CHAPTER 1 : INTRODUCTION

Marketing Strategy:
The process of ascertaining consumer needs, converting them into a product
or service & then moving the product or service to the final consumer or user to
satisfy such needs & wants of specific customer segment or segments with
emphasis on profitability, ensuring the optimum use of resources available to the
organization.
Marketing is so basic that it cant be considered a separate function. It is the
whole business seems from the point of view of its final results that is from the
customers point of view Business success is not determined by the producer but
by the customer.
According to me marketing means, push the product to the market & pull the
customer towards the business. We can say that the main aim of the marketer is to
convert the want of the customer to the need of the customer. Thus marketing job
is to convert societal needs into profitable opportunities. Hence, Marketing
occupies an important position in the organization of a business unit. It is one of
the important line activities of business operation. It consists of the ownership of
goods. Goods are not complete products until they are in the hands of the
customer. It is the process by which products are made available to the ultimate
consumers from their point of origin. It consists of all those activities, which are
meant to ensure the flow of goods & services from the producer to the consumer.
Therefore, marketing thinking must start with a crystallization of needs of
consumer segment of which the efforts will ultimately be aimed. In terms of
needs, the product or service must be developed or improved so that ultimately
the product satisfies such needs of the consumer segment involved.
Today marketer, have to take tough decisions because todays market place is
venomously more complex. Domestic markets, at one time safe from foreign
invaders are now the happy hunting grounds of giant global corporation as well as
global niche specialists. Major strides in technology have considerably shortened

time & distance. New products are launched & astonishing pace are available
worldwide in a short time. Communicating ones media are proliferating new
distribution channels & formats keep appearing. Competitors are everywhere &
hungry

Marketing Mix :( 4Ps OF MARKETING)

Marketing mix is a by-product of customer oriented marketing approach.
After identifying the market & gathering the basic information about it, the next
step in the direction of market programming is to decide upon the instruments &
the strategy for meeting the needs of the customers & challenges of rival sellers.
According to W.J. Stanton, Marketing mix is a combination of four elements
such as product, pricing structure, distribution system & promotional activities
used to satisfy the needs of an organizations target market & at the same time
achieves its marketing objectives. Every business enterprise has to determine its
marketing-mix for the satisfaction of the needs of the customers. Marketing mix
represents a blending of decision in four areas product, pricing, promotion &
physical distribution. These elements are inter-related, because decision in one
area usually affects action in the others.
Marketing mix is marketing managers instrument for the attainment of
marketing goals. It is composed of four ingredients, i.e., (i) product (ii) price (iii)
place (iv) promotional activities. These elements constitute the core of
marketing system of a firm. A marketing manager implements his strategies &
policies through these instruments.
Marketing mix represents a blending of four elements namely product, price,
place & promotion. Determination of marketing mix is an important decision
which the marketing manager has to take. The basic purpose of marketing mix is
to satisfy the needs & wants of the customer in most effective manner. As the
needs of customers & the environmental factors change, marketing mix is also
changed.

OBJECTIVE OF THE STUDY

To study marketing mix undertaken by TATA STEEL LTD

To study 4 Ps of marketing with respect to TATA STEEL LTD
To analyze 4 Ps of marketing of TATA STEEL with other players
and to find out competitive advantage of TATA STEEL has over its
competitors
To understand buying behavior in case of Industrial Marketing
To study SWOT Analysis of TATA STEEL LTD

RESEARCH METHODOLOGY
RESEARCH DESIGN:
This is a descriptive research as it will clarify the what
marketing mix undertaken by the TATA STEEL. It would give us a
clear picture on the MARKETING STRATEGY OF TATA
STEEL.

DATA COLLECTION:
SECONDARY DATA:
Online reports related to MARKETING STRATEGY OF
TATA STEEL

RESEARCH TECHNIQUE:
ANALYSIS:
Detailed examination of available pieces of information with a
view to better understanding of a topic

LIMITATIONS OF THE STUDY

Primary data could not be sorted due to a lack of time

Secondary data collected from online report directly due to a lack

of time

To keep the originality of data collected from company database;

language of presentation has not been change

The company doesnt declare all the data & the internal data are
kept confidential; therefore stats & diagram not use in project
report

The project report hasnt use colour printouts due to lack of fund

CHAPTER 2: COMPANY PROFILE OF TATA STEEL

INTRODUCTION:
Tata Steel, formerly known as TISCO and Tata Iron and Steel Company
Limited, is the world's sixth largest steel company, with an annual crude steel
capacity of 31 million tons. It is the second largest private sector steel company in
India in terms of domestic production. Ranked 315th on Fortune Global 500, it is
based in Jamshedpur, Jharkhand, India. It is part of Tata Group of companies. Tata
Steel is also India's second largest and second-most profitable company in private
sector with consolidated revenues of Rs 1,32,110 crore and net profit of over Rs
12,350 crore during the year ended March 31, 2008.
Its main plant is located in Jamshedpur, Jharkhand, with its recent
acquisitions; the company has become multinational with balanced global
presence in over 50 developed European and fast growing Asian markets, with
manufacturing units in 26 countries operations in various countries. The
Jamshedpur plant contains the DCS supplied by Honeywell. The registered office
of Tata Steel is in Mumbai. The company was also recognized as the world's best
steel producer by World Steel Dynamics in 2005. The company is listed on
Bombay Stock Exchange and National Stock Exchange of India, and employs
about 82,700 people.
Tata Steel`s Jamshedpur (India) Works has a crude steel production
capacity of 6.8 MTPA which is slated to increase to 10 MTPA by 2010. The
Company also has proposed three Greenfield steel projects in the states of
Jharkhand, Orissa and Chhattisgarh in India with additional capacity of 23 MTPA
and a Greenfield project in Vietnam. Through investments in Corus, Millennium
Steel (renamed Tata Steel Thailand) and NatSteel Holdings, Singapore, Tata Steel
has created a manufacturing and marketing network in Europe, South East Asia
and the pacific-rim countries.
Tata Steel, through its joint venture with Tata BlueScope Steel Limited,
has also entered the steel building and construction applications market. The iron
6

ore mines and collieries in India give the Company a distinct advantage in raw
material sourcing. Tata Steel is also striving towards raw materials security
through joint ventures in Thailand, Australia, Mozambique, Ivory Coast (West
Africa) and Oman. Tata Steel has signed an agreement with Steel Authority of
India Limited to establish a 50:50 joint venture company for coal mining in India.
Also, Tata Steel has bought 19.9% stake in New Millennium Capital Corporation,
Canada for iron ore mining.
On 2nd April, 2007, the Company completed the acquisition of Corus
Group plc, Steel Company headquartered at UK for an Enterprise Value of USD
14.7 billion. Post the acquisition of Corus, Tata Steel Group is now the worlds
6th largest steel company with current steel deliveries of 32 million tons. Set up as
Asias first integrated steel plant and Indias largest integrated private sector steel
company, a century ago, it is now the worlds second most geographically
diversified steel producer, with operations in 24 countries and commercial
presence in over 50 countries. The Jamshedpur operations in India is increasing its
capacity from 5 mtpa to 10 mtpa by end 2010 and the Company has also signed
MoUs to set up four greenfield steel projects in the states of Jharkhand, Orissa
and Chhattisgarh in India and one in Vietnam.

HISTORY:
The Swadeshi Movement encouraged Jamsetji Tata to set up Asias first
ever privately-owned integrated iron and steel plant. His interest in iron making
was triggered in 1882 when he came across an official report on the Chanda
district which identified large deposits of high-quality iron ore but also noted a
lack of suitable coal in the region. His idea of endowing his country with its own
iron and steel industry gained support within the government and in 1907, when
the Swadeshi Movement was at its height, the Tata Iron and Steel Company Ltd.
was incorporated. The Tatas raised the finance to build the steel plant within India
a significant milestone in Indian economic history. They proved a point to the
then British government that an Indian company had the vision and the

wherewithal to build an industry from the ground up and had the know-how to
apply international standards to meet local needs. The setting up of the Tata Iron
and Steel Company Ltd. gave Indian industry a voice paving the way for many a
future enterprise.
Tata Steel introduced an 8-hour work day as early as in 1912 when only a
12-hour work day was the legal requirement in Britain. It introduced leave-withpay in 1920, a practice that became legally binding upon employers in India only
in 1945. Similarly, Tata Steel started a Provident Fund for its employees as early
as in 1920, which became a law for all employers under the Provident Fund Act
only in 1952. Tata Steel's furnaces have never been disrupted on account of a
labour strike and this is an enviable record.

TIME-LINE:
1907: Tata Steel was established by Indian Parsi businessman Jamsetji Tata in
1907
1924: Manufacture of Steel by Duplex Process commenced.
1935: Production of high-tensile steel commenced.
1940: The new 100-Tonne Blast Furnace started operation.
1961: An industrial license is obtained by Tata Steel for an Alloy-Steel project in
July.
1963: The government approves in principle expansion by One-Million tons
during the 4th Plan.
1965: The Steel Ministry agrees to expansion to 4-Million Ingot tons with a Strip
Mill.
1974: Amalgamation with West Bokaro Limited for coal mine operations.
1979: Five-year Rural Development programme for upliftment of the villagers
near Jamshedpur taken up.

1981: In 1981, Ratan was named Chairman of Tata Industries; the Group's other
holding company, where he became responsible for transforming it into the
Group's strategy think-tank and a promoter of new ventures in high-technology
businesses.
1985: JRD Tata becomes Chairman Emeritus after guiding Tata Steel as Chairman
for 46 years. Russi Mody takes over as new Chairman. Merger of the Indian tube
company with Tata Steel.
1986: Started an export cell which co-ordinated the Companys growing exports.
1991: In 1991, Mr Ratan N Tata took over as group chairman from J.R.D. Tata,
pushing out the old guard and ushering in younger managers. Since then, he has
been instrumental in reshaping the fortunes of the Tata Group, which today has
the largest market capitalization of any business house on the Indian StockMarket.
Dr JJ Irani becomes Managing Director.
1993: The new One-million ton capacity "G" Blast Furnace was commissioned.
1997: The Company sold the 67.5 MW Power Plants, under construction at
Jojobera, put under its earlier Modernizations Programme-Phase III, to Tata
Electric Companies for a total consideration of Rs. 300 crore. Received Prime
Ministers trophy for the Best Integrated Steel Plant for the year 1995-96. Dr JJ
Irani was conferred an Honorary Knighthood by the Queen of Great Britain.
2000: Mr. Tata was honored by the Government of India with the Padma Bhushan
on 26th January 2000, on the occasion of the 50th Republic Day of India.
2000: Company was recognised as the world's lowest-cost producer of steel.
2005: The company was also recognised as the world's best steel producer by
World Steel Dynamics.
2007: On January 31 2007 Tata Steel won their bid for Corus after offering 608p
per share, valuing Corus at 6.7 bn ($11.3bn); as a result and pending acceptance
and completion of the takeover, the joining of the two will create the fifth largest
steel company in the world.

Companys Overall Strategy:

With the global increase in opportunities & demand of steel, TATA steel
has planned to become 2nd largest by 2012, by expanding the production.
Financial prudence remains the hallmark of any strategy that Tata Steel adopts
thats why it reduces the capital expenditure plan by 40%. By keeping stiff control
on financial risk TATA steal remain committed to its long-term strategy and will
continue to allocate capital towards its existing operations and new projects that
are of strategic importance.
In February 2008, the Tata Steel Group launched a new Vision with the aim of
setting a world benchmark in Value Creation and Corporate Citizenship. With
regard to Value Creation, the Tata Steel Group set itself a target of increasing the
return on invested capital of its existing assets to 30% by 2012-13 and to generate
selective growth. In order to meet this target, the Group has developed a two-fold
strategy:

In order to increase the quality of earnings of its existing assets, the Group
will pursue the optimization of its European assets, restructure low
profitability assets and continue to derive benefits through continuous
improvement and synergies across the Group.

In order to generate selective growth, the Group will pursue capacity

expansions and securing access to raw materials. The Group is increasing its
capacity in India, through expansion of its current operations in Jamshedpur
and through the construction of a Greenfield site in Orissa, and assessment of
raw material investment opportunities as and when they arise.
Corporate citizenship involves providing a safe working place, respecting the

environment, caring for its communities and demonstrating high ethical standards.
The Group wants to be a part of the climate change solution and has set a target to
reduce its CO2 emission from the current 2.07 tonnes of CO2 per tonne of liquid
steel to 1.5 tonnes of CO2 per tonne of liquid steel by 2012 through process
improvements, breakthrough technologies and development of new products and
services. More specifically, the emission target is planned to be achieved through:
10

Large investments including BOS gas recovery and back pressure valves at
Port Talbot and a new ladle furnace at IJmuiden.

Burden optimization, e.g. through switching to pellet feed, increased scrap

ratio, reduced slag volume and increased coal injection.

Smaller investments and housekeeping actions e.g. yield improvements,

lighting efficiency and variable speed drives across all entities.
During the year, the Group has continued to execute its long-term strategy and

the tactical planning for development of new markets is well underway. South
East Asia is one of the key growth regions and the Group is focused on
developing a Greenfield expansion in Vietnam and optimizing operations in both
NatSteel and Tata Steel Thailand. In the construction sector, the Group is
exploring options to develop strong positions in India and in South East Asia
through leveraging its European expertise. The Group also continued to explore
raw material opportunities to improve the cost competitiveness of its European
and South East Asian operations

11

CHAPTER 3: DATA COLLECTION & ANALYSIS

MARKETING MIX AT TATA STEEL LTD.

4 Ps OF MARKETING:
1. PRODUCT:
Tata Steel Products:
The Companys products consist of TSL products, produced by the
Companys Indian operations and its NatSteel and Tata Steel Thailand operations,
and Corus products, and produced in the United Kingdom and The Netherlands.
TSLs products can be divided into three main categories:
1. Finished and semi-finished steel products;
2. Ferro alloys products; and
3. Other products and services, including tube products, bearing products,
refractory products, pigments, municipal services and investment activities.
Corus Products:
Corus has four main product segments: (1) strip products; (2) long
products; (3) distribution and building systems; and (4) aluminum.

TSL Products:

1) Finished and Semi-finished Steel Segment Products

TSLs finished steel products are produced at its Indian facilities, as well as in
various Asia Pacific countries by NatSteel and in Thailand by Tata Steel Thailand.
TSLs finished steel products can be principally divided into flat products and
long products, including wires. In addition, TSL also produces relatively smaller
quantities of semi-finished steel, rings, agricultural tools, and steel equipment.

12

The following table lists the various finished and semi-finished products TSL
produces, as well as the principal uses for these products and their principal
markets

2) Ferro Alloys Segment Products

TSLs ferro alloys segment produces chrome ore, pyroxenite and manganese ore
as well as ferro chrome and ferro manganese. Ferro chrome and ferro manganese
are used by the steel industry to create stainless steel products. TSL is the leading
manufacturer of ferro chrome in India and the leading manufacturer of chrome ore
internationally.

13

Corus Products:

1) Strip Products
Uncoated strip products comprise hot rolled, cold reduced and electrical steels,
which are sold both in coil form and, cut to length, in sheet form. Corus is one of
the market leaders in the manufacture of coated strip products.
2) Long Products
Long products comprise sections and plates, and rods. Engineering steels also
form part of the long products division and are produced by the electric arc
method as opposed to the basic oxygen steelmaking method in the United
Kingdom

Jindal Steels Products (Competitors Products):

1) Hot Rolled products:

HR Coil, HR plate and sheet, HRPO, HRSPO
Applications: Automobile, Boiler and Pressure Vessels, Ship Building, Railways,
Transmission Towers, Oil and Petro Chemicals, Marine Containers, Coal and
Mining
General and Heavy Engineering
2) Cold Rolled Products:
CR coil and Sheet
Applications: Automobile, White good, Cold rolled formed section, General
engineering
& fabrication, Packing, Drums/ barrels, Furniture
3) Galvanized Product:
Galvanized Corrugated Sheet, GP Sheet and Coil
Applications: Automobile, Boiler and Pressure Vessels, Ship Building, Railways,

14

Transmission Towers, Oil and Petrochemicals, Marine Containers, Coal and

Mining,
General and Heavy Engineering.
4) Pre-Painted Galvanized Product:
PPGI coil, PPGI sheet, PPGI profile
Application: Roof, Wall cladding and other building products, Household
appliances,
Furniture, Automotives

Comparison Between Tata Steel Products & Jindal Steel Products:

One of the biggest strengths of Tata Steel was that it had captive sources

for all key raw materials: coal, iron ore, and limestone. The company began to
harness its unutilized deposits of iron ore at Joda in Orissa. As compared both
products tata steel products are good in quality & also comfortable for industries.

2. PRICE:
Pricing is one of the most crucial elements behind a successful product. It
is more pragmatic and fact oriented in industrial marketing as compared to pricing
for consumer products. Pricing in industrial marketing is closely related to the
firms product, distribution and communication strategies.

Factors Influencing Pricing Strategy in Steel Industry:

The most important factors which affect pricing strategies in steel industry are:
1. Production Costs
2. Market demand (derived in nature)
3. Competition
4. Government regulations

15

1) Production Costs:
Tata Steel is the lowest cost manufacturer of steel and keeping production
costs low have played a major role in achieving that. The following measures
have helped Tata Steel in maintaining cost leadership:
a) Acquiring sources of raw materials in India and globally:
Tata Steel has captive coal mines in West Bokaro and Jharia. The mines in
Bokaro have reserves of over 196 million tones and the coke mine in Jharia can
produce 1.9 million tones of raw coal annually. Its iron ore mines are located in
Noamundi and Joda and chromite mines at Sukinda contribute to raw materials
for Tata Steel.
Internationally, Tata Steel has 5% interest in the Carborough Downs Coal
Project located in Queensland Australia for low ash coal. The Sila Eastern
Company has been established to develop limestone mines in Thailand mainly for
the captive use of Tata Steel.
b) Capacity expansion:
With the expansion of its Jamshedpur plant by 2012 and Greenfield units
in Orissa and Chhattisgarh becoming operational in 3-4 years, its manufacturing
capacity will jump to 21 mtpa. Acquisition of Corus has made Tata Steel one of
the largest manufacturers of steel.
c) Technology:
Tata Steel has developed several technologies that help in keeping
production costs low. Some of them are:
-

Process innovation and use of blue dust in sinter plants increased productivity
by 60%.

Stamp charging technology was indigenously developed to convert low

quality coal to high quality coking coal. This reduced the import of coking
coal.

16

All these factors and more have led to Tata Steel being the lowest cost, but still
the best quality steel manufacturer.
2) Market Demand:
Demand for steel is derived in nature since it is majorly used as an input.
The following facts and figures suggest that there exist healthy demand in market
for Tata Steel to serve.
-

World consumption of steel is expected to be 1.23 billion tonnes in 2010

registering a growth of 10% over 2009. The exports during 2010 are expected
to be higher by around 4% as compared to 2009.

In India, apparent consumption is expected to increase by more than 10% in

FY 11 buoyed by expected strong performances from consuming segments
like automotive, construction, infrastructure and capital goods.

With economic and steel market conditions becoming more favorable and the
steel producers needing to recover the rise in input costs, it is anticipated that
there will be a strong rise in the steel prices in 2010-11. However, significant raw
material price increases, interest rate tightening and inflation may provide some
downsides to an otherwise positive outlook for the industry.
3) Competition:
Existing and potential competition inevitably affects pricing strategy by
setting an upper limit. The amount of latitude a firm has in its pricing decision
largely depends on the degree to which it can differentiate its products in the
minds of buyers.
Pricing strategy is also influenced by the anticipated reactions of
competitors to pricing decisions. Price reductions on products that are
undifferentiated are generally met immediately by all suppliers, resulting in little
shift in market share.
The major competitors of Tata Steel in India are Steel Authority of India
Ltd, JSW Steel Ltd and Essar Steel Limited. Tata Steel's rare advantage is that it
has captive iron ore mines with capacities far in excess of its current needs.
17

Therefore, it makes imminent sense to expand its primary steel-making facilities

in India and look for finishing capabilities elsewhere. Greater the volumes, lower
the production costs and hence lower the prices at which its products are offered.
This shows that the ability to maintain lower prices of its products have given
Tata Steel the edge over its competitors.

Pricing Strategy at Tata Steel:

A pricing strategy must be conceived in relation to overall business

objectives and marketing strategy. The success of any business depends upon a
blend of long run profit, growth and survival objectives. Price, because of its
influence on unit sales volume and profit margins, affects long run profit
objectives. And maintaining profitability through sound pricing practices is
necessary to ensure the firms survival over time.
The pricing strategy adopted by Tata Steel is the Market Penetration
Strategy. This strategy is based on the assumption that demands for the product is
highly elastic. By setting relatively low price
Tata Steel has managed to obtain large market share. The advantage of this
kind of pricing is that it discourages competition since there is less opportunity to
reap unusual benefits on investment. Since Tata Steel is in control of large iron
ore deposits it has increased its capacity manifold and so enjoys economies of
scale. It has thus maintained prices of its products lower than of its competitors
and has increased the scale and efficiency of operations, since it has lower
production costs.

Competitors Analysis:

The various competitors of Tata Steel are:

1) SAIL
2) JSW
3) Essar Steel
4) Ispat Industries
18

Recently in India the prices of steel have increased. Steel manufacturers

like JSW believe that increase in the raw materials i.e. the iron ore from the mines
have led to this price rise. Many of these manufacturers are now concentrating on
backward integration just like Tata Steel wherein the iron ore mines are also
owned by the company which helps in achieving lower manufacturing costs.
1) JSW:
They are moving ahead with a two prong strategy wherein on one side the
focus is on the domestic market catering mainly to OEM segment by servicing
them with all value added products customized to their requirement and on the
other hand a special drive in the retail segment will continue by opening of stateof-the-art branded steel retail is the largest players in the private outlets with
brand name JSW Shoppe.
2) SAIL:
Following are the strategies adopted by SAIL for effective pricing:
a) Cost reduction and increased productivity through advanced technology and
improved processes.
b) Production of value added and customized products to create niche markets
c) Avoid inventory build-up and make production strictly market driven
3) Essar:
Essar Steel is currently expanding its capacity at Hazira from 4.6 MTPA to
8.5 MTPA and then to 10 MTPA. We can see that this is an attempt to cater the
large market demand and achieve economies of scale.
Essar Steel has pioneered the concept of steel retailing in the country
through branded retail outlets Essar Hypermart. This is primarily catering to
SME segment.

19

3. PLACE:
Place represents the location where a product can be purchased. But in
industrial marketing place is often referred to as the distribution channel.

Distribution channels at Tata Steel:

Tata Steel Limited delivers steel products to Indian customers through:

1) Direct supply channels,
2) 21 stockyards,
3) 25 consignment agents,
4) 15 external processing agents and
TATA Steel main distribution channel is selling branded steel through
Mjunction.It provides cutting edge of Information Technology, is a 50:50 venture
of SAIL and Tata Steel. It is India's largest e-Commerce company and the world's
largest e-Marketplace for steel. Mjunction offers a wide range of selling, sourcing
and knowledge services that empower businesses with greater process
efficiencies.
Tata Steel initiated the first online e-Sale through Mjunction in the month
of February 2002 and since then has sold 221,259 MT. The products that Tata
Steel has sold through MJunction are: HSM Defectives, HSM POR, GP Coils, LP
Defectives, Prime Billets and Secondary Products. The results have been
extremely encouraging for Tata Steel, with products being sold to customers all
over the country. The prices obtained by Mjunction have been reflective of the
market situation.
The entire cycle time of selling materials has been reduced by the speed
and efficiency with which on-line competitive bidding events has been created
and managed by Mjunction. Through intensive market-making efforts and the use
of technology, it is bringing in both, greater efficiencies to processes and greater
focus to the sale of non-core products of Tata Steel.

20

Full

Service

Mjunction.com takes

on

business

process

outsourcing(BPO)

mode

end-to-end responsibility of selling client's low 'value'

and/or standard products. It undertakes market research and market-making

activities to generate buyer leads. It also creates suitable market lots to ensure
maximum participation from buyers. Some of the other services provided by
Mjunction are conducting auction event fulfillment services, undertaking
collection of payments, like earnest money deposit and principal, ensuring fast
and secure handling of money. It has tied up with Citibank and HDFC Bank for
collecting sales tax documents and managing customer complaints.

Distribution Channels at JSW Steel:

JSW Steel has launched JSW Shoppe to markets its steel products as

compared to Mjunction launched by TATA Steel. The exclusive JSW showrooms

retail all types of JSW steel, ranging from HR coil to colour-coated steel.
"JSW is looking at opening 600 retail outlets in the next two years time to
market steel in the country. The reason for such openings is to keep a check on the
variation in steel prices from company to company," JSW Vice Chairman and
Managing

Director

Sajjan

Jindal

told

in

press

interview.

JSW aims to provide a unique experience of buying steel products through

branded distribution channels. It started off with an idea to give a different feel
and ambience to steel retail. JSW Steel wanted to give a feel of a minidepartmental store or a mall, which would have the same format, same look and
feel wherever the buyer goes in the country. So, it will give a branding to the
distribution channel. It will also display all the products in one place so that the
customer gets a touch and feel of what the steel looks like. The smaller towns will
be focus areas. The bigger towns and metros will also have shops, but their focus
is on tier 2 and 3 cities. If this takes off properly, they propose to target 600
Shoppes in 2012. This will enable them to sell 600,000 tonnes a month, which
comes to 7.2 million tonne a year (when the company opens 600 stores by 2012).
By 2012, they are targeting at least 50% of sales through the Shoppes.

21

Comparison of distribution Channels of TATA Steel Vs JSW Steel:

As compared to TATA Steel, JSW Steel does not sell its products online. It

is here that TATA Steel has a competitive advantage. According to reports TATA
Steel sell over 50% of its products through Mjunction. The revenues through
Mjunction has crossed 450 crores(INR) in the year 2009-10.As a result it serves
as a huge platform for TATA Steel to sell its products without incurring
distribution costs.Its margins has therefore shown an upward trend in the past six
years. JSW Shoppe, the retail outlet opened by JSW Steel has started its
operations in 2007 and yet to penetrate the market whereas Steel Junction, the
retail outlet of TATA Steel has already opened its outlets in many places including
semi-urban and rural areas.

4. PROMOTION:
In B2B marketing advertising, promotions and publicity plays an
important role in the communication strategies. Hence, to contribute to the overall
effectiveness of the promotional strategies utmost care must be taken by the
companies.
B2B promotion is used to create awareness of the company, to increase the
sales of the product and to increase the overall effectiveness of the selling efforts.
The promotional programme begins with carefully developed advertising
objectives that must be formulated from corporate and marketing objectives in
such a manner as to set the direction for creating, co-coordinating, and evaluating
entire promotional programme.

Promotional activities undertaken by TATA Steel:

Branding Steel Based on Customer Focus:

As one of Indias most successful companies, Tata Steel represents a great

example of a strongly branded B2B company. In 2001and 2005, Tata Steel was

22

ranked the worlds best steel company in studies carried out by World Steel
Dynamics Inc., USA (WSD), a leading steel information service provider.

Branding Steel:
The profitability of the steel industry in India is generally linked to

business cycles, reaping profits when economy is going well and eroding them
when it is in depression. In the late 1990s, the Indian steel industry was
experiencing a glut in the market which strongly affected the profit margin of all
related companies. To reduce its dependence on the external environment and
business cycles, Tata Steel adopted a strategy which stressed the following two
points:

Branding its products

Moving to high value added products.

The company soon realized that a strong customer focus is essential if any

branding approach was to be successful. It soon began to introduce Internal

Campaigns in order to bring the customer-centric message to its employees. In
the late 1990s, the company launched several Internal Marketing Programs to
emphasize customer focus and service. The programs had taglines such as:

Customer first her haal mein (Customer comes first in any case),

Customer first her haal mein, her saal (customer comes first in every case,
every year),

Customer ki kasam hain taiyaar hum (We pledge to the customer that we
are ready for him).
To achieve this Tata Steel set up a branding task force in January 2000 to

explore the possibilities of branding Tata Steel products. Only three months later,
the task force evolved into a brand management department. Within this
department they created the distinct sub functions market development, order
generation and order fulfillment which were computerized, enabling Tata
23

Steel to reduce its customer response time significantly. The company also
initiated the concept of customer account managers who were authorized and
empowered to solve specific customer grievances immediately. The company
furthermore sought to increase customer interaction in order to better understand
customer needs and to explore new and improved ways to meet these needs and
expectations.
Tatas second area of key focus was to shift into the domain of high value
added products. In April 2000, Tata Steel launched its first branded product, along
with the commissioning of its CRM plant.
Tata Shaktee is their brand for galvanized corrugated sheets. Eight months
later the company introduced its second brand, Tata Tiscon (re-bars) for rods used
in the construction industry.
In February 2003, Tata Steel launched another product brand Tata
Steelium. By September 2003, Tata Steel had three products as well as three
generic brands in its brand portfolio
The leader of the company had decided that branding the commodity steel
would provide them a unique selling proposition in a great way. Branding Steel
would help Tata Steel in two big ways:

It would help stabilize the flow of revenues even during business downturns.

It would make premium pricing possible.

The communication tools used for the brand launches were primarily

Print ads

Outdoor advertising.
Yet, they also created TV commercials that portrayed signs of happy

customers and employees reveling in the concern the company had for them. We
also make Steel was the punch line that signaled the triumphant finale of that TV
ad. Because of these initiatives undertaken by Tata steel had put them well ahead
of their competitors in promotional activities.

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Because the corporate brand Tata was already associated with various
products and attributes the company decided not to put the main focus on it but to
create sub brands with separate identities, supported by the corporate brand as codriver. They had learned from the European competition that specialty product
offerings and strong brand associations had guarded the market against the low
cost importers from the Far East.

Challenges Faced:
At the beginning, one of the major obstacles Tata Steel had to overcome

was its inexperienced marketing personnel. Their knowledge of branding

techniques was quite limited and moreover, many of them had doubts about the
feasibility of branding steel. As a solution they started several training programs
for them and organized seminars and workshops where experienced people from
other sectors came and spoke to employees regarding various issues related to
branding. It also formed separate marketing teams for its long and flat
products, keeping in view, the different approaches required for both. The
positioning reinforces especially the brands leadership position, both in the
market place and in the minds of the Indian consumer

Value Management:
Tata recognized early that their employees were essential assets in the

course of becoming more customer-focused. Therefore it adopted a program of

Retail Value Management, under which the company provided training to sales
people recruited by the retailers to help increase sales. In a region in northern
India, for instance, sales teams trained by the company approached local
architects and convinced them of the advantages of using more steel, resulting in a
doubling of the market share of Tata Tiscon in that region. One of the most
important things in promotional strategies is to know who you are actually
messaging to.
One of the major implications that Tata undertook in the course of their
promotion efforts was a concise target group check and distribution revamp. The

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company was actively involved in both B2B branding and promotion. The B2B
customers were mainly automakers Maruti, Telco and Ford, who with their
knowledge of steel helped the company to focus on product quality on a holistic
way, negotiating for specifications and discussing the advantages of using
different grades of steel.
Tata Steel realized that only 200 large industrial customers were providing
the big chunk of its total sales 80 percent while the remaining 20 percent were
contributed to by around 5,000-6,000 smaller customers. The logical consequence
was to adopt different sales strategies for B2B and B2C. For the 200 key accounts
that made up for 80 percent of the sales, the company started an extensive
Customer Value Management program. Under this program they allocated a
whole team consisting of people from various departments of the company to one
customer.

Benefits reaped from Promotional activities:

From the beginning, the branding and promotional initiative of Tata Steel

showed impressive results. It was found that the sale of branded products
increased by 84 per cent.
The future expectations and prospects of the company are also very
positive. Today, Tata Steel is already one of the best branded names in steel
industry and has already started initiatives in the co-branding arena with high end
customers like Ashok Leyland and Telco.
Looking to the future, Tata Steel has announced that the company would
be focusing on co-branding initiatives with its high-end customers such as Telco,
Ashok Leyland. Company sources say that initially Tata Steel would be focusing
on the automobile sector; later the co-branding initiative will be expanded to the
consumer durables sector also.

Competitor Analysis in Promotional activities:

The main competitors for Tata Steel are

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Ispat

SAIL

JSW
However if we look at the promotional activities undertaken by JSW and

SAIL we can see that Tata Steel is well ahead of them in promotions.
JSW basically uses two types of promotional activities

Print media (business magazines, trade publications and industrial directories)

Direct Marketing (direct mail, catalogs and data sheets)

In case of JSW Catalogs and data sheets are the main part of their

promotional effort .However the main drawback is that rarely catalogs alone are
used to make a purchasing decision. They nearly provide buyer with the basis of
comparison with other companies product once the decision has been made to
purchase a particular product. Data sheets provide detailed technical information
about the product. But sometimes it is a case that sales people seldom have all the
answers that the buyers require. However Tata Steel is quite instrumental in its
promotional activities as compared to its competitors. . Therefore it adopted a
program of Retail Value Management, under which the company provided
training to sales people recruited by the retailers to help increase sales.
They have used all channels of promotions to market their product and has
equally emphasized on its promotional activities as compared to its competitors.
Because of this there is tremendous increase in its sales and Tata Steel is already
one of the best branded names in steel industry and is well placed ahead of its
competitors.

Buying Behavior:
There are normally three types of buying behavior exhibited in the
industrial buying: New task, Modified Rebuy and Straight Rebuy. In case of Tata
Steels purchases most the buying is Straight Rebuy and Modified Buy. Sometimes
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the specifications and quality has to be modified and that comes under the
Modified Buy.
The role of buying center is very important while buying the material. The
buying center comprises of people from the organization who have sufficient
knowledge about the raw materials. In the purchases of raw materials the major
members are the purchase manager, safety engineer, General Manager, vicepresident of operations and mining engineer. These people with their specialized
knowledge prepare the initial draft of the specifications, identify the raw materials
that meet those specifications, shortlist the suppliers, have detailed discussion
about the products and negotiate their prices..
Let us explain the phenomena with an example: Suppose an automobile
manufacturer wants to go for buying of steel for manufacturing the automobile,
the following procedure will be followed:
1. The company will understand the need and characteristic of the need.
2. The company will search for possible suppliers and will contact them..
3. The supplier like Tata Steels will send their sales representative to interact
with the company personnel
4. The sales representative will brief on the product specifications and suggest
the tonnage required after considering various factors like size of automobile,
quality of steel offering, size of sheets, flat or rolled.
5. Based on the interaction the buyer may ask one particular company for a
proposal or a group of companies to submit their proposals.
6. The buying may be done on the basis of evaluation of the proposals.
7. In case of one company being asked for a proposal there will be a series of
negotiations on price as well as specification till the final deal is struck.
8. The influencers in this decision maybe the administrative officer who looks
after the upkeep and administration of manufacturing department.

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9. The Gate keeper will be the Public relationship department of the company
and also the secretary of the manager who filter the information reaching the
buying centers.
10. The decider will be the director of the company who has the formal authority
to finalize the deal and actually will make the final decision. He will
communicate his decision to the manager who in turn will finalize the deal.
11. Once the deal has been finalized contract will be signed between the parties.
12. This is an example of a New Task in buying.

SWOT Analysis of Tata Steel:

SWOT analysis is done for a company, to find out its overall Strengths,
Weaknesses, Threats and opportunities leading to gauging the competitive
potential of the company. The SWOT Analysis enables a company to recognize its
market standing and adopt strategies accordingly. Here SWOT analysis of ICICI
bank is made to understand the positioning of the bank better:

STRENGTHS:

1. Tata Steels Indian operations are self-sufficient in the case of its major raw
material iron ore through its captive mines.
2. Very advanced Research and Development wing which is carrying out
researches and experiments in the areas of raw materials, blast furnace
productivity, steel making, product development, process improvement etc.
Several thrust area projects were taken up
3. Tata had a strong retail and distribution network in India and SE Asia. Tata was
a major supplier to the Indian auto industry and the demand for value added steel
products was growing in this market.
4. The Company is on its way to reach a crude steel capacity of 10 million tonnes
per annum by FY 2011. The first phase of reaching the crude steel capacity of 6.8
million tonnes per annum, Brown field projects, is nearing completion

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5. The Company has in place adequate internal control systems and procedures
commensurate with the size and nature of its business. The effectiveness of the
internal controls is continuously monitored by the Corporate Audit Division of the
Company. Corporate Audits main objective is to provide to the Audit Committee
and the Board of Directors, an independent, objective and reasonable assurance of
the adequacy and effectiveness of the organisations risk management, control and
governance processes. Corporate Audit also assesses opportunities for
improvement in business
processes, systems & controls and may provide recommendations, designed to
add-value to the organization. It also follows up on the implementation of
corrective actions and improvements in business processes after review by the
Audit Committee and Senior Management.
6. Tata Steel has been on a path of accelerated growth with foray into several
geographies and markets through aggressive mergers and acquisitions.
7. Tata Steel now is in the process of implementing a structured approach in risk
management called Enterprise Risk Management (ERM). The key objectives of
the Company through ERM are:
a) To enshrine the process of ERM as a usual Business Process and integrate into
all decision making and planning processes.
b) To ensure that all levels of Management identify and monitor risks through a
properly defined framework.
c) To provide periodic information and updates to the Board and the
Shareholders on the significant risks and the ways of mitigating the same.
8. Tata Steel addresses the risk of cyclicality of the Steel industry by marinating
rich product mix and higher value added products whose volatility is lower.
Moreover, the industry itself has been undergoing some structural changes with
Consolidations. These changes are expected to bring in greater stability to prices.
9. Tata Steel with its modernization plans has ensured that it deploys the best
technologies to ensure quality, cost-efficiency and environment-friendly
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processes. Through acquisition of Corus and with new Greenfield ventures, Tata
Steel has ensured that it has diversified the concentration risk in single technology
of Iron & Steel making

WEAKNESS:

1. Endemic Deficiencies: These are inherent in the quality and availability of

some of the essential raw materials available in India, eg, high ash content of
indigenous coking coal adversely affecting the productive efficiency of ironmaking and is generally imported. Advantages of high Fe content of indigenous
ore are often neutralized by high basicity index. Besides, certain key ingredients
of steel making, eg, nickel, Ferro-molybdenum are also unavailable indigenously.
2. 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 and the prices of coking and noncoking coal are ever increasing.
3. Raw materials for steel production are rapidly depleting and are nonrenewable;
company has to come up with sustainable methods in steel production.
4. Steel production in India is also hampered by power shortages.
5. Insufficient freight capacity and transport infrastructure impediments to hamper
the growth of Indian steel industry.
6. Low Labour Productivity: In India the advantages of cheap labour get offset by
low labour productivity; eg, at comparable capacities labour productivity of SAIL
and TISCO are 75 t/manyear and 100 t/manyear, for POSCO, Korea and
NIPPON, Japan the values are 1345 t/man year and 980 t/manyear.
7. High Cost of Basic Inputs and Services: High administered price of essential
inputs like electricity puts Indian steel industry at a disadvantage; about 45% of
the input costs can be attributed to the administered costs of coal, fuel and
electricity, eg, cost of electricity is 3 cents in the USA as compared to 10 cents in
India; and freight cost from Jamshedpur to Mumbai is $50/tonne compared to
only $34 from Rotterdam to Mumbai.
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OPPORTUNITIES:

1. The biggest opportunity before Indian steel sector is that there is enormous
scope for increasing consumption of steel in almost all sectors in India.
2. Unexplored Rural Market: The Indian rural sector remains fairly unexposed to
their multi-faceted use of steel. The rural market was identified as a potential area
of significant steel consumption way back in the year 1976 itself. However,
forceful steps were not taken to penetrate this segment. Enhancing applications in
rural areas assumes a much greater significance now for increasing per capital
consumption of steel. The usage of steel in cost effective manner is possible in the
area of housing,
fencing, structures and other possible applications where steel can substitute other
materials which not only could bring about advantages to users but is also
desirable for conservation of forest resources.
3. Excellent potential exist for enhancing steel consumption in other sectors such
as automobiles, packaging, engineering industries, irrigation and water supply in
India. New steel products developed to improve performance simplify
manufacturing/installation and reliability is needed to enhance steel consumption
in these sectors
4. It is estimated that world steel consumption will double in next 25 years.
Quality improvement of Indian steel combined with its low cost advantages will
definitely help in substantial gain in export market.
5. The Tata Steel Group is leveraging the Groups collective Research and
Development experience in the Groups various geographies to further enhance
the Groups performance and also the integration process.
6. Corus acquisition bring in a tremendous technological advantage by access to
best practices in global steel industry
7. Global M&A brought in following synergies
Greater productivity leading to increased output and market size.

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 Greater economies of scale leading to cost reduction through combined buying

Cross fertilization of Research and Development capabilities and operational
best
practices, leading to greater innovation and operational efficiencies.
8. Booming infrastructure has opened up high demand for steel worldwide

THREATS:

1. In the developed world, industries have been facing rising environmental costs
due to the increased concerns on Global Warming. It is, therefore, a challenge and
responsibility for the Steel industry to be the trustee in conservation of nature for
future generations
2. It is recognised that the steel and aluminium industries are significant
contributors to man-made greenhouse gas emissions as the manufacture of steel
produces carbon dioxide (CO2), and the manufacture of primary aluminium
generates both CO2 and perfluorocarbons (PFCs).
3. High raw material input cost and scarcity of nonrenewable raw materials are a
threat to the industry.(eg: Coal, limestone etc)
4. Threat of Substitutes: Plastics and composites pose a threat to Indian steel in
one of its biggest markets automotive manufacture. For the automobile industry,
the other material at present with the potential to upstage steel is aluminum.
However, at present the high cost of electricity for extraction and purification of
aluminum in India weighs against viable use of aluminum for the automobile
industry. Steel has already been replaced in some large volume applications large
diameter water pipes (RCC pipes), small diameter pipes (PVC pipes).

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CHAPTER 4: FINDINGS, RECOMMENDATION & CONCLUSION

Competitive Advantages of Tata Steel:
After understanding the 4Ps of marketing pertaining to Tata Steel it was
found out that Tata Steel has implemented the marketing mix better as compared
to its competitors which has given them an edge and thus it is one of the leading
steel manufacturer in India. Apart from that there are several advantages that Tata
Steel has which gives it competitive advantage.

Harnessing New and Better Sources of Raw Materials

One of the biggest strengths of Tata Steel was that it had captive sources

for all key raw materials: coal, iron ore, and limestone. The company began to
harness its unutilized deposits of iron ore at Joda in Orissa

Innovating to Use Blue Dust

The company had, over the years, accumulated large quantities of very

fine iron ore called blue dust (an iron rich ore which is as fine as talcum powder),
which was a by-product of iron-ore mining operations

New Coke Making Technology

Until the late eighties, Tata Steel, like all other steel manufacturers in

India, was importing large quantities of coking coal as Indian coal has high ash
content compared to imported coal and cannot be used as coking coal

Reducing Energy Costs

The company embarked on several steps to become self-sufficient in its

fuel needs. Earlier, it used large quantities of liquid fuel from one of the petroleum

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refineries. Significant process changes enabled the company to totally stop the use
of liquid fuels.

Modernization of Facilities
Many of the initiatives discussed above resulted in improving the

performance of the existing assets. Simultaneously, the modernization of the

facilities became an important focus area.

Quality and Cost at the Centre-stage

The top management of Tata Steel was part of a delegation organized by

the Confederation of Indian Industry (CII) in the early nineties to study how the
Japanese implemented quality. They found vast differences between the quality
practices in Japan and India.

Conclusion:
By detailed examination of project we understood company profile &
companys overall strategy and also understood what marketing mix undertaken
by Tata Steel Ltd. It helps to analyze 4 Ps of marketing of Tata Steel with other
players and to find out competitive advantage of Tata Steel has over its
competitors. It helps to understood buying behavior in case of Industrial
Marketing & SWOT Analysis of Tata Steel Ltd.
After understanding the 4Ps of marketing pertaining to Tata Steel it was
found out that Tata Steel has implemented the marketing mix better as compared
to its competitors which has given them an edge and thus it is one of the leading
steel manufacturer in India.

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BIBLIOGRAPHY:

http://www.tatasteel.co.in/
http://www.tatasteel.com/
http://www.jsw.in/
http://www.jindalsteel.com/
http://www.dnaindia.com/money/report_jsw-sees-50pct-steel-salesfrom-retail_1259258
economictimes.indiatimes.com Definitions Marketing
http://www.hindustantimes.com

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