Dredging Corporation of India Project Work

DREDGING CORPORATION OF INDIA LIMITED

CHAPTER-1

INTRODUCTION

1 DREDGING CORPORATION OF INDIA


1.1 INTRODUCTION

Definition: A dredgers is a piece of equipment which can dig,

transport and dump a certain amount of under water laying soil in

a certain time.

The quantity of soil moved per unit of time is called Production.

Dredgers can dig hydraulically or mechanically. Hydraulic

diggings make use of the erosive working of a water flow. For

instance, a water flow generated by a dredge pump is lead via

suction mouth over a sand bed. The flow will erode the sand bed

and forms a sand-water mixture before it enters the suction pipe.

Hydraulic digging is Profit . W.J.Vlasblom Pagina 1 van 27 May

2003 Wb3408b Designing Dredging Equipment mostly done with

special water jets. Hydraulic digging is mostly done in soils such

as silt, sand and gravel.

Mechanical digging by knives, teeth or cutting edges of dredging

equipment is apply to cohesive soils. The transport of the

dredged soil can be done hydraulically or mechanically too, ether

continuously or discontinuously.

Hydraulically Mechanically Continuously Transport via pipeline

Transport via conveyor belts Discontinuously Transport via grab,

ship, car Deposition of soil can be done in simple ways fit by

opening the grab, turning the bucket or opening the bottom doors

in a ship. Hydraulic deposition happens when the mixture is

flowing over the reclamation area. The sand will settle while the



water flows back to sea or river. Dredging equipment can have

these three functions integrated or separated.

1.2 NEED FOR THE STUDY

The study of dredging is an area where ther is lot of scope for

marketing and out of which ocean dredging has assumed

tremendous importance in maintaining required depths at major

and minor ports and for the handling the traffic at the ports and

inland dredging will help in developing inland water ways for

navigation, maintaining the depth in irrigation cannal, lakes, and

rivers, restoration of storage capacities in reservoirs etc

So dredging is the area where there is lot of scope of marketing

and clients are scatterd not only all over the country but also

world wide



1.3 OBJECTIVES OF THE STUDY:

The practical study of D.C.I LTD, and its marketing activities has

been undertaken with the following objectives:

To review and study the overall aspects of marketing of the

dredging corporation of India limited

To study the ocean dredging and inland dredging and their

specific elements of marketing

To study the marketing strategies of the dredging

corporation of India limited

Analyze the marketing functions of dredging corporation of

India

To study the other activities of dredging corporation of India



1.4 METHODOLOGY:

The study was conducted in the organization with a view to

analyse the marketing strategies in the dredging corporation of

india limited

Sources of data:-

a)primary data

As far as this topic is concerned different members of DCI had

been consulted to elicit required information, managers of the

concerned departments have been collected

b) secondary data

the aid of the following papers was taken to acquiring information

1) Through company annual reports and brouchers

2) through periodical reports

3) through the annual requirements of inland water ways

authorities of India



1.5 LIMITATIONS

Data given is inadequate as the officials are compiled to the

norms of corporation

To analyse the clients of DCI by form of quettionarries is not

possible as they are spread all over the world

To analyze the competitors their data is almost a secret

Dci is a service-oriented organization so various

interpretations may not hold good



CHAPTER-2



INDUSTRIAL PROFILE

2.1 INTRODUCTION TO INDUSTRY

Profile

The Dredging Corporation of India Limited (D C I) was established

in the year 1976 to provide dredging services to the Major Ports

of the country in India. D C I is a pioneer organization in the field

of dredging and maritime development. D C I is fully equipped to



offer the complete range of dredging and allied services to the

users in India and Abroad and to provide the vital inputs for the

national development. It's Head Office is strategically situated on

the east coast of India at Visakhapatnam, DCI helps to ensure

continuous availability of the desired depths in the shipping

channels of the major and minor Ports, Indian Navy, Fishing

Harbors and other maritime organizations. It further serves the

Nation in a variety of ways, be it capital dredging for creation of

new harbors, deepening of existing harbors or maintenance

dredging for the upkeep of the required depths at various Ports

along the 7,500 Kms coastline of India.

D C I owns most modern and sophisticated fleet consisting of

three Cutter Suction Dredgers and Ten Trailer Suction Dredgers.

D C I is an M.O.U. signing Company with Government of India.

D C I is a schedule B & a MINI RATNA- CATEGORY-I Public Sector

Enterprise. D C I is one among the Public Sector Undertakings of

India in which the Government has disinvested it's share holding.

The shares of the Company are listed at Delhi, Mumbai, Calcutta

& National Stock Exchanges of India

2.2 Industry Scenario:

The size of the Indian dredging industry is estimated to be

around Rs. 6000 crore of which the Dredging Corporation of

India (DCI) is a major player. Dredging companies also spread 9

DREDGING CORPORATION OF INDIA


their risk by involving themselves in other underwater

construction works, required in offshore oil exploration and

laying of oil and gas pipelines, inland waterways, building of

roads and bridges on water bodies and sea reclamation

projects. From the past data it can be safely assumed that the

industry would be bullish in the future. There also exists the

massive 600 crore project for deepening of the main approach

channel which has been proposed by Jawaharlal Nehru Port

Trust.

2.3 GOVERNMENT POLICY

10

DREDGING CORPORATION OF INDIA


New policy ends monopoly of Dredging Corporation

Our Correspondent / Vishakhapatnam Feb 05, 2004, The recent announcement by the central government on the

new national dredging policy has come as a major blow to

Dredging Corporation of India(DCI), exposing it to competition

from both domestic



2.6 MAJOR PLAYERS OF D.C.I

BOARD OF DIRECTORS

CAPT. S.S.TRIPAT

HI

CAPT.Shri. S.S.TRIPATHI - Chairman and Managing Director Dredging Corporation of India Ltd., "Dredge House", Port Area, Visakhapatnam - 530 035, India

Shri P.V.R. Murthy - Director (Finance) Dredging Corporation of India Ltd., "Dredge House", Port Area, Visakhapatnam - 530 035, India

Shri.S.VasudevaRao,IPS Chief Vigilance Officer



HEAD OF DEPARTMENT:

Shri.A.KrishnaRaoGeneral Manager GM

(Tech) Shri.A.Bose

General Manager (HR)

Shri.V.V.N.MurthyDy. General Manager (IT)

Shri.K.A.SreekanthCompany Secretary

Shri.K.KiritiGeneral Manager (Fin)

Shri.M.SankaraRaoHOD(Ops)

Shri.M.SankaraRaoHOD(Ops) (Mktg)

.Capt.Shri.P.M.SaravananDy. General Manager (HSE)


2.i Composition of Board of Directors as on 31/03/2008:

Pursuant to the Articles of Association of the Company

The Members of the Board of Directors are appointed by the

President of India. Part-time Non-Official Directors are

Independent Director pursuant to Clause 49 of the Listing

Agreement. The composition of the Board as on 31/03/2008 is As

under:-Name Executive/ Non-Executive Official/Non-Official

Age Qualifications

i) Capt .S. S. Tripathi, - CMD Executive Whole-time official

ii) Cmde.G.V.Ratnam- ,DOT Executive Whole-time official

iii) Shri P.V.Ramana Murthy -DFN Executive Whole-time official

iv) Shri Rakesh Srivastava - IAS Non-Executive Part-time official

v) Dr.A.R.Goyal - Non-Executive Part-time official 53

vi) Dr.S.Narasimha Rao - Non-Executive Part-time Non-official

vii) Shri S.Balachandran - Non-Executive Part-time Non-official

viii) Dr. Debashis Sanyal- Non-Executive Part-time Non-official

ix) Prof.Gautam Barua - Non-Executive Part-time Non-official

2.5 ARTICLES RELATING TO OUR COMPANY

DREDGING CORPORATION OF INDIA TO OPEN OFFICE IN

BAHRAIN,SETUP

DREDGING CORPORATION OF INDIA RECIEVES BIDS FOR 1.5MNN

SHARES

2.6 INFORMATION ABOUT D.C.I

Dredging Corporation of India Limited

Type Public Sector Unit

Industry Dredging, Land reclamation

Founded 1976

Headquarters

Visakhapatnam, India

Key people S.S.Tripathi(Chairman and Managing Director)

M.S.Rao (Dy.Gen. Manage(Ops.)S.Vasudeva

Rao,IPS,Chief Vigilance Officer

Products Maintenance Dredging, Capital Dredging, Land

Reclamation, Beach Nourishment

Revenue Rs.5,461,000,000 (Rs.546.1 crores), 2004-

2005

Employees 998 (2003)

Website www.dredge-india.nic.in

http://www.dredge-india.nic.in/

http://en.wikipedia.org/wiki/Website

http://en.wikipedia.org/wiki/Employment

http://en.wikipedia.org/wiki/Crores

http://en.wikipedia.org/wiki/Rs.

http://en.wikipedia.org/wiki/Rs.

http://en.wikipedia.org/wiki/Revenue

http://en.wikipedia.org/wiki/Product_(business)

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Visakhapatnam

http://en.wikipedia.org/wiki/Land_reclamation

http://en.wikipedia.org/wiki/Land_reclamation

http://en.wikipedia.org/wiki/Dredging

http://en.wikipedia.org/wiki/Industry

http://en.wikipedia.org/wiki/Types_of_business_entity

DCI Fleet

Trailer Suction Hopper Dredgers

DCI Dredge - V DCI Dredge – VI

DCI Dredge - VIII

DCI Dredge - IX

DCI Dredge - XI

DCI Dredge - XII

DCI Dredge - XIV

DCI Dredge - XV

DCI Dredge - XVI

DCI Dredge - XVII

Cutter Suction Dredgers

DCI Dredge - VII DCI Dredge - Aquarius

backhoe / dipper Dredgers

DCI Dredge BH1

09/11/2010 the DCI Dredge BH1 was launched at shipyard De Donge at Flushing East, Holland. Photo

http://www.shipspotting.com/gallery/photo.php?lid=1208784

Trivia

DCI is superstitious about the number 13. No dredgers are named

with the number 13, nor are any cabins within the ships

Maintenance Dredging

Maintenance DredgingEvery Port or Harbour designed with certain

designed navigable depth in it’s channel or water bodies for the safe

entry and exit of ships. This depth will decrease due to deposition of

sediments and other material by the influence of littoral drift,

underwater currents, wave & tidal actions etc., in a course of time

which varies from Port/Harbour to Port/Harbour and depends on rate

of siltation. To restore it’s depth, removing the accumulated

material is inevitable in most of the Ports & Harbours. The process

of removing the accumulated material is called “Maintenance

Dredging”.

CapitalDredging

Capital Dredging The process of removing the “virgin” soil to create

the designed depth in the water bodies/adjacent to water bodies is

called “Capital Dredging”.

DCI is having two Cutter Suction Dredgers to meet he capital

dredging requirements in the India/Abroad. A New Cutter Suction

Dredger of 2000 Cu. M per hr dredging capacity will join the DCI

fleet during Oct-2004

Beach Nourishment

Beach Nourishment The coastal line in the beach is subject to

deposition/erosion of sediments due to various reasons. However if

the rate of erosion is more than rate of deposition, it is necessity to

replace the quantity of erosion to maintain the coastal line intact.

The process of deposition of sediments in the coastal line from the

adjoining areas is called “Beach Nourishments”

DCI ‘s Dredge-XII and Dredge-XIV are capable of shore pumping up

to 2400m and Dredge-XVI and Dredge-XVII are capable of shore

pumping up to 2500m and rain bowing facility

Reclamation

The process of raising the land level to create a artificial land either

just below or adjacent to water bodies is called “Reclamation”. The

fill material is generally used from the adjacent water bodies so as

to improve the depth in the water bodies as well as to use to same

for creation of land.

DCI’s Cutter suction Dredgers and Trailer Suction Hopper Dredgers

Dredge-XII, Dredge-XIV, Dredge-XVI and Dredge-XVII are capable for

reclamation purposes.

2.7 Types of Dredging

• Capital Dredging

– Creating depths

• Maintenance Dredging

– Maintaining depths

• Inland Dredging

– Dredging in rivers, canals, lakes etc.

• Associated Activity

– Land reclamation and beach nourishment

• Other Dredgers

• Dredgers developed for specific situations.

• Example:-Side casing dredgers

-Dustpan dredgers

– Water injection dredgers

2.8 DREDGERS DETAILS

2.9 DREDGERS

DCI DREDGE-V

DCI DREDGE VI

DCI DREDGE-VIII

DCI DREDGE IX

DCI DREDGE- XI

DCI DREDGE-XII

DCI DREDGE XIV

DCI DREDGE XV

DCI DREDGE XVI

CUTTER SUCTION

DCI DREDGE VII

DCI DREDGE AQUARIUS

OTHER VESSELS

DCI TUG-VII

CHAPTER-3

COMPANY PROFILE

3.1 MISSION STATEMENT OF DREDGING CORPORATION OF INDIA LIMITED

To provide Integrated dredging and related marine services for

promoting the country's national and international maritime trade,

beach nourishment reclamation, inland dredging, environmental

protection and ultimately to become a global player, in the field of

dredging.

3.2 HISTORY OF DREDGING CORPORATION OF INDIA

COMPANY HISTORY:1976

- The company was originally incorporated as a private limited

Company on 29 March, and was subsequently converted into a public

limited

Company on 10 March 1992. The main object of the company is

Dredging activity i.e. engaged in executing capital and maintenance

dredging

for ports to open new parts and/or to expand the existing ports.

- Due to the difficulties experienced in catering to specialized

dredging requirements the Government of India decided to incorporate

a fully owned Govt. company under the Companies Act, 1956.

- Marine dredging ships are equipped with sophisticated equipment

Incorporating latest technology. There are 3 nos. cutter section

dredgers having a pumping capacity of 1000 cu.m./hr to 3640

cu.m./hr., 8 nos. trailer suction dredgers having a hopper capacity of

3450

cu.m. to 6500 cu.m. and 3 nos. inland dredgers having a pumping

capacity

of 100 to 200 cu.m./hr.

- Over the years, the corporation has developed expertise and

capability to undertake capital and maintenance dredging land

reclamation, desiltation of lakes and ponds, salvage and towage etc.

- 280,00,00 No. of equity shares issued, subscribed and paid up

(1,400 shares of these fully paid up; 279,98,600 shares issued for

consideration other than cash).

1984:

- It has acquired 3 Portable Cutter Suction Dredgers with a total

capacity of 16 lakh cu.m. Unlike the bigger sea going dredgers,

these portable dredgers can be dismantled into smaller sections,

transported on the road and reassembled in whichever site it is required

to

work.

2001

-Dredging Corporation is in the hunt for strategic partner in a bid

to get more exposure in foreign waters.

2002

-BSE informed its members that special margin of 25% has been

Imposed on dredging Corporation.

2003

-The crew/monthly paid workers at the behest of their union, Forward

Seimens Union of India served notice to the management of the company

that

They would commence their work to rule the agitation on DCI Dredgers.

-Dr Ramesh Gupta has ceased to be the directors of the Dredging

Corporation of India on completion of his term of 3 years.

-Dr.S Kathiroli, Project Director, National Institute of Ocean

Technology has been appointed as part time non-official director on the

board of Dredging Corporationof India Ltd.

2004

-Comes out with public issue of 5.60 million equity shares, receives

the highest subscription for a public offer of the government's stake

in a big-ticket company, cut-off price fixed at Rs 400 per share

2007

- Dredging Corporation Of India Limited has informed that Ministry

vide its letter No.PO-28028/20/2006-DCI dtd.7/9/2007 informed the

appointment of Capt. S.S.Tripathi as Chairman-cum-Managing Director

of the company. Capt Tripathi assumed charge as Chairman-cum-

Managing

Director of the company on 12/9/2007 from Shri A.K.Dhar. Shri A.K.Dhar

was holding the charge Chairman-cum-Managing Director DCI in addition

to his duties as Director (Finance).

3.3 OBJECTIVES OF DREDGING CORPORATION OF INDIA LIMITED

MAIN OBJECTIVES:

[(Ref : As provided in the Memorandum of Association of DCI Limited

IIIA(1)]

1. To acquire and take over from the Government of India the MOST

(Ministry of Shipping and Transport) Dredger Pool and Central

Dredging Organization along with all or any of the assets, liabilities,

responsibilities and commitments of the Government of India in

connection therewith on which terms and conditions as may be

determined between the Government and the Company on its

incorporation.

2. To carry on all or any other business of owners, operators,

contractors, charters, agents, builders, wrights, brokers, repairers,

refitters, vendors and or salvagers of dredgers and dredging

equipment of all kinds including equipment afloat and ashore, ships,

oil tankers supporting craft, tugs, survey ships, light ships, barges

launches, lighters, floating cranes buoys, supply vessels, drilling

platforms, submersibles, amphibian vehicles, helicopters, marine

structures of all kinds pipe lines and special purpose vessels.

3. To carry on all or any of business of dredging, drilling, blasting,

land reclamation, shore nourishment, ocean, harbor and inland

towage, marine salvage, marine harbor and Inland towage, marine

salvage, marine construction, sub-sea structures, surveys and

associated work on land, in and under water in any part of the world.

4. To carry on all or any business of proprietors, managers and/or

operators of moorings, wharves, jetties and piers.

5. To carry on the business of Engineers, manufacturers, repairers,

assemblers, processors and/or fitters of engines, boilers machinery

and equipments and components thereof for dredgers and vessels of

all kinds and uses.

6. To carry on the business of consultants in all fields in which the

Company is engaged or authorized to engage in, including

dredging, dredger operation and management, dredging equipment

design, marine, mechanical, electrical, civil metallurgical and

electronic engineering, naval architecture, manufacture of ancillary

items and equipment, land reclamation and associated works, harbor

engineering, beach nourishment and shore protection, manufacture

of dredgers salvage equipment and ancillaries therefore; planning,

layout, repair, design or work necessary for execution of all the

above works for the benefit of the Company itself or for an outside

party with or without remuneration

3.4 SWOT ANALYSIS OF DREDGING CORPORATION OF INDIA LIMITED

Strengths

High technical competence, trained manpower, good quality top

management

Weaknesses

Lack of full fledged marketing set-up because of full capacity

utilization in the past resulting from reserved market share

High manning levels

Opportunities

Maintenance dredging is a perennial requirement for ports

and India with its long coastline, resulting in good business

potential

Growth opportunities in capital dredging from new ports

Value added services for ports

Dredging opportunities in South-East Asia & Middle East.

Threats

Regulatory changes may erode dominant market share

Preferential treatment in case of government contracts, if

removed, could impact growth and profitability

Emerging competition from global dredging firms

eyeing India opportunities

Low quotes by foreign companies with depreciated equipment to

capture market

Growth Strategy

Maintenance Dredging

o DCI’S endeavor would be:

To maintain market share in maintenance dredging as

DCI would capitalize on its know how of the Indian ports

in terms of soil, weather etc.

DCI is also in the process of appointing marketing agents

abroad, identification of alliance partners etc. To

facilitate diverting part of its capacity to international

markets

Growth Strategy – Contd..

Maintenance Dredging - Business

Environment in Addressable Markets

o Considering the regulations in international market and

availability of free market for foreign players, DCI can address

the market in the following countries:-

Singapore - Malaysia

Indonesia - Sri Lanka

Thailand - Taiwan

Philippines - Middle East

Bangladesh

3.5 UNIQUE ACHEIVEMENTS OF DREDGING CORPORATION OF INDIA LIMITED

PAST ASSIGNMENTS

Major maintenance dredging assignments executed

Sl. No. Client Work done during the years

Value of work

(Average of last

3 years)

Rs. in

Crores

1Kolkata Port Trust,

Kolkata

1993-94, 1994-95, 1995-96, 1996-97, 1997-98,

1998-99, 1999-00, 2000-01, 2001-02, 2002-03,

2003-04, 2004-05, 2005-06, 2006-07, 2007-08 &

2008-09

385.00

2New Mangalore Port

Trust, Mangalore

1993-94, 1994-95, 1997-98, 1999-00, 2000-01,

2001-02, 2002-03, 2003-04, 2005-06, 2006-07,

2007-08 & 2008-09

36.00

3Mormugao Port

Trust, Goa

1992-93, 1993-94, 1994-95, 1996-97, 1997-98, 1999-00, 2002-03, 2003-04,

2004-05, 2005-06 & 2008

18.05

4Jawaharlal Nehru

Port Trust, Mumbai

1993-94, 1994-95, 1995-96, 1997-98, 1998-99, 1999-00, 2000-01, 2001-02, 2002-03, 2003-04,

2004-05, 2005-06, 2006-07 & 2007-08

11.65

5Cochin Port Trust,

Kochi

1990-91, 1992-93, 1993-94, 1995-96, 2001-02, 2002-03, 2003-04 & 2006-07

30.59

6Kandla Port Trust,

Kandla

1993-94, 1994-95, 1995-96, 1996-97, 1997-98, 1998-99, 1999-00, 2000-01, 2001-02, 2002-03,

2003-04, 2004-05 & 2005-06

52.97

7Mumbai Port

Trust, Mumbai

1992-93, 1993-94, 1994-95, 2002-03 &

2003-0414.50

8Paradip Port Trust,

Paradip

1992-93, 1993-94, 1996-97, 1997-98, 1999-00, 2000-01, 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, 2006-07,

2007-08, 2008-09 & 2009-10

37.49

9 Visakhapatnam Port Trust,

Visakhapatnam

1996-97, 2000-01, 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, 2006-07 &

19.53

2007-08

10Chennai Port,

Chennai1998-99, 1999-00, 2001-02 & 2003-04

14.66

11 Indian Navy, Kochi

1997-98, 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, 2006-07 & 2007-08

7.54

12Indian Navy,

Mumbai1992-93, 1993-94,

1998-99 & 2000-016.67

13 Okha Port, Okha 2001-02 6.39

14Karwar Port,

Karwar1992-93 5.58

Past Capital Dredging Assignments Executed

Sl. No. ClientWork done during

the years

Value of work

(Average of last

3 years)

Rs. in Crores

1 Essar, Hazira 1991-92 & 1993-94 23.10

2Mormugao Port

Trust, Mormugao1994-95 22.40

3Kolkata Port Trust,

Kolkota1994-95 22.40

4Cochin Port Trust,

Kochi1994-95 19.60

5Kakinada Port,

Kakinada1995-97 66.00

6Jawaharlal Nehru

Port Trust, Mumbai

1997-98 16.00

7Paradip Port Trust,

Paradip1998-99 & 2002-03 19.90

8New Mangalore

Port Trust, Mangalore

2000-01 26.70

9Bharat Petrolium

Corporation, JNPT, Mumbai

2001-02 30.32

10Visakhapatnam

Port Trust, Visakhapatnam

2001-02 12.81

11 Taichung Harbour, 2001-02 26.42

Taichung, Taiwan

12 Bahrain 2004-05 & 2005-06 96.40

PRESENT COMMITMENTS

Sl. No.

PortPeriod Value of Work

(approx) Rs. In Crores

1Kolkata Port Trust

Maintenance Dredging at Haldia Channels.

5 Years from January 2009Rs.390.00 Per

Year

2

Visakhapatnam Port Trust Annual

Maintenance Dredging in NST and its approaches

and other areas of Visakhapatnam Port

Trust.

5 Years from 2008-09 to 2012 -13

Rs. 6.00 Per Year

3

Paradip Port Trust Deepening of channel at

Paradip Port, Capital Dredging.

January 2008 to June 2010 Rs. 234.52

4 New Mangalore Port Trust Maintenance

2 Years 2009-10 & 2010-11 Rs. 40.54 Per Year

Dredging at NMPT for the years 2009-10 & 2010-11.

5

Murmagao Port Trust Maintenance

Dredging for the years 2009, 2010 &

2011.

2009 Rs. 29.70 Cr.

2010 Rs. 30.60 Cr

2011 Rs. 31.05 Cr.

6

Murmagao Port Trust Capital

Dredging for the year 2009.

2009 - 2010 Rs. 49.95

7

Director General Naval Project, Maintenance

Dredging of Naval area at

Visakhapatnam.

3 Years from 2010Rs. 14.78 Per Year

8

Southern Naval Command, Kochi

Maintenance Dredging of naval

Channel at Ernakulam.

2 Years from 2010Rs. 25.00

Per Year

9 Capital Dredging Phase-II at Ennore

Port

18 months

Rs. 171 Crores

3.6 FUTURE PLANS OF THE COMPANY

Keeping the various developments in the dredging industry in view, this

company has initiated action in several areas, including

consolidation of share in maintenance dredging in India

More participation in capital dredging- acquiring necessary skills,

training company personnel, chartering dredgers

Acquisition of dredgers with fuel efficient design and advanced

technology, fitted with sophisticated and state of the art

technology

Reducing operational cost-focusing on fuel efficiency in ship

operations, streaming spare parts procurement systems

Closing monitoring of repairs

B) FUNCTIONAL PROFILE 3.7 MARKETING:

MARKETING DEPARTMENT INTRODUCTION

While the marketing functions of the Corporation were being attended

to by the Contract Cell of Operations Department in 1999, a separate

Marketing Department has been set up to provide more focus on the

marketing functions keeping in view the Government policy to open

the dredging market to International Dredging Companies.

The basic objectives of Marketing Department is to focus more on the

business opportunities available in domestic and international markets

so as to ensure gainful deployment of dredgers and to expand its

market base outside India so as to take a proper mix of the market.

The main functions of the marketing are:

• to continuously work for optimizing the existing opportunities

• consolidate the existing market

• explore new market opportunities nationally and internationally

• identify the growth opportunities of the company in national and

international markets

• advise and assist management in acquiring additional resources

required to take the market demand and

• to assist the Corporation in diversifying the activities of the company

so as to enhance business of the company in the near future. At

present Marketing Department is headed by Dy. General Manager

and is assisted by Manager (Marketing) , and Asst. Manager

(Marketing ) to look after the marketing functions and to achieve the

over all objectives of the company. The Marketing Department is also

responsible for enhancing the corporate image of the company by

continuous interaction with the clients, obtaining feedback from the

clients and providing necessary inputs to the internal management for

enhancing the image of the company. The Head of the Marketing

Department is assisted by Asst. Manager (P R) in carrying out the

corporate image building and public relations activity of the company.

HR department is in the process of filling the vacant posts viz Genl.

Manager (MKTG) ,

3.8 PERSONNEL ADMINISTRATION :

MAN POWER:

The total number of employees (both Shore and Floating) in the

Corporation, Ist March, 2010 was 721, as against 767 during

the previous year, excluding MPWs.

EMPLOYMENT OF VARIOUS RESERVED CATEGORIES:

The manpower position with regard to various reserved categories is

as indicated hereunder:

A. Employment of SC/ST Candidates

The Corporation continued its efforts to fulfill its obligation in

providing employment opportunities to SC/ST candidates, in

accordance with the Government Policy. The overall representation

of SC/STs in the Corporation (bothShore and Floating

Establishments, but excluding MPWs) as on 31st March, 2010 was

SCs - 97, i.e., 13.45% as against prescribed percentage of 16.66%

and STs 39 i.e., 05.41 % as against the prescribed percentage of

7.5%.

B. Employment of Ex-Servicemen

The representation of Ex-Servicemen (both Shore and Floating) in

group

C and D categories in the Corporation was 13.28% and Nil as

against the percentage of 14.50% and 24.50% respectively as

prescribed by the

Government.

C. Employment of Physically Handicapped

The number of physically handicapped employees in the

Corporation as on 31st March, 2010 is 7 (seven), the group-wise

break-up A, B, C & D is

as furnished hereunder:-

Group Sanctioned Total strength No. of Percentage strength in

identified persons with posts with disabilities reference

actually to identified employed posts

The overall percentage of Group A&B posts comes to 3.27% of the

Identified posts in these Groups, which is higher than the

prescribed

3%. The overall percentage of Group C and D posts comes to 4.10%

of

the total sanctioned strength in these groups which is higher than

the

prescribed 3%. The Physically handicapped persons are being paid

additional conveyance assistance as per the Government

instructions.

D. Employment of women

The number of women employees on Rolls as on 31.03.2010 is 53

as

against 46 as on 31.03.2009. Out of them number of executives is

15 and

Non-Executives is 38.

Compliance with Governments Policy on Women:

Basing on the Supreme Court’s judgment and keeping in view the

Government instructions on sexual harassment of women at work

places, a

Complaints Committee headed by a woman officer was constituted

to

Inquire into the complaints of sexual harassment at work places. A

Complaints register is also being maintained.

DCI is a Life Member of the Forum for Women in Public Sector and

one

women’s representative from DCI has been nominated to the above

forum.

Apart from the Trade Unions, the problems, if any, relating

Particularly to women employees are looked into as and when the

same

are brought to the notice of the Management.

Existing Benefits and Welfare Measures for the Women Employees:

i) The women employees in the Corporation are entitled to 135 days

of

Maternity Leave.

ii) Special Casual leave not exceeding 14 working days is sanctioned

to

Regular women employees of the Corporation to undergo non-

puerperal

sterilizations.

iii) One day special casual leave is allowed to the regular women

Employees of the Corporation who had ICUD insertions.

iv) A rest room is provided exclusively for the women employees.

v) Working uniforms are provided to Group D women employees, as

per the scales prescribed in the Rules.

vi) The women employees are sponsored to various in- house and

also

external training programmes. Out of 53 women employees 24 had

undergone training during the past one year i.e., from 01.04.2009 to

31.03.2010.

WAGE SETTLEMENTS

A. Floating establishment:

i) The INSA-MUI (FG/HT) Agreements in respect of Floating Officers,

for

the periods from 2008 to 2010 and 2010 to 2012 have been

implemented.

ii) The 1NSA-NUSI Agreements, relating to Petty Officers for the

period

from 2008-10 was implemented upto 31/03/2010. The wage revision

is due

from 01/04/2010.

iii) The Wage Agreement of Crew for the period from 2008- 10 was

Implemented upto 31 /03/2010. The wage revision is due from

01/04/2010.

B. Shore establishment:

i) The Revised pay scales of Executives have been implemented

w.e.f. 01.01.2007

ii) Wage Revision for Non-Executive Employees in the Shore

Establishment is due from 01.01.2007 and negotiations are in

progress. INDUSTRIAL

RELATIONS:

The industrial relations in the Corporation continued to be cordial

throughout the year under report. WELFARE MEASURES:

The Corporation continued various welfare schemes viz., Family

Pension

Scheme, Group Gratuity Assurance Scheme, Personal Accident

Insurance

Coverage, Group Savings Linked Insurance Scheme, Contributory

Provident Fund, Maternity Benefit Scheme, Subsidised Canteen

Facility, Transport Subsidy, Medical Attendance, Leave Travel

Concession, Incentive Scheme for acquiring higher qualifications,

Merit Scholarship for the children of SC/ST employees, and

Mediclaim medical attendance facility for the retired employees etc.

Other welfare measures such as House Building Advance, HBA

Interest Subsidy, HBA Family Security Mutual Fund, Special casual

leave for maternity/paternity and incentives for adopting small

family norms and advances for childrens higher education, marriage

and purchase of computer etc., are extended to the employees.

PERSONNEL ADMINISTRATION:

Manpower planning.

Recruitment and training

Job analysis, evaluation, monitoring and performance evaluation.

Organization support services.

For facilitating speedy and effective decisions the organization has a

management information systems division whose functions are :

Data acquisition, evaluation and reporting to the concerned

departments and Chief Executive.

Appraisal of project and Dredge performance Systems Engineering

and Appraisal of project and Dredge performance

Systems Engineering and Automation on board dredgers.

The dredgers are operated by experienced seafarers comprising

master marines with foreign going certificates.

Chief Engineer Officers Electrical Officers and Radio Officers. They

are assisted by technical personnel crew for dredge operations,

maintenance of machinery etc. most of them were trained on board

out dredgers and also at reputed Institutes abroad in the fields of

dredging repairs and maintenance.

Most of the dredgers are provided with most modern electronic

equipment for position fixing, production monitoring etc. for

effective dredge operations. The Head Quarters of the Dredging

Corporation of India is equipped with latest computer systems with

integrated data processing facility for communicating with the

projects located in the different parts of the country. With the above

systems and expert manning at different parts of the organization,

both at the project fields, monitoring evaluation and control are built

in, so that the quality of the work will be consistent and uniform

through out the performance of the contract.

HUMAN RESOURCES: DCI in its fold has very senior master

mariners, marine /mechanical/civil engineers backed by vast

expertise in the operation and maintenance of sophisticated

dredgers. Technology is being continuously updated by imparting

training to the key personnel through expert dredge training

institutions in Holland. DCI has acquired expertise to undertake any

assignment, be it dredging, reclamation, salvage, vivil engineering,

construction or consultancy. DCI believes that a motivated and

trained work force is highly essential for any successful

organization. Apart from attractive remuneration, the corporation

provides good welfare activities including House Building Advance

at low interest.

INTERNAL CONTROL SYSTEMS AND THEIR

ADEQUACY:

The company has reasonable system of delegation at proper

levels and an adequate system of internal control commensurate

with its size and nature of its business. The company has an

adequate and independent internal audit department for conducting

extensive audit of various important operational and financial

matters both at head office and at projects. The internal controls are

reviewed by the internal audit department. The vigilance

department deals with vigilance and disciplinary cases with

emphasis on preventive vigilance.

C&AG conducts proprietary audit. The company has formed an audit

committee of directors consisting of four independent non-executive

directors, significant audit observations and follow up action thereon

are reported to the audit committee. The proceedings of the audit

committee are submitted to the board.

HUMAN RESOURCES DEVELOPMENT:

The Company is making sincere and concerted efforts for the overall

development of Human Resources, both on shore and floating

establishments.

During the year, 7 DCCP apprentices were inducted for training. Six

Management Trainees were also inducted in various disciplines,

during

the year. As part of social responsibility, students from local

institutions were guided for project works in Human Resource

Management, Labour Management, Marketing Management,

Information

Technology etc.,

Fifteen Electrical Officers and Seven Dredge Operators / Dredge

Engineers have undergone technical training. Lecture programmes

on

Work Culture, Enhancing Management Development, Leadership

were

arranged for the benefit of the employees by inviting eminent

academic

and professional personalities, during the year. As against target of

131 personnel to be trained under the MoU Targets, a total of 213

employees were trained in the specified program

MEMORANDUM OF UNDERSTANDING

For the 17th consecutive year, your company has signed Memorandum of understanding with government of India for the year 2009-2010. The company expects the rating of “VERY GOOD” FOR 2008-2009

YEAER 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

A.SHORE

EXECUTIVES

158 159 157 192 181 179

NON-EXECUTIVE

S

251 226 227 180 177 181

MANGEMENT TRAINEES

- - - - 17 6

TOTAL-A 409 385 384 372 375 366

B. FLOATING

OFFICERS 169 148 134 138 143 143

PETTY OFFICERS

66 60 43 20 39 22

CREW 270 256 254 239 39 22

MPW/DPL 20 20 3 - 1 1

TOTAL-B 325 484 434 397 393 356

GRAND TOTAL

934 869 818 769 768 722

(A+B)

3.9 FINANCE DEPARTMENT:FINANCELAL DEPARTMENT:

Development and maintenance of accounting policies, internal and

external financial policy and control system.

Financial analysis and contract review and report to board of

directors and government of India.

Personal of Annual Accounts.

Internal financial auditing and co-ordination with external auditing

authorities.

Co-ordination with operations Department in rendering, project

execution and project closing.

BALANCESHEET OF 2010 RESULTS:

1. We have audited the attached Balance Sheet of DREDGING

CORPORATION OF INDIA LIMITED, VISAKHAPATNAM as at 31st March,

2010 and also the Profit and Loss Account of the Company for the year

ended on that date annexed thereto and the Cash Flow Statement for

the year ended on that date. These financial statements are the

responsibility of the Companys Management. Our responsibility is to

express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards

generally accepted in India. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the

financial statements are free of material misstatement. An Audit

includes examining on test basis evidence supporting the amounts and

disclosures in the Financial Statements. An audit also includes assessing

the accounting principles used and significant estimates made by the

management, as well as evaluating the overall financial statement

presentation. We believe that our audit provides a reasonable basis for

our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued

by the Central Government of India in terms of sub- section (4A) of

Section 227 of the Companies Act, 1956, we enclose in the Annexure

hereto a statement on the matters specified in paragraph 4 and 5 of the

said Order.

4. Further to our comments in the Annexure referred to in paragraph 3

above, we report that:

(i) We have obtained all the information and explanations, which to the

best of our knowledge and belief were necessary for the purposes of our

audit.

(ii) In our opinion, proper books of account as required by law have

been kept by the company so far as appears from our examination of

those books.

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow

Statement dealt with by this report are in agreement with the books

of account.

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and

Cash Flow Statement dealt with by this report comply with the

Accounting Standards referred to in Sub-section (3C) of Section 211

of the Companies Act, 1956.

(v) The provisions of Section 274(1 )(g) of the Companies Act, 1956

are not applicable to this company vide number 2/5/ 2001 -CL-V :

General Circular No.8/2002 dated 22-03-2002 issued by Ministry of

Law, Justice and Company Affairs, Department of Company Affairs.

(vi) In our opinion and to the best of our information and according to

the explanations given to us, the said accounts read together with

the Accounting Policies and Notes on Accounts give the information

required by the Companies Act, 1956, in the manner so required and

give a true and fair view in conformity with the accounting principles

generally accepted in India.

(a) in the case of Balance Sheet, of the state of affairs of the

Company as at 31st March, 2010;

(b) in the case of the Profit and Loss Account, of the profit of the

Company for the year ended on that date; and

(c) in the case of Cash Flow Statement, of the cash flows of the

Company for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

(Referred to in paragraph (3) of our Report of even date)

(i) (a) The Company has maintained proper records showing full

particulars including quantitative details and situation of fixed assets.

(b) All the fixed assets have been physically verified by the

management during the year in a phased manner. As informed to us,

no material discrepancies were noticed on such verification.

(c) The Company has not disposed off substantial part of the fixed

assets during the year and the going concern status of the company

is not affected.

(ii) (a) Physical verification of inventory has been conducted by the

management at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by

the management are reasonable and adequate in relation to the size

of the company and the nature of its business.

(c) The Company has maintained proper records of inventory. As

informed to us, no material discrepancies were noticed on physical

verification as compared to the book records.

(iii) (a) The Company has not granted any loans, secured or

unsecured to companies, firms or other parties covered in the

register maintained under section 301 of the Companies Act, 1956. In

view of the above, clause 4 (iii) (b), (c) and (d) are not applicable. (e)

The Company has not taken any loans, secured or unsecured from

companies, firms or other parties covered in the register maintained

under section 301 of the Companies Act, 1956. In view of the above,

Clause 4 (iii) (f) and (g) are not applicable. (iv) In our opinion and

according to the information and explanations given to us, there are

adequate internal control procedures commensurate with the size of

the Company and the nature of its business, for the purchase of

inventory and fixed assets and for sale of goods and services. During

the course of our audit, we have not observed any major weaknesses

in internal control.

(v) (a) According to the information and explanations given to us,

there were no contracts or arrangements referred to in Section 301

of Companies Act, 1956 that need to be entered into the Register

required to be maintained in pursuance of Section 301 of the

Companies Act, 1956. In view of the above, Clause 4 (v) (b) is not

applicable. (vi) The Company has not accepted any deposits from the

public during the year

(vii) In our opinion, the Company has an internal audit system

commensurate with its size and nature of its business. (viii) The

Central Government has not prescribed maintenance of cost records

under Section 209(1 )(d) of the Companies Act, 1956 in respect of

the nature of business carried on by the Company. (ix) (a) The

Company is generally regular in depositing the undisputed statutory

dues including Provident Fund, Investor Education and Protection

Fund, Income Tax, Sales Tax, Wealth Tax, ServiceTax, Customs Duty,

Cess and any other statutory dues with the appropriate authorities.

According to the information and explanations given to us, no

undisputed amounts payable in respect of aforementioned dues were

in arrears, as at 31" March, 2010 for a period of more than six

months from the date they became payable. (b) According to

information and explanations given to us, there were no statutory

dues that have been deposited on account of dispute. (x) The

Company has no accumulated losses and has not incurred cash

losses during the financial year covered by our audit and in the

immediately preceding financial year. (xi) The Company has not

defaulted in repayment of dues to financial institutions or banks. As

there are no debentures, the question of repayment does notarise.

(xii) The Company has not granted loans and advances on the basis

of security by way of pledge of shares, debentures and other

securities.

(xiii) The Company is not a chit fund or a nidhi/mutual benefit

fund/society. Therefore, clause 4(xiii) of the Companies (Auditors

Report) Order, 2003 is not applicable to the company. (xiv) The

Company has not been dealing or trading in shares, securities,

debentures and other investments. There fore, clause4(xiv) of the

Companies (Auditors Report) Order, 2003 is not applicable to the

Company. (xv) The Company has not given any guarantee for loans

taken by others from banks or financial institutions. Therefore, clause

4(xv) of the Companies (Auditors Report) Order, 2003 is not

applicable to the Company. (xvi) The Company has not obtained any

term loans during the year and therefore, clause 4(xvi) of the

Companies (Auditors Report) Order, 2003 is not applicable to the

Company.

(xvii) The Company has not raised any funds on short-term basis or

long-term basis during the year and therefore, clause 4(xvii) of the

Companies (Auditors Report) Order, 2003 is not applicable. (xviii) The

Company has not made any preferential allotment of shares to

parties and companies covered in the register maintained under

section 301 ofthe Companies Act, 1956. (xix) The Company has not

issued debentures during the year and therefore, the clause 4(xix) of

the Companies (Auditors Report) Order, 2003 is not applicable.

(xx) The Company has not raised money by public issue during the

year and therefore, the clause 4 (xx) of the Companies (Auditors

Report) Order, 2003 is not applicable.

(xxi) In our opinion and according to the information and

explanations given to us, no fraud on or by the Company has been

noticed or reported during theyearthat causes the financial

statements to the materially misstated.

TURNOVER:

YEAR TURNOVER OF DCI

2006-07 626.21

2007-08 771.47

2008-09 832.22

2009-10 693.45

OPERATION DEPARTMENT:

While the operations departments monitor supervise the project units

for effective execution of the project, the project unit interacts with

client and operations departments at head quarters. In case of any

requirements deviating from those in contract, efforts are made to

resolve at project level and appraise the operation departments. Where

it requires the approval of head quarters, the same will be brought to

their notice forthwith along with action taken at project level. The same

is applicable in case of additional contractual requirements also. The

performance of project, with reference to the contract, plant and

equipment along with ancillaries and sub-contractor is documented by

every project unit and sent to head quarters for operations

department.At the same time, since DCI is a matrix type organization,

the project office interact with other departments at head office for

effective and qualitative functioning. Brief details of functions

supervised by other departments are given below.

TECHNICAL SERVICES:Repairs, maintenance and refit of dredgers and

ancillary crafts and equipment and fleet modifications. Purchase,

storage, transport and control of spares and stores and inventory

control of spares and stores. Development of fuel and lubrication

standards and generation of data base regarding performance of

equipment. Inspection of plant and equipment and certification.

Technical support for project unit and certification.

Technical support for project unit and identification of reliable workshops.

ORGANIZATION STRUCTURE OF DCI

ORGANIZATION STRUCTURE:The Organization Structure of DCI LTD is elected by the Government of

India. The Government of India will appoint the board of directors to

manage the company in terms of available power knowledge under the

article of Association. The Chairman and Managing Director is the Chief

Executive and Head of the organization and he executes his power from

the Head Office in Visakhapatnam.

ORGANIZATION STRUCTURE OF DCI

Balance sheetMar '

10Mar '

09Mar '

08Mar '

07Mar '

06

Sources of funds

Owner's fund

Equity share capital 28.00 28.00 28.00 28.00 28.00

Share application money - - - - -

Preference share capital - - - - -

Reserves & surplus1,301.

031,240.

781,210.

781,105.

11 965.01

Mar ' 10

Mar ' 09

Mar ' 08

Mar ' 07

Mar ' 06

Loan funds

Secured loans - - - - -

Unsecured loans - 5.51 16.53 30.16 46.39

Total1,329.

031,274.

291,255.

321,163.

261,039.

40

Uses of funds

Fixed assets

Gross block 994.58 956.63 923.57 849.01 848.76

Less : revaluation reserve - - - - -

Less : accumulated depreciation 710.12 644.37 591.87 552.06 515.29

Net block 284.46 312.26 331.70 296.95 333.47

Capital work-in-progress 269.13 238.50 235.52 143.22 24.41

Investments 30.00 30.00 24.50 14.50 5.50

Net current assets

Current assets, loans & advances 982.69 988.76 933.20 977.24 914.18

Less : current liabilities & provisions 237.25 295.24 269.60 268.65 238.16

Total net current assets 745.44 693.52 663.60 708.59 676.01

Miscellaneous expenses not written - - - - -

Total1,329.

031,274.

291,255.

321,163.

261,039.

40

PROFIT AND LOSS ACCONTING -2010

Profit & Loss(Rs. in Crores)Consolidated

Particulars Mar-10 Mar-09 Mar-08 Mar-07 Mar-06 Mar-05

INCOME :

Sales Turnover 645.43 685.28 705.37 572.95 506.97 524.85

Excise Duty 0.00 0.00 0.00 0.00 0.00 0.00

Net Sales 645.43 685.28 705.37 572.95 506.97 524.85

Other Income 49.99 160.97 66.15 66.99 52.02 55.50

Stock Adjustments 0.00 0.00 0.00 0.00 0.00 0.00

Total Income 695.42 846.25 771.52 639.94 558.99 580.35

EXPENDITURE :

Raw Materials 0.00 0.00 0.00 0.00 0.00 0.00

Power & Fuel Cost 172.70 203.16 202.72 172.06 145.91 114.88

Employee Cost 72.26 82.59 78.14 47.79 57.41 59.68

Other Manufacturing Expenses 258.37 411.75 270.32 154.82 94.29 91.01

Selling and Administration Expenses 13.09 16.97 21.15 13.94 13.16 20.58

Miscellaneous Expenses 34.56 17.32 5.17 6.10 36.25 67.34

Less: Pre-operative Expenses Capitalised 0.00 0.00 0.00 0.00 0.00 0.00

Total Expenditure 550.98 731.79 577.50 394.71 347.02 353.49

Operating Profit 144.44 114.46 194.02 245.23 211.97 226.86

Interest 0.87 0.00 1.58 2.31 3.08 3.91

Gross Profit 143.57 114.46 192.44 242.92 208.89 222.95

Depreciation 66.02 52.68 41.73 36.58 37.09 47.10

Profit Before Tax 77.55 61.78 150.71 206.34 171.80 175.85

Tax 7.50 14.50 -5.05 16.50 17.50 73.50

Fringe Benefit tax 0.00 0.91 0.94 1.11 0.74 NA

Deferred Tax 0.00 0.00 0.00 0.00 -22.90 -10.94

Reported Net Profit 70.05 46.37 154.82 188.73 176.46 113.29

Extraordinary Items 0.00 0.00 0.00 0.01 0.01 0.01

Adjusted Net Profit 70.05 46.37 154.82 188.72 176.45 113.28

Adjst. below Net Profit 0.00 0.00 0.00 0.00 0.00 0.00

P & L Balance brought forward 296.72 287.73 232.55 153.36 71.49 7.75

Statutory Appropriations 0.00 0.00 0.00 0.00 0.00 0.00

Appropriations -22.20 37.38 99.64 109.54 94.59 49.55

P & L Balance carried down 388.97 296.72 287.73 232.55 153.36 71.49

Dividend 8.40 14.00 42.00 42.00 42.00 33.60

Preference Dividend 0.00 0.00 0.00 0.00 0.00 0.00

Equity Dividend % 30.00 50.00 150.00 150.00 150.00 120.00

Earnings Per Share-Unit Curr 24.52 15.71 52.74 65.03 60.92 38.82

Earnings Per Share(Adj)-Unit Curr 24.52 15.71 52.74 65.03 60.92 38.82

Book Value-Unit Curr 474.65 453.14 442.42 404.68 354.65 308.73

CHAPTER-4

THEORETICAL FRAME WORK

&

CONCEPTUAL DATA

THEORETICAL FRAME WORK

Marketing is a basic that it cannot be considered as a separate

function. It is the whole business seen from the point of view or its final

result, that is from the customers point of view. Business is not

determined by the producers, by the customers.

PETER F. DRUCKER

Marketing strategy[1][2] is a process that can allow an organization to

concentrate its limited resources on the greatest opportunities to

increase sales and achieve a sustainable competitive advantage [3] . A

marketing strategy should be centered around the key concept

that customer satisfaction is the main goal.

What is a marketing strategy?

A marketing strategy specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market. Two interrelated parts are needed:

1. A target market - a fairly homogeneous (similar) group of customers to whom a company wishes to appeal

2. A marketing mix - the controllable variables the company puts together to satisfy this target group .

Target marketing is not mass marketing

Note that a marketing strategy specifies some particular target customers. This approach is called” target marketing” to distinguish it form “mass marketing.” Target marketing says that a marketing mix is tailored to fit some specific target customers. In contrast, mass marketing- the typical production oriented approach –vaguely aims at “everyone” with the same marketing mix. Mass marketing assumes that everyone is the same – and it considers everyone to be a potential customer. It may help to think of target marketing as the “rifle approach” and mass marketing as the “shotgun approach”

http://en.wikipedia.org/wiki/Customer_satisfaction

http://en.wikipedia.org/wiki/Marketing_strategy#cite_note-2

http://en.wikipedia.org/wiki/Competitive_advantage



The importance of target customers in this process can be seen in Exhibit 2-2, where the target customer –the “C” – is at the center of the diagram. The customer is surrounded by the controllable variables that we call the “marketing mix”. A typical marketing mix includes some product, offered at a price, with some promotion to tell potential customers about the product, and a way to reach the customer’s place.

Marketing is a social and managerial process by which individuals

and groups obtain what they need and want through creating, offering

and exchanging products of value to others.

Marketing Mix deals with the way in which a business uses price, product, distribution and promotion to market and sell its product.

The marketing mix is often referred to as the “Four P’s” - since the most important elements of marketing are concerned with:

Mr. CATHY

Product

Price

Place

Promotion

Product - the product (or service) that the customer obtains.

Price - how much the customer pays for the product.

Place – how the product is distributed to the customer.

Promotion - how the customer is found and persuaded to buy the product.

It is known as a “mix” because each ingredient affects the other and the mix must overall be suitable to the target customer.

The marketing mix is the way in which the marketing strategy is put into action - in other words, the actions arising from the marketing plan.

What is marketing strategy planning?

Marketing strategy planning means finding attractive opportunities and developing profitable marketing strategies. But what is a “marketing strategy” ? We have used these words rather casually so far. Now let’s see what they really mean.

Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement [4] .

Basic theory:

1. Target Audience2. Proposition/Key Element

3. Implementation

Types of strategies

Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing


http://en.wikipedia.org/wiki/Mission_statement

http://en.wikipedia.org/wiki/Sales

http://en.wikipedia.org/wiki/Strategic_management

http://en.wikipedia.org/wiki/Marketing_mix

some generic strategies. A brief description of the most common categorizing schemes is presented below:

Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies: Leader

Challenger

Follower

Nicher

Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow.

Product differentiation (broad)

Cost leadership (broad)

Market segmentation (narrow)

Innovation strategies - This deals with the firm's rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types:

Pioneers

Close followers

Late followers

http://en.wikipedia.org/wiki/Pioneers

http://en.wikipedia.org/wiki/Business_model_innovation

http://en.wikipedia.org/wiki/Market_segmentation

http://en.wikipedia.org/wiki/Cost_leadership

http://en.wikipedia.org/wiki/Product_differentiation

http://en.wikipedia.org/wiki/Porter_generic_strategies

http://en.wikipedia.org/wiki/Market_dominance

Growth strategies - In this scheme we ask the question, “How should the firm grow?”. There are a number of different ways of answering that question, but the most common gives four answers:

Horizontal integration Vertical integration

Diversification

Intensification

A more detailed scheme uses the categories[6]:

Prospector Analyzer

Defender

Reactor

Marketing warfare strategies - This scheme draws parallels between marketing strategies and military strategies.

Formulating a Market StrategyBY REX STEWART

#006 AUGUST - SEPTEMBER - 1986

In the previous article, we talked primarily about tools to determine your market niche and ways to utilize these tools in gathering information to determine your store's market position. With this information gathered,

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http://en.wikipedia.org/wiki/Marketing_warfare_strategies


what do we do with it? On the board level, it should be utilized to formulate a strategic plan or to review an already existing plan. More importantly, on the staff level, the information gathered is the basis for an operational marketing strategy.

A marketing strategy should be used as a working paper that guides the store's operations for the next 1-2 years. The format of a marketing strategy has three sections:

1. basic assumptions -- based on survey results and past planning processes;

2. strategic goals -- goals for growth and fiscal health of the co-op;3. achieving goals -- operational ideas for changes that will alter the

perception of the storefront by the public to conform to the strategic goals.(An advertising strategy, to be discussed in our next column, is a result of the marketing strategy and needs to be treated as a separate document. A market strategy creates the product to be advertised; the advertising strategy defines the markets to be advertised in and the media vehicles to be used.)

As mentioned earlier, it is important that corporate goals are established through a strategic planning process before an operational marketing strategy can be written. These corporate goals, along with gathered data, will form the basis of the strategy formulation. The first step is to analyze the corporate goals, asking three primary questions: 1) How do overall corporate goals relate to marketing? 2) Are the goals achievable through store operation? 3) Are the resources available -- both capital and personnel -- to achieve these goals?

If these questions are sufficiently answered, you are ready to formulate your strategy. From surveys and competition research (discussed in the previous article), you have the basis for the analysis.

Analysis of market:

-->Is the market growing?-->How large is present market (dollars and people)?

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-->What determines the size of the market?-->What services that relate to our business are currently being offered in the market?-->What services do customers desire?-->How is market segmented; what is our appropriate and perceived niche?-->Is demand for product growing? consistent? declining? fluctuating?-->Market shares of competitors: what are they and why do they have them?

These answered questions, and additional questions specific to your market, will give you a broad overview of the current market conditions.

Analysis of customer:

-->What is your customer base?-->What are the perceived needs and wants of the customer?-->What are the reasons they buy from your store or a competitor?-->What % of their food dollar is spent at your store?-->What is the demographic and psychographic profile of your average customer?-->What customers/trade area can be sufficiently serviced?-->What services do they desire that you can sufficiently supply?

Supplier analysis:

-->Are they price competitive?-->Do they provide the desired product lines of your customer base?-->How do your suppliers compare with competitors (price, product, wholesale services)?-->Are they promotion and marketing oriented?

Competitor analysis:

-->Who are your primary and secondary competitors?-->What are their strengths and weaknesses?-->What are their strategies?-->What is their share of the market?-->What is their ability to service the market?-->How do their resources compare to yours (size, management, buying power, supplier services, etc.)?-->What is the demographic/psychographic profile of their average customer?-->Advantages and disadvantages competition has over your store.

Cost analysis:

-->Cost of strategy (promotion, equipment, increased inventory, advertising, etc.).-->Effect on corporate profit -- does return on investment warrant strategy implementation?-->What are fixed and variable costs associated with implementation?

In completing this analysis, you have identified the key outside forces and formed the basic assumptions that make your business what it is today. Your next step is to use the analysis to set your strategic goals to change or strengthen your market perception and niche.

The third step in completing the market strategy is achieving goals. This is the nuts and bolts of the strategy -- operational ideas that will alter the perception of the storefront by the public to conform to strategic goals.

The development of the operational strategy starts from the ground up, utilizing the people who have the most familiarity with the areas they work in; this is where some of the best, most productive ideas come from. A form needs to be developed to solicit comments from appropriate staff members, with a determined timeline. This form should

spell out exactly what the task at hand is and the areas where ideas are needed. This accomplishes two things: it allows all staff to participate in the strategy development, and it allows a myriad of ideas and suggestions to flow to the strategy coordinator for consideration.

The operational portion of the strategy starts with the stated purpose and goals. Then, each area of operations is looked at, with stated goals and objectives for each one. The areas commonly looked at in a retail co-op are:

product line development pricing sales (increasing sales per customer) services merchandising/ordering equipment, layout promotion (in-house) equity miscellaneous (policy effects, budgeting, operational plans, etc.).

Under these categories, the goals and objectives for operational change are laid out.

This completes the formulation of the market strategy. The detailed data-gathering analysis and goal-setting will allow you to create an operational section of the strategy that addresses your store's long-term needs and goals. It will give everyone in the organization a sense of vision and working for a common goal. And it will give the manager the ability to focus on long-term projects that integrate with other departmental goals and object

DEVELOPING MARKETING MIXER FOR TARGET MARKETS

There are many marketing mix decisions:

There are many possible ways to satisfy the needs of target customers. A product might have many different features. Customer service levels before or after the sale can be changed. Various advertising media- newspapers, magazines, cable, the Internet – may be used. A company’s own sales force or other sales specialists can be

used. The price can be changed; discounts can be given, and so on. With so many possible variables, is there any way to help organize all these decisions and simplify the selection of marketing mixes.

Customer is not part of the marketing mix:

The customer is shown surrounded by the four Ps in Exhibit 2-4 Some students assume that the customer is part of the marketing mix- but this is not so. The customer should be the target of all marketing efforts. The customer is placed in the center of the diagram to show this. The C stands for some specific customers- the target market.

A marketing program blends all of the firm’s marketing plans into one “big” plan. See Exhibit 2.8. This program, then, is the responsibility of the whole company. Typically, the whole marketing program is an integrated part of the whole- company strategic plan we discussed earlier.

We will emphasize planning one marketing strategy at a time, rather than planning- or implementing- a whole marketing program. This is practical because it is important to plan each strategy carefully. Too many marketing managers fall into sloppy thinking. They try to develop too many strategies all at once—and don’t develop any very carefully. However, when new strategies are evaluated, it makes sense to see how well they fit with the existing marketing program. And, we’ll talk about merging plans in to marketing program Marketing strategy planning may be very important to you soon—maybe in your present job or college activities. In appendix C on marketing careers, we present some strategy planning ideas for getting a marketing job.

THE IMPORTANCE OF MARKEING STRATEGY PLANNING

We emphasize the planning part of the marketing manager’s job for a good reason. The “onetime” strategy decisions – the decisions that decide that company is in and the strategies it will follow – usually determine success, or failure. An extremely good plan might be carried out badly and still be profitable, while a poor but well- implemented plan

can lose money. The case history that follows shows the importance of planning and why we emphasize marketing strategy planning throughout this text.

MARKETING STRATEGY PLANNING PROCESS HIGHLIGHTS OPPORTUNITIES

We’ve emphasized that a marketing strategy requires decision about the specific customers the firm will target and the marketing mix the firm will develop to appeal to that market. We can organize the many marketing mix decision in terms of the four Ps –Product, Place, Promotion and Price. Thus the “final” strategy decisions are represented by the target market surrounded by the four Ps. However, the idea isn’t just to come up with some strategy. After all, there are hundreds or even thousands of combinations of marketing mix decisions and target markets that a firm might try. Rather, the challenge is to zero in on the best strategy.

Narrow down to a superior marketing mix

A Marketing mix must meet the needs of target customers, but a firm isn’t likely to get a competitive advantage if it just meets needs in the same way as some other firm. So in evaluating possible strategies the marketing manager should think about whether there is a way to differentiate the marketingmix . Differentiation means that the marketing mix is distinct from and better than what is available from a competitor.

Screening criteria make it clear why you select a strategy

There are usually more different opportunities –and strategy possibilities – than a firm can pursue. Each one has its own advantages and disadvantages. Trends in the external market environment many make a potential opportunity more or less attractive. These complications can make it difficult to zero in on the best target market and marketing mix.

THE SERVICE MARKETING MIX:

The marketing concept is equally applicable to organization in the

service sector and to manufactures of physical goods. Understanding

and identifying the needs and wants of the market under lies successful

marketing for services organizations and other types. Service has

special characteristics, which can affect marketing activities.

INTANGIBLE:

Services are intangible. Unlike physical products, they cannot be

moved, taste, felt, heard, or smelled before they brought.

INSEPARABLE: Service are typically produced and consumed

simultaneously. This is not true for physical goods, which are

manufactured, put into inventory, distributed through the multiple

resellers, and consumed later.

HETEROGENEOUS:

Service are highly variable, some doctors have excellent bedside

manners, there are less patients. Some surgeons are very successful in

performing certain operations, other are less successful. Service buyers

are aware of this variability and have to talk to others before selecting a

service provider.

PURISHABLE:

Service cannot be stored, some doctors charge patients for missed

appointments, because the services glue existed only at the point. the

perish ability of services is not a problem when demand steady, when

demand fluctuates, service firms have problems. to relate marketing

mix concept to services marketing is another way to begin. the

challenge of service marketing is to think creatively about marketing

mix through. And expending marketing is for services.

TRADITIONAL MARKETING MIX:

One of the most basic concepts in marketing is marketing mix defined as the element or communicates with customers. The traditional marketing mix composed of 4p”s i.e., product, place, promotion and price.

These elements appear as core decision variable in any marketing text of marketing plan the notion of mix implies that all of the variable are interrelated and depended on each other to some extent. Further the marketing mix philosophy implies that there is an optional mix of four factors for given market segment at a given point of time.

KEY strategy decision areas for each of the 4p are requiring some modifications when applied to services. For example traditionally promotion is through of as involving decisions related to sales promotion, and publicity.

In services, these factors are also important, but because services are produced and consumes simultaneous, service delivery people(such as clerks, ticker-takers, nurses, phone personnel, service engineers) are involved in “real time“ promotion of the services even if their jobs are typically defines in terms of the operational functions they perform..

Pricing also becomes very complex in services where “units costs needed to calculate prices may be difficult to determines, and where the customers frequently uses prices as a cue to quality.

EXPANDED MARKETING MIX FOR SERVICES:

Because services are usually produced and consumed simultaneously, customers are often present in the firm’s personnel, and are actually part of the service production process.

Also, because services are intangible customers will often be looking for any intangible customers will often be looking for any tangible cue to help them understand the nature of the service experience. These facts have led to services to conclude that they can use additional variables to commun8icate with and satisfy their customers. For example in the hotel industry the design and décor of the hotel as well as the appearance and attitudes of its employees will influence customer’s perceptions and experiences.

Acknowledgement of the important of these additional variables has led services marketers to adopt the concept of an expanded marketing mix for the service shown in the three remaining columns in table given above. In additional to the traditional 4’ps., the service marketing mix includes people, physical evidence and process.

PEOPLE: All human who pay a part in service delivery and thus influence the buyer’s perceptions, namely, the firm’s personal, the customer in the delivery of a service itself.

How these people are dressed, their personal appearance, and their attitudes and behavior, all influence the customer perceptions of the service provider or centaur person can be very important. in fact, for some services, such as consulting, counseling, teaching, and other professional relationship based service, the provider is the service.

In other cases the contact person may play what appears to be a relatively small part in service delivery dispatch. Yet research suggests that even these providers may be the vocal point of the service encounters that can prove critical for the organization.

PHYSICAL EVIDENCE: The environment in the service is delivered and when and where the firm and customer interact, of any tangible

components that facilitate performance or communication of the service.

The physical evidence of the service includes all of tangible representations of the service such as brochures, letterheads, business cards, report formats, signage, and equipments in some cases it includes the physical facility where the service is offered, for example, the retail ban branch facility may be irrelevant.

In other cases, such as telecommunications services, the physical facility may be irrelevant. In this case, other tangibles such as billing statements and appearance of the repair truck may be important indicators of quality.

Especially when consumers have little on which to judge the actual quality of service they will rely on these cues, just as they rely on the cues provided by the people and the services process.

Physical evidence cues, provides excellent opportunities for the firm to send consistent and strong messages regarding the organizations purpose, the intended market segments, and the nature of the service.

PROCESS: The actual procedures, mechanisms, are maintained by flow of activities by which the service delivery and operating system. the actual delivery steps the customer experiences, or the operational flow of the services, will also provide customers with evidence in which to judge the services. Some services are very complex, requiring the customer to follow a complicated and extensive series of actions to complete the process.

Highly bureaucratized services frequently follow this pattern, and the logic of the steps involved often escapes the customer. Another distinguishing characteristic of the process that can provide evidence to the customer is whether the service follows a production line/standardized approach of whether the process is empowered/customized one. None of these characteristics are another form of evidence used by the consumer to judge service.

The three new marketing mix elements (people, physical evidence, and process) are included in the marketing mix as separate elements because they are within the control of the firms and any or all of them may influence the customer’s initial decision to purchase a service, as well as the customer’s level of satisfaction and repurchase decision.

STRATEGY FORMULATION

Goals indicate what a business unit wants to achieve; Strategy is a game plan for getting there. Every business must design a strategy for achieving its goals, consisting of a marketing strategy, and a compatible technology strategy and sourcing strategy.

PORTER’S GEMEROC STRATEGIES

Michael porter has proposed three generic strategies that provide a good starting point for strategic thinking; overall cost leadership, differentiation, and foucs.40

Overall cost leadership: the business works hard to achieve the lowest production and distribution costs so that it can price lower than its competitors and win a large market share. Firms pursuing this strategy must good at engineering, purchasing, manufacturing, and physical distribution. They need less skill in marketing. The problem with this strategy is that other firms will usually compete with still lower costs and hurt the firm that rested its whole future on cost.

Differentiation: The business concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market. The firm cultivates those strengths that will contribute to the intended differentiation. Thus the firm seeking quality leadership, for example, must make products with the best components, put them together expertly, inspect them carefully, and effectively communicate their quality.

Focus: the business focuses on one or more narrow market segments. The firm gets to know these segments intimately and pursues either cost leadership or differentiation within the target segment.

The online air travel industry provides a good example of these three strategies. Travelocity is pursuing a differentiation strategy by offering the most comprehensive range of services to the traveler. Lowest fare is pursuing a lowest- cost Strategy; and Last Minute is pursuing a niche strategy in focusing on travelers who have the flexibility to travel on very short notice.

According to Porter, firms pursuing the same strategy directed to the same target market constitute a strategic group. This firm that carries out that strategy best will make the most profits. Firms that do not pursue a clear strategy and try to be good on all strategic dimensions do the worst. International Harvester went out of the farm equipment business because it did not stand out in its industry as lowest in cost, highest in perceived value, or best in serving some market segment; Porter drew a distinction between operational effectiveness and strategy.

MARTKETING STRATEGY OF PORTER’S

Target market: Teenagers and youth (15-25 years ) in the Rs.10,000 and above monthly household-income families who are trendy, ambitious and health conscious.

Positioning: Tangy, energy drink form the Himalayas for bright youth, and which is beneficial for body and mind.

Product: Leafy material, packed in modern carton packs of 25 grams, 50 grams and 100 grams. The 25 grams packets, will be trial packs, Which will be discontinued in the fourth year of operation. The product has to be brewed like tea in boiling water, preferably consumed without adding milk, sugar can be added for taste

Pricing: Available in Rs.49 for 25 grams, Rs.95 for 50 grams and Rs.180 for 100 grams packs.

Distribution: In select up market retail chains, health and beauty stores, and up market kirana stores.

Marketing communications: Focus on crating brand awareness and a distinctive image based on the twin benefits of energy and concentration with emphasis on exclusivity; high-profile product-launch strategy involving toppers of competitive examination from the target group with focus on publicity and media coverage.

Marketing research: Initial tracking studies to measure differentiation, preference, market penetration, and repeat purchase rate; to monitor the profile of the customers.

SERVICES MARKET SEGMENTATION:

Market segmentation has along been considered as one of the most essential marketing concepts available to managers concerned with marketing products. However, within the services sector marketing the concept is, in general, underutilized, with much organization adopting an unsophisticated approach taken is often to wait and see which clients or customers come forward to buy a service to it. The approach taken is often to wait and see which clients or customers come forward to buy a service, or to offer a range of service without focusing on the specific needs of needs of identified segments.

Broadly, a service company has the following three alternatives to target market selection.

An undifferentiated marketing approach where is no recognition of distinct segments in the market. This is sometimes termed market aggregation.

A differentiated marketing approach where a company identifies, for example, five segments in market, and develops separate marketing mix programs aimed at each segment.

A concentrated marketing approach where. Although there is are cognition that are a number of discreet segment, the company focuses its marketing mix primarily at one specific segment.

Market segmentation is especially important for services in the current competitive market place. Service industries are suffering from increasing competition both in the number of competitors and in the proliferation of service offerings. Market segmentation helps prevent the waste of valuable resources by directing into those areas that will help achieve success.

Service products are frequently not clearly differentiated. Market segmentation offers the opportunity of gaining competitive advantage, in a highly contested market, through differentiation. The market segmentation approach involves identification of the benefits which different homogeneous groups seek, allowing relevant features and requirements to be determined and used as a source of service differentiation.

Once the market augment has been selected, the process of target marketing involves developing a positioning for the target segments selected and then developing a marketing mix for each target market.

THE MEANING AND SIGNIFICANCE OF MARKETING STRATEGY

Marketing strategy is the complete and unbeatable plan designed specially for attaining the marketing objectives of the firm. The marketing objectives indicates what firm wants to achieve, the marketing strategy provides the design for achieving them.

It is the marketing strategy that decides the success of the business unit level, which in turn decides the total corporate success. the linkage between marketing strategy, it is only logical that marketing strategy over all direction due from the marketing objectives of firm

FORMULATING THE MARKETING STRATEGY:

Marketing strategy is a well out lined plan. And there are definite ways of formulating it. Basically formulation of marketing strategy consists of two main steps:

SELECTING THE TARGET MARKETING. ASSEMBLING THE MARKETING MIX.

This essence of the marketing strategy of any form can be grasped from the firm’s target market and its mix. The target market show to which the firm intends to sell the products, the marketing mix shows how the firm intends to sell. Together they constitute the marketing strategy platform of the firm.SELECTING THE TARGET MARKETING:To say target market is selection is a part of marketing strategy developed is under statement. When the selection of the target market is over, and important part of the marketing strategy of the firm is already determined, defined and expressed.ASSEMBLING THE MARKETING MIX : The assembling the marketing mix means assembling, the 4p’s in the right combination. Involved in this process are the choice of the appropriate marketing activities and the allocation of the appropriate marketing effort to each on of them.

MARKETING STRATEGIES FALL UNDER TWO GENERAL CATEGORIES:

Major of business battle are infect fought with a differentiation base strategy.

THE PRICE BASED MARKETING STRATEGY :

The business unit that opts for the price rout in its competitive battle will enjoy certain flexibilities in the matter of pricing of its products and use price as the main competitive demands. It will be enjoying certain inherent cost advantages, which permit it, tore sort to a price based fight.

THE DIFFERENT BASED MARKETING STRATEGY:

The marketing strategy based on different works in the principle that any aspect of the offer and any activity of the firm can be made distinctive compared with the competing offers. From the simple of commodities to the most sophisticated of products and services, the scope foe differentiation is tremendous.

MARKETING STRATEGIES FOR SERVICE FIRMS:

Until recently service firms lagged behind manufacturing firms in their use of marketing. Many service businesses are small and do not use formal management or marketing techniques. There are also professional service businesses like law and accounting

Firms that formally believed it was unprofessional service to use marketing. Other services business like school, hospitals faced so much demand or so little competition until recently that saw no need for marketing but this has changed.

SERVICE MAY BE DEFINED AS FOLLOW:

A service is any act or performance that one party can offer to

another that is essentially intangible and does not result in the

ownership of anything its production may not be ties to a physical

product.

Traditional 4p’s marketing approaches work well for goods but

additional elements require attention in service business. Booms and

Bitner suggested three additional 4p’s for service marketing PEOPLE,

PHYSICAL EVIDENCE, PROCESS because most services are provided by

people selection, training and motivation of employees can make a

huge difference in customer satisfaction. Ideally, employees should

exhibit competence, attitude, responsiveness, initiative, problem solving

ability, and goodwill.

Companies also try to demonstrate their service quality through

physical evidence and presentation the customer also does a physical

environment consisting of a building, interior, equipment, and furniture.

In view of this complexity, Gonroos has argued that service marketing

requites not only external marketing but also internal and interactive

marketing EXTERNAL MARKETING describes the normal work to

prepare, price, distribute and promote the service to customers. Internal

marketing describes the work to retain and motivate employees to

service to customers well.

MANAGING SERVICE QUALITY:

A service firm may win by delivering consistently higher-quality

device than competition and exceeding customer expressions. these

expectations are formed by their past experiences, word of mouth and

advertising. after receiving the service, customers lose interest in the

provider. If the perceived service meet of exceeds their expectations,

they are apt to use the provider again.

SERVICE QUALITY GAP MODE:

Parasuraman, zeithaml and beery formulated a service-quality model

that highlights the main requirements for delivering high service quality.

1. Gap between consumer expectation and management

perception:

Management does not always perceive correctly what customers want.

Hospital administrators may think that patients want better food, but

patients may more concern with nurse responsive.

2. Gap between management perception and service-quality

specification:

Management might correctly perceive the customers wants but not set

a specified performance standard. Hospital administrators may tell the

nurses to give “fast” service without specifying it quantitatively.

3. gap between service-quality specifications and service

delivery:

the personnel might be poorly trained, or incapable or unwilling to meet

the standard. or they may be held to conflicting standards, such as

taking time to listen to customers and serving them fast.

4. Gap between service delivery and external communications:

Consumer expectations are affected by statements made by company

representative and ads. If a hospital brochure shows a beautiful room,

but the patient arrives and finds the room to be cheap and tack looking,

external communications have distorted the customer’s expectations.

5. Gap between perceived service and expected service:

This gap occurs when the consumer misperceives the service quality.

The physician may keep visiting the patient to show care, but the

patient may interpret this an indication that something rally is wrong.

“The same researchers found five determents of service quality.

These are presented in order of importance.”

RELIABILITY: The ability to perform the promised service dependably

and accurately.

RESPONSIVENESS: The willingness to help customers and to provide

prompt service.

ASSURANCE: The Knowledge And Courtesy Of Employees And Their

Ability To Convey Trust And Confidence.

EMPATHY: The provision of caring, individualized attention to

customers.

TANGIBLES: The appearance of physical facilities, equipment,

personnel, and communication materials.

MAJOR TRENDS IN CUSTOMER SERVICE:

Lele has noted following major trends in the customer service area.

1. Equipment manufactures are building more reliable and more easily

fixable equipment. One reason is the shift from electromechanical

equipment to electronic equipment, which has fewer breakdowns and

is more repairable. Companies are adding modularity and

disposability to facilitate self-servicing.

2. Customers are becoming more sophisticated about buying product

support services and are pressing for “services unbundling”. They

want sea rate prices for each service element and the right to select

the elements they want.

3. Customers increasingly dislike having to deal with a multitude of

service providers handling different types of equipment. Some third-

party service organization now services a greater range of

equipment.

4. Service contracts ( also called extended warranties), in which sellers

agree to provide free maintenance and repair services for a specified

period of time at a specified contract price, may diminish in

importance. Some new car warranties now cover 1,00,000 miles

before servicing. The increase in disposable or ever-fail equipment

makes customers less inclined to pay from 2 percent to 10 percent of

the purchase price every for a service.

5. Customer service choice increasing rapidly, and his is holding down

prices and profits on service. Equipment manufactures increasingly

have to figure out now to make money on their equipment

independent of service contracts.

4.2 MARKETING STRATEGIES OF DCI

The dredging is a new concept which came into recognition in 80s.

The dredging is a new area which is found as a remedy of substitute for

a lot of age old problems.

The clients of dredging i.e., dredging are scattered all around and

belongs to different fields. Dredging corporation of India is attending

almost all the clients through proper planning and co-ordination.

YEAR WISE DREDGING ACTIVITIES

A) During the year 1991-92.

Dredging and reclamation for link read project NH-47A Cochin.

Desolation of oil catch pit at Bhilai steel plant, Bhilai.

Chartering of dredger-ID-II with ancillary equipment including

manning, managing and operation of dredger for dredger for

dredging at sand bar mouth of Ennore thermal power station

(ETPS) at Chennai.

B) During the year 1992-93

Reclamation for cochin for link road project.

Dredging for cochin navy with inland dredge-1.

C) During the year 1993-94

Dredging and filling of southern end of WILLINGTON ISLAND AT

COCHIN.

Dredging for Cochin navy w2ith inland dredger-1.

D) During the year 1994-95, 96-97, 97-98

Chartering ID-IV for Ennore thermal power station.

Dredging of sand bar channels and along side the wharf of old

Mangalore port.

Dredging for Indian navy at cochin

E) during the year 1998-99,1999-2000,01-02,02-03,03-04,04-

05,05-06

Dredging of low loft pump house of HPCL at Visakhapatnam.

Capital dredging of Mirkarwada fishing harbor at Ratnagiri.

Dredging of Cochin navy.

Dredging at NTPC, Kayamkulam

Dredging at Pondichery port.

Dredging of Bunder basin at Kandla.

Dredging of Ganga river for IWAI.

“Thus the Indian dredging market share of DCI is very large.”

PRODCEDURE OF CONTRACT UNDERTAKEING:

Generally the procedure of contract undertaking is made through

enquires. The enquires are sometimes from the DCI’s side and

sometimes it is from the client’s side.

a) Enquires from DCI’s side: Naturally in this type DCI will inform

the potential client about the usefulness of inland dredging and

DCI’s activities in this area and how it will be useful to the client.

b) Enquires from the client’s side: In other cases the client’s will

send a requisition about their needs of dredging and DCI’s

feasibility to take up that work. After studying the project

feasibility, DCI will enter into an agreement.

In both the cases, DCI’s price quotations follow the same procedure.

But before signing a project, DCI will conduct survey to see whether

the project is feasible to take up, then only contract will be signed,

otherwise it rejects the assignments.

PRICING POLICIES OF DCI:

The quotation of dredging project of DCI consists of a lot of a

factors. It is not a fixed or a standard rate. It takes numerous factors

into consideration while quoting a price for project undertaking.

The factors are:

a) Site conditions

b) Nature of material (sand, silt, clay).

c) Disposal distance

d) Elevation

e) Siltation during dredging

f) Idle periods

g) Availability of equipment.

“The price quotations depend largely on above said factors.”

PRICE STRUCTURE:

In dredging DCI first estimates the time which the project has to be

completed, before going for the estimation of the project.

1. Depreciation of equipment proposed.

2. Insurance.

3. Repairs and maintenance.

4. Spares and stores.

5. Fuel and lubricants.

6. Dredger manning.

7. Project establishments and manning.

8. Service contracts (jeep, car, boat, cranes etc.).

9. Telex, telephone, stationery.

10. Communication system.

11. Project office accommodation.

12. Electricity.

The expected life of the equipment is generally 14 years.

Depreciation is calculated on straight line method.

After calculating the expenditure of all the above said items, DCI will

include a 15% profit and then quotes the price.

“This is the procedure how DCI will from its price structure.”

CONSTRAINTS OF DREDGING:

The dredging is not a smooth way without; having ups and downs

in its way. It faces a lot of problems in its proceedings.

SUCH PROBLEMS FACED BY DCI ARE:

Minimum infrastructure facilities like repairs, Spares,

Bunkers, etc.

Marine workshops

Transportation

In dredging the clients are scattered all over the country some are

in remote places and some other are in underdeveloped areas. In some

cases, minimum infrastructure facilities like spares, repairs, bunkers are

not available at working site timely and quickly. This obstructs the

proceedings.

In some cases marine workshops are not available near the project.

They have to be arranged by head office or near by towns for repairs.

This delays the project duration and increase cost per unit. In some

cases it is not possible for the client to provide even crane assistance

and transportation of equipment has to be take care by DCI, it self.

DCI’S FLEET:

DCI owns most modern and sophisticated computer controlled fleet

consisting of two cutter suction dredgers, ten trailer dredger and three

inland dredgers. It has an annual installed capacity of 80,000 million cu.

mtrs.

DCI KEEPING PACE WITH MODERNISATION:

To remain major player in dredging DCI constantly up grade its

technology to international standard. Sophisticated electronic

equipment is used during dredging operations so that quality work could

be produced. DCI”s motto is quality service to the customers at cost

effective prices.

DCI is one of the MOU-signing PSU since 1992-93 and has consistently

achieved excellent rating so far.

DCI is one among the 31 companies in which the government has

disinvested its share holding. The shares of the company are listed on

DELHI, MUMBAI, & KOLKATA STOCK EXCHANGES.

DCI has given lot of thrust to instrumentation, specially on board

dredging. Training and maintenance is emphasized as also prompt

delivery. To provide a comprehensive range of service, DCI has over the

years built up a fund of expertise and art fleet of dredgers and related

equipment. The use of electronics in scanning the channel bed,

measuring the depths and widths particularly being focused on.To keep

face with the demand of the future, DCI plans to procure as well as

expand its service in India and abroad.

CONTRIBUTION TO THE SOCIETY:

Besides its own business of carrying out dredging activity for

national development DCI is contributing for the welfare of the society

also. during the year under review donations to the turn of rupees 14.76

lakhs been extended to various organizations which include hospitals,

education, institutions and welfare operations.

INDUSRIAL RELATIONS:

The human force in the organization is basically comprised up two

categories viz., floating establishment and shore establishment.

The shore establishment covers all the personnel working at various

project office situated all over India and head office at Visakhapatnam.

The floating employees include all the personnel working on board and

other floating crafts.

The total man power in the organization is 934 as on March 2008.

Dredging corporation of India believes in the theory that a motivated

and trained work force is highly essential for any successful defining

customer target and the best way to satisfy their needs and wants

competitively and wants competitively and profitability.

Marketing has its origin and in the fact that human are creatures of

needs and wants. Needs and wants create a state of discomfort, which

is resolved through acquiring products can satisfy a given need, product

choice is guided by the concept or value, cost and satisfaction. These

products are obtainable in several ways: self-production, coercion,

begging and exchange.

Most modern societies work on the principal of exchange which, means

that people specialize in producing particular products and trade them

for other things they need. they engage in transaction and relationship

building. a market is a group of people who share a similar need.

Marketing encompasses those activities involved in working with

markets, that is in trying to actualize potential exchanges.

SCOPE OF DREDGING:

From the origin of dredging as an idea, the conception is changing

from time to time. People in various fields are identifying the importance

of dredging to their requirements. Thus dredging has diversified into

various fields such as irrigation canals, drainage network, flood control,

industry rivers, reservoirs, tourism development, environmental

protection, water ways etc,. The requirement various from field to field

and client to client.

IRRGATION AND DRAINAGE NETWORK:

Agriculture, a large source of employment kin our country went

through a capped change the use of water for agriculture. Many

hectares of barren land was cultivated.

This leads to the construction and maintenance of irrigation canals

and drainage networks. but due to deforestation and erosion of soil

causes deposition of eroded soil in the river beds, reservoirs, irrigation

canals are silted up. The water reaches fields but water cannot be

absorbed into the soil as the ground water level is high, thus the water

should not stay in the fields after the time period, the way out of water

from fields is given by drainage network. But flow of water from the

fields brings huge masses of eroded soil into the drainage. The

salutation in the drainage network reduces its capacity and there is peril

at the sea approach drainage. As they are highly silted u, water cannot

from drainage into sea. Instead water flows back due to tides of sea and

this causing an artificial inundation damaging crop. To control this, the

remedy is to dredge the silted up blocks in drainage networks and at the

sea approaches.

FLOOD CONTROL:

Interested population in turn increased the need of land foe

agriculture and habitant.Acquisition of extra land brought only through

deforestation. The erosi0on of soil due to deforestation is causing

siltation in rivers. The siltation in rivers causing shallow depths

obstructing free flow of water and also resulting loss of area in rivers.

The lost area is gained by meandering and widening of rivers. This

makes the rivers though little is gained.

So, a moderate to heavy rainfall can be absorbed by the soil and all the

rainfall has to taken off from through drainages. Otherwise its flow into

rivers causes floods, as the rivers cannot sustain the present flow itself

and decreased capacity of rivers causes floods. The dredging of the river

beds and desiltation of shallow depths and nourishment of bank is the

best solution to the flood control. In the many measures of flood control,

ID, of drivers, drainage network, reservoirs and irrigation canal networks

is recognized as most important one

INDUSTRY:

Industries generally require huge quantities of water for vari9ous

purposes. They store water in reservoirs with huge capacity, from the

sea channels. Generally the channels are silted up due to tides of sea.

To remove this siltation and industrial waste like ash, the only remedy is

dredging. Now many industries like power plants, steel plants,

petroleum refineries, fertilizers are using the services of dredging.

In fishing harbors, the depths in approach channels have to be

maintained to provide adequate facilities for fishing vessels. This can be

achieved through dredging.

MAINTENANCE OF LAKES:

One of the main attractions of tourism are lakes like Dal lake in

Kadhmir, Ooty lake in Ooty, Hussain Sagar lake in Hyderabad etc. but

these lakes are silted up due to the deposition of mass of eroded soil of

neighboring areas, dumping of waste and also due to the unauthorized

drainage connections into them. Thus not only one factor, but a lot of

factors are obstructing the free flow of water and thus makes silt

deposited in lakes, thus siltation in lakes spoils ecology. The boating a

main attraction at these lakes gets spoiled. The panacea for all these

problem is I.D. Dredging of lakes will restore the same old attraction of

these lakes.

INLAND WATER WAYS:

By 2000 AD it is estimated that India will be earning Rs. 10,823

crores from exports while Rs. 15,370 crores will be spent on import of oil

production. Thus 74% of our earning will be utilized for energy. Can

India afford such a position. Water transport is energy efficient and cost

effective.

Cost per tone is lowest for inland water ways. These facts and

figures speak volumes in favour of inland water transport. Compared

other modes of transport systems, IWT creates minimum pollution and

other environmental hazards.

National transport policy committee in May, 1980 indentified ten

waterways to be declared as national waterways. Consequently the

Ganga-Bhaagirathi-Hoogly coast canal has been declared on national

water No.111.

To achieve these economics, through inland water transport, river

should have minimum depth for the free flow of vessels. This canals,

reservoirs, inland transport, environmental protection, power generation

etc. has made DCI to run its attention towards dredging.

DCI ACTIVITIES:

As a part of diversification DCI has entered the field of inland

dredging. The growing demand for dredging in various fields such as

rivers, canals, reservoirs, inland transport, environmental protection.

Power generation etc. has made DCI to run its attention towards inland

dredging.

CHAPTER-5SUMMARY AND SUGGESTIONS

SUMMARY

Dredging operations appears to the very mundane and monotonous

affair, remaining the slit or any obstructive material from under water

and depositing it at a distance. Yet there is a tremendous magic in

dredging.

Dredging is the immediate measure for maintenance of edequate

depths of water for safe navigation at ports, navy, shipyards, etc..

While most of the people connect the magic of dredging with trade and

transport, there are many other equally or more important areas such

as flood controls, flood production, power generation, fresh water etc..

The summary page of Dredging Corporation Of India Ltd. captures the

details on its Live Prices, Key Fundamentals, Futures and Options

Quotes, Competitors, Comparative Analysis, Shareholding Pattern,

Financials, and community prediction.

As it is highly capital intensive, private parties could not enter the field

of ocean dredging, but in the area of inland dredging the growing

demand and low investment attracted the private parties and already a

few are in the market.

SUGGESTOINS:

In any area of business TO increase profit there are only two ways.

Reducing cost of production.

Increase the demand.

So in this areas of business that is dredging also there are two ways to

improvements its market operation or strategies.

Increasing the demand

Reducing cost of operations and unnecessarily wastes

So increasing the demand can be done in dredging through

popularization the concept by giving lot of publicity to the concept of

inland dredging

a) The concept of dredging and its benefits can be popularized

through paper statements

b) Seminars have to be conducted regularly between potential clients

and D.C.I has to informs them about its activates.

c) D.C.I has to be segment its clients property and advice then about

their dredging requirements and how D.C.I can handle them

d) D.C.I has to maintain good relations with clients and inform them

about the latest developments.

e) D.C.I can distribute its industries and other clients and can make

them remaining the concept dredging time to time.

CHAPTER-6FINDINGS AND CONCLUSION

FINDINGS:

As D.C.I is a public sector cooperation it has many limitations, even if

D.C.I capacity utilization is 101% its competitors are left over, some

part of market share which is eventually servers.

Dredging operations appears to be mundane and monotonous

affair removing sand , slit, or any obstructive material from under

water and depositing it at a distance. yet there is a tremendous

magic in dredging.

Dredging is the immediate measure for maintenance of adequate

depths for safe navigations at ports ,navy, shipyard etc.

While most of the people connect the magic of dredging with trade and

transport there are many other equally or more important

areas ,such as major ports ,shipyards, navy, water, transport, land

reclamations etc, where is dredging techniques can be applied to

procedure beneficial results for the ordinary human being.

Dredging is a capital-intensive industry. Under utilization of the capital

employed , affects the developmental growth of the country.

overutilization of the capital intensive assets will lead to early

exhaustion of the resources of the country. So in order to determine

optimum dredging resources, it is necessary to forecast the dredging

demand required to be met in terms of material to be removed

depths of channels , situations process dumping ,distance,

maneuverability etc. since dredging operations are carried under water

which are influenced by different variable parameters ,assessments of

dredging demand is quite difficult.

To meet the demand for dredging services ,all around the country, the

government of India decided to incorporate a fully owned government

organization under companies act of 1956.accordingly DCI has been

incorporate in the year 1976..

DCI stated its activities in meeting dredging demand. As time went on,

the importance of dredging has increased. to meet the growing demand

of dredging.DCI has diversified its activates where there is a lot of

scope and market Some of the common adverse environmental effects

are:

1. Effects associated with operations at dredging site:

1. Stationary dredgers any interfere with navigation and with

fishing unless advance programming and co-ordination avoids it.

2. Stationary installations such as under water cables, pipelines

and sewer out falls may be disturbed. Objectionable noise

especially at night may be discomfort.

3. Turbidity may be created at the dredging site.

4. Beach erosion may be disadvantageous to trawl fishing.

5. D.C.I stands 6th the world in the dredging industry, but many

international co-operations are nearly entering India for which

D.C.I has to reach international standards and try to achieve

next best position

6. Existing fleet is not sufficient to meet the present demand The

dredging is not a smooth way without having up’s and down’s in

its ways.. it faces a lot of problems in its proceedings.

Conclusion:

As dredging corporation of India limited is government organization, it

has a social responsibility. In national interest it has to popularize the

concept of dredging in the areas of ports, harbors, navy, shipyards,

marine organization etc…

Mainly there are two types of dredging namely sea dredging and inland

dredging. Out of which D.C.I ltd is mainly concentrating on sea dredging

The dredging market is yet in nascent stage the dredging market is to

be two stages expansion of dredging market is to be two stages

One is be popularized D.C.I ltd, about its concept and activities

The other is by creating potential demand for dredging

Campaign is to be done is some professional bodies like institute of

engineers if India, institute of architectects, public health

organization, tourism development bodies et…to popularized

functions and activities of DCI ltd.

At present DCI LTD is working in almost all the ports in India.

Earlier DCI LTD ruled the dredging market of India, but due to

recent introduction of new companies into Indian dredging

market,the market share of DCI LTD has come down.

CHAPTER-7BIBILIOGRAPHY

BIBLIOGRAPHY:

AUTHOR NAME: A) PHILIP KOTLER B) PETER DRUCKER

WEBSITES USED: WWW.GOOGLE.COM WWW.DREDGE - INDIA.COM WWW.DREDGER CORPORATION OF INDIA

LTD.COM

http://WWW.DREDGER/

http://WWW.DREDGE/

Documents

Dredging Corporation of India Project Work