Marketing Strategies of SAIL

7/27/2019 Marketing Strategies of SAIL

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CHAPTER 1

INTRODUCTION

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1.1 OVERVIEW OF THE INDUSTRY

Steel is the backbone of all industrial and commercial activities. Realizing this,

computers planners have been formulating and updating annual plans for production of

iron and steel .it is in this context that a number of steel plans were set up, are still beingset up and the production capacities of the existing ones being expended. Bokaro Steel

Plant (BSP) was the fourth in the row to be set up in public sector. Considering the huge

investment in this venture, it was considered worthwhile to study its economic aspects

including the benefits that have since accrued out of these.

While SAIL and Tata Steel were the main producers, the latter being the only private

player. In 1990, the Indian steel Industry had a production capacity of 23 MT. 1992 saw

the onset of liberalization and the Indian economy was opened to the world. Indian steel

sector also witnessed the entry of several domestic private players and large private

investments flowed into the sector to add fresh capacities. With a current capacity of 35

MT the Indian Steel Industry is today the 8th largest producer of steel in the world.

Today, India produces international standard steel of almost all grades/varieties and has

been a net exporter for the past few years, underlining the growing acceptability of its

products in the global market.

Steel is a highly capital intensive industry and cyclical in nature. Its growth is intertwined

with the growth of the economy at large, and in particular the steel consuming industries

such as manufacturing, housing and infrastructure. Steel, given its backward and forward

linkages, has a large multiplier effect. With capital investments of over Rs 100, 000

crores, the Indian steel industry currently provides direct/indirect employment to over 2

million people. As India moves ahead in the new millennium, the steel industry will play

a critical role in transforming India into an economic superpower.

IRON AND STEEL INDUSTRY: AN OVERVIEW

In the world as a whole, iron and steel industry has witnessed rapid growth during last

100 years. In 1870the world steel production was merely 10 million tones (mt) which

increased threefold to 28 mt in 1900 and over sevenfold to 73mt in 1920.Therafter in the

next 60 years, the production increased about tenfold 717 mt in 1980; highest production

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of 747mt was achieved in 1979.Due to recession, the demand of steel went down after

1979, particularly in technologically advanced countries. Though it has been steadily

increasing since 1983, the production of steel has been regulated to suit the demand

levels.

The last decade saw the Indian steel industry integrating with the global economy and

evolving considerably to adopt world-class production technology to produce high

quality steel. The total investment in the Indian steel since 1990 is over Rs 19,000 crores

mostly in plant equipments, which have been installed after 1990. The steel industry also

went through a turbulent phase between 1997 and 2001 when there was a downturn in the

global steel industry. The progress of the industry in terms of capacity additions,

production, consumption, exports and profitability plateaued off during this phase. But

the industry weathered the storm only to recover in 2002 and is beginning to get back on

its feet given the strong domestic economic growth and revival of demand in global

markets.

In the world today new technologies continue to be ushered in to achieve further

conversation of materials and energy to meet the diversified demand of better steel

qualities, to exercise better process control, to preserve the environment, to remain

competitive in costs and, in short, to cater to the challenging conditions of the world in

progress. Apart from the spirit of innovation and mankinds constant endeavor to excel

challenges offered by the changes in situations motivate the human efforts towards the

technology development.

A look at the world steel production shows as if it has reached its zenith. Although the

picture may be so for the developed countries. While the consumption of the steel is

stagnating in most of the developed countries, it is not the same for developing countries.

While the consumption of steel is stagnating in most of developed countries, there hasbeen continuing growth in steel consumption in developing countries. The per capita

consumption of steel by the steel countries range between 350 kg and 700 kg; but, on the

other hand, the developing countries, with the exception of a few, consume less than 50

kg per head (As in 1990s). It is, therefore, anticipated that with the passage of time, the

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steel consumption of the developing countries will increase to facilitate much needed

industrial and economical development of these countries.

ANALYSIS OF STEEL ACROSS THE GLOBE

The declining price trend after an unprecedented rise in Q1 of 2005 has taken sheen off

the global steel market. However, there is a widespread perception that in the post Q2 of

the current year the global price are bound to go up. Only this time the rise would be

flattened and not abnormal. The domestic demand in Europe is steel low with industries

production showing a downward trend forcing the major steel producer to call back the

price hike announced earlier. The postponement of purchase by the buyers is likely to

result in running down the current inventories. Data released recently indicate that EU

has imported a total of 22.8 million tones including semis; which have gone up by 8

percent in 2004.The import of CR coil and coated coils were also higher than last year

EU exports totaled 245 million tones in 2004.

Area Prod in Jan-Mar

2005 (million tones)

Prod in Jan-Mar

2004 (million tones)

% Growth

EU (25) 47.96 48.13 -0.3

Other Europe 6.83 6.94 -1.6

CIS 27.62 27.67 -0.2

N America 32.42 32.32 0.3

S America 11.21 11.18 0.3

Africa 4.34 3.91 10.8

Middle East 3.58 3.27 9.4

Asia/Oceania* 55.46 54.55 1.7

China 77.79 62.82 23.8

World 267.21 250.79 6.5

*Excluding china

Table 1

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0

50

100

150

200

250

300

production in

jan-march

2005(milliontones)

production in

jan-march

2004(milliontones)

EU 25

other europe

cis

north america

south america

africa

middle east

asia/oceania

china

world

% growth

EU 25 -0.3

other europe -1.6

cis -0.2

north america 0.3

south america 0.3

africa 10.8

middle east 9.4

asia/oceania 1.7china 23.8

world 6.5

Table 2

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-0.3-1.6

-0.2 0.3 0.3

10.89.4

1.7

23.8

6.5

-5

0

5

10

15

20

25

30

% growth

EU 25

other europe

cis

north america

south america

africa

middle east

asia/oceania

china

world

Flat price have fallen in North American market by $70-80 per ton in the last two month.

The current HR coil price by US mills is pegged at $615 fob/t with CR price at $695 per

ton. Compared to flat producer the long product market is relatively stable and there is no

decline in the price of structural more due to fall in import volumes. China has also

remove a 13 percent rebate on steel billet and slab exporter with effect from 1st April

2005 to enhance domestic availability this has led to price fall in April. The export rebate

on bars and rods has been reduced from 13 to 10 percent from 1st May. Indian long

product market is largely influenced by global price of semis. The CIS price of billets is

currently running at $370gob/t; which is nearly at the same level as in March. There are

reports that Russian steel producer are expending a major chunk of the equity

participation in mills in other countries as a long term trading ventures.

Crude steel production figure for 2005 released by HIS exhibits a growth of 6.5 percent

in the first three month over the corresponding period in previous year. China remains the

leading steel producer with growth touching 24 percent.

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1.2 PROFILE OF THE ORGANIZATION

One of the leading steel producer of in the world and the largest steel maker of the

country. SAIL occupies a prime place in the industrial scenario of India. SAIL, is Indias

largest and one of the Worlds leading steel producer with a turnover of around Rs.16500

crores. Quality steel products from SASIL, have carved a niche for themselves in the

global steel market. The company aims at making its global presence felt through export,

joint ventures and alliance with internationally reputed steel markets.

In a fast changing product market scenario, SAIL has lunched a new strategy for

achieving a turnaround, which includes financial restructuring and business restructuring

to focus on core business of making carbon steel and withdrawing from non-core and

non-viable activities. Making employees focus on market requirement, ensuring greater

involvement of plans in marketing initiative, achieving cost leadership through rigorous

cost cutting drive and rationalizing manpower to bring down the total number of

employees to competitive levels are some other facets of the strategy.

In the new millennium, there is a strong focus on SAILs business activities for customer

satisfaction, adopting an approach for increased synergy between production capabilities

and market needs and ensuring supply of customized products with shorter lead times.

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SAIL has been progressively investing in technological up gradation of its plants and

facilities for supporting costs reduction, improving product quality and yields, and for

environmental protection. In the new millennium, the accent of SAIL has been to

accelerated the process of change, adapt to emerging competitive business environment

and excel as a business organization both within and outside India.

VISION OF SAIL

To be a respected world Class Corporation and the leader in Indian steel business in

quality, productivity, profitability and customer satisfaction.

MISSION OF SAIL

We build lasting relationships with customers based on trust and mutual benefit.

We uphold highest ethical standards in conduct of our business.

We create and nurture a culture that supports flexibility, learning and is proactive to

change.

We chart a challenging career for employees with opportunities for advancement and

rewards.

We value the opportunity and responsibility to make a meaningful difference in

peoples lives.

BOKARO STEEL PLANT AT A GLANCE

DEVLOPMENT OF BOKARO STEEL PLANT

In September 1955 the Govt. of India decided to develop the Bokaro site for a steel plant.

Accordingly, an initial provision of Rs. 3.75 cr. Was made and Hindustan Steel Limited

(HSL) was asked to take up the preliminary work. HSL appointed M.N.Dastur &Co., the

consultants, for carrying out the feasibility study. The feasibility report, submitted in

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December 1959, recommended establishment of a 2 million-tone plant, which was

accepted. M.N.Dastur & Co. was then commissioned to prepare a Detailed Project Report

(DPR) in May 1962. The DPR envisaged 1.5 mt. Plants in stage 1st and 4 mt. Plants in

stage 2nd. Again, on the basis of DPR, Hindustan Steel Works Construction Limited

were appointed as civil contractors to undertake the site work.

In order to arrange

external finance,

Government of India

started negotiations

with government of

USA. Accordingly, it

was agreed in January

1962 that techno-

economic survey

would be made by US Govt. Agency for International Development (US AID). The

report, submitted in December 1962 by US Steel Corporation, who was appointed by

USA to conduct the survey, envisaged a 1.4-mt steel plant, increasing its capacity to 4 mt

over of 10 years. However, there was sharp resistance in August 1963 for providing

assistance to state aided project in India and that ended the scope for American finance.

A global quest for financial aid by any other country was started which ultimately

culminated in the USSR agreeing to finance the project. An agreement was signed with

the Soviets on 25 January 1965 for rendering financial assistance and technical

collaboration for establishment of Bokaro Steel Plant. In pursuance to this agreement V/o

Tiazpromexport, Moscow, prepared a DPR for the diverse aspect of works at Bokaro

between 1965 and 1969. Bokaro Steel Plant was originally incorporated as a limited

company in Jan. 1964. But, after the information of Sail in 1973,m it become the wholly

owned subsidiary of SAIL in terms of public Sectors Iron and Steel companies

(Restricting and Miscellaneous Provisions Act, 1978).

The Plant was conceived as the countrys first SWADESHI steel plant with build with

maximum indigenization going into the going into the equipments, Materials and Know

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how. Thus, this project has been a radiant shift from the earlier dependence on foreign

sources for know-how and consultancy, design, and equipment, supervision, erection, etc.

to almost a full measure of self-reliance. Its first of 1.7 million ton ingot steel

commenced on 2nd October. 1972 with the commissioning of the third blast furnace.

Except for minor units in cold Rolling mills, all units of 4 million-tons stages have

already been commissioned as on date. The Plant is designed to produce flat products like

Hot Rolled coils, Hot Rolled Plates, Hot Rolled Sheets, Cold Rolled coils, Cold Rolled

Sheets, Galvanized (Plain & Corrugated) Sheets and Tin Mill Black Plates Linked with

major raw materials sources, the supply of Iron Ore and fluxes is ensured from the

captive mines of SAIL situated at Kiriburu, Meghataburu, Bhawanathpur and Kuteshwar.

Some more leasehold for limestone/dolomite is being developed for meeting the future

requirements. Washed coal supplied from different washeries at Dugdha, Kathara, and

Giddi, ETC. and raw coals obtained from jharia coalfield. Thus, most of the coal

requirements are met from nearby sources making Bokaro a coal-based steel plant.

ANNUAL RAW MATETIAL CONSUMPTION OF BOKARO STEEL

PLANT

Raw material Consumption in Thousand tones

1.5MT stage 4.0 MT stage

Lump Iron Ore 1240 2164

Iron Ore fines 2930 5393

Limestone for sinter plant 1185 1906

Limestone for lime & dolomite shop 443 1067

Manganese Ore 140 256

Dolomite for lime & dolomite shop 57 139

Quartizite 90 140

Coking Coal 3344 5573

Ferro Alloys 14.8 34.8

Bauxite 17 40

Quartzite sand for foundries 12.4 29

Maudling clays 5.8 9

Muddling for thermal power plant 231 372

Table 2

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PRICING POLICY

Bokaro Steel Plant is one of the largest integrated steel plants in Asia. BSL mainly

produces Hot rolled sheets, cold rolled sheets, galvanized sheets, corrugated sheets etc.

but in the production of these items, many valuable by products are generated. In order to

maximize sale revenue and cut down the cost of main products, these by products are

sold, but these by products being of high market value need special efforts and procedure

for selling. Here the marketing department of BSL plays a major role.

These by products generated in the process of converting coal to coke though of very

high market value cannot compete with similar petroleum products in term of quality.

As a by product selling company cannot become a market leader in those products when

there is the presence of large units selling similar products as their main product so BSL

cannot become market leader.

BSL is not market leader in the field so its prices mainly depend upon the prices set by

market leaders. BSL follows the prices set by the market leaders though there is other

factors also which play a vital part in price determination. These factors are Dispatches of

last three months.

(a) Demand

(b) Stock in hand

Besides these factors the market forces decide the price and marketing department meet

those prices. The main objective of the pricing policy of BSL is maximization of sales

revenue. The objective is fulfilled by either increasing the prices when the demand is

high or decreasing the prices when demand is low or giving some turn over discount on

its products. The pricing committee takes all decisions relating to pricing policies.

DISCOUNT POLICY

Generally no discount is offered but in some cases when bulk sale and quick disposal is

given preference then discount is offered. Currently only on ammonium sulphate discount

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is offered. These discounts are termed as Turn over discount (TOD). On ammonium

sulphate the discount is as follows 1000 to 1500 metric tone Rs. 200 per metric ton.


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1.3 PROBLEMS OF THE COMPANY

It has to create credibility in the public.

It has to compete with the wide range of products that its competitors offer.

It has to decide on the strategies to be adopted which will help to counter competition.

It has to increase its no. of offices and also enhance its network of agents so that it

can compete with other companies.

It has to focus on providing effective training to its employees so that the customer

base can be increased and moreover customer satisfaction can be ensured.

1.4 Competitors Analysis

Tata Steel

Tata Steel (earlier known as Tata Iron & Steel Company or Tisco) represents the

countrys single largest, integrated steel plant in the private sector. The company has a

wide product portfolio, which includes flat and long steel, tubes, bearings, ferro-alloys

and minerals as well as cargo handling services. While in terms of size, Tata Steel ranks

34th in the world; it was ranked first (for the second time) among 23 world class steel

companies by World Steel Dynamics in June 2005. Recent overseas acquisitions are Tata

Steel buying Anglo-Dutch firm Corus for over 12 billion dollars

With its plant located in Jamshedpur (Jharkhand) and captive iron ore mines and

collieries in the vicinity, Tata Steel enjoys a distinct competitive advantage. The main

plant at Jamshedpur manufactures 5 MTPA of flat and long products, while its recently

acquired Singapore-based company, NatSteel Asia, manufactures 2 MTPA of steel across

Singapore, China, Philippines, Malaysia and Vietnam. Corporate Catalyst India A report

on Indian Iron and Steel Industry

Steel Authority of India Limited (SAIL)

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Steel Authority of India Limited (SAIL) is a leading Public Sector Undertaking (PSU) in

which the Government of India owns about 86 per cent of equity. It is a fully integrated

iron and steel maker, producing both basic and special steels for domestic construction,

engineering, power, railway, automotive and defence industries and for sale in export

markets. It is ranked amongst the top ten public sector companies in India in terms of

turnover.

They manufactures and sells a broad range of steel products, including hot and cold

rolled sheets and coils, galvanised sheets, electrical sheets, structurals, railway products,

plates, bars and rods, stainless steel and other alloy steels.

SAIL have five integrated plants and three special steel plants, located principally in the

eastern and central regions of India and situated close to domestic sources of raw

materials, including the Companys iron ore, limestone and dolomite mines. The

company has the distinction of being Indias largest producer of iron ore and of having

the countrys second largest mines network. This gives them a competitive edge in terms

of captive availability of iron ore, limestone, and dolomite which are inputs for steel

making.

Bhushan Power & Steel Ltd

Bhushan Power & Steel Ltd., an ISO 9002 certified company, is a merged entity of

Bhushan Industries Ltd., Bhushan Metallics Ltd. and Decor Steel Ltd. Bhushan Steel has

a turnover of more than USD 540 Million and is a leading manufacturer of Flat, Round

and value added products in Steel.

Bhushan have 7World class and state of art plants at Chandigarh, Derabassi, Kolkata and

Orissa in India. A completely integrated plant is commissioned under Phase I in Orissa

and Phase II is all set for take off. In Orissa plant, technology and equipments are

procured from world-renowned Companies like Luirgi from Germany, ABB Ltd., SMS

Demag, Siemens etc. It is selling its Value added range of products in Secondary Steel

through a large distribution network in India (comprising more than 25 sales offices) and

Abroad.

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ESSAR Steel

Essar Steel Limited (the Company) is the flagship Company of the Essar Group and

looks after the Groups interest in the steel business. The Company was incorporated in

June 1976 under the name of Essar Construction Limited and was engaged primarily in

core sector activities, including marine construction, pipeline laying, dredging and other

port-related activities. In 1984, the Company ventured further into other core sectors

mainly the field of exploration and development, drilling onshore and offshore oil and

gas wells for Indian Public Sector oil exploration companies. In view of this the

Companys name was then changed to Essar Offshore and Exploration Limited in May

1987.

In August 1987, the Companys name was changed to Essar Gujarat Limited, to reflect its

highly diversified business interest. In 1988, the Company made an initial public offer for

its shares, which are now listed on Bombay Stock Exchange, National Stock Exchange of

India and 2 other Indian Stock Exchanges.

The Company diversified into the steel business in late 1980s with the purchase of an

HBI manufacturing plant in Emden, Germany, which was dismantled and relocated to

Hazira, on the west coast of India.

1.5 SWOT ANALYSIS

The SWOT analysis of the company refers to the strengths & weaknesses inherent

in the organization & the opportunities & threats faced by them from the environment,

internal as well as external. This analysis is the foundation stone of the strategic planning

process as well as short-term plans needed to attain the strategic objective of the

organization.

The analysis has been done in order to have a better understanding of the

organization. The information given by the organization has been used to carry out the

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analysis. The strengths, weaknesses, opportunities & threats identified are enumerated as

follows:

A) Strength:

One of the largest and lowest cost producers of coal based sponge iron

in the country.

Total backward integration ensuring steady stream of profits

Captive mining of iron ore and coal with coal washery facility

Captive power generation

Identifying projects and business opportunities.

Expertise in project implementation at low capital cost and within the

schedule time.

Lowest cost producer of sponge iron (coal based in the country).

Huge reserve of iron ore and coal in mines.

The worlds longest rail developed in the factory brightens companys

future outlook.

B) Weakness:

Domestic consumption of steel dependent on infrastructure spending by

GOI.

C) Opportunity:

Forward integration into value-added Products, Rails & Universal

beams will drive future growth.

Association with NKK to create huge export potential for Rails.

State of Chhattisgarh encourages the setting up of new power projects.

The Governments policy to privatize the power trading leaves new

opportunities opened for the company.

Reduced availability of steel scrap (substitute for the sponge iron) will

increase demand for the sponge iron.

The increasing price of steel in the market will maximize the

profitability of the company further.

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D) Threats:

Sponge iron prices movements are dependent on international scrap

prices, which fluctuate widely.

The main competitors like SAIL, TISCO, MITTAL STEEL, JSPL etc.

of BSIL.

E) Challenges:

The gap between demand and supply of steel is increasing. The

challenge before the company is to fulfill the customer needs through

increased production.

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CHAPTER 2

RESEARCHOBJECTIVE AND

METHODOLOGY

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2.1 SIGNIFICANCE

The first & foremost step in any research work is to identify the problems or

objectives on which the researcher has to work on.

Any Research has its own importance in any business organization . The

research shows the real fact about product as well as organization. Research is a

systematic and scientific investigation of any idea either precise or abstract from

a continuous basis for learning , it could be either exploratory or descriptive.

According to above definition research is a systematic and scientific

investigation through which any organization try to find out its strength and

weakness as well as opportunity and threat. As we know in the present era the

business activities have become more complex and complicated due to modern

technology, globalization and liberalization and in other hand today customer are

highly conscious about products and brand .

In recent time customers are not blind follower of a product. They are giving

high priority to all feature like price, quality, innovative features etc. But after all

this features brand becomes the inevitable parts of any product because it gives the

complete identification of product so it is also the one most important part.

My research work is highly focused on this issue, which is important for me as

well as the organization. During research work I learnt retailers opinion about product

and services .

I learnt which factors affect the retailer to sale an individual product, this

research gives me insight to understand the retailers problem as well their area of

interest, in this I got the great experience about the market

For company point of view I tried to find the serious drawback, which is

highly, affected the sale of chocolates. I tried to find market share of SAIL which

is itself important .I tried to find the sale figure of SAIL in term of rupees, due

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to some hurdle I dont claim my research work is 100% accurate because so many

factors was uncontrolled during the project .I tried to finish my research with

100% accuracy which is best available in market .

2.2 MANAGERIAL USEFULNESS OF THE STUDY

The research is a systematic investigation of any idea. The research is widely used

in the business world for analyzing & evaluation business policy as well as the analyzing

& evaluates competitors activity and policy. The research is itself valuable. The research

gives fact and figure, which is useful in planning.

As it is obvious any business activity is based on to the 4 Ps of marketing viz.

price, product, promotion, place all these Ps have its own importance and all are inter-

related with each other but most importantly all the factor are independent in the nature.

In any organization all factors are carefully formulated to gain a success in the market. It

is very important for business analyst to evaluate the modern trend and market position.

In the other hand it is vital for business operation to know the need and desire of

customer. All the necessary information is received from market by research work.

The study reveals many facts that have come up during my project and these facts

can either be used as opportunities in exploring and expanding the business as well as can

be used as safeguards against threats by the competitions. To prepare an effective

marketing strategy a company must study it s competitors as well as its actual and

potential retailer. A company should maintain good relation with their distributors and

retailers keeping in view competitive orientation in todays global market. Company

should neither put much emphasis on competitors positioning nor should it solely

concentrate on its own products and policy. Rather it should find midway between these

two extremes and adopt flexible policy. Companies should manage a good balance of

declares retailer, consumer & competitors monitoring .

The information will prove beneficial in taking proactive action for combating

competition .the standing of the company and its competitors in the mind off the retailer

in a vital factor in deciding the success of business the study also aims at finding out the

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market share in term of their sale, product penetration demand etc which is adjusted by

retailer. This information is good guide to management as it brings out the strength of the

competition their product penetration, product demand their promotion policy, which

gives an overview where the company needs to improve. This study basically aimed at

providing the management desired vital information about the market situation.

2.3 OBJECTIVES OF THE STUDY

Steel Industries play a vital role in maximization of national income in every country like

India. The objective of the project is to evaluate the contribution and performance of steel

industries in India.

This evaluation is also concerned with the competitiveness of Indian steel industries in

foreign market. These evaluations are based on the kind of efforts that the Indian steel

industries are making and generating desired results for maximum performance.

The following are the objectives of my present study:-

To study the role of Indian Steel Industry in the contribution to National Income.

To evaluate the present marketing strategy and key attributes help to enhance the

efficiency of Steel Industry.

To know the export capacity of Indian steel industry to enhance national income.

2.4 SCOPE OF THE STUDY

There are some of the following scopes of study:-

This study can be applied to find out an effective role of steel industries related to

other economic sectors in India.

From the present study we can know the market share of different Steel firms and

accordingly formulated strategy to enhance it.

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The present study can be extended to assess the present marketing condition of

different Steel Plants.

The study can be used to design a proper product, price, place & promotional strategy

for the by-products of different Steel Plants.

2.5 RESEARCH METHODOLOGY

The author has carried out a research which is both qualitative and quantitative in its

support. The qualitative approach applies to both, descriptive and inductive forms of

research. While as in case of quantitative approach, an extensive use has been made of

the literature available to carry out a detail research on the nature of the problem. The

author has chosen SAIL & TATA Steel as the target companies in particular.

A combination of both primary and secondary resources have been used to achieve the

aims and objectives of this report

Primary data collection methods

Sample size: 100

Sample area: NCR Delhi

Sample unit: officials and employees of SAIL & Tata steel

Method of collection of data: Questionnaire method as well as interview method was

employed to extract best results from the target respondents

Secondary Research

The secondary sources of data consists of books for an academic perspective, industry

journals, magazines for competitive strategy, annual reports, government publications

and views of other authors.

Some of the secondary sources of information include

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Books

Internet links

Journals

Analysis

The results of the questionnaire were analyzed using graphs and charts and a trend on the

internal working of the organization were marked out. This allowed reaching conclusions

on the issue as to whether the internal operations of the organization are conducive for

growth or not.

The results of the interviews would allow us to go in-depth into the marketing policies of

the organization and would allow us to link it to the future competitive position.

Both quantitative and qualitative data analysis shall be done by using appropriate means

which complies with both academic and professional standards.

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2.6 LIMITATIONS & DIFFICULTIES

In completing the study the investigator encountered number of difficulties.

In such a short span of time it is very difficult to study the whole personnel functions

or a/c of the organization.

The impact of the marketing programme on organization is a continuous process. It is

impossible to study the whole procedure within such a short span

Apart from this there were lots of other problems encountered during the research

work. The officials were very hesitant and reluctant to give interviews and answers toquestions of investigators.

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CHAPTER 3

CONCEPTUAL

DISCUSSION

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In this chapter the author has discussed and critically analyzed the literature related to

competitive dimensions & advantages which are crucial in modern economic

environment. The effective marketing strategies of SAIL to attain competitive advantage

have also been discussed here. Techno-economic parameters, cost effectiveness, human

resource management issues, Research & Development, environment management,

public relations, cost competitiveness, quality competitiveness, all these issues in regard

to steel sector in India have been discussed in length. This section also discusses the

policies of marketing and strategic planning as well as the demand for steel and its

relevance to national economy.

COMPETITIVE DIMENSIONS & ADVANTAGES ARE CRUCIAL

IN MODERN ECONOMIC ENVIRONMENT

Given the choices that customers face today, how do they decide which product or

service to buy? Different customers are attracted by different attributes. Some customers

are primarily interested in the cost of a product or service, and correspondingly some

companies attempt to position themselves to offer the lowest price. The major

competitive dimensions that form the competitive position of a company include the

following.

Cost Make it cheap Within every industry, there is usually a segment of the market

that buys solely on the basis of low cost. To successfully compete in this niche, a firm

must be the low cost producer, but even doing this does not always guarantee profitability

and success.

Product quality and reliability Make it good. Quality can be divided into two

categories: product quality and process quality. The level of quality in a products design

will vary with the market segment at which it is aimed. Obviously, a childs first two

wheeled bicycle is of significantly different quality than the bicycle of a world class

cyclist. The goal in establishing the proper level of product quality is to focus on the

requirements of the customer. Over-designed products with too much quality will be

viewed as prohibitively expensive. Under-designed products, on the other hand, will lose

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customers to products that cost a little more but are perceived by the customers as

offering greater value.

Process quality is critical because it relates directly to the reliability of the product.

Regardless of whether the product is a childs first two wheeler or a bicycle for an

international cyclist, customers want products without defects. Thus, the goal of process

quality is to produce error free products.

Delivery speedMake it fast. In some markets, a companys ability to delivery more

quickly than its competitors may be critical. Seeing a need for speedy, reliable overnight

delivery, FEDEX became a $15 billion company and the worlds large expedited delivery

service.

Delivery reliabilityDeliver it when promised. This dimension relates to the ability

of the firm to supply the product or service on or before a promised delivery due date. For

an automobile manufacturer it is very important that their supplier of tires provide the

needed quantity and types for each days car production.

Coping with changes in demand Change its volume. In many markets, a

companys ability to respond to increases and a decrease in demand is an important factor

in its ability to compete. It is well known that a company with increasing demand can do

little wrong. When demand is strong and increasing, costs are continuously reduced due

to economics of scale, and investments in new technologies can be easily justified. But

scaling back when demand decreases may require many difficult decisions relating to

laying off employees and related reductions in assets. The ability to effectively deal with

dynamic market demand over the loan term is an essential element of operations

strategies.

Flexibility and new product introduction speedChange it. Flexibility, from astrategic perspective refers to the ability of a company to offer a wide variety of products

to its customers. An important element of this ability to offer different products is the

time required for a company to develop a new product and to convert its processes to

offer the new product.

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According to a report published in Times of India (2007) SAIL had received excellent

rating for achieving targets set in the MOU with the Government for the year 2005-06.

Considering the sustained growth demonstrated by the company during 2006-07, a

similar rating is expected this year as well. During 2005-06, while maintaining capacity

utilisation at 104%, the company focused on the production of finished steel, lower

energy consumption and reduction in coke rate, increased production through the

continuous cast (CC) route and improved the product mix during 2006-07.

Effective strategies of SAIL to attain competitive advantage

Despite the market remained buoyant, the rising steel production worldwide put

tremendous pressure on availability of essential inputs like coking coal. Despite facing a

severe coking coal crisis during the first half of 2006-07, however, the SAIL plants

achieved all-time best performance by optimising operations and laying a thrust on value

addition in downstream units such as production of finished steel, plates, rails, structural

steel, etc., total finished steel production went up by 4 lakh tones to a record level of 9.28

million tonnes (MT), a growth of 5% over the previous year. The proportion of finished

steel production in total steel went up to 84% during 2006-07 from a level of 80%

achieved in 2005-06. The SAIL plants showed marginal increase in production of crude

steel as well as saleable steel 21,000 tonnes and 4,000 tonnes respectively.

The four main integrated steel plants of SAIL produced a record 7.53 MT of steel through

the concast route during the year. This was 4% higher than the CC production of the

previous year. As a result, the proportion of BOF-CC production went up to 64% of total

crude steel production. In fact, 2006-07 save best-ever average capacity utilisation of

continuous casting facilities at 125%. Production of value-added items like plates, bars &

rounds and railway products recorded growth. Plate production at 2.12 MT was the

highest ever, with a growth of 15% Bhilai steel plant also produced 864,00 tonnes of

rails, the highest so far and 7% more than the production in 2005-06. The first

consignment of 65-meter long rails welded into 130-meter panels was dispatched by BSP

to the Indian Railways during the year. Production of wheels &axels by Durgapur Steel

Plant at 29,000 tonnes was the highest ever and 38% more than that of 2005-06.

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The long product plants also produced the highest-ever volume of 5.4 lakh tonnes of bar

& rounds during the year recording a growth of 8%. A total of 6 lakh tonnes of structurals

were produced by SAIL in 2006-07, 3% higher than the previous year and the highest so

far. The three special steel plants of SAIL at Durgapuri, Salem and Bhadravati together

produced 3.79 lakh tonnes of saleable steel, the highest ever and 27% more than their

achievement of 2005-06, contributing substantially to the companys cumulative

production performance. The total iron ore requirement of the SAIL plants was met from

captive sources. The companys mines produced 19.83 MT of iron ore, the highest ever,

during the year. The mines of Raw Materials Division in the eastern part of the country

together produced nearly 13 MT of iron ore, showing a growth of around 1.2% over the

previous year and setting a record. While all the RMD mines registered best-ever yearly

output, Barusa Iron Mine deserves special mention for showing highest growth of 14.5%

with a production volume of 1,341,000 tonnes.

The special thrust laid by RMD during 2006-07 on quality enhancement measures and

cost reduction resulted in better productivity and effective mitigation of the companys

variable input costs. Among the various steps taken by RMD to enhance efficiency were

better mine planning, development of mines in new areas, improved processing facilities,

and replacement of old heavy earthmoving machinery with new equipment. Adoption of

various cost cutting measures led to substantial savings. During 2006-07, SAIL became

the first industrial enterprise in the country to wheel surplus power from one of its captive

units to another through the national grid. Generation of power by the captive power units

at 525 MW was also the highest ever, showing a growth of 6% over 2005-06

Techno-economic parameters

The following are the techno-economic parameters:-

Coke rate: Lowest ever rate of 536 kg/tonne of hot metal was achieved during the year,

an improvement of 1% over 2005-06.

Refractory consumption: At 16.7 kg/tonne of crude steel, was lowest ever, 9% lower

than the consumption in 2005-06, due to significant increase in BOF lining and ladle life

at all the plants.

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Energy consumption: The SAIL plants together consumed only 7.28 giga calories per

tonne of crude steel on an average, which was 2% lower than the previous year, in spite

of the increase in production of value-added steel which consumes higher energy.

Cost Effectiveness

Economic Times states that the thrust on improving efficiency of cost management

launched by SAIL during the downturn in the steel sector continued during the year 2005.

New schemes were identified and existing schemes reviewed and revised to offset the

impact of the sharp rise in input prices, particularly in the case of coking coal, Ferro

alloys, etc., during the year, resulting in savings of about Rs. 130 crore. SAILs cost

management endeavours once again received recognition at the national level. The

Institute of Cost & Works Accountants of India adjudged SAIL as being the second best

company in the public sector in India during 2005 in this parameter and presented the

company its National Award for Excellence in Cost Management. SAIL had received the

winners trophy last year for excellence in cost reduction during 2004.

Marketing Muscle

The consumption of finished steel in the country is estimated to have crossed the 33 MT

mark during 2006-07 a growth of about 6% over the previous year. In line with the

increased level of consumption, SAIL established a new domestic sales record of 10.3

MT, an increase of 8% over the achievement of the previous year. To ensure higher

availability of steel in the domestic market, SAIL consciously contained exports at a

minimum level during the year. The company shipped only about 4 lakh tonnes of steel

during the year against 11 lakh tonnes in 2003-04. SAIL sold a total volume of 8.6 MT of

finished steel during 2006-07 recording a growth of 8%. The major product categories in

which sales growth took place were plates (32%), HR coils (8%), TMT (30%), wheels &

axles (33%) and heavy structurals (20%). Supplies of rails to the Indian Railways

increased by 5% over the previous year to 7.3 lakh tonnes, including long rails up to a

length of 78 meters.

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A thrust was given on supplying steel on priority to user segments of national importance

such as government, PSUs (public sector undertakings) and state small scale industry

corporations (SSICs). As a result, there was a 25% increase in supplies of SAIL steel to

the government sector and 65% to SSICs. Along with 40% higher supplies to projects,

SAIL was able to hike supplies to consumers by 17% during the year on an overall basis.

During the year, all the branches, stockyards and offices of CMO were linked to a

centralised database. This helped in online availability of data, consistent data integrity

and seamless information flow across all applications, leading to increased efficiency in

serving customers.

Human Resource Management

Around 4,700 employees separated from the company during FY 07, around 1,440

voluntarily. SAILs total manpower at the end of the year thus stood at around 127,000,

showing a reduction of about 48,000 since 1998. The companys labour productivity

grew by 4% to 142 tones/man/year in 2006-07. To equip employees with higher technical

skills, SAIL has signed an agreement with Tata-Corus/UK and CAI/Austria for provision

of specialised training.

Sharing of prosperity with employees was a major management thrust during 2006-07.

Among the initiatives taken in this regard were payment of wage/salary arrears for the

period 1.1.1997 31.12.2000, restoration of earned leave encashment, enhancement in

conveyance expenses, mining allowance, reimbursement of night shift expenses,

enhanced incentive payments, etc. A rolling trophy was introduced to encourage

management excellence amongst young managers of the company. A team from Bhilai

Steel Plant lifted the inaugural Chairmans Trophy for Young Managers for the year 2004

from amongst 130 contesting teams across the organisation. Ten SAIL employees were

selected by the Ministry of Labour for the nations highest awards recognising

exceptional achievements of workmen for the year 2007. Three BSP employees will

receive the Shram Vir shile 7 employees (5 from BSP and 2 from VISL) will receive the

Shrem Shri title later this year.

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Research & Development

The development measures at SAIL projects at SAIL focus on process improvement, cost

competitiveness, product quality, product development and basic research for

improvement in techno-economic parameters to increase capacity utilisation. Major

initiatives aimed at cost competitiveness included:

Improvement in lining life of converter to 2,000 heats in SMS-II at RSP including steel

ladles at RSP & BSP by technological initiatives

Raising productivity of DSP Sinter Plant to 1.36 tonnes/m/hr (peak 1.6 tonnes)

Increase in BF productivity at RSP by process changes in furnace working from

peripheral working, reversal off BLT matrix and other changes in charging system.

Technological initiatives like hot charging of wheels, modification of ingot design, etc.,

helped in record production of wheels & excles at DSP

Reduction in HSM roll spalling at BSL

Measures to obtain increased campaign length and reduced roll consumption at BSL.

Installation of automation of hot saws in BSPs Rail & Structural Mill

Product development efforts by RDCIS included the following:

SAIL-HITEN 690 AR grade plates at BSP

Spring steel at DSP

High strength cold rolled steel (HSCR-35) at BSL.

Steel noise barriers for roads/highways

DMR-249 for Indian Navy warships

Environment Management

According to Annual Report of SAIL published in March 2007, SAIL is committed to

providing a healthy environment in and around its steel plants. Over 2 lakh trees planted

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in 2006-07 added further substance to the companys efforts in this direction. Around 13

million trees have been planted so far by SAIL at different plant/unit/mine locations. The

SAIL plants/units maintained their thrust on controlling pollution during the year. Some

of them even received awards for excellence in pollution control measures. They are:

Gold award in metal sector for outstanding achievement in environment management for

2003-04 by Greentech Foundation/New Delhi to BSP and RSP

Indira Gandhi Memorial National Award-2004 for Excellent Pollution Control

Implementation Gold Award by International Greenland Society (IGS)/Hyderabad to

BSP and RSP

Indira Gandhi Memorial National Award for Excellent Environment and Ecological

Implementation Gold Award by IGS to Barsua Iron Mine.

Public Relations

According to Annual Report of SAIL published in March 2007, to reinforce employee

morale, internal communication activities were further strengthened. A planned approach

yielded excellent results, with appreciative feedback from employees at all levels on the

initiatives taken and themes selected to motivate, inform and instill pride in the

workforce. Wide and focused communication through both print and electronic media

strengthened the image of the organisation amongst the companys stakeholders and

general public. Revival of the television ad campaign Theres a little bit of SAIL in

everybodys life in the later part of the year, re-inforced the companys image as the

industry leader in viewers minds due to its excellent recall value. Other campaigns such

as the one highlighting SAILs turnaround as the most impressive in Indian industry,

Steel Green and Steel in Need, SAIL in Deed were well received by the target audiences.

A radio jingle in Hindi, Safetypin se flyover..., also generated popular response.

Cost competitiveness

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According to Annual Report of SAIL published in March 2007, the following cost

reduction measures are adopted in SAIL to gain competitive advantage:-

(a) Reduction in fixed cost through volume growth, reduction in manpower cost and

financial charges;

(b) Reduction in variable cost through technological interventions like elimination of

ingot steel route, 100% Basic Oxygen Furnace and Continuous Casting, coke rate

reduction via CDI/auxiliary fuel injection, and higher levels of process control

computerization/automation, leading to enhancement of operating efficiency; and

(c) By business process improvements such as streamlining of supplies of key inputs of

steel making through higher utilisation of e-commerce, centralized procurement for

select items, etc.

Quality competitiveness:

SAIL also emphasize on technology & input quality improvement across value chain;

thrust on special quality steel and new products; improvement in process consistency and

metal treatment; advanced online testing and quality control facilities;

standardization/automation/process control & IT. Corporate Plan-2012 has considered the

market growth projections assuming overall steel consumption at about 8% per annum.

However, the growth trends and macro-economic indicators could lead to higher growth

potential. Therefore, depending on the market growth, strategies of competitors, global

economic scenario, government policies and resource availability, SAILs plans may be

revised from time to time, and further growth in terms of volume, products, etc., may be

aimed through Greenfield investments, acquisitions/mergers etc. The current plan

provides the broad direction for SAIL to move forward and would be reviewed

periodically.

Marketing Strategies Of SAIL

Sinha (2007) categorically states the clinical marketing strategies adopted by SAIL,

according to Sinha (2007), the Steel being an industrial commodity it is very necessary to

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JIT Delivery means just in time delivery. SAIL is able to make delivery just in time

because it works in pre-planned manner; it takes order only after consulting the

production units. So that the products car be delivered in right time.

Production According To Market Needs

SAIL is always in touch in market and tries to produce according to market needs. SAIL

tries to produce quality products / new products which full fill the need of market.

Policies Of Marketing And Strategic Planning

SAIL has responsible function in the working of marketing department. All the risky

developments, taking out solution to crippled situations, this section carries out product

pricing and related activities, some of the programmes, policies and procedures are as

follows :-

Positioning the product a value based place in customer mind.

Finalize annual sales plan and quantity, monthly, weekly, and daily rolling

programme of Rolling mills in consultation with CMO and mills. This plan is basedon the sales forecast receive from JPU SPL/ Iron and steel controller.

Optimizing the product-mix by proper utilization of available stocks.

Receiving Enquiries and complaints, cancellation of orders etc.

Coordinating the works of mills and traffic department so as to maximize dispatches.

Co-ordinations with CMO from stages of enquiry, for exports, development of new

Profiles, sections, modification of product scheduling till the orders are completed.

Development of new qualities of steel.

Periodical market surveys of products to analyze the market position.

Implementation of suggestions received from the customers feed bock.

Ensure customer satisfaction by meeting customers regularly; provide redressal to

their problems and fulfillment of demand.

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GROWTH OF STEEL INDUSTRY IN INDIA

The Indian steel industrys onward journey in the recent time has been caused of great

pride to all of us. The last four-year have seen the deregulated Indian steel industry

performing at its peak level in almost all spheres. Steel production went up by 8 percent

to reach a level of 33 million tones in2002-03 from 31 million tons recorded a year

before. The domestic demand for steel also registered a growth rate of 6 percent and grew

from 27 million toes in 2001-02 to 29 million tons in 2002-03. The most spectacular

achievement has, however, been recorded in export performance. Export of finished steel

from India increased by a whopping 37 percent from 2.7 million tons in 2001-02 to 3.7

million tons in 2002-03. In addition, significant improvement was noted in the exports of

semi-finished steel, stainless steel and pig iron. All these favorable trends have been

reflected in the improved profitability of the major steel markets in both the public and

private sectors.

The biggest success story has been that of TISCO, which has recorded an increase of 391

percent in its profit during this fiscal compared to the previous year. ESSARs balance

sheet has been in the black after a long time, while other major steel markers nave

reduced their losses significantly. The fact that such an improvement has come at thetime of intense global competition and worrisome proliferation of non-tariff barriers in

the development world, speaks volumes about the resilience, the innovativeness and,

above all, the competitive spirit of the Indian exporters of steel. The dexterity, with which

the Indian exporters diversified their destination markets, modified the composition of

their export basket to suit the changing global demand profile, affected sizable reduction

in production in production costs and adoption of state-of-the art technologies provides

ample testimony to the maturity of this industry. From highly protected inward-looking

industry of the pre-liberalization years it has matures into a modern and globally

integrated industry in an astonishingly short span of time.

The evolution of steel industry can be divided into three distinct phases. The first phase

commenced with pioneering efforts of the lateJamsetji Nusserwanji Tata who laid the

foundation of modern steel industry in India by establishing a steel plant at Jamshedpur

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(Tata Iron and Steel Co.) in 1906 in the face of sever odds. Despite initial difficulties, the

company underwent continuous expansion achieving 8% average annual growth rate of

capacity during first 30 years. In 1918, the Indian iron and steel company (IISCO) was

founded by British interests in Bengal. At first IISCO restricted it self to the manufacture

of big iron primarily for export to Great Britain. In1926, The steel corporation of Bengal

was formed which under took the construction of a steel mill adjacent to their blast

furnaces. Another small plant at Bhadravati in Mysore was founded in 1918 to produce

charcoal pig iron. In the mid thirties it added facilities to manufacture steel. In the context

of development, which was taking place in the rest of the world, their efforts could be

considered creditable. At the end of Second World War, India had a capacity if 1.5

million tones, 1 percent of the worlds production

The second phase began immediately after independence. it was clear that if economic

independence was to be achieved after political independence and low standard of living

of masses was to be raised, a much more accelerated industrial growth was essential. For

providing the infrastructure base, even in the First Five Year Plan, new steel plants were

planned. It was decided to set up simultaneously three steel plants. An agreement was

signed on 2 February 1955 with the Government of USSR for assistance in establishing

one million tones steel plant at Bhiali. Germany agreed to assist in setting up a million

tones steel at Rourkela and Britain offered to help in founding a million tones plant at

Durgapur. However, efforts to obtain assistance from the USA to set up a plant in Bihar

did not yield results. About the same time it was decided to expend TISCO and IISCO to

a capacity of 2 million tones, 1 million tones respectively. Thus the Second Five Year

Plan saw the most striking progress in steel industry. During this period different units in

the steel plants were progressively commissioned increasing the installed capacity from

about 1.5 to 6 million tones. In the Third Five Year plan, capacity of 3 public sector steel

plants were further increased Rourkela from 1 to 1.8 million tones, Bhilai from 1 to1.25 million tones and Durgapur from 1 to 1.1.6 million tones thus giving a six fold

boost to the capacity existing at the time of independence.

The third phase began with the decision to set up the fourth public sector steel plant at

Bokaro. Right from the beginning Bokaro was conceived as Indias first steel plant with

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indigenous equipment, material and technological know-how. The government of USSR

offered technical and financial assistance and the inter governmental agreement signed on

25th January 1965 envisaged that Bokaro will have maximum Indian efforts.

Presently, with the expansion of existing steel plant, particularly Bhilai upto 4 mt.

expansion and Bokaro upto 4.7 mt expansion. There are 2 million ingot tones of mild

steel plants, each at Vijaynagar in Mysore and Viskhapatnam in Andhra Pradesh and an

alloy steel plant at Salem in Tamilnadu with a capacity of two hundred thousand tones of

finished steel. Facilities have been provided for ultimate expansion of Bhilai Steel Plant

to 7.5 million tones and Bokaro Steel Plant to 10 million tones, besides plans for

expansion of other steel plant.

India had to depend largely on foreign countries in regard to technology, equipment and

consultancy service for its steel programme in fifties and sixties. In order to reduce this

dependence, large capacity steel plant equipment-manufacturing unit was set up in Heavy

Engineering Corporation in Ranchi. This was supported by other industries in public

sector like Bharat Heavy Electrical Limited (BHEL), Mining and Allied Machinery

Corporation Ltd. (MAMC), Bharat Heavy Plants and Vends Ltd.(BHPVL), Instrumental

Limited (IL), Hindustan Machine Tools (HMT), Garden Reach Shipbuilders and

Engineers Ltd. (GRSE), Jessops, Braithwaite and many other leading industries in public

and private sector

To ensure proper expertise for construction of steel plant the Hindustan Steel Works

Construction Ltd. (HSCL) was set up. In the field of consultancy service Metallurgical &

Engineering Consultant (India) Limited (MECON) and M. N. Dastur & Company

(Dasturco) were developed. Efforts were also made to standardize major items of

equipment thus providing the advantage of repeat manufacture by using the same design,

documentation, engineering, thereby ensuring early deliveries and lower costs. Thestandardization of steel plant and equipment, however, did not mean freezing the

technological levels as development in operational scales; sound maintenance and

improvement in the preparation of inputs play vital roles. It was therefore, necessary to

freeze the design at a certain stage of development and then improve on them. The

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Japanese steel industry, which has made great stride, had also worked on this pattern in

its earlier stages.

The Indian steel industry has thus developed from a small capacity of 1.3 million

tones of ingot steel in 1974 to 14.6 millions in 1988-89. Certain chance in strategy of

development is called for in order to regain the quantum to growth without which the

economic development would suffer.

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CHAPTER 4

DATA ANALYSIS

ANDINTERPRETATION

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DATA ANALYSIS

PART-1

QUESTIONNAIRE ANALYSIS SAIL OFFICIALS

(1 for very poor, 5 for very strong)

Q1. Which company do you think is the main competitor of your company?

TATA Steel

Jindal Steel

Essar Steel

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

TATA STEEL

JINDAL S TEEL

ESSAR S TEEL

SAIL

TATA S TEEL 4

JINDAL S TEEL 3

ESSAR STEEL 2

SAIL 5

Fig. 1

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Q2. How would you rate your companies competitiveness in relation to the

industry?

Less Competitive

Moderately Competitive

Very Competitive

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Less competitive

Moderately Competitive

Very Competitive

Less competitive

Moderately

Competitive

Very

Competitive

5 5

TATA STEEL SAIL

Fig. 2

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Q3. Do you think being a public sector company is a hurdle for the growth of the

company?

Yes

No

0%

10%

20%

30%

40%

50%

60%

70%

yes

no

yes 30%

no 70%

SAIL

Fig. 3

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Q4. In your opinion is your company ready to expand overseas like other Indian

steel companies?

Yes

No

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

yes

no

yes 90% 85%

no 10% 15%

TATA STEEL SAIL

Fig. 4

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Q5. What affect do the government policies have on the company?

Positive Negative

0%

10%

20%

30%

40%

50%

60%

70%

80%

positive

negative

positive 65% 80%

negative 35% 20%

TATA STEEL SAIL

Fig. 5

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Q6. What affect will the opening up of the Indian steel sector will have on the

future of your company?

Positive Negative

0%

10%

20%

30%

40%

50%

60%

70%

80%

positive

negative

posit ive 70% 75%

negative 30% 25%

TATA STEEL SAIL

Fig. 6

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Q7. In your opinion, which style of leadership does your company have?

Autocratic Moderate Democratic

0%

5%

10%

15%

20%

25%

30%

35%

40%

Autocratic

Moderate

Democratic

Autocratic 30% 40%

Moderate 40% 20%

Democratic 30% 40%

TAT A STEEL SAIL

Fig. 7

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Q8. How are the atmosphere and the environment at work?

Very Tensed Tensed Moderate Relaxed Very Relaxed

0%

5%

10%

15%

20%

25%

30%

35%

40%

very tensed

tensed

moderate

relaxed

very relaxed

very tensed 30% 35%

tensed 40% 35%

moderate 20% 15%

relaxed 5% 10%

very relaxed 5% 5%

T ATA ST EEL SAIL

Fig. 8

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Q9. How would you rate the turnover rate in your organization?

Very High High Medium Low Very Low

0%

5%

10%

15%

20%

25%

30%

35%

40%

very high

high

medium

low

very low

very high 30% 25%

high 25% 20%

medium 20% 40%

low 15% 5%

very low 10% 10%

T AT A STEEL SAIL

Fig. 9

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Q10. Does the company offer you opportunities for growth and advancement of

your career?

Yes No

0%

10%

20%

30%

40%

50%

60%

70%

80%

yes

no

yes 75% 70%

no 25% 30%

TATA STEEL SAIL

Fig. 10

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Q11. According to you how is the culture of the organization?

Conducive for growth Hinders Growth

0%

10%

20%

30%

40%

50%

60%

70%

conducive forgrowth

hinders growth

conducive for

growth

65% 70%

hinders growth 35% 30%

T AT A ST EEL SAIL

Fig. 11

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Q12. What does your company think about its customers?

Customer is king Customer is Important Customers are just Customers

0%

10%

20%

30%

40%

50%

60%

70%

consumer is king

consumer is

important

consumers are just

important

consumer is king 60% 70%

consumer is

important

35% 28%

consumers are

just import ant

5% 2%

TATA STEEL SAIL

Fig. 12

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Q13. Does your company reward you for your performance?

Yes No Sometimes

0%

10%

20%

30%

40%

50%

60%

70%

80%

yesno

yes 75% 70%

no 25% 30%

TATA STEEL SAIL

Fig. 13

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Q14. Does your company have a clear and defined future goal?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

yes

no

yes 80% 85%

no 20% 15%

T AT A ST EEL SAIL

Fig. 14

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Q15. How clear are authority and responsibility relationships defined in your

organization?

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

very clear

very unclear

cant say

very clear 40% 45%

very unclear 30% 15%

cant say 30% 40%

TATA STEEL SAIL

Fig. 15

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Q16. Do you own the shares of your company?

Yes No

0%

10%

20%

30%

40%

50%

60%

70%

80%

yesno

yes 75% 70%

no 25% 30%

T AT A ST EEL SAIL

Fig. 16

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Q17. If yes, then are you happy with the dividend payouts?

1 2 3 4 5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

yes

no

yes 85% 90%

no 15% 10%

T AT A STEEL SAIL

Fig. 17

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Q18. In your opinion how has been the performance of your companies stock in

the recent past?

1 2 3 4 5

0%

5%

10%

15%

20%

25%

30%

35%

good

very good

satisfactory

outstanding

good 20% 25%

very good 30% 30%

satisfactory 35% 20%

outstanding 15% 25%

T ATA STEEL SAIL

Fig. 18

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Q19. Would you invest money in your own companies stock?

Yes No

0%

10%

20%

30%

40%

50%

60%

70%

yes

no

yes 60% 65%

no 40% 35%

T AT A ST EEL SAIL

Fig. 19

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Q20. The future is very competitive; do you think your organization is ready to

face the competition?

1 2 3 4 5

0%

10%

20%

30%

40%

50%

60%

70%

yes

no

yes 60% 65%

no 40% 35%

TATA STEEL SAIL

Fig. 20

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PART-2

QUESTIONNAIRE ANALYSIS CUSTOMERS

Q1. Do you agree that the steel industry in India is witnessing an industrial and

market boom?

Yes -------------------------------------------------- 75 per cent

No ---------------------------------------------------- 12 per cent

Do not know/ Can not say -------------------------- 13 per cent

0%

10%

20%

30%

40%

50%

60%

70%

80%

Yes No Do not know/ Can not say

Fig. 21

Interpretation:

The above response reflects that the rolling steel industry in India is presently witnessing

an industrial and a market boom.

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Q2. What factors contribute the most to the boom in this segment of market?

Growth in infrastructure projects ---------------------- 26 per cent

Liberalisation of the economy -------------------------- 50 per cent

Special policy measures of the government ----------- 12 per cent

Other factors ----------------------------------------------- 05 per cent

Do not know/ Can not say -------------------------------- 07 per cent

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Growth in infrastructure projectsLiberalisation of the economySpecial policy measures of the governmentOther factors

Fig. 22

Interpretation:

The liberalisation of the economy is the key to the boom. In India demand is being driven

up by mammoth infrastructure projects, like the construction of dams, ports, power

plants, railways and motorways.

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Q4. How do you see the export market of SAIL in the world steel market?

Competitive in the world market ------------------------- 32 per cent

Is in a survival state ---------------------------------------- 23 per cent

Insignificant in the world market --------------------------- 12 per cent

Do not know/ Can not say ---------------------------------- 33 per cent

0%

5%

10%

15%

20%

25%

30%

35%

Competitive in the world market Is in a survival state

Insignificant in the world market Do not know/ Can not say

Fig. 24

Interpretation:

The export market of SAIL (India), if we go by the views of the respondents, has a

significant presence in the world export market.

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Q5. Do you agree that increase in SAILs export was one of the main reasons for

the recent expansion in global of steel market?

Yes -------------------------------------------- 67 per cent

No ----------------------------------------------- 10 per cent

Do not know/ Can not say -------------------- 23 per cent

0%

10%

20%

30%

40%

50%

60%

70%


Fig. 25

Interpretation:

The industrial expansion of SAIL in terms of production and market is more or less

driven by the export drive of the market in general and the industry in particular.

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Q6. Which are the major export markets of your company?

The company exports more than 40 percent of its production to countries like

China, Middle-East, Europe and the U.S. etc. The export growth is driven by in

house development of low Nickel J series rolling steel. The company has also a

strong presence in certain overseas markets for its thin cold rolled strips and coils

for a variety of scientific and industrial usage.

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Q7. Do you agree that the Indian Steel market is growing at a fast pace and

thereby attracts foreign investors and market leaders?

Yes ------------------------------------------------- 86 per cent

No --------------------------------------------------- 06 per cent

Do not know/ Can not say ----------------------- 08 per cent

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


Fig. 26

Interpretation:

The fast growing Indian rolling steel market provided good market opportunities for

rolling steelmakers, and attracted many domestic and foreign investors attention. It is afact that the Indian rolling steel industry is being developed very fast in recent years.

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Q8. What are the marketing strategies adopted by SAIL in both the domestic and

international market?

Product Expansion ------------------------------ 45 per cent

Strengthening the export strategy -------------- 30 per cent

To create demand for our products -------------- 12 per cent

Other measures ---------------------------------------02 per cent

Do not know/ Can not say -------------------------- 01 per cent

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Product Expansion Strengthening the export strategy

To create demand for our products Other measures

Do not know/ Can not say

Fig. 27

Interpretation:

The Steel makers are resorting to product expansion for strengthening their domestic and

overseas market. Besides the above stated measure, the companies are also working in

the direction of building a competitive marketing strategy and creating domestic demand

for their products.

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Q9. What are the impediments to improve the export potential of SAIL?

Structural impediments ---------------------------------- 46 per cent

Tariff related issues ---------------------------------------- 17 per cent

Unstructured market ------------------------------------- 20 per cent

Other factors ---------------------------------------------- 10 per cent

Do not know/ can not say -------------------------------- 07 per cent

0%

10%

20%

30%

40%

50%

Structural impediments Tariff related issues

Unstructured market Other factors

Do not know/ can not say

Fig. 28

Interpretation:

India is a large and growing consumer of steel products, making it a net importer. India is

struggling to fix a myriad of structural and performance problems that threaten its rolling

steel industry: industry fragmentation, poor product quality, low labor productivity, an

overly narrow product range (concentrated at the low, value-added end of the market),

growing domestic demand and supply imbalances and obsolete plant and equipment. The

industry remains grossly inefficient, technologically backward and unable to meet

adequately the ever-changing needs of the market.

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Q10. How do you see the future of SAIL in India?

Bright future ahead ------------------------------ 23 per cent

Competitive --------------------------------------- 50 per cent

Future is not good --------------------------------- 05 per cent

Do not know/ can not say ------------------------- 22 per cent

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Bright future ahead Competitive

Future is not good Do not know/ can not say

Fig. 29

Interpretation:

Despite an increase in production costs, SAIL has been successful in improving its

operating profit per ton on an absolute basis, due to consistent improvement in product-

mix.

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CHAPTER 5

FINDINGS AND

RECOMMENDATIONS

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Evaluation of Marketing Strategy of SAIL

Marketing is the process of planning and executing the conception, pricing, promotion

and distribution of ideas, goods and services to create and exchange that satisfy

individual and organizational objective. The marketing concept requires that customer

satisfaction rather than profit maximization is the goal of the organization. In other

words, the organization should be consumer oriented and should try to understand

consumers requirement and satisfy them quickly and efficiently, in way that are

beneficial to both organization and the consumer. This means that any research

organization should try to obtain information on consumer need and gather marketing

intelligence to help and satisfy these needs efficiently.

Marketing research is a critical part of such a marketing intelligence system, it helps to

improve management decision making by providing relevant, accurate and timely

information. Every decision poses unique needs for information and relevant strategies

can be developed based on the information gathered through marketing research.

One of the major tasks in researching a market is to estimate its a current decisions hang

on these estimates whether the market demand upon in future to justify the market entry.

Once a company enters a market segment in order to allocate it resources effectively.

Thus we can see that demand estimate is essential in carrying out three important

functions: -

Analysis of market opportunities

Planning of marketing efforts

Control of marketing performance

A market is a set of all actual and potential buyer of a product. The actual or, available

market is a set of buyer who has interest and access to a particular market offer. If the

organization is not satisfied with its current sales or has some expansion plans, it could

try to attract a large percentage of people from its served market by promoting the

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product to available market. Untimely it could try to expend the potential market by

launching the campaign to convert uninterested buyer into interested buyer.

BY PRODUCT: In the steel industries we heated the coke we get some gas and tar

product such as Ammonia, Tar, Benzene etc. These products are unwanted but we cant

leave them vain. Because they are profitable as well as harmful for the environment and

industries. So we go through the certain process and made some valuable product.

Example: - When Bokaro heat the coke we get ammonia gas, we mix it in the sulfuric

acid and made ammonia sulphate that use as a fertilizer with brand name RAJA.

SECONDARY PRODUCT: In the process of making core project some defective come

out. Because of some of break down and some mechanical default. We also get some

scrap in the process of making cutting sheets. These secondary products are process from

the beginning or sold through the auction and lot sale.

For a nation that is economically strong, free of the problems of underdevelopment and

plays a meaningful role in the world as befits a nation of over one billion people, the

groundwork would have to begin right now. The Indian Steel Industry will be required

and is willing to play a critical role in achieving this target.

The findings from above data and interpretations thereof are as follows:

With abundant iron ore resources and well-established base for steel production in the

country, steel is poised for growth in the coming decades in India. Production has

increased from 17 MT in 1990 to 36 MT in 2003 and 66 MT is targeted for 2011. In this

way steel industry is contributing much in national income at a high pace.

Steel will continue to have a stronghold in traditional sectors such as construction,

housing, ground transportation, special steels will be increasingly used in hi-tech

engineering industries such as power generation, petrochemicals, fertilizers etc. As the

key attributes discussed above are very much in favor of steel industry.

In budget 2004-05, the customer duty on non-alloy steel was reduced steel from 15% to

10% and on alloy steel from 20% to 15%. Further, custom duty on several raw materials

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used by the steel sector like non-coking coal, met coke and nickel has been reduced to

5% and on coking coal to zero. So government is also coming forward to make Indian

steel industry a global hub.

Marketing is one of the most dynamic fields in any business along with finance,

production and operations, Human resource management and systems. Its orientation

needs to be handled carefully

Marketing Strategies of SAIL

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