1. How can Lafarge-Aget differentiate its position in the eyes of customers? Lafarge-Aget can use segmentation to better understand its customers by stratifying all customers into two groups. The first group is tactical oriented and the second group is strategic oriented. For the tactical oriented customer, Aget should develop customer support teams, which will aid the customer starting with the project design and materials specification through to the maintenance phase. The use of such prior and posterior support will help differentiate Aget from other competitors by delivering differentiable value and create or enhance working relationships with customers. This will lead to market share growth, solidify market position, increase customer satisfaction, fend off competition and enhance incremental profitability. For the strategic oriented customer, Aget- should position itself as a quality brand with competitive pricing.
2. Although cement is a commodity at large, does pricing affect demand in the industry? No, pricing does not affect demand in the industry. Cement is a homogeneous product with low price elasticity due to lack of substitute materials. Market demand for cement is normally elastic given its low value commodity character. However, demand for cement is local and price inelasticity’s can be observed especially among different grades of cement. The market demand for cement worldwide keeps growing and as the standard of living keeps increasing, the opportunity for continued cement sales and specialty cements is likely to grow, as well. Demand is location differentiated, i.e., it varies from location to location depending largely on population density, but highly undifferentiated -in terms of quality. The demand for cement depends on macroeconomic factors such as population growth, GDP growth, interest rate, economic policies formulated that, for instance, affect...
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