Chapter 1. Indian steel industry

1.1 Introduction

Steel Industry in India is on an upswing because of the strong global and

domestic demand. India's rapid economic growth and soaring demand by sectors

like infrastructure, real estate and automobiles, at home and abroad, has put

Indian steel industry on the global map. According to the latest report by

International Iron and Steel Institute (IISI), India is the seventh largest steel

producer in the world.

The origin of the modern Indian steel industry can be traced back to 1953 when a

contract for the construction of an integrated steelworks in Rourkela, Orissa was

signed between the Indian government and the German companies Fried Krupp

und Demag AG. The initial plan was an annual capacity of 500,000 tonnes, but

this was subsequently raised to 1 million tonnes. The capacity of Rourkela Steel

Plant (RSP), which belongs to the SAIL (Steel Authority of India Ltd.) group, is

presently about 2 million tonnes. At a very early stage the former USSR and a

British consortium also showed an interest in establishing a modern steel

industry in India. This resulted in the Soviet-aided building of a steel mill with a

capacity of 1 million tonnes in Bhilai and the British-backed construction in

Durgapur of a foundry which also has a million tonne capacity.

The Indian steel industry is organized in three categories i.e., main producers,

other major producers and the secondary producers. The main producers and

other major producers have integrated steel making facility with plant capacities

over 0.5 mt and utilize iron ore and coal/gas for production of steel. The main

producers are Tata Steel, SAIL, and RINL, while the other major producers are

1

ESSAR, ISPAT and JVSL. The secondary sector is dispersed and consists of: (1)

Backward linkage from about 120 sponge iron producers that use iron ore and

non-coking coal, providing feedstock for steel producers; (2) Approximately 650

mini blast furnaces, electric arc furnaces, induction furnaces and energy

optimizing furnaces that use iron ore, sponge iron and melting scrap to produce

steel; and (3) Forward linkage with about 1,200 re-rollers that roll out semis into

finished steel products for consumer use.

1.2 Strengths of Indian Steel Industry:

Low labour wage rates

Abundance of quality manpower

Mature production base

Positive stimuli from construction industry

Booming automobile industry

1.3 Structural Weaknesses of Indian Steel Industry:

1. Although India has modernized its steelmaking considerably, however, nearly

6% of its crude steel is still produced using the outdated open-hearth process.

2. Labour productivity in India is still very low. According to an estimate crude

steel output at the biggest Indian steelmaker is roughly 144 tones per worker per

year, whereas in Western Europe the figure is around 600 tones.

3. India has to do a lot of catching in the production of stainless steel, which is

primarily required by the plant and equipment, pharmaceutical and chemical

industries.

4. Steel production in India is also hampered by power shortages.

2

5. India is deficient in raw materials required by the steel industry. Iron ore

deposits are finite and there are problems in mining sufficient amounts of it.

India's hard coal deposits are of low quality.

6. Insufficient freight capacity and transport infrastructure impediments to hamper the growth of Indian steel industry.

3

TATA COMPANY’S PROFILE

2.1 Introduction

The TATA Group comprises 98 operating companies in seven business sectors:

information systems and communications; engineering; materials; services;

energy; consumer products; and chemicals. The Group was founded by

Jamshedji Tata in the mid 19th century, a period when India had just set out on

the road to gaining independence from British rule. Consequently, Jamshedji

TATA and those who followed him aligned business opportunities with the

objective of nation building. This approach remains enshrined in the Group's

ethos to this day.

The TATA Group is one of India's largest and most respected business

conglomerates, with revenues in 2007-08 of 131,535.88 crore, the equivalent of

about 3.8 per cent of the country's GDP, and a market capitalization of $77.5

billion as on August 13, 2008. TATA companies together employ some 289,500

people. The Group's 27 publicly listed enterprises — among them stand out

names such as TATA Steel, TATA Consultancy Services, TATA Motors and

TATA Tea — have a combined market capitalization that is the highest among

Indian business houses in the private sector, and a shareholder base of over 2.9

million. The TATA Group has operations in more than 85 countries across six

continents, and its companies export products and services to 80 countries.

4

The TATA family of companies shares a set of five core values: integrity,

understanding, excellence, unity and responsibility. These values, which have

been part of the Group's beliefs and convictions from its earliest days, continue to

guide and drive the business decisions of TATA companies.

5

2.2 LEGACY OF TATA GROUP

There is a difference between making money for oneself and creating wealth for

others. This is the story of a business house that has created wealth for a nation.

It is a story of struggle, anxiety, adventure and achievement. This is the story of

our pioneers.

Jamshedji Tata: The founder of the Tata Group began with a textile mill in

central India in the 1870s. His powerful vision inspired the steel and power

industries in the country, set the foundation for technical education, and helped

India leapfrog from backwardness to the ranks of industrialised nations.

Sir Dorabji Tata: Through his endeavours in setting up Tata Steel and Tata

Power, this elder son of Jamshedji Tata was instrumental in transforming his

father's grand vision into reality. It was also under his leadership that the Sir

6

Dorabji Tata Trust, the premier charitable endowment of the Tata’s, was created,

propelling the Tata tradition of philanthropy.

Sir Ratan Tata: Jamshedji Tata's younger son had a personality that reflected

his sensitivity to the struggles of ordinary people and his desire to utilise his

considerable wealth to enhance the quality of public life.

A philanthropist all his life, he created a trust fund for "the advancement of

learning and for the relief of human suffering and other works of public utility".

The Sir Ratan Tata Trust is today the second largest of the Tata trusts.

JRD Tata: The late chairman of the Tata Group pioneered civil aviation on the

subcontinent in 1932 by launching the airline now known as Air India. That was

the first of many path-breaking achievements that JRD, who guided the destiny

of the Group for more than half a century, came to be remembered for.

7

Naval Tata: Naval Tata's myriad contributions in the fields of business, sports

administration and labour relations symbolized all that is best in the Tata spirit of

giving back to society and the communities in which its enterprises grow.

8

2.3 PRODUCTS & SERVICES OFFERED BY TATA

Agricultural appliances (Tata Agrico)

Agrochemicals (Rallis)

Auto Accessories (Tata Auto Comp GY Batteries)

Books (Tata McGraw-Hill)

Cellular products and services (Tata Indicom)

Ceramics (Tata Ceramics)

Charter flights (Taj Air)

Coffee (Tata Coffee)

Cooling appliances (Voltas)

Credit card (Tata Sons)

Electronics (Infiniti Retail)

Entertainment (Tata Sky)

Fertilisers (Tata Chemicals)

Financial services (investment: Tata Asset Management, Tata Capital, Tata Investment Corporation)

Food products (food additives: Tata Chemicals; spices: Tata Tea, Tata Coffee)

Garments and home products (Westside)

Holiday homes (Tata Coffee)

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Home appliances (Tata BP Solar)

Hotels (Indian Hotels)

Housing (THDC)

Insurance (Tata AIG Life, Tata AIG General)

Jewellery (Tanishq)

Leather products (Tata International)

Multi-utility vehicles (Tata Motors)

Passenger cars (Tata Motors)

Tea (Tata Tea, Tetley)

Telecommunications (Tata Indicom, VSNL)

Watches, clocks (Titan)

10

2.4 TATA STEEL

TATA Steel's products include hot and cold rolled coils and sheets, galvanized

sheets, tubes, wire rods, construction rebar’s, rings and bearings. In an attempt

to 'discommodities' steel, the company has introduced brands like Tata Steelium

(the world's first branded Cold Rolled Steel), Tata Shaktee (Galvanized

Corrugated Sheets), Tata Tiscon (re-bars), Tata Bearings, Tata Agrico (hand

tools and implements), Tata Wiron (galvanized wire products), Tata Pipes (pipes

for construction) and Tata Structura (contemporary construction material). The

company has launched the Customer Value Management initiative with the

objective of creating complete understanding of customer problems and finding

solutions jointly. The company's Retail Value Management addresses the needs

of distributors, retailers and end consumers. The company has also launched

India's first steel retail store - steeljunction - for making steel shopping a happy

and memorable experience.

2.5 POLICIES OF TATA STEEL:

Tata Steel, in accordance with its founding principles, will continue to improve the

quality of life of its employees and the communities it serves.Tata Steel will

conduct its business ever mindful of its social accountability, respecting

applicable laws and with regard for human dignity.

Tata Steel will positively impact and influence its partners in fostering a sense of

social commitment for their stakeholders.

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2.5.1 Quality Policy:

Consistent with the group purpose, Tata Steel shall constantly strive to improve

the quality of life of the communities it serves through excellence in all facets of

its activities. TATA STEEL are committed to creating value for all our

stakeholders by continually improving our systems and processes through

innovation, involving all our employees.

This policy shall form the basis of establishing and reviewing the Quality

Objectives and shall be communicated across the organization. The policy will be

reviewed to align with business direction and to comply with all the requirements

of the Quality Management Standard.

2.5.2 Alcohol and Drugs Policy:

Tata Steel believes that the loyalty and commitment of its employees depend

upon the quality of life they are offered at work and at home.

TATA STEEL recognize that indiscriminate use of alcohol and drugs is injurious

to the well being of individuals, their families and the community as a whole.

TATA STEEL acknowledges that the misuse of these psychoactive substances is

a major health and safety hazard.

Tata Steel is therefore committed to creating an alcohol and drug-free

environment at the work place. This would be achieved through the involvement

of all employees and the Joint Departmental Councils in spearheading

appropriate initiatives. The initiatives would include:

1. Raising awareness, through the dissemination of information, education and

training and by promoting healthy life styles among our employees and their

families.

2. Motivating those employees who have an alcohol/drug problem, to seek

assistance, while maintaining confidentiality about such cases.

12

 2.5.3 Human Resource Policy:

Tata Steel recognizes that its people are the primary source of its

competitiveness. It is committed to equal employment opportunities for attracting

the best available talent and ensuring a cosmopolitan workforce. It will pursue

management practices designed to enrich the quality of life of its employees,

develop their potential and maximize their productivity. It will aim at ensuring

transparency, fairness and equity in all its dealings with its employees.

Tata Steel will strive continuously to foster a climate of openness, mutual trust

and teamwork.

2.5.4 Corporate Social Responsibility Policy:

Tata Steel believes that the primary purpose of a business is to improve the

quality of life of people.

Tata Steel will volunteer its resources, to the extent it can reasonably afford, to

sustain and improve healthy and prosperous environment and to improve the

quality of life of the people of the areas in which it operates.

2.5.5 Environmental, Occupational Health & Safety Policy:

Tata Steel reaffirms its commitment to provide safe working place and clean

environment to its employees and other stakeholders as an integral part of its

business philosophy and values. We will continually enhance our Environmental,

Occupational Health & Safety (EHS) performance in our activities, products and

services through a structured EHS management framework. Towards this

commitment, we shall;

1. Establish and achieve EHS objectives and targets.

13

2. Ensure compliance with applicable EHS legislation and other requirement

and go beyond.

3. Conserve natural resources and energy by constantly seeking to reduce

consumption and promoting waste avoidance and recycling measures.

4. Eliminate, minimize and/or control adverse environmental impacts and

occupational health and safety risks by adopting appropriate "state-of-the-

art" technology and best EHS management practices at all levels sand

functions.

Enhance awareness, skill and competence of our employees and contractors so

as to enable them to demonstrate their involvement, responsibility and

accountability for sound EHS performance.

2.5.6 Research Policy:

Tata Steel believes that research provides the foundation for sustained, long-

term, stakeholder delight. Tata Steel shall nurture and encourage innovative

research in a creative ambience to ensure that the competitive advantage in its

overall business is retained and surpassed. Towards this goal, the Company

commits itself to providing all necessary resources and facilities for use by

motivated researchers of the highestcalibre.10 Research in Tata Steel shall be

aligned to the technological initiatives necessary to evolve and fulfil the overall

business objectives of the Company.

2.5.7 Social Accountability Policy:

Tata Steel, in accordance with its founding principles, will continue to improve the

quality of life of its employees and the communities it serves.Tata Steel will

conduct its business ever mindful of its social accountability, respecting

applicable laws and with regard for human dignity.Tata Steel will positively

impact and influence its partners in fostering a sense of social commitment for

their stakeholders.

14

2.5.8 Key Enterprise Processes:

Leadership

Strategic Planning & Risk Management

Market Development

Investment Management

Human Resources

Improvement & Change Management

Order Generation

Operation & Fulfillment

Supply Management

Research & Development

Information Management

Social Responsibility & Corporate Services

2.5.9 Values:

Trusteeship

Integrity

Respect for the individual

Credibility

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Excellence

2.6 DISTRIBUTION NETWORK OF TATA TISCON (TATA)

16

TATA has its distribution network all over India. Marketing and sales

headquarters are divided in to four areas.

East region- This includes kolkata, Bhubaneswar, Jamshedpur, Patna and Siliguri.

West region- This includes Mumbai, Ahmdabad, Indore, Nagpur, and Pune.

North region- This includes New Delhi, Jaipur, Kanpur, Ludhiana, and Faridabad.

South region- This includes Banglore, Chennai, Vijaywada, and Secunderabad.

17

2.7 Company Profile of DTC

Introduction

Delhi Trading Corporation. (D.T.C.) is a member of the Steel Group of

Companies based at Jaipur, the financial back-bone of north India. DTC is the

Authorized Distributor of TATA STEEL for TATA TISCON Re-bars, on an

exclusive basis for Northern Region. This professionally managed company has

built up the Retail Channel across in Rajasthan by appointing authorized

Retailers/Dealers under its banner.

The company has been awarded for its Quality Management System. By

rendering unequalled quality service to its customers and continual improvement

as its management mantra, DTC is growing phenomenally every year.

The Company has got its yard at VKI AREA,JAIPUR with its digitized weigh-

bridge and enormous storage area where the materials are stored scientifically

for proper distribution. The organization is only developing further in the pursuit of

deployment of global best practices.

MILESTONE

Company was established in 1984 under the banner of DTC group

of industries.

In 2000 had a conglomerate diversification in steel industry as

authorised distributor of TATA TISCON debars for the state of

RAJASTHAN.

In 2002 got the distribution right of TATA TISCON rebar’s for the

Rajasthan state, in North region.

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In 2003 got the distribution rights for the entire Rajasthan region.

In 2006 got special award from TATA for maintaining good

relations with retailers and subsequently expanding business

opportunities.

Retail sales during 2007-08 are 32158 MT worth Rs.10.57 crore.

Project sales during 2007-08 are 9367 MT worth Rs 3.18 crore.

Total sales from both the segments are 41525 MT worth Rs 13.75

crore.

In 2008 D.T.C. got a special award from TATA for increasing sales

during the period 2007-08.

DISTRIBUTION NETWORK OF D.T.C

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Currently D.T.C. is operating in Rajasthan states of Northern region. It has appointed

retail dealers in every district of the Rajasthan and continuously giving in efforts to

increase market share as trying to form a relation with its dealer and retailers so that

it can achieve all the target of social accountability.

ORGANISATION CHART OF TATA STEEL LIMITED.

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Fig. organisation chart of TATA STEEL LIMITED

The organisation structure of TATA STEEL LIMITED includes three levels. In the

top management there is a Managing Director. He controls and commands the

whole organisation. After that line of authority is divided in to three parts. (1).

Chairman. (2) Vice Chairman. (3) Manager-planning and development.In the

middle level management there are Finance and comm. Managers and

departmental heads of all the regions. They are responsible to top level

MANAGING DIRECTOR

CHAIRMAN

VICE CHAIRMAN

MANAGER PLANNING & DEVELOPEMENT

FINANCE AND COMM. MANAGER

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management. In the lower level management there are Customer Accounts

Manager and Supervisors.

22

EXCELLENCE

TATA STEEL’s excellence may described by the company code of conduct. The

main points are (1) Ruthless cost cutting of wasteful expenditure, (2) Always

ready for the change, (3) Strive relentlessly to build relationships and influence

consumption.

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CHAPTER 3. RESEARCH METHODOLOGY

3.1 TITLE OF THE STUDY

“Physical Channel Management of TATA STEEL LTD.”

A project study report on the “Physical Channel Management of TATA STEEL

LIMITED” to find out the physical distribution channel.Channel management is

said to be the backbone of any business and is one of the important factor

behind the successful story of any business.

This project will give knowledge about the Indian steel industry (REBAR).It will

help to know about growing steel industry in India and about the adaptation of

channel distribution as per the need organization.

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3.2 DURATION OF THE PROJECT

The duration of the project was 45 days.

3.3 OBJECTIVE OF STUDY

The objective of the study was to find out the efficiency of the channel of

distribution of TATA STEEL LIMITED. here it was taken care of how the

organization is maintaining its physical channel and improvement could be done

so both the three concerns are benefited.

1. D.T.C. (DISTRIBUTOR).

2. DEALER

3. END CUSTOMER.

To meet out this objective a sample was taken of the dealers and a questionnaire

was supplied to them and their response was soughed. In the research every

minute detail were considered so that the objective Of the research are achieved.

Main objectives of the study are as follows-

To find out the efficiency of the channel of distribution of TATA STEEL

LIMITED.

To study the Indian steel industry during the global economic recession.

To study TATA STEEL’s extensive distributor/dealer network.

To get awareness about the physical channel management of TATA

STEEL LIMITED.

To study the effect of price fluctuation on the dealers of TATA STEEL

LIMITED.

To find out limitations of the channel management.

To know whether the dealers are satisfied with the company or not.

To find out whether unorganised market influences the price of the

product.

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3.4 TYPE OF RESEARCH

The research type employed in this research was exploratory as to know about

the review of the dealers. A survey was to conducted in the market to find out

the review of the dealers so that the efficiency and effectiveness of the physical

distribution channel can be analyzed and measures could be suggested. In

exploratory method of research it is easy to found out the real cause behind

any thing. Exploratory method is better than the descriptive as here elaboration

of a subject is done after analyzing the real market condition. Here primary

data was collected through personal visit to the market and giving a

questionnaire to the concerned people.

3.5 SAMPLE SIZE AND METHOD OF SELECTING SAMPLE

DATA COLLECTION.

I have used the following data collection methods during my research study:

PRIMARY DATA.

SECONDARY DATA.

PRIMARY DATA: Survey and questionnaire .

SECONDARY DATA: Secondary data is taken from manuals, books, journals and

internet.

The sample considered for this purpose was selected from the city of JAIPUR.

As DELHI TRADING CORPORATION (DISTRIBUTOR) is operating in Rajasthan

states and as it was not possible to meet each and every dealer within the

stipulated time.

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The city of Jaipur was selected because of the following reasons.

1. This city is the capital of Rajasthan.

2. The market of Rajasthan has got all the condition of a perfect market.

3. Jaipur is a big city and relatively it has got more no. of dealer then the

other cities.

4. The dealers of this city are easy to reach as they are within a close

proximity.

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The names of the dealer contacted for this purpose are given below.

1. ADITYA METACAST PVT LTD.JAIPUR

2. ANIL BUILDING MAT.JAIPUR

3. BALLU STEELS.AJMER

4. DELHI STEEL SYNDICATE.JODHPUR.

5. KRISHNA CEMENT AGENCIES.SANCHOR.

6. KUMAWAT TRADING CO.KOTPUTLI.

7. MAHADEV IRON STORE.BIKANER

8. MOHIT STEELS.,JAIPUR

9. MUFFDAL HARDWARE STORE.BANSWARA

10.PAWAN TRADING CO..HINDON.

11.PUKHRAJ RAM NARAYAN & CO.SUMERPUR

12.RAJASTHAN ENTERPRISES.BANSWARA.

13.RAMESHWAR LAL MALI, BIKANER,

14.SANGHI STEEL., JAIPUR

15.SUNRISE STEELS., JAIPUR

16.SURESH AGENCIES, JAIPUR

17.DELHI STEEL., KOTA

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3.6 Scope of study

This study will be helpful to find out the review of the dealers so that the

efficiency and effectiveness of the physical distribution channel can be

analyzed and measures could be suggested.

3.7 Limitations of the study

This project includes following limitations:-

It was difficult to study the Indian steel industry during the global

economic recession.

The area of Indian steel Industry is large enough to study.

It was difficult to get all the necessary information regarding the project.

It was difficult to study unorganised market.

Time constraint is the biggest constraint in taking up the study.

29

Chapter 4. FACTS AND FINDINGS

4.1 PRODUCTS:A little something to build your dream. And make it last. Throughout

the long years of its existence, Tata Steel has attempted to touch

the lives of millions of Indians. It has attempted not just to create

steel, but to create opportunities. To build not just plants, but lives.

If Tata Steel has improved the social fabric of the land, suffice it to

say that, that was expected of us by you. For we ardently believe

that what comes from the people must go back to the people. Which

is why, we are, indeed delighted to present to you.

The difference between TATA TISCON and any other Rebar in the market:-

TATA TISCON is the only Rebar in the market today that provides consistent

mechanical and chemical properties Rebar after Rebar. This is because TATA

TISCON is manufactured from virgin steel (made from TATA STEELS own

mines) and rolled with superior technology and strict discipline strong quality

control ensures that each rebars reflects the trust and quality that the TATA

name commands.

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Product Superiority     

High DuctilityNo cold twisting

Higher and uniform strength

Elongation 18-25%

No residual stress

Yeild strength 450 N/mm2 (min)*Uniform properties all through due to TMT process.

 

*(Typical values for 90% of cases)

1. Chemical Composition

TATA TISCON bars are produced in Fe 415 IS: 1786 grade. However,

carbon levels are restricted to much lower than the specification, which

results in excellent ductibility, high bendability and superior weld

ability.

Chemistry Unit IS : 1786 Fe 415

TATA TISCON

Carbon % 0.30**max 0.17-0.24Carbon equivalent(C+Mn/6)

% 0.38max

Sulphur % 0.060max 0.050maxPhosphorous % 0.060max 0.045S&P % 0.110max 0.090maxNitrogen ppm - 100max*(Typical Values for 90% of heats)**(In case of weldable bars the carbon content

31

should be 0.25% max)

2.Mechanical Properties.

Because of their unique method of manufacture, TATA TISCON

Bars possess a combination of strength and ductility that is far in

excess of the minimum limits specified in the standard is: 1786 in case

of yield strength for TATA TISCON, though the standard specifies 415

N/mm2 and designers use this value for design, the typical values are

as high as 450 N/mm2. For the same product, the typical value of

ductility as measured by elongation is 18%minimum as against

Because of their unique method of manufacture, TATA TISCON bars

possess a cothe standard value of 14.5% minimum. Undoubtedly, this

ductility is a guarantee of higher levels of safety.

Mech. Properties

Unit

IS : 1786 Fe 415

TATA TISCON*

Yeild Stress N/mm

415 min 450 min

Tensile Stress

N/mm2

10% over YS 520 min

Elongation % Min

14.5 min 18 min

*(Typical Values for 90% of heats)

Bond Strength:

The rib pattern of TATA TISCON bars has been specially designed to ensure that

excellent bond strength exists between the bar and the surrounding concrete.

32

The ribs are cut by automated milling machines which produce uniform and

concrete ribs. While the specification stipulates that bond strength should be 40%

higher than that of Mild Steel plain bars, TATA TISCON has values, which are

100-200% higher than those of Mild Steel Bars.

Bending:

The tough outer surface and core of TATA TISCON results in a rebar with

excellent values of bend ability. The bar can be bent around mandrels much

smaller than those specified in IS 1786. This has obvious advantages at

construction sites.

Weld ability:

TATA TISCON due to its low carbon equivalent has a weld ability which is

superior to conventional cold twisted bars. It can be butt-welded or lap-welded

using ordinary rutile coated electrodes of matching strength. In manual arc

welding no prewarming or post heat treatment is necessary.

Corrosion Resistant Characteristics:

TATA TISCON is produced by thermo-mechanical treatment and not by cold

twisting. Therefore, there are no torsion residual stresses in the bar, which result

in superior corrosion resistance characteristics compared to traditional cold

twisted bars.

Dimensional Tolerances:

TATA TISCON is supplied with section weight lower than the nominal, is

guaranteed for not more than the nominal, and is guaranteed for not more than

1% heavy.

Seismic Resistance Properties:

33

Studies were conducted on concrete beam column joints reinforced with TATA

TISCON to evaluate its performance under repeated reversed loading with

inelastic strains as would be encountered during an earthquake. The energy

dissipation was found to be almost same for each cycle; indication uniformly

maintained ductility till failure. The tests revealed superior seismic resistance

properties for TATA TISCON.

TATA TISCON strength and ductility exceeds the minimum level specified by IS:

1786 standards. While normal yield strength specifies 415N/ mm2 TATA TISCON

has yield strength of 450/mm2 which ensures stronger homes.

34

FLOW CHART OF PRODUCT PROPERTIES

35

Product Range  TATA TISCON bars are available in the following size range: 8, 10, 12, 16, 20, 22, 25, 28, 32, 36, & 40 mm

 

Standard Size and useful data     

Section (mm) Nominal weight (kg/meter)

Nominal length(Mts/MT approx)

8 0.395 253110 0.617 162012 0.888 112616 1.58 63320 2.47 40525 3.85 26028 4.83 20732 6.31 15936 7.99 12540 9.85 102

36

MARKET SHARE

The market of the rebar’s is primarily divided into following segments in India.

1. Individual house building.

2. Construction in real estate.

3. Government construction.

4. Mega infrastructure.

The market of rebar’s in Rajasthan states is primarily comprises of 2 segment.

1. Organized segment.

2. Unorganized segment.

The following players are present in the market and they can be divided on the

basis of above division.

1. ORGANISED SEGMENT:

a) STEEL AUTHORITY OF INDIA (SAIL).

b) RASHTRIYA ISPAT NIGAM LTD.(RINL)

c) TATA TISCON

d) KHAMDHENU TMT

2.UNORGANISED SEGMENT:

a) BISCON TMT

b) SAI TMT

c) ELLEGANT TMT

d) BHAGWATI TMT

e) AADHUNIK TMT

f) SHYAM STEEL

37

The market is divided between these two segments in the ratio of

30% ORGANISED SEGMENT

70% UNORGANISED SEGMENT

The market of Rajasthan is divided in both segments and TATA TISCON has a

market share of 30% in the organised segment. Since the last few years there

has been a significant increase in its market share .Today it has a good list of

clientele from all the 4 segments.

D.T.C. has put on all its effort to build a good market for TATA TISCON rebar

and it is continuously helping TATA to maintain a good channel of distribution. It

has trained its retailers so that they could aware common people of the benefits

of using high quality rebars.

38

Acquisition of CORUS

There is no doubt that Tata has pulled off a coup — Corus makes nearly four

times more steel than Tata Steel. The deal was cleared on 31st January 2008.

Together; the combine becomes the fifth largest producer in the world and the

second in Europe. But to make the most of the deal, Tata has to manage several

variables including steel prices, raw material supplies and interest costs on the

$8-billion debt that is being raised to fund the deal.

Soon he may also have to deal with the sensitive issue of possible job cuts in

Corus’s manufacturing plants. There are also the usual set of integration

39

challenges that come with such large buyouts. The deal may be done, but the

hard work is just beginning.

Despite the thumbs-down from the markets, the TATA Group is convinced of the

long-term synergies in manufacturing, access to global customers, opening India

to CORUS or leveraging research and development for TATA Steel’s projects.

40

Chapter 5. ANALYSIS AND INTERPRETATION

TATA and D.T.C. has good business prospects in the RAJASTHAN REGION.

The quality of the management and the efficient and dedicated employees and

channel partner.

Analysis from the area of research are given below by considering the questions

one by one as follows.

1. Whether the dealer is an exclusive?

Here as an answer most of the dealer were found to be in a

proportion.

80 % Dealers exclusive TATA TISCON DEALER

20 % Non exclusive

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Here it was found that 80% of the dealers were exclusive tata tiscon dealer and

they are proud to be associated with this brand, due to various factor such

quality, brand name, international standard followed by company etc.

2. Is profit margin better then other companies (both from organized and

unorganized)?

In this regard a mix response was found.

65% DEALERS AGREED

35 % DEALERS NOT AGREED

Here 65% of dealers agreed that they are receiving a better percentage then the

other companies are giving to its dealer.

Rests of the 35% were not agreed with the former one due to some unknown

reason.

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3. Positive aspect according to them?

Research conducted in this regard bring forth following findings

QUALITY

BRAND NAME

SAME PRICE ALL OVER INDIA

INTERNATIONAL STANDARD

Here it was found that the entire dealer’s reviews were divided in following

distribution. The findings are represented in the form of Venn diagram according

to their choice. Weight age is given according to their answers.

95%

1

85%

3

70%

2

65%

4

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4. Negative aspect according to them

Here the dealers were unanimous in following sections. One half thought that it is

1. PRICE FLUCTUATION

2. MONOPOLISTIC RESTRICTION

3. NO CREDIT FACILITY

4. HIGHER PRICE

PRICE FLUCTUATION: TATA uses to fluctuate its price in every 3-6 month which

is earlier then its competitors.

MONOPOLISTIC RESTRICTION: TATA imposes restriction such as dealers are

not allowed to take big project order, imposing new system of reporting daily sales

through e-mail.

NO CREDIT FACILITY: no credit facility is provided.

HIGHER PRICE: TATA has got a higher price for each kilo of iron (difference is 4-

5 Rs. a kilogram).

5. Additional benefit given by D.T.C.

The dealers here sighted the following benefits that are vested to them by their distributor.

SALES ASSISTANCE: D.T.C. provide sales assistance to new dealers,

they send their sales executive to the individual house builder address if

the dealer ask them to do so.

TRAINING: D.T.C. provides training to the dealers in 1 week programme

every year, and special training on the launch of new product.

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ADVERTISING AND SALES PROMOTION SUPPORT: time to time

advertisement and sales support are provided, advertisement material

such as banner, poster, pamphlets, glow sign etc.

EFFECTIVE SERVICING: fast and spontaneous reply is made on receiving

any query from dealer.

REGULAR, ADEQUATE AND PROMPT SUPPLY OF THE PRODUCT:

fast prompt supply is done on receiving order. Delivery is made within 24

hours.

EFFECTIVE COMMUNICATION: effective and timely communication is the

backbone of a good channel management. DTC. has provided all its dealer

with important call no. of its executive. Other then this TATA has provided

with an all India basis toll free no. to its dealers.

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6. End customer review about product?

THE dealers contacted for the purpose of research quoted that the end customer

are satisfied to 85% irrespective of the higher price they are paying for the product

because they regard quality as the prime factor in their purchasing decision. Some

of the other factor for which customer prefer to buy TATA REBARS are free home

delivery, fair weigh, international design of rebar, corrosion resistant property,

higher ductility, higher weld ability etc.

15%

85%

85 % SATISFIED CUSTOMER15 % NOT SATISFIED

The blue part denotes the satisfied dealer.

The red part denotes the unsatisfied dealer.

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7. Restriction of any kind imposed by distributor or company?

The dealers have sighted policies of both the TATA Company & their

distributor D.T.C. which they considered to be as restriction on them some

of the following are

Restriction of sending day to day sales report for that most of the dealers

have to purchase new computer and have to bear extra expense of

internet.

Have to purchase electronic weighing machine which after a year was of

no use to, as TATA has introduced single piece selling system now.

Have restricted them not to handle big project and they can deal with

individual house builder only which have less margin then the former one.

Have to complete the target on month basis if not achieved for 2-3 month

they may loose their dealership.

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8. Discount given to them?

On asking this question all the dealers were unanimous on the point that no discount is given to them.

No discount, 100% of the dealer gave the same review.

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9. Whether dealers are satisfied? YES/NO

In regard of this question it was found that about 75% of the dealers were found

to be satisfied with the distribution channel and management of both the

companies i.e. TATA & DTC.

75 % SATISFIED

25 % NOT SATISFIED

The red part denotes the unsatisfied dealer.

The blue part denotes the satisfied dealer.

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Chapter 6. SWOT ANALYSIS

SWOT ANALYSIS means analysis of strength, weakness, opportunities and

threat of a person or of an organization. Today in this competitive world full of

uncertainties and problems, an organization has to face so it has to prepare itself

for any kind of situation so organization do SWOT analysis on regular interval so

that they could access their strength, weakness and could analyse its situation

and can be prepared for any kind of situation.

By doing the SWOT analysis of TATA STEEL LIMITED following details were

found –

6.1 STRENGTH: brand name, quality, effective physical distribution, honesty

in weighing, free home delivery. Unique single piece selling, same price all over

India.

6.2 WEAKNESS: price fluctuation higher price.

6.3 OPPORTUNITY: fast developing real estate business, launch of new

super ductile product.

6.4 THREATS: basically no threats have seen but unorganized segment if not

controlled then it can be a potential threat in near future.

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Unique single rod selling: In this concept, TATA has introduced a new

strategy of selling single piece as compared to the selling by weight.

Free home delivery: TATA has introduced free home delivery for the

I.H.B. segment.

Price fluctuation: weakness observed was that TATA changes its price

every 6 months which when compared with others players is fast by 6

months.

New super ductile product: recent launch of new super ductile product

has prove to be an opportunity for the company as it is much superior

quality then the existing product offered by the competitors.

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Fig. SWOT analysis.

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Chapter 7. Conclusion

As it can be concluded from data interpretation and analysis that TATA STEEL

LIMITED has got a good future in steel industry because today it is maintaining

an effective channel distribution and management. Channel management is said

to be the backbone of any business and is one of the important factor behind the

successful story of any business. In Indian market where no. of intermediaries

are more here to be successful coordination should be there.

TATA STEEL LIMITED is maintaining an effective channel distribution and

management.

TATA has got a good future in steel industry.

80% of the dealers were exclusive TATA TISCON dealer and they are

proud to be associated with this brand, due to various factor such quality,

brand name, international standard followed by company etc.

Profit margin is not greater then other companies (both from organized

and unorganized).

Negative aspect according to the dealers were price fluctuation,

monopolistic restriction, no credit facility, higher price.

Company has made some restrictions on the dealers.

THE dealers contacted for the purpose of research quoted that the end

customer are satisfied to 85% irrespective of the higher price they are

paying for the product because they regard quality as the prime factor in

their purchasing decision. Some of the other factor for which customer

prefer to buy TATA REBARS are free home delivery, fair weigh,

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international design of rebar, corrosion resistant property, higher ductility,

higher weld ability etc.

No discount is given to the dealers. It may be the reason of dissatisfaction

of some dealers.

It was found that about 75% of the dealers were found to be satisfied with

the distribution channel and management of both the companies i.e. TATA

& DTC.

Effective and timely communication is the backbone of a good channel

management. TATA and D.T.C. are having effective communication with

dealers and customers.

The end customer are satisfied to 85% .

“In India it is believed that doing business is building relation”, so to be

successful in Indian market you have to maintain a good relation with the

intermediaries and end consumer, and TATA is maintaining it very effectively.

The punch line of TATA is clearly depicting it clearly “ATOOT JOOD” both in term

of quality and relation with customer and intermediaries.

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Chapter 8. Recommendation and suggestions

Through the analysis of the data collected and through market study following recommendations are suggested:

1. Should try to convince dealer’s with less capital to be exclusive by making them agree on the point that future scope of TATA in steel sector is bright and better quality and brand name is going to the most preferable point in the eye of customer.

2. TATA should try to give more margins to its dealer so that better hold of the market.

3. Positive aspect according to the dealer should be maintained and other strong advantage should be looked for such as price, higher rate of production.

4. Price fluctuation should be stopped and if not then its should be avoided for as long as possible, if fluctuation is done it should be done after competitor has revised their rates.

5. No new scheme and policy should be forcibly implemented if a policy is to be made then it should be taken care of that the interest of the small dealer should not be hampered.

6. Credit facility should be given so that market share could be increased,

as in Indian market credit given and taken is the essence of Indian market.

7. Price rate should be brought down as other players are having advantage of low price.

8. The types of benefit given by D.T.C. are very good and they are appraised by dealer.

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9. Customer review is found to be satisfactory and it should be maintained in future.

10. Company should try to give discount in off season (monsoon).

11. Dealer satisfaction is found to be satisfactory, and should be maintained in future.

12. Start advertisement campaign again on television, radio and Internet

also. Do intensive marketing for business opportunity and products both.

13. Build trust upon customers through services.

14. Provide part time training.

15. Do some social activities through which company could get benefit of marketing indirectly.

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Questionnaire.

1. Whether the dealer is an exclusive? YES/NO

2. Is profit margin better then other companies (Both from organized and unorganized)? YES/NO

3. Is there any Additional benefit given by D.T.C.? YES/NO

4. Whether dealers are satisfied with company? YES/NO

5. Is there any restriction imposed by distributor YES/NO

Or company?

6. Is Discount given to them? YES/NO

7. Satisfaction of customer, YES/NO

8. Is there any credit facility by company? YES/NO

9. Is there any price fluctuation in the market? YES/NO

10. Does price differ from area to area? YES/NO

11. Prompt supply of the product. YES/NO

12. Does company provides any traning for launching YES/NO Of a new product?

13. Free home delivery by the company. YES/NO

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BIBLOGRAPHY

I have consulted many sources of information to furnish my project report. I have

tried my best to put comprehensive matter regarding all those things come under

my project area. I have gone through several sources of information. These are

as follows-

WEB SITES

www.tatasteel.com

www.economywatch.com

www.steelonthenet.com

www.excelbooks.com

Books

MARKETING MANAGEMENT

STRATEGIC MANAGEMENT

SUPPLY MANAGEMENT

Search Engines

www.google.com

www.yahoo.com

www.altavista.com

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