Marketing Strategies of Visakhapatnam Steel Plant

Introduction:
A marketing strategy allows an organization to concentrate its limited resources on the greatest opportunities to increase sales and its competitive advantage. Often companies will spend a ton of money on promotional activities that don't get results. Instead take a closer look at your product, packaging and pricing; your customer; and what makes your company stand out. When you are clear and confident on your offerings, you can spend less on your marketing strategy and achieve better results.

Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned.

Marketing strategy involves careful scanning of the internal and external environments. Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints. External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely

to impact success. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.

Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation. A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan.

Marketing Strategies of Steel Plant

The Visakhapatnam Steel Plant (VSP) is coming up with a new marketing strategy to ensure better penetration of its products and also to ensure that products reach end users directly. VSP, which sells an average of 30 lakh tonnes of steel every year, expects Rs 7,500 crore in sales turnover this fiscal. According to the proposed marketing strategy, the company will widen its market network which will see its products being available across the state. At present, they have 24 branch offices and 160 long term contractors (LTC) across the country. About 50 LTC dealers sell only VSP products but now they want to broaden this network across south India, mainly in Andhra Pradesh. To this end they have set up a committee which will survey the market and recommend the places where they need to set up an additional dealer network, Y Siva Sagar Rao, director (commercial), VSP, told Business Standard. The quality of VSP steel is better than that of competitors and if customers engaged good designers, the consumption of our steel products in construction could come down

between 10 and 15 per cent, Rao claimed, adding, It is because of this reason that customers prefer our steel despite them being priced higher between Rs 1,000 and Rs 2,000 per tonne, when compared to products from other steel companies, he stated. At present, VSPs major customers like reroller mill operators and wire products manufacturer have been depending on dealers for VSP products.

They are paying a premium to get these materials from the dealers which has led to VSP mulling the supply of material directly to its major users.

Steel Industry in India

The Indian Steel industry is almost 100 years old now. Till 1990, the Indian steel industry operated under a regulated environment with insulated markets and large scale capacities reserved for the public sector. Production and prices were determined and regulated by the Government, while SAIL and Tata Steel were the main producers, the latter being the only private player. In 1990, the Indian steel Industry had a production capacity of 23 Million Ton (MT). 1992 saw the onset of liberalization and the Indian economy was opened to the world. Indian steel sector also witnessed the entry of several domestic private players and large private investments flowed into the sector to add fresh capacities.

The last decade saw the Indian steel industry integrating with the global economy and evolving considerably to adopt world-class production technology to produce high quality steel. The total investment in the Indian steel since 1990 is over Rs 19,000 crores mostly in plant equipments, which have been installed after 1990. The steel

industry also went through a turbulent phase between 1997 and 2001 when there was a downturn in the global steel industry. The progress of the industry in terms of capacity additions, production, consumption, exports and profitability plateaued off during this phase. But the industry weathered the storm only to recover in 2002 and is beginning to get back on its feet given the strong domestic economic growth and revival of demand in global markets.

With a current capacity of 38 Million Ton the Indian Steel Industry is today the 8th largest producer of steel in the world. Today, India produces international standard steel of almost all grades/varieties and has been a net exporter for the past few years, underlining the growing acceptability of its products in the global market.

With capital investments of over Rs 100, 000 crores, the Indian steel industry currently provides direct/indirect employment to over 2 million people. As India moves ahead in the new millennium, the steel industry will play a critical role in transforming India into an economic superpower.

The present steel consumption per capita per annum is about 30 kg in India, compared to 150 kg in the world, and 350 kg in the developed world.The estimated urban consumption per capita per annum is around 77 kg in the country, expected to reach Approximately 165 kg in 2019-20.

Marketing Department
VSP has 23 no of Branch Sales Offices all over India and five Regional Offices viz. North Delhi, South - Chennai, West - Mumbai, East - Kolkata and Andhra Visakhapatnam. Main Activities of the Marketing are as follows:

Collecting Market feedback and Customers requirements for the preparation of Annual Sales Plan in coordination with Works Department, for the sale of Pig Iron, Steel and Byproducts.

Preparation of Marketing Policies. Finalisation of MOUs, Spot sale agreements etc, in Domestic and Export Markets.

Preparation of Monthly Rolling Plans in coordination with Works Department for meeting the sale commitments.

Processing of Materials like straightening of coils, cutting, bending, bundling, packaging etc. at the plant premises and in the branches to meet customers requirements.

Dispatch of products to various stockyards by road or rail or to customers from the plant on direct dispatch basis.

Operation of the contracts for transportation of products by road and stockyard handling/ consignment agency contracts for domestic sales, stevedoring contracts and third party inspection agency for exports.

Sale of products at branches, Headquarters and on direct dispatch basis to the customers in domestic markets and on Ex-works and fob

Visakhapatnam basis in exports subject to tying up of commercial and financial terms and conditions. Ensure documentation as per the procedures and as per the statutory requirements. Rendering after sales services, obtaining customer feedback and Customer Relations Management. The details/information on the following aspects of Marketing are available in www.vizagsteel.com, Marketing Module.

a. Rolling Plan b. Products c. Prices d. Exports e. Network f. Customer Relation

Further, five Consignment Sale Agencies are also functioning at Jamshedpur, Raipur, Pondicherry, Jammu and Guwahati.

Objectives of the Study

The present study is undertaken with the following specific objectives:

To study the Marketing plans of Visakhapatnam steel plant designed to fill market needs.

To understand internal and external environment. To give suggestions for better performance in future.

Methodology
The data obtained for the study is divided into two groups.

Primary data Secondary data

Primary data is collected directly from people and organization through structured questionnaire. Primary data comprises information obtained during discussions with the heads of department, the officials and the staff.

Secondary data means that the data is obtained from sources such as annual report or computer database. Secondary data comprises of information obtained from annual reports, balance sheets and financial statements and other important documents maintained by the organization.

For this project, most of the data was be collected from secondary data viz., Annual reports of Visakhapatnam Steel Plant and data collection through Internet.