B2B Project Work

Branding

Of

Tata Steel

Group -2 Biswajit Das 1018038

Ritesh kumar 1020027 Abhinav Tushant 1018002

Archana Singh 13202071

TATA STEEL

Tata steel was founded by J.N. Tata in 1907 near a village called Sakchi (now Jamshedpur).

Asia's first integrated private sector steel company, Tata Steel Group is among the top-ten global

steel companies with an annual crude steel capacity of over 29 million tons per annum (mtpa). It

is now the world's second-most geographically-diversified steel producer, with operations in 26

countries and a commercial presence in over 50 countries. The Tata Steel Group, with a turnover

of US$ 24.82 billion in FY 13, has over 80,000 employees across five continents and is a Fortune

500 company. The Group's vision is to be the world's steel industry benchmark in "Value

Creation" and "Corporate Citizenship" through the excellence of its people, its innovative

approach and overall conduct. Underpinning this vision is a performance culture committed to

aspiration targets, safety and social responsibility, continuous improvement, openness and

transparency. In 2008, Tata Steel India became the first integrated steel plant in the world,

outside Japan, to be awarded the Deming Application Prize 2008 for excellence in Total Quality

Management. In 2012, Tata Steel became the first integrated steel company in the world, outside

Japan, to win the Deming Grand Prize 2012 instituted by the Japanese Union of Scientists and

Engineers. The Tata steel basically comprises with three main operations: Indian operations,

European operations and South East Asia Operation.

The Key Market segments: Steel is the backbone to countless products and services that shape

the everyday lives of people throughout the world. We offer total shape dependability,

innovation added value to customers in every market sector through our wide array of products.

Automotive

Construction

Consumer Goods

Engineering

Packaging

Material Handling

Energy and power

Agriculture

PRODUCTS & BRANDS

Tata Steel’s Jamshedpur Works produces hot and cold rolled coils and sheets, galvanized sheet,

tubes, wire rods, Ferro alloys and construction rebar. To differentiate its premium quality steel

products, Tata Steel has introduced brands such as Tata Steelium (the world’s first branded cold

rolled steel), Tata Shaktee (galvanized corrugated sheets), Tata Tiscon (re-bars), Tata Bearings,

Tata Agrico (hand tools and implements), Tata Wiron (galvanized wire products), Tata Pipes

(pipes for plumbing, irrigation and plant processes), Tata Structura (contemporary construction

material), Tata Sigcomag, Galvano and Tata Shaktee Ultima.

Tata Steel Ltd. is a Large Cap company (having a market cap of Rs 36998.45 Cr.) operating in

Iron and Steel sector.

Tata Steel Ltd. key Products/Revenue Segments include Saleable Steel which contributed Rs

36108.46 Cr to Sales Value (77.97% of Total Sales), Other Raw Materials which contributed Rs

3179.13 Cr to Sales Value (6.86% of Total Sales), Welded Steel Tubes which contributed Rs

2095.56 Cr to Sales Value (4.52% of Total Sales), Semi Finished Steel And Scrap which

contributed Rs 1376.20 Cr to Sales Value (2.97% of Total Sales), Charge Chrome which

contributed Rs 1103.72 Cr to Sales Value (2.38% of Total Sales), Power which contributed Rs

897.99 Cr to Sales Value (1.93% of Total Sales), Other Operating Revenue which contributed Rs

439.79 Cr to Sales Value (0.94% of Total Sales), By Products which contributed Rs 427.02 Cr to

Sales Value (0.92% of Total Sales), Ferro Manganese which contributed Rs 210.95 Cr to Sales

Value (0.45% of Total Sales), Bearings which contributed Rs 187.77 Cr to Sales Value (0.40%

of Total Sales), Other Agro Products which contributed Rs 159.52 Cr to Sales Value (0.34% of

Total Sales), Other Services which contributed Rs 86.96 Cr to Sales Value (0.18% of Total

Sales), Metallurgical Machinery which contributed Rs 36.27 Cr to Sales Value (0.07% of Total

Sales), for the year ending 31-Mar-2014.

For the quarter ended 30-Sep-2014, the company has reported Standalone sales of Rs. 10700.98

Cr., up 3.11% from last quarter Sales of Rs. 10377.73 Cr. and up 8.91% from last year same

quarter Sales of Rs. 9825.95 Cr. Company has reported net profit after tax of Rs. 2476.41 Cr. in

latest quarter.

Pricing of B2B Product

Most businesses follow the fundamental pricing strategy of cost-plus. That is, charging buyers

the cost of producing or purchasing and marketing a product or service, then adding on a

reasonable margin to allow for a measure of profit. Although pricing in B2B have different kind

of challenges. In B2B environment, companies make purchasing decisions to make profit so this

makes the purchasing decisions more risky. Thus, companies tend to form long-term

relationships and agree on a fixed-price with their suppliers.

Even though retail companies have a high transaction volume, they have a relatively simple

pricing calculation. In B2B markets, customer is a firm and organizational purchasing is

considered more complex than consumer purchasing. Thus, B2B environment requires a

combination of strategy, business process and technology so that firms can capitalize ahead of

their competitors and gain tremendous competitive advantage.

Pricing decision in B2B markets has to involve currency considerations, market share dynamics,

financial factors and the need that the price has to be predetermined by the quality and price

balance.

As described on the table above, B2B and B2C pricing differ from each other in many aspects. In

B2C, transaction volumes are high which in B2B is very volatile and may change from low to

high. Pricing data has accurate info in B2C which in B2B resides in many different systems.

Pricing calculation can be considered as simple in B2C environment but in B2B it is considered

as a complex process. In addition pricing authority is also centralized in B2C. However, In B2B

it is distributed as the sales team determines discounts in many cases. In addition to pricing data,

pricing levels reside in many systems in B2B as well which has very few levels in B2C

environment. Last but not least, pace of change is very low in B2C but in B2B pace of change

fluctuates from medium to high.

Branding Of B2B Product

Brands allow a producer or owner to distinguish his/her goods or services. Branding today is a

strategic tool that helps the supplier cut through the morass of the market, get noticed, and

connect with the customer on many levels and in ways that matter. A strong brand becomes the

customer’s “shorthand” for making good choices in a complex, risky, and confusing

marketplace. To stay alive and flourish in highly competitive environments, business-to-business

(B2B) companies spend more time and money on R&D. Suppliers focus on making their

products smarter, faster, and smaller, and more cost-effective and reliable, than the competition.

They also find ways to improve and add services so that they provide customers with a complete

and satisfying experience. Marketplaces are constantly changing, so companies have to adapt in

order to stay ahead.

But these B2B companies truly differentiate their offering and be relevant to customers over the

long-term. This is where brands is created by company. Brands matter in B2B markets. In fact,

they may matter even more in B2B than in B2C. Brands matter because companies act just like

people when it comes to evaluating what products or services to buy. Along with a number of

explicit rational criteria, a powerful irrational impulse is always present to influence the purchase

decision. A strong brand with an effective positioning strategy speaks to and taps into the totality

of these buyer needs. Brands matter when supplier teams are doing business with buyer teams.

Through effective internal branding efforts, the brand becomes the “glue” that binds the supplier

culture and organization together, enabling the brand to make good on its external promise.

Enterprise customers will reward a brand which delivers a unified, consistent and satisfying

experience with repeat business.

However, common beliefs in the B2B marketing universe overlook the importance of brands.

Consider the following thoughts: Consumer brands are defined and presented largely based on

emotive appeals—“warm and fuzzies.” In B2B, products and services, rather than “brands,” are

pitched, sold, and transacted through cold logic. Consumers are drawn to brands’ status, prestige,

affinity and self-security. Business customers specify and purchase based pricing, specifications,

product performance and metrics. Such thinking by B2B marketers is not only naïve (and defies

logic) but also undermines their ability to drive incremental business value and ROI.

BRANDING

In B2B marketing advertising, promotions and publicity plays an important role in the

communication strategies. Hence, to contribute to the overall effectiveness of the promotional

strategies utmost care must be taken by the companies. B2B branding is used to create awareness

of the company, to increase the sale of the product and to increase the overall effectiveness of

selling efforts. The promotional program begins with carefully developed advertising objectives

that must be formulated from corporate from corporate and marketing objectives in such a

manner as to set the direction for creating, co-coordinating, and evaluating entire promotion

programme.

BRANDING BY TATA STEEL

As one of India’s most successful companies, Tata Steel also represents a great example of a

strongly branded B2B company. In 2001 and 2005, Tata Steel was ranked the world’s best steel

company in studies carried out by World Steel Dynamics Inc., USA (WSD), a leading steel

information service provider. The ranking were based on a set of different criteria, ranging from

cash operating cost to stock market performance of the respective three years.

The profitability of the steel industry in India is generally linked to business cycles, reaping

profits when economy is going well and eroding them when it is in depression. In the late 1990s,

the Indian steel industry was experiencing a glut in the market which strongly affected the profit

margin of all related companies. To reduce its dependence on the external environment and

business cycles, Tata Steel adopted a strategy which stressed the following two points: Branding

its products and moving to high value added products.

The company soon realized that a strong customer focus is essential if any branding approach

was o be successful. It soon began to introduce internal campaigns in order to bring the customer

centric message to its employees. In the late 1990s, the company launched several internal

marketing programs to emphasize customer focus and service. The programs had taglines such

as, “customer first- her haal mein, her saal” (Customer comes first in every case, every year),

“customer I kasam – hain taiyaar hum” (We pledge to the customer that we are ready for him).

These are the mantras behind Tata Steel’s success. This transfer from producer logic to customer

logic was seen as the path to influence customer behavior for mutual gain.

Before jumping on to the brand wagon, Tata Steel Set up a branding task force in January 2000

to explore 2000 to explore the possibilities of branding that will manufacture zinc/ aluminum

metallic coated steel, painted steel and rolls formed steel products, and deliver pre-engineered

buildings and other building solutions. The new company will offer a comprehensive range of

branded steel products for building and construction application. Only three months later, the

task force evolved into a brand department. Within this department they created the distinct sub

functions “market development”, “order generation” and “order fulfillment”, which were

computerized, enabling Tata Steel to reduce its customer reponse time significantly. The

company also initiated the concept of “customer account managers” who were authorized and

empowered to solve specific customer grievances immediately. The company furthermore

sought to increase customer interaction in order to better understand customer needs and

expectations.

The Steel industry has been racing along at a surprisingly high speed during recent years, largely

due to the huge buying from China. Tata Steel has also done extraordinarily well as the industry

moved upwards, but the next big challenges are already seen on the horizon: global reach with

global branding.

The leader of the company had decided that branding the commodity steel would provide them a

unique selling proposition in a great way. Branding Steel would hold Tata Steel in two big ways:

It would help stabilize the flow of revenues even during business downturns.

It would make premium pricing possible.

CHALLENGES FACED:

At the beginning, one of the major obstacles Tata Steel had to overcome was its inexperienced

marketing personnel. Their knowledge of branding techniques was quite limited and moreover,

many of them had doubts about the feasibility of branding steel. As a solution they started

several training programs for them and organized seminars and workshops where experienced

people from sectors came and spoke to employees regarding various issues related to branding. It

also formed sparate required for both. The positioning reinforces especially the brand’s

leadership position, both in the market place and in the minds of the Indian consumer.

VALUE MANAGEMENT

Tata recognized early that their employees were essential assets in the course of becoming more

customer-focused. Therefore it adopted a program of Retail Value Management, under which the

company provided training to sale people recruited by the retailers to help increase sales. In a

region in northern India, for instance, sales teams trained by the company approached local

architechs and convinced them of the advantages of using more steel, resulting in a doubling of

the market share of Tata Tiscon in that region. One of the most important things in promotional

strategies is to know who you are actually messaging to. One of the major implications that Tata

under took in the course of their promotion efforts was a concise target group check and

distribution revamp. The company was actively involved in both B2B branding and promotion.

The B2B customer were mainly automakers Maruti, Telco and Ford, who with their knowledge

of steel helped the company to focus on product quality on a holistic way, negotiating for

specifications and discussing the advantages of using different grades of steel.

Tata Steel realized that only 200 large industrial customers were providing the big chunk of its

total sales – 80 percent – while the remaining 20 percent were contributed to by around 5,000 –

6,000 smaller customers. The logical consequence was to adopt different sales strategies for B2B

and B2C. For the 200 key accounts that made up for 80 percent of the sales, the company started

an extensive Customer Value Management Program. Under this Program they allocated a whole

team consisting of people from various department of the company to one customer.

BENEFITS FROM BRANDING

The branding and promotional initiative of Tata Steel showed impressive result. It was found that

the sale of branded product increased by 84 percent. The future xpectation and prospects of the

company are also very positive. Today, Tata Steel is already one of the best branded names in

steel industry and has already started initiatives in the co- branding arena with high end

customers like Ashok Leyland and Telco.

Looking to future, Tata Steel has announced that the company would be focusing on co-

branding initiatives with its high end. Company sources say that initially Tata Steel would be

focusing on the automobile sector and at later stage it will expand to the consumer durables

sector also

COMPETITOR ANALYSIS IN BRANDING ACTIVITIES

The main competitors for Tata Steel are

ISPAT

SAIL

JSW

Uttam Galva, etc.

However if we look at the branding activities undertaken by JSW and SAIL we can see that Tata

Steel is well ahead of them in promotions.

JSW basically uses two types of branding activities

Print media (business magazines, trade publications and industrial directories)

Direct Marketing (direct mail, catalogs and data sheets)

In case of JSW Catalogs and data sheets are the main part of their promotional effort .However

the main drawback is that rarely catalogs alone are used to make a purchasing decision. They

nearly provide buyer with the basis of comparison with other companies’ product once the

decision has been made to purchase a particular product. Data sheets provide detailed technical

information about the product. But sometimes it is a case that sales people seldom have all the

answers that the buyers require. However Tata Steel is quite instrumental in its promotional

activities as compared to its competitors. . Therefore it adopted a program of Retail Value

Management, under which the company provided training to sales people recruited by the

retailers to help increase sales.

They have used all channels of promotions to market their product and has equally emphasized

on its promotional activities as compared to its competitors. Because of this there is tremendous

increase in its sales and Tata Steel is already one of the best branded names in steel industry and

is well placed ahead of its competitors.

Technology Parameters and its Advantages for TATA Steel

Key Facilities Advantage over competition

1> Coupled shallow bath Lower idle time and improved productivity

hydrochloric acid pickling

Less damage of the strips

Uniform product quality

Low acid and energy consumption

2> Tandem cold rolling mill Better gauge and shape accuracy

No damage during storage

Lower cost in terms of investment, manpower, and consumables

Less off-gauge and higher yield

3>

Batch annealing

Can take care of orders in small lots which is the characteristic of

Indian

retail market

Can get close to customer’s requirement of draw- ability,

ductability along

with strength

4> Skin passing

Precise amount of surface roughness is imparted,

Possibility of surface defects like stretch marks, etc., are

eliminated

No need for the customer to prepare the coil before deformation

5> 100% inspection under strobe

lights by trained inspector and

with electrostatic oiling

capability

100% performance at customer’s end and not merely a

specification

guarantee

Matching precise oil requirement of the customer and thus

ensuring

smooth operation at customer’s end.

6> Machine packing with thin No damage due to moisture or loss of oil

plastic film

Increased protection to handling damage

7>

Electrolytic cleaning

Removes dirt or contaminations from the grooves and deepening

on strip

surface

8> Electro discharge texturing

machine

Matte, bright and mirror bright finish depending on the

customer’s

end use requirements

Strengths and Weaknesses of Major Competitors of TATA Steel

Competitior

Name Strength Weakness

SAIL Large capacity; operates through financially

strong Steel quality not suitable for higher-end

traders all over India; supplier of many other

categories of steel in retail market; sales tax

(VAT) advantage due to many number of

own stockyards across India.

applications; do not have authorized

selling agents; little control over traders;

focus on low-end segments; sells large

quantity of steel in standard grade.

Essar Steel High volume, superior technology, good

quality

No organized distribution network for

retail

product, good distribution network existing

for their hot rolled items; ability to supply

number of flat products to the distributors,

marketing of steel; no experience of

providing technical support to the

channel members and customers; attempt

location advantage for western and southern

parts of India; targeting high end sectors like

auto, appliance, etc.

to sell steel through multiple channel

creating dissonance.

Bhusan

Steel &

Power

Good product quality; supplies in

customized Not an integrated steel plant (however

and

Bhushan

Steel &

Strips

blanks; focus on high margin customers like

auto and appliance; good quality service

centre in the mill; can supply small

quantities of deep drawing grades to retail

segments.

captive HR is coming up) not having

strong distributor’s network, availability

of steel is not regular and mostly

opportunistic in nature based on price

differential between domestic and export

market.

Uttam

Galva

Excellent tie-up both domestic and

international

Not an integrated steel plant and depend

on

for hot rolled steel as input material;

doubling the production capacity; good

quality of product; concentrates on local

sales with better service and higher margins;

controls the thinner CR market

import for input materials; availability of

steel is not regular.

in western region.

Hero

Cycles

Narrow mill; 60% own consumption; can

supply High input cost, small volume.

customized sizes; good product quality.