Global Marketing Strategies for Indian Firms

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<p>EXECUTIVE SUMMARY Global marketing offers a way for companies of all sizes to grow by expanding their customer base beyond the domestic market. However, the complexities of global marketing demand careful planning and proper implementation. This study has been conducted to gain knowledge about the potential strength of Stainless Steel exports of China. The supply demand scenario, domestic steel industry and the present and possible role of India was analyzed in case of China. To start with the Indian and the world Iron and steel Industry is studied and comparative study of the performance of Exporting Countries and Indian industry is analyzed. Indias positioning in the global perspective will depend upon cost competitiveness of the Indian. Besides the continuous developed, emphasis productivity is to given on new quality</p> <p>technology/process/products</p> <p>improvement,</p> <p>improvement. The Chinese steel market is one of the most active markets in the world. China is a country with a dynamic economy whose annual growth rate has stayed at 7-8 percent in the last five years. After this China Customer are segmented, and the most attractive segments for Indian Exporters are selected as target markets. The company studied is Jindal Steel Ltd. Jindal Stainless is among the top twelve stainless steel producers in the world along with Arcelor, KTS, Acerinox, Avesta Polarit, and POSCO etc. The company itself has two offices in China and is a well-known brand in the Chinese Stainless Steel Industry. It is a pioneer in the production of Chrome Manganese Stainless Steel and last year 90% of Jindal Stainless exports were to China.</p> <p>1</p> <p>OBJECTIVES OF THE STUDY</p> <p>Indian business firms are facing problems on the international marketing front and the possible strategies that can employ for going global and maintain their stride with global scenario</p> <p>2</p> <p>3</p> <p>MARKETING MIX OF GLOBAL MARKETING</p> <p>Marketing planning helps you decide what products or services are required in your market, then how to sell them and what price to put on them. So focus on the seven Ps of marketing people, planning, product, positioning, pricing, place and promotion. People The personal, cultural, social and psychological attitudes of your customers are important. If you are going to meet their needs; do some basic market research. Planning Your market research needs to be analyzed and evaluated. You can then start to predict the requirements of your customers. Product (or service) What makes your product different from that of your competitor? Can you develop any brand values for your product? Decide what your unique selling point is and work out how the customer will benefit from your product or service. Positioning Differentiate your product from that of your competitors. Look for the gap in the market for your product; work out why this gap exists. How big is this market? Does it have short and/or long term growth potential? Decide who your competitors are and how they will react to your plans. What makes your product special? How will you develop and exploit competitive advantage; work out the best time to launch your product. Pricing What people feel about a product is reflected in what they are prepared to pay for 4</p> <p>it. Identify what value your customers place on your product. Then decide which market segment you will attack e.g. premium or budget. What discount structure (if any) will you offer for volume. What will be your pricing policy for agents, wholesalers and retailers? Place You may need to work out how your goods will move from where they are produced to where they are sold. You may want to use wholesalers, retailers or your own premises. Or will you use direct marketing, telemarketing, or ecommerce via the Internet? Promotion This is the most visible aspect of marketing. It pulls together various communication elements- Corporate identity; Branding; Advertising strategy; Public relations, internal and external; Direct marketing; Sales promotion and merchandising; Sales and sales management; Exhibitions.</p> <p>5</p> <p>6</p> <p>DEVELOPING MARKETING STRATEGIES Positioning and differentiating the market offerings through the product lifecycle Developing new market offerings Designing global market offerings</p> <p>This study will also be conducted to gain knowledge about the potential strength of Stainless Steel exports of China. The supply demand scenario, domestic steel industry and the present and possible role of India was analyzed in case of China. To start with the Indian and the world Iron and steel Industry is studied and comparative study of the performance of Exporting Countries and Indian industry is analyzed. In the next step, the environmental analysis of China is done. The environments selected included macro-micro economic environment, legal environment, social environment, and business environment, of China. Indias positioning in the global perspective will depend upon cost competitiveness of the Indian. Besides the continuous developed, emphasis productivity is to given on new quality</p> <p>technology/process/products</p> <p>improvement,</p> <p>improvement. The Chinese steel market is one of the most active markets in the world. China is a country with a dynamic economy whose annual growth rate has stayed at 7-8 percent in the last five years. The Iron and Steel Industry is one of the major foreign exchange earners, despite of important role it plays in balancing Indias international trade. Steel has pervaded our daily lives from the kitchen to hospital and industry. Because of its ability to withstand corrosion, steel has found an indispensable slot even in the medical world. 7</p> <p>Extensively used, steel is sudden in a wide assortment of container industry, galvanizing units, engineering industry electrical industry, re-rolling industry and heavy industry. Hence we can say that: There is a little bit of steel in everyones life Iron containing less than 2% carbon and less than 1-% silicon and not more than a trace of phosphorus is what is usually termed steel. Carbon is the principal hardening element in steel. The increment of carbon % within steel increases the hardness of steel. The hardness becomes correspondingly less in steel containing more than 85% carbon than low carbon ranges. PRODUCTION PROCESS There are two primary methods of making steel, differing in terms of the process and raw materials used : the blast furnace route (BF) and the electric arc furnace (EAF) route. In the BF process, the iron is first reduced with coke in a blast furnace and then refined to produce molten steel, while in the EAF process a mix of scrap and sponge iron is melted using electricity in an electric are furnace to produce long and flat products. Stainless steel is gaining recognition and it is considered as the friendly and sustainable material because of its corrosive resistance and for its easy to clean / hygienic surfaces. Its versatility, durability and its supraliminal quality makes stainless steel the exceptional material of a choice for the new millennium. Initially stainless steel found its applicability in cutlery and gradually into textile, chemical and other engineering industries. Today its application has created wonders in the Architecture, Building and Construction (ABC) and Automobile, Railways and Transportation (ART). Stainless steel usage in the building and construction sector would increase in the coming years. If the potential of the market is fully realized in terms of the prospective end use</p> <p>8</p> <p>sectors mentioned above along with the continuing growth of the utensil market, the future growth rate of stainless steel can even be higher than witnessed in the last decade. INDIAN STEEL INDUSTRY Indian Steel Industry is now going through a speedy growth path. In the global scenario, China remains the worlds largest crude steel producer in 2008. Chinas steel sector has been following an upward trend, with sale of steel product reaching their highest levels in recent years. Increased imports and decreased export have combined to bring great pressure to bear upon chinas steel market. The Antidumping Measure taken by the United States against China HR Plates has seriously helped up Chinas export. In china the volatile Nickel price create uncertainty in the stainless steel market. Chinas Metal Sector has been enjoying a period of astonishing growth. Trend of production and consumption are further elaborated with respect to category of products like cold rolled flat, bars, wire rods and pipes. Stainless steel world has a department specialized in research and intelligence to help meet the markets increasing need for the resolution of complex technological and informational problem. Stainless steel production in India is speedily increasing since the last three decades. Initially India had to depend on foreign markets to meet its requirement of stainless steel. Today India is self sufficient enough to make stainless steel of all grades, shapes &amp; sizes and is also a major exporter of stainless steel of utensil grade. In the Public Sector, the special steel plants of Steel Authority of India Limited (SAIL) at Durgapur and Salem have made significant contribution for the growth of this industry. Mukand Limited, Panchmahal Steel Limited, Shah Alloys Industries Ltd., Jindal Strips Limited have also contributed significantly in making India self-sufficient in stainless steel production. (William A. Johnson, 2001) 9</p> <p>Most (around 75%) of the Indian stainless steel market is still in the kitchen segment. Indian Railways is switching over to manufacture their passenger coaches which will require 15 mt stainless steel per coach in coming 5 years. The Indian government is using Ferric cold rolled stainless steel strips for making coins. The main focus of Indian stainless steel industry is China which still imports 90% of stainless steel. (William A. Johnson 2001) EXPORTS FROM INDIA Iron and steel exports from India started after 1964, the first time Indias supply dominated her domestic needs. Though the Indian exports are quite vulnerable to domestic demand conditions, the export market has been doing reasonably well in the past few years, with FY03 seeing an increase of more than 100% over the previous year. The increase in exports to Asia (approx. 227%) and America (105%) has contributed to this massive growth. The abundant availability of raw materials like iron ore and cheap manpower in India provide tremendous potential for the iron and steel sector to grow. (Peter M Fish, 2003) The recovery of the steel sector witnessed in 2006-07 was carried forward in Q1 2007-08. Production and apparent consumption were higher by 8.4 per cent and 1.6 per cent, respectively. Production growth was 9.4 per cent in the flats segment as against 5.7 per cent in the non-flat segment. Apparent consumption growth in the flat and non-flat segments was 1.5 per cent and 5.1 per cent, respectively. The apparent consumption growth in the flat segment was negative despite a positive production growth, due to sharp rise in exports coupled with a poor domestic off-take largely due to the transporters strike in April 2003. Export performance was remarkable with a growth of 38.6 per cent during the period. Imports were higher by 26.8 per cent.</p> <p>10</p> <p>Export growth was higher for flat products (41.8 per cent) as against non-flat products (21.8 per cent). Import growth was higher for non-flat products (42.9 per cent) as against flat products (25.7 per cent). The capacity utilization (primary and secondary producers) of crude steel production improved from 86.3 per cent in Q1 2002-2003 to 92.0 per cent in Q1 2003-2004. India exported about 3.85 million tonnes of stainless steel production in 2007-08. Of these, low nickel high manganese grade hot rolled and cold rolled products were 30,000 tones. In the 300 series, hot rolled and cold rolled products were about 30,000 tones, Corex Furnace Bars 43,600 tones, wire and cables about 22,000 tones. The export of 400 series was 13,800 tones of which CF Bars were 9,200 tones and wire and coils about 3,400 tones. The export of utensils and kitchenware during 2007-08 was about 80,000 tones. The value of utensil export by India in 2007-08 was about US $ 47 million to Middle-East. STATEMENT OF THE PROBLEM The study is intended to find the export potential of Stainless steel to Chinese market, to reveal present pattern and possible future developments of supply, demand and consumption in relevant product specific markets. Jindal Strips Limited is the largest integrated producer of stainless steel in India. It is Flagship Company of Jindal Group set up in 1970 under the visionary of Mr. O.P.Jindal. Jindal Organization is ranked fourth amongst the top Indian Business houses. The company initiates developing new market for its stainless steel products around four to five years back and has been able to achieve compounded average growth. Jindal is the leader in domestic market of stainless steel and it is trying to become a major player in international market. With a market share of 50% in India, it also exports to various 11</p> <p>countries across the globe. Jindal stainless is the only company in India which has the composite stainless steel plant for the manufacture of Slabs, Blooms, Hot rolled and Cold Rolled Coils. This study is carried out keeping in the interests of Jindal Strips Limited and hence it becomes important to have an insight of the domestic market and export potential in the Chinese market. OBJECTIVES OF THE STUDY 1. To study various global marketing strategies 2. This study highlights the export potential of Jindal Strips Limited in China. 3. This study may help Jindal Strips Limited in identifying new markets. 4. This study would present the strategic alliances that Jindal Strips limited can form to reduce the risk in the market.</p> <p>12</p> <p>13</p> <p>A global industry is an industry in which the strategic positions of competitors in major geographic or national markets are fundamentally affected by their overall global positions. A global firm is a firm that operates in more than one country and captures R&amp;D, production, logistical, marketing, financial advantages in its costs and reputation that are not available to purely domestic competitors. Global firms plan, operate, and coordinate their activities on a worldwide basis. Fords world truck has a Europeanmade cab and a North American- built chassis, is assembled n Brazil, and is imported into the United States for sale. Otis Elevator gets its door systems from France, small geared parts from Spain, electronics from Germany, and special motor drivers from Japan; it uses the United States for systems integration. A company need not be large to sell globally.</p> <p>DEVELOPING AN INTERNATIONAL MARKETING STRATEGY An international marketing strategy involves developing and maintaining a strategic fit between the international company's objectives, competencies, and resources and t...</p>