May 16, 2024

Cemex: How to become profitable in a non-profit industry?

The cement industry can be characterized by low growth, high asset requirements, and unpredictable demand. But with an amazing marketing and communications team, that can create a well-structured corporate brand strategy, even a cement company can become a worldwide reference.

 

Cemex

History

Cemex, located in northern Mexico, is the most profitable cement company in the world. It was founded in 1906 but started its dynamic growth in the 1990s. In just 10 years moved from 28th to 2nd place in the global cement industry. In 2005 sold more than 15.3 billion dollars (in 2004 it was 8.2 billion dollars).

Cemex is engaged in the production, distribution, and marketing of cement, ready-mix products, and aggregates. It operates in more than 50 countries and has commercial relations in over 90 nations.

In this traditional, low-tech industry, Cemex is known as a digital leader, because it implements IT and e-business ideology. To be able to operate in such a global position, Cemex combines a deep knowledge of the local market with its global network and information technology system.

Despite technology, Cemex draws attention to the development of the right behavior and values of all Cemex people. It makes sure everyone has a worldwide knowledge of products, customers, and operations. That knowledge is used to develop robust processes that show the most efficient practices to create a business system, that can be integrated all over the world.

Cemex´s business model is made of several elements:

  1. Focus on its core business
  2. The best value proposition
  3. Growth through integrated positions across the value chain
  4. Allocate capital effectively
  5. Improvement of operations

 

Brand Management

Brand positioning plays a major role in market share, Cemex holds a leading position in countries like Mexico, Spain, or the US. These countries are fast growing and have major infrastructure needs, as well as a relatively low per-capita cement consumption- which means growth potential.

Cemex´s consumers associate the brand with strengths, tradition, durability, and good quality, branded cement. That differentiate its products, but also build customer loyalty. Cemex believes that brand loyalty gives a sustainable competitive advantage, which is why customer satisfaction is a top priority.

 

Brand Strategy

Cemex developed a transnational brand strategy that uses base products to create brand equity to its corporate brand, then uses the corporate brand to expand its value to new products. In the beginning, the promotion focused on the local, well-known product (logo of local cement firm, with a small Cemex logo on soccer team jerseys), and if the corporate brand becomes recognizable by potential customers, the focus is on building the corporate image (making Cemex logo larger than local one).

The strong corporate brand has been the most cost-efficient advantage for Cemex. The individual Cemex brands in each country allow Cemex to adapt to the needs of specific customers and price constraints of the market (B2C). On the other hand, corporate brand strength maintains a link to Cemex´s B2B direct clients, distributors, and service users. Strong brand recognition is crucial for the company’s continuous growth.

Cemex is more than a logo, slogan, or mission statement- it is “a promise we make to our customers to deliver outstanding services and top-quality products”. The brand unlike other cement companies, can be associated with strength, prestige, and stability, due to its human resources competencies, financial results, and socially responsible behaviors.

 

Company´s values

The values that shape Cemex´s image are collaboration, integrity, and leadership. Cemex showed its collaboration commitment by building and licensing one of its distributors- Construrama. It is the largest construction materials chain in Latin America. By that Cemex offers a win-win proposition, as the brand itself gains customer loyalty and distributors gain- brand recognition, access to products, and competitive prices. Cemex shows its integrity by its involvement into social responsible programs such as “Patrimonio Hoy”. This programme is intended to help low income families receive microloans for the purpose of buying construction materials. By improving services, more efficient distribution, simplified business transactions, and 24/7 access to real-time account information, Cemex strengthened its leadership brand image.

 

Keytakeaway

Cemex is a global company, customer, investor, and technology innovation focused. The company created a strong relationship with its stakeholders. It has been decisive for the proper development of its B2B initiatives as a strong contributor to B2B success. Cemex’s success relies on a well-developed strategy and the commitment of all its employees.

 

 

Sources: Kotler, P., & Pfoertsch, W. (2006). B2B Brand Management. Springer Berlin Heidelberg.

Tags: B2B, brand positioning, brandstrategy, cement, Cemex, collaboration, corporatebrand, globalcompany, growth, success, successful business, successstory
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