2011

Marketing 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 Report

Contents: 1. Historical Glance a. Company perspective b. Business perspective 2. Situational Analysis a. b. c. d. e. Overview of Global business of Bitumen Competitor Analysis SWOT analysis of Market PESTEL Analysis Porters 5-forces analysis

3. Marketing Strategy a. b. c. d. e. f. g. Segmentation of the Market Demand Analysis 4Ps Product Strategy Pricing Strategy Promotion Strategy Customer Relationship Management (CRM)

4. Sales Strategy a. b. c. d. Channel Strategy Sales Force Management Supply Chain Management (SCM) E-Commerce

5. Marketing Budget a. b. c. d. Cost-Benefit Analysis Balance Score Card Value-chain-analysis ANSOFF Matrix

6. Key Assumptions a. Limitations of study b. Homogenous demand in Market 7. Bibliography

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EMBA10: B2B Marketing; Group-8 Project Report Executive Summary: Bitumen is the essence of Infrastructure development, roads being the lifeline of an economy. The demand of Bitumen was of 4.1 MMTPA as against a supply of 3.7 MMTPA due to the emphasis by National Governments to induct infrastructure development as constituent of long term plans. India has focussed on Infrastructure development through building of road network in its Eleventh Five-Year Plan (20072012) where projects like Golden Quadrilateral, NHDP (National Highway Development Project), Bharat Nirman and PMGSY (Pradhan Mantri Gram Sadak Yojana) have been envisaged. The Union Budget for 2011-12 proposed an allocation of ` 214000 crore for infrastructure sector, which is 23.3% higher than previous year and amounts to 48.5% of the Gross Budgetary support to plan expenditure. This provides business houses with an immense potential for growth and hence major players can leverage their marketing expertise to procure, brand and distribute Bitumen. The study involves developing a Marketing Plan for Company India for creating a marketing channel involving Government agencies, Infrastructure companies and contractors. Company Bitumen in India also supplies ready to use instant road repair premix under brand name Company MAC PR (Micro-surfacing using Cold Bitumen Emulsions). This allows road to be opened to traffic within 10-15 minutes and imparts good strength to repaired area. Company Bitumen product 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 by global Company bitumen expertise. Company India is more of a solution provider, supplying tailormade, fit-for-application and treatment of road products based on customer needs. Company typically works with the contractor, design and supervision consultant and the owner of airport runways/ major highways and even with rural roads to provide the most suitable and best product suited to their application, product needs and local conditions. The cold in-place recycling (CIPR) is a process where the existing bituminous pavement is recycled without application of heat. In CIPR process the scarified material from the existing pavement is crushed to the required gradation and binder in cold form (emulsion or cutback or foamed bitumen) is added. Externally acquired Reclaimed Bituminous Pavement (RBP) or fresh aggregates are also added depending on the requirement. The material is mixed in-situ, compacted, and left for curing. During this process additive like, cement, quick lime, fly ash is also used.

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1. Situational Analysis:
a. Overview of Global business of Bitumen Naturally occurring bitumen has been around for many thousands of years; a recording of a bituminous substance is found in the Bible. From the late nineteenth century onwards demand for bitumen has been increasing, Company began major bitumen production in the UK in 1920 with the opening of the Company Haven refinery. Company Bitumen operates for more than 85 years with global experience and local knowledge and offers dedicated account management, seeking to provide 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 highly viscous liquid or semi-solid that is present in most crude petroleum and in some natural deposits, it is a substance classed as a pitch, and is used in road construction, where it is used as the glue or binder mixed with aggregate particles to create asphalt concrete. Its other main uses are for bituminous 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, Aggregate Industries Limited, CEMEX UK Operations Limited, CertainTeed Corporation, Colas Denmark A/S, CRH PLC, Dehtochema, GAF Materials Corporation, Hanson, Husky, Lafarge SA, Nynas AB, Oldcastle Materials, 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 2008 base to 108 million metric tons in 2013, equivalent to 655 million barrels of primary asphalt. The worlds most developed asphalt markets (North America, Western Europe and Japan) will post moderate gains in demand. In China and India, growth in demand will remain well above the world average, although gains will decelerate. For the rest of the Asia/Pacific region, gains will be about average but will outpace the mature West European and North American markets. In Latin America and the Africa/Mideast region, decelerating growth in road building activity and construction spending will lead to reduced opportunities for asphalt. Paving products accounted for more than 80 percent of total asphalt demand the remaining 20 percent is attributed to water-proofing products. b. SWOT analysis of Bitumen Market

Strength: Inelastic Demand (universal)

Weakness: Low product differentiation SWOT

Opportunities: Growing Markets (India & China)

Threats: Monopolies (National Oil Companies)

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EMBA10: B2B Marketing; Group-8 Project Report Strengths: Demand for Bitumen as a product is universal in nature due to unavailability of product substitutes as a Road Paving Medium. Apart from construction of cement roads which is costlier than Asphalt, no other medium is used for road construction. This leads to an inelastic market demand wherein consumption volumes are seldom affected by economic imbalances. Most infrastructure development projects are funded by Sovereign National Governments or international 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 @ (25C; 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-meter As Bitumen is a residual by-product of Petroleum Refining, it is available in all the refineries across the globe. Bitumen when processed further develops properties which can be graded based on its softness. Specifications of materials and road are governed by BIS, IRC. Opportunities: Asian economy has been growing at a stealthy pace, India and China being its economic drivers. The economic growth is supplemented by a need for infrastructure growth and hence the enormous market potential for the product. The Chinese government rolled out a series of stimulus packages to boost domestic demand in both infrastructure investment and consumption in a bid to bolster economic growth. China Road Projects Region Kilometres Open to traffic (kms) 1. Northeast China: Liaoning, Jilin, Heilongjiang 6,127 kms 2. North China: Beijing, Tianjin, Hebei, Shanxi, Henan, Inner Mongolia 10,257 kms 3. Northwest China: Xinjiang, Qinghai, Gansu, Ningxia, Shaanxi 6,496 kms 4. Southwest China: Chongqing, Yunnan, Guizhou, Sichuan, Tibet 7,929 kms 5. Central China: Jiangxi, Anhui, Hunan, Hubei 10,103 kms 6. South China: Guangdong, Guangxi, Fujian, Hainan 7,056 kms 7. East China: Shanghai, Zhejiang, Jiangsu, Shandong 2,309 kms Indian Road Projects Region Kilometres Open to traffic (kms) 1. Golden Quadrilateral - Connecting Delhi-Kolkata-Chennai-Mumbai 5,846 Kms 2. North-South and East-West Corridors connecting Kashmir to Kanyakumari including Salem to Cochin Spur and Silchar to Porbandar 7,300 Kms 3. 4-laning of (NHDP Phase- III) accelerated road development programme for the North Eastern region 10,000 km 4. 2-laning with paved shoulders of National Highways under NHDP PhaseIV 20,000 km 5. 6-laning of GQ and some other selected stretches under NHDP Phase-V 6,500 km 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-VII Vishal (20104009) Page 5

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Threats: In the Indian scenario, refining of petroleum products were controlled by state owned Public Sector Undertakings (PSU) till late 1900s. However post liberalization, the sector was opened up for private participation and thereafter during 1998-2002, the Administered Pricing Mechanism (APM) was finally dismantled allowing a fair remuneration for private marketers. Though private Oil and Gas majors have made significant investments in Oil Marketing the dominance of National Oil Companies still gives the PSUs an advantage in the market. Country USA France Spain Germany Japan Sweden Australia Austria Brazil South Africa Mexico Saudi Arabia Turkey Romania India Annual Tonage BIT. Emulsion 3,166,000 1,200,000 440,000 168,000 334,996 69,000 80,000 21,000 420,000 120,000 45,000 12,000 20,000 30,000 30,000

Bitumen 26,000,000 2,800,000 1,600,000 2,780,000 4,418,000 492,000 607,000 386,000 1,330,000 300,000 266,360 89,000 600,000 200,000 2,500,000 12.2% 42.9% 27.5% 6.0% 7.6% 14.0% 13.2% 5.4% 31.6% 40.0% 16.9% 13.5% 3.3% 15.0% 1.2%

Percentage

Ex-Refinery prices exclusive of taxes (Rs. /Metric tonne) Applicable from: November 01, 2011

BITUMEN PORT REF(Mumbai/Manglore/Kochi) KOYALI MATHURA PANIPAT PORT REF (Haldia/Vizag/Chennai) BARAUNI BITUMEN (PACKED) PORT REF(Mumbai/Manglore/Kochi) KOYALI MATHURA PANIPAT PORT REF (Haldia/Vizag/Chennai)

GRADES VG-10 33660 33660 34860 35160 33760 34790 36660 36660 37860 38160 36760

VG-30 34460 34460 35660 35960 34560 35590 37460 37460 38660 38960 37560

VG-40 36830 36830 38030 38330 36930

39830 39830 41030 41330 39930

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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.

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EMBA10: B2B Marketing; Group-8 Project Report

d. Porters 5-forces analysis

Supplier Bargaining Power

Threat of Substitute Product

Competitive Rivalary

Threat of New Market Entrant

Customer Bargaining Power

Applying Michael Porters 5-forces Model to the Cold Bitumen Markets in India, we can analyse the following points; a. b. c. d. e. f. g. h. SUPPLIER BARGAINING POWER Supplier concentration: Low Importance of volume to supplier: High Differentiation of inputs: Low Impact of inputs on cost or differentiation: Low Switching costs of firms in the industry: Low Presence of substitute inputs: Low Threat of forward integration: High Cost relative to total purchases in industry: Low

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EMBA10: B2B Marketing; Group-8 Project Report a. b. c. d. e. f. g. h. i. j. a. b. c. d. e. f. g. h. i. j. k. l. BUYER BARGAINING POWER Bargaining leverage: High Buyer volume: High Buyer information: High Brand identity: High Price sensitivity: High Threat of backward integration: Low Product differentiation: High Buyer concentration vs. Industry: Low Substitutes available: High Buyers' incentives: High THREAT OF NEW ENTRANTS Absolute cost advantages: Low Proprietary learning curve: High Access to inputs: Low Asset specificity: Medium-High Government policy: Low-Medium Economies of scale: Medium-High Capital requirements: Medium-High Brand identity: High Switching costs: Low Access to distribution: Low Expected retaliation: High 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

a. b. c. d. e. f. g. h.

DEGREE OF RIVALRY Exit barriers: Medium-High Industry concentration: High Fixed costs/Value added: High Industry growth: Medium-High Product differences: High Switching costs: Low Brand identity: Low-Medium Diversity of rivals: Low-Medium Sandeep (20104005) Vishal (20104009) Page 9

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EMBA10: B2B Marketing; Group-8 Project Report Summarizing Michael Porters 5-Forces model of pure competition in seeking to develop an edge over rival firms by understanding the industry context in which the firm operates we observe that; 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 the road due to explosive economic growth. Thus the road designs need to be suitably upgraded to take care of present load and traffic intensity conditions on the roads. Also, certain parts of the country are subjected to heavy rainfall or heavy snowfall. Indias legacy road infrastructure as well as paving modern Highways and Airports of tomorrow needs application of High end products and technologies as there is a massive legacy road network that has weak base and cannot be upgraded overnight but need to be maintained using maintenance applications. Also remote roads do not have the facility of transporting and using conventional Bitumen thereby creating a demand for Cold 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 years

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EMBA10: B2B Marketing; Group-8 Project Report The Golden Quadrilateral and NSEW projects map:

c. 4Ps: 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.

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EMBA10: B2B Marketing; Group-8 Project Report d. Product Strategy Company India has developed a comprehensive specialist product portfolio designed to meet the needs of every user, industrial, professional or domestic. Bitumen products are tailored to meet the needs of asphalt manufacturers, road builders, construction, government, communities, asset owners, designers and architects giving usable and effective solutions for all manner 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 costbenefit, 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

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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.

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EMBA10: B2B Marketing; Group-8 Project Report g. Customer Relationship Management (CRM): Customer Relationship Management can be widely defined as company activities related to developing and retaining customers. It is a blend of internal business processes: sales, marketing and customer support with technology and data capturing techniques. Customer Relationship Management 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 customers 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 product

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3. 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 Care & Support

Lead Generation

Fulfillment

Lead Qualification

Negotiation & Sales Closure

Bid & Proposal

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. Companys specialized offerings are also distributed through retail outlets which serve specific customer segments.

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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 system efficiency through Supply Chain Management wherein information travels opposite to flow of materials. 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.

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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 ECommerce 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 systems

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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 pricediscovery happens at a much rational level. It also leverages small players to compete with large players offering them a level playing platform to conduct business. E-Commerce also helps reduce the transaction cost of the process, thus reducing the TCO (Total Cost of Ownership) of the product.

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4. Marketing Budget:
e. Cost-Benefit Analysis Cost-benefit analysis is a means of evaluating all of the potential costs and revenues that may be generated if the project is completed, the outcome of such analysis will determine 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 area

The marketing plan budget allocation should consider both tangible and intangible aspects of cost and benefit in the long run. The allocation of budget to specific marketing channels for Bitumen would consists of aspects like dealer margin, bulk discounts, customer benefit campaigns and budgets for trade shows.

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f.

Balanced Scorecard

The balanced scorecard is a strategic planning and management system that is used extensively in business and industry to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance 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 pavement

Financial: Brand the product as a premium product with differentiation in product application with enhanced features than conventional Bitumen

Customer: The product should reflect the brand value premium with significant positioning of the technological superiority

Internal 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 Bitumen

Learning & 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 packed Sandeep (20104005) Vishal (20104009) Page 22

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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 large number of players forcing major players to leverage support functions like Technology to get past smaller players in terms of margins. The value added to the product through the value chain, less the 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 same technical, financial, and merchandising resources used for the original product line, whereas diversification usually requires a company to acquire new skills, new techniques and new facilities. Company India marketing strategy involves introduction of innovative products in its product portfolio which necessarily caters to the existing market for Bitumen which can be termed as a traditional market.

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Company India product range can be categorized into the ANSOFF Matrix;
Standard, emulsion and oxidised grades Bitufresh, Company Spramul Company WAM Foam

Market Penetration

Product Development

Market Development
CompanyCariphalte, Company Multiphalte

Diversification
Instapave, Company Mexphalte

6. 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.

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7. 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://wwwstatic.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.pdf

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