SUMMER TRAINING PROJECT REPORT ON

EVALUATION OF SAIL’S RETAIL MODEL COMPARED TO THE COMPETITORS

STEEL AUTHORITY OF INDIA

FOR THE PARTIAL FULLFILLMENT OF THE REQUIREMENT FOR THE AWARD OF

POST GRADUATE DIPLOMA IN BUSSINESS MANAGEMANT

SUBMITTED BY

NEHA NAYYAR

PGDBM 2009 – 2011

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CERTIFICATE

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ACKNOWLEDEGEMENT

This experience with STEEL AUTHORITY OF INDIA LTD. could not have been more enriching. The company gave me an excellent opportunity to learn the true dynamics of the market.

I would like to take up this opportunity to heartily thank Mr.Vivek Singh, Senior Manager (Marketing-LP) NR for guiding me throughout the project. The learning made would not have been possible without his invaluable guidance. I would like to express my sincere gratitude to Mr.V. K. Pandey, DGM (MAG) & Mr.Pritam Saha, AGM(M-Retail) NR for extending their valuable support to me during project.

I would also like to thank all SAIL executives across Delhi, Faridabad and Ghaziabad branches for supporting me throughout the project. They extended their best support, taking time out of their busy schedules. I would specially like to mention Ms. Meena Sharma as she was the first person who guided throughout the project.

This project would not have been possible without the help of the above mentioned anf all else whose names I may have missed out.

Thanking You

Neha Nayyar

NIILM-CMS

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EXECUTIVE SUMMARY

As a Commercial organisation dealing with production and marketing of Iron & Steel, maximising returns under the prevailing marketing conditions are of critical importance for Steel Authority of India Limited (SAIL). Under present marketing conditions, SAIL has to compete with other players in domestic & foreign markets. The project covers the EVALUATION OF SAIL’S RETAIL MODEL COMPARED TO COMPETITORS. It also includes dealer’s activities evaluation and their scope of improvement. So that SAIL can revamp its retail model in order to have maximum outreach to the end consumer. For this first I studied the present retail model. Followed by a market research to study the present standing of the channel. Then I gave my recommendations on the bases of analysis done of data collected, about how we can be the market leader.

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TABLE OF CONTENT

CHAPTER ONE

COMPANY PROFILE:

Vision, Mission, Value Overview Brief details of

SAIL Integrated Plants SAIL CMO and ITD

Product and their Applications Dealer Network Company at present

CHAPTER TWO

PROJECT ON RETAIL CHANNEL EVALUATION.

SAIL Dealership Scheme Number of dealer in branch of Northern Region Objective of study Research Methodology Survey Analysis with Graphs Conclusion Scope of Improvement Questionnaire BIBLIOGRAPHY

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THE COMPANY

“There’s a little bit of Sail in everybody’s life”

- Goes the brand tagline

Steel Authority of India Limited (SAIL) is the leading steel-making company in India. With a turnover of Rs. 43,935 crore, the company is among the four Maharatnas of the country's Central Public Sector Enterprises. 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.

 

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COMPANY PROFILE

SAIL is India’s largest steel producer with a turnover of Rs. 40,551 crore in 2009-10

It operates and owns five integrated steel plants at Bhilai, Durgapur, Bokaro, Rourkela and Burnpur and three speciality steel plants at Salem, Duragapur and Bhadravati. A subsidiary at Chandrapur produces ferro alloys.

It is one of the Largest Producer of Iron Ore in India with 23.4 MT productions in the year 09-10.

SAIL’s countrywide network comprises 37 Branch Sales Offices, 67 Warehouses, 26 Customer Contact Offices. With total number of dealers reaching 2500, SAIL has its presence in almost all districts of the country.

To develop new technology for the steel industry and achieve world standards in quality, SAIL has a well equipped Research &Development centre for Iron &steel at Ranchi. Besides, it has its in house Centre for Engineering &Technology, the management Training Institute and Safety Organisation at Ranchi.

The company is presently implementing a massive expansion plan to increase its hot metal, crude steel and saleable steel production. The ongoing expansion has been planned to achieve saleable steel production of 20.23 million tonne, at a cost of Rs. 37,000 crore (USD 8 billion) approximately by 2012.

SAIL has successfully planted seeds of promise, strengthening the nation and touching the lives of millions as largest steel producer of the country. SAIL has been fulfilling responsibilities that came with it.

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HISTORY

A Rich Heritage

The Precursor

SAIL traces its origin to the formative years of an emerging nation - India. After independence the builders of modern India worked with a vision - to lay the infrastructure for rapid industrialisation of the country. The steel sector was to propel the economic growth. Hindustan Steel Private Limited was set up on January 19, 1954.

Expanding Horizon (1959-1973)

Hindustan Steel (HSL) was initially designed to manage only one plant that was coming up at Rourkela. For Bhilai and Durgapur Steel Plants, the preliminary work was done by the Iron and Steel Ministry. From April 1957, the supervision and control of these two steel plants were also transferred to Hindustan Steel. The registered office was originally in New Delhi. It moved to Calcutta in July 1956 , and ultimately to Ranchi in December 1959.

The 1 MT phases of Bhilai and Rourkela Steel Plants were completed by the end of December 1961. The 1 MT phase of Durgapur Steel Plant was completed in January 1962 after commissioning of the Wheel and Axle plant. The crude steel production of HSL went up from .158 MT (1959-60) to 1.6 MT. A new steel company, Bokaro Steel Limited, was incorporated in January 1964 to construct and operate the steel plant at Bokaro. The second phase of Bhilai Steel Plant was completed in September 1967 after commissioning of the Wire Rod Mill. The last unit of the 1.8 MT phase of Rourkela - the Tandem Mill - was commissioned in February 1968, and the 1.6 MT stage of Durgapur Steel Plant was completed in August 1969 after commissioning of the Furnace in SMS. Thus, with the completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela and 1.6 MT at Durgapur, the total crude steel production capacity of HSL was raised to 3.7 MT in 1968-69 and subsequently to 4MT in 1972-73.

Holding Company

The Ministry of Steel and Mines drafted a policy statement to evolve a new model for managing industry. The policy statement was presented to the Parliament on December 2, 1972. On this basis the concept of creating a holding company to manage inputs and outputs under one umbrella was mooted. This led to the formation of Steel Authority of India Ltd. The company, incorporated on January 24, 1973 with an authorized capital of Rs. 2000 crore, was made responsible for managing five integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and Burnpur, the Alloy Steel Plant and the Salem Steel Plant. In 1978 SAIL was restructured as an operating company.

Since its inception, SAIL has been instrumental in laying a sound infrastructure for the industrial development of the country. Besides, it has immensely contributed to the development of technical and managerial expertise. It has triggered the secondary and tertiary waves of economic growth by continuously providing the inputs for the consuming industry

VISION

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To be a respected world-class corporation and the leader in Indian Steel business in quality, productivity, profitability and customer satisfaction.

CREDO

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 support flexibility, learning and is proactive to

change. We chart a challenging career for employee with opportunities for advancement and

rewards. We value the opportunity and responsibilities to make a meaningful difference in

people’s lives.

Plants

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Bhilai Steel Plant

Nine - times winner of Prime Minister's Trophy for best Integrated Steel Plant in the country, Bhilai Steel Plant (BSP) is India's sole producer of rails and heavy steel plates and major producer of structural. The plant is the sole supplier of the country's longest rail tracks of 260 metres. With an annual production capacity of 3.153 MT of saleable steel, the plant also specializes in other products such as wire rods and merchant products. Since BSP is accredited with ISO 9001:2000 Quality Management System Standard, all saleable products of Bhilai Steel Plant come under the ISO umbrella. 

At Bhilai IS0:14001 has been awarded for Environment Management System in the Plant, Township and Dalli Mines. It is the only steel plant to get certification in all these areas. The Plant is accredited with SA: 8000 certification for social accountability and the OHSAS-18001 certification for Occupational health and safety. These internationally recognised certifications add value to Bhilai's products and helps create a place among the best organisations in the steel industry. Among the long list of national awards it has won, Bhilai has bagged the CII-ITC Sustainability award for three consecutive years. 

 

BOKARO STEEL PLANT - A PARTNER IN NATION BUILDING

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History

Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited company on 29th January 1964, and was later merged with SAIL, first as a susidiary and then as a unit, through the Public Sector Iron & Steel Companies (Restructuring & Miscellaneous Provisions) Act 1978. The construction work started on 6th April 1968.

The Plant is hailed as the country’s first Swadeshi steel plant, built with maximum indigenous content in terms of equipment, material and know-how. Its first Blast Furnace started on 2nd October 1972 and the first phase of 1.7 MT ingot steel was completed on 26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT stage have already been commissioned and the 90s' modernisation has further upgraded this to 4.5 MT of liquid steel. 

The new features added in modernisation of SMS-II include two twin-strand slab casters along with a Steel Refining Unit. The Steel Refining Unit was inaugurated on 19th September, 1997 and the Continuous Casting Machine on 25th April, 1998. The modernisation of the Hot Strip Mill saw addition of new features like high pressure de-scalers, work roll bending, hydraulic automatic gauge control, quick work roll change,

laminar cooling etc. New walking beam reheating furnaces are replacing the less efficient pusher type furnaces.

A new hydraulic coiler has been added and two of the existing ones revamped. With the completion of Hot Strip Mill modernisation, Bokaro is producing top quality hot rolled products that are well accepted in the global market.Bokaro is designed to produce flat products like Hot Rolled Coils, Hot Rolled Plates, Hot Rolled Sheets, Cold Rolled Coils, Cold Rolled Sheets, Tin Mill Black Plates (TMBP) and Galvanised Plain and Corrugated (GP/GC) Sheets. Bokaro has provided a strong raw material base for a variety of modern engineering industries including automobile, pipe and tube, LPG cylinder, barrel and drum producing industries.

DURGAPUR STEEL PLANT

Set up in the late 50's with an initial annual capacity of one

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million tonnes of crude steel per year, the capacity of Durgapur Steel Plant (DSP) was later expanded to 1.6 million tonnes in the 70's. A massive modernisation programme was undertaken in the plant in early 90's, which, while bringing numerous technological developments in the plant, enhanced the capacity of the plant to 2.088 million tonnes of hot metal,1.8 million tonnes crude steel and 1.586 million tonnes saleable steel. The entire plant is covered under ISO 9001: 2000 quality management system.

The modernized DSP now has state-of –the-art technology for quality steel making. The modernized units have brought about improved productivity, substantial improvement in energy conservation and better quality products. DSP’s Steel Making complex and the entire mills zone, comprising its Blooming & Billet Mill, Merchant Mill, Skelp Mill, Section Mill and Wheel & Axle Plant, are covered under ISO: 9002 quality assurance certification.

With the successful commissioning of the modernized units, DSP is all set to produce 2.088 million tones of hot metal, 1.8 million tones of crude steel and 1.586 million tones of saleable steel annually.

ROURKELA STEEL PLANT

Rourkela Steel Plant (RSP), the first integrated steel plant in the public sector in India, was set up with German collaboration with an installed capacity of 1 million tonnes. Subsequently, its capacity was

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enhanced to 1.9 million tonnes.

The plant was modernised in the mid-1990s with a number of new units having state-of-the-art facilities. Most of the old units were also revamped for effecting substantial improvement in the quality of products, reducing cost and ensuring cleaner environment.

RSP was the first plant in India to incorporate LD technology of steel making. It is also the first steel plant in SAIL and the only one presently where 100% of slabs are produced through the cost-effective and quality-centric continuous casting route.

RSP presently has the capacity to produce 2 million tonnes of hot metal, 1.9 million tonnes of crude steel and 1.67 million tonnes of saleable steel. It is SAIL’s only plant that produce silicon steels for the power sector, high quality pipes for the oil & gas sector and tin plates for the packaging industry. Its wide and sophisticated product range includes various flat, tubular and coated products. 

Almost all major units of the plant, including its Personnel Department and Steel Township, are certified to ISO:9001 standards. RSP’s Silicon Steel Mill, Sintering Plant II, Environment Engineering Department, Plate Mill, Hot Strip Mill, ERW and SW Pipe Plants, Special Plate Plant as well as Steel Township have been awarded ISO:14001 certification for Environment Management.

IISCO STEEL PLANT (ISP)

IISCO Steel Plant (ISP), an integrated steel plant in Burnpur, has the capacity to produce 4.26 lakh tonnes of saleable steel and 2.54 lakh tonnes of pig iron annually. ISP, the erstwhile Indian Iron & Steel Company (IISCO), which was a 100% subsidiary of Steel Authority of India Limited (SAIL) has been amalgamated with the parent company with effect from 16 February 2006.

ISP produces a large number of steel structural’s and special sections as well as pig iron. the plant pioneered the production of centre –sill Z-section used in the fabrication of

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wagon and Z-type sheet piling section used in construction of barrages, bridge foundations and other projects and colliery arch section used for roof support in collieries. The plant has also developed ‘slit rolling’ for small diameter rounds (10 mm and 12 TMT), which are in high demand in the domestic market.

The plant is set to undergo modernisation-cum-capacity expansion though which its hot metal production capacity will be raised to 2.5 MT by 2011-12.

ISP is accredited with ISO 9001:2000 QMS for its Heavy Structural Mill and Merchant & Rod Mill. It has also been awarded ISO 14001:2004 EMS for its entire Rolling Mill Complex. 

Location ISP is situated at Burnpur near Asansol in the Burdwan district of West Bengal.

Alloy Steels Plant

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The pioneer in the production of alloy and special steels. Alloy Steels Plant (ASP), Durgapur was commissioned with an initial capacity of 1,00,000 tonnes of ingot steel and 60,000 tonnes of saleable steel. Through two phases of expansion and modernization, the capacity has been revised to 2.46 lakh tonnes of liquid steel and 1.78 lakh tonnes of saleable steel.

Recipient of ISO-9001 (2000) certification for the entire plant, ASP is equipped with state-of-the-art technology for producing world-class quality alloy and special steels. The plant has one slab-cum-twin bloom continuous casting machine, the only one of its kind in India. It is specially designed for casting special steels like Austenitic and Ferritic stainless steel and a variety of non-stainless steels including bulletproof steel. The continuous casting machine is equipped with a state-of-art Electro-Magnetic Stirrer in its mould for casting Blooms.

ASP has the capacity to produce Slabs, Blooms, Bars, Plates and Forged items of over 400 grades in a wide range of sizes. It also produces value added items like Cold Rolling Mill rolls, Concast rollers, crane wheels, springs, hammers, grate bars, hot saw blade, shear blade, bright bar, stainless steel liner plate, etc. ASP is also supplying import substitution item components to many customers through established conversion agents.

MAHARASHTRA ELEKTROSMELT LTD. 

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Maharashtra Elektrosmelt Ltd (MEL) is a Subsidiary of Steel Authority of India Ltd, a Government of India Enterprise and the largest Manganese based Ferro Alloy producer in the country.

MEL has an installed capacity of 1,00,000 TPY equivalent Ferro Manganese. The product range of MEL includes High Carbon Ferro Manganese, Silico Manganese and Medium/Low Carbon Ferro Manganese. It is accredited with Quality Assurance Certificate ISO 9001:2000. 

MEL's major infrastructure facilities include two nos. of 33 MVA Submerged Electric Arc Furnaces for the production of ferro alloys, Manganese Ore Sintering Plants, Furnace gas based Power Plant and one small Electric Arc Furnace for the production of MC

SAIL Consultancy Division (SAILCON)

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SAIL, during its existence of over four decades, has acquired a high level of expertise and vast experience in building, operation and maintenance of integrated and mini steel plants and associated facilities encompassing diverse technologies, equipment and products-mix. The knowledge thus gained led to formation of a consultancy and services marketing division – SAIL Consultancy Division (SAILCON), based in Delhi, to provide a wide range of services to the iron & steel and other industries in India and abroad.

SAILCON is a single window at SAIL catering to clients across the world, providing design, engineering, technical, management and training consultancy and services available from various SAIL plants and units. It is an ISO: 9001:2000 certified organization equipped to render quality services from concept to commissioning.

Central Marketing Organisation

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ISO 9001:2000 certified Central Marketing Organisation ( CMO ) is India’s largest industrial marketing set-up. It markets carbon steel produced by the five integrated steel plants of SAIL. Headquartered in Kolkata, it transacts business through its network of 37 Branch Sales Offices spread across the four regions, 25 departmental Warehouses equipped with mechanised handling systems, 42 Consignment Agents and 26 Customer Contact Offices. CMO’s domestic marketing effort is supplemented by its ever widening network of rural dealers who meet the demands of the smallest customers in the remotest corners of the country. With the total number of dealers crossing 2,000, SAIL's wide marketing spread ensures availability of quality steel in virtually all the districts of the country. CMO through its joint venture partner M/s Metal Junction has simplified steel buying by providing net based facilities through its on line ‘e store’, providing door delivery facilities to small house-builders.

A strong IT support system enables real-time network connectivity within the entire CMO network. Extensive customer contact, product and segment specialization, close monitoring of order servicing and feedback analysis through a Customer Satisfaction index are established norms at CMO. The customer-friendly approach of CMO is backed by practical after-sales service. Through the process of Key Account management, CMO provides single-window service to key customers across the country for every business transaction from enquiry to order booking, order tracking to delivery, and even consultancy and after-sales service. 

CMO’s International Trade Division

International Trade Division ( ITD), in New Delhi- an ISO 9001:2000 accredited unit of CMO, undertakes exports of Mild Steel products and Pig Iron from SAIL’s five integrated steel plants. Ever ready to meet the exacting demands of its global customers, ITD maintains a close liaison with customers and the production units to cater to the customized requirements of its customers both in terms of quality and sizes. 

SAIL’s product basket includes products such as Rails, Structurals, Merchant Products, Wire Rods, Re-Bars, Plate Mill Plates, Hot Rolled Coils, Hot Rolled Plates/ Sheets, Cold Rolled Steels, Galvanised Steels, Cold Rolled Non Oriented ( CRNO ) coils, Chequered Plates, Slabs, Billets and Pig Iron besides cut-to-size Hot Rolled and Cold Rolled materials through its joint venture service centre. Our major products are also covered by stringent certifications such as CE marking TUV and ‘U’ mark required by sophisticated uses in European markets. 

ITD has successfully established SAIL’s brand name globally. Among the notable destinations for SAIL products are Japan, P.R. of China, Korea, Taiwan, Vietnam, Philippines, Singapore, Malaysia, Thailand, Indonesia, Australia, Mexico, Europe (UK, Germany, France, Belgium, Italy, Spain, Netherlands, Portugal), Sudan, Oman, UAE and the neighbouring countries such as Myanmar, Bangladesh, Sri Lanka and Nepal. 

The Transport & Shipping Division of CMO headquartered at Kolkata with its branch offices at Haldia, Paradip, Vizag and Kolkata ports, ensures timely import of the key ingredient in steel making, coking coal and handles its entire logistics. It also caters to other plant imports and ensures efficient dispatch of steel exports. 

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Both ITD and T&S are accredited with ISO 9001:2000 certification. 

Applications

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Hot Rolled Coils, Sheets and Skelp:

Hot rolled coils, sheets and skelp (narrow coil), are the largest product category of the company in terms of both sales volume and revenue. Hot rolled coils are primarily used for making pipes and have many direct industrial and manufacturing applications, including the construction of tanks, railway cars, bicycle frames, ships, engineering and military equip-ment and automobile and truck wheels, frames and body parts. Hot rolled coils are also used as feedstock for cold rolling mills where they undergo further process-ing.Hot rolled coils are also delivered to the company's own cold rolling mills and silicon sheet mill and pipe plant in a wide range of widths and thicknesses as the feedstock for higher value-added steel products. The company is the largest producer of hot rolled coils, sheets and skelp in India.

 Semi-Finished Products:

 The company produces semi-finished products, including blooms, billets and slabs, which are converted into finished products in the company's processing plant and, to a lesser extent, sold to rerollers for conversion to finished products.

Plates:

Steel plates are used mainly for the manufacture of bridges, steel structures, ships, large diameter pipes, storage tanks, boilers, railway wagons and pressure vessels. The company also produces weatherproof steel plates for the construction of railcars. The company is currently the largest producer of steel plates in India with a domestic market share of more than 80 per cent for these products. The company is the only producer of wide and heavy plate products in India.

Cold Rolled Products:

Cold rolling of hot rolled products produces a superior

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surface finish, improves the physical properties of the steel, such as tensile strength, and reduces its thickness to precise gauges. As a result, cold rolled products generally command higher prices thanhot rolled products. The products of the cold rolling mill include cold rolled sheets and coils, which are used primarily for precision tubes, containers, bicycles, furniture and for use by the automobile industry to produce car body panels. Cold rolled products are also used for further processing, including for colour coating, galvanising and tinning. The company also produces further processed cold rolled products, including galvanised sheets and tin plates.

Railway Products:

Railway products, including rails, wheels and axles, sleeper and fish plates (which are used to connect and strengthen rails), are produced through a process of hot rolling blooms in the finishing mills and forging ingots and blooms in the forging press or hammer. Railway products are used primarily to upgrade and expand the existing railway network in India.

Structural’s: 

Structural steel products are produced through a process of hot rolling in the section or structural mills. They are long steel products with cross sections of various shapes. I-beams, channels and angle steel are used in mining, the construction of tunnels, factory structures, transmission towers, bridges, ships railways and other infrastructure projects.

Bars and Rods: 

The company produces steel bars and rods through a process of hot rolling billets in the finishing mills. Reinforcement steel and wire rods are primarily used by the construction industry. The company is one of the largest producers of reinforcement bars in India which are primarily sold to the construction industry.

Speciality Products: 

Speciality products include electrical sheets, tin plates and pipes. Electrical sheets are cold rolled products of silicon steel for

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electrical machinery. Tin plates are cold rolled steel electrolytically coated with tin for food packaging. Pipes are longitudinally or spirally welded from hot rolled coils for conveying such things as water, oil and gas.

Alloy and Stainless Products 

In addition to the steel products indicated above, SAIL produces a wide range of alloy steel products at ASP,SSP and VISL. Elements including chromium, nickel, vanadium and molybdenum are used in the alloy mixture to impart special properties to steel. These alloy steels are primarily used for sophisticated applications, including in the automobile, railway and defence industries. 

A wide variety of alloy and stainless steel plates, hot rolled sheets, cold rolled sheets, bars, billets, blooms, forgings and die blocks are manufactured at ASP in an Electric Arc Furnace. SAIL is able to produce different qualities of alloy steels to meet the requirements of its customers. To increase steel's corrosion resistance properties, nickel and chromium are used in the making of stainless steel. SSP produces cold rolled stainless steel coils and sheets with thickness ranging from 0.3 mm to 6 mm and width ranging from 500 mm to 1,250 mm. These materials can be produced in a large number of grades for different applications. Stainless steel products are used for diverse applications including household utensils, automobile trims, conveyor belts, elevators, chemical and food processing equipment, building and interior decoration and pharmaceutical equipment. 

SAIL Dealer Network

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SAIL has a country-wide network of over 2000 dealers and still growing. This is in addition to its stockyards and offices across India Offering branded SAIL products. This network ensures availability of quality steel in virtually all the districts of the country. Even as SAIL proudly declares its contribution to projects of national importance, it works towards empowering the smallest steel consumer in the remotest corner of the country, to enable him build long-lasting, cost-effective and safe structures.

OBJECTIVE of SAIL is to establish a wide distribution network for branded products of SAIL and to increase its reach, to promote and popularize SAIL products, to improve market share in the long run.

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The products that are covered under this scheme are TMT bars/ coils, GP Sheets/ coils & GC sheets, Converted Products. SAIL also considers supply of small quantity of Light Structural /MS Wire Rods 5.5mm to 8mm/ HR/CR sheets (up to 20 tons max per month) within the overall agreed quantities.

The PRICE AND COMMERCIAL BENEFITS which are given by SAIL 1) SAIL materials are delivered according to the SAIL Dealership scheme at the monthly notified prices against payment in advance. For extending secured credit beyond 15 days, the same will be on interest bearing basis as permissible under Credit Policy. Dealer can be entitled to equivalent cash discount in lieu of 15 days Interest Free Credit component when sale to dealer are on cash and carry basis. 2)It fix a Maximum Recommended Retail Price (MRRP) exclusive of levies, duties, VAT/Sales Tax, octroi, which are to be added extra as applicable for the products to be sold by the SAIL Dealer. 3) SAIL Dealers has to display the MRRP prominently at their premises and obliged to charge to their customers at prices within MRRP.

ANNUAL AWARD FOR DEALERS Top 15 dealers based on evaluation i.e. adding new customers, improving brand image, consistent availability of product, annual commitment etc. in each Region are awarded at various levels.

FINANCIAL ARRANGEMENTS TO BE MADE BY THE SAIL DEALER Under General category furnish a Security Deposit @Rs.500/MT of agreed monthly off-take through DD/PO, payable at Branch locations, within 15 days of the date of letter of Intent for appointment issued to the dealer. Security Deposit need not be paid by the SAIL Dealers under SC/ST and OBC categories or for Partnership Firm/Companies where majority of Partners/Directors belong to SC/ST/OBC categories. No interest is pay on the security deposit. On request of SAIL Dealers, SAIL may consider further extension of time for payment of security deposit by 15 days at a time. 

AGREED OFF-TAKE:The monthly off-take for SAIL Dealer is generally restricted to 100 MT cumulative at any location and upto a maximum of 200 tons subject to availability of materials. Shortage material is fulfilled on next month. 

The TENURE is that the SAIL Dealer is initially appointed for a period of two years, extendable by one year at a time.

The TERMINATION CLAUSE is that if any dealer repeated failures (more than two quarters) in lifting the agreed quantity by the SAIL Dealer, for reasons not attributable to SAIL, or SAIL can terminate the agreement at any time, by serving written notice of 15 days

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on the SAIL Dealer after taking into account the following: Evaluated performance, Adverse customer feedback, Repeated complaints regarding sales of material outside his assigned jurisdiction, Unsatisfactory performance in any other respect, detrimental to the interest of SAIL.

QUALITY COMPLAINTS:a) It is Dealer's responsibility to provide all the post sales service with regard to his customers including settlement of the quality complaints.b) SAIL attend to the quality complaints only at Dealers premises. However, in exceptional circumstances, SAIL, at its discretion, may also attend to quality complaints at the premises of Dealer's customers. c) All quality complaints are settled as per the quality complaint procedure of SAIL in vogue.

TERRITORIAL JURISDICTION:The Dealer is to cater to the small/tiny demands of user/consumers within the territorial jurisdiction assigned to the dealer by the Branch under whose jurisdiction the dealer operates. More than one dealer can be appointed in one area. SAIL shall, however, retain the right to sell directly within such jurisdiction. 

MODALITIES OF PURCHASE:The dealers have to purchase materials from the nominated SAIL Branch. Deliveries are from stockyard/consignment agency yard/premises of conversion agent/ premises of de-coiling agent/premises of service centres. Door delivery is given to customer free of cost (including unloading also).

MAINTENANCE OF STOCKS, the Dealer has to maintain stocks of the relevant products so that it material is available to small/tiny user/consumers on "Off-the-Shelf" basis. Therefore, he may schedule his purchases and place indents on SAIL as per SAIL's order booking and planning system in vogue to normally avoid any stock-out situation.

SALES PROMOTION:The Dealer can also undertake Sales promotion of SAIL products, which are being sold through him, subject to his promotional materials being cleared in advance by SAIL. All the Dealers are required to display boards of uniform style/ color as provided by SAIL. The maintenance and running expenditure in this regard is borne by the Dealer. The SAIL Dealer can use the caption “Dealer of SAIL" in his letterhead and advertisement material. Promotional Incentive is that Dealers who take up promotional steps like Hoardings, Wall-paintings, and Newspaper/Cable TV Advertisement directly shall be entitled for a reimbursement of a promotional incentive restricted to a maximum of Rs.100/- per ton of actual lifting in the financial year. Re-imbursement may be effected on a quarterly basis based on dealers self certification. It would be required for the display to depict SAIL logo (except for Cable TV ads) and that the advertiser is an authorized dealer of SAIL for the displayed products.

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The SYSTEM OF FEED-BACK:a) The Dealer is required to submit a monthly report on the performance to the concerned Branch as per the format given below: -

(Qty.in M/T) Sl. No

Plant Category Sales Stocks at the month endFor the month Cumulative

b) In addition to (a) above, the Dealer is required to furnish the list of customer(s) dealt with and quantity supplied to them, on a monthly basis to the concerned Branch.

MODALITIES FOR OPERATION OF THE DEALERSHIPThere is no restriction on the Dealer about the number of products that he like to deal in, within the list of products covered by the scheme. Depending upon the extent of responses, SAIL may decide about appointing a dealer to deal with one and/or more products.  

GENERAL:a) The Dealer who are appointed by SAIL will not deal with institutional customer/Industrial units/ Govt. Deptts./ PSUs and Projects and not participate in any kind of tenders on behalf of SAIL without the prior approval of the concerned Branch of SAIL. The Dealer is required to serve such requirements as would be communicated to him by SAIL.b) SAIL representative may inspect availability of materials at the premises of the Dealer from time to time. c) Applicants belonging in SC/ST and OBC category will be accorded preference in appointment as a SAIL Dealer subject to their fulfilling the conditions and eligibility criteria and subject to their furnishing documentary evidence of belonging to SC/ST/ OBC.d) On appointment, an agreement containing the various Terms and conditions is signed between the SAIL Dealer and SAILe) While evaluating applicants for appointment of SAIL Dealer, suitable weightage is given by SAIL to such applicants who intend to deal exclusively with SAIL products.f) A minimum qualifying criteria that the applicant should possess an office/retail outlet besides a storage space of suitable capacity.

RECENT DEVELOPMENTS:

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15 new DMO – Dealer Marketing Officers have been posted all over India in 2009.

Quarterly benefits introduced (ex. on doing 250% of committed qty).

Introduced Light structural’s also introduced in 2009 (initially only TMT & GP/GC was there)

Initially Dealership commitment limit earlier was 100 MT is now been increased upto 300 MT.

GP Lifting limit was 100 MT, Increased to 200 MT.

16 new exclusive dealers have been appointed in northern region, who will be dealing only in sail products.

We have taken last year stringent action against non performers(above 100 in NR itself removed due to non performance ).

From 2009 onwards procedure regarding appointment of dealers has been changed. From now on its all done through internet.

Now predominant product wise RM & BM are main dealership looking officers, instead of senior RM or BM (last yrs development)

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PROPOSED CHANGES EXPECTED IN FUTURE:

Structural changes in our own organization. Dealer marketing officer may be report to regional dealer managers. Now they are reporting to Sr. BM.

Centralized & independent approach - Independent advisable command & with own Ed’s (Introduced on 06/-7/2010 with independent command str. Headed by a GM).

Flat & long product dealership may be totally differentiable

Channel of distribution change– A major ‘Distributor’ may be appointed who may distribute to small retailers.

Major cities Guys can become wholesale financer CUM our Distributor. Which would result in

Ease of reach to distributors Control over small GP packaging Availability of credit facility Transportation problem

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RESEARCH METHODOLOGY

Methodology is concerned with the procedure followed to accomplish the task.

SAMPLE:

Delhi, Faridabad and Ghaziabad branches were taken into consideration. As no of dealer in different branches was large, so only active dealers were selected. The questionnaire was distributed roughly to 50 dealers, however only 34 properly filled were taken into consideration.

METHOD FOR COLLECTION OF DATA-

1) Secondary Data was collected with the help of SAIL employees, from website, from branch office etc.

2) Primary Data:-Questionnaire was used for research study was self developed. Data was collected from dealer and later was processed and analyzed to reach conclusion.

Type of question-

The responses format of question were-

a) Opened ended question : In this type of question I asked question openly and they give answer based on their experience in dealing with company.

b) Closed Ended question: In this type of question I asked in which the dealers has to only tick mark the answer according to their likes and dislikes.

PROCEDURE-

At first I visited the three branches in Delhi, Faridabad and Ghaziabad region of SAIL. Where I meet the branch managers who gave insight into branch working and after that had a visited to respective warehouse to understand the logistics functioning. Second phase included collection of data from dealers with the help of questionnaire.

Questionnaires in which dealers left question unanswered/incomplete, were not considered for analysis.

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EVALUATION OF DATA :

Sample Data Findings

Sample Size Total 45

Responded = 34 Not/Incompletely Responded = 11

Distribution of responded sample

Delhi Faridabad Ghaziabad9

9.510

10.511

11.512

12.5

12 12

10

No. of Dealers

No. of Dealers

S. No. Branch No. of Dealers1 Delhi 122 Faridabad 123 Ghaziabad 10

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Findings:-

Reason for being a sail dealer.

74%

21%

6%

Brand NameProduct QualityProfit Margins

Of the total sample of 34, 73% became associated with company because of brand name i.e. 25

No.s %Brand Name 25 73Product quality 7 21Profit Margins 2 6

Will you switch to competitor if provided with better services?

44%

56%

Yes No

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44% i.e. 15 out of 34 dealers agreed they would switch to competitors if they are provided with better services.

No.s %Yes 15 44No 19 56

Effect of advertising & promotional activities on sales by the dealers end .

Interestingly where more than 60% dealers were in favour of promotional activities and on the other hand 38% said it makes no difference.

Wall Paintings, Hoardings and Calendar are the main tools used for promotional activities.

Effect No’s %No change 13 385 – 10 % 18 5310 – 20% 2 6More 1 3

Perception of customers towards brand SAIL

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38%

53%

6%

3%

Chart Title

No change5 - 10 %10 - 20 %More

41%

44%

15%

Very goodGoodAverageUnaware

Sail has established itself a powerful brand.

Brand Perception No.s %Very good 14 41

Good 15 44Average 5 15Unaware 0 0

Quality measure of Sail products compared with the competitor’s

24%

50%

3%

24%

Chart Title

Much BetterBetterSimilarBad

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Though more than 70% dealers were satisfied with quality of sail products but 24% were disappointed.

Galvanized products and conversion materials were the areas where sail was losing its business to competitor’s especially to secondary producers.

Quality comparison No.s %Much Better 8 23Better 17 50Similar 1 3Bad 8 24

Dealer’s satisfaction with the profit margins.

35%

53%

12%

Chart Title

Very much SatisfiedAvg satisfiedNo satisfied

Majority of the dealers i.e. 65% think that more work could be done in this area. Few of them even disclosed that if given better margins they would switch to

competitors.

Dealers satisfaction No.s %Very much satisfied 12 35Average satisfaction 18 53Not satisfied 4 12

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What could be area of improvements:

Quality standards to be maintained (spl for galvanized products) i.e. GP/GC sheet and coil.

Timely Delivery of materials Better material packaging Faster administration procedures Introduce more product mix in terms of size

Additional services which dealers like to have are:

Credit Facility Earlier Delivery(within 24 hrs) Facility to measure weights

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RECOMMENDATION:-

As SAIL is growing from year to year therefore it is very much important for them to sustain its loyal customers for longer period. There are lots of competitors in market like Tata, Essar Steel, Jindal Steel etc. For this they have to do improvement time to time in order to tackle their competitors and for further growths.

Therefore there are lot of scope still remaining in the improvement specially for dealers in SAIL in order to achieve their objective. Following are few points of improvement which they can do to improve, sustain and grow:-

1) Quality standards to be given the priority.

2) Better material packaging technique to be adopted.

3) Strengthening of market research must be done in order to track down Latest trends in the market Moves of competitors Regular feedback from dealers

4) Faster reflexes to the changes taking place in the market environment.

5) Online order tracking facility at dealers end must be available.

6) More selling and marketing through E-commerce route to be promoted.

7) Marketing and promotional activities should be done through TVC, print media, internet etc in order to promote and increase the visibility of brand SAIL by the company itself.

8) New schemes for dealers to be introduced on regular bases.

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Questionnaire:

Name of dealer :- Date : -

location :- company associated with :-

1. What was the reason that you became the dealer of this company?a. Brand nameb. Product qualityc. Income

2. If any other company provide you the same product at lower rates irrespective of their composition will you switch over?a. Yesb. No.

3. Do you use any type of advertisement to attract the customer and make them aware about your brand?a. Yes. (specify)b. No.

4. Percentage increase in sale due to advertisement?a. Approx 5% to 10%b. Approx 10% to 20%c. Mored. No change

5. What is the brand image of your brand in the minds of customer?a. Very Goodb. Goodc. Averaged. Or they are not aware.

6. Are you satisfied with the services provided to you?a. Yesb. No.

7. According to you how do you think about the quality of your product as compared to its competitors?a. Excellentb. Betterc. Goodd. Bade. No comparison.

8. Are you satisfied with the rates at which you get the commodities?a. Very much satisfiedb. Satisfied

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c. Average satisfiedd. Not satisfied.

9. Who according to you are the major competitors operating in your area?a. TATAb. SAILc. Essard. Jindale. Local/Others retailers.

10. Are you satisfied being associated with the concern company?a. Yesb. No.

11. Which area according to you needs improvement?

12. Other facilities which you want from the company?

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