The strategic marketing planning process of united cement company of nigeria ltd

May 22, 2018 Marketing

This paper seeks to outline the strategic marketing planning process of United Cement Company of Nigeria Limited, Calabar – a successful business organisation in Nigerian. THE COMPANY United Cement Company of Nigeria Limited. Established in February, 2004 to start skeletal production of cement at the Old site in Spring Road, Calabar. The company finished its ultra-modern building at its permanent site at Mfamosing in 2008, fired its kiln on 31st January, 2009 and produced its first clinker on 6th February, 2009 and produced and despatched its first bag of cement on 24th February, 2009.

With these, the 2. 5 Million metric tonne Cement factory was set for business. As the second largest cement producer in Nigeria and based in Cross River State, Unicem was ready to effectively serve the cement needs of the south-south and south-east region of Nigeria. THE VISION Building A Better Future. THE MISSION To Be The Leading Cement Company In Nigeria By: Optimizing shareholder value; Optimizing shareholder value Being the employer of choice; and Being recognised as the most socially responsible company in Nigeria. THE MARKETING PLAN

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To make quality cement from a fully integrated plant, using 90% local materials and majority local staff and serve the cement needs of the south-south and south-east region of Nigeria through a comprehensive distribution structure and at the most competitive landed prices. In 2013, the company shall produce, sell and/or despatch 2. 3 million metric tons of its 2. 5mt capacity. SITUATIONAL ANALYSIS THE MARKET ENVIRONMENT The marketing environment includes forces such as: political, legal, regulatory, economic, social, technological, and competitive.

United Cement Company of Nigeria Limited functions in two different market environments namely the Macro and Micro which affects it externally and internally. (Kotler, 2004), the PEST analyses and the Porters Five Forces model of United Cement Company of Nigeria Limited would be discussed in this report. PEST analysis stands for “Political, Economic, Social, and Technological analysis” and describes a framework of macro-environmental factors used. POLITICAL ANALYSIS

The political situation in Nigeria has experienced a stable balance since the commencement of the democratic governance and this has impacted on United Cement Company of Nigeria Limited in different ways. The government announced a ban on the importation of building materials including cement. The high tariffs that is currently in place means good market for local companies in the industry. Presently, the demand for cement in Nigeria is well above 18 million metric tons and as such provides good market for stakeholders in the industry. ECONOMICAL ANALYSIS

Nigeria is a growing economy therefore it is less affected by the recent global economic financial crisis and this has a positive impact on the sales of UniCem’s cement as people have housing needs, this therefore is a positive development for the company. Also, the population growth rate in Nigeria is really high and it calls for an expansion – accommodation needs which helps increase the sales of building materials including cement. The Exchange rate in Nigeria is low comparing to the US dollar and it can affect the business when the raw materials are being imported as it cost a lot of money.

Another economical issue which is affecting United Cement Company of Nigeria Limited negatively is based under the running cost which is the lack of constant electricity supply in Nigeria; this has forced the company to make use of alternative means of power supply such as generators where the company spends a huge budget on diesel which has a constant increasing price. SOCIAL ANALYSIS Situated in Peace-loving Cross River State, Unicem enjoys stability from the enabling business environment to its advantage.

United Cement Company of Nigeria Limited is also involved in social responsibility by sponsoring events such as football match which is aimed at discovering new talents, building of markets, hospitals, schools, provision of pipe borne water amongst other social events and creative writing workshop, a program created to groom the young writer, adult literacy classes, etc (MfamoNews, May 2009). TECHNOLOGICAL ANALYSIS Technology has been a major aspect in United Cement Company of Nigeria Limited. Unicem employs ultra-modern machinery in its production of cement resulting in efficient production and quality product at least cost.

They have invested in the equipments used for clinker production to make its use give the best of desired cement. They also invest in computers and internet facilities and generators for electricity because of the electricity issues in Nigeria. COMPETITIVE ANALYSIS The major competitor for United Cement Company of Nigeria Limited is Dangote Cement Company, a 5. 5 Million metric ton capacity plant that manufactures cement in the brand name of “Dangote Cement” in Nigeria. Dangote Cement Company is located in Obajana, kogi state, Nigeria.

The other little cement companies include Benue Cement Company(BCC) (now under Dangote group), Atlas Cement in Port Harcourt, Bauchi-Gwana Cement, Alkaeri L. G. A. Bauchi (subsidiary of Cretent Intl), Bua Cement, Ukpilla Former Edo cement, near Benin City, Cement Company of Northern Nigeria, also known as Sokoto Cement, with 6 offices in northern states, Obajana cement factory (Dangote group), Ibeshe, Ogun state, Ashaka Cement in Kano State in the north, Lakatabu cement factory (WAPCO Lafarge), Ifo, OGUN STATE and in Lagos state.

In general, competition for United Cement Company of Nigeria Limited is minimal as its only major competitor is Dangote Cement Company. United Cement Company of Nigeria Limited has the edge over these competitors majorly because of its brand loyalty and because of the fact that it has good qualities such as quick set time, little moisture that allows it last longer, etc. The company presently employs different strategies in marketing and transporting its products. OPPORTUNITIES / ISSUE ANALYSIS – SWOT Analysis

United Cement Company of Nigeria Limited has various strengths and weaknesses as well as opportunities and threats facing it as it engages in the production of cement with 90% local materials. STRENGTHS United Cement Company of Nigeria Limited is situated in Cross River State, a peaceful community with friendly indigenes and well endowed with one of the richest type of limestone in the whole world. The company has ultra-modern technologies and expatriates that mounted them and supervised their performance before handing them over to well trained indigenes.

The raw materials used in its cement production are locally sourced making its availability constant and cheap. Labour is also locally sourced and trained abroad to meet international standard. With the above in place, Unicem has been able to produced one of the best quality cement that has been attested to by big corporations like Julius Berger, Arab Contractors, RCC and the likes. Unicem cement has quick setting capabilities that makes it a ready choice when it comes to building of bridges, construction of quick intervention roads, building of sky scrappers etc. WEAKNESSES

Foremost among the few weakness that United Cement Company of Nigeria Limited has is in its Capacity – 2. 5 million metric tons simply means that she cannot serve a quarter of the cement needs of the country. She can also lose out when it comes to competing with other high capacity factories like Dangote Group. Another weakness United Cement Company of Nigeria Limited has is that of Transportation of its products to the destination of its customers. Unicem relies on contractors to provide trucks for its operations and when this fails or when the trucks are inadequate, the company suffers.

She is not yet ready to own its own fleet of trucks due to obvious reasons of high cost of maintenance due to bad roads and sabotage by drivers. Another weakness is in network of roads that is just one in and out of the company. Once there is an issue on this road, the company stands still on its production. Last but not the least of possible weakness is in the ability of its staff, majority of who are indigenes of the community, to easily liaise with the community to down tools and cause strike actions. These youths are often on the winning side because they have the community’s backing.

OPPORTUNITIES United Cement Company of Nigeria Limited has enormous opportunities when it comes to engagement in international trade as it is bounded on one side by the Calabar river and it can utilize this to her advantage. The land mass where the factory is situated is big enough to accommodate another production facilities that can see Unicem increase its production capacities in the nearest future. THREATS One of the biggest threat United Cement Company of Nigeria Limited has is that of competitors especially from Dangote group. While Unicem can only produce 2.5million metric tons, Dangote can double that in one of its cement plants. Any direct competition from Dangote would cripple Unicem. Another threat is in shortage of power supply. Unicem spends so much on diesel consumption to power its Plants in order to sustain its production since power from the National grid is very unstable and of low voltage. The dredging of the Calabar river is yet to be completed so many years after its being awarded. Without the dredging of the river, channeling cement through the waterways would still be a mirage.

The access road to United Cement Company of Nigeria Limited is just one and very winding causing a lot of trucks to fall and block the road for hours and sometimes days. Unicem is trying to handle this challenge by constructing a new access road that will lead to the outskirt of the Calabar city. OBJECTIVES OF THE MARKETING DEPARTMENT AND/OR THE COMPANY United Cement Company of Nigeria Limited as its objectives, the following: To build a better future. To be the leading cement company in Nigeria To produce at optimum capacity of 2. 5million metric tons per annum.

To adequately penetrate and effectively cover the entire cement market in the south-south and south-east region of the country. To attend to customer request with urgency and service them satisfactorily. To maintain the lowest landing cost in the region and be the deciding force in this market. MARKETING STRATEGY United Cement Company of Nigeria Limited focuses limited resources on the best opportunities to increase sales and thereby achieve a sustainable competitive advantage. (Ulrich et al, 2002) United Cement Company of Nigeria Limited uses Marketing strategy to maintain competitive advantage.

It uses the market segmentation, targeting and positioning as a means of carving out its own share of the market and catering for their needs. Unicem has segmented the market into corporate organizations like Construction companies, big buyers that own warehouses and can buy up to 100 trucks of cement at a time and small buyers who can afford to retail the products after buying about 20 trucks. Another segmentation is based on Transportation: those that can afford to arrange for their transport needs and those for whom the company makes transport provision for. SEGMENTATION

United Cement Company of Nigeria Limited uses geographic Segmentation mostly to identify its customers and concentrate its selling efforts on them knowing that it has comparative advantage over others here. TARGETING United Cement Company of Nigeria Limited selected a particular market segment (south-south and south-east) toward which all its marketing effort is directed. Market targeting enables the characteristics of the chosen segment to be taken into account when formulating a product and its advertising. (Keegan, 2001) The bulk cement product targets the industrial users like

Julius Begger, this is evident from the kind of incentive programs which is usually directed toward them while the cement bags are targeted at the other higher financial class of people, this is also evident in its own type of incentives like price slash per ton. Last among its target audience are the small buyers who don’t enjoy most incentives apart from buying directly from the factory at factory price. POSITIONING United Cement Company of Nigeria Limited has successfully position its product in the minds of the consumers as the most reliable cement in terms of quick setting and hardening capability.

Another thing Unicem has done to position its product favourably in the minds of its consumers is to talk about it as being locally produced and as such fresh and durable over time. By so doing, Unicem has become successful in achieving the mental position it wants in the mind of its consumers. Other strategies Unicem employed included but not limited to the following: SELF COLLECTION Unicem has made provision for its customers who own trucks to drive to the factory and get their cement for themselves at no extra cost. This strategy gives the customer much room to distribute the bags of cements to his clients at will and to wherever.

Some customers who do not own trucks are equally favoured as Unicem does the delivery for them at a fee. The arrangement benefits both parties – Unicem sells its product and the customer gets it at his destination without delay or damage at a reasonable price that is better than what others like independent transporters would have charged. USE OF CEMENT DEPOTS Unicem rents or build depots in the strategic regions it has chosen to serve and constantly transports trucks of cement there for easy accessibility by its customers all year round.

The arrangement is such that it presents itself as being there in that region for customers to easily assess the product while long delays are cut off. The price here is also very competitive. GIVING OF INCENTIVES Unicem gives incentives to most of its customers that surpass the set target in order to encourage them to do more. This makes for more patronage. REBATES Sometimes Unicem give rebate to her customers to enable them strive to evacuate their purchases especially in times of glut. For every 10 trucks bought and carried, a customer gets a particular amount which shall be translated to trucks of cement by the end of the month.

ADVERTISING Unicem involves itself in much advertising especially billboards, media advertising like radio jingles, T. V. adverts, print materials like stickers etc for the purpose of creating awareness for the product in the minds of the people. This helps its customers. Some billboards are also made for the customers with their business names on it. SALES PROMOTION Unicem also promotes its brand name with branded items like T-shirts, Umbrellas, Mugs, Diaries, etc. These items are given to dedicated customers by the end of the year as Christmas gift items whilst at the same time promoting the company.

Through its sales force, audience is sought with its customers to know how the various customers are faring and how their business is progressing. With these, the customer feels a sense of belonging and gives his loyalty to the company and its product. RESTRICTION OF ENTRANCE This is a strategy adopted to help the customers who buy directly from Unicem to have other customers to sell to at a profit so they can come back to patronize Unicem. If all were to be allowed to enter the business, then the business wouldn’t worth what one needs to borrow money from the bank to invest as profitability would be very minimal. ACTION PROGRAM United Cement Company of Nigeria Limited has its operational marketing plan for 2013 – the period under review, as : PRODUCTION CAPACITY: The company shall produce at optimum capacity and meet the production target of 2. 5million metric tons. A minimum production of 7,000 tons per day is expected under the year in review 2013. All sectors must work at optimum capacity to attain this – morning, afternoon and night shift must work in unity with minimal down time to achieve this. ORDER PLACEMENT:

A minimum of Sixty-seven billion, five hundred million (N67,500,000. 00) sales worth is expected for the year 2013. This sales figure shall be accounted for in the following percentage: Industrial Buyers – 50% – N33,750,000 – 1,250,000tons Big Buyers – 40% – N27,000,000 – 1,000,000tons Small Buyers – 10% – N 6,750,000 – 250,000tons PRODUCT DELIVERY: A minimum of two hundred and thirty-five (235) trucks shall be our daily target for product delivery to all the states including Calabar and environs, Akwa Ibom, Abia, Rivers, Enugu, Ebonyi, Imo, and Anambra states.

The delivery shall include: Self collection and Direct delivery. The objective is to have Unicem cement in all the shops in these states. Landing cost is also to be kept minimal. Talks with various Transporters is on-going for best price. EXPECTED SALES RETURNS: The expected sales returns on these number of trucks to be dispatched shall be: 83,334 trucks X N810,000 = N67,500,540,000 CONTROLS: The following control measures were put in place by United Cement Company of Nigeria Limited to forestall leakages and maximize optimum result: 1.

Use of independent contractors in transporting of raw materials and finished products in order to control down time and put sanctions in place for defaulters. Effective monitoring shall also be carried out. 2. All payment into the company and from the company shall be made in Banks. Customers shall collect ATP (authority to pay) and pay stated amount to designated banks before coming back for their consignments. Contractors shall file their claims with evidence of job completion and receive CRVs (Credit Vouchers) with which to collect checks from the cashier for payment at the bank.

3. All products – both raw materials coming into or going out of the company shall be weighed at the weighing bridge before entry or exit is granted. Evidence of being weighed shall be documented and a receipt given to that effect. 4. All staffs shall be motivated for full and dedicated services to be achieved – salaries shall be paid on time and adequate compensation given for extra work hours put in and duly authorized. 5. The accounts department shall ensure the keeping of all proper books for record and documentation. RECOMMENDATION FOR FUTURE DEVELOPMENT

United Cement Company of Nigeria Limited is already a major force in Nigeria but it is still not internationally recognised like other International companies in the industry so the major recommendation for United Cement Company of Nigeria Limited would be to expand their products internationally or at least expand it within Nigeria and Africa. They could also build new factories in different places in Nigeria to help expand their organisation. Since the distribution of their goods is done by contractors, they could venture into that business so they could get proper feedback from their customers and be able to satisfy them more effectively.

Investing more in technology can also help with the growth of their organisation. CONCLUSION United Cement Company of Nigeria Limited is and would remain one of the major cement companies in Nigeria and this marketing report that shows their strategies and tactics have tried to explain the reasons why they are such a major force in the cement industry in Nigeria. It is obvious that there is room for improvement by them expanding their market and business into new states but the important thing is that they are succeeding in their primary goal which is being able to satisfy their customers in their home land.

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