SUMMER TRAINING PROJECT REPORT ON

EVALUATION OF SAIL’S RETAIL MODEL COMPARED TO THE

COMPETITORS

STEEL AUTHORITY OF INDIA

FOR THE PARTIAL FULLFILLMENT OF THE REQUIREMENT FOR THE AWARD

OF

POST GRADUATE DIPLOMA IN BUSSINESS MANAGEMANT

SUBMITTED BY

NEHA NAYYAR

PGDBM 2009 – 2011

1
CERTIFICATE

2
 ACKNOWLEDEGEMENT

This experience with STEEL AUTHORITY OF INDIA LTD. could not have been more
enriching. The company gave me an excellent opportunity to learn the true dynamics of the
market.

I would like to take up this opportunity to heartily thank Mr.Vivek Singh, Senior Manager
(Marketing-LP) NR for guiding me throughout the project. The learning made would not
have been possible without his invaluable guidance. I would like to express my sincere
gratitude to Mr.V. K. Pandey, DGM (MAG) & Mr.Pritam Saha, AGM(M-Retail) NR for
extending their valuable support to me during project.

I would also like to thank all SAIL executives across Delhi, Faridabad and Ghaziabad
branches for supporting me throughout the project. They extended their best support, taking
time out of their busy schedules. I would specially like to mention Ms. Meena Sharma as she
was the first person who guided throughout the project.

This project would not have been possible without the help of the above mentioned anf all
else whose names I may have missed out.

Thanking You

Neha Nayyar

NIILM-CMS

3
 EXECUTIVE SUMMARY

As a Commercial organisation dealing with production and marketing of Iron & Steel,
maximising returns under the prevailing marketing conditions are of critical importance for
Steel Authority of India Limited (SAIL). Under present marketing conditions, SAIL has to
compete with other players in domestic & foreign markets.
The project covers the EVALUATION OF SAIL’S RETAIL MODEL COMPARED TO
COMPETITORS. It also includes dealer’s activities evaluation and their scope of
improvement. So that SAIL can revamp its retail model in order to have maximum outreach
to the end consumer. For this first I studied the present retail model. Followed by a market
research to study the present standing of the channel. Then I gave my recommendations on
the bases of analysis done of data collected, about how we can be the market leader.

4
 TABLE OF CONTENT

CHAPTER ONE

COMPANY PROFILE:

 Vision, Mission, Value

 Overview
 Brief details of
 SAIL Integrated Plants
 SAIL CMO and ITD
 Product and their Applications
 Dealer Network
 Company at present

CHAPTER TWO

PROJECT ON RETAIL CHANNEL EVALUATION.

 SAIL Dealership Scheme

 Number of dealer in branch of Northern Region
 Objective of study
 Research Methodology
 Survey Analysis with Graphs
 Conclusion
 Scope of Improvement
 Questionnaire
 BIBLIOGRAPHY

5
 THE COMPANY

“There’s a little bit of Sail in everybody’s life”

- Goes the brand tagline

Steel Authority of India Limited (SAIL) is the leading steel-making company in India.
With a turnover of Rs. 43,935 crore, the company is among the four Maharatnas of the
country's Central Public Sector Enterprises. It is a fully integrated iron and steel maker,
producing both basic and special steels for domestic construction, engineering, power,
railway, automotive and defence industries and for sale in export markets.
 

6
 COMPANY PROFILE
SAIL is India’s largest steel producer with a turnover of Rs. 40,551 crore in 2009-10

It operates and owns five integrated steel plants at Bhilai, Durgapur, Bokaro, Rourkela and
Burnpur and three speciality steel plants at Salem, Duragapur and Bhadravati. A subsidiary at
Chandrapur produces ferro alloys.

It is one of the Largest Producer of Iron Ore in India with 23.4 MT productions in the year
09-10.

SAIL’s countrywide network comprises 37 Branch Sales Offices, 67 Warehouses, 26

Customer Contact Offices. With total number of dealers reaching 2500, SAIL has its
presence in almost all districts of the country.

To develop new technology for the steel industry and achieve world standards in quality,
SAIL has a well equipped Research &Development centre for Iron &steel at Ranchi. Besides,
it has its in house Centre for Engineering &Technology, the management Training Institute
and Safety Organisation at Ranchi.

The company is presently implementing a massive expansion plan to increase its hot metal,
crude steel and saleable steel production. The ongoing expansion has been planned to achieve
saleable steel production of 20.23 million tonne, at a cost of Rs. 37,000 crore (USD 8 billion)
approximately by 2012.

SAIL has successfully planted seeds of promise, strengthening the nation and touching the
lives of millions as largest steel producer of the country. SAIL has been fulfilling
responsibilities that came with it.

7
 HISTORY

A Rich Heritage

The Precursor

SAIL traces its origin to the formative years of an emerging nation - India. After
independence the builders of modern India worked with a vision - to lay the infrastructure
for rapid industrialisation of the country. The steel sector was to propel the economic
growth. Hindustan Steel Private Limited was set up on January 19, 1954.

Expanding Horizon (1959-1973)

Hindustan Steel (HSL) was initially designed to manage only one plant that was coming up
at Rourkela. For Bhilai and Durgapur Steel Plants, the preliminary work was done by the
Iron and Steel Ministry. From April 1957, the supervision and control of these two steel
plants were also transferred to Hindustan Steel. The registered office was originally in New
Delhi. It moved to Calcutta in July 1956 , and ultimately to Ranchi in December 1959.

The 1 MT phases of Bhilai and Rourkela Steel Plants were completed by the end of
December 1961. The 1 MT phase of Durgapur Steel Plant was completed in January 1962
after commissioning of the Wheel and Axle plant. The crude steel production of HSL went
up from .158 MT (1959-60) to 1.6 MT. A new steel company, Bokaro Steel Limited, was
incorporated in January 1964 to construct and operate the steel plant at Bokaro. The second
phase of Bhilai Steel Plant was completed in September 1967 after commissioning of the
Wire Rod Mill. The last unit of the 1.8 MT phase of Rourkela - the Tandem Mill - was
commissioned in February 1968, and the 1.6 MT stage of Durgapur Steel Plant was
completed in August 1969 after commissioning of the Furnace in SMS. Thus, with the
completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela and 1.6 MT at Durgapur, the
total crude steel production capacity of HSL was raised to 3.7 MT in 1968-69 and
subsequently to 4MT in 1972-73.

Holding Company

The Ministry of Steel and Mines drafted a policy statement to evolve a new model for
managing industry. The policy statement was presented to the Parliament on December 2,
1972. On this basis the concept of creating a holding company to manage inputs and
outputs under one umbrella was mooted. This led to the formation of Steel Authority of
India Ltd. The company, incorporated on January 24, 1973 with an authorized capital of
Rs. 2000 crore, was made responsible for managing five integrated steel plants at Bhilai,
Bokaro, Durgapur, Rourkela and Burnpur, the Alloy Steel Plant and the Salem Steel Plant.
In 1978 SAIL was restructured as an operating company.

Since its inception, SAIL has been instrumental in laying a sound infrastructure for the
industrial development of the country. Besides, it has immensely contributed to the
development of technical and managerial expertise. It has triggered the secondary and
tertiary waves of economic growth by continuously providing the inputs for the consuming
industry

8
 VISION

To be a respected world-class corporation and the leader in Indian Steel business in quality,
productivity, profitability and customer satisfaction.

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 support flexibility, learning and is proactive to
change.
 We chart a challenging career for employee with opportunities for advancement and
rewards.
 We value the opportunity and responsibilities to make a meaningful difference in
people’s lives.

9
 Plants
Bhilai Steel Plant
Nine - times winner of Prime Minister's Trophy for best
Integrated Steel Plant in the country, Bhilai Steel Plant
(BSP) is India's sole producer of rails and heavy steel
plates and major producer of structural. The plant is the
sole supplier of the country's longest rail tracks of 260
metres. With an annual production capacity of 3.153 MT
of saleable steel, the plant also specializes in other
products such as wire rods and merchant products. Since
BSP is accredited with ISO 9001:2000 Quality
Management System Standard, all saleable products of
Bhilai Steel Plant come under the ISO umbrella. 

At Bhilai IS0:14001 has been awarded for Environment Management System in the Plant,
Township and Dalli Mines. It is the only steel plant to get certification in all these areas. The
Plant is accredited with SA: 8000 certification for social accountability and the OHSAS-18001
certification for Occupational health and safety. These internationally recognised certifications
add value to Bhilai's products and helps create a place among the best organisations in the
steel industry. Among the long list of national awards it has won, Bhilai has bagged the CII-
ITC Sustainability award for three consecutive years. 

10
BOKARO STEEL PLANT - A PARTNER IN NATION BUILDING

History

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 susidiary 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 country’s

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'
modernisation has further upgraded this to 4.5 MT of
liquid steel. 

The new features added in modernisation 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 modernisation of the
Hot Strip Mill saw addition of new features like high
pressure de-scalers, 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.

A new hydraulic coiler has been added and two of the existing ones revamped. With the
completion of Hot Strip Mill modernisation, 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
Galvanised 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.

11
DURGAPUR STEEL PLANT

Set up in the late 50's with an initial annual capacity of one

million tonnes of crude steel per year, the capacity of
Durgapur Steel Plant (DSP) was later expanded to 1.6 million
tonnes in the 70's. A massive modernisation programme was
undertaken in the plant in early 90's, which, while bringing
numerous technological developments in the plant, enhanced
the capacity of the plant to 2.088 million tonnes of hot
metal,1.8 million tonnes crude steel and 1.586 million tonnes
saleable steel. The entire plant is covered under ISO 9001: 2000 quality management system.

The modernized DSP now has state-of –the-art technology for quality steel making. The
modernized units have brought about improved productivity, substantial improvement in
energy conservation and better quality products. DSP’s Steel Making complex and the entire
mills zone, comprising its Blooming & Billet Mill, Merchant Mill, Skelp Mill, Section Mill
and Wheel & Axle Plant, are covered under ISO: 9002 quality assurance certification.

With the successful commissioning of the modernized units, DSP is all set to produce 2.088
million tones of hot metal, 1.8 million tones of crude steel and 1.586 million tones of saleable
steel annually.

12
ROURKELA STEEL PLANT

Rourkela Steel Plant (RSP), the first integrated steel

plant in the public sector in India, was set up with
German collaboration with an installed capacity of 1
million tonnes. Subsequently, its capacity was
enhanced to 1.9 million tonnes.

The plant was modernised in the mid-1990s with a

number of new units having state-of-the-art facilities.
Most of the old units were also revamped for effecting
substantial improvement in the quality of products, reducing cost and ensuring cleaner
environment.

RSP was the first plant in India to incorporate LD technology of steel making. It is also the
first steel plant in SAIL and the only one presently where 100% of slabs are produced
through the cost-effective and quality-centric continuous casting route.

RSP presently has the capacity to produce 2 million tonnes of hot metal, 1.9 million tonnes
of crude steel and 1.67 million tonnes of saleable steel. It is SAIL’s only plant that produce
silicon steels for the power sector, high quality pipes for the oil & gas sector and tin plates
for the packaging industry. Its wide and sophisticated product range includes various flat,
tubular and coated products. 

Almost all major units of the plant, including its Personnel Department and Steel
Township, are certified to ISO:9001 standards. RSP’s Silicon Steel Mill, Sintering Plant II,
Environment Engineering Department, Plate Mill, Hot Strip Mill, ERW and SW Pipe
Plants, Special Plate Plant as well as Steel Township have been awarded ISO:14001
certification for Environment Management.

13
IISCO STEEL PLANT (ISP)

IISCO Steel Plant (ISP), an integrated steel plant in Burnpur, has the capacity to produce
4.26 lakh tonnes of saleable steel and 2.54 lakh tonnes of pig iron annually. ISP, the
erstwhile Indian Iron & Steel Company (IISCO), which was a 100% subsidiary of Steel
Authority of India Limited (SAIL) has been amalgamated with the parent company with
effect from 16 February 2006.

ISP produces a large number of steel structural’s and special sections as well as pig iron.
the plant pioneered the production of centre –sill Z-section used in the fabrication of
wagon and Z-type sheet piling section used in construction of barrages, bridge foundations
and other projects and colliery arch section used for roof support in collieries. The plant
has also developed ‘slit rolling’ for small diameter rounds (10 mm and 12 TMT), which are
in high demand in the domestic market.

The plant is set to undergo modernisation-cum-capacity expansion though which its hot
metal production capacity will be raised to 2.5 MT by 2011-12.

ISP is accredited with ISO 9001:2000 QMS for its Heavy Structural Mill and Merchant &
Rod Mill. It has also been awarded ISO 14001:2004 EMS for its entire Rolling Mill
Complex. 

Location 
ISP is situated at Burnpur near Asansol in the Burdwan district of West Bengal.

14
Alloy Steels Plant

The pioneer in the production of

alloy and special steels. Alloy
Steels Plant (ASP), Durgapur
was commissioned with an initial
capacity of 1,00,000 tonnes of
ingot steel and 60,000 tonnes of
saleable steel. Through two
phases of expansion and
modernization, the capacity has
been revised to 2.46 lakh tonnes
of liquid steel and 1.78 lakh
tonnes of saleable steel.

Recipient of ISO-9001 (2000)

certification for the entire plant, ASP is equipped with state-of-the-art technology for
producing world-class quality alloy and special steels. The plant has one slab-cum-twin
bloom continuous casting machine, the only one of its kind in India. It is specially
designed for casting special steels like Austenitic and Ferritic stainless steel and a variety
of non-stainless steels including bulletproof steel. The continuous casting machine is
equipped with a state-of-art Electro-Magnetic Stirrer in its mould for casting Blooms.

ASP has the capacity to produce Slabs, Blooms, Bars, Plates and Forged items of over 400
grades in a wide range of sizes. 
It also produces value added items like Cold Rolling Mill rolls, Concast rollers, crane
wheels, springs, hammers, grate bars, hot saw blade, shear blade, bright bar, stainless steel
liner plate, etc. ASP is also supplying import substitution item components to many
customers through established conversion agents.

15
MAHARASHTRA ELEKTROSMELT LTD. 

Maharashtra Elektrosmelt Ltd (MEL) is a Subsidiary of Steel Authority of India Ltd, a

Government of India Enterprise and the largest Manganese based Ferro Alloy producer in
the country.

MEL has an installed capacity of 1,00,000 TPY equivalent Ferro Manganese. The product
range of MEL includes High Carbon Ferro Manganese, Silico Manganese and
Medium/Low Carbon Ferro Manganese. It is accredited with Quality Assurance Certificate
ISO 9001:2000. 

MEL's major infrastructure facilities include two nos. of 33 MVA Submerged Electric Arc
Furnaces for the production of ferro alloys, Manganese Ore Sintering Plants, Furnace gas
based Power Plant and one small Electric Arc Furnace for the production of MC

16
SAIL Consultancy Division (SAILCON)

SAIL, during its existence of over four decades, has acquired a high level of expertise and
vast experience in building, operation and maintenance of integrated and mini steel plants
and associated facilities encompassing diverse technologies, equipment and products-mix.
The knowledge thus gained led to formation of a consultancy and services marketing
division – SAIL Consultancy Division (SAILCON), based in Delhi, to provide a wide
range of services to the iron & steel and other industries in India and abroad.

SAILCON is a single window at SAIL catering to clients across the world, providing
design, engineering, technical, management and training consultancy and services
available from various SAIL plants and units. It is an ISO: 9001:2000 certified
organization equipped to render quality services from concept to commissioning.

17
Central Marketing Organisation

ISO 9001:2000 certified Central Marketing Organisation ( CMO ) is India’s largest

industrial marketing set-up. It markets carbon steel produced by the five integrated steel
plants of SAIL. Headquartered in Kolkata, it transacts business through its network of 37
Branch Sales Offices spread across the four regions, 25 departmental Warehouses
equipped with mechanised handling systems, 42 Consignment Agents and 26 Customer
Contact Offices. CMO’s domestic marketing effort is supplemented by its ever widening
network of rural dealers who meet the demands of the smallest customers in the remotest
corners of the country. With the total number of dealers crossing 2,000, SAIL's wide
marketing spread ensures availability of quality steel in virtually all the districts of the
country. CMO through its joint venture partner M/s Metal Junction has simplified steel
buying by providing net based facilities through its on line ‘e store’, providing door
delivery facilities to small house-builders.

A strong IT support system enables real-time network connectivity within the entire CMO
network. Extensive customer contact, product and segment specialization, close monitoring
of order servicing and feedback analysis through a Customer Satisfaction index are
established norms at CMO. The customer-friendly approach of CMO is backed by
practical after-sales service. Through the process of Key Account management, CMO
provides single-window service to key customers across the country for every business
transaction from enquiry to order booking, order tracking to delivery, and even consultancy
and after-sales service. 

CMO’s International Trade Division

International Trade Division ( ITD), in New Delhi- an ISO 9001:2000 accredited unit of
CMO, undertakes exports of Mild Steel products and Pig Iron from SAIL’s five integrated
steel plants. Ever ready to meet the exacting demands of its global customers, ITD
maintains a close liaison with customers and the production units to cater to the customized
requirements of its customers both in terms of quality and sizes. 

SAIL’s product basket includes products such as Rails, Structurals, Merchant Products,
Wire Rods, Re-Bars, Plate Mill Plates, Hot Rolled Coils, Hot Rolled Plates/ Sheets, Cold
Rolled Steels, Galvanised Steels, Cold Rolled Non Oriented ( CRNO ) coils, Chequered
Plates, Slabs, Billets and Pig Iron besides cut-to-size Hot Rolled and Cold Rolled materials
through its joint venture service centre. Our major products are also covered by stringent
certifications such as CE marking TUV and ‘U’ mark required by sophisticated uses in
European markets. 

ITD has successfully established SAIL’s brand name globally. Among the notable
destinations for SAIL products are Japan, P.R. of China, Korea, Taiwan, Vietnam,
Philippines, Singapore, Malaysia, Thailand, Indonesia, Australia, Mexico, Europe (UK,
Germany, France, Belgium, Italy, Spain, Netherlands, Portugal), Sudan, Oman, UAE and
the neighbouring countries such as Myanmar, Bangladesh, Sri Lanka and Nepal. 

The Transport & Shipping Division of CMO headquartered at Kolkata with its branch

18
offices at Haldia, Paradip, Vizag and Kolkata ports, ensures timely import of the key
ingredient in steel making, coking coal and handles its entire logistics. It also caters to
other plant imports and ensures efficient dispatch of steel exports. 

Both ITD and T&S are accredited with ISO 9001:2000 certification. 

19
Applications

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 and silicon 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.

Plates:

Steel plates are used mainly for the manufacture of

bridges, steel structures, ships, large diameter pipes,
storage tanks, boilers, railway wagons and pressure
vessels. 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.

20
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 products
generally 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.

Railway Products:

Railway products, including rails, wheels and axles, sleeper and fish
plates (which are used to connect and strengthen rails), are produced
through a process of hot rolling blooms in the finishing mills and
forging ingots and blooms in the forging press or hammer. Railway
products are used primarily to upgrade and expand the existing
railway network in India.

Structural’s: 

Structural steel products are produced through a process of hot

rolling in the section or structural mills. They are long steel
products with cross sections of various shapes. I-beams, channels
and angle steel are used in mining, the construction of tunnels,
factory structures, transmission towers, bridges, ships railways and
other infrastructure projects.

Bars and Rods: 

The company produces steel bars and rods through a process of hot
rolling billets in the finishing mills. Reinforcement steel 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.

21
Speciality Products: 

Speciality products include electrical sheets, tin plates and pipes.

Electrical sheets are cold rolled products of silicon steel for
electrical machinery. Tin plates are cold rolled steel electrolytically
coated with tin for food packaging. Pipes are longitudinally or
spirally welded from hot rolled coils for conveying such things as
water, oil and gas.

Alloy and Stainless Products 

In addition to the steel products indicated above, SAIL produces a wide range of alloy steel
products at ASP,SSP and VISL. Elements including chromium, nickel, vanadium and
molybdenum are used in the alloy mixture to impart special properties to steel. These alloy
steels are primarily used for sophisticated applications, including in the automobile, railway
and defence industries. 

A wide variety of alloy and stainless steel plates, hot rolled sheets, cold rolled sheets, bars,
billets, blooms, forgings and die blocks are manufactured at ASP in an Electric Arc
Furnace. SAIL is able to produce different qualities of alloy steels to meet the requirements
of its customers. To increase steel's corrosion resistance properties, nickel and chromium
are used in the making of stainless steel. SSP produces cold rolled stainless steel coils and
sheets with thickness ranging from 0.3 mm to 6 mm and width ranging from 500 mm to
1,250 mm. These materials can be produced in a large number of grades for different
applications. Stainless steel products are used for diverse applications including household
utensils, automobile trims, conveyor belts, elevators, chemical and food processing
equipment, building and interior decoration and pharmaceutical equipment.
 

22
 SAIL Dealer Network

SAIL has a country-wide network of over 2000 dealers and still growing. This is in addition
to its stockyards and offices across India Offering branded SAIL products. This network
ensures availability of quality steel in virtually all the districts of the country. Even as SAIL
proudly declares its contribution to projects of national importance, it works towards
empowering the smallest steel consumer in the remotest corner of the country, to enable him
build long-lasting, cost-effective and safe structures.

OBJECTIVE of SAIL is to establish a wide distribution network for branded products of

SAIL and to increase its reach, to promote and popularize SAIL products, to improve market
share in the long run.

23
The products that are covered under this scheme are TMT bars/ coils, GP Sheets/ coils &
GC sheets, Converted Products. SAIL also considers supply of small quantity of Light
Structural /MS Wire Rods 5.5mm to 8mm/ HR/CR sheets (up to 20 tons max per month)
within the overall agreed quantities.

The PRICE AND COMMERCIAL BENEFITS which are given by SAIL

1) SAIL materials are delivered according to the SAIL Dealership scheme at the monthly
notified prices against payment in advance. For extending secured credit beyond 15 days, the
same will be on interest bearing basis as permissible under Credit Policy. Dealer can be
entitled to equivalent cash discount in lieu of 15 days Interest Free Credit component when
sale to dealer are on cash and carry basis.
2)It fix a Maximum Recommended Retail Price (MRRP) exclusive of levies, duties,
VAT/Sales Tax, octroi, which are to be added extra as applicable for the products to be sold
by the SAIL Dealer.
3) SAIL Dealers has to display the MRRP prominently at their premises and obliged to
charge to their customers at prices within MRRP.

ANNUAL AWARD FOR DEALERS Top 15 dealers based on evaluation i.e. adding new
customers, improving brand image, consistent availability of product, annual commitment
etc. in each Region are awarded at various levels.

FINANCIAL ARRANGEMENTS TO BE MADE BY THE SAIL DEALER

Under General category furnish a Security Deposit @Rs.500/MT of agreed monthly off-take
through DD/PO, payable at Branch locations, within 15 days of the date of letter of Intent for
appointment issued to the dealer. Security Deposit need not be paid by the SAIL Dealers
under SC/ST and OBC categories or for Partnership Firm/Companies where majority of
Partners/Directors belong to SC/ST/OBC categories. No interest is pay on the security
deposit. On request of SAIL Dealers, SAIL may consider further extension of time for
payment of security deposit by 15 days at a time. 

AGREED OFF-TAKE:
The monthly off-take for SAIL Dealer is generally restricted to 100 MT cumulative at any
location and upto a maximum of 200 tons subject to availability of materials. Shortage
material is fulfilled on next month.
 

The TENURE is that the SAIL Dealer is initially appointed for a period of two years,
extendable by one year at a time.

24
The TERMINATION CLAUSE is that if any dealer repeated failures (more than two
quarters) in lifting the agreed quantity by the SAIL Dealer, for reasons not attributable to
SAIL, or SAIL can terminate the agreement at any time, by serving written notice of 15 days
on the SAIL Dealer after taking into account the following: Evaluated performance, Adverse
customer feedback, Repeated complaints regarding sales of material outside his assigned
jurisdiction, Unsatisfactory performance in any other respect, detrimental to the interest of
SAIL.

QUALITY COMPLAINTS:
a) It is Dealer's responsibility to provide all the post sales service with regard to his customers
including settlement of the quality complaints.
b) SAIL attend to the quality complaints only at Dealers premises. However, in exceptional
circumstances, SAIL, at its discretion, may also attend to quality complaints at the premises
of Dealer's customers.
c) All quality complaints are settled as per the quality complaint procedure of SAIL in vogue.

TERRITORIAL JURISDICTION:
The Dealer is to cater to the small/tiny demands of user/consumers within the territorial
jurisdiction assigned to the dealer by the Branch under whose jurisdiction the dealer operates.
More than one dealer can be appointed in one area. SAIL shall, however, retain the right to
sell directly within such jurisdiction.
 

MODALITIES OF PURCHASE:
The dealers have to purchase materials from the nominated SAIL Branch. Deliveries are from
stockyard/consignment agency yard/premises of conversion agent/ premises of de-coiling
agent/premises of service centres. Door delivery is given to customer free of cost (including
unloading also).

MAINTENANCE OF STOCKS, the Dealer has to maintain stocks of the relevant products
so that it material is available to small/tiny user/consumers on "Off-the-Shelf" basis.
Therefore, he may schedule his purchases and place indents on SAIL as per SAIL's order
booking and planning system in vogue to normally avoid any stock-out situation.

SALES PROMOTION:
The Dealer can also undertake Sales promotion of SAIL products, which are being sold
through him, subject to his promotional materials being cleared in advance by SAIL. All the
Dealers are required to display boards of uniform style/ color as provided by SAIL. The
maintenance and running expenditure in this regard is borne by the Dealer. The SAIL Dealer
can use the caption “Dealer of SAIL" in his letterhead and advertisement material.
Promotional Incentive is that Dealers who take up promotional steps like Hoardings, Wall-
paintings, and Newspaper/Cable TV Advertisement directly shall be entitled for a
reimbursement of a promotional incentive restricted to a maximum of Rs.100/- per ton of
actual lifting in the financial year. Re-imbursement may be effected on a quarterly basis
based on dealers self certification. It would be required for the display to depict SAIL logo

25
(except for Cable TV ads) and that the advertiser is an authorized dealer of SAIL for the
displayed products.

The SYSTEM OF FEED-BACK:

a) The Dealer is required to submit a monthly report on the performance to the concerned
Branch as per the format given below: -
(Qty.in M/T)
Sl. Plant Category Sales Stocks at the
No For the month Cumulative month end
b) In addition to (a) above, the Dealer is required to furnish the list of customer(s) dealt with
and quantity supplied to them, on a monthly basis to the concerned Branch.

MODALITIES FOR OPERATION OF THE DEALERSHIP

There is no restriction on the Dealer about the number of products that he like to deal in,
within the list of products covered by the scheme. Depending upon the extent of responses,
SAIL may decide about appointing a dealer to deal with one and/or more products.
 

GENERAL:
a) The Dealer who are appointed by SAIL will not deal with institutional customer/Industrial
units/ Govt. Deptts./ PSUs and Projects and not participate in any kind of tenders on behalf of
SAIL without the prior approval of the concerned Branch of SAIL. The Dealer is required to
serve such requirements as would be communicated to him by SAIL.
b) SAIL representative may inspect availability of materials at the premises of the Dealer
from time to time.
c) Applicants belonging in SC/ST and OBC category will be accorded preference in
appointment as a SAIL Dealer subject to their fulfilling the conditions and eligibility criteria
and subject to their furnishing documentary evidence of belonging to SC/ST/ OBC.
d) On appointment, an agreement containing the various Terms and conditions is signed
between the SAIL Dealer and SAIL
e) While evaluating applicants for appointment of SAIL Dealer, suitable weightage is given
by SAIL to such applicants who intend to deal exclusively with SAIL products.
f) A minimum qualifying criteria that the applicant should possess an office/retail outlet
besides a storage space of suitable capacity.

26
RECENT DEVELOPMENTS:

 15 new DMO – Dealer Marketing Officers have been posted all over India in 2009.

 Quarterly benefits introduced (ex. on doing 250% of committed qty).

 Introduced Light structural’s also introduced in 2009 (initially only TMT & GP/GC
was there)

 Initially Dealership commitment limit earlier was 100 MT is now been increased upto
300 MT.

 GP Lifting limit was 100 MT, Increased to 200 MT.

 16 new exclusive dealers have been appointed in northern region, who will be dealing
only in sail products.

 We have taken last year stringent action against non performers(above 100 in NR
itself removed due to non performance ).

 From 2009 onwards procedure regarding appointment of dealers has been changed.
From now on its all done through internet.

 Now predominant product wise RM & BM are main dealership looking officers,
instead of senior RM or BM (last yrs development)

27
PROPOSED CHANGES EXPECTED IN FUTURE:
 Structural changes in our own organization. Dealer marketing officer may be report to
regional dealer managers. Now they are reporting to Sr. BM.

 Centralized & independent approach - Independent advisable command & with own
Ed’s (Introduced on 06/-7/2010 with independent command str. Headed by a GM).

 Flat & long product dealership may be totally differentiable

 Channel of distribution change– A major ‘Distributor’ may be appointed who may

distribute to small retailers.

 Major cities Guys can become wholesale financer CUM our Distributor. Which would
result in
 Ease of reach to distributors
 Control over small GP packaging
 Availability of credit facility
 Transportation problem

28
RESEARCH METHODOLOGY

Methodology is concerned with the procedure followed to accomplish the task.

SAMPLE:

Delhi, Faridabad and Ghaziabad branches were taken into consideration. As no of dealer in
different branches was large, so only active dealers were selected. The questionnaire was
distributed roughly to 50 dealers, however only 34 properly filled were taken into
consideration.

METHOD FOR COLLECTION OF DATA-

1) Secondary Data was collected with the help of SAIL employees, from website,
from branch office etc.
2) Primary Data:-Questionnaire was used for research study was self developed.
Data was collected from dealer and later was processed and analyzed to reach
conclusion.

Type of question-
The responses format of question were-

a) Opened ended question: In this type of question I asked question openly and
they give answer based on their experience in dealing with company.
b) Closed Ended question: In this type of question I asked in which the dealers has
to only tick mark the answer according to their likes and dislikes.

PROCEDURE-

At first I visited the three branches in Delhi, Faridabad and Ghaziabad region of SAIL.
Where I meet the branch managers who gave insight into branch working and after that had a
visited to respective warehouse to understand the logistics functioning. Second phase
included collection of data from dealers with the help of questionnaire.

Questionnaires in which dealers left question unanswered/incomplete, were not considered

for analysis.

29
EVALUATION OF DATA:

Sample Data Findings

 Sample Size
 Total 45
 Responded = 34
 Not/Incompletely Responded = 11

 Distribution of responded sample

No. of Dealers
12.5
12
12 12
11.5
No. of Dealers
11
10.5
10
10
9.5
9
Delhi Faridabad Ghaziabad

S. No. Branch No. of Dealers

1 Delhi 12
2 Faridabad 12
3 Ghaziabad 10

30
Findings:-
 Reason for being a sail dealer.

6%

21%

Brand Name
Product Quality
Profit Margins

74%

 Of the total sample of 34, 73% became associated with company because of brand
name i.e. 25

No.s %
Brand Name 25 73
Product quality 7 21
Profit Margins 2 6

 Will you switch to competitor if provided with better services?

44%
Yes
No
56%

31
 44% i.e. 15 out of 34 dealers agreed they would switch to competitors if they are
provided with better services.

No.s %
Yes 15 44
No 19 56

 Effect of advertising & promotional activities on sales by the dealers end .

Chart Title
3%
6%

No change
38% 5 - 10 %
10 - 20 %
More

53%

 Interestingly where more than 60% dealers were in favour of promotional activities
and on the other hand 38% said it makes no difference.

Wall Paintings, Hoardings and Calendar are the main tools used for promotional
activities.

Effect No’s %
No change 13 38
5 – 10 % 18 53
10 – 20% 2 6
More 1 3

 Perception of customers towards brand SAIL

32
 15%

41%
Very good
Good
Average
Unaware

44%

 Sail has established itself a powerful brand.

Brand Perception No.s %

Very good 14 41
Good 15 44
Average 5 15
Unaware 0 0

 Quality measure of Sail products compared with the competitor’s

Chart Title

24% 24%
Much Better
Better
Similar
3% Bad

50%

33
 Though more than 70% dealers were satisfied with quality of sail products but 24%
were disappointed.
 Galvanized products and conversion materials were the areas where sail was losing its
business to competitor’s especially to secondary producers.

Quality comparison No.s %

Much Better 8 23
Better 17 50
Similar 1 3
Bad 8 24

 Dealer’s satisfaction with the profit margins.

Chart Title
12%

35% Very much Satisfied

Avg satisfied
No satisfied

53%

 Majority of the dealers i.e. 65% think that more work could be done in this area.
 Few of them even disclosed that if given better margins they would switch to
competitors.

Dealers satisfaction No.s %

Very much satisfied 12 35
Average satisfaction 18 53
Not satisfied 4 12

34
 What could be area of improvements:

 Quality standards to be maintained (spl for galvanized products) i.e. GP/GC sheet
and coil.
 Timely Delivery of materials
 Better material packaging
 Faster administration procedures
 Introduce more product mix in terms of size

 Additional services which dealers like to have are:

 Credit Facility
 Earlier Delivery(within 24 hrs)
 Facility to measure weights

35
RECOMMENDATION:-

As SAIL is growing from year to year therefore it is very much important for them to sustain
its loyal customers for longer period. There are lots of competitors in market like Tata, Essar
Steel, Jindal Steel etc. For this they have to do improvement time to time in order to tackle
their competitors and for further growths.

Therefore there are lot of scope still remaining in the improvement specially for dealers in
SAIL in order to achieve their objective. Following are few points of improvement which
they can do to improve, sustain and grow:-

1) Quality standards to be given the priority.

2) Better material packaging technique to be adopted.

3) Strengthening of market research must be done in order to track down

 Latest trends in the market
 Moves of competitors
 Regular feedback from dealers

4) Faster reflexes to the changes taking place in the market environment.

5) Online order tracking facility at dealers end must be available.

6) More selling and marketing through E-commerce route to be promoted.

7) Marketing and promotional activities should be done through TVC, print media,
internet etc in order to promote and increase the visibility of brand SAIL by the
company itself.

8) New schemes for dealers to be introduced on regular bases.

36
Questionnaire:
Name of dealer :- Date : -

location :- company associated with :-

1. What was the reason that you became the dealer of this company?
a. Brand name
b. Product quality
c. Income

2. If any other company provide you the same product at lower rates irrespective of their composition
will you switch over?
a. Yes
b. No.

3. Do you use any type of advertisement to attract the customer and make them aware about your
brand?
a. Yes. (specify)
b. No.

4. Percentage increase in sale due to advertisement?

a. Approx 5% to 10%
b. Approx 10% to 20%
c. More
d. No change

5. What is the brand image of your brand in the minds of customer?

a. Very Good
b. Good
c. Average
d. Or they are not aware.

6. Are you satisfied with the services provided to you?

a. Yes
b. No.

7. According to you how do you think about the quality of your product as compared to its competitors?
a. Excellent
b. Better
c. Good
d. Bad
e. No comparison.

8. Are you satisfied with the rates at which you get the commodities?
a. Very much satisfied
b. Satisfied

37
 c. Average satisfied
d. Not satisfied.

9. Who according to you are the major competitors operating in your area?
a. TATA
b. SAIL
c. Essar
d. Jindal
e. Local/Others retailers.

10. Are you satisfied being associated with the concern company?
a. Yes
b. No.

11. Which area according to you needs improvement?

12. Other facilities which you want from the company?

38
39