The Pakistani Construction Chemical Industry Marketing Essay

Construction Chemicals are the broad range of chemicals that are used as additives before or after construction stages to enhance the strength and durability of concrete structures. These range of construction chemicals are further divided into admixtures, flooring adhesives, water proofing, surface treatments, sealants, grouts and anchors, depending on their use in various applications of repair and construction.

The Pakistani construction chemical industry despite its troubled economy is growing at a steady rate due to availability of natural resources and construction projects within country and neighboring Afghanistan. Construction chemical industry is very closely related to construction industry and is very much dependent over it. Many international companies those are considered as pioneers and giants in construction chemicals have developed construction sites in Pakistan to capture this geographic segment. Many local companies have also stepped in this line of business and are adapting international standards in technology and processes that has increased this industry magnitude but also developed the competition. Though it is a growing industry in local perspective yet at the same time on a smaller level it also attracts the attention of the niche segment of qualified people who know what will be the ultimate satisfaction that they will receive after using such type of products and services.

Internship in MBA program is very helpful in understanding the standards, codes and ethics that are practiced in real markets. As a marketing student to gain information on how companies in this competition adopt marketing strategies and focus on the needs and wants of the customers to stay contemporary and profitable. For this purpose I took internship in marketing department of Ultra Chemicals, a construction chemicals company whose industry is very dynamic. The company started its business in 2003 as a licensee of Ultra Construction Chemicals LLC USA and specializes in importing and manufacturing of construction chemicals Admixtures & Surface Treatments, Grouts and Anchors, Water proofing Materials, Industrial Floorings, Concrete Protective Coatings, Joint Sealants & Adhesives.

I gained a lot of practical experience working in this company and I am quite confident that this exposure will have a positive impact on given assignments and entrepreneurial activities as a professional in marketing. I did internship for six weeks of one week in finance department and rest in marketing department to have a broad exposure. Working in finance department was more like to get a general idea about department functions and I was able to get interaction with finance department staff and watched their general activities. Higher management corporation and support helped very much in gaining the inside view of the organization processes and making it a good learning experience. During the internship period I met many clients, people in the marketing field and observed their activities. In this report I have discussed technical terms that are used in this industry and conducted SWOT analysis. At the end of this report I have made some conclusions and recommendations for the company. Vision and Mission statements are as follows:

Vision Statement:

To be the leader in chemical industry and to serve commercial, residential and industrial construction by utilizing our vast research, expertise and experience.

Mission Statement:

We at Ultra chemicals are totally committed to developing customer-valued, admixtures, surface treatments, protective coatings concrete repairs, industrial flooring, grouts & anchors, adhesives, waterproofing & sealants solutions.

Our focus is directed toward continuous improvement, superior quality and exceptional service.

Table of contents

Serial No.

Topic

Page No.

01

Overview of the Organization

8

 

i. Brief history

8

 

ii. Nature of the organization

9

 

iii. Product lines

10

 

iv. Brand portfolio of the organization

11

 

v. Strategies of branding used by the organization

12

vi. List of main clients of UC

13

 

vii. List of main competitors of UC

18

02

Organizational structure

19

 

i. Organizational Hierarchy chart

19

 

ii. Number of employees

20

iii. Introduction of all the departments

20

 

iv. Comments on the organizational structure

21

03

Plan of my internship program

21

 

i. A brief introduction to head office

21

ii. Starting and ending dates of my internship

21

 

iii. Names of the departments in which I got training

21

04

Training program

22

 

i. Description of activities performed by departments

22

ii. Description of the tasks assigned tasks

22

05

Structure of Marketing Department

25

 

i. Department hierarchy

25

ii. Number of employees in Marketing department

26

 

iii. Marketing operations

26

06

Functions of Marketing Department

27

 

i. Segmentation strategy

28

 

ii. Target marketing strategy

28

 

iii. Product planning, development & management

28

 

iv. Positioning

29

 

v. Pricing strategy

30

vi. Distribution strategy

34

 

vii. Promotional strategy

35

07

Structure of the Sales Department

36

i. Department hierarchy

36

 

ii. Number of employees working in sales department

36

iii. Sales operations

36

08

Function of Sales Department

37

 

i. Sales methodology

37

ii. Type of selling

37

 

iii. Sales returns procedures

38

09

Customer Services Department

39

 

i. Process of developing relations with customers

39

ii. Techniques of retaining the customers

40

 

iii. Techniques of attracting new customers

40

iv. Ways of handling different kinds of customers

40

10

Critical Analysis of UC

42

11

SWOT analysis

44

12

Conclusion

46

13

Recommendations

46

14

References

47

Overview of the Organization

Brief history of organization:

Ultra Chemicals, LLC. a, USA based company adopting Market Development and Product Development Strategies formed its subsidiary, Ultra Construction Chemicals (PVT) Limited.

The company started its operations in Pakistan in 2003. It provide improved quality construction additives as well as technical support to different sites including Commercial, Residential, Housing Societies, Underpasses, Flyovers, Dams, Hydro powers, Combined Cycle Power Projects, Bridge Structures, Airports and Canal Lining etc by utilizing research and expertise to serving valued customers throughout its region.

Nature of organization:

The Company imports raw materials of most of its chemical products from various countries like, Japan, Korea, Russia, South Africa and America. Admixtures are blended and mixed at Ultra chemical Processing Unit which is located exactly 4KM, off Ferozpur Road, Lahore

Epoxies in finished form are directly imported from Japan & Korea through its parent company. These are imported in bulk quantities and re-packed into small tin packs for further selling to the customers.

The Company has strong technical team which provides technical services and supervisions to its customers. The services include product applications, Precaution, port life, full cure time, and final strength of the products and concrete cubes.

The business is classified as consumer durables because the nature and use of the products in processes and projects are made so that the projects have extended lives and durability in their structures.

iii) Product Lines and Brand Portfolio of the organization: –

The company offers a complete range of construction chemicals/additives which are used to enhance concrete structure life, workability, quality, and strength. The wide range of construction chemicals products includes:

Concrete Admixture

Ultra Powder 2000

Ultra Super Plast 470

Ultra

Grouts n Anchors

Ultra Lock E3-GP

Surface Treatment

Ultra Curing Compound

Industrial Flooring

Ultra Hard Floor

Protective Coating

Ultra Tuffcoat-90

Water Proofing

Ultra Seal Grey

Joints Sealants etc

Ultra Poly Urethane Sealant

Strategies of branding:

Branding Strategy plays an important role in creating a, sign, symbol, and name that differentiates and identifies a product from other products. An effective branding strategy provides you a chance to penetrate and increase market shares in a competitive market. Branding is very particular in nature that a company adopts under some condition like product, consumer behavior and company position in competitive environment.

The company has adopted Range Brand Strategy. This strategy offers one brand name through a single promise for a range of products belonging to the same area of competence. Ultra Construction Chemical has only one brand name (Ultra) which is used for all of its range of interrelated products.

Main Clients:

National Level Project References

International Air Port Sialkot.

Greater Thai Canal.

Kachi Canal.

Rainee Canal.

KCI Chashma.

Satpara Dam.

Sher Shah Bridge Multan.

Mole Power Project Kohat.

Head Baloki Thermal Power Station.

Islamabad Muree Motorway.

Lahore to Gujranwala Road Bridges.

Pakistan Atomic Energy Commission.

Chief Minister Secretariat Lahore.

President House Islamabad.

Prime Minister House Islamabad.

Metro Cash & Carry.

Industrial Sector (Cement Industry)

Pioneer Cement Factory Joharabad.

Best Way Cement Factory Chakwal.

Gharibwal Cement Factory Find Dadan Khan.

Saadi Cement Factory Hattar.

Mustehkum Cement Factory Hattar.

Fauji Cement Factory Fatah Jhang.

Thatta Cement Factory Sindh.

Lucky Cement Factory Karachi.

Pakistan Cement Factory Chakwal.

DG Cement Factory D.G Khan.

Leather, Textile Industries Etc.

East Pakistan Chroome Tainery Shaikhupura.

Universal Leather Kahna Lahore.

Yusaf Tainery Sahiwal.

Dada Tainery Ferozpur Road Lahore.

Sapphire Finishing Raiwind Lahore.

Nishat Mills Defence Road Lahore.

Nishat Chunian.

Five Star International Faisalabad.

Manakine Textile Rohi Nala Lahore.

Ehsan Sons Raiwind

Master Textiles Raiwind

Koh-e-Noor Textile Raiwind Mange Road Lahore.

Mayfair Textile Raiwind

Azgard-9 Raiwind.

Akash Textile Faisalabad.

Sonex Tiles Industry Kamokey.

Mater Tiles Gujranwala.

Bata Pakistan.

Nestle Pakistan Kbirwala Sheikhupura.

Pak Arab Fertilizer

Fatima Fertilizer Rahim Yaar Khan.

Angro Fertilizer Ghotki.

Ghani Glass Industries.

Honda Car Factory Multan Road Lahore.

Honda Motorcycle Sheikhupura Raod Lahore.

LG Factory Sunder Industrial Estate Lahore.

Faisal Asad Textile Layyah.

Coca Cola Lahore

Pepsi Cola Lahore.

Sunder Industrial Estate Lahore.

Clariant Pakistan Jamshoro.

Millat Tractors Sheikhupura Road Lahore.

KSB Pumps.

Doctor Hospital Lahore.

Adil Hospital Defence Lahore.

Precast Industries:

Izhar Group of Companies.

Izhar Pvt. Ltd.

Gondal Precast Gujrat.

Imam & Co

Jamal Precast Rawalpindi.

Saeed Precast Kohat.

Rana Concrete Lahore.

Junaid Pool Plant.

Potential Engineers

C-Mix Concrete Lahore

Pharmaceutical Industries:

Ameer Pharma Shaikhupura Road.

Sharooq Pharma Ferozpur Road Lahore.

Shahzaib Pharma Haripur.

Pharmajin Ferozpur Road.

Gyton Pharma Raiwind Road.

Glaxo Smith Kot Lakhpat.

Selmore Pharma Multan Road Lahore.

International Pharma Defence Road Lahore.

Zakfas Pharma Multan.

Mass Pharma Raiwind

Ethical Lab Thokar Niaz Baig Lahore.

Mac & Rains Pharma Raiwind Road.

Shopping Centers, Housing Sectors:

Pace Pakistan Pvt. Ltd.

Rabi Centre Lahore.

Ahad Tower Lahore

AH Tower M.M. Alam Road Lahore.

Pak Gulf-7 Star Islamabad.

Sethi Motors Model Town More Lahore.

Essem Hotel Islamabad.

Emmar Housing Project Islamabad.

Defence Housing Authority Lahore.

Eden Developers/Housing.

Bahria Town Lahore & Rawalpindi.

EME Society DHA Multan Road Lahore.

City School System.

Beacon House Schools System.

Salamat School System.

Laccas School System.

Punjab Group of Colleges.

Askari Villas Airport Lahore.

Aero Developers

Mubarak Sales Center Lahore.

Al-Gugair Giga Tower Karachi.

Rehman Hospital Ferozpur Road Lahore.

Thokhar Niaz Baig Fly Over Lahore.

Muslim Tower Under Pass Lahore.

Royal Palm Golf Club Lahore.

Warid , U Fone,Telenor Towers.

Main competitors

List of major competitors is appended below

SIKA International

BASF Pakistan

FOS-Pak Construction Chemical (Pvt) Ltd

ABE- Construction Chemical (Pvt) Ltd

Imporient Construction Chemicals (Pvt) Ltd

Zohebia Construction (Pvt) Ltd

Organizational Structure

The organizational structure of Ultra Chemicals has functional departmentalization structure with centralized decision making.

i) Organizational Hierarchy chart

ii) Number of employees

The total numbers of employees working in Ultra Construction Chemicals offices (head office & branch offices) and in factory are 120

iii) Introduction of all departments.

Human Resource Department:

Human resource department of Ultra construction chemical dealing with matters of employees like, training, hiring, labor relations and benefits. Human resource management also plays an important role to make employee labor force well-organized as well as maintaining employee database.

Finance Department:

Every organization plays an important role to meet the need of all of its stake holders. This is true in the finance sector. Ultra construction chemical has a strong finance department which plays a broad range of roles to under take inside and outside of its business. The finance department of Ultra construction chemicals handles all traditional responsibilities and finance matter such as finance accounting, payroll management, recoveries, estimating and handling cash in hand and outflow, record keeping and managing liquidity.

Marketing Department:

It is the major responsibility of marketing department of Planning and coordination of all marketing activities. Ultra construction chemicals marketing department works to promote their products at reasonable price in the market. The marketing department of Ultra construction chemicals is also responsible of generating new inquiries, through tender opening, news papers, building consultants, contractors and media. Developing long term relation with exiting as well as new customers.

Sales Department:

The sales department of Ultra construction chemical is responsible for the sales of the company’s manufactured products and services. Payment collection, after sales services, logistic, controlling and assessing sales force activities is also duty of Ultra Chemicals sales department.

Comments on the organizational structure :

Ultra Construction chemical has departmentalization decision making structure. It includes wide span of control with central decision making approach. This type of decision making strategy is good for company products, services and business.

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3. Plan of internship program:

i) Brief introduction of head office:

Ultra Chemicals head office is situated in 26 CC-2 Civic Centre, Central Plaza, New Garden Town Lahore, where I conducted my internship. It is floor which is divided into four departments that include finance, marketing, sales and human resource departments.

ii) Starting and ending dates of Internship:

Staring date of my internship is June 01, 2010 and ending date is July 13, 2010.

iii) Names of the departments in which I got my training:

Finance Department

I got training in Finance department for one week starting from June 01, 2010 to June 08, 2010 and learned voucher entries, book keeping, journal entries.

Sales & Marketing Departments

From June 09, 2010 till the completion of my internship. During this tenure, I learned / performed the following: –

Companies Marketing policies

Market Analysis & Prepared Marketing Plan

Promoting Company’s products

Understanding customer’s needs & requirements

4) Training program:

Internship Training program started on June 01, 2010 and ended on July 07, 2010

i) Detailed Description of the operations performed by the department:

a) Finance department:

Activities of this department are recovery of cash from clients and agencies, preparation of budget, payroll management, account maintaining and keeping records.

b) Marketing department:

This department is responsible for conducting marketing research, advertising and promotion, devise a marketing plan, manage product portfolio. In addition to these activities this department focuses on customer needs, develop and communicate with customers, develop plans that would help in gaining a competitive edge in competition.

Detailed description of assigned tasks: –

Separate target and separate responsibility is assigned to sales representative. I had to meet 0.6 Million Sales Target during my Internship

meeting with chief civil engineer: (M. Israr Farrooqi) , discussion regarding epoxy sacreeding (used in hygienic & chemical resistant floor in food departments, hospitals lobby, beverages, food processing plant, pharmaceuticals production plant, cold storage ) and self leveling in new cereal plan building

Visit to Head of construction, Mr Khwaja Tasueef at Metro cash & carry Thokar Niaz Baig Lahore for water steel structure water proofing with(epoxy primer, intra seal flex=high elongation coating & pasting of polyester fiber,

c) Visit to Sapphire power plant Muridke:

Met Mr. Rana Khaliq ur Zaman Arif and discussion regarding grouting of diesel tank pipes with some high strength epoxy material. And surface treatment of water unloading station of acids like (caustic soda, HCL, H2so4 (sulphuric acid) and water proofing of underground storage tanks

d) Visit to Nishat Mills Ltd:

Its head office is situated at 7 Main gulberg, Lahore. I had a detailed discussion with Mr. Khurram Procurement Manager regarding all construction products specially focused on related jobs like grouting of power looms machines foundation.

e) Visit to Coca Cola concentrated plant:

It is situated 1 N Gulberg industrial area Lahore. A brief discussion with Raza Ali maintenance manager regarding epoxy sacreeding and self leveling of floor (hygienic coating) for hygienic conditions such as non bacterial growth.

f) Visit to Descon Engineering Limited:

The head office is located at Ferozpur road Lahore. A detailed discussion with Mr. Rafiq (Project Buyer) regarding treatment of expansion joints Ultra Safe Lastic-V (sealant for vertical surface) for Mangla dam Projects and Satpara Dam Project for rebarring of concrete structures.

g) Visit to Dawood Hercules Sheikhupura raod lahore:

The corporate Head office: 35-A, Shahrah-e-Abdul Hameed Bin Baadees (Empress Road), Lahore 54000, Pakistan. I have conducted a meeting with Mr. Rasheed (chief civil) regarding workshop floors treatments with some epoxy high strength materials and surface treatment of cooling tower basin with some cement materials and polymer added mortar.

5) Structure of the Marketing Department:

Marketing department has a traditional structure with decentralized decision making and narrow span of control.

i) Department hierarchy:

ii) Number of employees working in the Marketing department:

There are ten employees working in marketing department of Lahore head office.

iii) Marketing Operations:

Marketing department of Ultra Chemicals performs various activities to enhance the positioning of brand and products. Performing activities to measure marketing and planning, advertising budgets, project work and promotional campaign results while systematically improving effectiveness and efficiency.

Generate market reports:

After completion of each project the marketing department makes reports and analysis of the completed projects.

To make budgets:

It is a planned activity that allocates revenues and expenses that are needed to carry out various marketing activities. It also covers pricing decisions specific to clients, rewarding employees with bonuses and also to make product range more innovative.

Brand Management:

Brand image is positioned so that the perceived value to the customer would increase brand equity by continuously improving the band contract .

Pricing

Pricing objectives and strategies are defined, in order to have optimal pricing. Terms and conditions of pricing are also established.

6) Functions of the Marketing Department:

To Conduct market research:

Market researchers conduct the research, prepare reports and present to marketing director.

Promotion and Advertising:

To expand customer base and find new customers are key assets to any firm specially in this challenging industry. Advertising and promotion strategies are used to find and attract new customers. For this purpose Ultra Chemicals launched many campaigns to increase their brand awareness by effective advertising and promotions systems.

Prepare Marketing Plan:

Marketing plan is prepared at the start of the year, targets are set to achieve and strategies are adopted to achieve these goals. Based on market research and analysis a plan is prepared and managers make sure that objectives are carried out without delays.

Segmentation strategy:

Segmentation strategy depends on the market potential and the ability to satisfy the customer needs. For this reports from market research process are consulted.

Segmentation strategy used by Ultra Chemicals is

1) Geographic Segmentation:

Geographic segmentation is the dividing of the target market in various segments depending on the customer’s usage and demands for those products. Clients of Ultra Chemicals are from various cities, and construction sites within Pakistan that require the products produced.

2) Behavioral Segmentation:

Behavioral segmentation is the dividing of the target market in segments according to potential buyers of products and their knowledge, usage and attitude towards that product.

Products of Ultra Chemicals are used by such people and professionals who are knowledgeable and understand the brand promise that it offers, because they are looking for quality and durability.

ii) Target marketing strategy:

Market research process also define the target market that helps in identifying those market segments that are potential clients and agencies that utilizes the products & services produced by a company. Right identification of the target market helps in saving time and monetary costs. Target market primarily includes those customers, regions and all those projects that are related with construction industry. The nature of this industry requires a market that is composed of knowledgeable and technical people who know what value and promises this brand offers. Though it is a growing industry in local perspective yet at the same time on a smaller level it can depends and target the niche segment of qualified people who know what will be the ultimate satisfaction that they will receive after using these products. On a larger scale Ultra Chemicals targets large scale projects.

After identification and selection of target market, strategies used by Ultra Chemicals are product and market specialization with full market coverage that span over whole country. Product specialization is used because the company has the potential to customize the products according to the need of their client agencies, and market specialization is used because the company offers this target market a variety of its products for usage.

iii) Product planning, development & management:

Product Planning:

After market research and careful analysis of market opportunities and assessing the needs of the customers, product planning process is started which aims at answering questions like which new product should be introduced or are there any modifications that can be made in the current product portfolio. What will be the process of after sales service and at what time the product should be introduced in the market. However basic product planning starts with idea generation many internal sources like customers, suppliers etc are consulted. When data is gathered from various sources is gathered, further screening and short-list is made and more feasible ideas is selected.

Product Development:

Ultra Chemicals manufacture their products in their production plant which is situated at Defence Road Rohi Nala, Opp: Kacha Tiba Village, Industrial State Lahore.

Basic raw materials are imported from various countries and under the supervision of qualified team of plant managers, supervisors and chemical analysts products are manufactured according to ASTM (American Standard testing Method) which is an international standard developed by American society for testing materials.

Product management:

When new product is developed then it is managed by commercialization which deals with the timing of the launch of the new product, also where and when to launch the product. After that test marketing is carried out where the product is tested in real market setting. Ultra Chemicals uses the push strategy and send out notifications, samples and promotional material to their regular clients and make the characteristics of the product known and managed through a communication network of professionals and customer service. All products of Ultra Chemicals are leveraged under its unique brand name.

iv) Positioning:

Positioning is what we do to the mind of our customers it should be done carefully because it is the foundation on which other marketing decisions are built. Any change in the positioning can result in price fluctuations.

Since the launch of Ultra Chemicals in 2003, the company has done effective promotional campaigns and developed a large customer base. They were successful in setting the perception of a company that offers a wide range of high quality to meet the need of customers by enhancing the safety, durability and design of construction. These activities resulted in good brand positioning and the perception of their products carry values of strength, reliability, durability and adaptability. Customers know that the brand fulfill its set of promises. There may be multiple positioning strategies based on the target market segment, but based on the nature of industry and business Ultra Chemicals positioning strategy is universal for all its segments i.e. to deliver strength, durability, and life of the projects.

v) Pricing strategy:

Pricing is the very important factor in the product mix. In positioning of the company products pricing can affect company’s image and attitude of the customers. It is very strategic in nature and require careful planning. Price fluctuations can result due to a change in the positioning of the company. A firm operates in an environment that is composed of factors like competitors and legal systems such as price controls to prevent pricing too high or too low. A firm should also consider that setting a price too low can lead to price war among competitors. There are various pricing objectives that a firm pursues

To maximize profit

Increase revenue

Increase selling

Increase profit margin

Use pricing to signal high quality

Only meeting costs to stay in market

Avoiding price wars

Based on desired objectives a firm can pursue various pricing strategies like

Cost plus pricing

Premium pricing

Psychological pricing

Target base pricing

It is generally accepted that the price should not be lower than the costs associated in conducting activities.

Ultra Chemicals pricing objectives are to increase profit margin and use price to signal high quality. There strategy is based on psychological and premium pricing strategies. Psychological pricing is used because the brand is already positioned in customer mind as having value attached of strength, durability and reliability that gives mental satisfaction with not much burden on budget.

Customers take price as a sign of quality.

Premium or value based pricing is also used based on the value that it has created for customer. Customers are priced according to the performance of products and technical expertise provided by the company. This pricing is very profitable for Ultra Chemicals and a high profit margin is set on it.

As general practice prices are quoted to customers with thirty days validity that is subjected to change due to circumstances. There are factors that affect the pricing mechanism of Ultra Chemicals. Any ch