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THE CEMENT NUMBER GAME Learning Objectives 1. Identify the various environmental factors that affect a company’s marketing offer. 2. Identify the various options available to a company in responding to changes in its competitive environment. 3. Prescribe appropriate marketing response strategy to change in competitive environment of a company. 4. Analyze the components of the consumer decision making process of cement buyers. Introduction For forty years GHACEM (formerly Ghana Cement Works) was the only company in Ghana involved in the production cement for the West African country’s market. But this is no more the case as the company now faces competition from others, some of whom are using the mass media to propagate a well-crafted advertising message with a big idea: numbers! Cements come in grades of 32.5, 42.5 and 52.5 (See Table 1 for the Cement Classification Grades). These numbers depict the ‘standard strength’, which is the minimum strength a concrete-mix prepared using the cement achieves in 28 days. Each grade is further differentiated based on what is technically referred to as ‘early strength’, which is the strength the cement’s concrete mix achieves a period of 2 days or 7 days. These time periods are represented by R (rapid) and N (normal) respectively. And so there are ‘N’ and ‘R’ versions of each grade. For example, for grade 32.5, there exist 32.5N and 32.5R. The ‘R’ and ‘N’ labels can further be differentiated with the following illustration - a 32.5R grade cement achieves an ‘early strength’ of 10MPa in 2 days, while a 32.5N grade cement achieves the same ‘early strength’ in 7 days. Both grades (32.5N and 32.5R) however will end up with the equal standard strength of 32.5. Table 1 captures the various grades of cement and their “early” and “standard” strengths. Obviously, numbers means a lot when it comes to cement. The issue of Numbers is central to the one question that kept bothering Benny Ashun, the Head of Sales and Distribution at GHACEM, all weekend: “what is the best way to respond to competitor’s tactics of portraying value via the number game?” This question has brought Benny to the office at 6:35 am, an hour earlier than usual. Good for him he doesn’t have to drive through heavy traffic to work as many others in the capital do all the time. He lives just five miles away from the office located in the premier and major port enclave of the country. Benny turns the pages of the 149 page report from Origin 8, the company’s marketing communications agency. The agency was contracted two years earlier to collect information from key markets that would provide insight into customer behavior including purchase decisions. Of a particular interest to GHACEM was what the cement class numbers or grades meant to the consumer. Cement class numbers is of interest to GHACEM because of what has become known in the industry as the “number game”. As Benny puts it, 1|Page “The number game is being sold as a competitive advantage, making people aware of a certain number that is supposed to suggest quality. Yes! So the number game is up and competitors use it to their advantage saying they sell a certain 42 for the same price as 32, so why don’t you buy my 42 instead of buying someone else’s 32”. Findings from the study presented to GHACEM within a year of commissioning indicated that 65.8 percent of cement patrons in the four major regions that together consume 65 percent of GHACEM cement had no knowledge at all of these numbers. And even for those who did, only a third of them demonstrated an understanding of what it meant. The findings notwithstanding, Benny is well aware that consumer behavior is rarely stable and that the increase in above-the-line advertising by competitors may have changed consumer’s perspectives since the report was authored. The number may now be an influencing factor informing customer’s purchasing decision. In few days Benny is expected to present his recommendation to management on how the company can respond to new developments in its business environment, i.e competitor advantage. The Company After its independence, Ghana embarked on an ambitious development agenda of creating jobs for its people and bridging the infrastructure gap. GHACEM was established on August 30, 1967 in collaboration with Norway as the first cement producer in Ghana. The establishment of the company was considered a turning point in the host country’s development because of the key role cement plays in the development of physical infrastructure. Currently, government of Ghana has five percent (5%) shareholding in the company. Heideilberg Cement Group is the highest shareholder with 93.1 percent. The rest is held by a private local investor (www.ghacem.com/en/our_background). GHACEM’s manufacturing plants located in the two port cities of the country: Tema and Takoradi together have a combined capacity of 4.2 million tons of cement, employing a direct workforce of more than 1000 and several others indirectly. It is the biggest cement manufacturer with 55 percent market share1, and has contributed GHS 284 ($81.1) million in direct taxes to the government in the previous year. With a conveyor system housed in a tunnel extending from the company premises to the docks area of the ports, materials are offloaded and conveyed to the factory in a more efficient manner. The location of the production plants in the port cities is strategic for many reasons. For instance GHACEM imports 75 percent of its raw materials for production. The location helps minimize the need to transport the materials to any other part of the country for production. Organizational Structure GHACEM has a six-member board of directors who sets the long terms strategic direction of the company. The managing director who is executive member of the board heads a ten-member team the company refers to as top management team. The Tema factory hosts the major administrative heads, but each of the production factories has its resident manager both of whom are part of the top management team. Two directorates work collaborate to develop and 2|Page implement short term strategies as far as competition in the market is concerned. These directorates are the Strategy and Corporate Affairs, and the Commercial directorates. Benny Ashun heads a department under the commercial directorate (Refer to Exhibit 1 for organizational chart). Benny Ashun Benny was born in Ghana in 1975. He had his high school education at one of the best schools in Ghana: Mfantsipim School, the alma mater of former UN secretary general Kofi Annan. He has degrees in Theatre arts, media production and marketing. He has also spent about five years in the United Kingdom working and receiving education at the Leeds College of Technology concurrently. Currently he is pursuing an Executive MBA in marketing at the University of Ghana Business School. He joined GHACEM about 10 years ago as contract staff at the corporate affairs department in Tema as Strategy and Corporate Affairs Officer, and has since then risen through the ranks to his current position as “the Head of Sales and Distribution and Deputy Brand Custodian”. Coupled with strategizing for the GHACEM brand, Benny is a private media practitioner. He has been a TV presenter for key programs for 5 years, broadcast journalist and event executive at Accra based Citi 97.3 FM and has also featured in films including “Life and Living It”, “Adams Apple” and “PEEPS” drama series. He is married with three children. Marketing Environment Scanning Ghana is a country of estimated population 27 million people and growing at a rate of 1.82 percent2. The country is bounded by three French-speaking countries (Togo to the East, Ivory Coast to the West, and Burkina Faso to the north). Ghana’s membership of the regional body ECOWAS (Economic Community of West African States) requires it to adopt the Common External Tariff (CET), which allows same tariff to be slapped on all items imported into the subregion3. Also part of ECOWAS is Nigeria, the closest English speaking country to Ghana on the west coast and Africa’s most populous country with a population of over 170 million people. Economic Environment The county’s Gross Domestic Product (GDP) went up recently and currently stands at GHS 74,003.7 ($ 21,143.91) million, thanks to the discovery of oil offshore. This has opened up the country for interests from many foreign investors. That notwithstanding, the country is bedeviled with a crippling energy crisis, high inflation rate, and an unstable exchange rate which saw the domestic currency depreciate as high as 26.6 percent in a six months4. Governments over the years have had to sign on to programs from the Bretton Wood institutions one point in time in their bid to rescue the economy from difficulties it faces. The Real Estate sector, the highest consumers of cement by far has seen significant impact of the oil find in Ghana. The sector recorded a growth of 13.9 percent from 0.2 percent in the previous year. Accra, the capital city is ranked among the top ten Real Estate hubs in Africa. Rental prices for residential properties in the pricy commercial areas of the cities are estimated to be on average $ 3,000 per month for a two-bedroom house and $ 5,000 per month for a four-bedroom executive house5. Available estimates put the housing deficit in the country at 1.7 million in 20146. The stakes seem high in the construction sector as both past and current governments 3|Page have all pledged their support for initiatives to bridge the housing deficit. Government is not the only party concerned about the housing deficits; individuals as well as companies are undertaking various residential construction projects all over the country. The development in real estate creates enormous demand for construction materials such as cement. Social Environment Ghana can be described as culturally diverse country with nine major ethnic groups. Even though these ethnic groups have their separate languages which are taught in schools, English remains the official national language. It is estimated that 67.1 percent of the total population read and write in English and other language7. Aside the economic gain it brings, ownership of a house is considered a social achievement in the country, and so contributes to a higher social status in the community. In the absence of affordable housing loans in the country, a lot of individuals resort to the use of personal savings to undertake such projects. The result is building projects taking longer periods to complete. In the wake of all these, local development authorities have had the cause to be more vigilant to ensure infrastructure developments in the country meet the required standard. This is in the wake of recent reports of collapse of buildings. As a result customers are now more mindful of the quality of cement and other building materials they buy. Technological Environment The country boasts of a vibrant mass media and relatively developed telecommunication system. There are a total of 75 licensed radio stations and 412 licensed FM stations. Mobile phone penetration rate for instance stands at over 130 percent and mobile internet penetration at almost 70 percent8. Social media usage is vibrant, and as a result the country has suffered its share of wild spread of rumors via social media platforms, which makes some bemoan the gullibility of the citizenry. Marketers and brand managers have taken advantage of these new technologies to send their messages across to target audience. Local advertisement are mostly accompany with fun music some of which ends up as common songs and slogans including politicians. The development of internet infrastructure in the country has also greatly impacted the use of Information Communication Technology (ICT) systems to facilitate service delivery. Notable among these is the implementation of the Ghana Integrated Cargo Clearing Systems (GICCS) to help reduce time spent at the port clearing imported goods. This comes as good news to the importers as well as local manufacturers import raw materials including cement, whom hitherto had to spend weeks in getting their goods out of the port. Legal Environment The country has experienced a relatively stable political environment after returning to a multiparty system of government from after 26 years of multiple military rules, which has led to many to commend it as an Africa’s most democratic country. The recent death of the third president in the current (4th) republic, and the smooth swearing into office of the new president gives credence to this notion. 4|Page The Ministry of Trade and Industry (MOTI) is the main government agency which oversee the operations companies that are into manufacturing of cement as well as those who import the product too9. MOTI has presented a legislative bill to parliament which will require all cement importers to register with the ministry, a move some see as a way to protect local manufacturers. For companies duly registered under the Economic Community of West of African States (ECOWAS) trade liberalization scheme however, the registration is binding. Cement Industry Aside the classification grades that separate cements, the amount of limestone content also separate cements into two groups: Portland Cement (PC) and Portland Limestone Cement (PLC). Portland cement is a fine proportional mix of Limestone, Alumina, Iron ore, and Silica. The process of production involves heating up the main ingredient - limestone to about 2,700o F to liberate Carbon dioxide and lime, via a process called calcination. This process produces clinker, and the amount of energy required during this process increases with increase in the grade of the cement. Clinker is then combined with another ingredient (gypsum) and less than 5% of limestone to create a binder with hydraulic properties10. It is estimated that the calcination process releases about 8% of the world’s Carbon dioxide emissions. This has necessitated modification to Portland cement to allow for higher percentage of limestone to produce Portland Limestone Cement (PLC).The Minnesota Concrete Council indicated that the use of 10% crushed limestone result in about 10% Carbon dioxide reduction, and so reduces greenhouse gas emission11. Currently the Ghanaian cement industry consist both PC and PLC. It also has three types of grades: 32.5R, 42.5N, and 42.5R. The total cement production capacity for the country is estimated at Nine (9) metric tons per year, but consumption currently stands at six (6) metric tons per year. Cement imports is also estimated to be over one (1) metric tons, which leaves total estimate deficit of four (4) tons (http://www.globalcement.com/news/itemlist/tag/Ghana). The situation has led to increased competition. Chronology of Competitions Competition in the Ghana’s cement industry only started after GHACEM enjoyed forty years of monopoly. Currently however, the cement industry can be divided into two: the importers and the local manufactures. Local Manufacturers The first competitor to GHACEM to enter the cement market in Ghana was the West African Cement (WACEM) Company, producers of the Diamond brand of cement, which established a plant at the eastern border town of Aflao. The company uses the neighboring country, Togo’s port to import its raw materials. WACEM came with a product clearly differentiated by the classification grade. Their brand name is Diamond and it is classified 42.5R, which is written in bold on its multiwall brown paper in blue ink. Diamond since its introduction has been selling at a price marginally lower than GHACEM. 5|Page Photo 1: Diamond Cement. Photo Credit: www.citifmonline.com For the first time, GHACEM had to deal with direct competition which also happens to be from a local manufacturer. Indeed, WACEM capitalized on the abundance of mass communication tools to put out in the public domain the selling proposition of its brand as offering a product which achieves ‘early strength’ in a shorter period but sells at lower price (Table 2). Just when GHACEM thought it had survived the competition from Diamond over its market share, other entrants found their way into the market. Benny refers to these new entrants as “importers”, probably because they do not have production plants cited in the country. Greenview International is the registered company that deals in the Dangote brand of cement. The product is produced in Nigeria by the Dangote Group, a conglomerate chaired by Africa’s 2015 richest according Fobes Magazine Aliko Dangote12. The company has its existing and planned operations in 16 African countries and employs 17,000 workforce. The company’s operation is also different from the rest because for the moment, it imports finished products and only bags them in Ghana. In Ghana, the Dangote Group is in its 5th year of operation. It started by importing and bagging bulk cement- at its terminal in Tema and selling into the domestic market. Recently however, the company has installed clinker grinding machine in the Western region of the country. The total workforce stands at nearly 700. Dangote cement in the Ghanaian market comes in the classification grade of 42.5R, and is bagged in 50kg pilfer free poly-sacks13. The product has consistently been sold at a price of GHS2.00 to GHS4.00 ($0.57 to $1.14) lower than GHACEM’s 32.5R PLC depending on the part of the country where it is being sold and the market demand at the time (Table 2). The company currently has no exclusive distribution channels in Ghana. However, its product is found in most retailing shops that sell building and construction materials. 6|Page Photo 2: Dangote Cement with new look. Photo Credit: www.dangote.com As expected, Dangote is using the classification grades in its marketing campaigns to make inroads into the Ghana market much faster than GHACEM might have anticipated. Benny mentioned how he has heard of how the classification grade has been used by Dangote to make inroads in neighboring English speaking country- Nigeria where the company originates. The increase in competition has already affected GHACEM’S market offering in many ways. Importers Aside Dangote, there used to be several imported products. Almost all these products are imported from Asia, and sells at much cheaper price. Most of these products are however perceived an inferior. Benny however believes cement importers have some unfair advantage over the local producers because they had found a way to pay lesser duties (CFI) on their finished products, compared to how much GHACEM pays on their raw materials. These companies are able to pay less CFIs by classifying their products raw materials instead of as imports. Benny however expressed relief that the government has acted on petitions local manufacturers submitted with evidence which show the comparative disadvantage they suffer. The government’s action has led to most of these importers moving out of the market. The number of importers currently in operation he recalled are SCL and SOL (Refer to Exhibit 2 for chart on market share). Cement Consumer Market Cement consumers in Ghana are diverse. There are the giant corporate developers who undertake high impact constructions like the bridges, roads, high rise commercial buildings among others. There are also several real estate developers apparently in response to the huge housing deficit in the country. Then there exist a large number of small businesses and individuals who hold themselves up as real estate developers, but are usually into developing 2 to 5 units of houses at a time. A segment of the small businesses are also into what is locally known as “block cutting”: these business manufacture building and pavement blocks form mortar, and sell them to other 7|Page small businesses and individuals. It is also common to see large number of individuals supervising the construction of their own properties. These individuals employs masons, and are personally involved in buying their own blocks and cement from distributors for their construction works. As Benny thought over an appropriate response strategy to the various developments in the cement market, he recounted a conversation he had over the weekend with Oscar, an estate developer who owns a small business. Oscar was then working on a project about three and half miles away from Benny’s residence. It was a Saturday morning, and Benny was on his weekly walk. Upon reaching the project site he ran into Oscar, the manager of the project who was then arriving at the site too. As the local culture is, Oscar was exchanging greetings with neighbors before settling in. As Benny walked towards them, he told himself it is a nice opportunity to have a quick chat with Oscar a bid to solicit information that may be useful to him in making a decision. He approached him and succeeded in getting his permission for about 10 minutes conversation. They engaged in a chat which proceeded as follows: Benny: “What are the various types [brands] of cement you know of in the market?” Oscar: “As for cement, before, it has always been GHACEM. But now the other ones too like Dangote are equally good” Benny: “So what do you look out for when choosing which cement to buy?” Oscar: “Quality is the first thing I consider, quality is very important to us. Then price too. The third thing is the bagging, which is not too much a factor but I consider it too.” Benny: “What about the bagging do you consider in making a decision?” Oscar: “You know Dangote, Dangote is in sack and GHACEM is in paper. When you’re working and may be the weather changes, your boys can quickly pack the sack one and there won’t be too much damage. The paper can easily get wet. Also in case you’re transporting and there is an accident, it is likely that GHACEM [the paper bag] can scatter [break apart]”. Benny: “What about the quality? How do you determine the quality of the cement you use? Oscar: “You have to mix with the right proportion of sand, gravels and water before building the pillar. Then after 28 days you will be able to tell how strong it is”. Benny: “So which brands do you use for your work?” Oscar: “I only buy Diamond when I’m doing mortar work like plastering, but if I’m doing purely concrete work I prefer Dangote or GHACEM, because in the building industry we treat concrete as one special area”. Benny: “So between the two [Dangote and GHANCEM] which one to you buy most?” Oscar: “Actually, it is Dangote”. Benny: “Are you aware of the number game?” 8|Page Oscar: “Number game? No oo … that may be a term among the dealers”. GHACEM’s Marketing Strategy over the Years Initial Market Offering GHACEM started its operation in Ghana with only one product- Portland Cement (classified as 42.5N) on the market when it was the only cement producer. It was the only choice of Ghanaians for all projects undertaken in the country then. The product is presented in a multiwall brown paper sack package of 50 kg each, and was sold to only registered distributors who buy at the factory gate, and at an ex-factory price fixed by the manufacturer. As Benny puts it “we were very much product oriented and had no distribution point other than the factory gate”. It is however common to see several retailing points all over the country which carry the product. These retailers are individuals who have to buy the product from the registered distributors. The company had no promotional strategy and did not engage in any promotional activity. Initially, GHACEM did not see its first competitor (Diamond Cement) to be much of a threat to its market share. They maintained that their product has been tested over the years, and has a high approval rating among the target buyers. As a testimony to the quality of their product, GHACEM quickly points to major infrastructure its product has been used to build and all of which have remained strong to date. Among these are the hydroelectric dams, ‘adomi’ bridge, the Accra-Tema, motorway, among others. Later on however, the company felt the need to respond to the change in the market. The “the drilling project” was then commissioned in line with the company’s plan to develop a new product. The drilling project was carried out to be sure there was enough quantity of Clinker available locally, and with the quality needed to meet the company’s standards. Even though the project was largely successful, the company decided on rather increasing the Limestone content of the product. This will reduce the energy needed for calcination process as well as the amount of carbon dioxide the process releases into the atmosphere. Eventually, GHACEM sought and received authorization from the Ghana Standards Authority to increase the limestone content to 25%. This means Limestone was used as a local material instead of the Clinker as intended. The result is a new product- a Portland Limestone Cement (PLC) with a classification grade of 32.5R. Benny admitted that 42.5R was a desired grade the company could produce but insisted the decision to go for the PLC with 32.5R grade was in the best interest of all stakeholders. He said; “So GHACEM could have turned the 42.5N into 42.5R but you needed so much energy, you needed so much clinker to get you the 42.5R. You also needed a certain competitive urge in terms of cost effectiveness because the cost of producing 42.5R was way higher than the cost of producing the 32.5R. So for cost effectiveness first of all, and second of all being friendly to the environment, and also by using local content as well, which is limestone to achieve the same purpose for which you need cement for, the 32.5R was approved”. Current Market Offering 9|Page The changes in the GHACEM’s business environment have transformed its marketing offer as well as its operations in a number of ways. Benny looks back to how much things have changed in the company with the increasing competition it faces each day. GHACEM’s target market has two segments, with a product targeted at each segment. The 42.5N grade Portland Cement (PC) which is labeled “GHACEM extra” is sold directly to the large construction firms who undertake high impact works. Benny calls this segment the “professionals”, and they constitute 20 percent of the total sales of the company. The 32.5R grade Portland Limestone Cement (PLC) labeled as “GHACEM Super Rapid” is sold to the smaller building contractors and individuals through the company’s distributors, and this constitutes 80 percent of GHACEM’s total sales. In providing reasons for the company’s choice of the two segments Benny said; “the segments were created because we believe we can add more value beyond the products being sold to them. So we offer technical support, and there is an officer with civil engineering and marketing background to take care of that”. It is common now for one to see television adverts of GHACEM on been aired on national televisions, several radio stations throughout the country, and in the print media. The company also has a social media site (www.facebook/ghacemghana). There is also public education campaign being carried out on radio called ‘GHACEM NEWS’ which seeks to educate the public on cement usage. As part of its corporate social responsibility the company has established GHACEM Foundation, with the responsibility to identify needy educational and health institutions to receive support from the company in the form of free products. The company has so far donated total value of product amounting to GHS 12.6 ($ 3.6) million. Photo 3: A website banner on GHACEM’s facebook page. Photo credit: www.facebook/ghacemghana 10 | P a g e In order to facilitate distribution throughout the country, the company controls fairly a good number of its distribution channels. The company has four (4) depots with thirteen (13) sales offices spread throughout the country which exclusively distribute the GHACEM brand of cement. The depots serve as receiving points for the sales offices. The sale offices then retail to both individual users as well as other small businesses that may either be into building construction or just block making. It is also common to see other small business retailing the product in small quantities. The difference between these small retail business and GHACEM’s sales offices is that the sales offices only sell GHACEM’s products while the other individual retail points usually deal in other products. The products are also sold in bulk usually per ton to their “professionals” segment. The price of GHACEM’s products is mainly driven by cost and competition (See Table 2). Pricing has become a major challenge for GHACEM, cost components such as foreign exchange rates, royalties, conveyance fees, mining fees, and utility among others, as well competitor’s price has become more unstable. Benny said in his frustration; “Just two years ago, if I could count rightly there were about four price adjustments: 2 downwards trends and 2 upward mainly because of the exchange rate fluctuations experienced by the locally currency” While GHACEM controls pricing at its sales offices, the company is unable to control how much the product is sold at the numerous independent retail shops. GHACEM’s future At this point in time, GHACEM has woken up to the reality of competition in the industry. Industry players have products that are classified in a higher grade and are being heavily promoted using the mass media. Even though research findings may indicate that the market has not yet been caught in the euphoria of the numbers, management of the company is wondering how long they can survive the competition. When and how could GHACEM respond? Benny is search of answers. 11 | P a g e References It is a free market – GHANCEM tells World Bank. (n.d). Ghana Trade. Retrieved from http://www.ghanatrade.gov.gh/Stock-News/its-a-free-market-ghacem-tells-world-bank.html 1 2 Country Meters (2016). Population of Ghana. Retrieved from Countrymeters.info/en/Ghana Kwofie, M. (2016, January 29). Ghana to implement CET on February 1. Graphic Online. Retrieved from http://www.graphic.com.gh/business/business-news/57301-ghana-to-implementcet-on-february-1.html#sthash.8c9lOMuE.dpuf 4 Cedi returns to ‘Africa’s worst currency’. (2015, August 27). Ghanaweb. Retrieved from http://www.ghanaweb.com/GhanaHomePage/NewsArchive/Cedi-returns-to-Africa-s-worstcurrency-378119 3 5 Knit, F. (2015). Africa Report (2015). Retrieved from http://content.knightfrank.com/research/155/documents/en/africa-report-2015-2802.pdf 6 Andoh, A. (2014, March 1). Ghana has 1.7-million housing unit deficit. Graphic Online. Retrieved from http://www.graphic.com.gh/news/general-news/18541-ghana-has-1-7-million-housing-unitdeficit.html 7 2010 housing and population census: summary of final results. (2012). Ghana Statistical Service [Data File]. Retrieved from http://www.statsghana.gov.gh/docfiles/2010phc/Census2010_Summary_report_of_final_results. pdf National Communication Authority. (2016). Industry Information – Telecom Subscriptions for August 2016. Retrieved from http://www.nca.org.gh/downloads/Industry-Information-August2016.pdf 8 9 Ghana Acts against cement importers. (2016, March 16). Global Cement. Retrieved from http://www.globalcement.com/news/item/4722-ghana-acts-against-cement-imports FAQ's – Cement. (n.d). Concrete Society of South Africa. Retrieved on March 15, 2016 from http://www.concretesociety.co.za/faqs/cement 10 11 Minnesota Concrete Council (2013). Literature Review Port-Limestone Cement. Retrieved from http://www.mnconcretecouncil.com/ftpgetfile.php?id=209 12 Afirca’s 50 richest. Fobes. (n.d). Retrieved from http://www.forbes.com/africa-billionaires/list/ 13 In-country operations: Overview. Dangote. (n.d). Retrieved from http://www.dangotecement.com/operations/ghana/ 12 | P a g e APPENDIX Exhibit 1: Abridged organizational chart for GHACEM Board of Directors Managing Director Strategy and Corporate Affairs Director Commercial Director Finance Director Head of Sales (Distributors) Human Resource Director Head of Sales (Professionals) Exhibit 2: Estimated Cement Market Share in Ghana Ghana Cement Market Share 10% GHACEM Diamond 35% 55% Dangote/SCL/SOL 13 | P a g e Table1 Cement Classification grades Early strength (MPa) Grade Standard Strength (MPa) 2 days 7 days 28 days 32.5N - > 10.0 > 32.5 32.5R > 10.0 - > 32.5 42.5N > 10.0 - > 42.5 42.5R > 20.0 - > 42.5 52.5N > 20.0 - > 52.5 Source: Concrete Society of South Africa Table 2 Average retail price per 50Kg bag of cement in Ghana Average Retail Price in GHS($) Tema (Southern Kumasi Wa (Northern zone) (Middle zone) Zone) 33.50 (9.57) 34.50 (9.86) 32.5 (9.29) 31.50 (9.00) 31.50 (9.00) Cement Brand Grade GHACEM Super Rapid 32.5R GHACEM Extra 42.5N Dangote Cement 42.5R 30.00 (8.57) 31.00 (8.86) - Diamond Cement Source: Compiled by author 42.5R 31.00 (8.86) 32.00 (9.14) - 14 | P a g e THE CEMENT NUMBER GAME Group Work Sheet Due Nov. 9. (1 inch margin, double space, 12 point font, with cover page, word file) Please submit your case in Q & A style. One Bb submission per group. 1. Based on the case material, list and discuss the various marketing environmental factors that impact cement production in Ghana. 2. Based on the case material, develop a SWOT analysis for GHACEM. 3. The textbook introduced two methods to analyze the growth opportunities for a marketer: Business Portfolio Analysis and Diversification Analysis. Choose one method and apply it to GHACEM case and discuss ways that the company can grow its business. 4. The following questions require you to apply the consumer decision making theory. • Illustrate the decision process that an individual consumer uses to make the cement purchase. • Explain what is the “number game” in Ghana cement industry? • At which stage of the decision making process will the cement number play a role in consumer’s purchase decision? Why? • If you were a marketing consultant, what recommendations would you give to Benny in facing this number game?
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The textbook introduced two methods to analyze the growth opportunities for a marketer:
Business Portfolio Analysis and Diversification ...


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