PROJECT REPORT

ON

A Study on the Marketing Strategy of SAIL with respect to

Domestic & International Market

STEEL AUTHORITY OF INDIA LTD

(Submitted under partial fulfillment of Masters in Business Management)

2011-13

Institute of Management Studies

Ranchi University
Ranchi

SUBMITTED BY

Roll No:
Regd No:

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 DECLERATION

i hereby declare that the project titled “A comparative study on the Marketing
Strategy of SAIL with respect to domestic & international market “ submitted for
the partial fulfillment of the M.B.A degree course is our original work and the
project has not formed the basis for the award of any degree, fellowship or any
other similar titles.

ACKNOWLEDGEMENT

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This project bears on imprint of many peoples. First of all we would like to thank
our project guide Mr. P.K.Sahay for his time and guidance he has extended to us. I
would also like to thank Mr.S.K.Saw (G.M.HRD) for allowing me to undertake
this project work in SAIL.

I also like to thank our friends and class mates for their manual support, strength,
help and for everything they had extended. Last but not least I would also like to
thank those who have helped me during this project directly or indirectly.

PREFACE

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 During our six weeks of summer training in the SAIL, we have done project
research work on “A comparative study on the Marketing Strategy of SAIL with
respect to domestic & international market”.

The project report tells us about the SAIL’s marketing strategy of domestic
& international business and a comparative analysis for the same. The initial part
of the report tells about SAIL and its body concerned with marketing that is
“Central Marketing Organization”. The next part describes the marketing strategy
adopted for the domestic & international market separately. And the final part
discuss about the cooperative analysis & inferences.

It also throws light on marketing process of SAIL on both domestic &

international market and the various finished product details. The finding of our
study emphases the problem which we have observed on all the marketing decision
relating to prime product are taken by the SAIL and carried out by CMO.

The final part of conclusion & recommendation to improve the functioning of

marketing of SAIL.

TABLE OF CONTENT

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 Sl.No Title Page No
Chapter-1 Summery 1 
Chapter-2 Objective  2
Chapter-3 Scope  3
Chapter-4 Limitation  4
Chapter-5 Research Methodology  5
Chapter-6 Company Profile  6-11
Chapter-7 Central Marketing Organization  12-16
Chapter-8 Theoritical Concept  17-25
Chapter-9 Marketing Strategy  26-60
   Understand Customer  26-30
   Analyze Market  31
   Analyze Competition  32-39
   Research Distribution  40-49
   Define Marketing Mix  50-55
   Financial Analysis  56-57
   Review & Revise  58-60
Chapter-10 Facts & Figures  61-66
Chapter-11 Conclusion  67
Chapter-12 Recommendation  68
Chapter-13 Bibliography  69

TABLE OF GRAPH
Sl.No Title Page No
Chapter-1 Summery 1 
Chapter-2 Objective  2
Chapter-3 Scope  3
Chapter-4 Limitation  4

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Chapter-5 Research Methodology  5
Chapter-6 Company Profile  6-11
Chapter-7 Central Marketing Organization  12-16
Chapter-8 Theoritical Concept  17-25
Chapter-9 Marketing Strategy  26-60
   Understand Customer  26-30
   Analyze Market  31
   Analyze Competition  32-39
   Research Distribution  40-49
   Define Marketing Mix  50-55
   Financial Analysis  56-57
   Review & Revise  58-60
Chapter-10 Facts & Figures  61-66
Chapter-11 Conclusion  67
Chapter-12 Recommendation  68
Chapter-13 Bibliography  69

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 SUMMARY

In today s competitive world where cutthroat competition exists, everyone wants to

know their position, their strength and weaknesses. So it is very essential to know
opportunity to target the potential market, capture the market, evaluate and form
the marketing strategies. Marketing strategy is an element of the overall strategy of
organization. It is a way through which companies achieve their goal, or in others
words, it is the complete unbeatable plan designed especially for attaining the
marketing objective of the firm. The marketing objective indicates what the firm
wants to achieve. The marketing strategy provides the path and design for

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achieving them. They are normally arranged in accordance with the guidelines
provided by the company objective and company budgets.

Steel Authority of India Ltd. is the steel manufacturing company. The main
products of plant are Rail Tracks, Billets, Blooms, Plates, Wire Rods, and Angles.
While the production of primary products there are generation of some byproducts
or secondary products. These secondary products also sold in the market and make
a huge amount of revenue. The quantity of these materials is very high therefore it
needs totally different marketing strategy to sell in the market.

This project was basically concerned to the study of marketing & strategic
planning of SAIL for its domestic & international market. Overall, this project
suggests in the improvement of the existing marketing strategy.

OBJECTIVE

 To study & analysis the innovative marketing strategy of SAIL.

 To have better understanding of marketing strategy of steel industry.
 To compare between domestic & international market.
 To get an overall idea about the marketing function of SAIL.

 For partial fulfillment of Masters in Business Management.

 To understand the theoretical concept related to practical business
environment.

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 To relate the theory with the practical approach.

 SCOPE
 Understand the marketing strategy of SAIL.
 Difference between domestic & international marketing strategy.
 Portfolio of products of SAIL.
 Organization structures and responsibilities of management.
 Each of the above areas would be critically analyzed in order to determine
the efficiency of SAIL.

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 LIMITATIONS

 Study is limited to academic purpose only.

 Due to limited time & resources the study was not extended to wide area.
 Gives only basic idea about the part of the business activity of the
organization.
 Customers are scattered over a large area therefore hard to contact.
 Customers are reluctant to prevail their internal information.

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 METHODOLOGY

Information collected to furnish this report is both from primary and secondary in
nature. Both primary and secondary data sources will be used to generate this
report. Primary data sources are scheduled survey, informal discussion with
professionals and observation. The secondary data sources are annual reports,
manuals, and brochures of organization and different publications.

To identify the implementation, supervision, monitoring and repayment practice-

interview with the employee and extensive study of the existing file was and
practical case observation has been done.

Research Methods:

 Primary Data

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 1. Scheduled survey.
2. Informal Discussion.
3. Observation.
4. Online Questionnaire.

 Secondary Method:
1. Annual reports.
2. Manuals.
3. Brochures
4. Publications.

COMPANY PROFILE

Steel Authority of India Limited (SAIL) is the leading steelmaking company in

India. It is a fully integrated iron and steel maker, producing both basic and special
steels for domestic construction, engineering, power, railway, automotive and
defense industries and for sale in export markets. Ranked amongst the top ten
public sector companies in India in terms of turnover, SAIL manufactures and sells
a broad range of steel products, including hot and cold rolled sheets and coils,
galvanized sheets, electrical sheets, structural, railway products, plates, bars and
rods, stainless steel and other alloy steels. SAIL produces iron and steel at four

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integrated plants and three special steel plants, located principally in the eastern
and central regions of India and situated close to domestic sources of raw
materials, including the Company's iron ore, limestone and dolomite mines. SAIL's
wide range of long and flat steel products are much indemand in the domestic as
well as the international market. This vital responsibility is carried out by SAIL's
own Central Marketing Organization (CMO) and the International Trade Division.
CMO encompasses a wide network of 38 branch offices and 47 stockyards located
in major cities and towns throughout India. With technical and managerial
expertise and know-how in steel making gained over four decades, SAIL's
Consultancy Division (SAILCON) at New Delhi offers services and consultancy to
clients world-wide. SAIL has a well-equipped Research and Development Centre
for Iron and Steel (RDCIS) at Ranchi which helps to produce quality steel and
develop new technologies for the steel industry. Besides, SAIL has its own in-
house Centre for Engineering and Technology (CET), Management Training
Institute (MTI) and Safety Organization at Ranchi. Our captive mines are under the
control of the Raw Materials Division in Calcutta. The Environment Management
Division and Growth Division of SAIL operate from their headquarters in Calcutta.
Almost all our plants and major units are ISO Certified.

Integrated Steel Plants

1. Bhilai Steel Plant (BSP) in Chhattisgarh

2. Durgapur Steel Plant (DSP) in West Bengal
3. Rourkela Steel Plant (RSP) in Orissa
4. Bokaro Steel Plant (BSL) in Jharkhand

Special Steel Plants

1. Alloy Steels Plants (ASP) in West Bengal

2. Salem Steel Plant (SSP) in Tamil Nadu
3. Visvesvaraya Iron and Steel Plant (VISL) in Karnataka

Subsidiaries

1. Indian Iron and Steel Company (IISCO) in West Bengal

2. Maharashtra Elektrosmelt Limited (MEL) in Maharashtra

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 3. Bhilai Oxygen Limited (BOL) in New Delhi

Joint Venture

SAIL has promoted joint ventures in different areas ranging from power plants to
e-commerce.

NTPC SAIL Power Company Pvt. Ltd- Setup in March 2001, this 50:50 joint
venture between SAIL and the National Thermal Power Corporation (NTPC)
operates and manages the Captive Power Plants-II of the Durgapur and Rourkela
Steel Plants which have a combined capacity of 240 MW.

Bokaro Power Supply Company Pvt. Limited- This 50:50 joint venture between
SAIL and the Damodar Valley Corporation formed in January 2002, is managing
the 302 MW power generation and 1880 tones per hour steam generation
facilities at Bokaro Steel Plant. Bhilai Electric Supply Company Pvt. Limited
Another SAIL-NTPC joint venture on 50:50 basis formed in March 2002 manages
the 74 MW Power Plant-II of Bhilai Steel Plant which has additional capacity of
producing 150 tones of steam per hour.
UEC SAIL Information Technology Limited- This 40:60 joint venture between
SAIL and USX Engineers & Consultants, a subsidiary of the US Steel Corporation,
promotes information technology in the steel sector.

Metaljunction Private Limited (www.metaljunction.com )- A joint venture

between SAIL and Tata Steel on 50:50 basis, this company promotes e-commerce
activities in steel and related areas.

SAIL- Bansal Service Center Pvt. Ltd.- SAIL has formed a joint venture with
BMW industries Ltd. on 40:60 basis to promote a service centre at Bokaro with the
objective of adding value to steel.

North Bengal Dolomite Limited- A joint venture between SAIL and West Bengal
Mineral Development Corporation ltd on 50:50 basis was formed for development
of Jayanti Dolomite Deposit, Jalpaiguri for supply of Dolomite to DSP and other
plants.

Romelt-SAIL (India) Ltd- A joint venture between SAIL, National Mineral

Development Corporation (NMDC) and Russian promoters for marketing Romelt

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Technology developed by Russia for reducing of iron bearing materials, which is
carried out with carbon in single stage reactor with the use of oxygen.

Ownership and Management- The Government of India owns about 86% of

SAIL's equity and retains voting control of the Company. However, SAIL, by
virtue of its "Navratna" status, enjoys significant operational and financial
autonomy.

BACKGROUND & HISTORY OF SAIL

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 industrialization of the country. The steel sector was to
propel the economic growth. Hindustan Steel Private Limited was set up on
January 19, 1954. The President of India held the shares of the company on behalf
of the people of India.

Expanding Horizon (1959-1973)

Hindustan Steel Ltd. (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. A new steel company, Bokaro Steel
Limited, was incorporated in January 1964 to construct and operate the steel plant
at Bokaro. 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. 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

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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.

The New Millennium

SAIL today is one of the largest industrial entities in India. Its strength has been
the diversified range of quality steel products catering to the domestic, as well as
the export markets and a large pool of technical and professional expertise. Having
achieved the initial goal of laying the foundation for the industrial development of
the country, SAIL took up the new challenge of facing the era of liberalized
economy and the emerging competitive scenario in the Steel market. On the eve
ofentering the new millennium, SAIL launched its Financial and Business
restructuring programme. The strategy includes a divestment of non-core activities,
restructuring of marketing function and a focus on pruning cost of operation. The
goal for the company is to emerge as one of the lowest cost producer in the global
steel market.

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ORGANIZATION STRACTURE
CHAIRMAN

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 DIRECTIOR (TECH) MANAGING DIRECTOR, BSP

DIRECTIOR
MANAGING DIRECTOR, BSL
(PERSONNEL)

DIRECTIOR (FINANCE) MANAGING DIRECTOR, RSP

CHIEF VIGILANCE
MANAGING DIRECTOR, DSP
OFFICER

EXE. DIR (OPRNS) EXE. DIRECTOR, VISL

EXE. DIR (IA) EXE. DIRECTOR, SSP

ED (TECH & LEGAL

EXE. DIRECTOR, ASP
SERVICES

EXE.DIR. (PROJECTS)

EXE.DIR. (CMMG)

EXE.DIR. (CP)

EXE.DIR. (CIG)

CENTRAL MARKETING ORGANIZATION (CMO)

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This is the marketing unit of SAIL. The CMO of the SAIL was formed in 1963.
When public sector plants were managed by Hindustan Steel Pvt. Limited. It
caters to the domestic market and is responsible for coordinated manner. The
CMO undertakes marketing of materials produced by SAIL, plant through a
distribution network of 43 Branch sales offices (BSO), stockyard, dockyards,
consignment agents & extension counter spread all over country. Central
Marketing Organization (CMO) most of its division have their headquarters at
Kolkata and they report to the Executive Director of marketing at Kolkata, who
in turn report to the Director headquartered at Delhi. However departments like
transport & shipping, export and imports etc. report to Executive Director located
at Delhi.

MAJOR FUNCTIONS OF CMO:

Marked Research Demand Assessment. segment prioritization, product planning,
sales and after sales service etc. CMO has a network of sales and after sales
service etc. CMO has a network of sales officer and stockyards within the country
for purpose of distribution of materials from these outlets. The other aspect
controlled by CMO is planning, customer service, transport & shipping data
information system etc. The distribution of the Iron & Steel products is done by the
CMO through 45 branches and stockyards located in all important steel consuming
centers in the country. For administration purposes, the branches are grouped under
6 regions.

The distribution through the stockyard is of the order of 69% & through due
dispatches by the plant 31%. They adopt various schemes to see that the movement

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of the products is fast & customers are satisfied.

OTHER IMPORTANT FUNCTION OF CMO :

CMO has got responsibility to sell Pig Iron. Mild Steel products manufactured by
BSP, DSP, RSP & BSL having its Head Quarters at Ispat Bhawan. 40. Chowrangee
Road. Calcutta- 71. CMO has got 43 branches spread throughout the country with
stockyard for storing & selling Iron & Steel materials produced by plants. Each
Branch is headed by a Branch Manager having other colleagues including Finance
Executive to help Branch Manager in day to day operations. CMO has got transport
& shipping department to handle the export-import consignment at different parts.

These officers are at following places:

(a) Kolkata (b) Haldia (c) Chennai (d) Vishakapatnam (e) Paradeep

SALES RESIDENT MANAGER (SRM):

There are four SRM’s located at the four integrated steel plants. The SRM acts as
an interface between the CMO and the steel plant.

The role of SRM are:

 To check the availability of materials in the plant and to oversee the increase

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 in production.
 To make the final rolling plan.
 To dispatch material as per orders.
 To prepare demand forecast every month.

To co-ordinate about production & dispatch in different steel plant. CMO has
got SRM offices at following places:

(a) Bhilai (b) Durgapur (c) Rourkela

To take care or the exports CMO has got office at New Delhi. There is separate
fertilizers & chemical divisions to sell fertilizers & chemicals produced by the
plants.

Marketing Management Group : This group is headed by marketing managers.

Marketing managers are responsible for market strategy and planning interims of
sales, market share & profitability in a specific market segment.

Salem Steel Products Division : This division headquartered at Chennai by Salem

Steel Plant. They have field office at each of the regional headquarters as well as
major consumption centers.

Marketing Services Division (MSD) :This division looks after the management is
supported by a computer center where data on marketing operation throughout the
county are processed on a regular basis to bring out periodical MIS report. The
responsibility of designing & implementing road movement, handling contract
system ect. is also with them.

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Commercial Division: This division deals with formulation of policies on
distribution. This division also deals with parliament question on behalf of CMO.

Application Engineering Group (AEG) : This division deals with application

about selection of best suited raw material development of new products required
by the market etc. It also undertakes technical inspection on behalf of the CMO
wherever needed. The AE personnel are posted at each regional headquarters.

Fertilizers & Chemical Division : This division is headquartered at Kolkata and

looks after distribution of Ammonium Nitrate products by Rourkela Steel Plant and
ammonium Sulphate produced by all the steel plants. This division has got offices
at field location where the demand for fertilizers is substantial.

Market Research Group : This division undertakes assessment of demand for pig
iron & steel product for long term perspective and advice management about the
market. This division brings out periodic report covering various aspects of
consumption market condition. Competitors activities etc. They have field
repetitive for collecting and forwarding market intelligence on the new quarters.

Transport and Shipping Department: The department of headquartered at

Koltata and has branch offices at major port areas. This division is responsible for
handling imports and export on behalf of SAIL. This division clears the goods
imported on sale at the ports and forwards the same to various steel plants.

Finance and Account Department:This department renders financial advice to

the line managers as well as CMO headquarters and maintain the account of the
organization covering home sales, transport and shipping exports, residual imports,
internal audit etc.

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Special Project Division: This Division is headquarters at Delhi & reports the
Director (commercial). This division deals with modernization of stockyards
giving technical help and assistance to the stockyard in maintenance of handling
equipment etc. The department also deals with construction of office, building of
central marketing organization and acquisition of construction of residential
accommodation etc.

Regional Offices of CMO:

1. Northern Region
2. Eastern Region
3. Southern Region
4. Western Region

Northern Region Southern Region Eastern Region Western Region

Agra Bangalore Siliguri Ahmedabad

Allahabad Calgawan Bhubaneswer Baroda
Chandigarh Chennai Bokaro Bhilai
Faridabad Coimbator Durgapur Bhopal
New Delhi Hyderabad Jamshedpur Goa
Kanpur Cochin Guwahati Indore

THEORITICAL CONCEPT

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Marketing Strategy: Marketing strategy is a process that can allow an
organization to concentrate its limited resources on the greatest opportunities to
increase sales and achieve a sustainable competitive advantage.

Marketing strategies serve as the fundamental underpinning of marketing plans

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

Marketing strategy involves careful scanning of the internal and external

environments. Internal environmental factors include the marketing mix, plus
performance analysis and strategic constraints. External environmental factors
include customer analysis, competitor analysis, target market analysis, as well as
evaluation of any elements of the technological, economic, cultural or
political/legal environment likely to impact success. A key component of
marketing strategy is often to keep marketing in line with a company's overarching
mission statement.

Once a thorough environmental scan is complete, a strategic plan can be

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

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Types of Strategies: Marketing strategies may differ depending on the unique
situation of the individual business. However there are a number of ways of
categorizing some generic strategies.

(1) Strategies Based on Market Dominance

In this scheme, firms are classified based on their market share or dominance of an
industry.

Typically there are four types of market dominance strategies:

 Leader
 Challenger
 Follower
 Nicher

(2) Porter Generic Strategies

Strategy on the dimensions of strategic scope and strategic strength. Strategic

scope refers to the market penetration while strategic strength refers to the firm’s
sustainable competitive advantage. The generic strategy framework (porter 1984)
comprises two alternatives each with two alternative scopes. These are
Differentiation and low-cost leadership each with a dimension of Focus-broad or
narrow.

 Product differentiation
 Cost leadership
 Market segmentation
 Innovation strategies

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This deals with the firm's rate of the new product development and business model
innovation. It asks whether the company is on the cutting edge of technology and
business innovation.

There are three types:

 Pioneers
 Close followers
 Late followers
 Growth strategies

In this scheme we ask the question, “How should the firm grow?” There are a
number of different ways of answering that question, but the most common gives
four answers:

 Horizontal integration
 Vertical integration
 Diversification
 Intensification

(3) Marketing Warfare Strategies

This scheme draws parallels between marketing strategies and military strategies.

Strategic Models: Marketing participants often employ strategic models and tools
to analyze marketing decisions. When beginning a strategic analysis, the 3Cs can
be employed to get a broad understanding of the strategic environment. An Ansoff

Page 26
Matrix is also often used to convey an organization's strategic positioning of their
marketing mix. The 7Ps can then be utilized to form a marketing plan to pursue a
defined strategy.

Ansoff Matrix

The Ansoff Growth matrix is a tool that helps businesses decide their product and
market growth strategy. Ansoff’s product/market growth matrix suggests that a

Page 27
business’ attempts to grow depend on whether it markets new or existing products
in new or existing markets.

The output from the Ansoff product/market matrix is a series of suggested growth
strategies that set the direction for the business strategy. These are described
below:

Market Penetration: Market penetration is the name given to a growth strategy

where the business focuses on selling existing products into existing markets.

Market penetration seeks to achieve four main objectives:

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  Maintain or increase the market share of current products – this can be
achieved by a combination of competitive pricing strategies, advertising,
sales promotion and perhaps more resources dedicated to personal selling
 Secure dominance of growth markets
 Restructure a mature market by driving out competitors; this would require a
much more aggressive promotional campaign, supported by a pricing
strategy designed to make the market unattractive for competitors
 Increase usage by existing customers – for example by introducing loyalty
schemes

A market penetration marketing strategy is very much about “business as usual”.

The business is focusing on markets and products it knows well. It is likely to have
good information on competitors and on customer needs. It is unlikely, therefore,
that this strategy will require much investment in new market research.

Market Development: Market development is the name given to a growth

strategy where the business seeks to sell its existing products into new markets.

There are many possible ways of approaching this strategy, including:

 New geographical markets; for example exporting the product to a new

country.
 New product dimensions or packaging: for example
 New distribution channels.
 Different pricing policies to attract different customers or create new market
segments.

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Product Development: Product development is the name given to a growth
strategy where a business aims to introduce new products into existing markets.
This strategy may require the development of new competencies and requires the
business to develop modified products which can appeal to existing markets.

Diversification:Diversification is the name given to the growth strategy where a

business markets new products in new markets.

This is an inherently more risk strategy because the business is moving into
markets in which it has little or no experience.

For a business to adopt a diversification strategy, therefore, it must have a clear

idea about what it expects to gain from the strategy and an honest assessment of
the risks.

3C's Model: The 3C's Model is a business model, which offers a strategic look at
the factors needed for success. It was developed by Kenichi Ohmae, a business and
corporate strategist. The 3C’s model points out that a strategist should focus on
three key factors for success. In the construction of a business strategy, three main
players must be taken into account:

 The Corporation
 The Customer
 The Competitors

Only by integrating these three C’s (Corporation, Customer, Competitors) in a

strategic triangle, a sustained competitive advantage can exist. Ohmae refers to
these key factors as the three C’s or strategic triangle.

The 7P’s of Marketing Mix

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Product:

Product is your core offering.This is “the thing” that will fulfill the needs of your
customer. If your product is faulty, every thing else fails. The attributes of the
product, vis-a-vis the attributes offered by competing products and substitutes, are
important in estimating the competitive scenario for the marketing strategy
formulation.

Price

Price has a lot of impact on the service buyer’s satisfaction level. Often, paying a
higher price makes a customer more satisfied. Price is often considered a proxy for
quality and vice-versa. What is important to note that services being all the more
intangible, the price becomes an important factor for the actual service
consumption to happen, after service awareness and service acknowledgement.

Place

Place often offers a different side of value (utility) to the customer. Who would
want to travel 10 miles to have a regular dinner, even if that is priced very
competitively and has a super quality? Services are often chosen for their place
utility. Closer to the customer means higher probability of purchase. Place utility is
important to evaluate, for strategizing on the other 6 Ps.

Promotion

Promotion plays a role in the perception the possible target audience may have
about your service. There has to be a fit between the promotion and the
positioning. Promotion leads to service (brand) recognition and further establishes
a proxy to evaluate quality of services based by potential customers.

People

People are crucial in service delivery. The best food may not seem equally
palatable if the waitress is in a sour mood. A smile always helps. Intensive training
for your human resources on how to handle customers and how to deal with
contingencies, is crucial for your success.

Processes

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Processes are important to deliver a quality service. Services being intangible,
processes become all the more crucial to ensure standards are met with. Process
mapping ensures that your service is perceived as being dependable by your target
segment.

Physical Evidence

Physical evidence affects the customer’s satisfaction. Often, services being

intangible, customers depend on other cues to judge the offering. This is where
physical evidence plays a part. Would you like eating at a joint where the table is
greasy or the waitresses and cooks look untidy and wear a stained apron? Surely
you would evaluate the quality of your experience through proxies such as these.

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 THE MARKETING STRATEGY
OF SAIL

UNDERSTAND CUSTOMER

Companies that Buy Steel

The Steel market in India is very stable. The growth and establishment of new steel
buyers is low which means that entirely new customers are rare.

The market serves consists of several small companies and a few larger. They
serve can be categorized as those that both manufacture and design tools and those
that only manufacture. The larger companies often do both design and
manufacture, while the smaller companies might not have the capability to do tool
design. The smaller companies’ function can sometimes be to manufacture what
the larger companies cannot fit into their production schedules. There are also
designers who work with only designing tools as consultants.

Smaller customers, family run businesses with few employees, often use only one
steel supplier and do not work actively with purchasing. They do not have the time
and/or knowledge to look into prices and new steel types. The smaller companies
will usually have only one supplier but may have contact with other dealers
through occasional visits. The number of suppliers a tool steel buyer uses depends
on what situation he is in. It is mainly the larger customer companies who will
check on prices with several competing suppliers. There are many companies who
check prices with several suppliers and then choose the cheapest without
considering different steel grades with better characteristics.

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Buying Decision on the Organizational Level

Component suppliers and OEMs, are an important influence on the steel buying
decision if they are involved in the tool design. They believe that it should try to
influence the customers’ customers to create a demand, since they are of equal size
to most companies who order tools from tool makers.

Preferences for certain steel grades are hard to change among the tool makers, who
are very traditional in this sense. It would be better to influence the companies
ordering the tool. They might have more interest in trying new steels with benefits
that can improve their production costs by reducing lead times. They can also be
less sensitive to changes in steel price and the risk involved with trying new steel
grades.

Buying Decision on the Individual Level

Designer of the tool, whether an employee of the tool maker, the component
supplier, the OEM or a consultant, often has the possibility to choose which steel
grade to work with. The tool designer is the most important person to convince of
the benefits when selling steel. If he does not believe in the benefits of the steel he
will not use it in his constructions. If the designer changes to a new steel grade he
will be the one taking the risk for any error that might occur. This is the reason
why many designers choose steel grades that are familiar to them. They do not
want to take more risk than necessary.

Influencing the marketing or purchasing department of the buying company, rather

than the designer, is sometimes pointless as these functions do not have much
influence on the choice of steel. If a purchaser or salesman tries to persuade the
designer that he should try a new steel grade the designer will probably be
skeptical and think it is some cost reduction effort that will reduce quality of the
tools he designs. Direct contact with the decision makers at larger clients is much
more sporadic, since contact is mainly held with personnel that handle routine
orders of steel and that do not have influence in the decisions.

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Workers who actually work with tool production do not have much to say in the
choice of steel. But if a change in steel is made, it is important that they are
prepared for this through some kind of education, so that the change runs
smoothly. If not, they might be reluctant to work with the steel grade in the future.
This will certainly not make any further sales easier.

Industrial Buying Process

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Factors Influencing a Buying Decision

Dealer Function

The reason that companies such as theirs are needed is that they can stock, cut and
sometimes do treatments on the steel and also that they carry a variety of steel in
stock. The most important function they fill, according to themselves, is that they
work as retail dealers.

Price

Price is the most important issue for their customers, but mention that competition
from low price countries such as China is an increasing threat. Also believe that, to
be competitive, tool makers in must become better at producing high quality tools.
This requires some new blood in the business and some courage to try new
methods and materials. The experience from customers is that those that try to
improve by doing such changes are more successful. The tool ordering companies
could be less sensitive to the price of tool steel than the tool makers are, since the
steel price is a small part of the total tool price they pay for a tool.

Delivery

Standard steel types are stocked in bars, cut in certain dimensions known by their
customers. A designer knowing these dimensions can take advantage of this when
constructing the tool. Standardized bars reduce the amount of work that is needed
before the right dimensions are cut, meaning that the order can be delivered sooner.
With such bars it is sufficient with one cut before the piece can be delivered to the
customer.

Technical Consulting

Customers do not use full technical competence. The designers in the customer
organizations often lack deeper knowledge in metallurgy and are only familiar with
the steel grades which have been used before. Despite this, the designers do not
seek the technical consulting that is available. This is one reason why technical
changes have difficulties in reaching the market. The tool makers are often more
interested in changing their machine park and treatment methods than trying new
steel types.

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Pilot Cases

Most customers are, curious about new steel products, but few dare be the first to
try something new. That is why pilot cases are very important as they can ensure
the customer that the new steel grade has been used by others.

Risk Factors

Changing to new steels implies a big risk, since every tool that is produced must
work. Makers are often in a tough economic situation as they give long term credit
to their customers. This increases the risk in changing steel. The tool makers do not
have the margins needed to make errors. Since there are economic risks involved
when producing tools, they changes steel grades only if the old one has failed. The
supplier of steel will also rarely be replaced unless he fails.

For a smaller tool maker, with few employees, the financial risk is even greater.
Since the market is currently slow and most companies have liquidity problems,
courage is required by the tool maker and much effort from the salesman to initiate
a change of steel. In such a company the individual designers probably do not feel
the risks involved in changing steel in the same way. If the change leads to
improvement it might increase the chances of getting promoted.

Quality

Because of the risks involved, quality and functionality of the steel and services is
extremely important. The most important factor to stay competitive, according to is
to keep high quality steel and not fail the customers’ expectations.

Traditional and Regional Factors

It is common that most tool makers in a region use the same grades and in this
sense it is a tradition bound market. Preference for a certain steel type – in a
region, in a company or from an individual – is a tradition that is hard to break.

Brand Names

Creating a strong brand name is equally important to stay competitive by being

different from competitors.

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 ANALYZE MARKET

The Indian steel industry was the third fastest growing steel industry in the world
next only to China. The demand for Indian steel was growing at 8-9 % as against a
global average of 5-6 %. By 2006, with a current capacity of 38 million tonnes per
annum (MTA) the Indian Steel Industry was the 8th largest producer of steel in the
world. With capital investments of over Rs. 100,000 crore, the Indian steel industry
provided direct/indirect employment to over 2 million people. Over the years, India
produced international quality steel of almost all grades/varieties and had also been
a net exporter of steel, though in smaller quantities. On November 4 2005, the
Indian Government gave its approval for the National Steel Policy (NSP), which
aimed at hiking production to over 100 Million Tonnes Per Annum (MTA) to
make the Indian steel industry globally competitive in terms of cost, quality and
product mix. The NSP anticipated achieving 100 MTA by 2019-20 from 38 MTA
in 2004-05. On the demand side, the strategy was to create additional demand for
steel through promotional efforts, awareness creation and strengthening the
delivery chain, especially in rural areas. On the supply side, the strategy was to
create additional capacity, remove procedural and policy bottlenecks in the
availability of inputs such as iron ore and coal, make higher investments in R & D
and human resource development and improvise infrastructure such as roads,
railways and ports. The core of this vision was Steel Authority of India Ltd.
(SAIL), one of Indian government public sector undertakings (PSU). SAIL’s
impeccable record in supporting the countrysteel infrastructural growth by
innovative metallurgical products like special alloy steels, was being challenged by
its own ageing plants and increasing competition. CMD affirmed that by going the
merger and acquisition way that other steel manufacturers preferred, SAIL would
also look for steel plants to acquire. Expressing confidence about SAIL’s
opportunities in facing up to the new challenges, the SAIL’s CMD confirmed, “We
are able to maintain our market share despite new producers coming up in nineties
and we shall continue to do so”.

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 ANALYZE COMPETITION

Public Sector

Rashtriya Ispat Nigam Ltd. (RINL)

RINL, the corporate entity of Visakhapatnmam Steel Plant (VSP) is the first shore
based integrated steel plant located at Visakhapatnam in Andhra Pradesh. The
plant was commissioned in August 1992 with a capacity to produce 3 million tonne
per annum (mtpa) of liquid steel. The plant has been built to match international
standards in design and engineering with state-of- the- art technology incorporating
extensive energy saving and pollution control measures. Right from the year of its
integrated operation, VSP established its presence both in the domestic and
international markets with its superior quality of products. The company has been
awarded all the three International standards certificates, namely, ISO 9001:2000,
ISO 14001: 1996 and OHSAS 18001: 1999. RINL was accorded the prestigious
‗Mini Ratna‘ status by the Ministry of Steel, Govt. of India in the year 2006 and
the company is gearing up to complete the ambitious expansion works to increase
the capacity to 6.3 mtpa by 2009. RINL has prepared a road map to expand the
plant‘s capacity up to 16 mtpa in phases.

Metal Scrap Trade Corporation Ltd.

(MSTC) MSTC Ltd. (formerly Metal Scrap Trade Corporation Ltd.) was set up on
the 9th September, 1964 as a canalizing agency for the export of scrap from the
country. With the passage of time, the company emerged as the canalizing agency
for the import of scrap into the country. Import of scrap was de-canalized by the
Government in 1991-92 and MSTC has since then moved on to marketing ferrous
and miscellaneous scrap arising out of steel plants and other industries and
importing Coal, Coke, Petroleum products, semi finished steel products like HR
Coils and export primarily Iron ore. The Company has also established an e-
auction portal and undertakes e-auction of Coal, Diamonds and Steel Scrap and has
developed an e- procurement portal in house.

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Ferro Scrap Nigam Ltd. (FSNL)

FSNL is a wholly owned subsidiary of MSTC Ltd. with a paid up capital of Rs.
200 lakh. The Company undertakes the recovery and processing of scrap from slag
and refuse dumps in the nine steel plants at Rourkela, Burnpur, Bhilai, Bokaro,
Visakhapatnam, Durgapur, Dolvi, Duburi & Raigarh. The scrap recovered is
returned to the steel plants for recycling/ disposal and the Company is paid
processing charges on the quantity recovered at varying rates depending on the
category of scrap. Scrap is generated during Iron & Steel making and also in the
Rolling Mills. In addition, the Company is also providing Steel Mill Services such
as Scarfing of Slabs, Handling of BOF Slag, etc.

Hindustan Steelworks Construction Ltd. (HSCL)

HSCL was incorporated in June 1964 with the primary objective of creating in the
Public Sector an organization capable of undertaking complete construction of
modern integrated Steel Plants. HSCL had done the construction work of Bokaro
Steel Plant, Vizag Steel Plant and Salem Steel Plant from the inception till
commissioning and was associated with the expansion and modernization of Bhilai
Steel Plant, Durgapur Steel Plant, IISCO (Burnpur) and also Bhadravati Steel
Plant. With the tapering of construction activities in Steel Plants, the company
intensified its activities in other sectors like Power, Coal, Oil and Gas. Besides this,
HSCL diversified in Infrastructure Sectors like Roads/Highways, Bridges, Dams,
Underground Communication and Transport system and Industrial and Township
Complexes involving high degree of planning, co-ordination and modern
sophisticated techniques. The company has developed its expertise in the areas of
Piling, Soil investigation, Massive foundation work, High rise structures, Structural
fabrication and Erection, Refractory, Technological structures and Pipelines,
Equipment erection, Instrumentation including testing and commissioning. The
company has also specialized in carrying out Capital repairs and Rebuilding work
including hot repairs of Coke Ovens and Blast Furnaces and other allied areas of
Integrated Steel Plants.

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MECON LTD.

MECON is one of the leading multi-disciplinary design, engineering, consultancy

and contracting organization in the field of iron & steel, chemicals, refineries &
petrochemicals, power, roads & highways, railways, water management, ports &
harbors, gas & oil, pipelines, non ferrous, mining, general engineering,
environmental engineering and other related/ diversified areas with extensive
overseas experience. MECON, an ISO: 9001- 2000 accredited company, registered
with World Bank (WB), Asian Development Bank (ADB), European Bank for
Reconstruction and Development (EBRD), African Development Bank (AFDB),
and United Nations Industrial Development Organization (UNIDO), has wide
exposure and infrastructure for carrying out engineering, consultancy and project
management services for mega projects encompassing architecture & town
planning, civil works, structural works, electric, air conditioning & refrigeration,
instrumentation, utilities, material handling & storage, computerization etc.
MECON has collaboration agreements with leading firms from the USA,
Germany, France, Italy, Russia, etc. in various fields. The authorized share capital
of the company is Rs. 10,400 lakh (previous year Rs. 4,100 lakh) against which the
paid up capital is Rs. 10,313.84 lakh (previous year Rs. 4,013.84 lakh). All the
shares are held by the Government of India.

Private Sector

The private sector of the Steel Industry is currently playing an important and
dominant role in production and growth of steel industry in the country. Private
sector steel players have contributed nearly 67% of total steel production of 38.08
million tonnes to the country during the period April-December, 2007. The private
sector units consist of both major steel producers on one hand and relatively
smaller and medium units such as Sponge iron plants, Mini Blast Furnace units,
Electric Arc Furnaces, Induction Furnaces, Rerolling Mills, Cold-rolling Mills and
Coating units on the other. They not only play an important role in production of

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primary and secondary steel, but also contribute substantial value addition in terms
of quality, innovation and cost effective.

TATA STEEL LTD.

Tata Steel has an integrated steel plant, with an annual crude steel making capacity
of 5 million tonnes located at Jamshedpur, Jharkhand. Tata Steel has completed the
first six months of fiscal 2007-08 with impressive increase in its hot metal
production. The hot metal production at 2.76 million tonnes is 4.6%more
compared to the corresponding period of the previous year. The crude steel
production during the period was 2.43 million tonnes which is marginally lower
than the production of 2.45 million tonnes last year. The saleable steel production
was at a lower level during the period April September, 2007 (2.34 million tonnes)
compared to the corresponding period of last year (2.36 million tonnes). Tata Steel
is continuing with its programme of expansion of steel making capacity by 1.8
million tonnes to reach a rated capacity of 6.8 million tonnes. The Project is
reported to be moving ahead of schedule and is likely to be commissioned by May
2008 against the original schedule of June 2008. The Company has planned to take
the capacity to 10 million tonnes by the fiscal year 2010. Tata Steel‘s Greenfield
projects in Orissa and Chattisgarh are progressing on schedule with placement of
equipment order for Kalinganagar Project in Orissa and commencement of the land
acquisition process. Jharkhand Project is awaiting announcement of Relief &
Rehabilitation policy of the State Government.

ESSAR STEEL LTD.

Essar Steel Holdings Ltd. (ESHL) is a global producer of steel with a footprint
covering India, Canada, USA, the Middle East and Asia. It is a fully integrated flat
carbon steel manufacturer—from iron ore to ready-to-market products. ESHL has a
current global capacity of 8 million tonnes per annum (MTPA). With its aggressive
expansion plans in India and other parts of Asia and North America, its capacity is
likely to go up to 25 MTPA by 2012. Its products find wide acceptance in highly
discerning consumer sectors, such as automotive, white goods, construction,
engineering and shipbuilding. Essar Steel Ltd., the Indian Company of Essar Steel
Holdings Limited, is the largest steel producer in western India, with a current
capacity of 4.6 MTPA at Hazira, Gujarat, and plans to increase this to 8.5 MTPA.

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The Indian operations also include an 8 MTPA beneficiation plant at Bailadilla,
Chattisgarh which has world‘s largest slurry pipeline of 267 km to transport
beneficiated Iron Slurry to the pellet plant, and an 8 MTPA pellet complex at
Visakhapatnam. The Essar Steel Complex at Hazira in Gujarat, India, houses the
world‘s largest gas-based single location sponge iron plant, with a capacity of 4.6
MTPA. The complex also houses the steel plant and the 1.4 MTPA cold rolling
complexes. The steel complex has a complete infrastructure setup, including a
captive port, lime plant and oxygen plant. Essar Steel produces highly customized
value-added products catering to a variety of product segments and is India‘s
largest exporter of flat products, selling close to half of its production to the highly
demanding US and European markets, and to the growing markets of South East
Asia and the Middle East. The company‘s products conform to quality
specifications of international quality certification agencies, like ABS, API, TUV
Rhine Land and Lloyd‘s Register. Essar Steel is the first Indian steel company to
receive an ISO 9001 and ISO 14001 certification for environment management
practices. Essar Steel utilizes Hot Briquetted Iron-Direct Reduced Iron (HBIDRI)
technology supplied by Midrex Technology, USA along with four 150 tonnes DC
electric arc furnaces imported from Clecim, France. The Hazira unit of Essar Steel
is equipped with 5.5 million tonnes per annum (MTPA) hot briquetted iron plant,
4.6 MTPA electric are furnace, 4.6 MTPA continuous caster, 3.6 MTPA hot strip
mill and 1.4 MTPA Cold Rolling Mill. During the year 2007-08, Essar was
awarded costs ISO/TS 16949 and OHSAS 18000 certification.

JSW STEEL LTD.

JSW Steel is a 3.8 MTPA integrated steel plant, having a process route consisting
broadly of Iron Ore Beneficiation – Pelletisation – Sintering – Coke making – Iron
making through Blast Furnace as well as Corex process – Steel making through :
BOF- Continuous Casting of slabs – Hot Strip Rolling – Cold Rolling Mills. JSW
Steel has a distinction of being certified for ISO-9001:2000 Quality Management
System, ISO-14001:2004 Environment Management System and OHSAS
18001:1999 Occupational Health and Safety Management System. The capacity as
on 1.11.2007 stood at 3.8 MTPA and the capacity is likely to rise to 6.8 MTPA by
2008, and further to 9.6 MTPA by 2010.

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JINDAL STEEL & POWER LTD. (JSPL)

Jindal Steel & Power Limited is one of the fast growing major steel units in the
country. The Raigarh plant of JSPL has a present capacity of 1.37 million tonne
per annum (MTPA) sponge iron plant, 2.40 MTPA Steel Melting Shop (SMS), 1.0
MTPA plant Mill, 2.30 sinter plant, 0.8 MTPA coke oven and a 330 Mega Watt
captive power plant. During the year 2006-07, the company produced 1.19 million
tonnes of sponge iron, 0.8 million tonnes of various steel products, 0.57 million
tonnes of hot metal and 0.21 million tonnes of rolled products. The performance of
JSPL during April-October 2007-08 was 0.68 million tonnes of sponge iron, 0.72
million tonnes of steel products (slabs/blooms/billets/rounds), 0.68 million tonnes
of hot metal, 0.27 million tonnes of rolled products and 0.11 million tonnes of
plates.

ISPAT INDUSTRIES LTD. (IIL)

IIL has set up one of the largest integrated steel plants in the private sector in India
at Dolvi in Raigad District, Maharashtra with a capacity to manufacture 3 million
tonnes per annum of hot rolled steel coils (HRC). The Dolvi complex also boasts
of an ultra modern blast furnace (setup by a group company Ispat Metallics India
Ltd.) capable of producing 2.0 million tonnes per annum of Hot Metal/ Pig Iron, a
2.0 million tonnes capacity Sinter Plant (newly commissioned) and a DRI plant
with a capacity of 1.6 million tonnes per annum. The complex boast of an ultra
modern captive jetty which meets the plants‘ requirement with regard to import of
various raw material. In the coming years, after augmenting necessary
infrastructure facility, it has planned to export the goods from the captive jetty.
Further, the complex envisages adding a 110 MW captive power plant (which will
use the Blast Furnace gas) in near future. The integrated steel plant is using the
converter-cum-electric arc furnace route (CONARC process) for producing steel.
In this project, IIL have uniquely combined the usage of hot metal and DRI
(sponge iron) in the electric arc furnace for production of liquid steel for the first
time in India. For casting and rolling of liquid steel, IIL has the state-of-the art

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technology called compact strip production (CSP) process, which was installed for
the first time in India and produces high quality and specifically very thin gauges
of Hot Rolled Coils.

Competitive Profit & Loss A/c

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 Competitive Market Value Status

Competitors        
         
Company Current Book Value P/E Ratio Market Cap
Price
        (Rs. Cr.)
JSW Steel Ltd. 659.50 813.81 9.05 14,714.58
Tata Steel Ltd. 404.55 537.64 5.87 39,290.48
Steel Exchange India Ltd. 56.05 32.73 17.13 291.18
Visa Steel Ltd. 50.00 21.31 0.00 550.00
Gallantt Ispat Ltd. 42.20 54.21 18.68 112.95
Technocraft Industries (India) Ltd. 40.00 134.92 6.89 126.11
OCL Iron & Steel Ltd. 37.35 43.26 27.48 501.02
Bhuwalka Steel Industries Ltd. 18.00 24.09 0.00 18.67
Eastcoast Steel Ltd. 14.15 -0.76 0.00 6.93
Ensa Steel Industries Ltd. 10.25 137.18 0.00 5.02
Ranjeev Alloys Ltd. 5.31 5.21 0.00 2.04
SAL Steel Ltd. 4.20 14.83 95.19 35.69
Shree Precoated Steels Ltd. 4.15 -12.75 0.00 34.36
Marmagoa Steel Ltd. 2.28 0.47 0.00 13.86
Facor Steels Ltd. 0.95 0.03 0.00 19.62

Competitive Sales & Market Cap

Name Last Price Market Cap. Sales Net Profit Total Assets

    (Rs. cr.) Turnover    

Tata Steel 403.7 39,207.93 33,933.46 6,696.42 75,910.28
SAIL 83.75 34,593.15 46,341.79 3,542.72 57,234.96
JSW Steel 655.95 14,635.37 32,122.66 1,625.86 30,799.71
Visa Steel 50 550 1,365.91 -118.85 1,437.66

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RESEARCH DISTRIBUTION

SAIL ALL INDIA MAP

Page 47
Page 48
Distribution through dealer network.
1. OBJECTIVE:

a) To establish a wide distribution network for branded products of SAIL and to

increase its reach.
b) To promote and popularise SAIL products.
c) To improve market share and NSR in the long run.

2. PRODUCTS COVERED UNDER THIS SCHEME:

a) TMT bars 8-12 mm.

b) GP/GC Sheets

Converted Products (Embossed with SAIL brand name) may also be supplied to
SAIL Dealers. In addition, SAIL may also consider supply of small quantities of
TMT 16mm, Light Structural’s and HR/CR Sheets within the overall agreed
quantities.

3. PRICE AND COMMERCIAL BENEFITS:

a) The SAIL Dealer may lift the material at the monthly intimated prices on cash
and carry basis.
b) If SAIL delivers the materials at dealer’s premises, costs incurred by SAIL for
transportation of materials to the dealer’s premises will be recovered from the
dealer.
c) While no selling price shall be fixed /prescribed by SAIL for the products to be
sold through the SAIL Dealer, the Dealer is generally expected to maintain price
levels so that no undue competition is created for materials sold by SAIL directly.
d) No Commission is payable under this scheme.

4. FINANCIAL ARRANGEMENTS TO BE MADE BY THE SAIL

DEALER:

a) The SAIL Dealers shall furnish a Security Deposit @Rs.1000/MT of agreed

monthly offtake through DD/PO, payable at Branch locations, within 15 days of
the date of letter of Intent for appointment issued to the dealer. No interest shall be
payable on the security deposit. SAIL may consider extension of time for payment
of security deposit by 15 days in exceptional cases.

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b) In the eventuality of termination of the dealership for reasons as at clause 7, the
Security Deposit is liable to be forfeited.

5. AGREED OFFTAKE:

a) No Dealer shall be appointed for an agreed offtake of more than 100 MT per
month at any location.
b) There shall be an agreed quantity to be lifted in a month for each product the
SAIL Dealer may like to lift and the same shall be indicated in the LOI/ agreement
drawn under the Scheme. The agreed quantity may vary for different
locations/products.
c) In case the SAIL Dealer fails to lift three times the monthly agreed quantity
during a quarter, they shall make up the shortfall within the next calendar quarter.
However, in case the failure in either quarter is due to SAIL’s inability to supply
the material, SAIL may consider waiver of such shortfalls.
d) In exceptional cases, SAIL may consider increase or reduction of the minimum
agreed offtake within the overall limit of 100MT.

6. TENURE:

The SAIL Dealer shall initially be appointed for a period of two years, extendable
by one year at a time.

7. TERMINATION CLAUSE:

a) Repeated failures (more than two quarters) in lifting the agreed quantity by the
SAIL Dealer, for reasons not attributable to SAIL, shall render him liable for
termination of his Dealership.
b) SAIL can also terminate the arrangement at any time, by serving written notice
of 15 days on the SAIL Dealer after taking into account the following:
i) Evaluated performance.
ii) Adverse customer feedback.
iii) Repeated complaints regarding sales of material outside his assigned
jurisdiction.
iv) Unsatisfactory performance in any other respect, detrimental to the interest of
SAIL.

8. QUALITY COMPLAINTS:

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a) It shall be the Dealer's responsibility to provide all the post sales service with
regard to his customers including settlement of the quality complaints.
b) SAIL will 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 will be settled as per the quality complaint procedure of
SAIL in vogue.

9. TERRITORIAL JURISDICTION:

The Dealer is expected 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. SAIL will, however, retain the right to sell directly
within such jurisdiction.

10. MODALITIES OF PURCHASE:

The Dealer may purchase materials from the nominated SAIL Branch/
stockyard/Consignment agent yard/ Premises of conversion agent and/or on Direct
Despatch basis. The Dealer would normally be expected to source their materials
from the nominated branch/stockyard under whom he is attached, but in
exceptional cases can be allowed to lift material from any other stockyard on the
strength of a "No Objection Certificate" from the nominated branch.

11. MAINTENANCE OF STOCKS:

The Dealer shall endeavor to maintain stocks of the relevant products so that SAIL
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.

12. SYSTEM OF FEED-BACK

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a) The Dealer shall be required to submit a monthly report on the performance to
the concerned Branch as per the format given below: -

b) In addition to (a) above, the Dealer will be required to furnish the list of
customer(s) dealt with and quantity supplied to them, on a monthly basis to the
concerned Branch.

13. MODALITIES FOR OPERATION OF THE DEALERSHIP:

a) There will be no restriction on the Dealer about the number of products that he
may like to deal in, within the list of products covered by the scheme.

b) Depending upon the extent of responses SAIL may decide about appointing a
dealer to deal with one and/or more products.

14. APPLICATION FORM

a) Application forms will be sold by the concerned Branch Sales Office and will be
priced at Rs.500/- per form. The application form can be downloaded from the
website www.sail.co.in, in which case the cost of the application form shall be paid
through Demand Draft at the time of submission of the application.

b) The Application Form along with its Annexures containing, ‘Instructions to

Applicants’ and ‘Terms & Conditions’ in the form of draft agreement, after duly
signing each page, would constitute the total set to be submitted by the applicants.

15. GENERAL

a) The Dealer 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.

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b) The Dealer will be required to serve such requirements as would be
communicated to him by SAIL.

c) SAIL representative may inspect availability of materials at the premises of the

Dealer from time to time.

d) Applicants belonging in Scheduled Caste/Scheduled Tribe 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.

e) On appointment, an agreement containing the various Terms and conditions will

be signed between the SAIL Dealer and SAIL

f) While evaluating applicants for appointment of SAIL dealer, suitable weightage

may be given by SAIL to such applicants who intend to deal exclusively with
SAIL products.

g) As a minimum qualifying criteria, the applicant should possess an office/retail

outlet besides a storage space of suitable capacity

Sales Centers

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DEFINE MARKETING MIX

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PRODUCT

(1) Product Wise

  Semis Blooms, Billets & Slabs  

  Long Products Structurals

Crane Rails
Bars, Rods & Rebars
Wire Rods  
  Flat Products HR Coils, Sheets & Skelp
Plates
CR Coils & Sheets
GC Sheets\ GP Sheets and Coils
Tinplates
Electrical Steel  

  Tubular Products   Pipes  

  Railway Products Rails

Wheels, Axles, Wheel Sets  

(2) Plant Wise

Page 57
  Bhilai Steel Plant Blooms, Billets & SlabsBeams
Channels, Angles,bars
wire rods (tmt, plain& ribbed)
plates, Rails & heavy structurals
Pig Iron, Chemicals & Fertilisers
  Bokaro Steel Plant HR Coils & Sheets
Plates
CR Coils & Sheets
GP Sheets & Coils/ GC Sheets
Pig Iron, Chemicals & Fertilisers
  Durgapur Steel Plant Blooms, Billets & Slabs
Joists, Channels, Angles
Bars, Rods & Rebars
Skelp
Wheels, Axles, Wheel Sets
Pig Iron, Chemicals & Fertilisers  
  Rourkela Steel Plant HR Coils
Plates
CR Coils & Sheets
GP Sheets/ GC Sheets
Tinplates
Electrical Steel
Pipes
Pig Iron, Chemicals & Fertilisers  
  Salem Steel Plant Stainless Steel

PRICE
STATEWISE MRRP MONTH :        

Page 58
 JANUARY 2012
(REVISED)
           

MRRP (INCL VAT ) for SAIL TMT -

Branch/Location STATES (RS/-T)
TMT TMT10
    8MM MM TMT 12 MM TMT 16 MM
CALCUTTA/DPR W.BENGAL 1 50100 49100 48000 48000
SILIGURI W.BENGAL 2 51200 50100 49100 49100
BHUBANESWAR ORISSA 50600 49500 48500 48600
ROURKELA ORISSA 50600 49500 48500 48600
PATNA/MUSALAPUR/HAJIPUR/GAYA/          
GOPALGANJ/ROSERA BIHAR 50100 49100 48000 48000
BOKARO/RANCHI/DEOGHAR/ DUMKA JHARKHAND 50100 49100 48100 48100
GUWAHATI ASSAM 51700 50600 49600 49600
SHILLONG MEGHALAYA 52300 51300 50200 50200
DIMAPUR/KOHIMA NAGALAND 57800 56700 55700 55000
IMPHAL MANIPUR 58400 57400 56400 56200
AIZWAL MIZORAM 55200 54200 53100 53100
ITANAGAR ARUNACHAL 53100 52000 51000 51000
AGARTALA TRIPURA 55100 54100 53000 53000
GANGTOK SIKKIM 54900 53800 52700 52700
DELHI DELHI 50100 49100 48000 48000
FARIDABAD HARYANA 50600 49600 48500 48500
GHAZIABAD UP 50100 49100 48000 48000
KANPUR/LUCK/ALL/AGRA/JAG/GOR UP 50100 49100 48000 48000
JALLANDHAR PUNJAB 50300 49300 48200 48200
LUDHIANA PUNJAB 50300 49300 48200 48200
MANDI PUNJAB 50300 49300 48200 48200
CHANDIGARH CHANDIGARH 50100 49100 48000 48000
CHANDIGARH A/C HIMACHAL CHANDIGARH 51200 50100 49100 49100
SHIMLA /MANDI/PARWANOO HIMACHAL 51700 50700 49600 49600
RISHIKESH/DEHRADUN UTARANCHAL 50100 49100 48000 48000
SRINAGAR J&K2 53100 52000 51000 51000
JAMMU J&K1 51200 50100 49100 49100
LEH J&K3 56000 55000 54000 54000
KALAMBOLI/PUNE (NON OCTROI) MAHARASTRA 1 50600 49600 48500 48500
KALAMBOLI/PUNE ( OCTROI 3%) MAHARASTRA 1 52100 51000 49900 49900
NAGPUR(NON OCTROI) MAHARASTRA 2 50600 49600 48500 48500
NAGPUR(OCTROI 1%)   51100 50000 49000 49000
NAGPUR(OCTROI 2%)   51600 50500 49500 49500
NAGPUR(OCTROI 3%)   52100 51000 49900 49900
GOA GOA 52200 51100 50100 50100
AHMEDABAD/BARODA GUJRAT 50600 49600 48500 48500
BHILAI/RAIPUR CHATTISGARH 50700 49600 48600 49300
JABALPUR M.P. 53100 52000 50900 50900
GWALIOR/INDORE/BHOPAL M.P. 53100 52000 50900 50900

Page 59
JAIPUR/BHARATPUR RAJASTHAN 50600 49600 48500 48500
KOTA RAJASTHAN 50600 49600 48500 48500
DADAR & NAGAR
SILVASA HAVELI 52600 51500 50500 50500
CHENNAI TN ,PONDI-2 50600 49600 48500 48500
TRICHY/COIMBATORE TN ,PONDI-2 50600 49600 48500 48500
COCHIN KERALA1/PONDI -1 51200 50100 49100 49100
PONDI 1(MAHE)/TRIVENDRUM KERALA1/PONDI 1 51200 50100 49100 49100
SECUNDRABAD   50600 49600 48500 48500
A.P./PONDI-
  3(YAMAN)        
VIZAG / VIJAYWADA   50600 49600 48500 48500
ANDAMAN &
PORT BLAIR NICOBAR 55500 54400 53300 53600
BANGALORE KARNATAKA 50600 49600 48500 48500
PONDI -1= MAHE, PONDI-
2=PONDICHERRY.PONDI-3- YAMAN          

PLACE

Dealer’s Network
REGION STATE Total No of Dealers

Page 60
Eastern Arunachal Pradesh 41
  Assam 77
  Bihar 142
  Jharkhand 65
  Manipur 13
  Meghalaya 21
  Mizoram 10
  Nagaland 20
  Orissa 114
  Sikkim 5
  Tripura 13
  West Bengal 128
Eastern Total   649
Northern Chandigarh 19
  Delhi 48
  Haryana 177
  Himachal Pradesh 95
  Jammu and Kashmir 33
  Punjab 89
  Uttar Pradesh 340
  Uttarakhand 40
Northern Total   841
Southern Andaman and Nicobar 1
  Andhra Pradesh 151
  Karnataka 78
  Kerala 62
  Lakshadweep 1
  Puducherry 10
  Tamil Nadu 190
Southern Total   493
Western Chhattisgarh 70
  Dadra Nagar Haveli 2
  Daman and Diu 4
  Goa 9
  Gujarat 100
  Madhya Pradesh 112
  Maharashtra 252
  Rajasthan 117
Western Total   666
Grand Total   2649

PROMOTION

Page 61
Advertisements by Dealers:

Outdoor Advertisements:

There is a little bit of SAIL

in everybody’s life.

TV Advertisements:

SALES PROMOTION:

Page 62
The Dealer may 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 will be required to display boards of uniform style/ colour as
provided by SAIL. However, the maintenance and running expenditure in this
regard will be borne by the Dealer. The SAIL Dealer may also use the caption
“Dealer of SAIL" in his letterhead and advertisement material.

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 FINANCIAL ANALYSIS
2000-2005            
Profit & Loss account            
  Mar '05 Mar '04 Mar '03 Mar '02 Mar '01 Mar '00

Income
32,169.4 24,551.2 19,508.5 15,725.5 16,417.5 16,450.1
Sales Turnover 2 0 8 6 5 7
Excise Duty 3,455.12 2,881.66 2,370.56 1,982.62 2,122.91 1,938.71
28,714.3 21,669.5 17,138.0 13,742.9 14,294.6 14,511.4
Net Sales 0 4 2 4 4 6
Other Income 662.2 515.96 476.94 964.24 473.34 590.51
Stock Adjustments 367.72 -485.84 -433 -422.38 103.93 -1,963.03
29,744.2 21,699.6 17,181.9 14,284.8 14,871.9 13,138.9
Total Income 2 6 6 0 1 4
Expenditure            
11,523.0
Raw Materials 5 8,829.69 7,967.76 7,334.09 7,194.05 6,894.26
Power & Fuel Cost 2,195.59 2,158.86 2,036.56 1,700.67 1,579.68 1,464.89
Employee Cost 3,811.75 4,758.49 3,723.47 3,249.78 3,112.08 2,735.49
Other Manufacturing Expenses 231.52 203.19 199.76 151.54 177.18 161.73
Selling and Admin Expenses 1,394.09 1,429.45 1,415.59 1,041.70 911.04 793.63
Miscellaneous Expenses 358.36 208.03 185.2 408.13 355.89 355.65
Preoperative Exp Capitalised -921.71 -893.07 -856.21 -798.55 -781.99 -743.8
18,592.6 16,694.6 14,672.1 13,087.3 12,547.9 11,661.8
Total Expenses 5 4 3 6 3 5

10,489.3
Operating Profit 7 4,489.06 2,032.89 233.2 1,850.64 886.58
11,151.5
PBDIT 7 5,005.02 2,509.83 1,197.44 2,323.98 1,477.09
Interest 605.05 953.57 1,381.79 1,588.27 1,751.68 1,808.23
10,546.5
PBDT 2 4,051.45 1,128.04 -390.83 572.3 -331.14
Depreciation 1,126.95 1,122.59 1,146.66 1,155.89 1,143.62 1,132.79
Other Written Off 184.89 310.01 330.98 226.46 146.57 144.74
Profit Before Tax 9,234.68 2,618.85 -349.6 -1,773.18 -717.89 -1,608.67
Extra-ordinary items 174.66 11.7 45.29 66.29 33.56 8.64
PBT (Post Extra-ord Items) 9,409.34 2,630.55 -304.31 -1,706.89 -684.33 -1,600.03
Tax 2,592.37 118.47 0 0 0 0
Reported Net Profit 6,816.97 2,512.08 -304.31 -1,696.37 -728.66 -1,698.85
Total Value Addition 7,069.60 7,864.95 6,704.37 5,753.27 5,353.88 4,767.59
Preference Dividend 0 0 0 0 0 0
Equity Dividend 1,363.03 0 0 0 0 0
Corporate Dividend Tax 185.24 0 0 0 0 0
Per share data (annualised)            
41,304.0 41,304.0 41,304.0 41,304.0 41,304.0 41,304.0
Shares in issue (lakhs) 1 1 1 1 1 1
Earning Per Share (Rs) 16.5 6.08 -0.74 -4.11 -1.76 -4.11
Equity Dividend (%) 33 0 0 0 0 0
Book Value (Rs) 24.95 12.2 6.11 6.85 10.98 12.75

Page 64
2006-2011
Profit & Loss account Rs. Cr.
  Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 Mar '06

Income  
47,156.2 44,059.7 49,331.4 46,175.8 39,722.5 32,805.9
Sales Turnover 5 2 7 5 9 6
Excise Duty 4,621.95 3,463.82 5,532.89 6,217.18 5,393.82 4,605.48
42,534.3 40,595.9 43,798.5 39,958.6 34,328.7 28,200.4
Net Sales 0 0 8 7 7 8
Other Income 2,038.97 2,557.00 2,002.77 1,701.59 1,408.71 937.94
Stock Adjustments 1,471.69 -1,157.45 1,872.87 436.28 289.15 1,131.31
46,044.9 41,995.4 47,674.2 42,096.5 36,026.6 30,269.7
Total Income 6 5 2 4 3 3
Expenditure  
22,642.4 18,611.1 23,915.4 17,257.6 16,252.2 15,034.5
Raw Materials 7 2 5 7 8 4
Power & Fuel Cost 3,586.07 3,364.30 3,119.42 2,825.56 2,578.84 2,489.74
Employee Cost 7,530.24 5,417.00 8,401.73 7,919.28 5,087.76 4,156.97
Other Manufacturing Expenses 1,310.00 870.35 643.35 492.18 346.59 303.71
Selling and Admin Expenses 1,927.46 1,754.02 1,701.52 1,727.55 1,602.31 1,619.20
Miscellaneous Expenses 45.42 206.62 878.94 737.79 528.71 524.91
Preoperative Exp Capitalised 0.00 0.00 -1,930.40 -1,832.22 -1,423.08 -1,352.05
37,041.6 30,223.4 36,730.0 29,127.8 24,973.4 22,777.0
Total Expenses 6 1 1 1 1 2

11,267.1
Operating Profit 6,964.33 9,215.04 8,941.44 4 9,644.51 6,554.77
11,772.0 10,944.2 12,968.7 11,053.2
PBDIT 9,003.30 4 1 3 2 7,492.71
Interest 474.61 402.01 253.24 250.94 332.13 467.76
11,370.0 10,690.9 12,717.7 10,721.0
PBDT 8,528.69 3 7 9 9 7,024.95
Depreciation 1,482.20 1,337.24 1,285.12 1,235.48 1,211.48 1,207.30
Other Written Off 1.12 10.33 128.02 75.49 128.59 181.44
10,022.4 11,406.8
Profit Before Tax 7,045.37 6 9,277.83 2 9,381.02 5,636.21
Extra-ordinary items 163.71 184.80 181.26 64.61 60.57 71.12
10,207.2 11,471.4
PBT (Post Extra-ord Items) 7,209.08 6 9,459.09 3 9,441.59 5,707.33
Tax 2,304.34 3,452.89 3,284.28 3,934.65 3,253.80 1,694.36
Reported Net Profit 4,904.74 6,754.37 6,174.81 7,536.78 6,202.29 4,012.97
14,399.1 11,612.2 12,814.5 11,870.1
Total Value Addition 9 9 6 4 8,721.13 7,742.48
Preference Dividend 0.00 0.00 0.00 0.00 0.00 0
Equity Dividend 991.30 1,363.03 1,073.90 1,528.25 1,280.42 826.08
Corporate Dividend Tax 161.15 227.52 181.26 258.91 197.98 115.86
Per share data (annualised)  
Shares in issue (lakhs) 41,304.0 41,304.0 41,304.0 41,304.0 41,304.0 41,304.0

Page 65
 1 1 1 1 1 1
Earning Per Share (Rs) 11.87 16.35 14.95 18.25 15.02 9.72
Equity Dividend (%) 24.00 33.00 26.00 37.00 31.00 20
Book Value (Rs) 89.75 80.66 67.75 55.84 41.92 30.51

REVIEW & REVISE

SAIL recorded a turnover of over Rs. 50,000 crore in 2011-12. During 2011-2012
capital expenditure of more than Rs. 11,000 crore was made by the company.
Major facilities completed during 2011-2012 include new Turbo Blower and Re-
building of Coke Oven Battery No.1 & 2 at Bokaro Steel Plant, coil preparation
line of Cold Rolling Mill -3, Re-building of Coke Oven Battery No.6 at Bhilai
Steel Plant and New Ladle Furnace at Alloy Steel Plant, Durgapur. SAIL’s
turnover for the first nine months at Rs. 35563.73 crore was 5 % higher than
CPLY. Profits were impacted compared to CPLY, due to higher input costs and
foreign exchange variations. The company’s PBT and PAT during the April-
December’11 period were recorded at Rs. 2849.51 crore and Rs. 1965.74 crore,
lower by 42.7 % and 41.7 % respectively, over CPLY. The difference in profit
(PBT) at Rs. 2120 crore, was primarily because of impact of coking coal price
increase at Rs. 1849 crore, and foreign currency variation of Rs. 1079 crore.
SAIL’s net worth grew by Rs. 2503 crore to Rs. 38618 crore as on 31st
December’11. SAIL Board approved interim dividend for its shareholders at 12 %
of the company’s paid-up capital.

Reflecting the uptrend in performance over the preceding quarter, SAIL Q3 profit
before tax (PBT) at Rs. 903.76 crore and Q3 profit after tax (PAT) at Rs. 632.12
crore, registered a growth of 26 % and 28 % respectively, over Q2FY12. Q3 PBT
was down by Rs.724.44 crore (44 %) over CPLY, owing to impact of Rs. 578
crore on account of increase in prices of Coking Coal, and Rs. 499 crore on
account of foreign exchange variation. The impact of these two factors, among
others, also brought down PAT by Rs. 475.35 crore (43 %). The turnover for
Q3FY12 at Rs. 11685.95 crore was 4.8 % less than CPLY.

Several ongoing projects in SAIL steel plants were completed in Q3FY12,

including rebuilding of Coke Oven Battery-II at Bokaro, installation of turbo-

Page 66
blower no. 8 at Bokaro, installation of 60-tonne ladle furnace at ASP and Tonnage
Oxygen Plants at Rourkela & Bhilai. Commissioning activities for pickling line
cum tandem cold Mill (PLTCM) for Cold Rolling Mill at Bokaro were started.

SAIL Board has accorded in-principle approval for bearing the expenses of two
CRPF battalions for facilitating a safe environment in Rowghat region. Tender has
been floated for a pelletisation (4 MT)-cum-beneficiation (10 MT) project at Gua
iron ore mines, and is likely to be finalized this year. This is a step towards raw
material securitisation and bringing in environment-friendly mining technology.

During Q3FY12, SAIL moved one step ahead in its journey to become a global
player. The SAIL-led consortium AFISCO (Afghan Iron & Steel Consortium),
which had submitted its bid for mining exploration rights at Hajigak, having an
estimated reserve of 1.7 billion tonnes of iron ore, won the status of 'Preferred
Bidder' for blocks B, C and D of the mines with an estimated reserve of 1.28
billion tonnes of high-grade magnetite iron ore (with 62-64% Fe content). ‘SAIL-
Kobe Iron India Pvt. Ltd.’ name has been approved for 0.5 million tonnes ITmK3
plant. Subsequent to signing of term sheet for this plant, environment impact study
& site survey including soil investigation has been started at ASP, Durgapur. At
domestic front, SAIL signed a deed of transfer with Burn Standard and Co. Ltd.
(BSCL) for the transfer of BSCL's Refractory Unit at Salem to the newly formed
subsidiary of SAIL, namely SAIL Refractory Company Limited (SRCL). Since
SAIL's requirement of refractory material is expected to increase substantially after
implementation of its modernisation & expansion plans, the merger holds immense
strategic advantage for SAIL in the long run.

A new SPV company ‘SAIL-Sindri Projects Ltd.’ has already been incorporated in
November’2011, for revival of the closed units of FCIL. SAIL is awaiting BIFR
clearance for taking further action.

SAIL was conferred ‘Industry Excellence Award’ by Institution of Engineers

(India) in December’2011. SAIL employees also continued their winning streak at
national performance awards. Of the 189 Shram Awards for earlier calendar years
presented by Prime Minister Dr. Manmohan Singh and Union Minister for Labour

Page 67
& Employment Shri Mallikarjun Kharge at a glittering ceremony held at Vigyan
Bhawan in October’11, 103 went to SAIL employees. This translates to 54.5% of
the total number of Shram awards presented. SAIL also bagged 50% of the total 28
Vishwakarma Rashtriya Puraskar awards, which were presented to the employees
in November’2011. Recently, SAIL has been conferred MoU Excellence Award in
the Mining & Metals category by Hon’ble Prime Minister, at a function jointly
organised by DPE and SCOPE. This year, Bhilai Steel Plant of SAIL was declared
the winner of the Prime Minister’s best Integrated Steel Plant trophy for 2009-10.
This is the tenth time that BSP has won this coveted award.

Page 68
 VITAL FACTS & FIGURES

Last 12 Years Sales Data

50,000.00
45,000.00
40,000.00
35,000.00
30,000.00
25,000.00
Series1
20,000.00
15,000.00
10,000.00
5,000.00
0.00
1 2 3 4 5 6 7 8 9 10 11 12

Comparative Sales Figure of Last 12 Years (2000-2011)

Page 69
50,000.00
45,000.00
40,000.00
35,000.00
30,000.00
25,000.00
Series1
20,000.00
15,000.00
10,000.00
5,000.00
0.00
1 2 3 4 5 6 7 8 9 10 11 12

Page 70
Page 71
Page 72
Page 73
Page 74
Page 75
FORCASTED SALES

Page 76
 CONCLUSION

 Scheme designed to facilitate rural steel consumption & boost

branded product sales.

 Key policy changes have been made in the retail marketing strategy of
Steel Authority of India Ltd (SAIL) with the aim of ensuring furthest
possible penetration of its branded products SAIL-TMT and SAIL-
JYOTI in the country's hinterland.

 The strategic initiative is also important in view of the fact that rural
consumption is likely to grow substantially from present level of 10
kg per capita.

 The Central Marketing Organisation (CMO) of SAIL deciding to

extend attractive financial terms & conditions as well as incentives in
order to popularise its newly launched Rural Dealership Scheme.

 SAIL has planned to appoint 1,000 rural dealers in taluka, blocks and
panchayats under this scheme during the current financial year with
the aim of increasing consumption of steel in rural India.

 A number of attractive incentives will be offered to dealers in rural

areas under the scheme.

 Encouragement to small retailers in the hinterland to reach SAIL's

materials to remote locations.

 Dealers will be given an attractive incentive, irrespective of whatever

quantity they lift in a month.

 This will give confidence to prospective dealers to participate in this

endeavor of promoting the use of steel in the rural sector.

 To minimize the financial risk of rural dealers, SAIL has also done
away with the provision of security deposit for offtake of material.

Page 77
 This has been done to encourage the rural dealers to do greater
volume business with SAIL.

 SAIL will also give them appropriate credit facilities.

 SAIL will arrange transportation of the steel products from its nearest
warehouses to the dealers' outlets and bear the transportation costs.

 SAIL has the country's largest retail network for marketing of steel
with a ground force of over 2,500 dealers.

 The dynamic changes initiated in SAIL's retail marketing will go a

long way in meeting long-term strategy of further spreading the
network and making it more robust in terms of easy procurement and
supply in the rural hinterland.

 Leveraging the retail channel is critical to SAIL's expansion and

growth plans.

 SAIL expects to commission a number of new production facilities in

2012, and this is expected to increase availability of SAIL-TMT
(construction rebars) by over a million tonnes in the market.

 SAIL's retail channel has been a success story since its re-launch in
2006.

 In Q1 of 2011-12, SAIL achieved 21% growth in sales through its

existing dealer network.

 Likewise, sales of branded products, SAIL-JYOTI and SAIL-TMT,

witnessed growth of 57% and 9.5%, respectively, through the retail
channel.

Page 78
 RECOMENDATION

 Implementation of Vehicle Tracking System (VTS).

 Introduction of Global Positioning System (GPS) mounted vehicles.

 Webpage to track vehicles on-line.

 Development of desired infrastructure at Hubs/Stock yards and deployment

of specialized vehicles.

 Auto compliant hub to be introduced.

 Fleet of special vehicles has to been augmented to deliver damage free skin
panels.

 Standard Operating Procedures for receipt, storage, handling and delivery of

steel materials at all stock points have to be implemented.

 Creation of transport parks in to ease out traffic flow and educate all drivers
on safety and health concerns.

Page 79
 BIBLOGRAPHIES

Books:

1. Marketing Management
(Analysis, Planning, Implementation & Control)
By: Philip Kotler

2. Foundation of Marketing
By: M.Dale, Beckman, Louis E. Boone

3. Marketing Management (Global Perspective-Indian Context)

By: V.S.Ramaswamy, S.Namakumari

Websites:
1. www.google.co.in

2. http://www.4-traders.com

3. www.wikipedia.org/wiki/Steel_Authority_of_India_Limited

4. www.sail.co.in

Reference & Magazines:

1. Forbes India

2. Internal Circulations

3. Business World

Page 80