Report / Study on
“A STUDY ON CUSTOMER SATISFACTION AND CUSTOMER
RELATIONSHIP MANAGEMENT”
VIZAG STEEL PLANT
VISAKHAPATNAM
Prepared By
G H C PRASAD REDDY
[Under the guidance of]
Mr. D SREENATH REDDY Dy.GM (Mktg)
In partial fulfillment of the Course-Industry Internship Programme (IIP)
in Semester II of the Master of Business Administration
ALLIANCE UNIVERSITY – SCHOOL OF BUSINESS
BANGALORE
2010-2012
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Master of Business Administration
Industry Internship Programme (IIP)
Declaration
This is to declare that the Report entitled “A STUDY ON CUSTOMER SATISFACTION
AND CUSTOMER RELATIONSHIP MANAGEMENT” has been made for the partial
fulfillment of the Course: Industry Internship Programme (IIP) in Semester II (Batch: August
2010-12) by me at VIZAG STEEL PLANT (organization) under the guidance of Prof. RAY
TITUS.
I confirm that this Report truly represents my work undertaken as a part of my Industry
Internship Programme (IIP). This work is not a replication of work done previously by any
other person. I also confirm that the contents of the report and the views contained therein
have been discussed and deliberated with the Faculty Guide.
Signature of the Student :
Name of the Student (in Capital Letters) : G H C PRASAD REDDY
Registration No : 10SBCM0506
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Master of Business Administration
Certificate
This is to certify that Mr. / Ms. G H C PRASAD REDDY Regn. No. 10SBCM0506 has
completed the Report entitled “A STUDY ON CUSTOMER SATISFACTION AND
CUSTOMER RELATIONSHIP MANAGEMENT” under my guidance for the partial
fulfillment of the Course: Industry Internship Programme (IIP) in Semester II of the Master
of Business Administration (Batch: Aug 2010 – 2012).
Signature of Faculty Guide:
Name of the Faculty Guide: D SREENATH REDDY
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ACKNOWLEDGMENT
I would like to express my gratitude to Mr. D SREENATH REDDY for providing
me an opportunity to work at VIZAG STEEL PLANT.
During the training session and the report preparation, I have been helped by many
personalities, without the help of whom; the completion of this task would have been very
tough. While submitting the work in printed form, I would take this opportunity to thank
everyone, who has supported me during this project.
First, my sincere gratitude to Mr D SREENATH REDDY Deputy General Manager,
VIZAG STEEL PLANT who had allowed me to undertake the project and who has helped
and supported me at every point throughout the tenure of the project. She has played a
versatile role, by being a friend to listen to my difficulties, being a teacher to correct me
whenever I was getting off the track and more importantly a facilitator, who provided me
with all the information and sources, which has an immense contribution in successful
completion of this project.
Secondly, I would like to thank Prof. RAY TITUS, Faculty Guide. Under whose
guidance I could produce a decent piece of work. One remarkable quality of which has
helped me to do justice to the work assigned to me is his quest for excellence. He guided me
all the way from the beginning till the end by giving me his valuable inputs, whenever I
required. It was a pleasure to be working under him.
G HC PRASAD REDDY
10SBCM0506
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TABLE OF CONTENTS
1. EXECUTIVE SUMMARY 7
2. INTRODUCTION
2.1 INDUSTRY PROFILE 10
2.2 COMPANY PROFILE 25
2.3 THEORETICAL BACKGROUND 36
3. PROJECT PROFILE
3.1 OBJECTIVE OF STUDY 48
3.2 RESEARCH METHODOLOGY 48
4. OBSERVATIONS & ANALYSIS
4.1 ANALYSIS 51
4.2 CUSTOMER SATISFACTION INDEX 67
5. FINDINGS 74
6. RECOMMENDATIONS 77
7. CONCLUSION 79
8. ANNEXURE
8.1 QUESTIONNAIRE 81
9. REFERENCES 84
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CHAPTER-1
EXECUTIVE SUMMARY
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EXECUTIVE SUMMARY
Customer Relationship Management (CRM) is the latest tools from the information
technology AND other basic industry which enables, promotes and develops business
towards better profitability. All business entities have realized the importance of CRM and
carving the efforts to make the customer loyal to business. The importance of the customer
in a making breaking a business has led to greater introspection, conceptual clarity and
evolution of customer relationship management, both as an art and science, and development
of appropriate tools and software for enhancing business and prolonging the product and
business life cycle. This evolution has been a consumer to a many time (repetitive), „long
term relationship‟ management and importance of the „life time value‟ of the customer.
The benefits of customer relationship management are considered are abounded. it
allows organizations not only to retain customers, but enables more effective marketing,
creates intelligent opportunity for cross selling and open up the possibility of rapid
introduction of new brands and products. The major objectives are Enable the company to
quickly identify, contract, attract and acquire new customers. Obtain a better understanding
of the customers – their wants and needs. Define the appropriate product and service offering
and match it to the customer‟s unique needs. Manage and optimize a company sales cycle.
Identify cross-selling and up-selling opportunities.
Visakhapatnam Steel Plant has been striving to enhance quality in delivery of
products and services and trying to retain customer towards long term association. The
researcher has identified the need and study the practices at VSP, and has identified that VSP
has been categorically improved their CRM practices.
The first chapter deals with the present state of Iron and steel industry in India, which
lays the context for the study, the chapter also introduces concepts relating to CRM and it
various issues.
The second chapter is a profile of Vishakhapatnam steel plant, a brief introduction, its
marketing strategies, major facilities, SWOT analysis of industry amongst others.
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The third chapter deals with the methodology involved in conducting this study. It
lists out the objectives of the study, the data collection methods employed and the scope of
the study.
The fourth chapter is an accumulation of data collected for the project. It consists of
all the primary and secondary data. The data collected is organized and exhibited in this
chapter.
The next chapter is an analysis of the data collected in the light of areas of
improvement for VSP, the analysis elaborates on the strategies that can be employed by VSP
for better CRM.
The last chapter is a list of recommendations given to the company on measures to
improve implementation of CRM.
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CHAPTER-2
INTRODUCTION & INDUSTRY
PROFILE
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INTRODUCTION & INDUSTRY PROFILE
PROFILE OF IRON & STEEL INDUSTRY
Steel is a versatile, constantly developing material that underpins all manufacturing
activity. If a product is not made from steel, then it is certainly made using steel at some point
in the manufacturing process.
2.1.1 OVERVIEW OF IRON AND STEEL INDUSTRY
Steel is crucial to the development of any modern economy and is considered to be
the backbone of human civilization. The level of per capita consumption of steel is treated as
one of the important indices of the level of socio-economic development and living standard
of the people in any country. It is a product of a large and technologically complex industry
having strong forward and backward linkages in terms of material flows and income
generation. All major industrial economies are characterized by the existence of a strong steel
industry and the growth of many of these economies has been largely shaped by the strength
of their steel industries in their initial stages of development.
2.1.2 HISTORICAL PERSPECTIVE
The finished steel production in India has grown from a mere 1.1 million tonnes in
1951 to 29.27 million tonnes in 2000-2001. During the first two decades of planned economic
development, i.e. 1950-60 and 1960-70, the average annual growth rate of steel production
exceeded 8%. However, this growth rate could not be maintained in the following decades.
During 1970-80, the growth rate in steel production came down to 5.7% per annum and
picked up marginally to 6.4% per annum during 1980-90, which increased to 6.65% per
annum during 1990-2000. Though India started steel production in 1911, steel exports from
India began only in 1964. Exports in the first five years were mainly due to recession in the
domestic iron and steel market. Once domestic demand revived, exports declined. India once
again started exporting steel only in 1975 touching a figure of 1 million tonnes of pig iron
export and 1.4 million tonnes of steel export in 1976-77. Thereafter, exports again declined to
pick up only in 1991-92, when the main producers exported 3.87 lakhs tonnes, which rose to
2.79 million tonnes in 1995-96. The steel exports in 1999-2000 were 2.36 million tonnes and
in 2000-01 it was 2.57 million tonnes. The growth in the steel sector in the earlier decades
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since Independence was mainly in the public sector units set up during this period. The
situation has changed dramatically in the decade 1990-2000 with most of the growth
originating in the private sector. The share of public sector and private sector in the
production of steel during 1990-91 was 46% and 54% respectively, while during 2000-01 the
same was 32% and 68% respectively. This change was brought about by deregulation and
decontrol of the Indian iron and steel sector in 1991. A number of policy measures have been
taken since 1991 for the growth and development of the Indian iron & steel sector. Some of
the important steps are
Removal of iron & steel industry from the list of industries reserved for the public
sector and also exemption from the provisions of compulsory licensing under the Industries
(Development & Regulation) Act, 1951, deregulation of price and distribution of iron & steel,
inclusion of iron and steel industry in the list of high priority industries for automatic
approval for foreign equity investments up to 74%, lowering of import duty on capital goods
and raw materials etc.
The Indian steel sector was the first core sector to be completely freed from the
licensing regime and the pricing and distribution controls. This was done primarily because
of the inherent strengths and capabilities demonstrated by the Indian iron and steel industry.
During 1996-97, finished steel production shot up to a record 22.72 million tonnes with a
growth rate of 6.2%, while in 1997-98, the finished steel production increased to 23.37
million tons, which was 2.8% more than the previous year. The growth rate has drastically
decreased in 1997-98 and 1998-99 being 2.8% and 1.9% respectively as compared to 20% in
1995-96 and 6.2% in 1996-97. The growth rate in 2000-2001 has improved to a healthy
9.60% with the total production touching 29.27 million tonnes. The production of finished
steel during 2001-02 has been 30.61 million tonnes, which means a lower growth rate of
about 4.5% compared to the previous year. This fall in the growth rate of steel production has
been brought about by several factors that, inter-alia, include general slowdown in the
industrial production and construction activities in the country coupled with lack of growth in
major steel consuming sectors. The total production of finished steel and the share of main
and secondary producers during 90's and up to 2002-03 are given in the annexure
2.1.3 THE INTEGRATED STEEL PLANTS IN INDIA ARE:
Rourkela Steel Plant
Bhillai Steel Plant
Bokaro Steel Plant
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Durgapur Steel Plant
Indian Iron Steel Company ( IISCO)
Tata Iron and Steel Company ( TISCO)
Visakhapatnam Steel Plant ( VSP)
ESSAR Steel Company
JINDAL Steel Company
2.1.4 IRON AND STEEL PROMOTION IN INDIA
Although iron and steel is one of the most important industries in the Indian
manufacturing sector, India is only the 15th largest steel producer in the world. Originating
from the first set up of a single steel plant in 1911-12, the iron and steel sector included 7
integrated iron and steel plants in 1995-96. Due to the regulatory and political development
of the sector only one of these plants is in private hands accounting for about 15% of total
steel production. The integrated steel units usually use the blast furnace – basic oxygen/open
hearth furnace process route for iron and steel production. In addition, there are about 180
secondary producers employing the electric arc furnace process. Another 500 mostly smaller
units rely on other processes such as induction furnace process, melting by re-rollers, and
ship breaking units.
2.1.5 PROJECTED PRODUCTION OF IRON & STEEL (Mt/annum)
Crude Steel
Production (Mt/annum) based on
Crude Steel Production (Mt/annum) based on
Year GDP total GDP industry Average
2001 28.71 29.53 29.12
2005 35.38 36.93 36.15
2010 45.95 49.07 47.51
Though currently the iron and steel sector seems to be on an upward path in a world
of free market competition and prices, there are several drawbacks threatening the Indian
industry. For example, the state of technology, despite the efforts towards modernization and
up gradation, is still inferior to that in other countries. Low costs of primary inputs have so
far led to low costs of production and economic viability of Indian steel. These advantages,
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however, may be eroded in the near future making Indian steel less competitive. Therefore,
technological progress and the adoption of more efficient and improved technologies need to
continue supported by policy and economic incentives to the extent possible.
2.1.6 OBJECTIVE OF STEEL POLICY
1.6.1 Strategic Goal: The long-term goal of the national steel policy is that India should have a
modern and efficient steel industry of world standards, catering to diversified steel demand.
The focus of the policy would therefore be to achieve global competitiveness not only in
terms of cost, quality and product-mix but also in terms of global benchmarks of efficiency
and productivity. This will require indigenous production of over 100 million tonnes (mT)
per annum by 2019-20 from the 2004-05 level of 38 mT. This implies a compounded annual
growth of 7.3 percent per annum.
Table 1: Production, Imports, Exports and Consumption of Steel
(in million tonnes)
2.1.7 INDUSTRY STRUCTURE
The iron and steel industry in India is organized in three categories‟ viz. main producers,
other major producers and the secondary producers. The main producers and other major
producers have integrated steel making facility with plant capacities over 0.5 mT and utilize
iron ore and coal/gas for production of steel. In 2004-05, the main producers i.e. SAIL,
TISCO and RINL had a combined capacity of around 19.3 mT and capacity utilization was
104 percent. The other major producers comprising of ESSAR, ISPAT and JVSL had a
capacity of 6.4MT with capacity utilization of 97 percent. The secondary sector is dispersed
and consists of:
(a) Backward linkage from about 120 sponge iron producers that use iron ore and non-
coking coal, with a capacity of around 13 mT, providing feedstock for steel
producers. The capacity utilization in 2004-05 was 75 percent.
Production Imports Exports Consumption
2019-20 110 6 26 90
2004-05 38 2 4 36
CAGR* 7.3% 7.1% 13.3 % 6.9 %
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(b) About 650 mini blast furnaces, electric arc furnaces, induction furnaces and energy
optimizing furnaces that use iron ore, sponge iron and melting scrap to produce steel.
Their capacity is around 14.7 mT, and capacity utilization in 2004-05 was 58 percent.
(c) Forward linkage with about 1,200 re-rollers that roll out semis into finished steel
products for consumer use. These are small and medium enterprises, whose reported
capacity is around 15 mT, and capacity utilization in 2004-05 was 55 percent.
2. 1.8 SWOT ANALYSIS OF THE INDUSTRY
The strengths, weaknesses, opportunities and threats for the Indian steel industry have
been tabulated below. The national steel policy lays down the broad roadmap to deal with all
of them.
Strengths
1. Availability of iron ore and coal
2. Low labour wage rates
3. Abundance of quality manpower
4. Mature production base
Weaknesses
1. Unscientific mining
2. Low productivity
3. Coking coal import dependence
4. Low R&D investments
5. High cost of debt
6. Inadequate infrastructure
Opportunities
1. Unexplored rural market
2. Growing domestic demand
3. Exports
4. Consolidation
Threats
1. China becoming net exporter
2. Protectionism in the West
3. Dumping by competitors
2.1.8 INDIAN STEEL INDUSTRY - A SWOT ANALYSIS
Strengths
India has rich mineral resources. It has abundance of iron ore, coal and many other
raw materials required for iron and steel making. It has the fourth largest iron ore reserves
(10.3 billion) after Russia, Brazil, and Australia. Therefore, many raw materials are available
at comparatively lower costs. It has the third largest pool of technical manpower, next to
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United States and the erstwhile USSR, capable of understanding and assimilating new
technologies. Considering quality of workforce, Indian steel industry has low unit labour
cost, commensurate with skill. This gets reflected in the lower production cost of steel in
India compared to many advanced countries (Table 3). With such strength of resources, along
with vast domestic untapped market, Indian steel industry has the potential to face challenges
successfully.
Weaknesses
Endemic Deficiencies
These are inherent in the quality and availability of some of the essential raw
materials available in India, eg, high ash content of indigenous coking coal adversely
affecting the productive efficiency of iron-making and is generally imported. Advantages of
high Fe content of indigenous are often neutralized by high basicity index. Besides, certain
key ingredients of steel making, eg, nickel, ferro-molybdenum is also unavailable
indigenously. Systemic Deficiencies However, most of the weaknesses of the Indian steel
industry can be classified as systemic deficiencies. Some of these are described here. High
Cost of Capital Steel is a capital intensive industry; steel companies in India are charged an
interest rate of around 14% on capital as compared to 2.4% in Japan and 6.4% in USA. Low
labour Productivity In India the advantages of cheap labour gets offset by low labour
productivity; eg, at comparable capacities labour productivity of SAIL and TISCO is 75
t/man year and 100 t/man year, for POSCO, Korea and NIPPON, Japan the values are 1345
t/man year and 980 t/man year. High Cost of Basic Inputs and Services High administered
price of essential inputs like electricity puts Indian steel industry at a disadvantage; about
45% of the input costs can be attributed to the administered costs of coal, fuel and electricity,
eg, cost of electricity is 3 cents in the USA as compared to 10 cents in India; and freight cost
from Jamshedpur to Mumbai is $50/ton compared to only $34 from Rotterdam to Mumbai.
Added to this are poor quality and ever increasing prices of coking and non-coking coal.
Other systemic deficiencies include:
Poor quality of basic infrastructure like road, port etc.
Lack of expenditure in research and development.
Delay in absorption in technology by existing units.
Low quality of steel and steel products
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Lack of facilities to produce various shapes and qualities of finished steel on-demand
such as steel for automobile sector, parallel flange light weight beams, coated sheets
etc.
Limited access of domestic producers to good quality iron ores which are normally
earmarked for exports, and
High level taxation.
Besides these Indian steel makers also lacked in international competitiveness on
determinants like product quality, product design, on-time delivery, post sales service,
distribution network, managerial initiatives, research and development, information
technology and labour productivity etc. As is evident in Table 4, the weaknesses gets
reflected in India‟s poor standing in the global competitiveness as measured in terms of
indicated parameters.
Opportunities
The biggest opportunity before Indian steel sector is that there is enormous scope for
increasing consumption of steel in almost all sectors in India. Table 6 gives a glimpse of
untapped potential of increasing steel consumption in India; eg, even to reach the comparable
developing and lately developed economies like China and other Europe, a quantum jump in
steel consumption will be required.
Unexplored Rural Market
The Indian rural sector remains fairly unexposed to their multi-faceted use of steel.
The rural market was identified as a potential area of significant steel consumption way back
in the year 1976 itself. However, forceful steps were not taken to penetrate this segment.
Enhancing applications in rural areas assumes a much greater significance now for increasing
per capital consumption of steel. The usage of steel in cost effective manner is possible in the
area of housing, fencing, structures and other possible applications where steel can substitute
other materials which not only could bring about advantages to users but is also desirable for
conservation of forest resources. Other Sectors Excellent potential exist for enhancing steel
consumption in other sectors such as automobiles, packaging, engineering Industries,
irrigation and water supply in India. New steel products developed to improve performance
simplify manufacturing/installation and reliability is needed to enhance steel consumption in
these sectors. Main objective here have to be improvement of quality for value addition in
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use, requirement of less material by reducing the weight and thickness and finally reduction
in overall cost for the end user. Latest technology must be adopted by Indian steel
manufacturers for production of superior quality of steel for these applications. For example,
pre-coated sheets can be used in manufacture of appliances, furnishings, electric goods and
public transport vehicles. Production and supply of superior grades of steel in desired shapes
and sizes will definitely increase the steel consumption as this will reduce fabrication need;
thereby reduce cost of using steel. Few other perceived opportunities are: Export Market
Penetration It is estimated that world steel consumption will double in next 25 years. Quality
improvement of Indian steel combined with its low cost advantages will definitely help in
substantial gain in export market.
Threats
Slow Industry Growth
The linkage between the economic growth of a country and the growth of its steel
industry is strong. The Indian steel industry is no exception. The growth of the domestic steel
industry between 1970 and 1990 was similar to the growth of the economy, which as a whole
was sluggish. This sluggish growth in the steel industry has resulted in enhanced rivalry
among existing firms. As the industry is not growing the only other way to grow is by
increasing one‟s market share. Consequently, the Indian steel industry has witnessed spurts of
price wars and heavy trade discounts, which has done Indian steel industry no good as a
whole. Threat of Substitutes Plastics and composites pose a threat to Indian steel in one of its
biggest markets. For the automobile industry, the other material at present with the potential
to upstage steel is aluminum. However, at present the high cost of electricity for extraction
and purification of aluminum in India weighs against viable use of aluminum for the
automobile industry. Steel has already been replaced in some large volume applications:
railway sleepers (RCC sleepers), large diameter water pipes (RCC pipes), small diameter
pipes (PVC pipes), and domestic water tanks (PVC tanks).
Technological Change
Technological changes often force the industry structure to change. For a developing
country like India where capital itself is costly, technological obsolescence is a major threat.
Price Sensitivity and Demand Volatility The demand for steel is a derived demand and the
purchase quantity depends on the end-user requirements. The traders discounts. This
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volatility of demand often affects the integrated steel manufacturers because of their inability
to tune their production in line with the market demand Fluctuations. Some other threats are:
Ever decreasing import duty on steel.
Dumping of steel by developed countries.
High quality products from developed countries available for import at very
competitive prices.
Non-availability of capital from financial institutions for iron and steel sector.
2.1.9 STRATEGIC RESTRUCTURING
A Comparative Analysis
The effect of globalization on steel industries in different regions or countries has not
been uniform. Each region is unique in its own way in terms of raw materials availability,
technology adopted, market conditions, trading policies, etc. Consequently restructuring of
steel industries in different regions have been done in a manner that best suits the needs and
situations of the country or region (Table 7). The divergent strategies adopted for
restructuring by steel industries in different countries/regions provide the right perspective for
building a turnaround strategy for Indian steel industry
2.1.10 STEEL DEMAND
Urban Areas: The present steel consumption per capita per annum is about 30 kg in
India, compared to 150 kg in the world, and 350 kg in the developed world. 2
The estimated
urban consumption per capita per annum is around 77 kg in the country, expected to reach
approximately 165 kg in 2019-20, implying a CAGR of 5 percent. Apart from the anticipated
growth in the construction, automobile, oil and gas transportation, and infrastructure sectors
of the economy, conscious promotion of steel usage among architects, engineers and students
by the Institute of Steel Development and Growth (INSDAG) and the large producers will
drive this additional consumption. Steps would be taken to encourage usage of steel in
bridges, crash barriers, flyovers and building construction. Benefits of steel usage would be
added to the technical education curricula in the country.
Rural Areas: The rural consumption of steel in India remains at around 2 kg per
capita per annum, primarily because steel is perceived to be expensive among the village
folks. Based on the promotional efforts mentioned above, and an active focus on opening new
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block level rural stock points, a target is set for raising the per capita rural consumption of
steel to 4 kg per annum by 2019-20, implying a CAGR of 4.4 percent.
Exports: Although the focus of Indian steel industry is on the domestic market,
export will be another window on the demand side. The growth of exports of steel from India
has been around 10 percent per annum over the past decade. That speaks for the international
cost competitiveness of the steel sector. It takes assiduous effort to create, and hold on to
export markets. While the business decision to export will depend on the prevailing relative
prices, the Government would encourage strategic alliances with buyback arrangements and
dedicated export production through 100% export-oriented units. A growth rate of around 13
percent per annum is envisaged up to 2019-20. The issues related to exports have been
discussed in section 13 on Trade Policy.
2.1.11 INDUSTRY PERFORMANCE
The performance of Indian steel industry has been analysed in the medium term from
1997 to 2011. The sample for analysis includes data from SAIL and Tata Steel among the
ISPs and JVSL, Ispat, Essar and Lloyds among the secondary majors7.
Category wise estimated demand for iron and steel all India 2002-2003
Category Quantity, × 103 t
Bars and rods 10500
Structural 2500
Railway materials 845
Plates 2250
HR coils/skelp 6600
HR sheets 500
CR coils/sheets 3300
GP/GC sheets 1930
Electrical steel sheets 200
Tin plates 325
Pipes 850
Total finished steel 29500
Important performance indices such as Debt-Equity Ratio (D/E), Return on Net worth (Post
tax) (RONW), Net Sales/Total Assets and Net Profit/Net Sales have been calculated and
depicted in the Figures 3-6. Figure 3 depicts the rising trend of D/E from 2.13 to 2.90 in the
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last four years. This shows that the industry is shouldering an increasing debt burden and
becoming more leveraged. Figure 4 shows an improvement in Net Sales/Total Assets (Asset
Turnover Ratio) from 0.42 to 0.52, although this figure lags behind international standards.
(This ratio for the US steel industry was 1.2 during the period 1975-1993)8. This
improvement indicates that the industry is utilizing its assets more efficiently and/or is
shedding assets. RONW (Post-Tax), as depicted in Figure 5, has plummeted from a + 3%
return in 1997-1998 to 0.9% before making a partial recovery to 0.3% in 2001-2002. This
indicates that the industry in general is eroding its net worth, losing money and thus,
becoming unattractive to the equity investors.
2.1.12 UNEXPLORED RURAL MARKETS
The Indian rural sector remains fairly unexposed to their multi-faceted use of steel.
The rural market was identified as a potential area of significant steel consumption way back
in the year 1976 itself. However, forceful steps were not taken to penetrate this segment.
Enhancing applications in rural areas assumes a much greater significance now for increasing
per capital consumption of steel. The usage of steel in cost effective manner is possible in the
area of housing, fencing, structures and other possible applications where steel can substitute
other materials which not only could bring about advantages to users but is also desirable for
conservation of forest resources.
2.1.13 STEEL PRICES
Following de-regulation of prices for integrated steel plants in 1991-92, the domestic
prices of steel have become market-determined. Market prices remain in step with
international prices, though generally lower. During industry downturns, prices fall and
during upturns, they rise. While rationalization of the customs and excise duty structure is
aimed primarily at reducing fiscal and revenue deficits, it has an indirect influence on
consumer prices. At present, there are around three thousand units manufacturing steel and
steel products, which are marketed by over 100,000 traders for ultimate consumers. This
dispersal of the distribution chain has been the principal reason why no price regulation of the
steel trade has ever been in force. Government has recently set up a Competition Commission
to look into complaints of monopolistic pricing.
Steel futures: The cyclical nature of the steel industry deters fresh investments due to
risks of recession. The mismatch between demand and supply also leads to price volatility
witnessed during recent times. Stagnation in steel prices for long periods followed by sudden
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spurt also affects the consumers and the infrastructure industry. Therefore, the efforts of
various stakeholders to develop risk-hedging instruments like futures and derivatives would
be supported.
2.1.14 HUMAN RESOURCES
The anticipated steel production of 110 mT by 2020 would require an additional
workforce of 220,000 after accounting for the expected productivity improvements.7 Further
the creation of 1 man-year of employment in the steel industry generates an additional 3.5
man-years of employment elsewhere in the economy due to its strong linkages with other
sectors such as transport, mining, construction, machinery, and steel fabrication. The total
additional employment generated in the economy due to expected production of 110 mT by
2020 would be around 1 million.
The profile of the required human resources will have a larger share of the skilled and
semi-skilled labour force. It is a matter of concern that availability of scientists, engineers and
technicians per thousand of population in India is 7.05 compared to 113 in Japan, 90 in U.K.,
53 in Korea, 54 in Australia and 85 in Germany.8 Further, the task is not limited to increase
in the stock of technical manpower. The technical and professional institutes of the country
would also be required to impart new competencies and capabilities in tune with changes in
technology and the needs of globalization. The existing training and research institutes under
the Ministry of Steel would be brought under an umbrella organization with representation
from each segment of the industry. The functions of this organization would include (a)
suitable training programmes especially for the secondary small scale units, (b) promotion of
steel consumption through dissemination of information on availability and suitability of steel
for various applications, and (c) collection and analysis of data on important parameters of
the industry.
2.1.15 TECHNOLOGIES, RESEARCH AND DEVELOPMENT
Though the choice of technology will be determined by entrepreneurs based on
techno-economic considerations, the Government would encourage adoption of technologies,
which:
• Have synergy with the natural resource endowments of the country.
• They are conducive to production of high-end and special steel required for
sophisticated industrial and scientific applications
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• Minimize damage to the environment at various stages of steel making and mining.
• Optimize resource utilization.
• Facilitate modernization of the steel industry so as to achieve global standards of
productivity and efficiency.
• Development of front end and strategic steel based materials.
India‟s expenditure on Research and Development has been negligible not only in
absolute terms but also as a percentage of GNP at 0.86%. This can be compared to the
developed world with an average ratio of 2.5%. In the case of steel industry, the ratio of
expenditure on R&D as a percentage of turnovers is only 0.26%.
The low priority to indigenous R&D has given rise to adoption of technologies that
are more suited to conditions prevailing in the developed world. For example, resource
position of raw materials requires development of technologies, which can use indigenous
coking coals and non-coking coals and for improvement in quality of high alumina Indian
iron ore. But lack of innovation and adaptation to Indian conditions is resulting in large-scale
import of coking coal and low performance in iron making. Aggressive R&D efforts would,
therefore, be mounted to create manufacturing capability for special types of steel, substitute
coking coal, enrichment and agglomeration of iron ore fines, develop new products suited to
rural needs, enhance material and energy efficiency, utilize waste, and arrest environmental
degradation. Public sector steel companies would enhance R&D expenditure in the coming
years to finance internal R&D efforts and sponsor outside research, which may provide a
framework for inter-disciplinary cooperation with the private sector across national
boundaries. Government‟s contribution to fostering basic and applied R&D will be enhanced
2.1.16 STEEL INDUSTRY-MAJOR PROBLEMS AND CONCERNS
The Indian steel manufacturers are faced with some major problems and concerns,
which work as inhibiting factors to their effort towards gaining the competitive edge. A few
of these are: Un remunerative Prices Stagnating demand, domestic oversupply and falling
prices in the last four years have hit Indian steel makers. Barring the sporadic rise in demand
in the recent months, it has suffered from UN remunerative prices to the extent that
companies have been finding it difficult to maintain capital costs. Stagnating Demand for
Steel According to McKinney and Co the domestic steel industry is set to witness a 33% over
capacity in the hot rolled coil
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2.1.17 ONGOING CHANGES IN THE IRON AND STEEL INDUSTRY
The ongoing trend of expanding and modernizing steel production is expected to
maintain in the future. Major investment and expansion projects are currently underway that
will substantially increase the availability of steel on domestic as well as international
markets. With the addition of two newly set up integrated steel plants, crude steel production
capacity in the country will reach 30 Mt by the year 2000 (as opposed to 20.77 Mt as of
1995). Future production of crude steel has been estimated regressing crude steel production
on
a) GDP total and
b) GDP industry.
GDP total is assumed to increase at its 1990-95 trend rate of 5.4% p.a., while GDP
industry is assumed to grow at 6.2% p.a. (1990-95 trend rates). Projections based on these
assumptions as well as the average of the two production estimates are given in Table 4.1.
Regressing crude steel production on GDP iron& steel showed lower explanatory power and
did not yield diverging predictions. Detailed regression results are presented in Appendix C.
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COMPANY PROFILE
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COMPANY PROFILE
Vision
To be a continuously growing world class company we shall
Harness our growth potential and sustain profitable growth.
Deliver high quality and cost competitive products and be the first choice of
customers.
Create an inspiring work environment to unleash the creative energy of people.
Achieve excellence in enterprise management.
Be respected corporate citizen, ensure clean and green environment and develop
vibrant communities around us.
Mission
To attain 16 million ton liquid steel capacity through technological up-gradation,
operational efficiency and expansion; to produce steel at international standards of
cost and quality; and to meet the aspirations of the stakeholders.
Objectives
Expand plant capacity to 6.3 Mt by 2008-09, with the mission to expand further in
subsequent phases as per the corporate plan.
Sustain gross margin to turnover ratio>25%.
Be amongst top five lowest cost liquid steel producers in the world by 2009-10.
Achieve higher levels of customer satisfaction than competitors.
Instill right attitude amongst employees and facilitate them to excel in their
professional, personal and social life.
Be recognized as an excellent business organization by 2008-09.
Be proactive in conserving environment, maintaining high levels of safety and
addressing social concerns.
2.2.1 PROFILE OF VIZAG STEEL PLANT
To meet the growing domestic needs of steel, the decision of the Government of India
to set up an integrated Steel Plant at Visakhapatnam was announced by the Prime committee
chooses the site near Balacheruvu creek and the prime minister did the formal inauguration
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and laid the foundation stone on 20th
January 1971. The consultant, M/s M.N.Dastur and
Company ltd., submitted a techno-economic feasibility report for the plant, with an annual
capacity of about 3 million tones of liquid steel, in October 1977. The service examined the
detailed project report prepared by Dastur Company and offered Technical and Economic
operation for the same. The government and erstwhile USSR signed agreement on June 12th
1979, for co-operation in setting up a 3.4 million tones integrated steel plant at
Visakhapatnam. In terms of this agreement, soviets and Indian design organization revised
the earlier detailed project report of Dastur Co., jointly and a comprehensive revised detailed
project report for VSP was submitted in November 1980. A new company i.e. Rashtriya
Ispact Nigam Ltd. (RINL) was incorporated to have independent decision taking facility
with more concentration on this particular unit. The construction of the project commenced
in 1982 with a schedule of 4 and 6 year for the first and second stage respectively. During
construction due to inadequate found availability, the project could not be adhered to,
resulting in huge cost and time overruns. In a bid to reduce the capital investment
Rationalized concept was adopted in 1985. As per this one steel melt shop and one rolling
mill i.e. the universal beam mill were dropped. The other steel melt shop of 2.2 MTPA of
liquid steel without any additional facilities. The Honorable Prime Minister
Sri.P.V.Narasimha Rao dedicated the plant to the Nation on 1st August 1992. Unlike other
integrated steel plants in the country. New technology, large-scale computerization and
automation etc., are incorporated in the plant. To operate the plant at international levels and
attains such labor productivity; the total manning of the organization has been limited to
17500 employees. The plant has a capacity of producing 3.0 MT of liquid Steel and 2.656
MT saleable steel.
2.2.2 HISTORY OF THE VIZAG STEEL PLANT
The decision of the government of India to set up an integrated steel plant at
Visakhapatnam was announced in parliament by the Prime Minister Smt.Indira Gandhi on
17th
April 1970. The selection committee chose the site near balacheruvu creak and the
prime minister did the formal inauguration on January 20, 1971. The Consultant,
M/S.M.N.DASTUR & company private limited submitted a techno economic feasibility
report in February 1972, and a detailed project report for the plant, with an annual capacity
of about 3 million tone of liquid steel in October, 1977. In setting up the 3.4 million tones
integrated steel plant at Visakhapatnam. In terms of this agreement the earlier DPR of
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Dastur & Co was revised jointly by Soviets and India design organizing and a
comprehensive revised DPR (CRDPR) for VSP was submitted in November 1971.
The project was estimated to cost Rs. 8397.28 corers, based on prices as in the 4th
quarter of 1981. However, during the implementation of the project it was observed that the
project cost has increased substantially over the sanctioned cost, mainly due to prices
escalations and under provision of DPR estimates. In view of these and the critical fund
situation, alternatives for implementation of the project with rationalization of the approved
concept were studied in 1986. Under the rationalized concept 3.0 million tones of liquid
steel to be produced in a year and the project is estimated to cost Rs.5822.17cr as on fourth
quarter of 1987.
2.2.3 REASONS FOR ESTABLISHMENT
All the steel plants in India were located in the non coastal area of the country;
because of that reason the plant authorities were incurring high import and export expenses
in the form of tax besides the transportation cost of the raw materials, finished products,
spares and other equipments for various purposes. The concern authority has gone in deep
discussion to reduce this type of cost for at least to the latest steel plant for this reason and
the political threat for locating the steel plant in Visakhapatnam are the main points.
Compared to the other steel plants in India it is the 1st shore based steel plant.
In the year 1979-80 the construction took high speed and in following year i.e.
1981 contract signed with Soviet Union for preparation of working drawing for coke
ovens, blast furnace and sinter plant.
1982, there were drastic changes in the management of VSP i.e. from SAIL to RINL.
During the year 1985, Govt of India thought of dispensing with the scheme of
installing of steel plant at Visakhapatnam once for all, because of high capital cost of the
exercise and very own phase getting returns on the investment. At his stage there were
around 30 to 35 thousand contract labours working in the construction under various
contract jobs.
In the early stages, the Govt. has given assurances to the people that they will be
given jobs in the steel plant whose lands are lost in the acquisition. The total area gathered
by the steel plant, authority is 27000 acres. The land owners in this area were most of them
farmers. Most of the farmers are uneducated. This type of people is around 6000 that is
performing different non technical, inexpensive and transportive etc.
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2.2.4 INFRASTRUCTURE OF VISAKHAPATNAM STEEL PALNT
a) Location and General layout
The plant is located on the coast of Bay of Bengal, 16 kms to the South – West of the
Visakhapatnam port. It lays between the northern boundaries of the national highway No.5
from Chennai to Kolkata and 7 kms to the south west Howrah – Chennai railway line.
b) Climate
Visakhapatnam has warm and humid climate. April to June is the warmest months of the
year and December to February are the coldest months. The benefits from he South west
monsoon and he northeast monsoons. The average annual rainfall is 873.6 mm. Highest
mean monthly maximum temperature is 37.8 deg. C.
2.2.5 MAJOR PLANT FACILITIES
VSP has the following production facilities
Three coke ovens batteries of 67 ovens, each having 41.6 m3 volumes.
Two sinter machines of 312 sq.m area.
Two blast furnace of 3200 m3 useful volumes.
Steel melting shop with three L.D. converters ( two operating and one standby –by of 150
tons each of capacity each and 6nos. of four strand continuous blooms casters
Light and medium merchant mill (LMMM) of 7,10,000 tones per year capacity
Wire rod mills ( WRM) of 8,50,000 ones per capacity
A. Modern Technology
VSP is the most sophisticated and modern plant in the country. Modern technology
has been adopted in many areas of production some of them for the first time in the country.
Among them are
Selective crushing of coal
7-meter tall coke ovens
Dry quenching of coke
On ground blending of sinter base mix
Conveyor charging and bell less top for blast furnace
100% continuous casting of liquid steel
Gas expansion turbine for power generation utilizing blast furnace top gas pressure
Hot metal desulphurization
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Extensive treatment facilities of effluents for ensuring proper environmental protection
Computerization for process control
Sophisticated high speed and high
B. Major Units of VSP
The seven major units of VSP, which are successfully running in the production of
steel, and Pig iron, are:
C. Coke Ovens & Coal chemicals Plant
Coking coal after selective crushing and proper blending is subjected to destructive
distillation (heating in the absence of air) in the Coke Ovens. After heating for nearly a period
of 16-18 hours at a temperature of about 1100 degree C, Coke is obtained and is used as a
fuel as well as reducing agent in the Blast Furnace. The Coke Ovens of VSP are engineering
feats by themselves. They are the tallest ovens meter constructed in the country. The Plant
has 3 batteries of 7 mtr. Another feature is the dry cooling of coke carried out by the inert gas
nitrogen thus, reducing pollution considerably. Besides bio-chemical plant separately
undertakes the treatment of effluents, by products like benzene, toluene, xylene, naphthalene,
coal tar, creosote oil, pitch, and ammonium gas, VSP produces, among other by- products,
pushkala a prime fertilizer based on ammonium sulphate.
D. Steel Melt Shop & Continuous Casting
There are Top blown converters each of 133cu.m Volume, produce a total of 2.7
million tones of liquid steel per annum. This liquid steel thus produced is casted in six-4
strand bloom casters.
A special feature in energy conservation is the collection of Converter gas to be used
as a fuel in the plant. The entire molten steel as VSP is continuously cast at the radial type
continuous casting machines resulted in significant energy conservation and better quality
steel. 100% Continuous casting on such a large scale has been conceived for the first time in
India.
E. Rolling Mills
The cast blooms from continuous casting department are heated and rolled in the three
high speed and fully automated rolling mills namely light & Medium Merchant Mill, Wire
Rod Mill and Medium Merchant & Structural Mill, to produce various long products like
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Reinforcement bars, rounds squares, flats, angles, channels billets, wire rods etc.
Technologies adopted at Rolling Mills include world – class Steel work and Tem core
process.
2.2.6 SWOT ANALYSIS
The SWOT analysis of RINL brings forth the opportunities and threats facing RINL,
with a view to buildings up on the strengths, exploiting the opportunities improving upon the
weakness and converting threats into opportunities. The strengths, weakness, opportunities
and threats of RINL are as under.
S- Strengths
State –of-the technology
High commitment to achieve capacity levels
Areas of excellence
Economies of scale
High expansion potential
Strong commitment to conserve environment
W-Weaknesses
High capital rated charges
Low return product –mix
Productivity below international levels
Practices not as per with international standards
O-Opportunities
Shore based
Sizeable export markets
Access to import resources
Proximity to southern markets
Increasing domestic demand due to thrust on infrastructure development
T- Threats
Availability of Iron ore & coal
Rising input costs
Increasing competition
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Sensitive to exchange rate variation
Possibility of import duties declining further.
Excise duties continue to be high
Lack of alternative sources for major raw materials
Major market place (north & west) located far off
Infrastructure continues to be inadequate.
VSP‟s State – of –the –art technology, high expansion potential and economies of scale
would be utilized for offsetting the disadvantages of low return product – mix and high
capital related charges. Shore based location of the company would promoted export and
import of quality raw materials. Proximity of VSP to southern make can help in capturing
larger market share in south. VSP would meet the increasing competition through its quality
products and customer orientation.
2.2.7 DESIGN AND ENGINEERING
The soviet design organization, GIPROMETS designed the coke oven and coal
chemical plant (excluding the 7-meter tall battery portion) sinter plant and blast furnace.
MECON of Ranchi engineered the 7-meter tall coke oven batteries with dry quenching.
Dastur & Co. has designed the remaining facilities.
a. Raw Material
Raw Material Source
Iron ore lumps & fines. Bailadilla, MP.
BF limestone. Jaggayyapeta, A.P.
SMS lime Stone. Dubai
BF Dolomite. Madharam, A.P.
SMS Dolomite. Madharam, A.P.
Manganese ore. Chipurupalli, A.P.
Boiler coal. Talcher, Orissa.
Cocking coal. Australia.
Medium Cocking coal (MCC) Gidi / swang / rajarappa / kargli.
b. Employment Opportunities
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At full operational stage, now Visakhapatnam Steel Plant has employed about 17369
technical staff. The indirect employment due to various ancillary units‟ development and
other services is much more.
c. Training and Development
RINL believes that the employees are its assets and strives to realize their potential in
full for mutual advantage.
A trained cadre of technical operative personnel and managerial cadre are provided
for the successful commissioning and operation of a large steel plant like VSP.
A training and development centre with facilities is available to develop trained cadre
of technical personnel and managerial cadre.
Employees are sent to other steel plants on short duration tours to find solutions to the
various issues facing the company.
Employees are also sent to suppliers manufacturing units.
VSP provides training programmer for enhancing their knowledge.
d. Township
A Modern township with all amenities has been developed adjacent to the steel plant
site, to house the plant employees. The township is having protected drinking water supply,
water borne sanitation, black top roads, schools hospitals, welfare centers, shopping centers,
community facilities, parks etc.
e. Water supply:
Operational water requirement of 36 mgd is being met from the Yeleru water supply
scheme.
f. Power supply:
Operation power requirement of 180 to 200 MW is being met through captive power
plant. The capacity of the power plant is 286.5mw; VSP is exporting around 60MW Power
to APSEB.
g. Advertising
Visakhapatnam Steel Plant is also following advertising, which is one among the
promotional strategies.
Print media
Brochures and booklets
Posters and leaflets
Directories
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Symbols of logs
Bill boards
Displays
2.2.8 MARKETING ACTIVITIES
Under integrated marketing some of the important activities of the marketing
management are as follows.
Collection of necessary information regarding marketing
Analysis of the data and drawing conclusion
Search and development stage of new marketing techniques
To chalk out detailed marketing programme
To implement that marketing programme
To coordinate between the wants of the customer‟s and their satisfaction.
2.2.9 CHANNELS OF DISTRIBUTION
Distribution channels can be characterized by the number of channel levels. Each
middle man who performs some work in bringing the product and title closer to final buyer
constitutes a channels level.
2.2.10 PROMOTION
Promotion is the scientific techniques of communication regarding the quality of
products through which consumers get to know about the merit and demerits to mortgage
and to overall informing the potential customers promotional techniques i.e. advertising
publicity and personal selling should be used. These are the real and major tools of
promotional activities. According to W.J.Stantion “promotion is and exercise tin information
and influence”.
2.2.11 MAJOR AWARDS WON BY VSP
India Priyadarshini Vrikshmaitra for massive forestation of RINL1992-93.
National Energy conservation Award 2002, first prize in integrated sector.
Award from Andhra Pradesh pollution control Board for significant work on calendar
Production technologies.
Rolling shield on Environment Protection
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Second prize for RINL‟s stalls at international Trade Fair.
Successful Re-Certificate or ISO 9001-2000
Udyog Excellence gold medal award for excellence in Steel Industry
Golden Peacock (1st Prize) “National Quality Award -1996.
Nehru Memorial National Award for Pollution control 1992-93 & 1993-94.
Best Management Award
Best Tax payer Award Govt- 0f Andhra Pradesh
Ispact Suraksha Puraskar (1st prize) for longest accident free period, 1991-1994.
Rolling shield for “Ecological protection” by ministry of information & Broad Casting.
Greenstick safety silver Award for 2002-2003 in Steel Sector for implementing best
safety standards.
INSAAN Organizational Excellence Award instituted by the Indian national suggestion
Schemes associated for the year 2004.
PM‟s Trophy for 2004-2005.
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THEORETICAL BACKGROUND
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2.3.1 INTRODUCTION TO CRM
Customer is the king, but that doesn‟t mean you are not. The new rule says body is a
king. It is a networking world – the society of persons.
Customer Relationship Management (CRM)is the latest tools from the information
technology repertoire which enables, promotes and develops business towards better
profitability
A brief introduction to CRM from the managerial perspective may be in order and
help us to appreciate its utility for the business organizations. The purpose of business is to
create customer.
The importance of the customer in a making breaking a business has led to greater
introspection, conceptual clarity and evolution of customer relationship management, both
as an art and science, and development of appropriate tools and software for enhancing
business and prolonging the product and business life cycle. This evolution has been a
consumer to a many time (repetitive), „long term relationship‟ management and importance
of the „life time value‟ of the customer.
CRM helps to seamlessly integrate the product and service to customer needs in a
better, faster and cheaper manner. CRM isn‟t a tool for electronic data. It has to use as a
„business strategy‟ to select and manage the most. Valuable customer relationships that give
the best results. CRM in thus not a technology but a strategy based on technology.
Customer „relationships‟ involve responsiveness, retention, refinement reliability and
empathy.
CRM says customers are business assets.
Customer relationship is developing and maintaining relationship between customer
and the company. Marketing activity should concentrate to build and enhance such
relationship.
CRM is the process of acquiring, relating and partnering with selective customers to
create superior value for the company and the end customer.
2.3.2 BENEFITS OF CRM
The benefits of customer relationship management are considered are abounded. it
allows organizations not only to retain customers, but enables more effective marketing,
creates intelligent opportunity for cross selling and open up the possibility of rapid
introduction of new brands and products.
The benefits like cost savings, revenue enhancement, and strategic impact
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Increased sale revenues
Increased with rate improve since companies can with draw from unlikely or bad
deals earlier on in the sales process
Increased margins
Improved customer satisfaction ratings
Decreased general sales and marketing administration costs
Identifying and targeting the most profitable customers and having a deeper
knowledge of customers.
Getting more marketing or cross –selling opportunities.
Ability to manage marketing campaigns with clear objectives
Increased market share due to customer relationships
Decreased marketing and promotion expenses
Improved channel efficiency
Profitable cross selling and up selling opportunities to existing customer
Reduce service expenses with online self –service
Increased repeat business revenues from customized, personalized customer online
experience –maximize lifetime profit per customer
Increased return on service / support investments
Reduced service parts inventory
Reduced physical storage space of service parts
Increased customers satisfaction and responsiveness
Faster response to customer enquires
Increased efficiency through automation
Receiving customer feedback that leads to new and improved products or services
2.3.3 NEED FOR CRM
Customer relationship management currently, a much talked about issue is not a fad, but is
very vital for companies in the present highly competitive world. And they are,
Companies have to increasingly pursue a customer centric competitive strategy rather than
a product – centric one.
E- Customers demand constant access, immediate response, and a personalized touch.
Focus is shifting form supply chain to demand chain effectiveness.
Better understanding and intelligent management of customer relationships is essential for
survival.
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2.3.4 THE 10 PRINCIPLES OF CUSTOMER RELATIONSHIP MANAGEMENT
1. Value segmentation
Based on customer needs, preferences, behaviors and economic potential, which provides
the basis for resource allocation decision in marketing, sales and service
2. Collaboration
The customer is involved in the specification, design and or delivery of a desire result.
3. Institutional memory
When a customer interacts which your company, everyone in the enterprise is award of prior
interactions, outstanding issues and pending opportunities.
4. Touch point alignment
Customers are able to do business with you through multiple channels, which are aligned to
customer need and value.
5. Real time information management
Employees have real time access to the right information in order to made customer based
decisions and resolve issues immediately
6. Closed loop processes
Integrated front and back office systems ensure that information and word flow carry
though the entire enterprises to their logical conclusion, closing the customer loop and
enabling continuous capture.
7. Customer scorecard
Employee performance requirements and measures and designed to drive specific customer
behavior
8. Listening posts
Forums to facilitate information sharing and learning about your customers that help you to
business with them learn from each other and provide valuable customers input to you
business.
9. One and done
Solving customer needs first time
10. Total experience management
Mapping all of the touch points between you and your customers and attempting to deliver a
consistent quality experience as perceived by the customer.
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2.3.5 CRM OBJECTIVIES
The following are the specific objectives of CRM
Enable the company to quickly identify, contract, attract and acquire new customers.
Obtain a better understanding of the customers – their wants and needs
Define the appropriate product and service offering and match it to the customer‟s unique
needs.
Manage and optimize a company sales cycle.
Identify cross-selling and up-selling opportunities.
Increase retention of existing consumers through improved after sales, service and support
2.3.6 THE GOAL OF CRM
The idea of CRM is that it helps business use technology and human resources to gain
insight into the behaviors of customers and the value of those customers. If it so workers as
hopped, a business can:
Provide better customer service
Cross – sell products more effectively
Help sales staff close deals processes
Discover new customers
Increase customer revenues
Responses to campaigns
Shipping and fulfillment dates
Sales and purchase data
Account information
Web registration data
Service and support records
Demographic data
Web sales data
Make call centers more efficient
Improve customer satisfaction and retain customer base.
2.3.7 Why CRM?
The purpose of CRM is to improve marketing productivity and enhance mutual values by
increasing the marketing efficiency, CRM also helps in.
Reducing the burden of excessive customer costs.
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Enhancing marketing effectiveness by carefully selecting customer for various programs.
Streamlining order processing and inventory management.
Personalizing the market offerings, based on the preference of the customer groups.
Building customer loyalty and commitment
2.3.8 THE KEYS TO SUCCESSFUL CRM IMPLEMENTATION
Break your CRM project down into manageable pieces by setting up pilot programs and
short-term milestones. Starting with a pilot project that incorporates all the necessary
departments and groups that gets projects rolling quickly but is small enough and flexible
enough to allow tinkering along the way.
Make sure your CRM plans include a scalable architecture framework
Don‟t underestimate how much data you might collect (there will be lots) and make and
then store EVERY piece of the data you can, but there is often no reason to store data.
Storing useless data wastes time and money.
Recognize the individuality of customers and respond appropriately. A CRM system
should for example, have built- in-pricing flexibility.
a. What causes CRM projects to fail?
From the beginning, lack of communication between everyone in the customer
relationship chain can lead to an incomplete picture of the customer poor communication
can lead to technology being implemented without proper support or buy-in from users.
b. Customer focus –an important ingredient:
Being customer focused also means maintaining constant communication and
dialogue with the customers. Enlightened organization practice closed loop communication
with their customers.
Communication must flow both ways, frequently and continuously and be structured in a
way that enables the organizations to monitor their performance from the customer
perspective.
2.3.9 CRM-POLICIES AND PROCEDURES AT VSP
PRO-ACTIVE STRATEGY FOR CUSTOMER SATISFACTION
1. Customer Policy
2. Norms for Customer Service
3. Customer Complaints Redresal Thro‟ Intranet
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4. on Line Replies to Customer Query
5. Reward & Recognitions
2.3.10 CUSTOMER POLICY FOR VSP IS FORMULATED AS:
VSP Will Endeavour To Adopt A Customer Focus Approach At All Times With
Transparency.
VSP Will Strive To Meet More Than The Customer Needs And Expectations
Pertaining To Products, Quality, and Value For Money And Satisfaction.
VSP Greatly Values Its Relationship With Customers And Would Make Efforts At
Strengthening These Relations For Mutual Benefit.
Customer Policy Launched On VSP Portal www.Vizagsteel.Com
Laminated Boards With Customer Policy Prominently Displayed In All Regions,
Branches And Stockyards And Offices Of All Senior Officers At Headquarters.
2.3.11 NORMS FOR CUSTOMER SERVICE
Following Norms For Various Customer Service Activities Developed To Improve Speed Of
Response:
Activity Time
1.0 Issue of Offer Letter 10 MTS
2.0 Issue of MR/Do 10 MTS
3.0 Loading At Stock Yard 2 Hours
4.0 Issue of Dc-Cum-Invoice 15 MTS
5.0 Issue of Cheque for Refund Same Working Day
Laminated Boards Containing These Service Related Norms Prominently Displayed
At All Regions, Branches And Stockyards.
2.3.12 POLICIES & STRATEGIES OF CUSTOMERS
Gathering of information about Customer‟s needs and expectations is carried out via
numerous channels such as:
• Customer satisfaction survey.
• Customer Meet at HQ/RO/BSO.
• Visit to customer‟s works by sr. executives.
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• Visit to customer‟s works by CFT.
• Interaction by front line MKTG executives.
• Visit by customers to our plant.
2.3.13 CUSTOMER FEEDBACK FLOWCHART
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2.3.14 QUALITY COMPLAINT FLOW CHART
2.3.14 INITIATIVES TAKEN BY VSP TO IMPROVE CSL
• Initiatives Taken To Improve Customer Satisfaction Levels:
1. CRM Cell Is Formed In Feb., 2004 and CRM Executives Are Identified In Each
Branch One From Marketing And One From Finance.
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2. By Special Campaign Suggestion Scheme. 725 Suggestions Were Received From
Employees During 2004-05.
3. Customer Policy Is Made For VSP.
4. Norms For Customer Service Activities Are Formulated And Displayed At All
Regions, Branches & Stockyards.
5. On Line Quality Complaint Settlement Is Launched In Intranet In All Branches To
Settle The Quality Complaints Quickly.
6. On Line Customer Query Module Is Launched In Our Web Site
Www.Vizagsteel.Com.
7. Action Plan Designed To Improve CSL Based On Feedback Survey Conducted By
IMRB, Org MARG And Internal Feedback.
8. Call Center Linked IVRS (Interactive Voice Response System) Is In Process for
Implementation.
2.3.16 CRM INITIATIVES PLANNED DURING 2009-2010
1. Introduction Of Customer Grievance Settlement Mechanism Planned With Immediate
Effect.
2. Aggressive Customer Contact Programme with Detailed Calendar for 2008-09 under
Preparation.
3. Implementation of E-Poll to Get Customer Feedback on Line.
4. Extension of Customer on Line Quality Complaints Settlement System To The Customer.
5. Opening Of A Call Center Linked With IVRS And Toll Free Numbers For Addressing
Customer Queries.
6. Information about Stocks and Prices to Customers Trough SMS.
7. Corporate Tune to Reinforce Identity of VSP under Process.
8. Provision of Tea/Coffee Vending Machines at Branches.
9. Presentation of Bouquets to Important Customers on Birth Days/Wedding Anniversaries.
2.3.17 CRM ACTIVITIES INITIATED AT VSP
In order to give thrust to customer services activities in VSP, A central CRM cell was
constituted at head quarter, marketing along with CRM cell in each region and branch. The
very first initiative taken by CRM cell was to adopt well defined customer policy was
widely circulated and displayed in all marketing officers of all senior officers of VSP.
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In order to impalement the customer policy, a number of CRM initiates have been
implemented by VSP.
Some of which are as follows,
1) System of obtaining regular customer feedback introduced.
2) Norms adopted for various customer related activates like issue offer litter / delivery order,
loading at stockyard and refund etc.
3) For expediting settlement of customer customer‟s quality complaints paper work in
processing of quality complaints and provide an efficiency and expeditious mechanism for
settlement of quality complaints
4) System of e-poll from customer queries on VSP‟S portal within 24 hour has been developed
and is likely to be. Hoisted shortly.
5) System of customer queries on VSP‟s portal within 24 hours has been developed and is
likely to be hoisted shortly Ministry Of steel had conducted a customer opinion survey
among the plants in India through an external agency IMRB business and industrial research
division.
Approach
Customer relation management should be pervasive in all sections of VSP
Identify parameters which improve customer‟s satisfaction levels
Collect feed back in structure way continuously on above parameters
Analyze the feedback and make action plan to improve satisfaction levels where CSI
score is low
Monitor the action plan for implementation
Compare the corresponding factors in next survey to confirm compliance
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CHAPTER-3
RESEARCH METHODOLOGY
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RESEARCH METHODOLOGY
STATEMENT OF THE PROBLEM
The problem identified for the present study can be stated as “identifying the existing
CRM practices at VSP and their contribution to enhance effectiveness of customer
satisfaction.”
3.1 OBJECTIVES OF THE STUDY
3.4.1 Primary objective:
A study on effectiveness of C.R.M practices of Rastriya Ispat Nigam Limited
3.4.2 Secondary objective:
To identify existing practices, policies and initiatives of C.R.M at V.S.P
To collect feedback from existing VSP customers in CRM
Collect opinion of CRM executives regards to VSP
To determine the existing satisfaction levels of VSP‟s customers
To identify the strategies currently being employed by VSP for CRM.
Analyzing of collected data regards to CRM practices
To offer recommendations and suggestions, if any, for improvement of customer
relations at VSP
3.2 NEED FOR THE STUDY
Customer relationships assume importance in the context of marketing today.
Organizations are today are looking beyond transactions with customers, they are
strategically building long-term relationships with their customers. In this context the study
assumes importance for Visakhapatnam Steel Plant in that the organization has started in a
small way towards customer relationships management. The organization is now on the
verge of going out in a big way into CRM, and the study is not aimed at helping the
organization review its present strategies and initiatives, in a bid to build on it.
3.3 METHODOLOGY
Data can be collected from two sources:
1 Primary data
2 Secondary data
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Primary data: collected from the VSP marketing executives and customers.
Primary data for the study consists of
(i) Feedback from VSP customers on CRM Practices of VSP through questionnaire
(ii) Opinion of CRM executives on existing practices, through a formal interview.
Secondary data:
Collected data from the VSP marketing surveys and opinions from VSP executives.
The secondary data for the study consists of
(i) the existing practices/process, policies and initiatives for CRM at VSP,
(ii) the strategies being currently employed by VSP for CRM,
(iii) Previous records on customer satisfaction and complaints at VSP.
3.4 ANALYSIS METHODOLOGY
1. Overall Important Index:
Every macro parameter composes of several micro parameters. Importance rating
against each parameter was taken on a 5 point scale, with 1 being least importance
and 5 being most importance. A rating of 2 and above was considered to be important
for a micro factor and a count of all those respondents who gave a rating of 2 and
above are taken. The importance index calculated was actually the proportion of the
total respondents to whom the particular micro attribute was important.
Thus, for every micro attribute it was calculated as:
= (Count of respondents who rated 2 or above)/ Total respondents
Similarly, the overall important index for the entire Macro parameter is calculated as:
= (Count of respondents who rated 2 or above for micro attribute 1 + Count of
respondents who rayed 2 or above for micro attribute 2 +…. Attribute n) / (Total
respondents for attribute 1 + Total respondents 2 +…. Attribute n)
2. Overall Customer Satisfaction Index:
Satisfaction rating was taken on a 5 point scale, with 1 = Extremely Dissatisfied and 5
= Extremely Satisfied. A rating of 1 to 5 is considered for a Micro factor or Multiplier
factor and a count of all those respondents who gave their ratings.
CSI for a macro parameter was calculated as:
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= [(Count of respondents who rated 1 to 5 for micro parameter 1)*(Importance
index of micro parameter 1) + (Count of respondents who rated 1 to 5 for micro
parameter 2) * (Importance index of micro parameter 2) + …. Attribute n) /
[(Sum of the respondents for micro attributes consisting the macro attribute) *
(Important index)]
3. Combined CSI:
This procedure was followed for calculating the satisfaction score of the users (Total
user CSI) and Trader (Total Trader CSI). Thus total CSI and total trader CSI were
calculated independently. The combined satisfaction score was arrived at by taking a
weighted average of these two scores, using the proportion of the number of trader
and user in the overall sample as weights.
Thus, the total satisfaction for each company was calculated as,
= (Total user CSI for the plant * Total user sample overall) + (Total Trader CSI
for the plant * Total trader sample overall) / (Total user sample overall + Total
trader sample overall)
3.5 SCOPE
Conceptual scope:-The study include is process/practices, polices and implementation of
CRM at VSPs.
Physical scope:-This study includes only Vishakhapatnam city customers
3.6 LIMITATIONS OF THE STUDY
The study was completed in a span of 8 weeks. Based on the objective of the study,
great care was taken in the collection of data throughout the study.
The following are some of the limitations during the study.
The study was limited to the customers relationship management activities held in
vizag steel plant.
The study is being conducted only in the Visakhapatnam steel plant and city.
In-depth analysis was not made due to limited availability of time.
The selected sample may or may not represent the entire workforce.
The responses obtained as a result of survey may not true
Wide area of customers.
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CHAPTER-4
OBSERVATIONS & ANALYSIS
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QUESTIONNAIRES ON CRM FOR CUSTOMERS
1. What is the main motivator of Customer Satisfaction?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Price 8 32%
Quality 7 28%
CRM 6 24%
All of Them 4 16%
Total 25 100%
INFERENCE:
Respondents feel that all of the above mentioned options i.e.
Price, Quantity and Customer Relation Management are equally
important for Customer Satisfaction.
32%
28%
24%
16%
1
Price Quality CRM All of Them
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2. How will you rate the Consistency in Product Quality?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 6 24%
Very Good 4 16%
Good 5 20%
Satisfactory 7 28%
Poor 3 12%
Total 25% 100%
INFERENCE:
24% of customers feel that the product quality is Excellent
where as 28% of the respondents say that they are satisfied with
the consistency in Product Quality.
24%
16%
20%
28%
12%
1
Excellent Very Good Good Satisfactory Poor
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3. Issue of Test Certificates being given for the materials delivered along with
the vehicle
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 3 12%
Very Good 5 20%
Good 4 16%
Satisfactory 6 24%
Poor 7 28%
Total 25% 100%
INFERENCE:
It seems to be like many of the customers are not satisfied with
the issue of test certificates which are given along with the
materials at the time of delivery of the goods.
12%
20%
16%
24%
28%
1
Excellent Very Good Good Satisfactory Poor
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4. How do you rate the Packaging, Color, Coding and Strapping of the
product?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 3 12%
Very Good 5 20%
Good 4 16%
Satisfactory 10 40%
Poor 3 12%
Total 25% 100%
INFERENCE:
Most of the customers, about 40% say that the packing, color,
coding and strapping of the products just reached only their
satisfaction levels.
12%
20%
16%
40%
12%
1
Excellent Very Good Good Satisfactory Poor
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5. Information on Prices of the products and discounts given on them?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 5 20%
Very Good 5 20%
Good 4 16%
Satisfactory 6 24%
Poor 5 20%
Total 25% 100%
INFERENCE:
There is equality in the percentages of all the five levels in
providing the information on prices of the products and the
discounts given on them.
20% 20%
16%
24%
20%
1
Excellent Very Good Good Satisfactory Poor
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6. How do you rate the intimation about the status of Pending Orders?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 3 12%
Very Good 5 20%
Good 4 16%
Satisfactory 10 40%
Poor 3 12%
Total 25% 100%
INFERENCE:
Most of the customers feel that the intimation about the status of
Pending orders is satisfactory.
12%
20%
16%
40%
12%
1
Excellent Very Good Good Satisfactory Poor
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7. How do you rate the information on Rolling, Dispatch Plan and stock in the
yard?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 5 20%
Very Good 4 16%
Good 8 32%
Satisfactory 5 20%
Poor 3 12%
Total 25% 100%
INFERENCE:
There is 32% of good response from the customers saying that
VSP provides information on rolling, dispatch and stock in the
yard.
20%
16%
32%
20%
12%
1
Excellent Very Good Good Satisfactory Poor
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8. How do you rate the Responsiveness of the Sales person towards
customer’s request?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 5 20%
Very Good 5 20%
Good 6 24%
Satisfactory 5 20%
Poor 4 16%
Total 25% 100%
INFERENCE:
There is a good rate of response from the sales person to wards
the customer as 20% people say excellent, 20% say very good
and 24% say good.
20% 20%
24%
20%
16%
1
Excellent Very Good Good Satisfactory Poor
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9. How about the timely Reconciliation of Accounts/ Refunds?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 6 24%
Very Good 6 24%
Good 4 16%
Satisfactory 7 28%
Poor 2 8%
Total 25% 100%
INFERENCE:
Customers feel that reconciliation of accounts and refunds is
above average since 44% say its satisfactory and above, where as
24% says its very good and excellent.
24% 24%
16%
28%
8%
1
Excellent Very Good Good Satisfactory Poor
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10. The satisfaction level of the operations carried out at the Stockyard?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 5 20%
Very Good 5 20%
Good 4 16%
Satisfactory 7 28%
Poor 4 16%
Total 25% 100%
INFERENCE:
Good response from the customers as 56% of the people say the
operations carried out at stockyard are very good.
20% 20%
16%
28%
16%
1
Excellent Very Good Good Satisfactory Poor
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11. How do you rate the time taken to issue Money Receipt/ Offer Letter/
Delivery Order?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 9 36%
Very Good 5 20%
Good 4 16%
Satisfactory 5 20%
Poor 2 8%
Total 25% 100%
INFERENCE:
VSP issues money receipt, offer letter and delivery order on time
since 36% of customers feel its excellent.
36%
20%
16%
20%
8%
1
Excellent Very Good Good Satisfactory Poor
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12. How do you feel about the time taken for the delivery of final products?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 3 12%
Very Good 5 20%
Good 5 20%
Satisfactory 7 28%
Poor 5 20%
Total 25% 100%
INFERENCE:
Delivery of final goods depends on the manufacturing process
and availibility of orders and stock in the yard, customers give a
satisfied feed back but 20% of customers still feel that the
delivery process is poor.
12%
20% 20%
28%
20%
1
Excellent Very Good Good Satisfactory Poor
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13. How do you rate the credit terms and rate of interest charged by VSP?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 7 28%
Very Good 3 12%
Good 6 24%
Satisfactory 7 28%
Poor 2 8%
Total 25% 100%
INFERENCE:
The credit terms and rate of interest charged by vsp is
reasonable, as 28% customers says excellent and 24% says good
and 28% feels satisfied.
28%
12%
24%
28%
8%
1
Excellent Very Good Good Satisfactory Poor
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14. How will you rate the processing of Cheque and credit facilities at VSP?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 7 28%
Very Good 3 12%
Good 5 20%
Satisfactory 8 32%
Poor 2 8%
Total 25% 100%
INFERENCE:
The process of cheque and credit facilities depends on time to
time according to the policies initiated at vsp, the rating given by
customers is good.
28%
12%
20%
32%
8%
1
Excellent Very Good Good Satisfactory Poor
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15. How would you rate the effectiveness of the Quality complaint resolution
system?
FINDINGS:
Alternatives No. of respondents Percentage of
respondents
Excellent 3 12%
Very Good 5 20%
Good 4 16%
Satisfactory 8 32%
Poor 5 20%
Total 25% 100%
INFERENCE:
Customers expect a quick and good solution for the complaints
raised by them, the effectiveness of quality complaint resolution
system is satisfactory but 20% of customers feels that it is poor.
12%
20%
16%
32%
20%
1
Excellent Very Good Good Satisfactory Poor
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CUSTOMER SATISFACTION INDEX
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CUSTOMER SATISFACTION INDEX
1. Motivator of Customer Satisfaction
Alternatives No. of respondents Multiplier Factor Result/Score
Price 8 4 32
Quality 7 3 21
CRM 6 2 12
All of Them 4 1 4
Total 25 - 69
CSI = Total Score/ No of Respondants = 69/25 = 2.76
2. Consistency in Product Quality?
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 6 5 30
Very Good 4 4 16
Good 5 3 15
Satisfactory 7 2 14
Poor 3 1 3
Total 25 - 78
CSI = Total Score/ No of Respondants = 78/25 = 3.12
3. Issue of Test Certificates along with the vehicle
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 3 5 15
Very Good 5 4 20
Good 4 3 12
Satisfactory 6 2 12
Poor 7 1 7
Total 25 - 66
CSI = Total Score/ No of Respondants = 66/250 = 2.64
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4. Packing color, Coding and Straping of products
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 3 5 15
Very Good 5 4 20
Good 4 3 12
Satisfactory 10 2 20
Poor 3 1 3
Total 25 - 70
CSI = Total Score/ No of Respondants = 70/25 = 2.80
5. Prices of products and discounts given on them
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 5 5 25
Very Good 5 4 20
Good 4 3 12
Satisfactory 6 2 12
Poor 5 1 5
Total 25 - 74
CSI = Total Score/ No of Respondants = 74/25 = 2.96
6. Status of Pending order
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 3 5 15
Very Good 5 4 20
Good 4 3 12
Satisfactory 10 2 20
Poor 3 1 3
Total 25 - 70
CSI = Total Score/ No of Respondants = 70/25 = 2.80
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7. Info on Rolling, Dispatch plan and stock in yard
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 5 5 25
Very Good 4 4 16
Good 8 3 24
Satisfactory 5 2 10
Poor 3 1 3
Total 25 - 78
CSI = Total Score/ No of Respondants = 78/25 = 3.12
8. Responsiveness of Sales person towards customer
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 5 5 25
Very Good 5 4 20
Good 6 3 18
Satisfactory 5 2 10
Poor 4 1 4
Total 25 - 77
CSI = Total Score/ No of Respondants = 77/25 = 3.08
9. Timely reconcillation of Accounts/Refunds
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 6 5 30
Very Good 6 4 24
Good 4 3 12
Satisfactory 7 2 14
Poor 2 1 2
Total 25 - 82
CSI = Total Score/ No of Respondants = 82/25 = 3.28
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10. Operations carried out at stockyard
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 5 5 25
Very Good 5 4 20
Good 4 3 12
Satisfactory 7 2 14
Poor 4 1 4
Total 25 - 75
CSI = Total Score/ No of Respondants = 75/25 = 3.00
11. Issue of Money Receipt/ Offer Letter/ Delivery Order
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 9 5 45
Very Good 5 4 20
Good 4 3 12
Satisfactory 5 2 10
Poor 2 1 2
Total 25 - 89
CSI = Total Score/ No of Respondants = 89/25 = 3.56
12. Time taken for the delivery of final products
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 3 5 15
Very Good 5 4 20
Good 5 3 15
Satisfactory 7 2 14
Poor 5 1 5
Total 25 - 69
CSI = Total Score/ No of Respondants = 69/25 = 2.76
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13. Credit terms and rate of interest charged by VSP
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 7 5 35
Very Good 3 4 12
Good 6 3 18
Satisfactory 7 2 14
Poor 2 1 2
Total 25 - 81
CSI = Total Score/ No of Respondants = 81/25 = 3.24
14. Cheque and credit facilities at VSP
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 7 5 35
Very Good 3 4 12
Good 5 3 15
Satisfactory 8 2 16
Poor 2 1 2
Total 25 - 80
CSI = Total Score/ No of Respondants = 80/25 = 3.20
15. Effectiveness of the Quality complaint resolution system
Alternatives No. of respondents Multiplier Factor Result/Score
Excellent 3 5 15
Very Good 5 4 20
Good 4 3 12
Satisfactory 8 2 16
Poor 5 1 5
Total 25 - 68
CSI = Total Score/ No of Respondants = 68/25 = 2.72
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OVERALL CUSTOMER SATISFACTION INDEX
Sl No Questions Individual CSI
1 Customer Satisfaction 2.76
2 Consistency in product quality 3.12
3 Issue of Test certificates 2.64
4 Packing, Color, Coding 2.80
5 Products and Discounts 2.96
6 Status of Pending orders 2.80
7 Rolling, Dispatch plan 3.12
8 Responsiveness of sales person 3.08
9 Reconciliation of Accounts/ Refunds 3.28
10 Operations at Stockyard 3.00
11 Money receipt, Offer letter, Delivery order 3.56
12 Delivery of final products 2.76
13 Credit terms and rate of interest 3.24
14 Cheque and credit facilities 3.20
15 Quality complaint resolution system 2.72
Total CSI 45.04
OVERALL CSI:
= Total CSI/ No of Questionary
= 45.04/15
= 3.0026
Percentage Calculation:
= (3.0026 / 5.0) * 100
= 60.05%
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CHAPTER-5
FINDINGS
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VSP-CRM Initiatives & Findings
1. Customer Policy related findings
CRM Cell is formed In Feb., 2004
Most of the policy guidelines don‟t find a clear place in implementation.
There is not enough focus on CRM in customer policy.
2. Process:-
VSP uses online query system for registering of complaints.
Duration for Customer‟s service responses in issuing, loading, refund of cheque.etc is
less than 1day.
Quality complaint flow chart is identified to have the following components, via,
registration, sample labeling, corrective action, and solving.
An exclusive customer contact calendar is used to maintain customer contact.
Interaction with customers is enabled at branch, region, and head quarters.
Quality complaint settlement module is launched through all the branches
3. Technologies
VSP does not use any CRM software for implantation.
VSP maintains a customer relationships portal to handle CRM with the following
components
a. Customer Query module
b. Customer Feedback module
c. Customer Registration module
d. Grievances Settlement Mechanism module
e. Quality Complaint System (QCS)
There are a number of weaknesses identifies with the content of these modules, the
details of which are extensively discussed in the analysis chapter of the report.
4. Implementation of CRM
Independent agencies and consultants are used for analyzing data.
VSP strive to achieve customer‟s satisfaction through quality and value for money &
customer relation.
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Relationship marketing is oriented towards individual customers along with an
emotional engagement.
Customer event schedule is to be introduced.
Take the customer opinion surveys to generates the attitude on the company.
5. Executive’s opinion through Interview
The company is excessively concentrating on improving production targets; it is
giving less emphasis to customer relationships at the top level.
A formal procedure / process for CRM implementation is found to be absent at VSP,
the activity conducted is arbitrary.
Software is not being used for CRM implementation, the only form being used is a
webpage on the company site.
Customer information is not shared to all the departments.
6. Customer opinion
Customer is not kept informed from time to time on new arrivals and offers.
Test Certificates are not being given for the materials deliver along with the vehicle.
Credit Terms and Rate of Interest charged by VSP is reasonable.
All operations carried out at stock yard seem to be good.
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CHAPTER-6
RECOMMENDATIONS
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RECOMMENDATIONS:
VSP Wants To Introduce The CRM Software To Maintain Huge Crowd Customers
Expand plant capacity to 6.3 Mt by 2010-11, with the mission to expand further in
subsequent phases as per the corporate plan.
Be proactive in conserving environment, maintaining high levels of safety and
addressing social concerns
Personnel attention towards customer requirements without software facility
Need to take the fixed model to follow the same according to the time being
conditional terms
The VSP doesn‟t use any type of CRM software to fulfill the CRM terms& norms.
VSP need to have software to fulfill their customer‟s requirements
Software brings the high involvement procedure from top management to customer‟s
level.
It needs develop in high frequency of implications according to needs and
technological changes.
It will be more useful technically with the introduction of CRM software
The CRM software helps maintain the customers and their personnel requirements
which also help in time reduction.
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CHAPTER-7
CONCLUSION
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CONCLUSION:
In this chapter we present the conclusion of my research. The goal or this research
was to study the customer relationship management systems and practices on today‟s
customer retention endeavor; CRM has been a key element of the modern marketing in recent
years. All around the world companies in different sizes have been trying to utilize CRM
systems to help them with their competitive business. On the other hand because of vigorous
competition not only acquiring new customers is becoming difficult but also holding existing
customers is a quite challenging task
During our research we learned that it is a lot cheaper to keep existing customer in
level that constantly encourage them to stay with a company is a dynamic and meticulous job.
That is why computerized CRM system can play a critical role in success of a company. But
the way that CRM systems are used can make substantial different on the outcome. Along
with sales and marketing, all the other departments of a business should be involved in CRM
processes. A new emerging approach that recently has been attracting corporations is
customer value management. Their goal is to identify value that can be delivered to the
customer along with their products through their supportive processes and services.
For a successful relationship it is up to the company to perform customer‟s
profitability analysis. As a result this analysis, if a customer is not doing well with presented
products or services, there is an opportunity for us to find a better solution for that customer
before loosing it to competitors.
One of the other important facts I learned in this research was; a fundamental
principle of CRM is that all customers are not same. Another words, it is not possible to
attract and retain all customers with the same policy and treatment. And also I found that
VSP has been providing proper customer service in order to retain them for a long period.
Another important issue of my research was VSP was giving freedom for customer to
check the products quality of what they want. And also I found that there was a delay in
loading process and also compliant resolution process was taking much time
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CHAPTER-8
ANNEXURE
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Questions on CRM for Customers:
1. What is the main motivator of Customer Satisfaction
a) Price b) Quality c) CRM d) All of them
2. Why are u a loyal Customer of VSP, give a reason.
3. Are you satisfied with the CRM activities of VSP?
a) Totally satisfied b) Satisfied c) Not satisfied d) Can‟t say
4. Do the customer relation manager understanding the need of the Customers ?
a) Strongly agree b) Agree c) Disagree d) Can‟t Say
5. Do you think the Marketing Mangers of VSP Work to improve Their Relationship
with Customers?
a) Always b) Occasionally c) Rarely d) Never
6. How will you rate the Consistency in Product Quality
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
7. Issue of Test Certificates being given for the materials delivered along with the
vehicle
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
8. How do you rate the Packaging, Color, Coding and Strapping of the product
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
9. Information on Prices of the products and discounts given on them
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
10. How do you rate the intimation about the status of Pending Orders
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
11. How do you rate the information on Rolling, Dispatch Plan and stock in the yard
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
12. How do you rate the Responsiveness of the Sales person towards customer‟s
request
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
13. How about the timely Reconciliation of Accounts/ Refunds
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
14. The satisfaction level of the operations carried out at the Stockyard
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
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15. How do you rate the time taken to issue Money Receipt/ Offer Letter/ Delivery
Order
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
16. How do you feel about the time taken for the delivery of final products
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
17. How do you rate the credit terms and rate of interest charged by VSP
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
18. How will you rate the processing of Cheque and credit facilities at VSP
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
19. How would you rate the effectiveness of the Quality complaint resolution system
a) Excellent b) Very good c) Good d) Satisfactory e) Poor
20. Within how many days do you expect the Quality complaints to be resolved?
a) 5days b) 10days c) 15days d) 20days
21. How often VSP executives visit your office/ factory.
a) Once in a month b) once in a quarter
c) Once in a half year d) once in a year
22. At what frequency customer meetings are conducted by VSP.
a) Once in a month b) once in a quarter
c) Once in a half year d) once in a year
23. Kindly mention one area of operations each about VSP.
Weakest Area:
Strongest Area:
24. What type of Customer are you.
a) Trader b) Project c) Actual User d) DLDS
25. Any suggestions to improve CRM at VSP.
*Name of the Customer:
*Email-id/ Contact no if any:
Signature of Customer
Note: (*) mark indicates optional.
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CHAPTER-9
REFERENCES
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BIBILOGRAPHY:
Text Books:
Philip Kotler (2002)
Marketing management prentice Hall of India, New Delhi. Eleventh edition.
Kothari C.R. (2003)
Research Methodology. Vishwa Prakasham, Mumbai.
Leon G. Shiffman and Leslie Lezar Kanuk (2003)
“Consumer Behavior”. Pearson Education, New Delhi.
WEBSITES:
www.vizagsteel.com
www.marketingprofs.com
www.incapltd.com
www.lelon.com.too
www.bseindia.com
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