Cemex and the Low Income Construction Market
Cemex Case Write-up
Cemex and the Low Income Construction Market * Cemex’s target market in Mexico does not realize their dream home, while they can afford it. * Cemex’s revenue comes from big-ticket/large scale customers, middle- and upper-income individuals, and low income/do-it-yourself homebuilder customers. The sales for low-income customers only drop 10-20% during 1994 Mexico crisis. And Cemex see large market potential in low-income customers market. Thus, Cemex’s target market in Mexico is low-income customers and do-it-yourself customers. * The target customers’ value was highly impacted by their surrounding environment and their parents’ generation. They think their life will not go out of the box that what they saw in their parents and community’s life. * They believe the life standard is decided by the where the person is born, his fate. They have the resignation of not being able to improve their housing in in short time. While, they don’t think they can make a nice home, financial planning and asset accumulation, which their parents have never tried and experienced. * From a distribution system, target market require below service outputs * Convenience: Low income customers lack the means to transport bulky construction material very far, convenience and close location is very important service outputs for them. * Availability: the customers do not plan how much cement they need. And it is not convenient for them to store the extra cement for future use. They only buy the cement when they need it. * Service: do-it –yourself homebuilders lack construction skills, and therefore often waste materials by failing to specify the exact quantities they require. The service to help customer to know the quantities and instructions of construction skills is the service output that customers require. * Price: Low-income customers are very sensitive to the price. They always want to buy the highest quality
Cemex and the Low Income Construction Market * Cemex’s target market in Mexico does not realize their dream home, while they can afford it. * Cemex’s revenue comes from big-ticket/large scale customers, middle- and upper-income individuals, and low income/do-it-yourself homebuilder customers. The sales for low-income customers only drop 10-20% during 1994 Mexico crisis. And Cemex see large market potential in low-income customers market. Thus, Cemex’s target market in Mexico is low-income customers and do-it-yourself customers. * The target customers’ value was highly impacted by their surrounding environment and their parents’ generation. They think their life will not go out of the box that what they saw in their parents and community’s life. * They believe the life standard is decided by the where the person is born, his fate. They have the resignation of not being able to improve their housing in in short time. While, they don’t think they can make a nice home, financial planning and asset accumulation, which their parents have never tried and experienced. * From a distribution system, target market require below service outputs * Convenience: Low income customers lack the means to transport bulky construction material very far, convenience and close location is very important service outputs for them. * Availability: the customers do not plan how much cement they need. And it is not convenient for them to store the extra cement for future use. They only buy the cement when they need it. * Service: do-it –yourself homebuilders lack construction skills, and therefore often waste materials by failing to specify the exact quantities they require. The service to help customer to know the quantities and instructions of construction skills is the service output that customers require. * Price: Low-income customers are very sensitive to the price. They always want to buy the highest quality