4 PS OF MARKETING:1. PRODUCT:

Tata Steel Products

The Companys products consist of TSL products, produced by the Companys Indian operations and its NatSteel and Tata Steel Thailand operations, and Corus products, and produced in the United Kingdom and The Netherlands. TSLs products can be divided into three main categories:

1. Finished and semi-finished steel products;

2. Ferro alloys products; and

3. Other products and services, including tube products, bearing products, refractory products, pigments, municipal services and investment activities.

Corus has four main product segments: (1) strip products; (2) long products; (3) distribution and building systems; and (4) aluminum.

TSL Products:

Finished and Semi-finished Steel Segment Products

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

1. PRICE:

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

Factors Influencing Pricing Strategy in Steel Industry

The most important factors which affect pricing strategies in steel industry are:

1. Production Costs

2. Market demand (derived in nature)

3. Competition

4. Government regulations

Production Costs

Tata Steel is the lowest cost manufacturer of steel and keeping production costs low have played a major role in achieving that. The following measures have helped Tata Steel in maintaining cost leadership:

1. Acquiring sources of raw materials in India and globally: Tata Steel has captive coal mines in West Bokaro and Jharia. The mines in Bokaro have reserves of over 196 million tones and the coke mine in Jharia can produce 1.9 million tones of raw coal annually. Its iron ore mines are located in Noamundi and Joda and chromite mines at Sukinda contribute to raw materials for Tata Steel.

Internationally, Tata Steel has 5% interest in the Carborough Downs Coal Project located in Queensland Australia for low ash coal. The Sila Eastern Company has been established to develop limestone mines in Thailand mainly for the captive use of Tata Steel.

2. Capacity expansion: With the expansion of its Jamshedpur plant by 2012 and Greenfield units in Orissa and Chhattisgarh becoming operational in 3-4 years, its manufacturing capacity will jump to 21 mtpa. Acquisition of Corus has made Tata Steel one of the largest manufacturers of steel.

3. Technology: Tata Steel has developed several technologies that help in keeping production costs low. Some of them are:

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

Stamp charging technology was indigenously developed to convert low quality coal to high quality coking coal. This reduced the import of coking coal.

All these factors and more have led to Tata Steel being the lowest cost, but still the best quality steel manufacturer.

Pricing Strategy:

A pricing strategy must be conceived in relation to overall business objectives and marketing strategy. The success of any business depends upon a blend of long run profit, growth and survival objectives. Price, because of its influence on unit sales volume and profit margins, affects long run profit objectives. And maintaining profitability through sound pricing practices is necessary to ensure the firms survival over time.

The pricing strategy adopted by Tata Steel is the Market Penetration Strategy. This strategy is based on the assumption that demands for the product is highly elastic. By setting relatively low

price Tata Steel has managed to obtain large market share. The advantage of this kind of pricing is that it discourages competition since there is less opportunity to reap unusual benefits on investment. Since Tata Steel is in control of large iron ore deposits it has increased its capacity manifold and so enjoys economies of scale. It has thus maintained prices of its products lower than of its competitors and has increased the scale and efficiency of operations, since it has lower production costs.

. PLACE:

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

Distribution channels at Tata Steel:

Tata Steel Limited delivers steel products to Indian customers through:

Direct supply channels,

21 stockyards,

25 consignment agents,

15 external processing agents and

TATA Steel main distribution channel is selling branded steel through Mjunction.It provides cutting edge of Information Technology, is a 50:50 venture of SAIL and Tata Steel. It is India's largest e-Commerce company and the world's largest e-Marketplace for steel. Mjunction offers a wide range of selling, sourcing and knowledge services that empower businesses with greater process efficiencies.

Tata Steel initiated the first online e-Sale through Mjunction in the month of February 2002 and since then has sold 221,259 MT. The products that Tata Steel has sold through MJunction are: HSM Defectives, HSM POR, GP Coils, LP Defectives, Prime Billets and Secondary Products. The results have been extremely encouraging for Tata Steel, with products being sold to customers all over the country. The prices obtained by Mjunction have been reflective of the market situation.

The entire cycle time of selling materials has been reduced by the speed and efficiency with which on-line competitive bidding events has been created and managed by Mjunction. Through intensive market-making efforts and the use of technology, it is bringing in both, greater efficiencies to processes and greater focus to the sale of non-core products of Tata Steel.

4. PROMOTION:

In B2B marketing advertising, promotions and publicity plays an important role in the communication strategies. Hence, to contribute to the overall effectiveness of the promotional strategies utmost care must be taken by the companies.

B2B promotion is used to create awareness of the company, to increase the sales of the product and to increase the overall effectiveness of the selling efforts. The promotional programme begins with carefully developed advertising objectives that must be formulated from corporate and marketing objectives in such a manner as to set the direction for creating, co-coordinating, and evaluating entire promotional programme.

Promotional activities undertaken by TATA Steel:

Branding Steel Based on Customer Focus

As one of Indias most successful companies, Tata Steel represents a great example of a strongly branded B2B company. In 2001and 2005, Tata Steel was ranked the worlds best steel company in studies carried out by World Steel Dynamics Inc., USA (WSD), a leading steel information service provider.

Branding Steel

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

Branding its products

Moving to high value added products.

The company soon realized that a strong customer focus is essential if any branding approach was to be successful. It soon began to introduce Internal Campaigns in order to bring the customer-centric message to its employees. In the late 1990s, the company launched several Internal Marketing Programs to emphasize customer focus and service. The programs had taglines such as:

Customer first her haal mein (Customer comes first in any case),Customer first her haal mein, her saal (customer comes first in every case, every year),Customer ki kasam hain taiyaar hum (We pledge to the customer that we are ready for him).