Table of Contents1.0 INTRODUCTION.................................................................................................................................3

1.1 Company Background.......................................................................................................................3

QUESTION 1..........................................................................................................................................3

1.1 Marketing Strategy........................................................................................................................3

1.2 Quality and Guaranteed of the Product..........................................................................................4

1.3 Corporate Social Investment (CSI)................................................................................................4

1.4 Environmental Performance..........................................................................................................4

1.5 Occupational Health & Safety.......................................................................................................5

1.6 Environmental Policy....................................................................................................................5

1.7 SWOT ANALYSIS.......................................................................................................................6

QUESTION 2..........................................................................................................................................7

2.1 PRICING.......................................................................................................................................9

2.2 PROMOTION.............................................................................................................................10

2.3 PLACE (Distribution)..................................................................................................................11

2.4 PRODUCTION...........................................................................................................................12

QUESTION 3........................................................................................................................................13

3.1 Micro Environmental Factors......................................................................................................13

QUESTION 4........................................................................................................................................16

4.1 Pricing Policy..............................................................................................................................17

4.2 Business ethics and organizational integrity................................................................................17

4.3 Financial reporting and auditing..................................................................................................17

QUESTION 5........................................................................................................................................18

5.1 Cement Tips.................................................................................................................................19

5.2 Your guide to concreting.............................................................................................................19

5.3 Your guide to plastering..............................................................................................................19

5.4 Your guide to bricklaying............................................................................................................19

QUESTION 6........................................................................................................................................20

QUESTION 7........................................................................................................................................21

7.1 Market and Demand....................................................................................................................22

7.2 Price-demand relationship...........................................................................................................22

7.3 Price elasticity.............................................................................................................................22

7.4 Competitor’s strategies, costs, prices and offers..........................................................................22

7.5 Economic Factor..........................................................................................................................23

7.6 The Government..........................................................................................................................23

7.7 Social concerns............................................................................................................................23

8.0 Conclusion and Recommendation.......................................................................................................24

Reference...................................................................................................................................................25

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1.0 INTRODUCTION

1.1 Company Background

Tanga Cement Company is a producer and supplier of cement used in construction and making

of concrete products. The construction of Tanga Cement commenced in 1978 with

commissioning taking place in July 1980. The plant was designed and constructed by a Danish

company, FL Smidth.

Tanga Cement Company Limited was built largely from funds donated by Danish Government.

In 1989 Holcim, the world's second largest cement company took over a contract to manage

Tanga Cement Company.

In 1996 Holcim Mauritius successfully acquired the majority share of the company. Today,

Holcim Mauritius holds 62.5% of the Company with 36.9% being owned by Tanzania General

Public and Institutions and 0.6% being owned by the Tanga Cement Employees' Share Trust,

Tanga Cement shares trade under its brand name, SIMBA at the Dar es Salaam stock Exchange.

QUESTION 1

Can Tanga Cement Co. Ltd. (TCCL) sustain its success in the consumer market in the face

of intense competition with local companies and importers of cement with just one

product? What would the company have to do in the near future to counter the threat of

intense competition?

According to Lecture’s notes (2011), marketing defines as the process by which companies

create value for customers and build strong customers relationship in order to capture value from

customers in return.

Tanga Cement Company Limited can sustain its success in the consumer market in the face of

intense competition with local companies and importers for the following reasons:

1.1 Marketing Strategy

Because of its marketing strategies, it is possible for Tanga Cement Company Limited (TCCL)

to sustain its success in the consumer market in the face of intense competition with local

companies and importers. TCCL claims to be the market leader in the cement industry followed

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by two proven policies that is on one hand by building profitable customer relationship and on

the other hand by continuously analyzing its competitors’ strengths and weakness.

1.2 Quality and Guaranteed of the Product

Also if TCCL with its products SIMBA cement will continue with its reputation on consistency

of their high quality products and proven strength make it the choice for builders, architects,

engineers, contractors and enthusiasts. This is because Simba Cement is the result of careful

research and development by our cement engineers and scientists. It is specially blended with

good quality control monitoring systems, high quality cement engineered for use in all structural,

building and particularly useful in marine and hydraulic construction. It is perfect for reducing

the heat of hydration in mass concrete and is often used to reduce the permeability of concrete in

water retaining structures

1.3 Corporate Social Investment (CSI)

Moreover, the TCCL should continue with its technical approach for trying to promote itself by

corporate social investments (CSI) programme to a higher level with the emphasis being put on

direct help to communities and the areas that have been supported are community development,

education, health and environment in different location where as they used to make the company

accepted, for instant ZAYEDESA’s which is supported by donate a total of 100 tons of cement

for renovation of schools, dispensaries, cooperative societies, the construction of an orphanage as

well as residential houses in rural areas. ROSMINI Sec School also donated by 80 tons,

construction of classrooms for PANDE Sec School in Tanga District as well as KWAMSISI Sec

School in Korogwe District. Other places are Musoma dispensary in Musoma District, Teachers

College in Karagwe in Karagwe, Msangani High School water project in Kibaha coast region,

Friend of Serengeti in Serengeti and Tarangire.

1.4 Environmental Performance

The environmental performance of the Company was comparatively good, especially in plant

emissions and rehabilitation programs.

The gaseous emission levels from the plant were in full compliance with the allowable

emission limits

4

The quarry rehabilitation programs were positively acknowledged and rewarded with a

special NEMC award for statutory fulfillment of environmental impact assessment

decommissioning process for a pozzolana quarry in Holili.

The Company’s Environmental Management System (EMS) program, in place since the

year 2004, continued to meet the requirements of the ISO14001:2004 standard.

Consistent with Company’s Environmental Policy, Tanga Cement managed to engage

various stakeholders through factory visits, discussion forums, as well as positive

interaction, heightening the environmental awareness of the operations to the public.

1.5 Occupational Health & Safety

Tanga Cement is passionate about people, their health and safety. They are committed to

providing an environment in which safety and a healthy working environment is paramount.

They Will:

Ensure that their business activities are at the highest standards of safety, health and

quality.

Build trust

Provide employees with the tools and skills to enable them work safely

Promote and positively influence off-the-job safety and behavior.

Through consistent and active participation by all employees and contractors, they are working

to achieve health and safety excellence.

1.6 Environmental Policy

Tanga Cement Company Limited (TCCL) recognizes the universal right of present and future

generations to an environment that is not harmful to human well-being. Therefore they conduct

their operations in such a way that we minimize any potential adverse effects of the cement

processes and products on the community, the environment and themselves.

In order to analyze the sustainability of Tanga cement company limited SWOT analysis is very

crucial to evaluate and understand the behaviours of the company as well.

5

From the lecture’s note SWOT analysis is defined as is a structured approach to evaluating the

strategic position of a business by identifying its strengths, weaknesses, opportunities and

threats. It can also be useful in developing strategic options to tackle opportunities and threats

and build on corporate strength and weaknesses.

1.7 SWOT ANALYSIS

Strengths

Tanga cement shares trade under its brand name SIMBA at the Dar es Salaam stock

Exchange.

Tanga cement has taken its corporate social investment programme to a higher level with

the emphasis being put on direct help to communities.

Simba cement takes its reputation on the consistency of high quality products,

manufacturing facilities comply with the requirement of ISO series of quality

management systems and proven strength make it the choice for builders, architects,

engineers and so on.

Tanga Cement Company limited is following the policies of building profitable customer

relationship and also by continuously analyzing its competitor’s strengths and

weaknesses.

Opportunities

Tanga Cement Company limited has the access of distributing their products in different

location within East Africa

Simba cement is extremely easy to work with and produces consistently excellent results

every time.

Tanga cement company limited occupied population and marketable areas like Dar es

Salaam, Moshi, Arusha, Mwanza, Morogoro, Zanzibar, Dodoma, Shinyanga, Lindi and

Mtwara.

Tanga Cement Company distributes its product within urban areas whereas markets are

taking place.

Tanga Cement Company limited is pursuing market positioning strategy.

A fulfilled customer needs

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Weakness

TCCL so far concentrated on selling cement only in urban markets which can be noticed

from its distributor’s network.

High cost structure.

Lack of access to the best natural resources.

Lack of access to key distribution channels.

Threats

Unreliable power supply to our plant continues to be the biggest challenge Tanga Cement

is facing.

Congestion in Tanzania ports and subsequent delay in clearing spare parts and

consumables goods on time to ensure uninterrupted production.

High cost of product distribution due to unavailability of railway as well as the poor road

network which translates into a high cost for transportation of cement.

Temporary shortages of cement in certain regions of Tanzania due to increased exports

and limitations in our output.

Therefore according to strong strengths and opportunities in the near future the company has to

maintain the strengths and opportunities they have and also it supposing to work hard and make

sure that all weaknesses and threats are going to be resolve.

QUESTION 2

What should TCCL do to penetrate the rural market or should it think of exporting the

product to other East African Communities?

Tanga Cement is one of Tanzania’s three major cement producers, representing 45% of the total

market share in the country. Located in the town of Pongwe, roughly ten miles outside the

coastal city of Tanga, the company has a production capacity of 600,000 annual tons, and its

7

primary raw material, limestone. The company also produces 1,600 tons of clinker per day. With

branch offices and warehouses strategically located throughout the country, Tanga Cement is set

to continue its successful expansion, which has been consistently registering 30% growth in

revenue year on year. Not bad for a company that was a poorly performing a parastatal role less

than a decade ago.

A market penetration strategy seeks to increase market share of the current product or services in

the existing market. This strategy adopted by the company to raise their sales revenue without

making changes in the products or services. The other dimension of market penetration is the

existing market which means company already offering products or services to the customer but

can forecast that the existing sales figures can be improved by working on marketing penetration

strategy.

Tanga Cement Company limited can be implemented by offering sales, Increasing sales force,

increase distribution and promotion of products, more expenditure in the rural areas and

advertising their activities will results in increasing sales. It is not guaranteed that market

penetration fully works after investing in sales and marketing of products and services, a TCCL

also should go for this strategy only if any below of the desirable situation exists.

If the current market is not fully saturated.

Market share of the competitors are decreasing whereas the industry growth rate is

increasing.

Existing buyers have the potential to purchase same products and services in more

quantity.

When economies of scale provides competitive edge.

All the above conditions give green signal to the TCCL to go ahead with market penetration

strategy. Generally Marketing decisions fall into the following four controllable categories

Product

Price

Place (distribution)

Promotion

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2.1 PRICING

Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a

large, if not dominant market share. This strategy is most often used businesses wishing to enter

a new market or build on a relatively small market share and will only be possible where demand

for the product is believed to be highly elastic, i.e. demand is price sensitive and either new

buyers will be attracted, or existing buyers will buy more of the product as a result of a low

price.

Before the Tanga cement company implementing a penetration pricing strategy, it must be sure

that it has the production and distribution capabilities to meet the expected increase in demand.

Even though there is the most obvious potential disadvantage of implementing a penetration

pricing strategy is the likelihood of competing suppliers following suit by reducing their prices

also, thus invalidating any advantage of the reduced price while if prices are sufficiently

differentiated the impact of this disadvantage may be diminished. Moreover price is one of the

four major elements of the marketing mix. It is an important strategic issue because it is related

to product positioning. Furthermore, affects other marketing mix elements such as product

features, channel decisions, and promotion.

9

While there is no single recipe to determine pricing, the following is a general sequence of steps

that Tanga Cement Company limited might be followed for developing the pricing of a new

product:

1. Develop marketing strategy - perform marketing analysis, segmentation, targeting, and

positioning.

2. Make marketing mix decisions - define the product, distribution, and promotional

tactics.

3. Estimate the demand curve - understand how quantity demanded varies with price.

4. Calculate cost - include fixed and variable costs associated with the product.

5. Understand environmental factors - evaluate likely competitor actions, understand

legal constraints, etc.

6. Set pricing objectives - for example, profit maximization, revenue maximization, or

price stabilization (status quo).

7. Determine pricing - using information collected in the above steps, select a pricing

method, develop the pricing structure, and define discounts.

2.2 PROMOTION

According to freshpromotion.com expressed that Promotion is an effective tool for creating

buyer motivation or rewarding regular clients, but it is also an effective way to add value to

brands and services by offering collateral or promotional premiums as purchase bonuses.

Nowadays, there are so many companies bankrupt. They cannot survive in the business field.

They have to retire their workers and close the companies because of financial problem. Besides,

they may have other problems in their companies such as corruption and indiscipline workers.

However, the main problem is still a problem related to the financial of their companies. They

are difficult to get customers so there is nobody who uses their products.

10

In the context of the marketing mix, promotion represents the various aspects of marketing

communication, that is, the communication of information about the product with the goal of

generating a positive customer response. Marketing communication decisions include:

Promotional strategy (push, pull, etc.)

Advertising

Personal selling & sales force

Sales promotions

Public relations & publicity

Marketing communications budget

TCCL should find the best way to use in rural areas promotion. In fact it should make good and

discipline promotion marketing. The company should approach to their customers so that they

can know the products well. Also TCCL can make a website to promote for their products

because now days internet can be available even in rural areas as well. In addition Tanga Cement

Company can even make online shops in the internet.

Tanga Cement Company can also suppose to offer good service for their customers. Besides they

should providing the assistance that they need, TCCL can also give promotional gifts for the

customers which can make them notice of their good intention. Then, they will surely come back

to the company to get products.

Moreover, TCCL can also use a traditional way for their promotion marketing in the rural areas

to the customers by coming to their home and doing door-to-door promotion and then explain the

products. In addition the Tanga cement company can also do their promotion in the rural areas

by using banners which explain the products characteristics and also the company can use

vehicle to announce the products within the streets, again by painting vehicle to display the

image of the products.

2.3 PLACE (Distribution)

This may be a channel, distribution, or intermediary. It is the mechanism through which goods

and/or services are moved from the manufacturer/ service provider to the user or consumer.

Distribution is about getting the products to the customer. Some examples of distribution

decisions include:

Distribution channels

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Market coverage (inclusive, selective, or exclusive distribution

Specific channel members

Inventory management

Warehousing

Distribution centers

Order processing

Transportation

Reverse logistics

Therefore in TCCL suppose to find out where the product delivers and how it will be should

reach this because it may be affected by infrastructures surrounded.

2.4 PRODUCTION

According to Kotler, P. (2000) explained this concept as is the oldest of the concepts in

business.  It holds that consumers will prefer products that are widely available and

inexpensive. Companies focusing on this concept concentrate on achieving high production

efficiency, low costs, and mass distribution.  They assume that consumers are primarily

interested in product availability and low prices.  This orientation makes sense in developing

countries, where consumers are more interested in obtaining the product than in its features.

The term "product" refers to tangible, physical products as well as services. Here are some

examples of the product decisions to be made:

Brand name

Functionality

Styling

Quality

Safety

Packaging

Repairs and Support

Warranty

Accessories and services

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Therefore Tanga Cement Company limited should increase their product in the market by

numbers in the rural areas to follow this concept for the situation of the product costs is too high

and price of the product reduced, so that it is needed because of payoff.

QUESTION 3

Describe the environmental forces that affect the ability of TCCL to serve its customers.

The company`s microenvironment consists of other actors close to the company that combine to

form the company`s value delivery network or that affect its ability to serve its customers. It

includes the company`s internal environment - its several department and management levels as

it influences marketing decision making. Marketing channel firm’s suppliers and marketing

intermediaries, including resellers, physical distribution firms, marketing services agencies, and

financial intermediaries cooperate to create customer value.

3.1 Micro Environmental Factors

These are the internal factors close to the company that have a direct impact on the organisations

strategy as among the environmental forces that affect the ability of TCCL to serve its customers.

13

These factors include:

3.1.1 Customers

TCCL survive on the basis of meeting the needs, wants and providing benefits for their

customers. Failure to do so will result in a failed business strategy.

3.1.2 Employees

Employing the correct staff and keeping these staff motivated is an essential part of the strategic

planning process of the Tanga cement company limited. Training and development plays an

essential role particular in service sector marketing in-order to gain a competitive edge. 

3.1.3 Suppliers

14

Increase in raw material, prices will have a knock on affect on the marketing mix strategy of a

TCCL, and they may be forced up as a result. A closer supplier relationship is one way of

ensuring competitive and quality products for the company. 

3.1.4 Shareholders

As TCCL requires greater inward investment for growth they face increasing pressure to move

from private ownership to public.  However this movement unleashes the forces of shareholder

pressure on the strategy of Tanga Cement Company. Satisfying shareholder needs may result in a

change in tactics employed by a company.

3.1.5 Media

Helpful or unhelpful media attention on a TCCL product can in some cases make or break of a

company. Consumer programmes with a wider and more direct audience can also have a very

powerful and positive impact, forcing company to change their tactics.

3.1.6 Competitors

The name of the game in marketing is differentiation. What benefit can the TCCL offer which is

better than their competitors? Can they sustain this differentiation over a period of time from

their competitors? Competitor analysis and monitoring is crucial if the TCCL is requiring

maintaining its position within the market. 

3.2 Macro Environmental Factors

The macro environment consists of large societal forces that affect the entire microenvironment.

It is defined as large societal forces that affect the micro environment are known as external

macro environment. Macro environment are among the environmental forces that affect the

ability of TCCL to serve its customers The six forces making up the company`s macro

environment include demographic, economic, natural, technological, political, and cultural

forces. These shape opportunities and pose threats to the company.

3.2.2 Demography:

It is the study of human population in term of size, density, location, occupation, age and other

statistics. Geographical shifts in population and a better educated and white collar people are part

of demography.

3.2.3 Economic force:

15

It affects the consumer buying power and spending pattern. In economic sense the key market

influences consumer income. The management of TCCL needs to be aware of the expenditure

pattern of consumer at various income levels. Major economic variable such as income, interest

rate, tax policy plays important role in determining the success of any company marketing

system. Economic forces related to consumer's upper class, middle class, working class and

underclass as well to market inflation, interest rate and taxation policy.

3.2.4 Competition:

It consist of brand competition for similar product for example Simba cement and Twiga cement,

Sony and Philips, waves and dawlance etc. and also substitute products for example, petrol and

CNG, tea and coffee etc.

3.2.5 Social and cultural forces:

It includes standard of living, religion, fashion, civilization, education etc. for example; vine is

prohibited in social, cultural and religion. It changes from country to country and from province

to province, from village to village and from particular region to region etc.

Moreover, macro environment is all about the major environs around us. It gives us information

regarding the main things with in an environment. A TCCL must know the value of macro

environment as it will give them high benefit in many ways. They must be habitual in working

in micro environments but macro environment will give the company exposure and more

chances of success. These will TCCL to advertise their product in a hi-fi market. This hi-fi

market will be accountable for exploring themselves in a better way. Moreover, TCCL must

know what they should be adept in getting habitual with macro environment as they will have

more benefit from it.

It is easy to make TCCL’s place in macro environment but time is a main factor. It always takes

time to be specific and choosy in selecting the environment. If a TCCL wants to get success in

macro environment then they must be fast and efficient. It will be their efficiency and activeness

which will pay them off. Let us take an example. If a person is a marketer and he is interested to

take advantage of macro environment. He can do it by advertising his product in an efficient

manner.

16

QUESTION 4

Explain the role of ethics in marketing followed by TCCL.

According to Kotler, P and Armstrong, G. (2008) describe that, Increasingly, Company is

responding to the need to provide company policies and guidelines to help its manager deals with

questions of marketing ethics. Of cause even the best guidelines cannot resolve all the difficult

ethical decisions that individuals and firms must make. But there are some principles that

marketers can choose among. One principle state that such issues should be decided by the free

market and legal system. A second, and more enlightened principle, but the responsibility is not

on the system, but it is in the hands of individual companies and managers. Each firm and

marketing manager must work out of philosophy of socially responsible and ethical behavior.

Under the societal marketing concept, managers must look beyond what is legal and allowable

and develop standards based on personal integrity, corporate conscience, and long term

consumer welfare.

Because business standard and practices vary from country to country, the issue of ethics poses

special challenges for international marketers. The growing consensus among today`s marketers

is that it is important to make a commitment to a common set of shared standard worldwide.

When we come back to our case study we found that, the TCCL is not looking at the free market

and the legal system to decide on the ethical issues rather it has worked out a philosophy of

socially responsible and ethical behavior.

The Company’s Code of Conduct governs all its activities, internal relations and interactions

with stakeholders in accordance with its ethical values. It is expected of all staff to maintain the

higher level of integrity and honesty in dealing with customers, suppliers, service providers and

colleagues.

Compliance with the Code of Conduct is the ultimate responsibility of the Managing Director

and the Company Secretary, with day-today monitoring delegated to line management with the

support of personnel officers.

The code is supplemented by the Company’s responsibility philosophy as well as its employment

practices, occupational health and safety controls.

4.1 Pricing Policy

The pricing policy is influenced by competitors’ prices and offers. However the perceived values

17

of the customers are taken into consideration by concentrating on the quality of the product.

4.2 Business ethics and organizational integrity

The Company’s Code of Conduct commits it to the highest standards of integrity, conduct and

ethics in its dealings with all parties concerned, including its Directors, managers, employees,

customers, suppliers, competitors, investors, shareholders and the public in general. The

Directors and staff are expected to fulfill their ethical obligations in such a way that the business

is run strictly according to fair commercial competitive practices.

4.3 Financial reporting and auditing

The Directors accept final responsibility for the preparation of the annual financial statements

which fairly present:

The financial position of the Company as at the end of the year under review;

The financial results of operations, as well as;

The cash flows for that period.

The responsibility for compiling the annual financial statements was delegated to management

and the external auditors report on whether the annual financial statements are fairly presented.

Also the Directors are satisfied that during the year under review:

Adequate accounting records were maintained;

An effective system of internal control and risk management, monitored by management,

was maintained;

Appropriate accounting policies, supported by reasonable and prudent judgments and

estimates, were used consistently; and

The financial statements were compiled in accordance with International Financial

Reporting Standards and in the manner required by the Companies Act, 2002.

The Directors are also satisfied that no material event has occurred between the financial year-

end and the date of this report. Furthermore, the Directors are of the opinion that the Company

has sufficient resources and commitments at its disposal to operate the business for the

foreseeable future. The financial statements have been prepared on a going concern basis.

18

QUESTION 5

Discuss how TCCL positions its products for maximum competitive advantage in the

market place.

According to Kotler, P and Armstrong, G. (2008) expressed that once Company has decided

which segments to enter, it must to decide on its differentiation and positioning strategy. The

differentiation and positioning task consists of three steps.

Identifying a set of possible differentiations that create competitive advantages.

Choosing advantages upon which to build a position.

Choosing the right competitive advantages and selecting an overall positioning strategy.

The brand`s full positioning is called value proposition. i.e. the full mix of benefits upon which

the brand is positioned.

In general, the Company can choose one from five winning value propositions upon which to

position its product:

More for more.

More for the same.

The same for less.

Less for much less.

More for less.

Company and brand positioning are summarized in positioning statements that state the target

segment and need, positioning concept, and specific points of difference. In addition Company

must then effectively communicate and deliver the chosen position to the market.

When we come back to the case study, the TCCL has appointed distributors mainly to cater for

the people who are constructing their houses. Now TCCL is pursuing market positioning

strategy-choosing the right competitive advantages and its “SIMBA” brand –full positioning. It

had 4 options but selected national brand.

5.1 Cement Tips

Your guide to concrete brick & block making

Tanga Cement Company hopes this guide is useful in establishing and maintaining a successful

brick or block making business, producing units of the highest quality with economical viability.

19

5.2 Your guide to concreting

Provided sufficient attention is paid to the selection of concrete materials, mix proportions,

placing, compaction, finishing and curing of concrete, the results should be strong, durable, look

good, meets the required strength and last a lifetime.

5.3 Your guide to plastering

Sand-cement plaster is used extensively in building work as a decorative or protective coating for

concrete, masonry walls and concrete ceilings. The mix has good workability which is easy to

work on.

5.4 Your guide to bricklaying

Bedding Mortar binds bricks and blocks together to give strength and stability to a wall. Freshly

mixed mortar must be soft and flexible (good workability mix), so that it spreads easily and

makes good contact, without becoming too harsh mix during the bedding process.

QUESTION 6

Discuss branding strategy and the decisions TCCL makes in building and managing its

brands.

Some analysts see brand as the major enduring assets of a company. Brands are more than just

names and symbols.ie. They symbolize everything that the products or services mean to

consumers.

Brand equity is the positive differential effect that knowing the brand name has on customer

response to the product or services. A brand with strong brand equity is a very valuable asset.

TCCL have their own brand name as SIMBA cement which is very positive to the consumers.

In building brands, Company need to make decision about brand positioning, brand name

selection, brand sponsorship, and brand development. The most powerful brand positioning

20

builds around strong consumer beliefs and values. Brand name selection involves finding the

best brand name based on a careful review of product benefits, the target market, and proposed

marketing strategies. A manufacturer has four brand sponsorship options.

It can launch a manufacturer`s brand or (national brand).

Sell to resellers who use a private brand.

Marketing licensed brands, and

Join forces with another company to co-brand a product.

A company also has four choices when it comes to developing brands. It can introduce as

followed

Line extensions,

Brand extensions,

Multibrands, or

New brands.

Company must build and manage its brand carefully. The brand positioning must be

continuously communicated to consumers. Advertising can help. However, brands are not

maintained by advertising but by the brand experience. Customers come to know a brand

through a wide range of contracts and interactions. Company must put as much care into

managing these touch points as it does into producing its ads Thus, managing a company`s brand

assets cannot longer be left only to brand managers. Some companies are now setting up brand

assets management teams to manage their major brands. Finally, Company must periodically

audit its brand`s strength and weaknesses. In some cases, brand may need to be repositioned

because of changing customer preferences or new competitors.

When came back to our case, the TCCL shares under its brand name, SIMBA at the Dar es

Salaam Stock Exchange. Also in TCCL brand select the national brand as Simba which means a

lion, as an animal found in Tanzania where as TCCL also located. When you came to

manufacture’s, the marketing licensed brand for TCCL is not qualified to them, thus the Simba

21

cement lies with company that control the brand name, some time command the loyalty of the

consumers. Moreover, the Simba brand came to develop by multibrands after change the image

colour from black paint to reddish. In addition developing a brand product requires a great deal

of long term marketing investment, especially for advertising, promotion and packaging.

QUESTION 7

Identify and define the external factors affecting pricing decisions, including the impact of

consumer perceptions of price and value in the case of TCCL.

The amount of money charged for the product or service, or the sum of all the values that

consumers exchanges for the benefits of having or using the product or service is known as

Price. (Kotler and Armstrong, 2008)

The external pricing considerations include the nature of the market and demand, competitors`

strategies and prices, and environmental factors such as economy, reseller needs, and

government actions. The seller`s pricing freedom varies with different types of markets.

Ultimately, the customer decides whether the company has set the right price. The customer

weighs the price against perceived values of using the product. If the price exceeds the sum of

the values, consumers will not buy. So the Company must understand concept such as demand

curves (the price–demand relationship) and price elasticity (consumer sensitivity to prices).

Consumers also compare a products` price to the competitors` product prices. (Kotler and

Armstrong, 2008). In this regard the TCCL therefore must learn the customer value and prices

of competitors` offers.

TCCL does not operate in vacuum but rather in a complex and changing environment which

includes suppliers, customers, competitors, nature of market and demand elasticity,

environmental factors like economy, resellers, government all these can affect price decisions.

Price decisions must be coordinated with product design, distribution and promotion decisions to

form it consistently and effectively.

22

7.1 Market and Demand

Setting prices for product or services depend largely on market and demand for that product or

service. However top management may decide to fix price for the product or service but increase

or decrease of price depend on the market and demand for that product or service.

In monopoly, market consists of one seller, the seller may be a government monopoly or private

regulated monopoly, and the rates are set by the government or regulated by the government.

Sellers try to develop differentiated offers for different customer segments and in addition to

price freely using branding, advertising and personal selling. The market consists of a few sellers

who are highly sensitive to each other’s pricing and marketing strategies.

7.2 Price-demand relationship

This is also affect price decisions whereby each price charged for the particular product or

service will lead to a different level of demand. The demand curve indicates the number of units

that will be bought in a given time period at different prices. The higher the price, the lower the

quantity demanded

7.3 Price elasticity

when there is no substitute product and the existing products is of high quality buyers are

normally do not bother with the price, so this also will lead effect to price decisions.

7.4 Competitor’s strategies, costs, prices and offers

When company setting its prices, it should consider the competitors’ costs and prices and

possible competitors reactions to the company’s own pricing moves. A low cost low margin

strategy, however, may stop competitors or driven them out of the market. This is because

customers based their judgment of a product’s value on the prices that competitors charge for

similar products.

7.5 Economic Factor

Moreover, they must consider the Economic condition is another factor that effect price

decisions. Economic conditions like boom, recession, inflation, and interest rates may affect

pricing decisions, because they affect both consumer perceptions of the product’s price and the

cost of producing a product. In addition the company must also consider what impact its price

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will have on other parties in its environment. How will resellers react to various prices? This

means that, the company should set prices that give resellers a fair profit.

7.6 The Government

It is also another external factor that affects price decisions; this is because of their policy and

also even infrastructure they have.

7.7 Social concerns

In setting price for product or service social concerns have to be taken into consideration as low

price there will no possible profit at this price

8.0 Conclusion and Recommendation Tanga Cement Company is a producer and supplier of cement used in construction and making

of concrete products. The construction of Tanga Cement commenced in 1978 with

commissioning taking place in July 1980. The plant was designed and constructed by a Danish

company, FL Smidth.

Tanga Cement is one of Tanzania’s three major cement producers, representing 45% of the total

market share in the country. Located in the town of Pongwe, roughly ten miles outside the 24

coastal city of Tanga, the company has a production capacity of 600,000 annual tons, and its

primary raw material, limestone.

TCCL seems to be very strong in terms of strengths and opportunities, and once it will continue

to maintaining their SWOT the success and sustainable for the company will remain the same.

Also in addition, the TCCL suppose to work very hard for their weaknesses and threats to beat

their competitors.

Moreover, the Tanga cement company limited can penetrate in market especial in rural areas by

trying to increase their effort of production which afford the society, also to do more promotion

to keep the product well known in the market, in addition place for distribution also is required to

find which will make ease for the company to put their product. TCCL should sit and fixing the

good price according to pricing concept.

Furthermore TCCL can continue to be the market leader in cement industry if it will fight with

the micro environment with the company, this can cause the effect of its strategies and failed to

serve their consumers as well. Even though for macro environment is difficult to handle them but

TCCL should look at them as much as possible to put it good approach.

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