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OVERVIEW OF INDUSTRY AS A WHOLE
India is the eighth largest producer of crude steel in the world, accounting for 3.37%of the
global steel production in2005. Indias finished carbon steel production grew to reach an
estimated 42.63mmtin 2005-06; primary producers alone contributed about 38%whereas
secondary producers contributed the rest. With
reference in changes in economy Indian steel
industry is poised for massive expansion. Dramatic
consumption growth over the last few years has
stimulated enormous expansion plans ,facilitated by
a relatively unexploited iron ore raw material base.
India is now being hailed as the new China, where
crude steel production soared from less than 100m
tonnes in1995 to over 400mtonnes in2006.This report focuses on detailed study about the
Indian Steel Industry. Steel became an integral part of development. It discusses basic
steel manufacturing processes like Blast Furnace and, Electric arc Furnace, industry value
chain with a special reference to major raw material trends and price trends of steel
products. Demand supply dynamics has been discussed along with key growth drivers
and Export-Import scenario. It also talks about Issues & challenges of the steel industry,
mergers and acquisitions, government policies and regulations. Top 10 Leading Players in
steel Industry have been profiled namely Steel Authority of India (SAIL), Tata Steel,
ESSAR Steel and JSW Steel in this report and analyzed on the basis of financial and
operational performance and compares their Competitive Positioning along with future
outlook in the light of increasing trend in investments in the domestic industry .Steel
Industry in India is on an upswing because of the strong global and domestic demand.
India's rapid economic growth and soaring demand by sectors like infrastructure, real
estate and automobiles ,at home and abroad, has put Indian steel industry on the global
map. According to the latest report by International Iron and Steel Institute (IISI), India is
the seventh largest steel producer in the world.
With reference to development which revised Indian infrastructure, the origin of the
modern Indian steel industry can be traced back to 1953 when a contract for the
construction of an integrated steelworks in Rourkela, Orissa was signed between the Indian
government and the German companies Fried Krupp und Demag AG. The initial plan was
an annual capacity of 500,000tonnes, but this was subsequently raised to 1 million tonnes.
The capacity of Rourkela Steel Plant (RSP), which belongs to the SAIL (Steel Authority
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of India Ltd.) group, is presently about 2million tonnes. At a very early stage the former
USSR and a British consortium also showed an interest in establishing a modern steel
industry in India. This resulted in the Soviet-aided building of a steel mill with a capacity
of 1 million tonnes in Bhilai and the British-backed construction in Durgapur of a
foundry which also has a million tonne capacity.The Indian steel industry is organized in
three categories i.e., main producers, other major producers and the secondary producers.
The main producers and other major producers have integrated steel making facility with
plant capacities over 0.5 mTand utilize iron ore and coal/gas for production of steel. The
main producers are Tata Steel, SAIL, and RINL, while the other major producers are
ESSAR, BSLAT and JVSL. The secondary sector is dBSLersed and consists of: (1)
Backward linkage from about 120sponge iron producers that use iron ore and non-coking
coal, providing feedstock for steel producers; (2) Approximately 650 mini blast furnaces,
electric arc furnaces, induction furnaces and energy optimizing furnaces that use iron ore,
sponge iron and melting scrap to produce steel; and (3) Forward linkage with about 1,200
re-rollers that roll out semis into finished steel products for consumer use.
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Structural Weaknesses of Indian Steel Industry
Although India has modernized its steelmaking considerably, however, nearly 6% of its
crude steel is still produced using the outdated open-hearth process. Labour productivity in
India is still very low. According to an estimate crude steel output at the biggest Indian
steelmaker is roughly 144 tonnes per worker per year, whereas in Western Europe the
figure is around 600tonnes.
India is deficient in raw materials required by the steel industry. Iron ore deposits are finite
and there are problems in mining sufficient amounts of it. India's hard coal deposits are of
low quality. Insufficient freight capacity and transport infrastructure impediments too
hamper the growth of Indian steel industry.
Strengths of Indian Steel Industry
Low labour wage rates
Abundance of quality manpower
Mature production base
Positive stimuli from construction industry
Booming automobile industry
Outlook The outlook for Indian steel industry is very bright. India's lower wages and
favourable energy prices will continue to promise substantial cost advantages compared to
production facilities in (Western) Europe or the US. It since industry players are engaged
in an unfettered rush for scale. This is evident from the recent acquisition of Corus by Tata.
The deployment of modern production systems is also enabling Indian steel companies to
improve the quality of their steel products and thus enhance their export prospects.
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COMPANY PROFILE
Steel Authority of India Limited (SAIL) is the leading steel-making company in India. It is
a fully integrated iron and steel maker, producing both basic and special steels for domestic
construction, engineering, power, railway, Auto motive and defense industries and for sale
in export markets.
During struggle for independence, Pt. Jawaharlal Nehru, our first Prime Minister, had a
very clear vision about the role of Steel in the development of our country. Although
TATA Iron &Steel Company (TISCO) has been establishment in 1907 marking the
beginning of Indian Steel Industry followed by Indian Steel Co. (1918), they were too
small to meet the development requirements of a big country like ours. Therefore, in the
1st Industrial Policy Resolution of the Govt., soon after independence, Govt. decided to
establish Steel Plants in Public Sector. However, work could be started at fast pace only in
1954, when Hindustan Steel Ltd., was formed and three Steel Plants of 1 MT capacity
each, were established with provision of further expansion at Bokaro, Rourkela and
Durgapur with assistance from USSR, West Germany and U.K. respectively.
To improve the functioning of Steel Industry, Govt. decided to form a holding company
during 1972, which was named as Steel Authority of India Ltd., (SAIL) and the same was
incorporated on January 24, 1973, with an authorized capital of Rs.2000 crores.
SAILwas formed by registration of a company under the companies Act and not by the
Act of Parliament. Govt., decided to abandon the holding company concept in1978and a
bill was presented to the LokSabha. Accordingly, SAIL was again recognized in the
following manner.
Hindustan Steel Ltd., Bokaro Steel Ltd., Salem Steel Ltd., SAIL International Ltd.,
BhilaiBSLat Ltd., Rourkela BSLat Ltd., DurgapurBSLat Ltd., wholly owned
subsidiaries ofSAILmerged into it and started functioning as Units of SAIL.
MECON, HSCL and NMDCbecome independent Companies and started under Ministry
of Steel. However, Kiriburu and Meghatuburu Iron Ore Mines were attached with BSLas
their Captive Mines.
Bharat Refectories Ltd. also became independent under the Ministry of Steel and refractory
units also came under them.
Thus, SAIL, at present, is having capacity of 12 MT of crude steel through its fourintegrated Steel Plants, at Bokaro, Bhilai, Durgapur and Rourkela. Two special steel
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plants at Durgapur and Salem produce a wide range of alloy and special steels. Marketing
of the products from these plants is done through a country wide distribution network
consisting of a chain of Stock Yards and
distribution network.
SAIL today is one of the largest industrial entities in India. Its strength has been the
diversified range of quality steel products catering to the domestic as well as the Export
markets and a large pool of technical and professional expertise.
Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL
manufactures and sells a broad range of steel products, including hot and cold rolled sheets
and coils, galvanized sheets, electrical sheets, structural, railway products, plates, bars and
rods, stainless steel and other alloy steels. SAILproduces iron and steel at four integrated
plants and three special steel plants, located principally in the eastern and central regions
of India and situated close to domestic sources of raw materials, including the Companys
iron ore, limestone and dolomite mines.
SAILs wide range of long and flat steel products are much in demand in the domestic as
well as the international market. This vital responsibility is carried out by SAILs ownCentral Marketing Organization (CMO) and the International Trade Division. CMO
encompasses a wide network of 38branch offices and47 stockyards located in major cities
and towns throughout India. With technical and managerial expertise and know-how in
steel making gained over four decades, SAILsConsultancy Division (SAILCON) at New
Delhi offers services and consultancy to clients world-wide. SAIL has a well-equipped
Research and Development Centre for Iron and Steel (RDCIS) at Ranchi which helps to
produce quality steel and develop new technologies for the steel industry. Besides, SAIL
has its own in-house Centre for Engineering and Technology (CET), Management
Training Institute (MTI) and Safety Organization at Ranchi. SAILs captive mines are
under the control of the Raw Materials Division in Calcutta. The Environment
Management Division and Growth Division of SAIL operate from their headquarters in
Calcutta. Almost all SAILsplants and major units are ISO Certified.
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HISTORY OF BOKARO STEEL PLANT
Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape
in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited
company on 29th January 1964, and was later merged with SAIL, first as a subsidiary and
then as a unit, through the Public Sector Iron & Steel Companies (Restructuring
&Miscellaneous Provisions) Act 1978. The construction work started on 6th April 1968.
The Plant is hailed as the countrys first Swadeshi steel plant, built with maximum
indigenous content in terms of equipment, material and know-how. Its first Blast Furnace
started on 2nd October 1972 and the first phase of 1.7 MT ingot steel was completed on
26th February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT
stage have already been commissioned and the 90s' modernization has further upgradedthis to 4.5 MTofliquid steel. The new features added in modernization of SMS-II include
two twin-strand slab casters along with a Steel Refining Unit. The Steel Refining Unit was
inaugurated on 19th September, 1997 and the Continuous Casting Machine on 25th April,
1998. The modernization of the Hot Strip Mill saw addition of new features like high
pressure de-scalars, work roll bending, hydraulic automatic gauge control, quick work roll
change, laminar cooling etc. New walking beam reheating furnaces are replacing the less
efficient pusher type furnaces.
Bokaro Steel Plant - the fourth integrated plant in the Public Sector - started taking shape
in 1965 in collaboration with the Soviet Union. It was originally incorporated as a limited
company on 29th January 1964, and was later merged with SAIL, first as a subsidiary and
then as a unit, through the Public Sector Iron & Steel Companies (Restructuring &
Miscellaneous Provisions) Act 1978. The construction work started on 6thApril 1968.The
Plant is hailed as the countrys first Swadeshi steel plant, built with maximum indigenous
content in terms of equipment, material and know-how. Its first Blast Furnace started on
2nd October 1972 and the first phase of 1.7 MT ingot steel was completed on 26th
February 1978 with the commissioning of the third Blast Furnace. All units of 4 MT stage
have already been commissioned and the 90s' modernization has further upgraded this to
4.5MT of liquid steel.The new features added in modernization of SMS-II include two
twin-strand slab casters along with a Steel Refining Unit. The Steel Refining Unit was
inaugurated on 19th September, 1997 and the Continuous Casting Machine on 25th April,
1998. The modernization of the Hot Strip Mill saw addition of new features like high
pressure de-scalars, work roll bending, hydraulic automatic gauge control, quick work roll
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change, laminar cooling etc. New walking beam reheating furnaces are replacing the less
efficient pusher type furnaces. A new hydraulic coiler has been added and two of the
existing ones revamped. With the completion of Hot Strip Mill modernization, Bokaro is
producing top quality hot rolled products that are well accepted in the global
market.Bokaro is designed to produce flat products like Hot Rolled Coils, Hot Rolled
Plates, Hot Rolled Sheets, Cold Rolled Coils, Cold Rolled Sheets, Tin Mill Black Plates
(TMBP) and Galvanized Plain and Corrugated (GP/GC) Sheets. Bokaro has provided a
strong raw material base for a variety of modern engineering industries including
automobile, pipe and tube, LPG cylinder, barrel and drum producing industries.
VISION
To be a respected worldclass corporation and the leader in Indian Steel business in
quality, productivity, profitability and customer satisfaction.
MISSION
Consistent with the corporate vision and core values, Bokaro steel plantstrives to create
sustainable long term competitive advantages bymanaging, mobilizing, inspiring and
motivating its employeesforcontinuous growth in productivity, quality and profitability
leading tototal customer satisfaction.
Bokaro steel plant recognizes that through the process of competencesbuilding, people
involvement, unleashing and leveraging the creativeenergies of our people, we can
create value for organization and exceedthe needs and expectation of our stakeholders.
Bokaro steel plant committed to safety, health and environment friendlyoperation and
practices for its people as well as personal touch in allpeople initiative and interaction to
bring since of togetherness and pridewe believes people create value when they feel
valued.TOTAL SALEABLE STEEL-3780 000 TONNES.
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Company's Objective
To acquire, operate and maintain the existing captive power and steam generating station
of SAIL at Bokaro Steel Plant in the state of Hharkhand along with switchyard connected
therewith and such other facilities and activivties incidental thereto.
To supply power and steam to BSL from the existing captive power and steam generating
station at Bokaro and associated units / facilities of SAIL so as to maintain its
captive status for the Bokaro Steel Plant.
Function of Company
SAIL has the following Credo:
We build lasting relationships with customers based on trust and mutual benefit.
We uphold highest ethical standards in conduct of our business.
We create and nurture a culture that supports flexibility, learning and is proactiveto
change.
We chart a challenging career for employees with opportunities for advancementand
rewards.
We value the opportunity and responsibility to make a meaningful difference
inpeoples lives.
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GENERAL INFOMATION OF SAIL
Ownership And Management
The Government of India owns about 86% of SAIL'sequity and retains voting control of
the Company. However, SAIL, by virtue of its "Navratna" status, enjoys significant
operational and financial autonomy.
INTEGRATED STEEL PLANT
1. Bokaro Steel Plant (BSL) in Jharkhand
2. Durgapur Steel Plant (DSP) in West Bengal
3. Rourkela Steel Plant (RSP) in Orissa
4. Bhilai Steel Plant (BSP) in Chhattisgarh
SPECIAL STEEL PLANTS
1. Alloy Steel Plant (ASP) in West Bengal
2. Salem Steel Plant (SSP) in Tamil Nadu
3. Visvesvaraya Iron & Steel Plant (VISL) in Karnataka
SUBSIDIARIES
1. Indian Iron & Steel Company Limited (BOKARO) in West Bengal.
2. Maharashtra Electrosmelt Limited (MEL) in Maharashtra
OTHER UNITS
1. Raw Material Division (RMD) at Kolkata, West Bengal
2. Central Marketing Organization (CMO) at Kolkata, West Bengal
3. SAIL Consultancy Division (SAILCON) at New Delhi4. Research & Development Centre for Iron & Steel (RDCIS) at Ranchi Jharkhand
5. Centre for Engineering & Technology (CET) at Ranchi, Jharkhand
6. Management Training Institute (MTI) at Ranchi, Jharkhand
7. Central Power Training Institute (CPTI) at Rourkela, Orissa
8. SAIL Safety Organization (SSO) at Ranchi, Jharkhand
9. Environment Management Division (EMD) at Kolkata, West Bengal
10. Growth Division (GD) at Kolkata, West Bengal
11. Central Coal Supply Organization (CCSO) at Dhanbad
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ORGANISATION STRUCTURE OF SAIL
RAWRRRRRRRRRRRR
R
Figure showing organisational chart of SAIL.
CHAIRMAN
DIRECTOR (TECH)
DIRECTOR
PERSONAL
DIRECTOR
FINANCE
CHIEF VIGILANCE
OFFICER
EXE. DIRRCTOR
(OPERATIONS)
EXE. DIR. (IA)
ED (TECH & LEGAL
SERVICES)
EXE. DIR.
(PROJECTS)
EXE. DIR
(CMMG)
EXE. DIR. (CIG)
EXE. DIRECTOR (CP)
MANAGING
DIRECTOR, BSL
MANAGING DIRECTOR,
BSL
MANAGING DIRECTOR,
RSP
MANAGING DIRECTOR,
DSP
EXE.DIRECTOR ,VISL
EXE.DIRECTOR ,SSP
EXE. DIRECTOR ASP
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CORE VALUES OF SAIL
Customer satisfaction.
Concern of people.
Consistent profitability.
Commitment of excellence.
Competitive Price
Complaint Settlement
PROBLEM OF BOKARO STEEL PLANT
1. Force to recruit Local People
2. At a time when political leaders, displaced people and local residents have unitedagainst Bokaro Steel Plant (BSL) and Bokaro Power Supply Company Limited
(BPSCL) for non-development of the area, the companies have taken up a confidence-
building measure in the area
3. Development of the peripheral area of the plant is one of the main demands of
displaced people here. The residents felt cheated and blamed BSL for showing apathy
even after acquiring their land.
2005-06 2011-12
Hot Metal 14.60 22.5
Crude Steel 13.47 21.6
Saleable Steel 12.05 20
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PLAYERS IN INDUSTRY
Joint Venture
SAIL has promoted joint ventures in different areas ranging from power plants to e-commerce.
.
NTPC SAIL Power Company Pvt. Ltd
Set up in March 2001, this 50:50 joint venture between SAIL and the
1.National Thermal Power Corporation (NTPC) operates and manages the Captive Power
Plants-II of the Durgapur and Rourkela Steel Plants which have a combined capacity of
240 MW.
Bokaro Power Supply Company Pvt. Limited
This 50:50joint venture between SAIL and the Damodar Valley Corporation formed in
January 2002is managing the302-MWpower generation and 1880tons per hour steam
generation facilities at Bokaro Steel Plant.
Bokaro Electric Supply Company Pvt. Limited
150Another SAIL-NTPCjoint venture on 50:50basis formed in March 2002manages
the 74 MW Power Plant-II of Bokaro Steel Plant which has additional capacity of
producing tones of steam per hour.
UEC SAIL Information Technology Limited
This 40:60joint venture between SAILand USXEngineers & Consultants, a subsidiary
of the USSteel Corporation, promotes information technology in the steel sector.
Metaljunction.com Private Limited
A joint venture between SAIL and Tata Steel on 50:50bases, this company promotes
e-commerce activities in steel and related areas.
SAIL-Bansal Service CenterPvt. Ltd.
SAILhas formed a joint venture with BMW industries Ltd. on 40:60bases to promote
a service centre at Bokaro with the objective of adding value to steel.
North Bengal dolomite limited
A joint venture between SAIL and West Bengal Mineral Development Corporation ltd
on 50:50basis was formed for development of Jayanti Dolomite Deposit, Jalpaiguri forsupply of Dolomite to DSP and other plants.
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Romelt -SAIL (India) Ltd
Romelt Technology developed by Russia for reducing of iron bearing materials, which
is carried out with carbon in single A joint venture between SAIL, National Mineral
Development Corporation (NMDC) and Russian promoters for marketing stage reactor
with the use of oxygen.
Bhilai JP Cement Ltd
SAIL has also incorporated a joint venture company with M/s Jai prakash Associates
Ltd to set up a 2.2 MT cement plant at Bhilai. Likely to commence operations by
March'2010.
Major customers
1. Ma Durga Ispat Udyog, Bokaro.
2. Bokaro Devlopement Area.
3. KartikeIspatPvt. Ltd, Kanpur.
4. Amit Steel Corporation, Howrah.
5. Diwan Steel, New Delhi.
6. Nenu Mal & sons, Kanpur.
7. Bhawani Metals, Bokaro.
8. Pandey Metals, Bokaro.9. Chinar Steel Segment, Bokaro.
10.MangalPvt. Ltd., Bokaro.
11.United IroCoporation, Dhanbad
12.Bharat Supply Company, Kolkatta
13.Anup Steels, Delhi
14.Hanuman & rise Pvt. Ltd, BIADA
15.AmitMetcumPvt. Ltd. Etc
16.Veer kanwarsingh steel Pvt. Ltd.
17.Maatara steel
18.S M S Enterprises
19.Basuki steel Pvt. Ltd
20.Shalimar steel Udoyog
21.ChotanagpurispatPvt.Lmt
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CONTRIBUTION IN GDP
Global crude steel production reached 1527 MT in 2011 showing a 6.8 % growth over
2010. India has emerged as a leading player in global steel industry contributing to about
4.7 % of global crude steel production in 2011. Large scale infrastructure expansion plans
for twelfth five year plan (FYP: 2012-17) and raising per capita steel consumption in India
promises unprecedented growth potential of Indian steel Industry during next 10 years.
World crude steel production: 2007-11, country-wise contribution (%) to world
crude steel production in 2011
CONTRIBUTION OF INDIAS ECONOMY TO GLOBAL GDP
India ranked as the third largest contributor (5.65%) to global GDP in 2011 in terms of
PPP ranking, only behind US and China. Indias economic growth has slacked during past
three years due to worldwide economic slowdown however during next five years its GDP
is expected to grow in 6-8 % range. The sectors with high growth potential like
manufacturing and construction sectors which account for about one fourth(FY 12) of
Indias GDP will be the key growth drivers for the Indian Steel Industry
GDP (trillion $) of leading global economies in terms of PPP- 201
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TOTAL EMPLOYEES
Human Resource
SAILs total manpower at the end of 30 April, 2012 stood at around 26,288. The
companys labor productivity 244.02 tones/man/yearas on 30.04.12.
Bokaro Steel Plant to fill up 1700 vacanciesTNN Jun 21, 2012, 05.05AM IST
BOKARO: Faced with manpower shortage, the Bokaro Steel Plant (BSL), a unit of
theSteel Authority of India Limited (SAIL), is coming up with 1,700 job vacancies this
year.
Chief executive officer (CEO) AnutoshMaitra on Wednesday said the company had got the
approval from the SAIL board for recruitment of 1,700 people for which the process would
begin this year.
GLOBAL PRACTICES
India &The Leading Steel Producers In The World
India is the largest producer of sponge iron and fourth largest producer of crude steel in the
world. India registered a 5.7 % growth in crude steel production in 2011 against 2010.
Japan was the only nation among top ten crude steel producers in the world posting
negative growth of minus 1.8 % for crude steel production in 2011 against 2010. Indian
steel industry which is not technologically as mature as steel industry of developed
economies is implementing latest technology, adapting backward integration and
improving efficiency in steel production to reduce cost, increase production and become
competitive globally.
Top ten crude steel producers in the world and their steel production in: 2010 and
2011 (MT)
Country China Japan United
States
India Russia South
Korea
Germany Ukraine Brazil Turkey
2011 695.5 107.6 86.2 72.2 68.7 68.5 44.3 35.3 35.2 34.1
2010 638.7 109.6 80.5 68.3 66.9 58.9 43.8 33.4 32.9 29.1
http://timesofindia.indiatimes.com/topic/Steel-Authority-of-India-Limitedhttp://timesofindia.indiatimes.com/topic/Steel-Authority-of-India-Limited7/22/2019 Marketing Strategies and 4 P's of Bokaro Steel
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INDIAS SHARE IN GLOBAL STEEL CONSUMPTION
Indias per capita steel consumption is only 57 kg against global average of 215 kg. This
shows a broad scope for increase in per capita steel consumption in India and potential
unprecedented expansion of steel industry in India. Global crude steel consumption for
2011 reached about 1373 MT
Global ranking
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Competitors Information
1) TISCO
Sales Turn over -3791 Crores,increase of over 13 % over last year
Sales Volume2052 MT,increase of over 10 % over last year.
ExportsRs.700 Crore
Market Shareincreased from 2 to 12 %
Expandingproduct mix.
2) RINL
Sales TurnoverRs.1900 Crore,increased by 52 %
Sales Volume 2.36 MT, increased by 67 %
Exports Rs. 600 crore
Market Shareincreased from 5 % to 21 %
3) ISPAT
Sales TurnoverRs.600 crore
Capacity4.2 MT
Exports60 % of total sales.
OTHER COMPETITORS
Essar Steel
Jindal Steel
UshaIspat
Lanco Industries limited
Saeas Goa.
Nippon DenroIspat.
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SWOT ANALYSIS OF SAIL BSL
Strengths
SAIL is the largest steel company in India with a 26% share in total crude steel production.
Captive iron ore mines, skilled manpower base, and existing infrastructure for brown-field
expansion provide it the strength to retain its leadership position in the Indian steelindustry. Its Captive power plants provide it with more than 60% of its total power
requirement, a proportion that is likely to increase after expansion in capacity of power
plants in its Joint Venture Companies. SAIL has the largest distribution network in India
comprising 37 branches, 64 warehouses and 24 customer contact offices. It has a presence
in all districts in India through a dealers' network. Its wide range of product-mix enables it
to meet the entire range of a customers' requirement. The Company has a strong Research
and Development Centre enabling it to develop superior products matching customized
needs. As a top profit earner in India SAIL has a healthy balance sheet and is virtually debt
free as its short term deposits are much higher than its total loans.
Bokaro Steel Plant has huge pool of skilled and experienced personnel.
Principle of hierarchy is given due respect in BSL enabling management to ensure
proper planning and its implementation.
Flawless corporate image of SAIL enhances the confidence of managers and customers
alike.
Record of harmonious customer relation boots the revenue gap towards north.
Huge infrastructure, which provides a strong base for better production and marketing
since it has country network of stockyards, dockyards and sales branch offices.
The By Product of BSL is coal based and of best quality against the petroleum based By
Products of its competitors giving the company edge.
A strong R&D cell of the company keeps on working over enriching the quality of the
products and to reduce the cost of whole process.
It has countrywide network of stockyards and dockyards/ branches/ customer can take
material from any location.
Customer perception of SAIL is fair and of reliable supplier > SAIL product has
International standard.
SAIL has a customer friendly approach and improved customer orientation.
SAIL is in the market from long time having long term relation from the customers.
SAIL, BSL never compromises regarding QUALITY so it has superior quality.
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Weakness
The current weaknesses of the Company stem from dependence on purchased coal from
domestic and overseas suppliers. Some technologically obsolete processes such as ingot
casting and the twin hearth furnaces continue to operate and will be eliminated only after
implementation of the modernization cum expansion plan. As the integrated steel plants of
SAIL are located primarily in the eastern states, it increases the transportation cost to the
fast growing markets of the west and south. Due to historical legacy the manpower cost in
the Company is higher than its competitors. Also, being a public sector company
adherence to a number of rules and procedures slows down the business.
Lack of team work inhibits proper implementation of companys policy. Word I is
very much rampant in the workforce of BSL, phrase like I am not responsible for the
undersigned responsibility
Complex pre and post sale activities repel the probable customers.
Due to its large organizational structure involving numerous policies and officials,
prompt decision making a real problem.
No one wants to take initiative as he/she does not want to be reason for blame if the
trick doesnt click.
The hard working marketing officials are not given due recognition and appropriate
reward that hurts their motivation and interest. Due to its large organizational structure, which involves numerous policies and
officials, it becomes difficult to take decision quickly and as result final decision
making becomes very slow.
Secondary product marketing depends on the primary product demand i.e. the demand
for primary product is less the production will have to be slowed down thus even if the
demand for secondary product is mounting up still the production wont be increased, so
the secondary product is directly linked to primary product demand.
Quality of the product which is slightly inferior as compared to competitors who are
having latest technology.
Sometimes products are not supplied as per requirement of customer.
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OPPORTUNITY
Steel consumption in India is growing at a rate of more than 10%, a trend that is likely to
persist as the nation enters into a steel intensive phase of development. The 11th Five Year
Plan has given a major thrust on the infrastructure sector with the total spending planned at
around US $ 500 billion by 2012. Mega projects in the power, energy, ports, railways and
surface transportation sectors, plans for rural infrastructure like Bharat Nirman, allocation
for which was raised to Rs. 31,280 crore and building over 2 lakh kilometers of National
Highways by 2010, present an unprecedented opportunity for SAIL which is implementing
expansion cum modernization plan to cater to the emerging demand. The size range and
quality makes SAIL's long products a preferred choice for project customers. In case of flat
products, SAIL remains a major supplier of HR Coils to the tube making sector and is
slowly increasing its presence in cold reducing segment. Plates from SAIL are rated
amongst the best and are in good demand from project customers. The water supply and oil
& gas sectors are the other segments where there is a large growth potential. The
modernized ERW Pipe Mill at Rourkela Steel Plant is able to cater to the requirement of
these sectors. Bokaro Steel Plant and Bhilai Steel Plant are also producing small quantities
of API grade HR Coil and Plates for servicing these sectors. The per capita consumption in
India at around 46 kg remains very low compared to the world average of around 200 kg.
One of the reasons for low steel consumption is low availability of steel in the rural area.
SAIL in recent years has developed a dealers' network which covers all the districts in
India. This will facilitate availability of quality steel in the interiors and promote market
development and growth. At a macro level, steel consuming segments such as
construction, auto, capital goods etc. are growing rapidly registering a double digit growth
in recent years and would continue to be the growth drivers given the structure of the
economy. The auto sector in India has experienced rapid growth for a number of years.
Improved road, growing middle class and globally competitive auto ancillary industry have
been the facilitators of good growth for the sector. Technological breakthrough and global
competitiveness in two wheeler and small car segments are likely to make India a global
hub for these products boosting demand for steel in the country.
The world market is showing the sign of revival from the spiral of recession in which it
remained engulfed for one year.
State government has plans for revocation of small scale industries in & around Bokaro,
which will fuel the demand of secondary & by product.
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Cock oven batteries 1 & 2 are rebuilt which will ultimately increase the efficiency of
Coke Oven By product plant.
Since SAIL has a wide network of stockyards/branch offices, it can supply its products
directly to customers without any difficulty.
SAIL has a very strong base it can diversify itself into the production of different goods
as per market requirements.
There is growing demand for secondary product in both domestic and international
market.
THREATS
Customs duty on steel imports has been made nil in India and products such as TMT are
also exempt from CVD. Sluggish market conditions in developing economies may make
India destination for large scale imports adversely affecting domestic players. Government
of India has imposed export levy on steel products. India is a net exporter of galvanized
products as its total capacity is in excess of domestic demand. Adverse impact on exports
of galvanized products will have a cascading impact on domestic market for cold rolled
and hot rolled coils and sheets. China's production of crude steel at 489 million tonne in
2007 was around 36% of the global production. As Chinese economy matures and its steel
consumption stabilizes, a part of the capacity will be serving only the export markets. Theproximity and growing domestic steel consumption will make India a preferred destination
for Chinese steel, significantly intensifying the competition.
Globalized economies have erased the geographical boundaries and have brought stiff
competition
Execution &dBSLatch of order include lot of paper works & formalities, which
makes it a cumbersome task. This has led to drifting of customers towards competitor.
By products are not the main products of BSL, neither BSL is the market leader of
these product.BSL fixes the price of the By Products on the basis of price set by its
market leaders i.e. Petroleum refineries & this pricing is known as going rate pricing.
Acquisition of Corus by Tata Steel will led to integration of their technology & this is
the place where Tata is going to gain a lot. Technology in India is two to three
generation behind. Exposure to latest technology will help Tata to improve quality &
reduce cost. So SAIL should be cautious in this respect
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RESEARCH METHOLOGY
Research Methodology:
Research methodology is considered as the nerve of the project. Without a proper well-
organized research plan, it is impossible to complete the project and reach to any
conclusion. The project was based on the survey plan. The main objective of
survey was to collect appropriate data, which work as a base for drawing conclusion and
getting result.
Therefore, research methodology is the way to systematically solve the research problem.
Research methodology not only talks of the methods but also logic behind the methods
used in the context of a research study and it explains why a particular method has been
used in the preference of the other methods.
Statement Of Research Problem
The objective was to find out the marketing mix of BSL-SAIL, and to find out the
marketing procedures followed in marketing of secondary products within BSL-SAIL.
STATEMENT OF RESEARCH OBJECTIVES
Primary objective
The main objective of field survey during the project was to find out the market mix of
BSL-SAIL.
Find out the different methods by which the marketing of secondary products are
carried out.
The main objective of research was to identify the strategy which is being used in
BSL-SAIL.
Secondary objective
While purchasing the BSL-SAIL products which parameter is most important for the
consumer?
To make a comparative data analytical report for the production of various steel
products within BSL-SAIL.
To enhance the knowledge of Iron and Steel products market.
To enhance the knowledge about the marketing set up of a Public Sector.
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Types of research used
Primary Research - Here the data is collected directly from the respondentsusing
various data collecting techniques. In this method although the rate of getting
responses and feedback is slower, then also it is much more accurate as direct
conversation with the population is being conducted here.
Secondary ResearchIt is being done generally with the data already existingwhich
is been collected by some other person or organization.
RESEARCH DESIGN:
Research design is important primarily because of the increased complexity in themarket
as well as marketing approaches available to the researchers. In fact, it is thekey to the
evolution of successful marketing strategies and programmers. Itis an important tool to to
study buyersbehavior, consumption pattern, brandloyalty, and focus market changes. A
research design specifies the methods andprocedures for conducting a particular study.
According to Kerlinger, Research Design is a plan, conceptual structure, and strategy of
investigation conceived asto obtain answers to research questions and to control variance.
DATA COLLECTION METHODS:
Primary data:
For primary data collection, I have used different data collecting methods such as
conducting survey interviews, distributing questionnaires, direct observation, and
telephonic interviews with mainly executive officers, dealers, employers, etc.
Secondary Data:
It is being collected from different Journals at BSL-SAIL, financial data from Finance
Department, Production and DBSLatch data from PPC department at BSL-SAIL, Burnpur.
Data analysis and interpretation:
Questionnaires (Two sets of it.)
Bar chart
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Limitations
ISP-SAIL is a huge organisation and so it was not possible to cover the entireorganisation.
Time factor for the staff is a big problem.
To get certain official and technical data is a real problem as they are highlyconfidential.
The marketing policies of ISP-SAIL change from time to time and from product toproduct.
The product range of ISP is numerous and so it is not possible to cover each andevery product.
Lack of proper guidance during specific situations.
Preparation of report:
The report was based on the analysis and presented with the findings and suggestions. The
sample of the questionnaires is attached with the report itself.
Sampling Methodology:
Details of the sampling methodology, I have made 2 sets of questionnaires, one for the
Executive and Non-Executive staff at BSL-SAIL; and the other for the personswho are apotential customer with the organization.
Non-Excutive staff members are : 40
10
-SAIL product: 03
150
100
Sample unit
Professionals, Business man, Employees and finally customers.
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CONCEPTUAL DISCUSSION
Marketing Department Overview OfBokaro Steel Plant
Marketing Department is one of the Departments under Materials
ManagementDivision of Bokaro Steel Plant. Marketing Department is entrusted with
theresponsibilities to sell BSLs Secondary Products, By-Products/Waste Products,and Idle
Assets etc.
The Marketing Departments sales procedures are covered by the guidelinesgiven by SAIL
Corporate office DELHI, and is given by CMMG(CORPORATE MATERIAL
MANAGEMENT GROUP), the objective ofwhich is To sell the materials in a fa ir and
transparent manner to achievemaximum possible revenue to the company
(a) Marketing of prime products of SAILs plant including BSL is done byCMO (Central
Marketing Organization) which is a unit of SAIL.
(b) Marketing of secondary products and coal chemicals are done directly byMarketing
Department of BSL. As a matter of fact, the Secondary & By-Products are marketed by the
individual Plants only.
Marketing of these products are conducted by various sections by marketingdepartment of
Bokaro Steel plants. It is engaged, with marketing of PrimaryProducts for home sale or
export throughCMO. The 4.0 Million tones sectionknown as plate mill section dealing with
plates. Now this section has got ISO -9002 certificate.The secondary section deals with the
secondary Products, it includes scraps ofiron and steel slag, coal and coke fractions, coal
chemicals .The Marketing development section deals with the MIS and strategic
Planningactivity come under this section.The Export section deals with the activities of the
exports in respect of Iron andSteel items produced by Bokaro steel plant.
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ORGANISTATION CHART OF MARKETING DEPARTMENT
(BSL)
Sr. Mgr. (Mktg.) Sr. Mgr.
(Mktg.)
GM (Marketing)
Jr. Mgr. (Co-ordn.)/Mktg.Cord, HK, Admn.& Est.TrainingOfficer
DGM (Mktg.)Audit, Vigilance, RTI, &
other queriesreply, Contract Cell(MM),Sec. Sales
AGM(Mktg.)Sec. Steel Ad &Est, QC,ISO,DCA, Contract Cell(MM)
Slag, Waste,Iron,Smug.Scheme
Sr. Mgr.(Mktg.)Coal& Chem.,ZincDross,
Manager(Mktg.)Reports, PriceMonitoring, MIS
Jr. Mgr.(Mktg.)SecondarySteel, SafetyOfficer
Jr. Mgr.(Mktg.)
Idle Assets, U&S,Surplus
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Function Of Marketing Department
To monitor the orders issued by CMO, So that these orders can fulfilled intime.
Put pressure on CMO, to get orders for an underutilized mill.
To sell all the secondary products directly i.e. directly by BSL and by CMO.
On day to day basis it takes care of the dBSLatches i.e. daily dBSLatcharechecked.
Policies Of Marketing
Marketing Planning has responsible function in the working of marketingdepartment. All
the risky developments, taking out solution to cripple`situations, this section carries out
product pricing and related activities, someof the programmes, policies and procedures are
as follows:-
Positioning the product a value based place in customer mind.
Finalize annual sales plan and quantity, monthly, weekly, and daily rollingprogramme
of Rolling mills in consultation with CMO and mills. This plans based on the sales
forecast receive from JPU SPL/ Iron and steelcontroller.
Optimizing the product-mix by proper utilization of available stocks.
Receiving Enquiries and complaints, cancellation of orders etc.
Coordinating the works of mills and traffic department so as to maximizedBSLatches.
Co-ordinations with CMO from stages of enquiry, forexports,development of new
Profiles, sections, modification of product schedulingtill the orders are completed.
Periodical market surveys of products to analyze the market position.
Implementation of suggestions received from the customers feedback.
Ensure customer satisfaction by meeting customers regularly; provideredress to their
problems and fulfillment of demand.
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SALES & CO-ORDINATION DEPARTMENT
The main function of sales and co-ordination department is to co-ordinate all the concerned
activities right from the purchase of items, production of items, to the distribution of items
to its concerned customers.
This department concerns with
Knowing the availability of raw materials.
Matching the availability with the demand registered.
Makes flow of this information to the concerned department for meeting the demand.
Co-ordination of concerned activities is done.
Dispatching of materials to the concerned customers.
Its flow of information is through
SRM
SALES CO-ORDIANTION
PRODUCTIO & PLANNING CONTROL
After successful co-ordination, the final dispatching of materials is done in two ways.
1) DIRECT DISPATCH: -Materials directly sent to the customers, no intermediary is
entertained, e.g. major customers (railways, NTPC, Indian oil)
2) STOCK-YARD DISPATCH :-It follows inventory management concept, distribution of
products from the inventory, through several intermediary, e.g. minor customers (
GODREJ).
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ROLE OF PS IN BOKARO STEEL PLANT
Products of Bokaro steel plant
The products are divided according to there sizes and shapes.The long product include:-
Struturals.
Crane Rails.
Bars,Rods and Rebars.
Wire Rods.
PRODUCTS
PRIMARY (SPECIFIC PARAMETER) SECONDARY/BY-PRODUCTS
CMO (KOLKATA) UNITS- BSL, BSS, RSP, DSP etc
BSL MARKETING
METHOD OF SELLING
E-AUCTION SALE TENDER FIXED PRICE SALE
BSL MARKETING
(MAIN SECTION)
STEEL CHEMICAL & BY-
PRODUCTS
SLAGS & WASTE
PRODUCTSIDLE ASSETS PRICING
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SECONDARY AND BY-PRODUCTS OF BSL
Apart from the primary and main steel products there are some other products which are
obtained during the steel making process. These products are termed as secondary and by
products. Some of the products are used within the Plant while rests are sold in the market.
SECONDARY PRODUCTS
Secondary products are the defective and rejected steel products. During the manufacturing
process due to improper mixing of material or some other manufacturing defect some of
the products are not produced according to the desired quality and do not match with the
customers demand. Hence these are rejected and termed as Secondary products. Some of
these products are used within the Plant for re-melting purpose and rests are sold to the
secondary buyers. Scraps generated inside the Plant are also termed as Secondary products.
A list of Secondary products is as follows.
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LIST OF SECONDARY PRODUCTS
PRODUCT PRODUCT
A. IRON MELTING SCRAP
CI.Block/SHM/CI
Boulder(Unbroken)/RBIM
PCM Shot Plate Scrap/CI Skull
Mixed CI Scrap/CI Fdry. Rejects
Fine Iron Chips/CI Boring
B. INDUSTRIAL SCRAPS
HR Coils
DDHR Pickled Coils
CRUAC/Def CR Coil/CRCE
Defective CR Sheet/CR Sheet ctg.
AMG HR Plate/Sheet/Ctg
Def.GP/GC Coil/Sheet
MCRC/Maint. scrap-ASP
MS Turning & Boring
C. PIG IRON D. BFG SLAG
BF Granulated Slag
E. REROLLABLE STEEL SCRAP
Defective Slabs
Slab End Cutting
MS Thick Plate Cuttings
Cobble Plate
F. IDLE ASSETS
Used rejected rolls
Used rejected stores items
Capital Idle Assets
G. STEEL MELTING SCRAP H. NON FERROUS (Zinc Dross)
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BY-PRODUCT
By-Products are mainly coal chemicals which come out during the coke making process.
Coke making process consists of the destructive distillation of coal in absence of air. A list
of By Products which are sold by BSL is as follows:
PRODUCT MODE OF
DELIVERY
USES
A. Benzyl
Products
(Benzene)
Railway tank
wagons, road tankers
in loose condition
It is used as an important raw material for various
drugs and dyes. Benzene hexa chloride is used as a
pesticide. It is also used in the manufacturing of
phenol, DDT, nylon etc.
B. Toluene
(Nitrationgrade)
Railway tank wagons It is used as a solvent in chemical reactions, Paint
industries, rubber industries, making of adhesives,making of printing ink etc.
C. Xylene Railway tank wagons It is used in making of Paints, thinners & varnish,
printing ink and in rubber industry.
D. Light Solvent
Naptha
Railway tank wagons It is used as solvent, making of dyes and printing
ink
E. Still Bottom
Oil
Railway tank wagons
and road tankers
It is mixed with other materials and used for various
purposes like water- proofing, making of roofs of
building. It is also used as industrial oil and in
making of rubber paints for vehicles.
F. Extra Hard
Pitch
Gunny bags in loose
condition
In aluminum industries as a binding material for
anode.
G. Soft Pitch Gunny bags in loose
condition
It is used in the production of pitch fiber pipes, roof
binders, in preparation of road tar, building
materials, sheeting, tilling etc. It is also used as
refractory bricks.
H. Hot Pressed
Naphthalene
Gunny bags in loose
condition
It is used as Dye intermediate, as an insecticide,
dBSLersing agent etc.
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DETAILS OF THE PRODUCTS
Hot Rolled Coils, Sheets and Skelp
Hot rolled coils, sheets and skelp (narrow coil), are the largest
product category of the company in terms of both sales volume
and revenue. Hot rolled coils are primarily used for making
pipes and have many direct industrial and manufacturing
applications, including the construction of tanks, railway cars,
bicycle frames, ships, engineering and military equip-ment and
automobile and truck wheels, frames and body parts. Hot
rolled coils are also used as feedstock for cold rolling mills where they undergo further
process-ing. Hot rolled coils are also delivered to the company's own cold rolling mills andsilicon sheet mill and pipe plant in a wide range of widths and thicknesses as the feedstock
for higher value-added steel products. The company is the largest producer of hot rolled
coils, sheets and skelp in India.
Semi-Finished Products
The company produces semi-finished products,
including blooms, billets and slabs, which are
converted into finished products in the company's
processing plant and, to a lesser extent, sold to
rerollers for conversion to finished products.
Steel plates are used mainly for the manufacture of
bridges, steel structures, ships, large diameter pipes,
storage tanks, boilers, railway wagons and pressurevessels.
Plates
The company also produces weatherproof steel plates for
the construction of railcars. The company is currently the
largest producer of steel plates in India with a domestic
market share of more than 80 per cent for these products.
The company is the only producer of wide and heavy plate
products in India.
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Cold Rolled Products
Cold rolling of hot rolled products produces a superior
surface finish, improves the physical properties of the
steel, such as tensile strength, and reduces its thickness
to precise gauges. As a result, cold rolled productsgenerally command higher prices thanhot rolled
products. The products of the cold rolling mill include
cold rolled sheets and coils, which are used primarily for
precision tubes, containers, bicycles, furniture and for
use by the automobile industry to produce car body
panels. Cold rolled products are also used for further processing, including for colour
coating, galvanising and tinning. The company also produces further processed cold rolled
products, including galvanised sheets and tin plates.
Structurals
Structural steel product are produced through a process of hot rolling
in the section or structural mills. They are long steel product with
cross sections of various shapes. I-beams, Channels and angle steel
are used in mining the construction of tunnels factory structure,
transmission towers, bridge, ships railways and other infrastructure
projects.
Bars and Rods
The company produced steel bars and rods through a process of hot
rolling billets in the finishing mills. Reinforcement steels and wire
rods are primarily used by the construction industry. The company is
one of the largest producers of reinforcement bars in India which are
primarily sold to the construction industry.
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PRICING POLICY AND SALES PROCEDURE
PRICING
Fixing the price of a product is the most vital function in the whole process ofthe
marketing and it should be done after proper market study and requires decision makingability. If price is too low the company will lose revenue and if the price is too high it will
lose customers resulting in loss of revenue valuable customers. Coal chemicals are the
main product which is to be marketed by the Marketing Department of Bokaro Steel Plant.
Almost all the products are sold on the fixed price basis. This is due to the fact that the
company does not enjoy monopoly in the said market and the price is totally market
driven.
The policy adopted by the marketing department for pricing of materials is largely guided
by the price offered by the bidders during the auction. The various factors taken into
consideration while pricing the re-rollable items can be enumerated as follows: -
Prices offered in the auction sales.
Quantity of material to be lifted.
Managing director's approval.
The average of the prices offered by the bidder during auction is taken as thebasis to fix the
prices of materials to be sold through marketing department.Further the techniques of
break-up-pricing are adopted i.e. the larger thequantity purchased lower will be the prices.
This technique encourages thebuyers to purchase larger quantity. Finally the managing
director approves theprices set by the pricing committee. On this basis, a price list is
prepared for allthe potential buyers. Price list also indicates the sales tax and Excise duty to
belevied. Thus the interested parties place their orders with the marketingdepartment on
the basis of price list reviewed every month. Every customer isrequired to have a security
deposit amount of Rs.1 lakh. The payment for thematerial required is to be in advance. The
material is supposed to be lifted on the specified date on account of delay the party has to
pay the difference in theprices, if there is any increase in subsequent month.
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Standing Pricing Committee:
The committee reviews the price of various products and takes decision in favour of
maximizing the profit. It holds meeting at least once in a month. But the volatility of the
market and pool of different products lead to a number of meeting of the committee in
quick succession.
The committee consists of:
GM (Utility), Chairman
GM (Marketing), Convener DGM (Finance), member
DGM (Sales Coordination), member
DGM (Stores), member
DGM (BPP), member
For Scrap goods the DGM (SSD) replaces the DGM (BPP). Rests of all the members are
always present in all the meetings.
While deciding the price following points are kept in mind:
DBSLatch of the last month.
Material in stock.
Forecast of next month.
General market condition.
Availability of transport facility.
GM (Marketing), as per the need, decides the frequency and time of meetings to be held.
Minute report of all the meetings is prepared and it contains the existing price and the
proposed price. The final price is moved to the MD through the official channel including
GM (Marketing), Executive Director(MM), GM (Finance and Accounts), and ED (Works).
After the MDs approvalthe price becomes applicable and the circular indicating the
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revised price BSLrinted, issued and distribution to the customers and all the
concerneddepartments.
DEMAND REGISTRATION OF BSL
Marketing department of BSL sales homogeneous steel scrap at fixed price. For this
purpose the procedure for registration of demand and offers is as below:
1. Preference for sale of material given to local parties and those, which are actual
customer. Material is not sold for trade.
2. Sale of material made to re-rolling mills and scrap processing units and the lots of sale
between them maintained at 67:33.
3. Based on the above consideration offer letter issued to the party offering a quantity,
which has been lifted by them during the last preceding year or allocated by the state
industries, Department. In the offer letter party is advised to complete commercialformalities e.g. submission of Die Registration Certificate etc.
SALES AND DISTRIBUTION OF SECONDARY & BY-PRODUCT
Selling Of Secondary Product
This involves a direct marketing process. The management of BSL in consultation with the
official of the market development and customer service department work as group for the
sale of these items.
Mode Of Sale
1.E-Auction Sale.
2.Fixed Price Sale.
3. Tender.
4. Interplant Transfer.
5. Transfer to PSU.
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DISTRIBUTION CHANNEL
For the purpose of distribution of steel policy in fashion, customer are categories into
A.B.C.D Priority sector customer ex-Defence. Railways etc are under category A andabout 60% of product allotted to them.The balance 40% is kept for the category B,C,D.On
the other hand for sale of scraps there is no such policy adopted by Bokaro steel plant
customer are served on first served basis.
Bokaro Steel Plant deals with its customer directly. There are liaising persons in the
marketing department who always remain in contact with the customers and extract
information about the current market demand on the basis of their interaction with them.
The products are directly marketed from Bokaro Steel Plant to the customers there are noother intermediaries .This is the business to Business marketing (B2B).
CHANNEL
Bokaro steel plant has zero level channels as it directly sells to the customer. There is no
intermediate among producer and consumer. Marketing department always remains in
constant with consumer extract information about the current market situation on the basis
of interactions between them.
MANUFATURE TO INDUSTRIAL CONSUMER
Packing and modes of delivery of the by-product is mainly by three ways. These are as
follows:-
1. Railway tanks (wagon)
2. Roadways (tanker)
3. Piggy back (rail and truck)
In the above surveys shows roadways do that 70% transportation of By-product reason
consumer are local. They are mainly traders they are buying and selling the By-product to
the market.
Railway is also important to the transportation of By-product but its more costly because
less number of the buyer involvement in the outside of the country. The distribution
channel the Bokaro Steel Plant has for its chemical product is designed keeping in the
mind the hazardous nature and difficulty in storing these products. so this distribution
channel cannot be changed but for Ammonium Sulphate the distribution channel can be
more flexible by:-
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Appointment of authorized agents :- It will help in increasing the sale and awareness
about the product in the regions other than Bihar,Orissa,Jharkhand and west Bengal.
Such arrangement will minimize the problem that the customers are facing .
Appointment of authorized dealers;- appointment of the authorized dealers in Uttar
Pradesh from where a few enquiries have come for the product. Such enquiries show
that there is a presence of the potential customer base in that area and need to be
tapped.
Buying and using vehicles off its own can change the mode of the transportation for the
chemical products.this will decrease customers problem of arranging for the vehicles
from the transporters and the handling and security problem of the plant. The customer will
be changed the transportation cost.
The pricing policy adopted by the plant is the best policy followed by this plant but
this policy can be made more compatible including a few big customers in the pricing
committee which will bring the prices of the product competitive to the market trend
and thus will decrease the chances of marketing strategy failure and surplus inventory.
As the product quality is not taken care of some method should be divided to take care
of product quality without affecting the quality of its prime product.
the internal environment of the marketing department should be more customer
friendly and customer oriented.
though computerization of the marketing department has been done but to get full
advantage of computerization, sales co-ordination ,scrap and salvage department and
by-product plant should be brought into account so that party wise and dBSLatches
wise a order can be fulfill.
In future sales and excise section of the finance and account department also be
brought under same roof :-
The Market segment should be more clearly defined on the basis of geographical
location, nature buying unit, loyalty status of buying unit ,customer demand etc.
Market Research for knowing about the potential customer as well getting the
feedback from the customer should be frequently done. Feedback can be easily
available through questionnaire and ask them to fill and back to organization and
suggestion.
My studies have been done from a management students point of view .the above
mentioned recommendation are in any based upon informal and formal feedback obtained
from the managers .The Management of SAIL(BOKARO STEEL OLANT) honestly
concerns for the future growth of the organization at the time of increased competitors
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,should take care on the recommendation given above. The macro and micro planning is
definitely varied but their enforcement will ensure SAIL in regaining and building its glory
on top.
PRICE OF BY PRODUCT DURING 2011-2012
INFERENCE:-
Statement Of Sale Of By Products (Values In Lakhs)
PERIOD 2009-10 2010-11
2011-12
1STQTR 850 1224 1278
2NDQTR 945 815 55
3RDQTR 916 1222 844
4THQTR 1022 1577 1572
0
5000
10000
15000
20000
25000
30000
35000
40000
AMONIUM
SULPHATE
BENZENE ANTHEACENE OIL
ITEM price
AMONIUM SULPHATE 7500-8000/T
BENZENE 39000-40500/T
ANTHEACENE OIL 35000-40000/T
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SALES BY-PRODUCT(VALUES IN LAKHS)
PERIOD 2009-10 2010-11 2011-12
1ST
QTR 2556 9293 18896
2ND
QTR 9223 16205 17141
3RD
QTR 2242 16237 11740
4TH
QTR 1232 23639 17495
TOTAL 10322 65427 65272
0
200
400
600
800
1000
1200
1400
1600
1ST QTR 2ND QTR 3RD QTR 4TH QTR
2009-10
2010-11
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PROFIT IN BSL
YEAR PROFIT(IN CRORE)
2008-09 1324
2009-10 1628
2010-11 1367
2011-12 2830
0
20000
40000
60000
80000
100000
120000
140000
160000
1ST 2nd 3rd 4th TOTAL
2011-12
2010-11
2009-10
0
500
1000
1500
2000
2500
3000
2008-09 2009-10 2010-11 Category 4
PROFIT
PROFIT
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PROCEDURE OF E-AUCTION
Advertisement/posting of dates and types of materials to be auctioned in SAIL website and
various news papers (Local & National) every 15thto 20thof the month for the next month,
1. Posting of details of lots to be auctioned one week prior to the date of auction, on the
website of SAIL and metal Junction.com
2. Inspection of lots to be auctioned by customers.
3. Auction is held on www. Metal Junction.com
4. Report of auction conducted is give by Metal Junction.com
5. Meeting of reserve price opening committee and their recommendation.
6. Approval for sale of lots recommended by RP opening committee.
7. Issue of offer to the customers, based on approval of chief Executives.
8. In this method the defective materials from all the mills is arranged in heaps of 100-
150 tones to be sold by auction. Generally auction sale takes place ones in a month.
Representative from all the re-rolling mills turn up during auction and they bid for the
available material. The raw material need of this mill is being made by the plant and
the availability of the re-reliable has increased the re-rolling mill to develop very fast.
The plant extends all types of facilities and assistance to these small scale units, which
to turn give scope for more employment, and then the material is lifted on the terms
and conditions as mentioned in the tenders.
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DATA FLOW DIAGRAM OF E-AUCTION
Advertisement of dates/type of
materials on SAIL
website/Newspaper
Posting of lot details to be
auctioned on SAIL / MetalJunction website
Inspection of lots by customers
Auction conducted on
metaljunction.com
Report of Auction by
metaljunction.com
Reserve Price Opening
Committee meetin
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PROMOTION
ADVERTISING POLICY:-
Companies in the present scenario of globalization and liberalization needs to do more than
making good product or competitively pricing its product-they need to inform consumers
about product and carefully position product in consumers mind.
Advertisement is the best form of non-personal communication. It is good way to inform
and persuade. Advertising serves the dual purpose of informing the product benefit and
positioning the product in consumers mind. Bokaro Steel Plant, products (i.e. products)
is used mainly of industrial use. Its product is the raw material for most of its consumers.
The customer base of BSL Plant is knowledgeable and knows about the products and its
benefit so on special effort is needed inform them about the product.
In BSL Plant, the main form of advertising is Tender Notice and notice other form of
advertising is also used but rarely. Information is provided to various persons through
advertising, which are directly or indirectly related with company. There are:-
Customers.
Users.
General Public or neutral persons.
People who are related with the economic progress of the company.
Public relation Department of Bokaro Steel Plant looks after the advertising policy of
Bokaro Steel Plant. All decisions related with advertising are taken by both Marketing and
Public Relation Department jointly supported by sales co-ordination.
Recommendations
Approval for Sale
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All advertisement of SAIL mainly contains factual date related to the products and its
comparative advantage over other similar products sometimes it also contains information
related to sales of a particular kind of product.
Main media used for advertising these products are newspapers and business magazines.
News papers and business magazines are selected based on the following criterions:-
1. Kind of product to be advertised and its used.
2. Are where the product is in demand.
3. Circulation of a particular newspaper and business magazines in the area.
4. Cost of advertising.
ADVERTISING AGENCIES USED
Mainly six advertising agency are used by bokaro steel plant
Continental advertising agency , Kolkata
The international advertising agency , Kolkata
Kavya communication pvt ltd , new Delhi
Message advertising and designing , Patna
Ranchi data system , Ranchi
Ridge advertising , Ranchi
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DISCUSSION ON TRAINING
Students Work Profile (Role And Responsibilities)
Role: I was given the role of observer by SAIL BSL. My role was to collect
information about the strategies used by BSL to market its secondary products and
also to understand the Marketing Mix of SAILBSL, as a Management Trainee.
Responsibilities: During the period of this project my company (BSL) has given me
so many responsibilities. They are as follows-
Survey,
Collection of data by preparing questionnaires,
Analysis of the situation and Marketing procedures
Reporting to the officer
DESCRIPTION OF LIVE EXPERIENCE
From this project, I have got an amazing live experience. As I am a fresh Graduate, so I do
not have any type of experience in a corporate work field. So, when I went to different
types of departments in BSL for asking about their way of conducting their process, I was
enjoying. I was quite surprised because of their friendly behavior. Moreover during my
plant visit programme, I was really thrilled to see the different methodologies that are used
to produce the material which is a necessary product in every bodies life and also for a
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growing nation, i:eSTEEL.
I am also really greatful to work with many officers in the Marketing department, where I
got my first practical knowledge in the field of marketing. I was really excited to apply my
theoretical knowledge in practicality.
STUDENTS CONTRIBUTION TO ORGANIZATION
Gathering the product knowledge of SAIL for its knowledge bank.
Collect the data of actual monthly production and sale of BSL products and by
products in every trading.
Help to promote the catalog of BSL as a small part of sales promotion.
Find out the problems that the dealer are facing while selling the BSL product. Find out the consumer response for the BSL product by asking the dealers of the
relevant product.
Presenting a detailed report on marketing strategies and marketing mix in BSL-SAIL.
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Questionnaire for Understanding Marketing Strategiesat BOKARO Steel
Plant- SAIL
Market:
1. What is the market opportunity? What is the market size? Market size with respect to
geography and to industry.
2. How can the market be segmented into logical customer groupings?
3. What are the industry trends that are fueling our success? And what are the trends that
are inhibiting our success?
4. According to you, what is the economic climate now and how will it be in the
upcoming two years?
5. How the economic climate does affect our business?
6. Is the market or our business is affected by seasons and climate? If so, then how?
Target audience:
1. What marketing segments are we targeting? What segments we are not targeting?
2. What is our customers primary reason
3. Why would someone prefer our products and offerings versus that offers by the
competitors?
4. Are there any issues or concerns that the target audience might have regarding thistype of product or offering?
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Competition:
1. What categories of competition threaten our success? Prioritize the categories?
2. Which are the companies which poses greatest threat to us? And how do they
differentiate themselves?
3. What tactical elements do they use to that threaten our success?
4. Which competitors have the largest market share within our target market segments?
5. What are the barriers which we are creating for ourselves to entry into the market
place?
Offering:
1. What need is our offering or product designed to fill? Identify the need for each target
audience?
2. What features and associated benefits does our offering provide?
3. How do we deliver the offerings identified above?
4. Of all these features, which one is of that extra value that differentiates us from our
competitors?5. What improvements can we make to our offering to better meet customer needs?
6. What new offerings would our customers most like us to develop?
Sales and Buying Process:
1. What is the process for selling our products? Do we use any of the following
processes?
>Direct Personal Sale >Direct Online Sale >Indirect through channels
2. Who is involved, both from our company and from our sales channel partners, in each
step of the sales process?
3. What criteria are used in selecting a vendor or a customer?
4. How do our customers buy our type of products?
5. What purchase process steps do we follow with our customers? Does the process vary
with respect to different vendors? If yes, then how?
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Pricing:
1. What are the main criteria which are followed in setting the price of the products?
2. What is the current price structure? Including discounts, rebates and so on. Do our
customers understand it?
3. Which of the competitors is considered the Price Leader? What is their offering?
4. What can be done to reduce costs without affecting any quality?
6. What is the perceived value of our offering as compared to the price
7. What service(s) do we currently include in the price of our product?
8. What industry trends are going to drive prices down? And what are the trends which
are going to drive prices up?
Media:
1. What are the primary forms of communication your competition use to promote and
communicate to your target audience?
2. Is a product catalogue used to promote products and services?
3. What other forms of media have you used in the past to promote products and services
and what has been the success/response rate experienced?4. Do you currently market over the Internet or have marketing links with other sites?
5. Do you attend trade shows or other industry events to promote your business?
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CURRENT ISSUES
1.Aug 28, 2013, TOI, Several important development projects - including the construction
of new Ganga bridge, fire station in Chas, link road to Chandrapura-Bokaro bridge,
VikasBhavan and Chas Water Supply Project - in the district which have been delayed due
to funds crunch and other dispute.
2.Aug 24, 2013 BMW Industries gets showcause notice for project delay- BIADA
Bokaro Industrial Area Development Authority had showcaused BMW earlier in 2012, for
delay. Besides, the company has not paid Rs 3.36 crore as cost of land and maintenance
charges, added Toppo. However, P Thomas, director-BMW, sent a letter to BIADA
managing director AarvaRajkamal seeking more time to recast the project plan.
3.It has been 46 years since the plant was set up, but the majority of the residents have not
received compensation, alternate land or jobs. They are still fighting
NEW DEVELOPMENT OF SAIL BSL
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Figures in bracket indicate capacity after implementation of ongoing phase of
modernisation and expansion to be completed by 2012-2013
Order for over Rs. 57,012 crore have already been placed for various Modernisation &
Expansion Projects / Sustenance Schemes
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ANALYSIS OF DATA
Q1. Use of I ron and steel in your li fe -----------
a. Extremely Important
b. Very Important
c. Somewhat important
d. Not very Important
e. Not at all Important.
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Q2. Business with BSL -----------
a. Extremely Important
b. Very Important
c. Somewhat important
d. Not very Important
e. Not at all Important
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3. Product quali ty of BSL -SAI L -----------
a. Excellent
b. Very good
c. Good
d. Fair
e. Poor
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Q4. Process of buying products of BSL -SAIL -----------
a. Excellent
b. Very good
c. Good
d. Fair
e. Poor
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Q5. Price of the products are same as market price ----- ------
a. Strongly disagree
b. Disagree
c. Neither agree nor Disagree
d. Agree
e. Strongly Agree
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Q6. BSL-SAI L satisfy your needs and demands ------
a. Strongly disagree
b. Disagree
c. Neither agree nor Disagree
d. Agree
e. Strongly Agree
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Q7. BSL-SAI L gives better service than other steel plant ---
a. Strongly disagree
b. Disagree
c. Neither agree nor Disagree
d. Agree
e. Strongly Agree
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Q8. You wil l continue buying products of BSL -SAI L for next five years ----
a. Strongly Disagree
b. Disagree
c. Neither agree nor Disagree
d. Agree
e. Strongly Agree
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Q9. What is your opinion about BSL -SAI L?
Q10.What is the fi rst word that comes to your mind when you hear the foll owing?
Steel Industry
BOKARO. Steel Plant
Inferences
30% of customer gives importance to price. So it shows that Indian consumers
are very price sensitive. They give more importance to price over the brand.
26% give importance to brand. So price and Brand matter a lots for the
costumers. And they are also want best brand in best price.
19% to product feature Service 16% and durability 9% Service is also a big
factor for the customer they are less interested in the durability.
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FINDINGS
RELATED TO MARKETING DEPARTMENT
During my Eight weeks training in marketing department of BSL. I have observed
certain problems in it these problems are findings of my studies.
All marketing procedure of prime products are decided by SAIL and carried out by
the Central Marketing Organization (CMO).
As the organization is concerned with a large number of productions activities and
the departmental work are done mostly manually from placement of orders to
documentation, which ultimately frustrates the employees.
The organization is more concerned with larger orders of steel products by ignoring
the smaller orders. The local customers with business of by-products are sometimes made to wait for
days to get their papers Cleared by the department.
Most of the existing yards suffers from improper stocking space and siding facility
often they are not well developed due to this the material stored there are rusted and
other defects are caused and later they are dBSLosed of by offering some concession
or at low rate which result in loss.
Due to improper packing, the materials reach the stockyard often in damaged
condition, which is attracting criticism from the customers and these damaged
materials are sold with loss.
Export considered Secondary to domestic selling as BSL is a govt. undertaking and
its First priority is given to domestic marketing.
Secondary product CRUAC/Def CR Coil/CREC, this is industrial scrap and they
generate maximum revenue from this product.
Sale of By- Products shows lots of up & down in different quarters in the year &
maximum sale in last quarter.
Production of By-products shows lots of fluctuation because its production is
depending on Coke oven plant.
BSLatch of By-product shows continuous growth.
By-Product N.G.BENZENE they produce maximum revenue because its cost is so
high.
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CONCLUSIONS AND RECOMMENDATION
The main issue attached with Bokaro Steel Plant is about its product.products is
that most of the customers finds its price higher than the other brands of
secondary and by-products available in the market. Since, customers are now
conscious about cost cutting measures so they other brands over BSL.
Local market is one of the most important advantages than BSLisenjoying over a
period of time but, due to set up of new steel plants in nearby places few years
from now it will no longer be an advantage for BSL. So, BSL should have to
work on decreasing the price of its secondary and by-products and also increase
its quality.
Since, from the survey it was found that most of the customers arepurchasing
secondary steel and by-products from BSL. So, BSLshould have to work on the
increase of p