Marketing Strategies and 4 P's of Bokaro Steel

7/22/2019 Marketing Strategies and 4 P's of Bokaro Steel

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OVERVIEW OF INDUSTRY AS A WHOLE

India is the eighth largest producer of crude steel in the world, accounting for 3.37%of the

global steel production in2005. Indias finished carbon steel production grew to reach an

estimated 42.63mmtin 2005-06; primary producers alone contributed about 38%whereas

secondary producers contributed the rest. With

reference in changes in economy Indian steel

industry is poised for massive expansion. Dramatic

consumption growth over the last few years has

stimulated enormous expansion plans ,facilitated by

a relatively unexploited iron ore raw material base.

India is now being hailed as the new China, where

crude steel production soared from less than 100m

tonnes in1995 to over 400mtonnes in2006.This report focuses on detailed study about the

Indian Steel Industry. Steel became an integral part of development. It discusses basic

steel manufacturing processes like Blast Furnace and, Electric arc Furnace, industry value

chain with a special reference to major raw material trends and price trends of steel

products. Demand supply dynamics has been discussed along with key growth drivers

and Export-Import scenario. It also talks about Issues & challenges of the steel industry,

mergers and acquisitions, government policies and regulations. Top 10 Leading Players in

steel Industry have been profiled namely Steel Authority of India (SAIL), Tata Steel,

ESSAR Steel and JSW Steel in this report and analyzed on the basis of financial and

operational performance and compares their Competitive Positioning along with future

outlook in the light of increasing trend in investments in the domestic industry .Steel

Industry in India is on an upswing because of the strong global and domestic demand.

India's rapid economic growth and soaring demand by sectors like infrastructure, real

estate and automobiles ,at home and abroad, has put Indian steel industry on the global

map. According to the latest report by International Iron and Steel Institute (IISI), India is

the seventh largest steel producer in the world.

With reference to development which revised Indian infrastructure, the origin of the

modern Indian steel industry can be traced back to 1953 when a contract for the

construction of an integrated steelworks in Rourkela, Orissa was signed between the Indian

government and the German companies Fried Krupp und Demag AG. The initial plan was

an annual capacity of 500,000tonnes, but this was subsequently raised to 1 million tonnes.

The capacity of Rourkela Steel Plant (RSP), which belongs to the SAIL (Steel Authority


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of India Ltd.) group, is presently about 2million tonnes. At a very early stage the former

USSR and a British consortium also showed an interest in establishing a modern steel

industry in India. This resulted in the Soviet-aided building of a steel mill with a capacity

of 1 million tonnes in Bhilai and the British-backed construction in Durgapur of a

foundry which also has a million tonne capacity.The Indian steel industry is organized in

three categories i.e., 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 mTand utilize iron ore and coal/gas for production of steel. The

main producers are Tata Steel, SAIL, and RINL, while the other major producers are

ESSAR, BSLAT and JVSL. The secondary sector is dBSLersed and consists of: (1)

Backward linkage from about 120sponge iron producers that use iron ore and non-coking

coal, providing feedstock for steel producers; (2) Approximately 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; and (3) Forward linkage with about 1,200

re-rollers that roll out semis into finished steel products for consumer use.


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Structural Weaknesses of Indian Steel Industry

Although India has modernized its steelmaking considerably, however, nearly 6% of its

crude steel is still produced using the outdated open-hearth process. Labour productivity in

India is still very low. According to an estimate crude steel output at the biggest Indian

steelmaker is roughly 144 tonnes per worker per year, whereas in Western Europe the

figure is around 600tonnes.

India is deficient in raw materials required by the steel industry. Iron ore deposits are finite

and there are problems in mining sufficient amounts of it. India's hard coal deposits are of

low quality. Insufficient freight capacity and transport infrastructure impediments too

hamper the growth of Indian steel industry.

Strengths of Indian Steel Industry

Low labour wage rates

Abundance of quality manpower

Mature production base

Positive stimuli from construction industry

Booming automobile industry

Outlook The outlook for Indian steel industry is very bright. India's lower wages and

favourable energy prices will continue to promise substantial cost advantages compared to

production facilities in (Western) Europe or the US. It since industry players are engaged

in an unfettered rush for scale. This is evident from the recent acquisition of Corus by Tata.

The deployment of modern production systems is also enabling Indian steel companies to

improve the quality of their steel products and thus enhance their export prospects.


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COMPANY PROFILE

Steel Authority of India Limited (SAIL) is the leading steel-making company in India. It is

a fully integrated iron and steel maker, producing both basic and special steels for domestic

construction, engineering, power, railway, Auto motive and defense industries and for sale

in export markets.

During struggle for independence, Pt. Jawaharlal Nehru, our first Prime Minister, had a

very clear vision about the role of Steel in the development of our country. Although

TATA Iron &Steel Company (TISCO) has been establishment in 1907 marking the

beginning of Indian Steel Industry followed by Indian Steel Co. (1918), they were too

small to meet the development requirements of a big country like ours. Therefore, in the

1st Industrial Policy Resolution of the Govt., soon after independence, Govt. decided to

establish Steel Plants in Public Sector. However, work could be started at fast pace only in

1954, when Hindustan Steel Ltd., was formed and three Steel Plants of 1 MT capacity

each, were established with provision of further expansion at Bokaro, Rourkela and

Durgapur with assistance from USSR, West Germany and U.K. respectively.

To improve the functioning of Steel Industry, Govt. decided to form a holding company

during 1972, which was named as Steel Authority of India Ltd., (SAIL) and the same was

incorporated on January 24, 1973, with an authorized capital of Rs.2000 crores.

SAILwas formed by registration of a company under the companies Act and not by the

Act of Parliament. Govt., decided to abandon the holding company concept in1978and a

bill was presented to the LokSabha. Accordingly, SAIL was again recognized in the

following manner.

Hindustan Steel Ltd., Bokaro Steel Ltd., Salem Steel Ltd., SAIL International Ltd.,

BhilaiBSLat Ltd., Rourkela BSLat Ltd., DurgapurBSLat Ltd., wholly owned

subsidiaries ofSAILmerged into it and started functioning as Units of SAIL.

MECON, HSCL and NMDCbecome independent Companies and started under Ministry

of Steel. However, Kiriburu and Meghatuburu Iron Ore Mines were attached with BSLas

their Captive Mines.

Bharat Refectories Ltd. also became independent under the Ministry of Steel and refractory

units also came under them.

Thus, SAIL, at present, is having capacity of 12 MT of crude steel through its fourintegrated Steel Plants, at Bokaro, Bhilai, Durgapur and Rourkela. Two special steel


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plants at Durgapur and Salem produce a wide range of alloy and special steels. Marketing

of the products from these plants is done through a country wide distribution network

consisting of a chain of Stock Yards and

distribution network.

SAIL today is one of the largest industrial entities in India. Its strength has been the

diversified range of quality steel products catering to the domestic as well as the Export

markets and a large pool of technical and professional expertise.

Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL

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

and coils, galvanized sheets, electrical sheets, structural, railway products, plates, bars and

rods, stainless steel and other alloy steels. SAILproduces iron and steel at four integrated

plants and three special steel plants, located principally in the eastern and central regions

of India and situated close to domestic sources of raw materials, including the Companys

iron ore, limestone and dolomite mines.

SAILs wide range of long and flat steel products are much in demand in the domestic as

well as the international market. This vital responsibility is carried out by SAILs ownCentral Marketing Organization (CMO) and the International Trade Division. CMO

encompasses a wide network of 38branch offices and47 stockyards located in major cities

and towns throughout India. With technical and managerial expertise and know-how in

steel making gained over four decades, SAILsConsultancy Division (SAILCON) at New

Delhi offers services and consultancy to clients world-wide. SAIL has a well-equipped

Research and Development Centre for Iron and Steel (RDCIS) at Ranchi which helps to

produce quality steel and develop new technologies for the steel industry. Besides, SAIL

has its own in-house Centre for Engineering and Technology (CET), Management

Training Institute (MTI) and Safety Organization at Ranchi. SAILs captive mines are

under the control of the Raw Materials Division in Calcutta. The Environment

Management Division and Growth Division of SAIL operate from their headquarters in

Calcutta. Almost all SAILsplants and major units are ISO Certified.


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HISTORY OF BOKARO STEEL PLANT

Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape

in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited

company on 29th January 1964, and was later merged with SAIL, first as a subsidiary and

then as a unit, through the Public Sector Iron & Steel Companies (Restructuring

&Miscellaneous Provisions) Act 1978. The construction work started on 6th April 1968.

The Plant is hailed as the countrys first Swadeshi steel plant, built with maximum

indigenous content in terms of equipment, material and know-how. Its first Blast Furnace

started on 2nd October 1972 and the first phase of 1.7 MT ingot steel was completed on

26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT

stage have already been commissioned and the 90s' modernization has further upgradedthis to 4.5 MTofliquid steel. The new features added in modernization of SMS-II include

two twin-strand slab casters along with a Steel Refining Unit. The Steel Refining Unit was

inaugurated on 19th September, 1997 and the Continuous Casting Machine on 25th April,

1998. The modernization of the Hot Strip Mill saw addition of new features like high

pressure de-scalars, work roll bending, hydraulic automatic gauge control, quick work roll

change, laminar cooling etc. New walking beam reheating furnaces are replacing the less

efficient pusher type furnaces.

Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape

in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited

company on 29th January 1964, and was later merged with SAIL, first as a subsidiary and

then as a unit, through the Public Sector Iron & Steel Companies (Restructuring &

Miscellaneous Provisions) Act 1978. The construction work started on 6thApril 1968.The

Plant is hailed as the countrys first Swadeshi steel plant, built with maximum indigenous

content in terms of equipment, material and know-how. Its first Blast Furnace started on

2nd October 1972 and the first phase of 1.7 MT ingot steel was completed on 26th

February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT stage

have already been commissioned and the 90s' modernization has further upgraded this to

4.5MT of liquid steel.The new features added in modernization of SMS-II include two

twin-strand slab casters along with a Steel Refining Unit. The Steel Refining Unit was

inaugurated on 19th September, 1997 and the Continuous Casting Machine on 25th April,

1998. The modernization of the Hot Strip Mill saw addition of new features like high

pressure de-scalars, work roll bending, hydraulic automatic gauge control, quick work roll


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change, laminar cooling etc. New walking beam reheating furnaces are replacing the less

efficient pusher type furnaces. A new hydraulic coiler has been added and two of the

existing ones revamped. With the completion of Hot Strip Mill modernization, Bokaro is

producing top quality hot rolled products that are well accepted in the global

market.Bokaro is designed to produce flat products like Hot Rolled Coils, Hot Rolled

Plates, Hot Rolled Sheets, Cold Rolled Coils, Cold Rolled Sheets, Tin Mill Black Plates

(TMBP) and Galvanized Plain and Corrugated (GP/GC) Sheets. Bokaro has provided a

strong raw material base for a variety of modern engineering industries including

automobile, pipe and tube, LPG cylinder, barrel and drum producing industries.

VISION

To be a respected worldclass corporation and the leader in Indian Steel business in

quality, productivity, profitability and customer satisfaction.

MISSION

Consistent with the corporate vision and core values, Bokaro steel plantstrives to create

sustainable long term competitive advantages bymanaging, mobilizing, inspiring and

motivating its employeesforcontinuous growth in productivity, quality and profitability

leading tototal customer satisfaction.

Bokaro steel plant recognizes that through the process of competencesbuilding, people

involvement, unleashing and leveraging the creativeenergies of our people, we can

create value for organization and exceedthe needs and expectation of our stakeholders.

Bokaro steel plant committed to safety, health and environment friendlyoperation and

practices for its people as well as personal touch in allpeople initiative and interaction to

bring since of togetherness and pridewe believes people create value when they feel

valued.TOTAL SALEABLE STEEL-3780 000 TONNES.


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Company's Objective

To acquire, operate and maintain the existing captive power and steam generating station

of SAIL at Bokaro Steel Plant in the state of Hharkhand along with switchyard connected

therewith and such other facilities and activivties incidental thereto.

To supply power and steam to BSL from the existing captive power and steam generating

station at Bokaro and associated units / facilities of SAIL so as to maintain its

captive status for the Bokaro Steel Plant.

Function of Company

SAIL has the following Credo:

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

We uphold highest ethical standards in conduct of our business.

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

change.

We chart a challenging career for employees with opportunities for advancementand

rewards.

We value the opportunity and responsibility to make a meaningful difference

inpeoples lives.


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GENERAL INFOMATION OF SAIL

Ownership And Management

The Government of India owns about 86% of SAIL'sequity and retains voting control of

the Company. However, SAIL, by virtue of its "Navratna" status, enjoys significant

operational and financial autonomy.

INTEGRATED STEEL PLANT

1. Bokaro Steel Plant (BSL) in Jharkhand

2. Durgapur Steel Plant (DSP) in West Bengal

3. Rourkela Steel Plant (RSP) in Orissa

4. Bhilai Steel Plant (BSP) in Chhattisgarh

SPECIAL STEEL PLANTS

1. Alloy Steel Plant (ASP) in West Bengal

2. Salem Steel Plant (SSP) in Tamil Nadu

3. Visvesvaraya Iron & Steel Plant (VISL) in Karnataka

SUBSIDIARIES

1. Indian Iron & Steel Company Limited (BOKARO) in West Bengal.

2. Maharashtra Electrosmelt Limited (MEL) in Maharashtra

OTHER UNITS

1. Raw Material Division (RMD) at Kolkata, West Bengal

2. Central Marketing Organization (CMO) at Kolkata, West Bengal

3. SAIL Consultancy Division (SAILCON) at New Delhi4. Research & Development Centre for Iron & Steel (RDCIS) at Ranchi Jharkhand

5. Centre for Engineering & Technology (CET) at Ranchi, Jharkhand

6. Management Training Institute (MTI) at Ranchi, Jharkhand

7. Central Power Training Institute (CPTI) at Rourkela, Orissa

8. SAIL Safety Organization (SSO) at Ranchi, Jharkhand

9. Environment Management Division (EMD) at Kolkata, West Bengal

10. Growth Division (GD) at Kolkata, West Bengal

11. Central Coal Supply Organization (CCSO) at Dhanbad


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ORGANISATION STRUCTURE OF SAIL

RAWRRRRRRRRRRRR

R

Figure showing organisational chart of SAIL.

CHAIRMAN

DIRECTOR (TECH)

DIRECTOR

PERSONAL

DIRECTOR

FINANCE

CHIEF VIGILANCE

OFFICER

EXE. DIRRCTOR

(OPERATIONS)

EXE. DIR. (IA)

ED (TECH & LEGAL

SERVICES)

EXE. DIR.

(PROJECTS)

EXE. DIR

(CMMG)

EXE. DIR. (CIG)

EXE. DIRECTOR (CP)

MANAGING

DIRECTOR, BSL

MANAGING DIRECTOR,

BSL

MANAGING DIRECTOR,

RSP

MANAGING DIRECTOR,

DSP

EXE.DIRECTOR ,VISL

EXE.DIRECTOR ,SSP

EXE. DIRECTOR ASP


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CORE VALUES OF SAIL

Customer satisfaction.

Concern of people.

Consistent profitability.

Commitment of excellence.

Competitive Price

Complaint Settlement

PROBLEM OF BOKARO STEEL PLANT

1. Force to recruit Local People

2. At a time when political leaders, displaced people and local residents have unitedagainst Bokaro Steel Plant (BSL) and Bokaro Power Supply Company Limited

(BPSCL) for non-development of the area, the companies have taken up a confidence-

building measure in the area

3. Development of the peripheral area of the plant is one of the main demands of

displaced people here. The residents felt cheated and blamed BSL for showing apathy

even after acquiring their land.

2005-06 2011-12

Hot Metal 14.60 22.5

Crude Steel 13.47 21.6

Saleable Steel 12.05 20


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PLAYERS IN INDUSTRY

Joint Venture

SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce.

.

NTPC SAIL Power Company Pvt. Ltd

Set up in March 2001, this 50:50 joint venture between SAIL and the

1.National Thermal Power Corporation (NTPC) operates and manages the Captive Power

Plants-II of the Durgapur and Rourkela Steel Plants which have a combined capacity of

240 MW.

Bokaro Power Supply Company Pvt. Limited

This 50:50joint venture between SAIL and the Damodar Valley Corporation formed in

January 2002is managing the302-MWpower generation and 1880tons per hour steam

generation facilities at Bokaro Steel Plant.

Bokaro Electric Supply Company Pvt. Limited

150Another SAIL-NTPCjoint venture on 50:50basis formed in March 2002manages

the 74 MW Power Plant-II of Bokaro Steel Plant which has additional capacity of

producing tones of steam per hour.

UEC SAIL Information Technology Limited

This 40:60joint venture between SAILand USXEngineers & Consultants, a subsidiary

of the USSteel Corporation, promotes information technology in the steel sector.

Metaljunction.com Private Limited

A joint venture between SAIL and Tata Steel on 50:50bases, this company promotes

e-commerce activities in steel and related areas.

SAIL-Bansal Service CenterPvt. Ltd.

SAILhas formed a joint venture with BMW industries Ltd. on 40:60bases to promote

a service centre at Bokaro with the objective of adding value to steel.

North Bengal dolomite limited

A joint venture between SAIL and West Bengal Mineral Development Corporation ltd

on 50:50basis was formed for development of Jayanti Dolomite Deposit, Jalpaiguri forsupply of Dolomite to DSP and other plants.


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Romelt -SAIL (India) Ltd

Romelt Technology developed by Russia for reducing of iron bearing materials, which

is carried out with carbon in single A joint venture between SAIL, National Mineral

Development Corporation (NMDC) and Russian promoters for marketing stage reactor

with the use of oxygen.

Bhilai JP Cement Ltd

SAIL has also incorporated a joint venture company with M/s Jai prakash Associates

Ltd to set up a 2.2 MT cement plant at Bhilai. Likely to commence operations by

March'2010.

Major customers

1. Ma Durga Ispat Udyog, Bokaro.

2. Bokaro Devlopement Area.

3. KartikeIspatPvt. Ltd, Kanpur.

4. Amit Steel Corporation, Howrah.

5. Diwan Steel, New Delhi.

6. Nenu Mal & sons, Kanpur.

7. Bhawani Metals, Bokaro.

8. Pandey Metals, Bokaro.9. Chinar Steel Segment, Bokaro.

10.MangalPvt. Ltd., Bokaro.

11.United IroCoporation, Dhanbad

12.Bharat Supply Company, Kolkatta

13.Anup Steels, Delhi

14.Hanuman & rise Pvt. Ltd, BIADA

15.AmitMetcumPvt. Ltd. Etc

16.Veer kanwarsingh steel Pvt. Ltd.

17.Maatara steel

18.S M S Enterprises

19.Basuki steel Pvt. Ltd

20.Shalimar steel Udoyog

21.ChotanagpurispatPvt.Lmt


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CONTRIBUTION IN GDP

Global crude steel production reached 1527 MT in 2011 showing a 6.8 % growth over

2010. India has emerged as a leading player in global steel industry contributing to about

4.7 % of global crude steel production in 2011. Large scale infrastructure expansion plans

for twelfth five year plan (FYP: 2012-17) and raising per capita steel consumption in India

promises unprecedented growth potential of Indian steel Industry during next 10 years.

World crude steel production: 2007-11, country-wise contribution (%) to world

crude steel production in 2011

CONTRIBUTION OF INDIAS ECONOMY TO GLOBAL GDP

India ranked as the third largest contributor (5.65%) to global GDP in 2011 in terms of

PPP ranking, only behind US and China. Indias economic growth has slacked during past

three years due to worldwide economic slowdown however during next five years its GDP

is expected to grow in 6-8 % range. The sectors with high growth potential like

manufacturing and construction sectors which account for about one fourth(FY 12) of

Indias GDP will be the key growth drivers for the Indian Steel Industry

GDP (trillion $) of leading global economies in terms of PPP- 201


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TOTAL EMPLOYEES

Human Resource

SAILs total manpower at the end of 30 April, 2012 stood at around 26,288. The

companys labor productivity 244.02 tones/man/yearas on 30.04.12.

Bokaro Steel Plant to fill up 1700 vacanciesTNN Jun 21, 2012, 05.05AM IST

BOKARO: Faced with manpower shortage, the Bokaro Steel Plant (BSL), a unit of

theSteel Authority of India Limited (SAIL), is coming up with 1,700 job vacancies this

year.

Chief executive officer (CEO) AnutoshMaitra on Wednesday said the company had got the

approval from the SAIL board for recruitment of 1,700 people for which the process would

begin this year.

GLOBAL PRACTICES

India &The Leading Steel Producers In The World

India is the largest producer of sponge iron and fourth largest producer of crude steel in the

world. India registered a 5.7 % growth in crude steel production in 2011 against 2010.

Japan was the only nation among top ten crude steel producers in the world posting

negative growth of minus 1.8 % for crude steel production in 2011 against 2010. Indian

steel industry which is not technologically as mature as steel industry of developed

economies is implementing latest technology, adapting backward integration and

improving efficiency in steel production to reduce cost, increase production and become

competitive globally.

Top ten crude steel producers in the world and their steel production in: 2010 and

2011 (MT)

Country China Japan United

States

India Russia South

Korea

Germany Ukraine Brazil Turkey

2011 695.5 107.6 86.2 72.2 68.7 68.5 44.3 35.3 35.2 34.1

2010 638.7 109.6 80.5 68.3 66.9 58.9 43.8 33.4 32.9 29.1
http://timesofindia.indiatimes.com/topic/Steel-Authority-of-India-Limitedhttp://timesofindia.indiatimes.com/topic/Steel-Authority-of-India-Limited


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INDIAS SHARE IN GLOBAL STEEL CONSUMPTION

Indias per capita steel consumption is only 57 kg against global average of 215 kg. This

shows a broad scope for increase in per capita steel consumption in India and potential

unprecedented expansion of steel industry in India. Global crude steel consumption for

2011 reached about 1373 MT

Global ranking


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Competitors Information

1) TISCO

Sales Turn over -3791 Crores,increase of over 13 % over last year

Sales Volume2052 MT,increase of over 10 % over last year.

ExportsRs.700 Crore

Market Shareincreased from 2 to 12 %

Expandingproduct mix.

2) RINL

Sales TurnoverRs.1900 Crore,increased by 52 %

Sales Volume 2.36 MT, increased by 67 %

Exports Rs. 600 crore

Market Shareincreased from 5 % to 21 %

3) ISPAT

Sales TurnoverRs.600 crore

Capacity4.2 MT

Exports60 % of total sales.

OTHER COMPETITORS

Essar Steel

Jindal Steel

UshaIspat

Lanco Industries limited

Saeas Goa.

Nippon DenroIspat.


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SWOT ANALYSIS OF SAIL BSL

Strengths

SAIL is the largest steel company in India with a 26% share in total crude steel production.

Captive iron ore mines, skilled manpower base, and existing infrastructure for brown-field

expansion provide it the strength to retain its leadership position in the Indian steelindustry. Its Captive power plants provide it with more than 60% of its total power

requirement, a proportion that is likely to increase after expansion in capacity of power

plants in its Joint Venture Companies. SAIL has the largest distribution network in India

comprising 37 branches, 64 warehouses and 24 customer contact offices. It has a presence

in all districts in India through a dealers' network. Its wide range of product-mix enables it

to meet the entire range of a customers' requirement. The Company has a strong Research

and Development Centre enabling it to develop superior products matching customized

needs. As a top profit earner in India SAIL has a healthy balance sheet and is virtually debt

free as its short term deposits are much higher than its total loans.

Bokaro Steel Plant has huge pool of skilled and experienced personnel.

Principle of hierarchy is given due respect in BSL enabling management to ensure

proper planning and its implementation.

Flawless corporate image of SAIL enhances the confidence of managers and customers

alike.

Record of harmonious customer relation boots the revenue gap towards north.

Huge infrastructure, which provides a strong base for better production and marketing

since it has country network of stockyards, dockyards and sales branch offices.

The By Product of BSL is coal based and of best quality against the petroleum based By

Products of its competitors giving the company edge.

A strong R&D cell of the company keeps on working over enriching the quality of the

products and to reduce the cost of whole process.

It has countrywide network of stockyards and dockyards/ branches/ customer can take

material from any location.

Customer perception of SAIL is fair and of reliable supplier > SAIL product has

International standard.

SAIL has a customer friendly approach and improved customer orientation.

SAIL is in the market from long time having long term relation from the customers.

SAIL, BSL never compromises regarding QUALITY so it has superior quality.


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Weakness

The current weaknesses of the Company stem from dependence on purchased coal from

domestic and overseas suppliers. Some technologically obsolete processes such as ingot

casting and the twin hearth furnaces continue to operate and will be eliminated only after

implementation of the modernization cum expansion plan. As the integrated steel plants of

SAIL are located primarily in the eastern states, it increases the transportation cost to the

fast growing markets of the west and south. Due to historical legacy the manpower cost in

the Company is higher than its competitors. Also, being a public sector company

adherence to a number of rules and procedures slows down the business.

Lack of team work inhibits proper implementation of companys policy. Word I is

very much rampant in the workforce of BSL, phrase like I am not responsible for the

undersigned responsibility

Complex pre and post sale activities repel the probable customers.

Due to its large organizational structure involving numerous policies and officials,

prompt decision making a real problem.

No one wants to take initiative as he/she does not want to be reason for blame if the

trick doesnt click.

The hard working marketing officials are not given due recognition and appropriate

reward that hurts their motivation and interest. Due to its large organizational structure, which involves numerous policies and

officials, it becomes difficult to take decision quickly and as result final decision

making becomes very slow.

Secondary product marketing depends on the primary product demand i.e. the demand

for primary product is less the production will have to be slowed down thus even if the

demand for secondary product is mounting up still the production wont be increased, so

the secondary product is directly linked to primary product demand.

Quality of the product which is slightly inferior as compared to competitors who are

having latest technology.

Sometimes products are not supplied as per requirement of customer.


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OPPORTUNITY

Steel consumption in India is growing at a rate of more than 10%, a trend that is likely to

persist as the nation enters into a steel intensive phase of development. The 11th Five Year

Plan has given a major thrust on the infrastructure sector with the total spending planned at

around US $ 500 billion by 2012. Mega projects in the power, energy, ports, railways and

surface transportation sectors, plans for rural infrastructure like Bharat Nirman, allocation

for which was raised to Rs. 31,280 crore and building over 2 lakh kilometers of National

Highways by 2010, present an unprecedented opportunity for SAIL which is implementing

expansion cum modernization plan to cater to the emerging demand. The size range and

quality makes SAIL's long products a preferred choice for project customers. In case of flat

products, SAIL remains a major supplier of HR Coils to the tube making sector and is

slowly increasing its presence in cold reducing segment. Plates from SAIL are rated

amongst the best and are in good demand from project customers. The water supply and oil

& gas sectors are the other segments where there is a large growth potential. The

modernized ERW Pipe Mill at Rourkela Steel Plant is able to cater to the requirement of

these sectors. Bokaro Steel Plant and Bhilai Steel Plant are also producing small quantities

of API grade HR Coil and Plates for servicing these sectors. The per capita consumption in

India at around 46 kg remains very low compared to the world average of around 200 kg.

One of the reasons for low steel consumption is low availability of steel in the rural area.

SAIL in recent years has developed a dealers' network which covers all the districts in

India. This will facilitate availability of quality steel in the interiors and promote market

development and growth. At a macro level, steel consuming segments such as

construction, auto, capital goods etc. are growing rapidly registering a double digit growth

in recent years and would continue to be the growth drivers given the structure of the

economy. The auto sector in India has experienced rapid growth for a number of years.

Improved road, growing middle class and globally competitive auto ancillary industry have

been the facilitators of good growth for the sector. Technological breakthrough and global

competitiveness in two wheeler and small car segments are likely to make India a global

hub for these products boosting demand for steel in the country.

The world market is showing the sign of revival from the spiral of recession in which it

remained engulfed for one year.

State government has plans for revocation of small scale industries in & around Bokaro,

which will fuel the demand of secondary & by product.


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Cock oven batteries 1 & 2 are rebuilt which will ultimately increase the efficiency of

Coke Oven By product plant.

Since SAIL has a wide network of stockyards/branch offices, it can supply its products

directly to customers without any difficulty.

SAIL has a very strong base it can diversify itself into the production of different goods

as per market requirements.

There is growing demand for secondary product in both domestic and international

market.

THREATS

Customs duty on steel imports has been made nil in India and products such as TMT are

also exempt from CVD. Sluggish market conditions in developing economies may make

India destination for large scale imports adversely affecting domestic players. Government

of India has imposed export levy on steel products. India is a net exporter of galvanized

products as its total capacity is in excess of domestic demand. Adverse impact on exports

of galvanized products will have a cascading impact on domestic market for cold rolled

and hot rolled coils and sheets. China's production of crude steel at 489 million tonne in

2007 was around 36% of the global production. As Chinese economy matures and its steel

consumption stabilizes, a part of the capacity will be serving only the export markets. Theproximity and growing domestic steel consumption will make India a preferred destination

for Chinese steel, significantly intensifying the competition.

Globalized economies have erased the geographical boundaries and have brought stiff

competition

Execution &dBSLatch of order include lot of paper works & formalities, which

makes it a cumbersome task. This has led to drifting of customers towards competitor.

By products are not the main products of BSL, neither BSL is the market leader of

these product.BSL fixes the price of the By Products on the basis of price set by its

market leaders i.e. Petroleum refineries & this pricing is known as going rate pricing.

Acquisition of Corus by Tata Steel will led to integration of their technology & this is

the place where Tata is going to gain a lot. Technology in India is two to three

generation behind. Exposure to latest technology will help Tata to improve quality &

reduce cost. So SAIL should be cautious in this respect


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RESEARCH METHOLOGY

Research Methodology:

Research methodology is considered as the nerve of the project. Without a proper well-

organized research plan, it is impossible to complete the project and reach to any

conclusion. The project was based on the survey plan. The main objective of

survey was to collect appropriate data, which work as a base for drawing conclusion and

getting result.

Therefore, research methodology is the way to systematically solve the research problem.

Research methodology not only talks of the methods but also logic behind the methods

used in the context of a research study and it explains why a particular method has been

used in the preference of the other methods.

Statement Of Research Problem

The objective was to find out the marketing mix of BSL-SAIL, and to find out the

marketing procedures followed in marketing of secondary products within BSL-SAIL.

STATEMENT OF RESEARCH OBJECTIVES

Primary objective

The main objective of field survey during the project was to find out the market mix of

BSL-SAIL.

Find out the different methods by which the marketing of secondary products are

carried out.

The main objective of research was to identify the strategy which is being used in

BSL-SAIL.

Secondary objective

While purchasing the BSL-SAIL products which parameter is most important for the

consumer?

To make a comparative data analytical report for the production of various steel

products within BSL-SAIL.

To enhance the knowledge of Iron and Steel products market.

To enhance the knowledge about the marketing set up of a Public Sector.


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Types of research used

Primary Research - Here the data is collected directly from the respondentsusing

various data collecting techniques. In this method although the rate of getting

responses and feedback is slower, then also it is much more accurate as direct

conversation with the population is being conducted here.

Secondary ResearchIt is being done generally with the data already existingwhich

is been collected by some other person or organization.

RESEARCH DESIGN:

Research design is important primarily because of the increased complexity in themarket

as well as marketing approaches available to the researchers. In fact, it is thekey to the

evolution of successful marketing strategies and programmers. Itis an important tool to to

study buyersbehavior, consumption pattern, brandloyalty, and focus market changes. A

research design specifies the methods andprocedures for conducting a particular study.

According to Kerlinger, Research Design is a plan, conceptual structure, and strategy of

investigation conceived asto obtain answers to research questions and to control variance.

DATA COLLECTION METHODS:

Primary data:

For primary data collection, I have used different data collecting methods such as

conducting survey interviews, distributing questionnaires, direct observation, and

telephonic interviews with mainly executive officers, dealers, employers, etc.

Secondary Data:

It is being collected from different Journals at BSL-SAIL, financial data from Finance

Department, Production and DBSLatch data from PPC department at BSL-SAIL, Burnpur.

Data analysis and interpretation:

Questionnaires (Two sets of it.)

Bar chart


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Limitations

ISP-SAIL is a huge organisation and so it was not possible to cover the entireorganisation.

Time factor for the staff is a big problem.

To get certain official and technical data is a real problem as they are highlyconfidential.

The marketing policies of ISP-SAIL change from time to time and from product toproduct.

The product range of ISP is numerous and so it is not possible to cover each andevery product.

Lack of proper guidance during specific situations.

Preparation of report:

The report was based on the analysis and presented with the findings and suggestions. The

sample of the questionnaires is attached with the report itself.

Sampling Methodology:

Details of the sampling methodology, I have made 2 sets of questionnaires, one for the

Executive and Non-Executive staff at BSL-SAIL; and the other for the personswho are apotential customer with the organization.

Non-Excutive staff members are : 40

10

-SAIL product: 03

150

100

Sample unit

Professionals, Business man, Employees and finally customers.


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CONCEPTUAL DISCUSSION

Marketing Department Overview OfBokaro Steel Plant

Marketing Department is one of the Departments under Materials

ManagementDivision of Bokaro Steel Plant. Marketing Department is entrusted with

theresponsibilities to sell BSLs Secondary Products, By-Products/Waste Products,and Idle

Assets etc.

The Marketing Departments sales procedures are covered by the guidelinesgiven by SAIL

Corporate office DELHI, and is given by CMMG(CORPORATE MATERIAL

MANAGEMENT GROUP), the objective ofwhich is To sell the materials in a fa ir and

transparent manner to achievemaximum possible revenue to the company

(a) Marketing of prime products of SAILs plant including BSL is done byCMO (Central

Marketing Organization) which is a unit of SAIL.

(b) Marketing of secondary products and coal chemicals are done directly byMarketing

Department of BSL. As a matter of fact, the Secondary & By-Products are marketed by the

individual Plants only.

Marketing of these products are conducted by various sections by marketingdepartment of

Bokaro Steel plants. It is engaged, with marketing of PrimaryProducts for home sale or

export throughCMO. The 4.0 Million tones sectionknown as plate mill section dealing with

plates. Now this section has got ISO -9002 certificate.The secondary section deals with the

secondary Products, it includes scraps ofiron and steel slag, coal and coke fractions, coal

chemicals .The Marketing development section deals with the MIS and strategic

Planningactivity come under this section.The Export section deals with the activities of the

exports in respect of Iron andSteel items produced by Bokaro steel plant.


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ORGANISTATION CHART OF MARKETING DEPARTMENT

(BSL)

Sr. Mgr. (Mktg.) Sr. Mgr.

(Mktg.)

GM (Marketing)

Jr. Mgr. (Co-ordn.)/Mktg.Cord, HK, Admn.& Est.TrainingOfficer

DGM (Mktg.)Audit, Vigilance, RTI, &

other queriesreply, Contract Cell(MM),Sec. Sales

AGM(Mktg.)Sec. Steel Ad &Est, QC,ISO,DCA, Contract Cell(MM)

Slag, Waste,Iron,Smug.Scheme

Sr. Mgr.(Mktg.)Coal& Chem.,ZincDross,

Manager(Mktg.)Reports, PriceMonitoring, MIS

Jr. Mgr.(Mktg.)SecondarySteel, SafetyOfficer

Jr. Mgr.(Mktg.)

Idle Assets, U&S,Surplus


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Function Of Marketing Department

To monitor the orders issued by CMO, So that these orders can fulfilled intime.

Put pressure on CMO, to get orders for an underutilized mill.

To sell all the secondary products directly i.e. directly by BSL and by CMO.

On day to day basis it takes care of the dBSLatches i.e. daily dBSLatcharechecked.

Policies Of Marketing

Marketing Planning has responsible function in the working of marketingdepartment. All

the risky developments, taking out solution to cripple`situations, this section carries out

product pricing and related activities, someof the programmes, policies and procedures are

as follows:-

Positioning the product a value based place in customer mind.

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

of Rolling mills in consultation with CMO and mills. This plans based on the sales

forecast receive from JPU SPL/ Iron and steelcontroller.

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

Receiving Enquiries and complaints, cancellation of orders etc.

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

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

Profiles, sections, modification of product schedulingtill the orders are completed.

Periodical market surveys of products to analyze the market position.

Implementation of suggestions received from the customers feedback.

Ensure customer satisfaction by meeting customers regularly; provideredress to their

problems and fulfillment of demand.


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SALES & CO-ORDINATION DEPARTMENT

The main function of sales and co-ordination department is to co-ordinate all the concerned

activities right from the purchase of items, production of items, to the distribution of items

to its concerned customers.

This department concerns with

Knowing the availability of raw materials.

Matching the availability with the demand registered.

Makes flow of this information to the concerned department for meeting the demand.

Co-ordination of concerned activities is done.

Dispatching of materials to the concerned customers.

Its flow of information is through

SRM

SALES CO-ORDIANTION

PRODUCTIO & PLANNING CONTROL

After successful co-ordination, the final dispatching of materials is done in two ways.

1) DIRECT DISPATCH: -Materials directly sent to the customers, no intermediary is

entertained, e.g. major customers (railways, NTPC, Indian oil)

2) STOCK-YARD DISPATCH :-It follows inventory management concept, distribution of

products from the inventory, through several intermediary, e.g. minor customers (

GODREJ).


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ROLE OF PS IN BOKARO STEEL PLANT

Products of Bokaro steel plant

The products are divided according to there sizes and shapes.The long product include:-

Struturals.

Crane Rails.

Bars,Rods and Rebars.

Wire Rods.

PRODUCTS

PRIMARY (SPECIFIC PARAMETER) SECONDARY/BY-PRODUCTS

CMO (KOLKATA) UNITS- BSL, BSS, RSP, DSP etc

BSL MARKETING

METHOD OF SELLING

E-AUCTION SALE TENDER FIXED PRICE SALE

BSL MARKETING

(MAIN SECTION)

STEEL CHEMICAL & BY-

PRODUCTS

SLAGS & WASTE

PRODUCTSIDLE ASSETS PRICING


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SECONDARY AND BY-PRODUCTS OF BSL

Apart from the primary and main steel products there are some other products which are

obtained during the steel making process. These products are termed as secondary and by

products. Some of the products are used within the Plant while rests are sold in the market.

SECONDARY PRODUCTS

Secondary products are the defective and rejected steel products. During the manufacturing

process due to improper mixing of material or some other manufacturing defect some of

the products are not produced according to the desired quality and do not match with the

customers demand. Hence these are rejected and termed as Secondary products. Some of

these products are used within the Plant for re-melting purpose and rests are sold to the

secondary buyers. Scraps generated inside the Plant are also termed as Secondary products.

A list of Secondary products is as follows.


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LIST OF SECONDARY PRODUCTS

PRODUCT PRODUCT

A. IRON MELTING SCRAP

CI.Block/SHM/CI

Boulder(Unbroken)/RBIM

PCM Shot Plate Scrap/CI Skull

Mixed CI Scrap/CI Fdry. Rejects

Fine Iron Chips/CI Boring

B. INDUSTRIAL SCRAPS

HR Coils

DDHR Pickled Coils

CRUAC/Def CR Coil/CRCE

Defective CR Sheet/CR Sheet ctg.

AMG HR Plate/Sheet/Ctg

Def.GP/GC Coil/Sheet

MCRC/Maint. scrap-ASP

MS Turning & Boring

C. PIG IRON D. BFG SLAG

BF Granulated Slag

E. REROLLABLE STEEL SCRAP

Defective Slabs

Slab End Cutting

MS Thick Plate Cuttings

Cobble Plate

F. IDLE ASSETS

Used rejected rolls

Used rejected stores items

Capital Idle Assets

G. STEEL MELTING SCRAP H. NON FERROUS (Zinc Dross)


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BY-PRODUCT

By-Products are mainly coal chemicals which come out during the coke making process.

Coke making process consists of the destructive distillation of coal in absence of air. A list

of By Products which are sold by BSL is as follows:

PRODUCT MODE OF

DELIVERY

USES

A. Benzyl

Products

(Benzene)

Railway tank

wagons, road tankers

in loose condition

It is used as an important raw material for various

drugs and dyes. Benzene hexa chloride is used as a

pesticide. It is also used in the manufacturing of

phenol, DDT, nylon etc.

B. Toluene

(Nitrationgrade)

Railway tank wagons It is used as a solvent in chemical reactions, Paint

industries, rubber industries, making of adhesives,making of printing ink etc.

C. Xylene Railway tank wagons It is used in making of Paints, thinners & varnish,

printing ink and in rubber industry.

D. Light Solvent

Naptha

Railway tank wagons It is used as solvent, making of dyes and printing

ink

E. Still Bottom

Oil

Railway tank wagons

and road tankers

It is mixed with other materials and used for various

purposes like water- proofing, making of roofs of

building. It is also used as industrial oil and in

making of rubber paints for vehicles.

F. Extra Hard

Pitch

Gunny bags in loose

condition

In aluminum industries as a binding material for

anode.

G. Soft Pitch Gunny bags in loose

condition

It is used in the production of pitch fiber pipes, roof

binders, in preparation of road tar, building

materials, sheeting, tilling etc. It is also used as

refractory bricks.

H. Hot Pressed

Naphthalene

Gunny bags in loose

condition

It is used as Dye intermediate, as an insecticide,

dBSLersing agent etc.


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DETAILS OF THE PRODUCTS

Hot Rolled Coils, Sheets and Skelp

Hot rolled coils, sheets and skelp (narrow coil), are the largest

product category of the company in terms of both sales volume

and revenue. Hot rolled coils are primarily used for making

pipes and have many direct industrial and manufacturing

applications, including the construction of tanks, railway cars,

bicycle frames, ships, engineering and military equip-ment and

automobile and truck wheels, frames and body parts. Hot

rolled coils are also used as feedstock for cold rolling mills where they undergo further

process-ing. Hot rolled coils are also delivered to the company's own cold rolling mills andsilicon sheet mill and pipe plant in a wide range of widths and thicknesses as the feedstock

for higher value-added steel products. The company is the largest producer of hot rolled

coils, sheets and skelp in India.

Semi-Finished Products

The company produces semi-finished products,

including blooms, billets and slabs, which are

converted into finished products in the company's

processing plant and, to a lesser extent, sold to

rerollers for conversion to finished products.

Steel plates are used mainly for the manufacture of

bridges, steel structures, ships, large diameter pipes,

storage tanks, boilers, railway wagons and pressurevessels.

Plates

The company also produces weatherproof steel plates for

the construction of railcars. The company is currently the

largest producer of steel plates in India with a domestic

market share of more than 80 per cent for these products.

The company is the only producer of wide and heavy plate

products in India.


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Cold Rolled Products

Cold rolling of hot rolled products produces a superior

surface finish, improves the physical properties of the

steel, such as tensile strength, and reduces its thickness

to precise gauges. As a result, cold rolled productsgenerally command higher prices thanhot rolled

products. The products of the cold rolling mill include

cold rolled sheets and coils, which are used primarily for

precision tubes, containers, bicycles, furniture and for

use by the automobile industry to produce car body

panels. Cold rolled products are also used for further processing, including for colour

coating, galvanising and tinning. The company also produces further processed cold rolled

products, including galvanised sheets and tin plates.

Structurals

Structural steel product are produced through a process of hot rolling

in the section or structural mills. They are long steel product with

cross sections of various shapes. I-beams, Channels and angle steel

are used in mining the construction of tunnels factory structure,

transmission towers, bridge, ships railways and other infrastructure

projects.

Bars and Rods

The company produced steel bars and rods through a process of hot

rolling billets in the finishing mills. Reinforcement steels and wire

rods are primarily used by the construction industry. The company is

one of the largest producers of reinforcement bars in India which are

primarily sold to the construction industry.


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PRICING POLICY AND SALES PROCEDURE

PRICING

Fixing the price of a product is the most vital function in the whole process ofthe

marketing and it should be done after proper market study and requires decision makingability. If price is too low the company will lose revenue and if the price is too high it will

lose customers resulting in loss of revenue valuable customers. Coal chemicals are the

main product which is to be marketed by the Marketing Department of Bokaro Steel Plant.

Almost all the products are sold on the fixed price basis. This is due to the fact that the

company does not enjoy monopoly in the said market and the price is totally market

driven.

The policy adopted by the marketing department for pricing of materials is largely guided

by the price offered by the bidders during the auction. The various factors taken into

consideration while pricing the re-rollable items can be enumerated as follows: -

Prices offered in the auction sales.

Quantity of material to be lifted.

Managing director's approval.

The average of the prices offered by the bidder during auction is taken as thebasis to fix the

prices of materials to be sold through marketing department.Further the techniques of

break-up-pricing are adopted i.e. the larger thequantity purchased lower will be the prices.

This technique encourages thebuyers to purchase larger quantity. Finally the managing

director approves theprices set by the pricing committee. On this basis, a price list is

prepared for allthe potential buyers. Price list also indicates the sales tax and Excise duty to

belevied. Thus the interested parties place their orders with the marketingdepartment on

the basis of price list reviewed every month. Every customer isrequired to have a security

deposit amount of Rs.1 lakh. The payment for thematerial required is to be in advance. The

material is supposed to be lifted on the specified date on account of delay the party has to

pay the difference in theprices, if there is any increase in subsequent month.


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Standing Pricing Committee:

The committee reviews the price of various products and takes decision in favour of

maximizing the profit. It holds meeting at least once in a month. But the volatility of the

market and pool of different products lead to a number of meeting of the committee in

quick succession.

The committee consists of:

GM (Utility), Chairman

GM (Marketing), Convener DGM (Finance), member

DGM (Sales Coordination), member

DGM (Stores), member

DGM (BPP), member

For Scrap goods the DGM (SSD) replaces the DGM (BPP). Rests of all the members are

always present in all the meetings.

While deciding the price following points are kept in mind:

DBSLatch of the last month.

Material in stock.

Forecast of next month.

General market condition.

Availability of transport facility.

GM (Marketing), as per the need, decides the frequency and time of meetings to be held.

Minute report of all the meetings is prepared and it contains the existing price and the

proposed price. The final price is moved to the MD through the official channel including

GM (Marketing), Executive Director(MM), GM (Finance and Accounts), and ED (Works).

After the MDs approvalthe price becomes applicable and the circular indicating the


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revised price BSLrinted, issued and distribution to the customers and all the

concerneddepartments.

DEMAND REGISTRATION OF BSL

Marketing department of BSL sales homogeneous steel scrap at fixed price. For this

purpose the procedure for registration of demand and offers is as below:

1. Preference for sale of material given to local parties and those, which are actual

customer. Material is not sold for trade.

2. Sale of material made to re-rolling mills and scrap processing units and the lots of sale

between them maintained at 67:33.

3. Based on the above consideration offer letter issued to the party offering a quantity,

which has been lifted by them during the last preceding year or allocated by the state

industries, Department. In the offer letter party is advised to complete commercialformalities e.g. submission of Die Registration Certificate etc.

SALES AND DISTRIBUTION OF SECONDARY & BY-PRODUCT

Selling Of Secondary Product

This involves a direct marketing process. The management of BSL in consultation with the

official of the market development and customer service department work as group for the

sale of these items.

Mode Of Sale

1.E-Auction Sale.

2.Fixed Price Sale.

3. Tender.

4. Interplant Transfer.

5. Transfer to PSU.


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DISTRIBUTION CHANNEL

For the purpose of distribution of steel policy in fashion, customer are categories into

A.B.C.D Priority sector customer ex-Defence. Railways etc are under category A andabout 60% of product allotted to them.The balance 40% is kept for the category B,C,D.On

the other hand for sale of scraps there is no such policy adopted by Bokaro steel plant

customer are served on first served basis.

Bokaro Steel Plant deals with its customer directly. There are liaising persons in the

marketing department who always remain in contact with the customers and extract

information about the current market demand on the basis of their interaction with them.

The products are directly marketed from Bokaro Steel Plant to the customers there are noother intermediaries .This is the business to Business marketing (B2B).

CHANNEL

Bokaro steel plant has zero level channels as it directly sells to the customer. There is no

intermediate among producer and consumer. Marketing department always remains in

constant with consumer extract information about the current market situation on the basis

of interactions between them.

MANUFATURE TO INDUSTRIAL CONSUMER

Packing and modes of delivery of the by-product is mainly by three ways. These are as

follows:-

1. Railway tanks (wagon)

2. Roadways (tanker)

3. Piggy back (rail and truck)

In the above surveys shows roadways do that 70% transportation of By-product reason

consumer are local. They are mainly traders they are buying and selling the By-product to

the market.

Railway is also important to the transportation of By-product but its more costly because

less number of the buyer involvement in the outside of the country. The distribution

channel the Bokaro Steel Plant has for its chemical product is designed keeping in the

mind the hazardous nature and difficulty in storing these products. so this distribution

channel cannot be changed but for Ammonium Sulphate the distribution channel can be

more flexible by:-


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Appointment of authorized agents :- It will help in increasing the sale and awareness

about the product in the regions other than Bihar,Orissa,Jharkhand and west Bengal.

Such arrangement will minimize the problem that the customers are facing .

Appointment of authorized dealers;- appointment of the authorized dealers in Uttar

Pradesh from where a few enquiries have come for the product. Such enquiries show

that there is a presence of the potential customer base in that area and need to be

tapped.

Buying and using vehicles off its own can change the mode of the transportation for the

chemical products.this will decrease customers problem of arranging for the vehicles

from the transporters and the handling and security problem of the plant. The customer will

be changed the transportation cost.

The pricing policy adopted by the plant is the best policy followed by this plant but

this policy can be made more compatible including a few big customers in the pricing

committee which will bring the prices of the product competitive to the market trend

and thus will decrease the chances of marketing strategy failure and surplus inventory.

As the product quality is not taken care of some method should be divided to take care

of product quality without affecting the quality of its prime product.

the internal environment of the marketing department should be more customer

friendly and customer oriented.

though computerization of the marketing department has been done but to get full

advantage of computerization, sales co-ordination ,scrap and salvage department and

by-product plant should be brought into account so that party wise and dBSLatches

wise a order can be fulfill.

In future sales and excise section of the finance and account department also be

brought under same roof :-

The Market segment should be more clearly defined on the basis of geographical

location, nature buying unit, loyalty status of buying unit ,customer demand etc.

Market Research for knowing about the potential customer as well getting the

feedback from the customer should be frequently done. Feedback can be easily

available through questionnaire and ask them to fill and back to organization and

suggestion.

My studies have been done from a management students point of view .the above

mentioned recommendation are in any based upon informal and formal feedback obtained

from the managers .The Management of SAIL(BOKARO STEEL OLANT) honestly

concerns for the future growth of the organization at the time of increased competitors


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,should take care on the recommendation given above. The macro and micro planning is

definitely varied but their enforcement will ensure SAIL in regaining and building its glory

on top.

PRICE OF BY PRODUCT DURING 2011-2012

INFERENCE:-

Statement Of Sale Of By Products (Values In Lakhs)

PERIOD 2009-10 2010-11

2011-12

1STQTR 850 1224 1278

2NDQTR 945 815 55

3RDQTR 916 1222 844

4THQTR 1022 1577 1572

0

5000

10000

15000

20000

25000

30000

35000

40000

AMONIUM

SULPHATE

BENZENE ANTHEACENE OIL

ITEM price

AMONIUM SULPHATE 7500-8000/T

BENZENE 39000-40500/T

ANTHEACENE OIL 35000-40000/T


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SALES BY-PRODUCT(VALUES IN LAKHS)

PERIOD 2009-10 2010-11 2011-12

1ST

QTR 2556 9293 18896

2ND

QTR 9223 16205 17141

3RD

QTR 2242 16237 11740

4TH

QTR 1232 23639 17495

TOTAL 10322 65427 65272

0

200

400

600

800

1000

1200

1400

1600

1ST QTR 2ND QTR 3RD QTR 4TH QTR

2009-10

2010-11


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PROFIT IN BSL

YEAR PROFIT(IN CRORE)

2008-09 1324

2009-10 1628

2010-11 1367

2011-12 2830

0

20000

40000

60000

80000

100000

120000

140000

160000

1ST 2nd 3rd 4th TOTAL

2011-12

2010-11

2009-10

0

500

1000

1500

2000

2500

3000

2008-09 2009-10 2010-11 Category 4

PROFIT

PROFIT


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PROCEDURE OF E-AUCTION

Advertisement/posting of dates and types of materials to be auctioned in SAIL website and

various news papers (Local & National) every 15thto 20thof the month for the next month,

1. Posting of details of lots to be auctioned one week prior to the date of auction, on the

website of SAIL and metal Junction.com

2. Inspection of lots to be auctioned by customers.

3. Auction is held on www. Metal Junction.com

4. Report of auction conducted is give by Metal Junction.com

5. Meeting of reserve price opening committee and their recommendation.

6. Approval for sale of lots recommended by RP opening committee.

7. Issue of offer to the customers, based on approval of chief Executives.

8. In this method the defective materials from all the mills is arranged in heaps of 100-

150 tones to be sold by auction. Generally auction sale takes place ones in a month.

Representative from all the re-rolling mills turn up during auction and they bid for the

available material. The raw material need of this mill is being made by the plant and

the availability of the re-reliable has increased the re-rolling mill to develop very fast.

The plant extends all types of facilities and assistance to these small scale units, which

to turn give scope for more employment, and then the material is lifted on the terms

and conditions as mentioned in the tenders.


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DATA FLOW DIAGRAM OF E-AUCTION

Advertisement of dates/type of

materials on SAIL

website/Newspaper

Posting of lot details to be

auctioned on SAIL / MetalJunction website

Inspection of lots by customers

Auction conducted on

metaljunction.com

Report of Auction by

metaljunction.com

Reserve Price Opening

Committee meetin


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PROMOTION

ADVERTISING POLICY:-

Companies in the present scenario of globalization and liberalization needs to do more than

making good product or competitively pricing its product-they need to inform consumers

about product and carefully position product in consumers mind.

Advertisement is the best form of non-personal communication. It is good way to inform

and persuade. Advertising serves the dual purpose of informing the product benefit and

positioning the product in consumers mind. Bokaro Steel Plant, products (i.e. products)

is used mainly of industrial use. Its product is the raw material for most of its consumers.

The customer base of BSL Plant is knowledgeable and knows about the products and its

benefit so on special effort is needed inform them about the product.

In BSL Plant, the main form of advertising is Tender Notice and notice other form of

advertising is also used but rarely. Information is provided to various persons through

advertising, which are directly or indirectly related with company. There are:-

Customers.

Users.

General Public or neutral persons.

People who are related with the economic progress of the company.

Public relation Department of Bokaro Steel Plant looks after the advertising policy of

Bokaro Steel Plant. All decisions related with advertising are taken by both Marketing and

Public Relation Department jointly supported by sales co-ordination.

Recommendations

Approval for Sale


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All advertisement of SAIL mainly contains factual date related to the products and its

comparative advantage over other similar products sometimes it also contains information

related to sales of a particular kind of product.

Main media used for advertising these products are newspapers and business magazines.

News papers and business magazines are selected based on the following criterions:-

1. Kind of product to be advertised and its used.

2. Are where the product is in demand.

3. Circulation of a particular newspaper and business magazines in the area.

4. Cost of advertising.

ADVERTISING AGENCIES USED

Mainly six advertising agency are used by bokaro steel plant

Continental advertising agency , Kolkata

The international advertising agency , Kolkata

Kavya communication pvt ltd , new Delhi

Message advertising and designing , Patna

Ranchi data system , Ranchi

Ridge advertising , Ranchi


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DISCUSSION ON TRAINING

Students Work Profile (Role And Responsibilities)

Role: I was given the role of observer by SAIL BSL. My role was to collect

information about the strategies used by BSL to market its secondary products and

also to understand the Marketing Mix of SAILBSL, as a Management Trainee.

Responsibilities: During the period of this project my company (BSL) has given me

so many responsibilities. They are as follows-

Survey,

Collection of data by preparing questionnaires,

Analysis of the situation and Marketing procedures

Reporting to the officer

DESCRIPTION OF LIVE EXPERIENCE

From this project, I have got an amazing live experience. As I am a fresh Graduate, so I do

not have any type of experience in a corporate work field. So, when I went to different

types of departments in BSL for asking about their way of conducting their process, I was

enjoying. I was quite surprised because of their friendly behavior. Moreover during my

plant visit programme, I was really thrilled to see the different methodologies that are used

to produce the material which is a necessary product in every bodies life and also for a


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growing nation, i:eSTEEL.

I am also really greatful to work with many officers in the Marketing department, where I

got my first practical knowledge in the field of marketing. I was really excited to apply my

theoretical knowledge in practicality.

STUDENTS CONTRIBUTION TO ORGANIZATION

Gathering the product knowledge of SAIL for its knowledge bank.

Collect the data of actual monthly production and sale of BSL products and by

products in every trading.

Help to promote the catalog of BSL as a small part of sales promotion.

Find out the problems that the dealer are facing while selling the BSL product. Find out the consumer response for the BSL product by asking the dealers of the

relevant product.

Presenting a detailed report on marketing strategies and marketing mix in BSL-SAIL.


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Questionnaire for Understanding Marketing Strategiesat BOKARO Steel

Plant- SAIL

Market:

1. What is the market opportunity? What is the market size? Market size with respect to

geography and to industry.

2. How can the market be segmented into logical customer groupings?

3. What are the industry trends that are fueling our success? And what are the trends that

are inhibiting our success?

4. According to you, what is the economic climate now and how will it be in the

upcoming two years?

5. How the economic climate does affect our business?

6. Is the market or our business is affected by seasons and climate? If so, then how?

Target audience:

1. What marketing segments are we targeting? What segments we are not targeting?

2. What is our customers primary reason

3. Why would someone prefer our products and offerings versus that offers by the

competitors?

4. Are there any issues or concerns that the target audience might have regarding thistype of product or offering?


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Competition:

1. What categories of competition threaten our success? Prioritize the categories?

2. Which are the companies which poses greatest threat to us? And how do they

differentiate themselves?

3. What tactical elements do they use to that threaten our success?

4. Which competitors have the largest market share within our target market segments?

5. What are the barriers which we are creating for ourselves to entry into the market

place?

Offering:

1. What need is our offering or product designed to fill? Identify the need for each target

audience?

2. What features and associated benefits does our offering provide?

3. How do we deliver the offerings identified above?

4. Of all these features, which one is of that extra value that differentiates us from our

competitors?5. What improvements can we make to our offering to better meet customer needs?

6. What new offerings would our customers most like us to develop?

Sales and Buying Process:

1. What is the process for selling our products? Do we use any of the following

processes?

>Direct Personal Sale >Direct Online Sale >Indirect through channels

2. Who is involved, both from our company and from our sales channel partners, in each

step of the sales process?

3. What criteria are used in selecting a vendor or a customer?

4. How do our customers buy our type of products?

5. What purchase process steps do we follow with our customers? Does the process vary

with respect to different vendors? If yes, then how?


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Pricing:

1. What are the main criteria which are followed in setting the price of the products?

2. What is the current price structure? Including discounts, rebates and so on. Do our

customers understand it?

3. Which of the competitors is considered the Price Leader? What is their offering?

4. What can be done to reduce costs without affecting any quality?

6. What is the perceived value of our offering as compared to the price

7. What service(s) do we currently include in the price of our product?

8. What industry trends are going to drive prices down? And what are the trends which

are going to drive prices up?

Media:

1. What are the primary forms of communication your competition use to promote and

communicate to your target audience?

2. Is a product catalogue used to promote products and services?

3. What other forms of media have you used in the past to promote products and services

and what has been the success/response rate experienced?4. Do you currently market over the Internet or have marketing links with other sites?

5. Do you attend trade shows or other industry events to promote your business?


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CURRENT ISSUES

1.Aug 28, 2013, TOI, Several important development projects - including the construction

of new Ganga bridge, fire station in Chas, link road to Chandrapura-Bokaro bridge,

VikasBhavan and Chas Water Supply Project - in the district which have been delayed due

to funds crunch and other dispute.

2.Aug 24, 2013 BMW Industries gets showcause notice for project delay- BIADA

Bokaro Industrial Area Development Authority had showcaused BMW earlier in 2012, for

delay. Besides, the company has not paid Rs 3.36 crore as cost of land and maintenance

charges, added Toppo. However, P Thomas, director-BMW, sent a letter to BIADA

managing director AarvaRajkamal seeking more time to recast the project plan.

3.It has been 46 years since the plant was set up, but the majority of the residents have not

received compensation, alternate land or jobs. They are still fighting

NEW DEVELOPMENT OF SAIL BSL


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Figures in bracket indicate capacity after implementation of ongoing phase of

modernisation and expansion to be completed by 2012-2013

Order for over Rs. 57,012 crore have already been placed for various Modernisation &

Expansion Projects / Sustenance Schemes


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ANALYSIS OF DATA

Q1. Use of I ron and steel in your li fe -----------

a. Extremely Important

b. Very Important

c. Somewhat important

d. Not very Important

e. Not at all Important.


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Q2. Business with BSL -----------

a. Extremely Important

b. Very Important

c. Somewhat important

d. Not very Important

e. Not at all Important


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3. Product quali ty of BSL -SAI L -----------

a. Excellent

b. Very good

c. Good

d. Fair

e. Poor


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Q4. Process of buying products of BSL -SAIL -----------

a. Excellent

b. Very good

c. Good

d. Fair

e. Poor


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Q5. Price of the products are same as market price ----- ------

a. Strongly disagree

b. Disagree

c. Neither agree nor Disagree

d. Agree

e. Strongly Agree


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Q6. BSL-SAI L satisfy your needs and demands ------


b. Disagree


d. Agree

e. Strongly Agree


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Q7. BSL-SAI L gives better service than other steel plant ---


b. Disagree


d. Agree

e. Strongly Agree


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Q8. You wil l continue buying products of BSL -SAI L for next five years ----

a. Strongly Disagree

b. Disagree


d. Agree

e. Strongly Agree


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Q9. What is your opinion about BSL -SAI L?

Q10.What is the fi rst word that comes to your mind when you hear the foll owing?

Steel Industry

BOKARO. Steel Plant

Inferences

30% of customer gives importance to price. So it shows that Indian consumers

are very price sensitive. They give more importance to price over the brand.

26% give importance to brand. So price and Brand matter a lots for the

costumers. And they are also want best brand in best price.

19% to product feature Service 16% and durability 9% Service is also a big

factor for the customer they are less interested in the durability.


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FINDINGS

RELATED TO MARKETING DEPARTMENT

During my Eight weeks training in marketing department of BSL. I have observed

certain problems in it these problems are findings of my studies.

All marketing procedure of prime products are decided by SAIL and carried out by

the Central Marketing Organization (CMO).

As the organization is concerned with a large number of productions activities and

the departmental work are done mostly manually from placement of orders to

documentation, which ultimately frustrates the employees.

The organization is more concerned with larger orders of steel products by ignoring

the smaller orders. The local customers with business of by-products are sometimes made to wait for

days to get their papers Cleared by the department.

Most of the existing yards suffers from improper stocking space and siding facility

often they are not well developed due to this the material stored there are rusted and

other defects are caused and later they are dBSLosed of by offering some concession

or at low rate which result in loss.

Due to improper packing, the materials reach the stockyard often in damaged

condition, which is attracting criticism from the customers and these damaged

materials are sold with loss.

Export considered Secondary to domestic selling as BSL is a govt. undertaking and

its First priority is given to domestic marketing.

Secondary product CRUAC/Def CR Coil/CREC, this is industrial scrap and they

generate maximum revenue from this product.

Sale of By- Products shows lots of up & down in different quarters in the year &

maximum sale in last quarter.

Production of By-products shows lots of fluctuation because its production is

depending on Coke oven plant.

BSLatch of By-product shows continuous growth.

By-Product N.G.BENZENE they produce maximum revenue because its cost is so

high.


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CONCLUSIONS AND RECOMMENDATION

The main issue attached with Bokaro Steel Plant is about its product.products is

that most of the customers finds its price higher than the other brands of

secondary and by-products available in the market. Since, customers are now

conscious about cost cutting measures so they other brands over BSL.

Local market is one of the most important advantages than BSLisenjoying over a

period of time but, due to set up of new steel plants in nearby places few years

from now it will no longer be an advantage for BSL. So, BSL should have to

work on decreasing the price of its secondary and by-products and also increase

its quality.

Since, from the survey it was found that most of the customers arepurchasing

secondary steel and by-products from BSL. So, BSLshould have to work on the

increase of p

Marketing Strategies and 4 P's of Bokaro Steel

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Transcript of Marketing Strategies and 4 P's of Bokaro Steel