EXECUTIVE SUMMARY

Global marketing offers a way for companies of all sizes to grow by expanding their
customer base beyond the domestic market. However, the complexities of global
marketing demand careful planning and proper implementation.
This study has been conducted to gain knowledge about the potential strength of
Stainless Steel exports of China. The supply demand scenario, domestic steel
industry and the present and possible role of India was analyzed in case of China.
To start with the Indian and the world Iron and steel Industry is studied and
comparative study of the performance of Exporting Countries and Indian industry is
analyzed.
Indias

positioning

in

the

global

perspective

will

depend

upon

cost

competitiveness of the Indian. Besides the continuous emphasis is to given on

new technology/process/products developed, productivity improvement, quality
improvement. The Chinese steel market is one of the most active markets in the
world. China is a country with a dynamic economy whose annual growth rate has
stayed at 7-8 percent in the last five years.
After this China Customer are segmented, and the most attractive segments for
Indian Exporters are selected as target markets. The company studied is Jindal Steel
Ltd. Jindal Stainless is among the top twelve stainless steel producers in the world
along with Arcelor, KTS, Acerinox, Avesta Polarit, and POSCO etc. The company
itself has two offices in China and is a well-known brand in the Chinese Stainless
Steel Industry. It is a pioneer in the production of Chrome Manganese Stainless
Steel and last year 90% of Jindal Stainless' exports were to China.

OBJECTIVES OF THE STUDY

Indian business firms are facing problems on the international marketing
front and the possible strategies the can employ for going global and
maintain their stride with global scenario

Marketing Mix of Global Marketing

Marketing planning helps you decide what products or services are required in
your market, then how to sell them and what price to put on them. So focus on
the seven Ps of marketing people, planning, product, positioning, pricing,
place and promotion.
People
The personal, cultural, social and psychological attitudes of your customers
are important. If you are going to meet their needs; do some basic market
research.
Planning
your market research needs to be analyzed and evaluated. You can then start
to predict the requirements of your customers.
Product (or service)
What makes your product different from that of your competitor? Can you
develop any brand values for your product? Decide what your unique selling
point is and work out how the customer will benefit from your product or
service.
Positioning
Differentiate your product from that of your competitors. Look for the gap in
the market for your product; work out why this gap exists. How big is this
market? Does it have short and/or long term growth potential? Decide who
your competitors are and how they will react to your plans. What makes your
product special? How will you develop and exploit competitive advantage;
work out the best time to launch your product.
Pricing
What people feel about a product is reflected in what they are prepared to pay
for it. Identify what value your customers place on your product. Then decide

which market segment you will attack e.g. premium or budget. What discount
structure (if any) will you offer for volume. What will be your pricing policy for
agents, wholesalers and retailers?
Place
You may need to work out how your goods will move from where they are
produced to where they are sold. You may want to use wholesalers, retailers
or your own premises. Or will you use direct marketing, telemarketing, or ecommerce via the Internet?
Promotion
This is the most visible aspect of marketing. It pulls together various communication
elements- Corporate identity; Branding; Advertising strategy; Public relations, internal
and external; Direct marketing; Sales promotion and merchandising; Sales and sales
management; Exhibitions.

Developing Marketing Strategies

Positioning and differentiating the market offerings through the product lifecycle

Developing new market offerings

Designing global market offerings

This study will also be conducted to gain knowledge about the potential strength of
Stainless Steel exports of China. The supply demand scenario, domestic steel
industry and the present and possible role of India was analyzed in case of China.
To start with the Indian and the world Iron and steel Industry is studied and
comparative study of the performance of Exporting Countries and Indian industry is
analyzed.
In the next step, the environmental analysis of China is done. The environments
selected included macro-micro economic environment, legal environment, social
environment, and business environment, of China.
Indias

positioning

in

the

global

perspective

will

depend

upon

cost

competitiveness of the Indian. Besides the continuous emphasis is to given on

new technology/process/products developed, productivity improvement, quality
improvement. The Chinese steel market is one of the most active markets in the
world. China is a country with a dynamic economy whose annual growth rate has
stayed at 7-8 percent in the last five years.
The Iron and Steel Industry is one of the major foreign exchange earners, despite of
important role it plays in balancing Indias international trade. Steel has pervaded
our daily lives from the kitchen to hospital and industry. Because of its ability to
withstand corrosion, steel has found an indispensable slot even in the medical
world. Extensively used, steel is sudden in a wide assortment of container
industry, galvanizing units, engineering industry electrical industry, re-rolling
industry and heavy industry. Hence we can say that:
There is a little bit of steel in everyones life

Iron containing less than 2% carbon and less than 1-% silicon and not more than
a trace of phosphorus is what is usually termed steel. Carbon is the principal
hardening element in steel. The increment of carbon % within steel increases the
hardness of steel. The hardness becomes correspondingly less in steel containing
more than 85% carbon than low carbon ranges.
PRODUCTION PROCESS
There are two primary methods of making steel, differing in terms of the process
and raw materials used : the blast furnace route (BF) and the electric arc furnace
(EAF) route. In the BF process, the iron is first reduced with coke in a blast
furnace and then refined to produce molten steel, while in the EAF process a mix
of scrap and sponge iron is melted using electricity in an electric are furnace to
produce long and flat products.
Stainless steel is gaining recognition and it is considered as the friendly and
sustainable material because of its corrosive resistance and for its easy to clean /
hygienic surfaces. Its versatility, durability and its supraliminal quality makes
stainless steel the exceptional material of a choice for the new millennium. Initially
stainless steel found its applicability in cutlery and gradually into textile, chemical and
other engineering industries. Today its application has created wonders in the
Architecture, Building and Construction (ABC) and Automobile, Railways and
Transportation (ART).
Stainless steel usage in the building and construction sector would increase in the
coming years. If the potential of the market is fully realized in terms of the
prospective end use sectors mentioned above along with the continuing growth of
the utensil market, the future growth rate of stainless steel can even be higher than
witnessed in the last decade.
INDIAN STEEL INDUSTRY
Indian Steel Industry is now going through a speedy growth path. In the global
scenario, China remains the worlds largest crude steel producer in 2008. Chinas

steel sector has been following an upward trend, with sale of steel product reaching
their highest levels in recent years. Increased imports and decreased export have
combined to bring great pressure to bear upon chinas steel market. The
Antidumping Measure taken by the United States against China HR Plates has
seriously helped up Chinas export.
In china the volatile Nickel price create uncertainty in the stainless steel market.
Chinas Metal Sector has been enjoying a period of astonishing growth. Trend of
production and consumption are further elaborated with respect to category of
products like cold rolled flat, bars, wire rods and pipes. Stainless steel world has a
department specialized in research and intelligence to help meet the markets
increasing need for the resolution of complex technological and informational
problem.
Stainless steel production in India is speedily increasing since the last three
decades. Initially India had to depend on foreign markets to meet its requirement of
stainless steel. Today India is self sufficient enough to make stainless steel of all
grades, shapes & sizes and is also a major exporter of stainless steel of utensil
grade. In the Public Sector, the special steel plants of Steel Authority of India Limited
(SAIL) at Durgapur and Salem have made significant contribution for the growth of
this industry. Mukand Limited, Panchmahal Steel Limited, Shah Alloys Industries
Ltd., Jindal Strips Limited have also contributed significantly in making India selfsufficient in stainless steel production. (William A. Johnson, 2001)
Most (around 75%) of the Indian stainless steel market is still in the kitchen segment.
Indian Railways is switching over to manufacture their passenger coaches which will
require 15 mt stainless steel per coach in coming 5 years. The Indian government is
using Ferric cold rolled stainless steel strips for making coins. The main focus of

Indian stainless steel industry is China which still imports 90% of stainless steel.
(William A. Johnson 2001)
EXPORTS FROM INDIA
Iron and steel exports from India started after 1964, the first time Indias supply
dominated her domestic needs. Though the Indian exports are quite vulnerable to
domestic demand conditions, the export market has been doing reasonably well in
the past few years, with FY03 seeing an increase of more than 100% over the
previous year. The increase in exports to Asia (approx. 227%) and America (105%)
has contributed to this massive growth. The abundant availability of raw materials
like iron ore and cheap manpower in India provide tremendous potential for the iron
and steel sector to grow. (Peter M Fish, 2003)
The recovery of the steel sector witnessed in 2006-07 was carried forward in Q1
2007-08. Production and apparent consumption were higher by 8.4 per cent and 1.6
per cent, respectively. Production growth was 9.4 per cent in the flats segment as
against 5.7 per cent in the non-flat segment. Apparent consumption growth in the flat
and non-flat segments was 1.5 per cent and 5.1 per cent, respectively.
The apparent consumption growth in the flat segment was negative despite a
positive production growth, due to sharp rise in exports coupled with a poor domestic
off-take largely due to the transporters strike in April 2003. Export performance was
remarkable with a growth of 38.6 per cent during the period. Imports were higher by
26.8 per cent.
Export growth was higher for flat products (41.8 per cent) as against non-flat
products (21.8 per cent). Import growth was higher for non-flat products (42.9 per
cent) as against flat products (25.7 per cent). The capacity utilization (primary and
secondary producers) of crude steel production improved from 86.3 per cent in Q1
2002-2003 to 92.0 per cent in Q1 2003-2004.

India exported about 3.85 million tonnes of stainless steel production in 2007-08. Of
these, low nickel high manganese grade hot rolled and cold rolled products were
30,000 tones. In the 300 series, hot rolled and cold rolled products were about
30,000 tones, Corex Furnace Bars 43,600 tones, wire and cables about 22,000
tones. The export of 400 series was 13,800 tones of which CF Bars were 9,200
tones and wire and coils about 3,400 tones. The export of utensils and kitchenware
during 2007-08 was about 80,000 tones. The value of utensil export by India in 200708 was about US $ 47 million to Middle-East.
STATEMENT OF THE PROBLEM
The study is intended to find the export potential of Stainless steel to Chinese
market, to reveal present pattern and possible future developments of supply,
demand and consumption in relevant product specific markets.
Jindal Strips Limited is the largest integrated producer of stainless steel in India. It is
Flagship Company of Jindal Group set up in 1970 under the visionary of Mr.
O.P.Jindal. Jindal Organization is ranked fourth amongst the top Indian Business
houses.
The company initiates developing new market for its stainless steel products around
four to five years back and has been able to achieve compounded average growth.
Jindal is the leader in domestic market of stainless steel and it is trying to become a
major player in international market. With a market share of 50% in India, it also
exports to various countries across the globe. Jindal stainless is the only company in
India which has the composite stainless steel plant for the manufacture of Slabs,
Blooms, Hot rolled and Cold Rolled Coils.
This study is carried out keeping in the interests of Jindal Strips Limited and hence it
becomes important to have an insight of the domestic market and export potential in
the Chinese market.

OBJECTIVES OF THE STUDY

1. To study various global marketing strategies
2. This study highlights the export potential of Jindal Strips Limited in China.
3. This study may help Jindal Strips Limited in identifying new markets.
4. This study would present the strategic alliances that Jindal Strips limited can
form to reduce the risk in the market.

A global industry is an industry in which the strategic positions of competitors in

major geographic or national markets are fundamentally affected by their overall
global positions. A global firm is a firm that operates in more than one country and
captures R&D, production, logistical, marketing, a financial advantages in its costs
and reputation that are not available to purely domestic competitors. Global firms
plan, operate, and coordinate their activities on a worldwide basis. Fords world
truck has a European-made cab and a North American- built chassis, is assembled
n Brazil, and is imported into the United States for sale. Otis Elevator gets its door
systems from France, small geared parts from Spain, electronics from Germany, and
special motor drivers from Japan; it uses the United States for systems integration. A
company need not be large to sell globally.

Developing an International Marketing Strategy

An international marketing strategy involves developing and maintaining a strategic fit
between the international company's objectives, competencies, and resources and
the challenges presented by its international market or markets. (Terpstra, V. and
Sarathy, R., 1997) As such, the international strategic plan forges a link between
the company's resources and its international goals and objectives in a complex,
continuously changing international environment. Given the changing nature of the
environment, the international company's strategic plan cannot afford a typical longterm focus (a five- or ten-year plan); rather, the planning process must be
systematic and continuous, and it must re-evaluate objectives in light of new
opportunities and potential threats. (Carol Graham, 2001)
Another dimension of international marketing strategy is linked to the company's
commitment to its international markets. Some companies use interna tional
marketing only to test the waters or to unload overproduction. (Carol Graham,
2001) This approach to international marketing, although it might open long-term
opportunities to the company, does not indicate a substantial commitment to

internationalization and is not a premise for success in the long term in

international markets. A long-term international commitment that entails substantial
investment in terms of resources and personnel is likely to bring the company the
greatest rewards in the long run. Such a strategy will make the company a stronger
competitor in the world market, as well as at home.
International strategic planning takes place at different levels(Isobel Doole and Robin
Lowe, 2003):
At the corporate level, the strategic plan allocates resources and establishes
objectives for the whole enterprise, worldwide. The corporate plan has a
long-term focus and involves the highest levels of management. PepsiCo
Beverages

headquarters

(including

its

international

headquarters)

are

located in Purchase, New York, USA. The company's corporate plan is

developed here.
Frank Bradley and Michael Gannon (2000) proposes that planning at this level
involves international target market selection decisions:

At the division level the strategic plan allocates funds to each business unit
based on division goals and objectives. In the PepsiCo example, its division
for Eastern Europe is located in Vienna, Austria. From there, the company
coordinates all local (country-level) operations. At this point, Pepsi may
use various portfolio analysis tools to decide which brands to harvest, to
invest in, or to divest, and plan its resources accordingly.

At the business unit level, within each country, decisions are made regarding which
consumer segments to target. At this level, Pepsi develops a strategic plan.

At the product level (line, brand), a marketing plan is developed for achieving
objectives.

PepsiCo's

marketing

plan

for

Poland,

for

example,

might

include increasing the consumption of Pepsi and Pepsi Light and launch ing
Pepsi Max beyond the cities of Warsaw, Krakow, Wroclaw, and Poznan.
DEVELOPING AN INTERNATIONAL MARKETING PLAN
At this stage of the planning process, the international company develops a marketing plan. Assuming that the company has already analyzed its marketing
opportunities and researched and selected the target market, it must now (Terry
Hennessy, 1999)

Develop marketing strategies for the target market, deciding on the prod
uct mix for the local target market, as well as on the other components of
the marketing mixdistribution, promotion, and pricing.

Plan the international marketing programs.

Manage (organize, implement, and control) the marketing effort.

The decision on which elements of the marketing mix to use in a particular target
market is closely linked to the product's life cycle and to the market entry strategy
selected: A product in the early stages of its life cycle, such as the Palm Pilot, will
most likely be sold to consumers in highly industrialized countries for a high price,
accompanied by heavy promotion. (Isobel Doole and Robin Lowe, 2003) A product
will most likely be manufactured in a developed country and exported to the rest of
the world. Alternatively, a product in the later stages of its life cycle, such as a
videocassette recorder, will be sold to consumers worldwide, regardless of country
development level. The company selling the product will heavily compete on price
and, thus, most likely manufacture the product in a developing country where labor

is inexpensive, to sell all over the world. Most likely, the company will have at least
one subsidiary located in the country of product manufacture. (Carol Graham, 2001)
Insights into the marketing strategies that companies use to target interna tional
markets reveal that marketing mix decisions are complex and based on extensive
research. Kraft Foods (www.kraftfoods.com), for example, has made interesting
product mix decisions: It sells coffee products and confectionery products that
cover the spectrum of target consumersand the brands often cannibalize.
Among the many brands of coffee Kraft Foods offers are:

Jacobs coffee: This product sells mainly in Central and Eastern Europe.
Jacobs coffee is popularly known as a quality German brand. Because con
sumers in Central and Eastern Europe have traditionally had frequent
interaction with German consumers and have acquired a taste and prefer
ence for German brands, marketing the Jacobs brand in this region was
appropriate. Had Kraft brought the product to the United States, it would
have had to challenge quality perceptions of bulk coffee associated with
developing countries in Latin America (Colombia and Guatemala, in par
ticular) and Africa (Kenya, especially) and value perceptions held by store
brands and other low-priced national brands such as Folgers and Kraft's
own Maxwell House. (Dana-Nicoleta Lascu 2003)

Gevalia coffee: This brand is aimed at the Scandinavian market and

imported into the United States as a gourmet product sold exclusively by
mail order.
Among the numerous confectionery products Kraft offers are the following:

Milka: Kraft Foods is now importing its European Milka brand of choco
late into the United States, selling it primarily through chain stores such as
Target. Mass-market consumers in the United States are increasingly
replacing favorite local candy bars with products that are perceived as
more sophisticated and that are available at competitive prices. (Dana-Nicoleta
Lascu 2003) Competitors such as Ferrero Rocher and Dove have had great
success with the pre mium chocolates they sell in the U.S. market, and they are
increasingly placing their products in the impulse-purchase section, by the cash
register. Kraft's Milka is using a similar strategy, selling its basic-milk chocolate
with the picture of a Swiss cow in the Alps on the packaging at Target
stores. Milka also is available in a wider selection at shops that specialize in
foreign gourmet foods. (Frank Bradley and Michael Gannon, 2000)

Suchard:

Kraft

Foods

is

restricting

the

distribution

of

its

premium

chocolate Suchard to Western Europe. Suchard has been for decades the
traditional

competitor

to

Lindt

in

the

premium

chocolate

market

in

Europe. The Suchard name has long been associated with French-speaking
Switzerland, and most European consumers do not know that it is owned
by an American company.

Toblerone: Kraft is distributing its Toblerone chocolate brand extensively,

all over the world.

Kraft also has numerous brands that are restricted to a few markets. Among them
are Daim, aimed at Scandinavian consumers, and Bis, aimed at Argentina and
Brazil.

Kraft Foods, a company based in the United States, has different mix strategies for
each market. And it sells to the U.S. consumer only a fraction of its international
offerings, some of which are positioned as premium European imports. It should be
mentioned that companies with more limited resources will very likely be more
restricted in their worldwide market coverage.
Companies entering more and more countries in search of new markets are likely
to face increasing difficulty in continuously monitoring and controlling their
international operations. These firms must monitor not only the constantly changing
marketing environment, but also changes in competitive intensity, in competitor
product/service quality strategies, in supply chains, and in consumer expectations.
(Dana-Nicoleta Lascu 2003)