You\'re part of the marketing department at Cemex, a global provider of building

Question

You're part of the marketing department at Cemex, a global provider of building materials. Your team has been called to a meeting at the Monterrey, Mexico headquarters with members of several other departments, and Cemex's CEO, Oswaldo Villalobos. "I just reviewed last quarter’s sales figures," Villalobos says, "and I'm not happy. Profits are down in North America."

Villalobos continues: "I've called this meeting because I'd like you to form a cross-functional business development team to focus on expanding our US operations. We know that spending on infrastructure is increasing," he says.

Villalobos is referring to a large infrastructure package recently signed by the new US administration. Your team was just discussing the news over coffee yesterday morning.

The plan includes funding for bridges, roads, and sewage systems. There's no question that US infrastructure spending will be up in the coming years.

"We're well-positioned to grab a bigger market share of the cement business," Villalobos says. "Cemex has mothballed capacity that we should tap into."

Villalobos looks at your group: "Report back to me in four weeks with a detailed marketing plan for this expansion. Include the steps to implement the plan along with the control measures to ensure that our forecasted sales targets are met."

The first step in developing a marketing strategy involves segmenting, targeting, and positioning (STP).

Segmenting refers to breaking the US cement market down into homogenous groups. Targeting refers to selecting the customer groups(s) that you will focus your marketing efforts on. The appropriate segmentation variable is dependent on the needs and wants of customers. These decisions are directly tied to your value proposition and require extensive marketing research on the customers. Once the segmentation variable is determined and the target markets selected, you need to develop the positioning strategy, which refers to the way you want the customer to view the product relative to the competition.

Describe the market research you would conduct to analyze and segment the US cement market. Explain how you would select your target cement markets, and explain the process of positioning Cemex's cement products relative to the competition.

Explanation / Answer

MARKET RESEARCH FOR CEMEX CEMENT PRODUCTS

The marketing strategy of a Cement production company can be as follows.

Segmentation of US Cement Industry

In order to segment the cement industry, the first and foremost step is to identify the needs of the various group of customers. The categorization is done based on residential, infrastructure and high-end constructions which are mainly business and commercial sectors. The needs and demands of these customers vary according to the type of construction activity.

Once the customers are categorized based on similar needs and preferences, they are segmented.

Targeting

Once the segmentation is done based on similar needs, the products specifications are done to meet the needs of each of these segments.

Positioning

Branding the product

After the stages of segmentation and targeting, branding is done as a market positioning strategy. It is done to introduce the product or brand to the targeted market. As a fast moving commodity, the effective branding to the most appropriate segment is highly essential in order to position the product. Cemex should focus on builders, construction businesses and architects as their most important segment rather than residential and household sectors.

Cemex should effectively use the marketing mix strategies in order to effective brand the product, with reasonable price, and distribution channels in order to position themselves in the market

Further, for an efficient supply channel, the company should focus on their logistics. The logistics shall be incorporated with technology where the company can track the movement of the products. This strategy would improve the efficiency of logistics and supply chain and saves much time and costs with regards to fuel and transportation. This kind of logistics and supply chain management had been incorporated by companies where a number of trucks run between suppliers and distributers. These trucks pick up raw materials from the suppliers through the effective logistics management and distribute the finished products to the customers. These enhances productivity and effective distribution.

Market Research Plan

In order to conduct a market research, both primary and secondary research can be conducted. Secondary research can be conducted by collecting data from company websites. The primary data can be collected by a mix of both quantitative and qualitative techniques where personal interviews shall be conducted with all groups of customers such as houses, business establishments, retailers and wholesalers, architects, masons and builders. This help Cemex to identify their needs and preferences. A random sampling can be adopted with both open and close ended questions.

The data can be collected from different states in the US.

For a qualitative data, face-to-face interviews can also be conducted.

The survey and interviews will help Cemex to identify the criteria on which cements are purchased by different market segments. It will help to identify the attributes on which cements are purchased. Above all, the market research will help to identify the perception of the customers about various competitor brands and to identify the marketing mix of the product. i.e., to determine the product specifications, to determine the pricing based on competitors, promotional activities.

Type of customers

After the market research, segmentation can be done based on the quantity of purchase such as small-quantity purchase customers such as retailers, households.

Large quantity purchase customers are customers who buy in bulk such as builders, construction businesses etc.

Other production unit which uses cement and cement products in the manufacturing of their products. These can be concrete products, cement brick manufacturers etc.

Questionnaire

The questionnaire can also include questions about the key purchase decision makers of cement such as architect, friend, the household owner, mason etc. (for small quantity purchases)

For bulk purchases in companies, the key purchase decision makers are owners, purchase manager, engineers, production managers etc.

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