TINPLATE Company of India – Need for a conceptual focus

An analysis of formulating a marketing mix where regulatory mechanisms

are not stringently implemented

Presented by:
Thomas Mathai
Sandeep Reddy
Vignesh Ravi
Mano Vignesh
 Tinplate Company of India Ltd (TCIL)

Battery Edible Oil

• Tinplate packing material supplier to manufacturers of 10%
• Edible Oil • Crown 18% 28%
• Battery • Processed food 45%
54%
45%
Segment Industry Volume TCIL Market Share % TCIL Revenue TCIL Profit Bottomline
Battery 10000 10% 35450000 6000 6000000 TCIL UNORGANIZED
TCIL FRITZ SUKAI SAIL
Edible Oil 148000 28% 1071224000 3000 124320000
Crown 15000 10% 44925000 3000 4500000
Crown Processed Food
Processed Food 35000 22% 259490000 5500 42350000
10%
Total 208000   1411089000   177170000
22%
45%
SEGMENT TCIL Topline TCIL Bottomline TCIL Profitability Industry Topline 45% 78%
Battery 3% 3% 17% 9%
Edible Oil 76% 70% 12% 54%
TCIL FRITZ SUKAI TCIL TMN
Crown 3% 3% 10% 10%
Processed Food 18% 24% 16%   28%
Segment Growth
20%
Question:
• Which segments should TICL should focus and formulate strategy? 15% 15%

• Should TCIL continue in edible oil and if so how to tackle the 8%

10%
12%
10%
12%
10%
9% 9%
unorganized sector? 7%
7%8% 8%
7% 6% 6%
5% 5%

Appendix 1993 1994 1995 1996 1997

Battery Edible Oil Crown Processed Food

Industry & Segment Analysis
Industry attractiveness

- Low perceived differentiation - Price & Quality

Rivarly among competitors - Unregulated market with secondary quality material usage

- Large presence of unorganized players

Barriers to entry - Globalization and decreasing customer duty

- Inhouse raw material production is captial intensive

Power of suppliers - Dependence on foreign suppliers

- Highly price sensitive customers who are not fully aware

Power of Buyers - Fragmented buyers

- Plastics based substitutes making their entry; too early stage;

Threat of substitutes - Changing dimensions of the package

• Not an attractive industry for an Indian company

• Regulatory mechanisms not stringently implemented
• Liberalization resulted in global players into Indian market
• Edible oil – fragmented with low regulations leading to price & quality differences; lack of brand differentiation
• Battery – specialized raw material needing strong R&D, cost of credit to make inroads
• Packaged food – large customers with existing contracts
Organization buying behavior:
Key questions:
1) What are the key pain points for customers and who are the pain custodians?
2) What are the underlying reasons for the pain points? Which are controllable and difficult to control?
Stakeholder Role Value sought Issue drill down Capability needed

Edible oil companies

Purchaser Buyer Price, service, delivery -

CEO Buyer/ Higher revenues and profits -

Decider
Marketing – Influencer Higher revenues and profits Lack of pricing power pressure Short term: Operational and supply chain
Pain custodian from middlemen unorganized efficiency to reduce costs, packaging
market exploiting lack of stringent differentiation
monitoring mechanism Long term: Influencing capabilities for
lobbying and creating consumer awareness
Production User Productivity, standards -

Battery segment
Production/ Influencer/ Codeveloping products as Poor perception of TCIL products New Product development, R&D
R&D user per specifications, highly
responsive Lacking the requisite levels in key
product parameters
Crown & Processed Food segments
Production/ Influencer/ Stringent standards to Poor perception of TCIL products New Product development, R&D
quality control user maintain brand equity
Lacking the requisite levels in key
Edible oil - A win-win-win solution:

Key questions: Old structure Key influencer

1)How can we reduce costs for
short term? TCIL
Can
Edible oil companies
Middlemen -
2)How can we ensure standards manufacturer/fabricator Wholesaler/retailer
for long term?
3)What are the mutual benefits Proposed structure – lower prices, better services through exclusive partners
for the supply chain players?
Solutions: Stakeholder benefits

 TCIL to appoint exclusive partners focusing on

operational excellence, better servicing through TCIL Can partners Edible oil companies
inventory management for edible oil producers.

 Collaborating with branded edible oil companies to Lower pricing from Consistent sales and Reduced inventory
create end consumer awareness through TTL operational excellence, security of orders, costs due to just-in-time
activities. EOS, supply chain exclusivity in territories for inventory, higher profits
efficiencies TCIL orders
 Long term: Lobbying with government through
industry associations for proper monitoring and
enforcing mechanisms. Cobranding with TCIL
Standard setting in the On time, hassle free,
gives credibility and
market place by educating safe delivery of high
develop trust and entry
edible oil companies standard tin cans
Customer perception change: into new accounts

 Old structure perception weightages:

Price > 60%, Brightness + delivery + service < 40% Moving downstream helps Training helps to achieve High expertise and one
to compete on factors operational excellence in stop solution for varying
 New structure perception weightages: other than prices, manufacturing and needs of the customers
Price < 60%, Brightness + delivery + service > 40% dictate pricing knowledgeable
Achieved by focusing on better service and delivery by salesforce
hassle free just-in-time inventory
How can TCIL compete with the foreign players in the Battery Segment?
2. Competing with the Foreign players:
Key questions:
TCIL adheres to 10% of Competing on price
1.
2.
Should TCIL even compete in the Battery Segment?
If so, how could they compete with the foreign players?
the total demand volume High cost of credit 90%
Demand met
What parameters to improve?
Fritz & Sukai, each share High Quality perception by Foreign
3. How do we manage our relationship with our customers?
45% of total market Highly rated on delivery players

1. Should TCIL even compete in the Battery Segment? Expectations from the customers What should TCIL do to compete?
Quality is the major KPI of Focus more on R&D capabilities
the segment
Long term focus Continue with credits
Changing & sensitive needs
Flexibility in operations
Tin Company Should focus on the
India Limited growing battery segment High service expectations Focus on the improving
the quality perception

3. Managing customer relationships in the segment

Highest Contribution Margin of
17% among the four segments R&D
- Close collaboration with the customer in
New Product Development
Highest Expected growth of - Talk in terms of product features
Key Buying
20% in the year 1997
Centre influence
Production/ Quality Control
Consistent increase in the Y-o-Y - Focus more on Pre & Post sales service
demand of tinplate in the segment - Improve on manufacturing flexibilty
Appendix
 TOPLINE AND BOTTOMLINE
MARKET SHARE
SEGMENT INDUSTRY VOLUME TCIL FRITZ SUKAI TMN UNORGANIZED SAIL
Battery 10000 10% 45% 45%      
Edible Oil 148000 28%       54% 18%
Crown 15000 10% 45% 45%      
Processed Food 35000 22%     78%    
Total 208000            

TOTAL VOLUME
SEGMENT TCIL FRITZ SUKAI TMN UNORGANIZED SAIL
Battery 1000 4500 4500 0 0 0
Edible Oil 41440 0 0 0 79920 26640
Crown 1500 6750 6750 0 0 0
Processed Food 7700 0 0 27300 0 0
Total 51640 11250 11250 27300 79920 26640

SALE PRICE
SEGMENT TCIL FRITZ SUKAI TMN UNORGANIZED SAIL
Battery 35450 44500 46000      
Edible Oil 25850       15000 20000
Crown 29950 35560 34990      
Processed Food 33700 40100 41300 43000 16000 24000
Total            
 TOPLINE AND BOTTOMLINE

TOPLINE
SEGMENT TCIL FRITZ SUKAI TMN UNORGANIZED SAIL
Battery 35450000 200250000 207000000 0 0 0
Edible Oil 1071224000 0 0 0 1198800000 532800000
Crown 44925000 240030000 236182500 0 0 0
Processed Food 259490000 0 0 1173900000 0 0
Total 1411089000 440280000 443182500 1173900000 1198800000 532800000

SEGMENT TCIL PROFIT BOTTOMLINE

Battery 6000 6000000
Edible Oil 3000 124320000
Crown 3000 4500000
Processed Food 5500 42350000
Total   177170000

SEGMENT TOPLINE BOTTOMLINE SEGMENT PROFITABILITY

Battery 3% 3% Battery 17%
Edible Oil 76% 70% Edible Oil 12%
Crown 3% 3% Crown 10%
Processed Food 18% 24% Processed Food 16%
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