INTRODUTION CEMENT INDUSTRY

India was the first largest Cement procedure in the world. The annul turnover of the

97Cement Plant was around Rs.10000 Crore. It contributed Rs.12000 Crore to excise duty.

The first cement plant was setup by the Indian Cement Companies Ltd at Porbandar Gujarat.

The total installed capacity for cement production in almost 70 years (1914-1982) had

amounted to 29 millions tones. This capacity was doubled in the next six years. New

capacities went well beyond the demand. The capacity and production of Cement over the

years of the total 84% of the capacity and 89% of the production was in the private sector.

Till, the early 80’ s Cement production capacities were much less than the demand. Until

1982 the stringent controls imposed during the Second World War had continued. There was

complete control by the Government of the pricing and distribution of Cement was scare and

commanded a high premium in the black market. In February 1982, there was partial

decontrol. A proportion of the production was treated as levy cement and bought by the Govt.

at a fixed price. The rest was allowed to be sold at market prices with effect from March

1989, the partial control was also lifted and the production could be sold in the market.

There had also come about a technological change in the production of Cement Too major

changes were

1. Manufacturing of Cement Utilizing the dry process rather than the wet process

technology.

2. Units moving from small kilns of 600-1200 tones per day (tpd) to huge kilns of 3000tpd.

As against 48.6% of the capacity in 1981 using the wet process by 1991 nearly 84%

of the capacity was the dry/semi-dry process.

2. Highlights of Indian and world cement industry

1) Annual global production of cement in the world is around 5 billion cubic yards.

2) The Indian cement industry is second largest cement producer in the world with

an install capacity of 144 million tones.

3) The Indian cement industry is a mixer of mini & large capacity plants. Majority of

the production of cement in the country is 94% by large cement plants.

4) Most of the cement plants in India are located in proximity to the raw material

sources, exploiting the natural sources to the full extent.

5) The western region is the most cement rich region while other regions have almost

same cement production capacity.

6) The Indian cement industry is about 90 years old.

7) The production of cement by Indian cement industries is nearly 6% of the world

production.

8) In India there are 124 large plants and around 365 mini plants.

9) The Indian cement industry with a total capacity of about 152 million tones.
3. INDUSTRY FEATURES:-

The Cement industry has certain special features:

(A) It was location; specific, necessarily closet to the main raw material viz. lime stone

deposits. 1.5 tones of limestone were required per ton of cement. Being location

specific there had been a concentration of cement plants in certain states like

No. State Percentage

1 Gujarat 8%

2 Karnataka 8%

3 Tamilnadu 8%

4 Rajasthan 10%

5 Madhya Pradesh 21%

6 Andhra Pradesh 18%

25%

20%

15%

10%

5%

0%
Gujarat Karnataka Tamilnadu Rajasthan Madhya Pradesh Andhra pradesh
1 2 3 4 5 6
 The certain state had practically no cement plants. The capacity installed in each state.

Production there from and sales in each state.

(B) Cement was stored at plants in silos with capacities of 8 to 10 days production when the

silos were full production had to e curtailed and limited to the quantity that could be

dispatched.

(C) Transportation cost had an important bearing on the final price of the cement.

(D) Road transportation was turning more and uneconomical with increasing loads. Road

transport consumed 25000 liter of HSD oil to move 1000 tones over 650 km. Compared to

5000 liters by rail.

(E) The extent of production was substantially dependent on infrastructure support of railway

coal and power.

CEMENT INDUSTRY AT GLANCE

Cement Companies 57 NOS

Cement Plants 12 NOS

Installed capacity 109.97 MNT

Private sector 100.75 MNT

Public sector 9.22 MNT

Man Power (NOS) 1,35,000 (approximately)

MARKET SHARE

COMPANY CAPACITY PER OF SALES

ACL 8.50 1,000

L&T 12.00 20

ACC 11.30 93

CORUISM 9.70 28

INDIAN CEMENT 6.60 92

4. PER CAPITAL CONSUMPATION OF CEMENT IN VARIOUS COUNTRIES

No. Country Per Capita consumption (in kg)

1 Japan 583
2 Turkey 454
3 USA 342
4 Egypt 335
5 Thailand 236
6 China 200
7 Malaysia 196
8 Pakistan 65
9 Indonesia 62
10 India 60
 Per Capita consumption (in kg)

700

600

500

400

Per Capita consumption (in kg)

300

200

100

0
Japan Turkey USA Egypt thiland China Malasia pakistan Indonesia India
1 2 3 4 5 6 7 8 9 10
 Ambuja Cement Ltd. INFORMATION

1. History and Development of the Unit

The Ambuja Cement Ltd. is a company, which has been promoted by Gujarat industrial and

investment Corporation in co-ordinance with “ Sekhsaria Group”

Originally the project was planned to be located at Mahuva, District Bhavnagar. But there the

possession of land could not be taken by the management due to non co-operative attitude of

villagers, which compelled the management to locate the project at village Vadnagar, Taluka

Kodinar in Junagadh District on western coastal Saurashtra region of Gujarat stat.

Government of Gujarat extended its full cooperation in establishing the unit and also in

acquiring mines on lease basis. GEM has provided 20MVA power. The Rail India technical

and economical services ltd. was appointed as consultants and surveyor for construction of

merger gauge railway line from Kodinar to Vadnagar.

The construction of plant & building commenced in November 1984. All the basic

infrastructure facilities required were completed by September 1986. The Ambuja Cement

Ltd. produces cement by process technology. This technology brought from KROUPP

POLYSIUSS (Germany).

Mr. Narotam Sekhsaria’ s strategy in cement has been two fold:

1. Grow in size

2. Build value through branding

Ambuja Cement Ltd. has grown from 0.7 million tones in 1986 to 12.5

Million tones through expansion and acquisitions of the following:

Ambuja cement Eastern (ACEL)

Ambuja Cement Rajasthan, and a 14% strategic stake in ACC.

2. ABOUT THE HOLCIM

Holcim, a Swiss Company with presence in 70 countries across the world is one of the largest

and most respected suppliers of cement in the world. Its capacity total up to 194 millions

tones of cement aggregates and down stream product stream products like Ready Mix

Concrete and asphalt including services. HOLCIM began in 1912 from a small village in

Switzerland. By early 205, European countries followed by Egypt, South Africa and

Lebanon.

In the 1980’ s Holcim continued to expand into new markets, including Eastern

European. A greate focus on aggregate and ready mixed concrete production strengthen the

company’ s position as a vertically integrated market leader.

The name of the group was changed from HOLDERBANK FINANCIERE GLARIS

Ltd. To HOLCIM Ltd. In May -2001. Today the international presence of Holcim consists of

a balanced mix of companies in industrialized and emerging markets.

 In INDIA, Holcim Group controls two cement companies.-Ambuja cement and ACC

together, they together have 38% market share of cement.

3. CORPORATE INFORMATION

CHAIRMAN EMERITUS

SERIAL NO. NAME DESIGNATION

1 Mr N.S.Sekhsaria Chairman
2 Mr Markus Akermann Director

3 Mr Paul Heinz Hugentobler Vice Chairman

4 Mr M.L.Bhakta Director
5 Mr Nasser Munjee Director
6 Mr Rajendra P.Chitale Director
7 Mr Shailesh Haribhakti Director
8 Dr.Omkar Goswami Director
9 Mr.Naresh Chandra Director
10 Mr. Onne van der Weijde Managing Director
Corporate Office

106, Maker Chambers 3,

Nariman Point,

Mumbai – 400 021

Auditors

M/S S.R. Batiboi & Associates

P.M. Nanabhoy & Co.

(Cost Auditors)

Registered Office

P.O. Ambujanagar,

Tal. Kodinar,

Dist- Junagadh,

Gujarat-362 715
4. DIFFERENT PLANTS & SUBSIDIARY COMPANIES, THEIR LOCATION &
PRODUCTION UNITS.

1. AMBUJANAGAR:

40 km away from veraval in saurashtra,Gujarat. This location consists of three units

namely:

a. Ambuja

b. Gajambuja Line-1

c. Gajambuja Line-2

2. DARLAGHAT:

Near Shimla in Himachal Pradesh with one unit.

3. GADCHANDUR:

Near Chandanpur in Maharashtra with one unit.

4. BHATINDA:

In Punjab with one Grinding Unit.

5. ROOPNAGAR:

In Punjab with one grinding unit.

5. Mission of the Company

The Ambuja Cement Ltd has the following missions towards the quality and

Environment.

1986 Ambuja cements’ first cement manufacturing plant at Ambujanagar, Gujarat,

worth 0.7 million tonnes capacity, commences production.

1987-88 Installation of a new-generation high -efficiency air separation and close-

circulating the operation of the cement mill.
1988-1989 Undertook the VAN-VIHAR project to convert a mined area into an
environmentally resorted and scenic location.
1992-93  Setting up of a 9.4 lakh tone plant at Ambujanagar- Gujambuja cement.
 Ambuja cement introduces the cutting-edge concept of bulk transportation
in the country.
 Setting up of the ambitious 1 million tonne cement plant at Suli in
Himachal Pradesh.
1994-95  Clinkerization facility in Suli, H.P and Ropar, Punjab is commissioned.
 Third 1 million tonnes plant is set up at ambujanagar
1996-97 The company sounds the boards for a new peak of corporate excellence in the
global competitive market. Achieves highest -ever export by an Indian cement
company. (5.33 lakh tonnes of cement and clinker were exported.)
1997-98 A new 12 MV power plant is also set up at Himachal Pradesh.
1998-99 Plans are unveiled for a new Greenfield plant at Guntur, Andhra Pradesh.
1999-00 India’ s cement industry applauds as a cement terminal is set up in Sri lanka.

2000-01 Company begins on a 2 million tonnes capacity plant in Chandrapur district,

Maharashtra.
2002-03  The Chandrapur plant achieves over 100% capacity utilization in the very
first year of the production.
 A Greenfield cement plant was planned at Kutch, Gujarat.
2007 The Government of India confers the PADMA BHUSHAN AWARD to
company Chairman SURESH K BHUSHAN for his contribution to Indian
business and Industry.
2008 The company sets up the Corporate Communication department which will be
answerable and accountable to its key internal and external stakeholders.
2010 In May, company has topped the Indian cement industry in Sales
Company s way of life

The Ambuja Cement Ltd reflect the following quotes as it way of life.

We shall improve the quality of life around us.

We will ensure effective communication.

We will do every thing with a human touch.

We shall excel in whatever we do.

We shall be committed to learning & growth.

We will enable our people to have the highest productivity.

We shall be known for our integrity.

6. Awards, Recognition & Achievements

YEAR AWARDED BY PURPOSE

1989-90 The Economic Times, Best Corporate performance award.
Harvard Business School
Association Of India
1989-90 National Productivity Certificate of Merit for productivity in cement
Council industry.
1990-91 National Productivity Second prize for productivity in cement
Council industry.
1990-91 Trade Headers Club, Madria, International award for best trade name, 1991
Spain
1990-91 Gujarat Pollution Control 1st prize for environmental management.
Board.
1991-92 National Council Of Cement National award for best energy performance.
& Building Material
1991-92 Bureau Of Indian Awards. Rajeev Gandhi National Quality Award.
1992-93 Bureau Of Indian Standards Quality system certificate ISO 9002.
1992-93 National Productivity Council 2nd best productivity performance award
1993-94 Chemical and Allied Product, Certificate of merit for cements and clinker
Export Promotion Council, export.
Calcutta
1993-94 International Green And Best production and product goal award.
Social Council, Hyderabad
2000-01 National Award 2nd best environmental award.
2000-01 Special Export Award Outstanding export award.
2002-03 National Award Prevention of pollution.
2002-03 Export Promotion Council, Outstanding export performance
CAPEXIL
2006-07 Asian Institute of “ Asian CSR Award 2007” in the “ Concern
Management, for Health” category for its robust programme
Philippines, on health and HIV/AIDS for the welfare of the
communities.
2006-07 Greentech Environment company for outstanding achievement in
Excellence Environmental Management for Himachal Unit
Gold Award by Greentech by
Foundation, New Delhi.
2006-07 “ Corporate Excellence Company’ s overall performance particularly
Award, 2007” by Indian in the
Institute of Materials fields of company visibility, brand image, and
management contribution to corporate social responsibility.
2006-07 “ Top Export Award” by For outstanding export performance
CAPEXIL, an export
promotion council, sponsored
by the Ministry of
Commerce
2006-07 "Dun and Bradstreet - Top Indian company in cement sector.
American Express Corporate
Awards 2007".
2007-08 Indian Bureau of Mines First Prize – Afforestation

Second Prize –
 Top Soil Management
 Air Quality Management

Third Prize –
 Management of Minerals and Sub-Grade
Minerals
 Water Quality Management
 Overall Performance.
2007-08 "Maratha Cement Works" "Greentech Environment
(Ambuja cements Ltd.’ s Excellence Gold Award 2008"
subsidiary)for overall Best
Environment management
practices & performance.
2007-08 Director General mines safety Awarded the first prize
(Ministry of Labour & Mines, to our Rabriyawas Mine (Ras Lime Stone
Govt. of India) Mine)
in the 22nd Mine Safety Week, Ajmer Region
for its over all performances.
2008-09 Gujarat Safety Council Ambujanagar unit won Certificate of
Appreciation for
"Accident Free Million Man Hour Worked".
2008-09 IMC Ramkrishna Bajaj "Performance
National Quality Excellence Trophy" in the Manufacturing
Category.
2008-09 National Award from NCBM. Ambujanagar unit won "Best Environmental
Excellence in Plant
Operation"

MAJOR ACHIVEMENTS OF AMBUJA CEMENT

Most Profitable cement company in India.

Lowest Cost producer of cement in the world.

Its environment protection measures are at par with the best in the world. The

pollution levels at all its cement plants are lower than the rigorous Swiss standards of

100 mg/NM3.

The only cement company to be awarded with the National Quality Award.

First cement company first to receive the ISO 9002 quality certification.

Received ISO 14000 certification for environmental systems.

India’ s largest exporter of cement.

Received Best Award for highest exports by CAPEXIL.

First cement company to introduce the concept of bulk cements movement by sea in

India
7. CORPORATE OBJECTIVE & STRATEGIC ORIENTATION

The management of ACL HAD COMMITED IT SELF TO SIX LONG term objectives.

1. Excellence in Quality.

2. Ceaseless quests for higher productivity.

3. Maximum customer satisfaction.

4. Environment conducive to employee growth.

5. Fair return to share holders.

6. Vigilant search for opportunity for growth and fulfillment of social objective.

The Strategic orientation of the company drew its roots from the co-operate

philosophy and objectives, when ACL was to begin production the market had become

surplus in production capacity ACL’ s older competitors had the advantage of lower capital

cost and stabled market position. This capital cost, interest and depreciation was half of

ACL’ s. Therefore ACL had to cut down on it’ s capital cost and operation cost quick

completion of the project improved utilization of capacity improved productivity of energy

input the ways to cut the costs even after keeping cost down the market had to accept ACL’ s

product & for that emphasis was on production & quality helped ACL beat the competition &

capture & share of the market.

ACL implementation of strategy was attempted through the following operation.

Business genres has done future on ACL hilighliting it’ s performance &

emphasizing the concern it had shown for the customers 15% of the production from Ambuja

cement to government agencies. Consumer both individuals & institutional ACL had

concentrated on selling in the state of Gujarat it self 90% of the production was sold in

Gujarat while most of the balance went to Maharashtra against the demand of 40% lakhs

tones ACL had captured 25 % of the Gujarat market which the management that this markets

share was unlikely to increase with the new plants at Ambuja Nagar schedule to be
operational the middle of 1993 which would double the production on ACL would have to

develop other market.

TRANSPORTATION & LOGISTIC

For the transportation of cements bags ACL had made several arrangement Bags packed

through electronic machine were sent down to the dispatch yard through conveyer belts for

loading in to lorry and wagons, About 250 lorries were dispatched every day lorries were

also used for bulk movement of cement.

Long term arrangement were made lorry operation with part of the fleet used being

practically captive such operation had been financed by the company & therefore obliged to

carry loads & at times when others operators might no be willing to such relationship provide

to be maturely advantages.

ACL also have a railway siding in its premising. The railway line at Ambuja nagar is meter

gage. These were adequate for movement in the Gujarat area but transshipment was needed

for a long movement. The facility also helped in reducing dependence solely on lorry

operators.

The company had been using barges for transporting cement by sea to Bombay because of

possibility of having to develop market outside Gujarat.

The company was also examining the possibility of sending cement in bulk through the sea

route for delivery in the new port.

Marketing

Marketing strategy of ACL emanated from the broad objective of giving the customers the

cement of high quality & to acquire the market leadership position.

Branding

ACL attempted to convert the cement market from commodity to specially they tried to

Brand the cement by not only giving the customers high quality cement but by aggressively

marketing & advertising the brand. At one times there advertising budget was three times

more than ACC cement who was producing ten times the quality of cement than ACL.

Packing

ACL also work on improving the packing cement HDPE bags were improved through

interaction with suppliers each bag had specially tag which was in the nature seal of quality

and quantity since contents of the bag deteriorated due to atmosphere condition stockiest

were helped to practice optimum handling & storage technique.

Stockiest & Dealers

The company’ s approach was one of building long term relationship with the customers.

The stockiest/dealers numbered about 600 in the early 1990s’ who had chosen on the basis

of their good reputation in the market for the customer service and financially integrity

stockiest were preferred if they were dealing in another building material like hardware paint
etc. so that a customer could shop for all the requirements at one place. Stockiest were also

given technical training so that they could help the customer in the proper use of cement.

Monitoring was done to ensure that stockiest did not charge higher price under cut.

To the customer the company prosecuted the stockiest/dealers as the company’ s

representative. In the premise of every Stockiest a document was prominently displayed

which was signed by the proprietor, who read (freely translated in the regional language)

“ I solemnly declare that I will sell Ambuja cement of genuine quality correct weight & at

reasonable price.”

This document also has certificate signed by the vice president (Marketing) of ACL to land

authentically to the document senior official of the company including the vice president

(Marketing) visited every dealers & stockiest & kept in touch with the market.

Promotion

The company had a programmed conductive seminar & workshop for masons, architect,

contractor etc. who were often the decision makers on behalf of the ultimate users. There

were conducted in every taluka in these session technical executive of the company provided

on the best use of the Ambuja cement making strong structure practical training was also

given at the site consequent to these activities there was strong demand for Ambuja cement. It

commended on of the higher price in the market.

The company had also carried out an advertisement appeared in Gujarati News papers. The

advertisement budget of ACL in the Gujarat exceed Rs. 1 crore in 1989 to 1990 & was said to

be much more than of a large cement player for the entire country. The picture of the giant

with his powerful muscles holdings dams & building security was expected to have powerful

impact. It personified ACL’ s emphasis on comprehensive strength. In could be seen on the

walls & hoardings in village & on bus panels through out the state of Gujarat.

8. Contribution of the Unit

The Gujarat Ambuja Cement Ltd.’ s contribution to the society and public is quite notable.

The Gujarat Ambuja Cement Ltd. provides employment to nearly 750 employees directly. It

also provides indirect employment to large number of people in the form of transporter,

retailer etc.

The Gujarat Ambuja Cement Ltd. adopted Kodinar Taluka & started health afforestation

energy conservation and water management program. They prepared several check dams &

diverted rain water, which recharges ore than 100 wells.

The Company has taken up large scale afforestation planting more than 14,000 plants &

developing nurseries in villages. Over 100 biogas plants have been installed in 12’ Th

villages. It is the only company which has reached “ Zero Pollution Level”

Comply with applicable locally and at national level and environmentally sound

technologies and practices.

 Development & propagate environment awareness amongst employees surrounding

community and enable them to adopt environmentally sound practices.

9. Product & Production Process

Product

The Gujarat Ambuja Cement Ltd. has fully automatic machinery & dry process technology.

This process is fully controlled by the computers. The main product of the Gujarat Ambuja

Cement Ltd. is Ordinary Portland Cement (OPC). The list of the products is given below,

1. Ordinary Portland cement (OPC)

2. Portland Pozzoland Cement (PPC)

3. 53 Grade OPC

4. 43 Grade OPC

5. Rapid Hardening Portland cement (RHPC)

6. High Strength Cement (HSC)

7. Special Grade of cement for use in Railway sleeper

The basic raw materials used by the Gujarat Ambuja Cement Ltd are,

1. Lime Stone

2. Clay Silica

3. Chalk

4. Gypsum

Production Process
The Production Process of The Gujarat Ambuja Cement Ltd is divided in 12 main steps,

which are as following

1. Raw Material Input

2. Crusher

3. Stacker

4. Reclaimed

5. Raw Material

6. Blending Silo

7. Pre Heater

8. Pre Calcinations

9. Clinkerisaton

10. Cement Mill

11.Packing

12.Quality Control
 REVIEW OF LITERATURE

1. In B2B there is often a need for the companies to educate the customers more than in B2C
as the products might be more complicated. The education may include e.g. guidance on
how to use the product or service,or the ways to get most out of it. (Peppers & Rogers 2001,
pp. 11-12). In supplier-retailer context it is beneficial for the supplier to educate the retailers
and their staff on product features. When the staff is trained, they can provide more
information for consumers which may lead to increased sales. These differencesbetween
B2B and B2Ccan lead to the conclusion that keeping existing customers happy and
developing the relationshipswithin the accountsto gain more sales plays an extremely
important role in B2Bsales. Supplier-buyer relationships are further discussed in the next
chapter.

2. Understanding the criteriaretailers use to choose the suppliers they wantto work withis
clearly very important. Diamond and Pintel (1989) list several factors that retailers can
consider when selecting vendors. Again,therelationships are important. Also,the
buyersaimto create solid, respecting relationships with the vendors to get better terms and
ser-vice. Other things retailers evaluate are the merchandise offered, distribution
policies, prices and pricing policies, promotions and merchandise policies, shipping terms
and de-livery reliability. (Diamond & Pintel 1989, pp. 149-154).that effect on the
expectations; word of mouth, personal needs, past experience and ex-ternal
communications. Together, these dimensions form the perceived service as well as
perceived service quality. (Zeithaml, Parasuraman & Berry 1990,pp. 18-23). 3.2.1

3. Elements of marketing mix effecting to retailer satisfaction In addition to the personal

relationships, the marketing mix elements play a role in the retailer decision making
process and therefore effect the customer satisfaction (Schellhase, Hardock &
Ohlwein1999). Therefore, the fundamental elements of market-ing mixin the retailing
environment are shortly introduced in this chapter. Marketing mix consist traditionally of
four Ps: Product, Price, Place and Promotion (see Chai 2009).

4. An important part of the mix in retailing environment is Place which in this context refers to
logisticsand supply chain.Pricing is one of the factors which plays a crucial role in supplier-
retailer relationships and can influence on retailer satisfaction. Retailers, of course, want to
have competitive consumer prices (Dhotre 2009,p. 53). Besides the product pricing, there
are other parts of pricing policies that can affect the retailer satisfaction. For example, the
pricing may be based onvolumes which is not beneficial for smaller retailers. (see Schellhase,
Har-dock & Ohlwein1999). Milton (1982,p. 196) presents five factors that retailers can use to
calculate supplier effectiveness quantitatively: net value of merchandise, mark-ups,
markdowns, cash discounts and transportation expenses.For retailer’s, it is essential to know
 their customers and whether there are trends which might have an impact on their
buying behaviour (Milton 1982,pp. 6-7).

5. Marsha Peter (2002) examines temporal changes in post-purchase product satisfaction

for durable goods purchase. Involvement and satisfaction variables were measured in
a cross-sectional and a longitudinal study of .r owners. Overall. consumers with high
product involvement showed slightly greater satisfaction with their cars than low-
involvement consumers over the term of ownership. However. in the 2-month period
after purchase, consumers with high product involvement showed a decline in
satisfaction, whereas low-involvement consumers' satisfaction increased. The role of
disconfirmation in these changes was investigated. Benefits and problems
disconfirmation were found to make independent contributions to satisfaction
judgments, satisfaction research and the strength and form of contribution varied with
product involvement. These findings suggest that benefits and problems
disconfirmation need to be measured separately in.

6. Marsha L. Rich. (2002) Post-purchase product satisfaction: Incorporating the effects

of involvement and time describes changes in post-purcha. product satisfaction for a
durable goods purchase. Involvement and satisfaction variables were measured in a
cross-.ctional and a longitudinal study of car owners. Overall. consumers with high
product involvement showed slightly greater satisfaction with their cars than low-
involvement consumers over the term of ownership. However. in the 2-month period
after purcha.. consumers with high product involvement show. a decline in
satisfaction. whereas low-involvement consumers' satisfaction Increased. The role of
disconfirmation in the. changes was investigated. Benefits and problems
disconfirmation were found to make independent contrbutions to .tisfaction
judgments. and the strength and form of contribution varied with product
involvement. The. findings suggest that benefits and problems disconfirmation need
to be measured .parately in satisfaction re.arch .

7. Claes Fornell(1992) examines that many individual companies and .me industries
monitor customer .tisfaction on a continual basis. but Sweden is the first country to do
so on a national level. The annual Customer Satisfaction Barometer (CSB) measures
customer satisfaction in more than 30 industries and for more than 100 corporations.
The new index is intended to be complementary to productivity measures. Whereas
productivity basi.11y reflects quantity of output. CSB measures quality of output
(asexperienced by the buyer). The author reports the results of a large-scale Swedish
effort to measure quality of the total consumption process as customer satisfaction.
The significance of customer satisfaction and its place within the overall strategy of
the firm are discuss.. An implication from examining the relationship between market
 share and customer satisfaction by a location model is that satisfaction should be
lower in industries where supply is homogeneous and demand heterogeneous.
Satisfaction should be Higher when the heterogeneity/homogeneity of demand is
matched by the supply. Empirical support is found for that proposition in monopolies
as well as in competitive market structures. Likewise, industries in general are found
to have a high level of customer satisfaction if they are highly dependent on
satisfaction for repeat business. The opposite is found for industries in which
companies have more captive markets. For Sweden. the 1991 results show a slight
increase in CSB. which should have a positive effect on the general economic climate.

8. Richard Oliver (2000) Response determinants in satisfaction judgment. examines that the
effects of five determinants of satisfaction are tested as well as individual differences in
satisfaction formation. Manipulations of attribution, expectancy. performance,
disconfirmation, and equity are written into stock market trading scenarios in a full factorial
design. Results show that all main effects and four ordinal two-way interactions are
significant. Then. an individual level analysis is performed on the repeated measures data.
Three clusters of subjects sharing Similar response tendencies (disconfirmation, performance,
and equity) are identified and related to investment attitudes, outcome attitudes, and
demographics. No consistent relationships are discovered, suggesting that the response
differences reflect deeper behavioral tendencies. Implications of this approach for satisfaction
paradigms, satisfaction theory, and individual satisfaction response orientations are presented.