Airports, ports and railways require paving solutions that can withstand extremely heavy loads and high pavement stress  Industrial Roads: Core applications include roofing, flooring and sealing. Roads within the Oil & Gas industry use Cold Bitumen to avoid possibility of Hazard due to heating of conventional Bitumen during application. b. Demand Analysis Demand for Bitumen can be categorized into;  Long-run demand: These supplies are made through tendering and purchase contracts wherein Bitumen is supplied to customers in long term consignments.  Short-run demand: these supplies are made through direct ad-hoc purchase of retail drums The demand for road infrastructure projects can be estimated from the following facts;  Annual growth projected at 12-15% for passenger traffic, and 15-18% for cargo traffic  Investment in road sector during the Eleventh Plan is projected at $ 78.50 billion  The Government is planning to increase spends on road development substantially with funding already in place based on a cess on fuel  100% FDI under the automatic route is permitted for all road development projects  100% income tax exemption for a period of 10 yearsAbhik (20104001) Sandeep (20104005) Vishal (20104009) Page 11
  • EMBA10: B2B Marketing; Group-8 Project ReportThe Golden Quadrilateral and NSEW projects map: c. 4P’s:  Product: Cold Bitumen as a product is nascent in its use being an innovative concept over conventional Bitumen. The product is used in specialized Paving jobs where conventional Bitumen is unfeasible or impractical. The product needs to be promoted as a hassle free value added service for quick repair of roads.  Price: The price of the product should be premium, wherein the operational benefits of the product should ensure cost savings over conventional Bitumen. The price should also be competitive such that bulk purchases of Conventional Bitumen do not offset purchase decisions for Cold Bitumen.  Place: Cold Bitumen is mainly applied on Road Paving repairs and hence the marketing place should be small time contractors who undertake patch work. These contracts are either awarded by Municipal contracts or Private companies.  Promotion: B2B promotion should target business publications, trade shows, direct mailers and direct selling.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 12
  • EMBA10: B2B Marketing; Group-8 Project Report d. Product Strategy Company India has developed a comprehensive specialist product portfolio designed tomeet the needs of every user, industrial, professional or domestic. Bitumen products are tailoredto meet the needs of asphalt manufacturers, road builders, construction, government,communities, asset owners, designers and architects giving usable and effective solutions for allmanner of markets. The product offerings can be categorized into;  Company Cariphalte: Specially formulated polymer modified bitumen based on carefully chosen combinations of bitumen and thermoplastic elastomers.  Company Mexphalte CRMB: Modified Bitumen manufactured using Crumb Rubber and specially selected modifiers  Company Low Temp Binders: Ready-to-use solution for time and cost saving in road construction designed to lower the mixing or laying temperature of asphalt compared to a conventional asphalt mixture  Company Instapave: A cost-effective solution to pave rural roads  Company Mexphalte C: A clear synthetic binder that can produce asphalts in a broad spectrum of colours, enabling the colour-matching of pavements to the local environment  Company Spramul: Spray-able emulsified versions  Company-mac PR: An instant all-weather pothole repair solution  Standard Grades: 30/40, 60/70, 80/100 based on penetration tests e. Pricing Strategy The pricing strategy for Company India will depend upon the following two factors;  Standard grades to be priced competitively: Standard grades (based on penetration tests) are widely available in the market under various brand names; hence to compete with smaller brands the pricing strategy should be competitive. These products offer core benefits to the customer and hence assess the product value based on cost- benefit, demand elasticity and switching cost. Once the purchase has been made and the customer is satisfied, they become less price sensitive overtime.  Specialized products are priced at a premium: Specialized offerings pricing strategies are value based, which depend on the add-on benefits offered by the product over the core benefits. The price of such products is based on product quality, innovative offerings, dynamic delivery and strong product service. These products can also be priced based on Target costing based on types and quality attributes required to succeed in a particular segment.  New product offerings can be priced on a continuum of skimming (initial high price) to penetration (initial low price) pricing strategies.  Competitive bidding strategies involving bulk supplies of Bitumen can involve either closed bidding or open bidding strategies.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 13
  • EMBA10: B2B Marketing; Group-8 Project Report f. Promotion Strategy Use of Social Media for Business Communication: The target audience for Bitumen promotion can be enumerated as;  Municipal bodies: The advertisement should send a clear message about the core benefits of the product which would influence their purchase decisions. Direct mails to procurement departments. Creating awareness among procurement officers about the quality and price edge of the product over its rivals can help in securing delivery contracts.  Government contracts: Organizing Trade shows to display new advancements and technological developments to mass audiences where customers can get hands on experience on the products, new customers can be identified and a general goodwill would be created for the company.  Industrial use: Promotions in Business Publications creating awareness among business houses.  Retail use: Use of social media to connect the brand with Small-Medium Users along with use of Bill-Board displays, print advertisement.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 14
  • EMBA10: B2B Marketing; Group-8 Project Report g. Customer Relationship Management (CRM): Customer Relationship Management can be widely defined as company activities related todeveloping and retaining customers. It is a blend of internal business processes: sales, marketingand customer support with technology and data capturing techniques. Customer RelationshipManagement is all about building long-term business relationships with customers. Operational CRM Analytical CRM Collaborative CRM Operational CRM:  Delivers personalized and efficient marketing, sales, and service through multi channel collaboration.  Enables a 360-degree view of your customer while you are interacting with them.  Sales people can access complete history of all customer interaction with the company, regardless of the touch point  Replenish field stock of old and outdated material with new stock Analytical CRM:  Acquisition: Customers from conventional Bitumen usage  Retention: Retaining customers for subsequent purchases/ contracts.  Information: Providing timely and regular information to customers.  Modification: Altering details of the transactional nature of the customer’s relationship Collaborative CRM:  Enables efficient productive customer interactions across all marketing channels.  Enables web collaboration to reduce contract costs.  Integrates call centres enabling multi-channel personal customer interaction.  Integrates view of the customer while interaction at the transaction level  Enables the company to get updates about product usage, expectations and shortfalls to maintain product quality standards in line with customer needs  Extend credit to small contractors who lack purchasing power for the new productAbhik (20104001) Sandeep (20104005) Vishal (20104009) Page 15
  • EMBA10: B2B Marketing; Group-8 Project Report3. Sales Strategy: a. Channel Strategy Bitumen is sold through the following broad channels;  Direct Bulk distribution through road tankers (Direct Channel): Direct selling through tenders and contracts wherein no channel intermediaries are involved. Mostly these consignments are long term supply contracts and hence economies of scale strategies in distribution are adopted to maximise channel efficacy. Customer Lead Care & Generation Support Lead Fulfillment Qualification Negotiation Bid & & Sales Proposal Closure  Retail distribution through packed drums (Indirect Channel) Bitumen sold through drums involves channel intermediaries which can be in the form of distributors or manufacturers representatives. The end users for the retail Bitumen are industrial units, water-proofing contractors, and small road repairs. Company’s specialized offerings are also distributed through retail outlets which serve specific customer segments.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 16
  • EMBA10: B2B Marketing; Group-8 Project Report b. Supply Chain Management It is an innovative approach to tighten the distribution process, bolster links with suppliers and customers and integrating organizational functions like production and marketing. The Bitumen Value Chain: Refinery Terminals Processing Distributor Wholesaler Customer Direct Distribution Channel Integrating business processes from customers to suppliers can help improve systemefficiency through Supply Chain Management wherein information travels opposite to flow ofmaterials. Real-time information sharing between different stakeholders of the system can ensure;  Better quality control of product (waste reduction): Coordination between site, vendor and supplier leads to low rate of consignment rejection.  Minimum inventory requirement: Bitumen solidifies at room temperature (pour point > 90 degree Celsius) and hence high inventory leads to high heating cost and hence high cost of ownership.  Continuous improvement of product: Feedbacks from vendors can be utilized to improve product quality on a continuous basis.  Low lag time between order, processing and delivery: Better business process integration can also result in avoiding unnecessary project delays due to unavailability of Bitumen on time.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 17
  • EMBA10: B2B Marketing; Group-8 Project Report c. E-Commerce E-commerce is a cost effective way of doing business through the aid of Information Technology. Business through E-commerce is achieved through a virtual market which serves as a global platform for the commodity. Company India has an active marketing strategy for its products (Bitumen) through the E- Commerce platforms.B2B Solutions on E-Platform:E-Commerce includes processes like;  E-Auctions/ E-Trading  E-Tendering  Internet marketing  Online transaction processing  Electronic data interchange (EDI)  Inventory management systemsAbhik (20104001) Sandeep (20104005) Vishal (20104009) Page 18
  • EMBA10: B2B Marketing; Group-8 Project Report Company E-Trading Platform:Other E-Commerce Platforms for Bitumen Trading:E-Commerce helps in connecting the buyer and the seller on a virtual platform wherein the price-discovery happens at a much rational level. It also leverages small players to compete with largeplayers offering them a level playing platform to conduct business. E-Commerce also helps reducethe transaction cost of the process, thus reducing the TCO (Total Cost of Ownership) of theproduct.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 19
  • EMBA10: B2B Marketing; Group-8 Project Report4. Marketing Budget: e. Cost-Benefit Analysis Cost-benefit analysis is a means of evaluating all of the potential costs andrevenues that may be generated if the project is completed, the outcome of such analysis willdetermine whether the project is financially feasible, or if another project should be pursued.Principles of cost benefit analysis;  There must be a common unit of measurement  Valuations should represent consumers or producers valuations as revealed by their actual behaviour  Benefits are usually measured by market choices  Cost benefit analysis involves a particular study areaThe marketing plan budget allocation should consider both tangible and intangible aspects of costand benefit in the long run. The allocation of budget to specific marketing channels for Bitumenwould consists of aspects like dealer margin, bulk discounts, customer benefit campaigns andbudgets for trade shows.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 20
  • EMBA10: B2B Marketing; Group-8 Project Report f. Balanced Scorecard The balanced scorecard is a strategic planning and management system that isused extensively in business and industry to align business activities to the vision and strategy ofthe organization, improve internal and external communications, and monitor organizationperformance against strategic goals.Customer benefits:  Corrects most of the types of pavement distresses e.g. raveling, rutting, corrugation, shoving etc.  Hauling cost is considerably low  Air quality related problems during construction is almost negligible as compared to the hot mix process  Since this process does not involve application of heat, premature aging of bitumen also can be avoided  More durable in freeze-thaw situations, compared to hot mix recycled pavementFinancial:  Brand the product as a premium product with differentiation in product application with enhanced features than conventional BitumenCustomer:  The product should reflect the brand value premium with significant positioning of the technological superiorityInternal Business Processes:Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 21
  • EMBA10: B2B Marketing; Group-8 Project Report  Robust processes should be incorporated to excel in distribution to gain an edge over conventional BitumenLearning & Growth:  Product innovation through customer feedback and trial applications through contractor relationship would ensure product development of Cold Bitumen in the long run. g. Value-chain-analysis Analyzing the Bitumen Value Chain (through primary activities);  Inbound Logistics: For Company Bitumen, the inbound logistics would include procurement of Bitumen from refineries, its transportation including intermediate warehousing. Each step of the value chain is associated with costs which tend to cumulate and add up to the final product price. The cost of storage and logistics can be a high percentage of the final cost due to the heating requirements for keeping the Bitumen in liquid stage during bulk transportation. Special insulated trucks having internal heating arrangement are used for transporting Bitumen over long distances.  Operation: The Bitumen is processes in units to modify its characteristics to suit the needs of the end users. The cost of operations includes production cost, packing cost, setup cost and labour cost.  Out-bound logistics: The distribution of Bitumen from the processing plant to the end user can be done either through direct bulk delivery or through packed drums. The delivery through drums involves many stages wherein the drums are packedAbhik (20104001) Sandeep (20104005) Vishal (20104009) Page 22
  • EMBA10: B2B Marketing; Group-8 Project Report and stored in distributor warehouses from where it is supplied to retailers. The processed Bitumen can be re-liquefied by heating and hence does not involve high cost of heating during transit/ storage. Bitumen packed in drums can be liquefied at customer location; some modified versions of Bitumen can be applied by mixing it with pre-required solvents.  Sales and Marketing: A major part of value addition can be attributed to the sales and marketing effort of any organization, Bitumen marketing being no different. Creating awareness for the customer regarding new innovative concepts of paving as well as information to various Governmental agencies to qualify for bidding process jacks up the cost of the product. Advertisements, trade promotions, sample distribution as well as demonstrations are also counted under the head of Sales and Marketing costs.  Servicing: Product after sales service in Bitumen marketing consists of post application visits to ascertain product effectiveness and durability of product. Companies need to constantly monitor the performance of the product and gather customer feedback regarding difficulties faced by the end user. Secondary activities-Bitumen market is highly competitive with presence of a largenumber of players forcing major players to leverage support functions like Technology to get pastsmaller players in terms of margins. The value added to the product through the value chain, lessthe cost incurred thereof is the net margin to the marketer. h. ANSOFF Matrix The first three strategies of the ANSOFF Matrix are usually pursued with the sametechnical, financial, and merchandising resources used for the original product line, whereasdiversification usually requires a company to acquire new skills, new techniques and new facilities.Company India marketing strategy involves introduction of innovative products in its productportfolio which necessarily caters to the existing market for Bitumen which can be termed as atraditional market.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 23
  • EMBA10: B2B Marketing; Group-8 Project ReportCompany India product range can be categorized into the ANSOFF Matrix; •Standard, emulsion •Bitufresh, Company and oxidised grades Spramul •Company WAM Foam Market Product Penetration Development Market Diversification Development •CompanyCariphalte, •Instapave, Company Company Mexphalte Multiphalte6. Key Assumptions a. Limitations of study: The study limits itself to marketing of Cold Bitumen (processed) in India by Company India. As the product is conceptualized as a new launch product, sales data, prices, and costs were not accounted for in formulating the marketing plan. The study also relies upon secondary data for conceptualizing the Market analysis. The study being part of the B2B course curriculum is not intended to make any judgements or market predictions about the Bitumen business markets. Facts and figures mentioned in the data might not be accurate but serve as an illustration for visualizing the market dynamics. b. Homogenous demand in Market: The market conditions and the demand pattern is considered as homogenous across the country and any geographical and seasonal variations in demand is excluded from the scope of the study. The announced investments to be made by the Government are assumed as constant with a linear growth rate. The sole purpose of the study is to make readers aware of the process of B2B marketing and should be excluded from the purview of market study. The study also excludes any representations from Company India and hence there is no commitment from the organization towards the facts shared in this study.Abhik (20104001) Sandeep (20104005) Vishal (20104009) Page 24
  • EMBA10: B2B Marketing; Group-8 Project Report7. Bibliography  http://home.iitk.ac.in/~adas/article10.pdf  http://www.iocl.com/Products/Bitumen.aspx  http://www.Company.com/home/content/ind/aboutCompany/Compa ny_businesses/india_business_structure/Company_bitumen_india/  http://www- static.Company.com/static/idn/downloads/Company_for_businesses/b itumen/data_sheets/flinkote3.pdf  http://books.google.co.in/books?id=bA1tIkRJL8kC&pg=PA113&lpg=PA1 13&dq=cold+bitumen+Company&source=bl&ots=pbOcJmC_- Y&sig=GzNj5c9NaskOjxo0dWjnMiG7iDY&hl=en&ei=peSyTovrKM3wrQe 64MTJAw&sa=X&oi=book_result&ct=result&resnum=5&ved=0CD8Q6A EwBA#v=onepage&q=cold%20bitumen%20Company&f=false  http://en.wikipedia.org/wiki/Asphalt  http://www.saudiaramcoworld.com/issue/198406/bitumen.- .a.history.htm  http://en.wikipedia.org/wiki/Customer_relationship_management  http://www.quickmba.com/strategy/porter.shtml  http://www.iitk.ac.in/infocell/announce/convention/papers/Changing %20Playfield-06-Saurabh%20Kumar%20Saxena.pdf  http://www.b2bmarketingplan.com/  http://tutor2u.net/business/strategy/ansoff_matrix.htm  http://www.renewal.eu.com/resources/Renewal_Pestle_Analysis.pdfAbhik (20104001) Sandeep (20104005) Vishal (20104009) Page 25