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REGULATION OF MARKETING ACTIVITIES THROUGH E-AUCTION IN BOKARO STEEL PLANTBY : SANJAY KUMAR SANJEEV BANKIRAROLL No.:-PGIB/04/39

There s A Little Bit of Sail In Everybody's Life

Largest company in India. Ranked 13th largest company in the world in crude steel production. 2nd largest steel producing company in India.

NET SALES TURNOVERPRODUCTION OF SALEABLE STEEL

Rs 40,551 Crores.

11.714 million Metric

Tonns.

1) PRIMARY PRODUCTS HOT ROLLED (HR)

COIL. HOT ROLLED (HR) SHEET. HOT ROLLED (HR) PLATE. GALVANISED PLANE (GP) - SHEET. GALVANISED PLANE (GP) COIL.

2) SECONDARY PRODUCTS Def. CR-SHEET. Def. HR-COIL. COBBLE PLATE. Def. HR-PLATE. CR-BABY COIL. Def. HR-SHEET.

Def. GP-SHEET.

3) BY - PRODUCTS Benzene, Toulene. Anthracene. Naphthalene. Still Bottom Oil. Hot pressed Naphthalene. Ammonium Sulphate. Ferrous Sulphate.

Process flow of E-AuctionAdvertisement of data/type of material On SAIL website/newspaper

Posting of Lot details to be Auctioned on SAIL/MJ website

Pre auction

Inspection of Lots By customers

Auction conducted on metaljunction.com

Report of auction by Metal junction to BSL

During auction

Reserve Price Opening Committee Meeting

Recommendation and Approval for Sale

Post Auction

Issue of Offer

OBJECTIVE SETTING1)

To find out the reasons for problem of E-Auction in Bokaro Steel Plant.

2)

To know how E-Auction helping Bokaro Steel Plant to improve its selling mechanism & increasing its sales revenue.

3)

To analyze the perception of potential customers of BSL towards E-Auction.

Questionnaire. 2) Survey Method.1)SAMPLE SIZE : SAMPLING UNIT : -

15BSL Customers.

SAMPLING METHOD : - Non Random Sampling

(Quota Sampling)

1) PRIMARY DATA COLLECTIONPrimary data is collected from 15 major potential customers of Bokaro Steel Plant through questionnaire.

2) SECONDARY DATA COLLECTIONSecondary data is mainly collected from various concerned department heads through survey(personal interviews).

PRIMARY DATA ANALYSIS . SOURCE : - 15 major potential customers of BSL.AREAS OF PROBLEM WITH RESPECT TO E-AUCTIONPROBLEMS RESPONDED BY

Material cost payment clearing time is too short. Delayed information about the new auction items. No material lifting facility. Rate of interest for extended payment clearing period is very high.

10 7 9 8

PROBLEMS /INCONVENIENCE

RESPONDED BY

Complex documentation. No in time stock maintenance. Lack of awareness/knowledge about e-auction. Stock damage problem.

5 4 1 2

The above table shows that these are the major problems or inconvenience faced by the customers with respect to eauction at Bokaro Steel Plant. Out of all the 15 major customers I interviewed these are the responses I got from them about the problem.

Majority of the customers (10) says that the material cost payment clearing time is too short. Some have problem regarding the lack of their material lifting facility from the material site. Some customers say that the rate of interest for extended payment period is very high i.e. 24%, some said that they get delayed information about the new auctioned items and so on.

PROBLEMS/INCONVE NIENCES.

NO. OF CUSTOMERS Dissatisfie satisfied d

%DISSATISFA AVG CTION DISSATISFAC LEVEL TION% LEVEL. 67 %

Material cost payment clearing period. Material lifting facility. Rate of interest for extended period of cost payment. Other factors.

10

5

34 %

9 8

6 7

60 % 53 %

30 % 26 %

3

12

20 %

10 %

Avg. Dissatisfaction level10% 26% 34%MATERIAL COST PAYMENT CLEARING TIME MATERIAL LIFTING FACILITY ROI FOR EXTENDED PERIOD OF COST PAYMENT

30%

OTHER FACTORS

Since majority of the customers(34%) are dissatisfied or having inconveniences regarding the material cost payment clearing time. This problem occurs more frequently, Hence it needs immediate attention from the company in order retain its existing customers as well as to attract new customers.

SOURCE : - Concerned Dept. Heads Through Interviews. BEFORE INTRODUCTION OF E-AUCTION(2004-2005)PRODUCT Def CR-SHEET Def HR-COIL Def CR-BABY COIL Def HR-PLATE COBBLE PLATE AVG QTY.(MT) 84.66 81.78 103.22 73.08 108.33 AVG PRICE. (Rs PMT) 28,460.33 33,350.83 31,300.81 36,650.88 29,366.66 24,09,451.53 27,27,430.87 32,30,869.60 26,78,446.31 31,81,290.27 AVG SALES.(Rs)

Avg. Sales Revenue3500000 3000000 2500000 2000000 1500000 1000000 500000 0 Avg. Sales Revenue

PRODUCT Def.CR-SHEET Def.HR-COIL Def.CR-BABY COIL Def.HR-PLATE Def. COBBLE PLATE

AVG QTY.(MT) 94.73 90.23 110.22 98.88 112.34

AVG PRICE. (Rs PMT) 32,450.83 39,700.67 35,700.89 40,050.45 36,550.82

AVG SALES.(Rs) 30,74,067.10 35,82,191.50 39,34,927.90 39,60,188.50 41,06,119.10

Avg. Sales Revenue Each Auction4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0

Avg. Sales Revenue Each Auction

4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0

After E-Auction Before E-Auction.

INTERPRETATION .. AVG SALES REVENUE : AVG MATERIAL DISPATCH : -

30% - 35% 10% - 15%

y According to the primary data analysis the major findings that came into highlight are listed below. The time period alloted for paying the total cost for the

material to the concerned customer is too short. i.e.7 days. Potential customers gets late Information about the new

auctioned items. No material lifting facility available for the issued material

to the customers.

Rate of interest for extended payment clearing period is

very high.i.e. (24 % pa)

Some customers finding the documentation process of e-

auction a bit complex and time taking. maintenance till its lifting. auction.

Once the material is issued, there is no sufficient stock

Few customers find that they are less awareness about e-

Sometimes stock damage problem also arises.

After complete analysis of data, the main conclusionand recommendation thet can be made out are listed below.

The time period alloted for paying the total cost for the material should increase, atleast 5-7 days. Rate of interest for extended cost of material payment period should come down to respectable level. i.e. 10-12 %. Sufficient material lifting facility should be available to the customers at the rate of 0.5%-1% of the total cost of the material to maintain its extra occurring cost.

There should be adequate stock maintenance of the issued

material till its lifting by the concerned customer. There should be easier and simpler documentation process

of e-auction so as to hold several minor customers. Extra focus should be given to the market makers and

make them potential enough to tap the untapped market, which would finally result in market development and high turn-over.