Report on Market Position and Problems of Meghna Cement Mills Limited (Part-1)

Executive Summary

Man is social being and lives in a society. They want to live in more happiness in future than previous days. For this reason they invent some things. Cement is one of them. Cement is very much needed for modern civilization. That civilization touched our country. The demand of cement increased day by day from that time. After that cement industry was grown in Bangladesh.

Private enterprises dominate production and import of cement to cater to the local market. The manufacturing of cement is based on both locally available raw materials and imported clinker. The two cement plants of the first type, one at chhatak and the other at Ayeenpur, have a total installed capacity of 260,000 tons a year. They produce cement from local limestone and use natural gas as fuel. The mills that produce cement from imported clinker are located mostly around dhaka, chittagong and mongla. There were 62 registered cement factories in the country in 1999, but only 13 of them were in production. The total installed production capacity of these factories is about 3.8 million tons a year. Their actual production, however, is much lower. A 50-kg bag of cement produced locally sells at Tk 250-260, while a bag of imported cement is priced at Tk 230-250. Local raw material based cement production depends on limestone deposits that lie in st martin’s island, joypurhat and sylhet areas. The deposits in Sylhet support the production of Chhatak and Ayeenpur cement factories.

In 1992 Bashundhara Group introduced another enterprise Meghna Cement Mills Ltd. In January 1996 they commercially produced cement called King Brand Cement. From then this brand get a strong position in the market with very good corporate image. The factory of King Brand Cement is situated beside the river of Pashur at Mongla, Bagerhat. The production capacity is 15 Lac MT per year. The weight of each marketed bag is always perfect of 50 kg due to the adoption of an automated packaging system.

At present MCML is producing three types of cement. One is Ordinary Portland Cement (OPC) and another two types are Portland Composite Cement (PCC) { CEM-II/B-M    (S-V-L) and CEM-II/A-M(S-V-L) }. In Bangladesh many high-rise building, road, bridge, culvert, hospital, shopping mall etc. have made by King Brand Cement. The Company has been awarded the coveted ISO-9001-2000 Certification in the year 2000 by the National Quality Assurance (NQA), registered by the National Accreditation of Certificate Boards, UK. The factory’s environmental standards are high.

My major achievement is that I came to know the marketing mix analysis of King Brand Cement. As I had continuous touch with the management, customers, dealers and other personnel in the organization and record their sales, collection etc. I learned the total distribution and selling process of this company. I personally very closely observed the working style and decision making process of different executives. My internship has a very good relationship with my major field of study. The reason is that I did my major in marketing and worked in the marketing department of King Brand Cement of Meghna Cement Mills Limited.

Any company is not fully independent and can not 100% to their customers. Meghna Cement Mills Limited is not different from them. They have some limitations in production, distribution, promotion and others. But King Brand Cement has very good image in the market for their quality and already captured 9% share of the market (3^rd position). Now it can not capture more market share because of some constraints inside and out side of the organization. They should be suited with the out side constraints of the organization. But it can be remove the inside constraints. For this I tried to give some recommendations to the organization.

The promotional activities must be increase and proper way like TV commercial need to moderate for gaining attention of customers. On the other hand print media should be attractive toward customer. Consumer scheme is more attractive other than other promotional activities. The quality of King Brand Cement is so good but price is high. It should be price competitive and reasonable. To provide well advantage toward the dealers for fulfilled their objectives and will be created smooth distribution Mechanism.

Since the starting of the operation King Brand Cement confident that they are quite capable of challenging others and positioning themselves in the highest rank by increasing the sales per day, introduction of the consistence quality blended cement, with integrating supply and distribution chains and logistics, securing an exclusive distribution network and buildings strong relationship all over the country segmented on the basis of consumers use. Though King Brand Cement is in good position in the market, it should think critically to generate new ideas for existing and potential consumers to hold the consistent growth in the market.

INTRODUCTION

Only a lot of theoretical knowledge will be little important unless it is applicable in the practical life. Masters of Business Administration (MBA) program is a mixture of both the theoretical and practical knowledge. To fulfill this requirement, a student is required to obtain real life exposure in an organization and thereby gain demonstrable skills and expertise in the field and also an understanding of the organization. We need proper application of our academic knowledge to make it more fruitful. Such an application is made possible through internship.

Internship is an integral part of MBA program, arranging for the students who have completed all academic courses required for MBA. Students also have to submit an internship report on an assigned topic. I was placed in MCML (Meghna Cement Mills Limited) to complete my internship program under the supervision of two supervisors one is internal form the institute and another is from the organization.  By consulting with my Internship supervisor it has been selected the topic “Identification of Market Position & Problems of Meghna Cement Mills Limited”.

ORIGIN OF THE REPORT

Major Mohammad Danesh Bin Wali, Course Instructor, Management Division, Military Institution of Science and Technology authorized writing of this research report on November, 2008. The report is a part of the course for the students of Masters of Business Administration. It was submitted by me on January 14, 2009.

OBJECTIVE OF THE REPORT

The report has two objectives:

Primary Objective. The primary objective is:

To fulfill the requirement, a student is required to obtain real life exposure in an organization, under MBA curriculum in Military Institute of Science and Technology.

Secondary Objective. Again secondary objective has part:

        Broad Objective

To Identify the Market Position & Problems of Meghna Cement Mills Limited”.

        Specific Objectives

1. To find out the brand preference of consumer while purchasing cement.
2. To identify the consumers’ perception about the quality of Meghna Cement.
3. To identify the consumers’ perception about the customer service.
4. To identify the consumers’ perception about the easy availability.
5. To identify which of the two concepts, quality or price, consumers consider more important in purchasing cement.
6. To identify the types of sales incentives received from different company.
7. To identify the problems that decreases the sales of King Brand Cement.
8. To find out the consumers’ perception about the price.

HISTORICAL BACKGROUND

Bashundhara Group (BG) is a leading private-sector industrial conglomerate in Bangladesh. It currently has 15 on-going concerns, ranging from real estate development and management to manufacturing and services. The BG strives to work in partnership with the Government for promoting sustainable development, environment preservation, and employment-generation and poverty reduction. The BG has a particular focus on urban housing, recreation centres, and commercial ventures. Thus, the motto of the Group is “For the People, for the Country”. At the crux of all industrial processes deployed at the Groups enterprises stands the need to ensure environmental stability. As a result, conscious efforts are made to use re-cycled material as industrial input.

The Meghna Cement Mills Limited (MCML) was the first undertaking Bashundhara Group in the manufacturing sector. This enterprise produces world-class cement and, as a testimony to this, stands the fact that the concern has been awarded the ISO-9001 certification for sustained quality control effort. The Company markets its cement under the registered trademark of “King Brand Cement. The factory of this Company is located in the southwestern part of Bangladesh at Mongla Port Industrial Area, in Mongla, Bagerhat under the Khulna Division. The MonglaPort is the second-largest seaport of Bangladesh. The Jetty of this Company is situated on the eastern side of the river ‘Possur’. This river is also connected with many other rivers of the country. Given this favorable geographical scenario, it is easy to implement a year-round delivery and raw material transportation to and from the MCML factory site to remote corners of Bangladesh. The factory stands close to the Mongla-Khulna Highway as well.

SCOPE

The report highlights the consumers’ perception about the quality, customer service, and easy availability of Meghna Cement. It also try to find out the problems and prospects of Meghna Cement. The discussion is limited to an identification of market position and problems of Meghna Cement Mills Ltd.

LIMITATIONS

The main limitation of this research might be the access to the sensitive internal information about the organization. Organizations do not disclose the information or make it public. The other limitation of data error, random sampling errors, administrative errors, data processing error, interviewer error, time constraint, data integrity, cost of the research are considered and addressed with due weight.

While doing this research we faced the following limitations-

•         I did not get positive attitude to conduct survey on individual information from respondents.
•         Difficult to survey all over the country.
•         Heavy workload at office was one of the main barriers of this study and additional time for doing the survey could hardly be extracted.
•         The Large sample size could detect the problems more accurately.
•         Lacking of practical skills.
•         Information is not update.
•         Some provide wrong information.

BENEFITS OF THE RESEARCH

•         The survey report will help management to take correct decision.
•         The respondents are the future decision makers so this report will light on their need.
•         It will help to identify the current market position & reasons for decreasing the sales.
•         It will help as a secondary data for further research.

REPORT PREVIEW

The report starts with an organizational overview of selected organization. The brief history and current profile of Bashundhara Group including the organizational structure, product portfolio, its operation and SWOT analysis are discussed in brief in this part. The next section focuses on the management problem and research problem, its limitation, scope, research objective. The subsequent section describes the research questionnaire and hypothesis, benefit of the study. Next, the paper provides a highlight on the research method system, data collection procedure, how to test the hypothesis and its findings. The finding is most important part of any research. Lastly, the report concludes with few recommendations, which shown the market position and problems of Meghna Cement Mills Limited.

LITERATURE REVIEW

Studies were carried out from various publications of Bashundhara Group including yearbook to develop an insight about the issue in question. Though no normal studies on subject have been undertaken as yet. The available data on sale, dealers and consumers were reviewed. Besides, the website of Bashundhara Group provided useful information in this study.

 PROBLEM DEFINITION

 Management decision problem

The problem basically arises due to rise in competition and also rise in potential market for this industry. The Meghna Cement Mills Ltd. is the largest domestic cement-producing unit in Bangladesh. But in recent Meghna Cement lost the ground to other versatile competitors and more and more strong competition penetrated the industry with their giant investment and kept evolving. So they are thinking to improve the quality and increase the sales and promotion. So the management wants to know “Are the customers satisfied with the current product in terms of quality, service, and easy availability?”

Marketing research problem

In consideration of the management problem the report is to identify the

•         Consumers’ perception of Meghna Cement
•         Reasons for increase or decrease of sale of Meghna Cement
•         Brand Preference of consumer while purchasing Cement

The problem statement of the research would be as follows:

“To find out the position that company’s offer and image to occupy a distinctive place in the mind of the target market.”

Problem Statement

The report seeks to address the following problem:

“To Identify the Market Position & Problems of Meghna Cement Mills Limited”.

RESEARCH QUESTION

For our research purpose, we tried to develop structural question. It will help us to determine the statistical analysis.

Research objective:

To find out the brand preference of consumer while purchasing cement.

Research question:

Which brand of cement you like most? Or what are the brands of cement you sell?

Justification:

The answer of this question will help us to find out brand preference for a particular brand of cement. This question will provide information to know the popularity of the brand and the market position.

Research objective:

To identify the consumers’ perception about the quality of Meghna Cement.

Research question:

 What is the consumers’ perception about the quality of Meghna Cement?

Justification:

The answer of this question will help us to understand the satisfaction level in terms of quality.

Research objective:

To identify the consumers’ perception about the customer service.

Research question :

Are you satisfied with the current customer service?

Justification:

This question will be asked to the consumers to find out the market position.

Research objective:

To identify the consumers’ perception about the easy availability.

Research question:

 Is the King Brand Cement easily available in the market?

Justification:

The answer of this question will help us to understand the satisfaction level in terms of availability in the market.

Research objective:

To identify which of the two concepts, quality or price, consumers consider more important in purchasing cement.

Research question:

What are the consumer’s reaction and whether they give more importance price or quality?

Justification

This will be an open-ended question. Whether customers have switched to competitors’ products will be identified with help of this question. Customer’s loyalty to the brand can also be found out with the question.

Specific Objective 6:

To find out which company’s cement is most demanded by the consumers.

Research question:

Which company cement is most demanded by the customers?

Justification:

This question will give ordinal data and analysis of this will help to know the market demand of Meghna cement in relation to its competitors. This question will provide information to know the popularity of the band and the market position. It will provide data that will help to know the competitors’ standing in the market.

RELATED HYPOTHESIS

The hypothesis for this research will be formulated in details after doing exploratory research. For research purpose hypothesis will be:

Hypothesis 1:    

Null Hypothesis: Less or equal to 40% consumers prefer King Brand in purchasing cement.

Alternative Hypothesis: More than 40% consumers prefer King Brand in purchasing cement.

Justification: Based on exploratory research we have assumed 40% consumers prefer King Brand in purchasing cement.

Hypothesis 2:

Null Hypothesis: More than or equal to 60% customers are satisfied regarding quality provided by Meghna Cement Mills Ltd.

Alternative Hypothesis: Less than 60% customers are satisfied regarding quality provided by Meghna Cement Mills Ltd.

Justification: Based on exploratory research 36 respondents, 23 respondents were satisfied regarding quality offered by Meghna Cement. We assumed 60% consumers were satisfied regarding quality.

Hypothesis 3:

Null Hypothesis: Less than or equal to 60% customers believe the price of King Brand Cement is comparatively high.

Alternative Hypothesis: More than 60% customers believe the price of King Brand Cement is comparatively high.

Justification: Based on exploratory research 64% customers believe the price of King Brand Cement is comparatively high.

Hypothesis 4:

Null Hypothesis: More than or equal to 40% customer think that high price is the main problem for not to buy King Brand Cement.

Alternative Hypothesis: Less than 40% customer think that high price is the main problem for not to buy King Brand Cement.

Justification: Based on exploratory research 33% customers think that price is the main problem for not to buy King Brand Cement.

Hypothesis 5:             

Null Hypothesis: No association between company name and quality.

Alternative Hypothesis: There is an association between the two.

Justification: Based on exploratory research, most of the respondent said there is an association between company name and quality

 RESEARCH DESIGN

A research design is a framework or blueprint for conducting the marketing research projects. Although a broad approach to the problem has already been developed, the research design specifies the details of implementing that approach.

Determination of Research Type

The research problem is “Identification of Market Position & Problems of Meghna Cement Mills Limited”. So there is no single best research design. The nature of the study is a descriptive one. It aims to find out the present market position and problem of Meghan Cement. Again the research is designed for specific purpose for the company as such basic research was not considered. The study will be a descriptive study and not a causal one.

Target Population

The target population of this research will be the dealers, retailers and ultimate consumers. Dealers are both exclusive and nonexclusive. Exclusive dealers sell only Meghna Cement where nonexclusive dealers sell both competitors and meghna cement. Dealers select the retailers in their own territory with certain percentage of commission. Retailers are those who are appointed by Bashundhara and receive product directly from factory and retailers sell in small quantity. Customers receive the product from retailers and some times from dealers directly.

Sampling procedure

The target population has been selected basing on their knowledge and type of involvement in the field. For research purpose three groups of population has been selected, the details of which are given below:

•         Consumer: For the study, the end users are both institutional and non institutional buyers who either purchase or use cement for construction purpose.
•         Dealer: They are the wholesalers who are appointed by authority of Meghna Cement to sell their products on commission. They are both exclusive and nonexclusive dealers. Nonexclusive dealers sell competitors products also.
•         Retailer: They procure items from the dealers. Their numbers are innumerable. They sell different company products.
• Consumers and retailers are many in numbers so they were sampled based on judgment and direction of management. Judgment samplings were appropriate as management is quite experienced in aiding the sample size. List of the customers and retailers are not exhaustive and up-to-date as such non-probability sampling was applied here. Retailers were also sampled on judgment because of time and resource constraints.

Sampling Method

The basic method for the sampling will be non-probability sampling basis. Probability sampling technique was avoided as time and resource will not permit to conduct study with such large sample that will be generated by probability sampling technique.

Sample Size Determination

In determining the sample size the following formula has been used:

                         n = pqz²/D²

Where, n = number of items in sample;

             Z = confidence level in standard error units;

             P = estimated proportion of successes;

             q = (1-p), or proportion of failures;

             D = Level of precision

Assuming that 50 percent of the respondents (p) will respond positively and 50 percent of the respondents will not respond positively. At 95 percent confidence level (Z = 1.96). Level of precision will 13 percent, the calculated sample size becomes about 56. The assumptions are taken to meet the time and resource constraints of the study. It is to be noted that since the sample size big and difficult to handle with a single member resource team, the sample selected for consumers 36, dealers 6 and retailers 14.

The size of the sample of different strata is selected based on convenience and the direction of the experienced supervisor. The detailed distribution is given below:

Table1: Sample Size Distribution

DATA COLLECTION 

For our research purpose we need both primary and secondary data.

Primary Data:

There is lack of in depth study about the subject. As such, primary data is the building block of the research work. The data of this study were collected from the interview conducted among the selected respondents in Dhaka. The interview was conducted with a pre-designed questionnaire. The questionnaire consists of both structural and unstructured question. The question was designed for customers, dealers and retailers. The primary data were collected in the following ways:

        Survey: A coordinated and extensive survey was carried out using door to door interview techniques. Dealers and retailers were interviewed using predetermined questionnaire. Customers were interviewed using the same technique but different set of questionnaire. A comprehensive questionnaire was developed to address the research objective. In the survey dealers, retailers and customers all were interviewed physically.

        Pilot study: For this study the experts particularly the veteran consumers, technicians and professionals who possess expertise and knowledge in this field were also interviewed. In pilot study, focus group discussion was not conducted, as the environment and expenditure did not permit to do so. So depth interview was resorted to probe and elicit desired answer to the questions.

Secondary Data:

There is not much research work done on the subject. As such, sources of secondary data were very much limited. However some data were available in the organization data bank, internet, brochures etc. A thorough survey of all these were done to find out the useful information.

DATA ANALYSIS

        Subjective Analysis: Qualitative data was analyzed using judgment, guidance of the supervisors and knowledge.

        Statistical Analysis: The analysis of the data was party done by using software SPSS, while part of it was done manually. Basing on the nature of the data appropriate test was conducted to test the hypothesis.

The Meghna Cement Mills Limited (MCML) was the first undertaking Bashundhara Group in the manufacturing sector. This enterprise produces world-class cement and, as a testimony to this, stands the fact that the concern has been awarded the ISO-9001 certification for sustained quality control effort. The Company markets its cement under the registered trademark of “King Brand Cement. The factory of this Company is located in the southwestern part of Bangladesh at Mongla Port Industrial Area, in Mongla, Bagerhat under the Khulna Division.

ORGANIZATION

Bashundhara is a premier industrial group in Bangladesh business area. Bashundhara started its journey in 1987 as a real estate concern “East West Property Development (Pvt.) Ltd popularly known as BASHUNDHARA. This project turned out to be very successful and had helped foster the growth of trust and confidence of the urban people in ‘Bashundhara’.   Now a day Bashundara operates fifteen vital enterprises of highly esteemed commercial and technological caliber. They include city development, cement, steel, LP gas, tissue, sanitary napkin, trading, import-export, paper, newsprint, technology, communication and network, sack, paper etc.Current value of the total assets of the enterprises of Bashundhara Group would be Tk. 15000 million (approx.). Total turnover of the businesses amounts Tk. 16000 million (approx.). Now about 8100 people are employed in various enterprises of the group. The Group’s publicly traded company, the Meghna Cement Mills limited, is currently listed on the two stock Exchanges of Bangladesh.

ORGANIZATION STRUCTURE  

The span of control of MCML is almost tall. In office high officials control the subordinates and subordinates are liable for their work to their authorized superior boss. In this organization all the people works in relaxation. As per job character job threatening is very low here. Very naturally job satisfaction is very high for all working people. On the other hand job-switching tendency for the mid level, high-level officers and expert peoples is very low here. Working environment is all over satisfactory here. Here the chairmen and directors take crucial decision.

 MISSION STATEMENT

Bashundhara Group (BG) is a leading private-sector industrial conglomerate in Bangladesh. It currently has 14 on-going concerns, ranging from real estate development and management to manufacturing and services. The BG strives to work in partnership with the Government for promoting sustainable development, environment preservation, and employment-generation and poverty reduction. Bashundhara Group has no any specific vision. But BG has a particular focus on urban housing, recreation center and commercial ventures. Thus the motto of the Group is “For the People, for the Country”. At the crux of all industrial processes deployed at the Group’s enterprises stands the need to ensure environmental stability. As a result, conscious efforts are made to use re-cycled material as industrial input.

The Group’s Efforts Seeks to:

•   Create affordable housing (developed land & homes) for people.
•   Foster better living environments and pleasant surroundings.
•   Ensure environmental balance and sustainability.
•   Use re-cycled raw material in industrial production.
•    Treat industrial effluents.
•   Establish recreational and shopping facilities for people.
•   Develop a meaningful partnership with others for development.
•   Provide better working conditions for its staff members.

COMPANY REFLECTION

In the year 1987, Bashundhara was lunched, initially as a real estate developer, moving in the later years into other areas, including manufacturing. Over the past two decades, the challenges in the fields of urban housing civic amenity provision have been unprecedented. In keeping with rapid population growth in metropolitan Dhaka, Bashundhara stretched itself to cover new boundaries and respond effectively to long-term needs of the mammoth city populace.

MARKETING MIX OF MEGHNA CEMENT MILLS LTD Marketing mix is defined as “the set of marketing tools that the firm uses to pursue its marketing objectives in the target market”. MCML also using the concept of marketing mix to pursue their marketing objectives.

Product All the local and foreign cement companies in Bangladesh are offering different quality of cement. As regards to the brand name, few renowned cement companies could position itself among the target customers. King Brand Cement may be described in following ways:

•         Product Variety: Meghna Cement presents their product in different ways. They  have both     Ordinary Portland Cement (OPC) type CEM I/ 52.5 N and Portland Composite Cement (PCC) which type CEM II/ B-M (S-V-L) 42.5 N and CEM II/ A-M (S-V-L) 42.5 N in the market.
•         Quality: Product quality consists of the ability to satisfy customer’s needs and wants as well as the ability of a product to perform its function; it includes the product’s overall durability, reliability, precision, ease of operation and repair and other valued attributes. King Brand Cement quality has two dimension that are level and consistency. The quality of King Brand Cement is comparatively good; it can compare it with any multinational cement. It is proved by BUET and certified by ISO-9001-2000 and BSTI.
•         Design: The style of King Brand Cement is simply that describes the appearance of a product. Design is a larger concept than style. They use modified design in packaging also modified in product quality.
•         Feature: The company offered with varying features. They create higher level models by adding more features. They have two types of cement OPC (ingredients; Clinker = 95% – 100%, Gypsum = 0% – 5%) and PCC (ingredients; Clinker = 65% – 79%, Fly Ash + Slag + Lime Stone = 21% – 35%, Gypsum = 0% – 5%).
•         Brand name: A good name can add greatly to a product’s success. Bashundhara Group itself a strong brand. Meghna Cement Mills Ltd. is an enterprise of Bashundhara Group. King Brand cement of MCML is well-known throughout Bangladesh. It is very easy to pronounce, recognize and remember.
•         Packaging: Bashundhara Group has its own cement bag factory that meets demand of the country. This bag is well furnished, environment friendly and pilfer proof.
•         Sizes: King Brand cement is contains 50 kg in each bag. It is available in all over the country.
•         Services: They try to give the customer best service. They deliver the product to the customer’s address in their own responsibility.     

  Pricing The cost of cement is very high at present. However, depending upon the quality and brand name of company, the aggregate financial involvement also varies quite significantly. List price: The price is called which is written on the product. The King Brand Cement do not write any price on the packet because this price is very much unstable. Their ex-factory is 347/- and sale in 362/- in Dhaka city at present. It varied on distance. Discount: Meghna Cement Authority offer different type of discount system that is depends on the party. The buyer can deduct 2%, if the bill is paid within 10 days.

Promotion Meghna Cement Mills Ltd. operates its advertising and other promotional programs by a separate advertising department. The department works for continuous innovative advertising campaigns for the consumer and business products of Bashundhara. The promotional activities for Meghna Cement are carried out by this department. This company has wide range of promotional activities to attract the target customers. The advertising department has some creative and energetic personnel who launch frequent promotional programs. The existing promotional tools used them are:

1. Advertising
2. Personal selling
3. Sales promotion
4. Public Relations
5. Direct Marketing

Another Part of The Post:

Report on Market Position and Problems of Meghna Cement Mills Limited (Part-2)