SUMMER TRAINING REPORT ON (A COMPREHESIVE STUDY OF MARKETING STRATEGY FOR THE SECONDARY PRODUCTS) AT BHILAI STEEL PLANT (AN INTEGRATED UNIT OF STEEL AUTHORITY OF INDIA LTD.) BY ( NIKHILESH YADAV) 2007-08 IN PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION DEGREE 1
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A Comprehesive Study of Marketing Strategy for the Secondary Products
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SUMMER TRAINING REPORT ON
(A COMPREHESIVE STUDY OF MARKETING STRATEGY FOR THE SECONDARY PRODUCTS) AT BHILAI STEEL PLANT(AN INTEGRATED UNIT OF STEEL AUTHORITY OF INDIA LTD.)
BY
( NIKHILESH YADAV)
2007-08
IN PARTIAL FULFILLMENT OF
MASTER OF BUSINESS ADMINISTRATION DEGREE
DISHA INSTITUTE OF MANAGEMENT AND TECHNOLOGY ,RAIPUR (C.G.)
1
CERTIFICATE
This is to certify that Mr. Nikhilesh Yadav Of DIMAT, MBA Semester – II has successfully completed the summer training in partial fulfillment of requirement for the award of MBA Degree prescribed by the Chattisgarh Swami Vivekanand Technical University, Bhilai.
This report is the record of authentic work carried out by the student during the academic year 2007 – 2008.
(Pradip Singh)
Internal Guide Director
2
DECLARATION
I Mr. NIkhilesh Yadav hereby declare that this report is the record of authentic work carried byme during the academic year 2007-08 in Bhilai Steel Plant (BSP) An integrated unit of Steel Authority (SAIL) Bhilai, District Durg (C.G.)
( )
Signature of the student
( Nikhilesh Yadav )
Name of the student
3
ACKNOWLEDGEMENT
I express my sincers thanks & regards to Bhilai Steel Plant, for giving me the
opportunity to study on the topic “A comprehensive study of Marketing strategy
for Secondary products at Bhilai Steel Plant.”
First & foremost I express my heartily thanks to Mr. Nitin Deshpandey
(Director DIMAT) my project guide Mr. Pradip Singh. I also thanks to Mr. Rama
Raju MD (BSP), Mr. S.M. Singh (GM-HRD), Mr. Anil Sharma (DGM-HRD), Mr. S.
Dubey (DGM-HRD), Mr. D.K. Jadhav (Sr. Mgr.-HRD), Mr. Namdev Barange
(Training coordinator –HRD) V.T. Section.
I also express my heartily thanks to Mr. S.R.Rai GM (M&SP) &
Mr.Ramarao AGM (M&SP) for their kind guidance. I also express my sincere
thanks to my coordinator Mr. S.S. Parida (M&SP) and all the heads of concerned
sections of marketing department, Mr. Sanjay Jaswal, Mr. D.P. Viswakarma, Mrs.
Susmita Dey, Mr.arindham jain (M & SP), Mr.Satpathy, Mr. R. Garga, and Mr.
Devendra Srivastava, Mr. P.K. Sahu for their kind cooperation in this project
work.
And lastly, I would like to thank all my group members for their kind
cooperations to complete this project work successfully.
Date… NIKHILESH YADAV
4
EXECUTIVE SUMMARY
During my eight weeks of summer training in the Bhilai Steel Plant, I have
done project research work on “Study on Marketing & Sales analysis of
Secondary Products”.
The project report tells us about the secondary product section and the
whole process, starting from collection of scrap to the lifting of material and its
distribution. The initial part of the report tells about SAIL and importance &
performance of Bhilai Steel Plant in the steel authority. It also tells about the
contribution of Bhilai Steel Plant to Sail’s profit. The next part describes the
procedure of selling & distribution the secondary product. And the major
consumer of BSP in this field.
It also throws light on use of secondary products for re-rolling mills as raw
material and the process of re-rolling and its products. The finding of my study
emphases the problem which I have observed. Such as refund of payment
procedure, price list of material, which is not available in the stockyard, all the
marketing decision relating to prime product are taken by the SAIL and carried
out by CMO.
In my opinion the organization is more concerned with larger order of steel
products by ignoring the smaller orders of steel products. The exports policy of
SAIL considers it secondary to domestic selling as it is a Govt. undertaking and
first priority is given to domestic marketing. The conclusion deals with the
objective of Bhilai Steel Plant to achieve sales analysis of secondary products.
The last portion conclusion & recommendation to improve the functioning of
marketing department of Bhilai Steel Plant.
INDEX
5
Sr. No. Content Page NO.
Chapter-1 Introduction 7
Chapter-2 Company Profile 22
Chapter-3 Product Profile 32
Chapter-4 Objective & scope of the project 41
Chapter-5 Research Methodology 43
Chapter-6 Data collection and interpretation 46
Chapter-7 Conclusion 61
Chapter-8 Limitation 63
Chapter-9 Recommendation 65
Chapter-10 Appendices 66
Chapter-11 Bibliography 70
6
CHAPTER -1 INTRODUCTION
STEEL ATHOURITY OF INDIA LIMITED (SAIL)
During struggle for independence, Pt. Jawahar Lal Nehru our first prime minister
of independent India had a very clear vision about the role of steel in the
development of our nation. Although Tata Iron & Steel Co. 9TISCO) established 7
in 1907 marking the beginning of Indian Steel industry followed by Indian Steel
Corporation (1918) they were too small to meet the development requirement of
a big country like ours. Therefore, in the first industrial policy resolution of the
government soon after independence, government decided to establish steel
plant in Public Sector only. However work could be started at faster pace in 1954
when. Hindustan Steel Limited was formed and the steel plants of 1 MT
capacity of each were established with provision of further expansion at Bhilai,
Rourkela and Durgapur with assistance from USSR, West Germany and UK
respectively.
Steel Authority of India Limited (SAIL) is the leading steel-making company in
India. It is fully integrated Iron and Steel maker, producing both basic and special
steel 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 sheet, electrical sheets,
structural, railway products, plates, bars and rods, stainless steel and other alloy
steels. SAIL produces Iron and Steel at four integrated plants and three special
steel plants, located principally in the eastern and central religions of India and
situated closed to domestic source of three raw materials including the
Company's Iron Ore, limestone and dolomite mines.
SAIL'S wide range of long and flat steel products are much in demand 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 (ITD). 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 known-how in steel making gained
over decades, SAIL's Consultancy Division (SAILCON) at New Delhi offers
services and consultancy to clients world-wide.
8
SAIL has a well-equipped Research and Development Center for Iron and Steel
(RDCIS) at Ranchi which helps to produce quality steel and develop new
technologies for the steel industry. Beside SAIL has its in-house Center for
Engineering Technology (CET) Management Training Institute (MTI) and Safety
Organization at Ranch. Its captive mines are under the control of the Raw
Materials Division in Kolkata. The Environment Management Division and
Growth Division of SAIL operate from their headquarters in Kolkata. Almost all its
plants and major units are ISO certified.
Integrated Steel Plants :-
Bhilai Steel Plant (BSP) in Chhattishgarh.
Durgapur Steel Plant (DSP) in West Bengal.
Rurkela Steel Plant (RSP) in Orissa.
Bokaro Steel Plant (BSL) in Jharkhand.
IISCO steel plant (IIS) in west Bengal.
Special Steel Plants :-
Alloy Steel Plants (ASP) in West Bengal.
Salem Steel Plant (SSP) in Tamil Nadu.
Visvesvaraya Iron and Steel Plant (VISL) in Karnataka.
Subsidiaries:-
Maharashtra Elektrosmelt Limited (MEL) in Maharastra.
JOINT VENTURE :
9
SAIL has promoted joint venture in different areas ranging from power to e-
commerce.
NTPC SAIL Power Company Pvt. Ltd.
Set up 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 Rurakela Steel Plants which have a combined
capacity of 240 MW.
Bokaro Power Supply Company Pvt. Ltd.
This 50:50 joint venture between SAIL and the Damodar Velley Corporation
formed in January 2002 is managing the 302 MW power generation and 1880
tones per hour steam generation facilitates at Bokaro Steel Plant.
Bhilai Electric Supply Company Pvt. Ltd.
Another SAIL-NTPC joint venture of 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 Ltd.
This is 40:60 joint ventures between SAIL and USX Engineers & Consultants. "A
subsidiary of the US Steel Corporation, promotes information technology in the
steel sector.
MetalJunction.com Private Ltd.
A joint venture between SAIL and Tata Steel on50:50 basis, this company
promotes e-commerce activities in steel and related areas.
SAIL – Bansal Service Centre Pvt. Ltd.
10
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 Ltd.
A joint venture between SAIL and West Bengal Mineral Development
Corporation Ltd. on50:50 basis was formed for development of Jayanti Dolomite
Deposit, Jalpaiguri for supply of Dolomite of DSP and other plant.
Romelt - SAIL (India) Ltd.
A joint venture between SAIL, National Mineral Development Corporation
(NMDC) and Russian promotes for marketing Romelt 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.
11
BACKGROUND & HISTORY OF SAIL :
A Rich Heritage:
The Precursor
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 Limited (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 plant were also transferred to
Hindustan Steel. The registered office was originally in New Delhi. It moved to
Kolkata in July 1956 and ultimately to Ranchi in December 1959.
A new steel company, Bakaro Steel Limited was incorporated in January 1964 to
construct and operate the steel plant at Bakaro. The 1 MT phases of Bhilai and
rourkela Steel plants were completed by the end of December 1961. The 1MT
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 1.58 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 1967, 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 Rurkela and 1.6 MT at
12
Durgapur, the total crude steel production capacity of HSL was raised to 3.7 MT
in1968-69 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 Crs. was made responsible for
managing five integrated steel plants at Bhilai, Bokaro, Durapur, "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. Beside, 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.
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 in production.
To make the final rolling plan.
To dispatch material as per orders.
To prepare demand forecast every month.
13
SAIL Today
SAIL today is one of the largest industrial 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 of entering the new millennium, SAIL launched its Financial and
Business restructuring program. 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.
PRODUCT MIX :
Product Wise
Semis Blooms, Billets & Slabs Long Products Structurals
Attaining market leadership through enhancing customer satisfaction.
Achieving continual improvement in productivity, quality and salability of
our products.
Active involvement of all our people in achieving our goals, objective and
targets.
Adherence to a quality management system based on ISO :9001:2000
and its periodic review for continued effectiveness.
ORGANIZATIONAL OBJECTIVE
To enhance customer satisfaction through :-
Improvement in productivity ad product quality.
Skill enhancement of our people by competence, commitment and culture
building.
Production as per Customer Requirement.
27
ENVIRONMENT POLICY
Bhilai Steel Plant committed to protect environment and shall strive to :
1. Introduce sound environmental management practices for minimizing pollution and its impact on air. water and land.
2. Conduct operations in an environmentally responsible manner for complying with legislation and regulations related to its environmental aspects.
3. Conserve and optimally utilize raw materials. energy. water and other resources.
4. Minimize waste generation and promote its recovery. Recycling and re-use.
5. Achieve continual improvement in environmental performance by setting and reviewing the objectives and targets periodically.
6. Enhance environmental awareness amongst employees and interested parties.
7. Communicate environmental policy to the persons working for or on
behalf of the organization and make it available to public on demand.
28
ORGANIZATION STRUCTURE OF BSP :
29
M D
E D (P & A)
E D(WORKS)
E D(PROJECT)
E D(MINES)
E D(M M)
E D(F & A)
DIR.(M&HS)
G M(VIG)
G M(M&SP)
G M
D G M
A G M
SR.MGR. MGR.
MGR.
DY.MGR.
ASST. MGR.
JR.MGR.
JR.MGR.JR.MGR.JR.MGR.JR.MGR.JR.MGR.JR.MGR.JR.MGR.
FLOWCHART REPRESENTATION OF M & SP DEPARTMENT :
Page 30 of 71
GM
DGM DGM DGM DGM MARKET DEVELOP
MENT OUTSTATI
ON OFFICER
Secondary products
CC&
Fertilizers
M & SP
Plate & Slabs
BBM ExportRSM, MM,
WRM, Pig. Iron
Exe.1
Exe.2
Exe.3
Exe.1
Exe.2
Exe.3
Exe.1
Exe.2
Exe.3
Exe.1
Exe.2
Exe.1
Exe.2
Exe.1 Exe.1
Exe.2
AWARDS & ACCOLADES
Bhilai Steel Plant has excelled in all walks of life, be it technology, quality,
environment or socio-cultural, some of the prestigious awards bugged by BSP
are as follows:
Prime-Minister Trophy for best Integrated Steel Plant in India - Won Seven times science its inception in the year 1992-93.
National Energy conservation Award in the integrated steel sector won for 1994, 1996, 1998 & 1999.
IIM National Quality Award winners in ferrous category during 1995-96, 1997-98 and 1999-2000.
BIS Rajiv Gandhi National Quality Award won twice in recent years.
100 Golden Peacock National Quality Award won thrice in recent years.
INSSAN award for employee suggestions six times in last seven years.
SAIL paryawaran Awards for all the six times (this award was given from 1992-93 till 1997-98), for best environmentally managed Integrated Steel Plant. Several Paryawaran Awards have also been won by captive mines and SMS-I of BSP.
Indo-German Green Tech. Environment Excellent Award for the year 1999-2000.
Apart from the above award individuals group awards have been won
time to time by BSP employees at National level in the field of Quality
Circles, Management, Metallurgy, Sports & Cultural Activities, etc.
Page 31 of 71
CHEPTER - 3
PRODUCT PROFILE
32
PRODUCT PROFILE
Bhilai offers a rich and varied product mix to the domestic and international
market by different ways. They are divided into two categories, which is
PRIME PRODUCTS: These are the products which are intentionally produces
SECONDARY PRODUCTS: These are the defected or rejected material
Due to the improper mixing of
chemical
Components or due to some lack in meeting customer requirement. Scrap
generated inside Bhilai Steel Plant is also termed as Secondary Products.
For eg. - Rejected slab, iron scrap, steel scrap, defective heavy blooms,
defective billet cutting, rails cutting, and slag.
SECONDARY PRODUCTS
( AN INTRODUCTION)
Secondary products section started functioning after the commencing of Bhilai
Steel Plant. The secondary product section of the marketing department is solely
responsible for the selling of secondary products and by-products of BSP.
All the defective or rejected items of this department except the rejected
defective plates, sells scrap. The defective plates are sold by CMO (Central
Marketing Organization) since December 2001.
WHAT ARE SECONDARY PRODUCTS ?
In the cause of manufacturing process, in every stage of production, always there
will be certain Percentage of products which do not confirm to the standard
quality, size and specification. Such products are termed as ‘Secondary
Products’. Moreover, while shaping the prime products, both end and sides are
cut. These cutting are also categorized as ‘Secondary Product’ in Bhilai Steel
Plant as they are re-relloable.
Following items are falls under the category of Secondary Products.:
Defective heavy blooms
Defective Billets cuttings
Rejected Slabs
34
Plate Mill side shearing
Defective Plates
Rails Cuttings
Rod Cuttings
UTILIZATION OF SECONDARY PRODUCTS:
The secondary products can be utilized in two ways:
1. By re-rolling of secondary products.
2. By selling secondary products
PLANNING FOR SALE OF SECONDARY PRODUCTS :
1 Marketing recovery department (MRD) works out the question of different type’s
of scrap available for on monthly basis. This is determined by ascertaining the
local scrap stock at the beginning of the month. Scrap arising during
consumption. The remaining quantity is considered for sale. A monthly report
on availability of scrap is prepared by MRD and sent to marketing department.
2. Marketing department finalizes the plan for actual quantity of scrap to be sold in
consultation with MRD. Mode of sale, terms and condition for sale, location and
commercial aspects are finalized by marketing department.
3. The pricing committee as approved by Managing Director fixes the price of
each type of scrap (Finance Department, Purchase department, R & D
department, Market development department and Production department are
the member of the pricing committee).
4. Marketing department obtain MD’s approval on price fixed by pricing committee
35
NECESSITY OF SELLING THE “SECONDARY PRODUCTS” :
The net sales realization from all the secondary products, by- products
and co- products of BSP is around Rs. 600 Cr. Which is quite more then many of
the big industries. Out of this the steel scraps arising itself bring about Rs. 150-200
crores of money every year. Re-production of main product from these secondary
products requires remolding it again for the required composition of the material as
per the desired specification.
By selling it
to the different mills/traders/processors the plant earn about Rs. 4000 per tones of
direct product then by reproducing it to the main product. Through the
traders/processors/re-rollers, using these arising as a raw material for different
finished products are making huge profit, the plant is also not losing anything.
Profit is the aim of every business, and when the reutilization of these products for
the finished products proves to be costlier, the management plans to sell it to the
local market.
36
MARKETING OF SECONDARY PRODUCTS ;
1. The initial face of BSP due to the limited product of steel it is also observe that
secondary products where dominated and there fore the specific marketing
activities towards sales of secondary products was absent in fact it was
uneconomical to have marketing activities during that period.
2. Due to new technologies its capacity has increased significance in late 90’s.
3. Due to change in economic scenario of India and companies policies towards
earning profits has led to implement marketing policies for secondary products.
4. The marketing strategies adapted by the organization were giving rise to
increase in competition between public sector unit & private sector companies.
Due to this end users were having options to choose from following strategies
has been adopted by the plant for marketing:
1. COMMITED DELIVERY.
2. COMPETITIVE PRICE.
3. QUICK COMPLAINT SETTLEMENT.
4. CULTURE OF CUSTOMER SERVICE.
It may be mentioned here that the company’s profit consist of 10% turnover of
secondary products for the last 2 years.
SALES & DISTRIBUTION OF SECONDARY PRODUCTS :
1. SELLING OF SECONDARY PRODUCTS:
This involves a direct marketing process. The management of BSP in
consultation with the official of the marketing and strategic planning department
work as group for the sale of these items. There are two methods of selling these
re-rolling defective materials.
(a) By auction sale.
(b) By marketing department (fixed price)
37
(a) AUCTION SALE:-
In this method the defective material from all mills is arranged in heaps of
100-150 tones to be sold by auction. Generally, auction sale take please once in a
month. Representative from all the re-rolling mills turn up during auction and they
bid for the available material. The raw material need of these mills is being met by
the plant and the availability of the re-rollable have increased the re-rolling mills to
develop very fast. The plant extended all type of facility and assistance to these
small scale units which in turn give scope for more employment. Then the material
is lifted on the term and conditions as mentioned in the tenders.
(b) FIXED PRICE SALE:
The re-rollable material is also sold through marketing department. The
percentage of material to be sold by auction or by marketing department depends
upon the management decision. There are different re-rollable materials coming
from different mills that can be sold. The pricing of these materials is carried out by
the pricing committee depending upon:
1. The price offered by the customers during auction sale.
2. The quantity to be sold.
3. The approval of the managing director.
The customer approaches the department makes the payment in advance and lifts
the material as and when it is made available to them.
RICING POLICY OF SECONDARY PRODUCTS :
The policy adopted by the marketing department for pricing of material is
largely guided by the price offered by the bidder during the auction. The various
factors taken into consideration while pricing the re-rollable items can be
enumerated as follows:
1. Prices offered in the auction sale.
2. Quantity of the material to be lifted by the buyers.
38
3. Managing Directors approval.
MAJOR CONSUMER OF SECONDARY PRODUCTS :
FEW CONSUMERS ARE :
1. RAYMOND CEMENT
2. GLOBAL TRADING COMPANY, HIRAPUR RAIPUR (CG)
3. D. P. BANSAL COMMERCIAL CO. LTD. , BHILAI (CG)
4. PEEKAY INDUSTRIES, GAZIABAD
5. COATS OF INDIA LTD. NOIDA
6. CHATTISGARH STEEL PRODUCT , URLA IND. EST. RAIPUR. (CG)
7. BALAJI STEELS, URLA , RAIPUR (CG)
8. LIGHT INDUSTRIAL AREA, BHILAI (CG)
9. TATIBANDH, RAIPUR (CG)
10. URLA INDUSTRIAL AREA, RAIPUR (CG)
11. KUMHARI (CG)
12. INDUSTRIAL AREA, RAWAN BHATA, BHILAI (CG)
13. SIMPLEX CASTINGS , BHILAI (CG
39
MARKETING PERFORMANCE OF
SECONDARY PRODUCTS
ITEMS QUANTITIES VALUE
IRON SCRAP 84570 T 52.57 crs.
STEEL SCRAP 98000 T 173.13 crs.
DEF. & CUTTING 79865 T 250.57 crs.
ITEMS ANTITQUIES VALUE
IRON SCRAP 76197 T 43.93 crs.
STEEL SCRAP 70525 T 133.76 crs.
DEF. & CUTTING 105634 T 194.93 crs.
ITEMS ANTITQUIES VALUE
IRON SCRAP 32048.6 T 26.91 crs.
STEEL SCRAPE 226750.4 T 548.04 crs.
DEF. & CUTTING 178680.3 T 346.65 crs
2007-08
40
2005-06
2006-07
CHEPTER - 4
OBJECTIVES AND SCOPE
OBJECTIVES OF STUDY :
41
In Bhilai Steel Plant there are various section of marketing department. Since I
have choose “Marketing Strategies for the secondary products at BSP”, my
main objectives are :
1. Market study of secondary products is BSP
2. To know what is secondary products, why it is necessary to sell the
secondary products.
3. To know the pricing of secondary products.
4. Ensuring timely dispatch of material products, scrap etc. to the potential
customers.
5. To know the use of secondary product.
6. To know the others terms and conditions for marketing of secondary
products.
SCOPE OF THE STUDY :
As discussed in above chapter related to steel industry in India, it is
showing the increase in steel production every year as compared to previous
year and hence it created interest for me to study the marketing & sales activities
related to secondary products. Secondary products are nothing but scrap or
defected material. In this cut throat competition organization should give
importance to marketing in sales activities of secondary products, which
alternatively add on to the profits of the organization, this study is mainly
concentrating on identifying the area of importance and cost saving related to
marketing of secondary products.
Limitation of Study :
1. The study deals with only BSP point of view.
2. As the major customer of BSP products are not an individual person.
It was very difficult to get formal feedback from them.
42
CHEPTER - 5
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
43
Research can be defined as systematized efforts to gain knowledge. A
research is carried out by different methodology, which has their own pros and
cons.
In this research work, I have collected information i.e. Primary and
secondary data. As far as secondary data collection, I had used sources like
company data (Past and existing), internet, company publications and some of
the old project summaries with company.
As far as primary data is concerned, I had done a structured questionnaire
survey with users of secondary product i.e. small scale industries. The primary
information collected from 50 different users.
SAMPLING UNIT
In the survey Bhilai and Raipur was chosen as the sampling unit.
SAMPLING SIZE
The sample size was 50 customers of different re-rolling mils & traders.
SAMPLING TECHNIQUE
The sampling technique used by the research for the study was convenience
sampling. The sampling was taken from different places in chhattisgarh like Bhilai
Raipur.
44
45
CHEPTER - 6
DATA INTERPRETATION
DATA ANALYSIS
46
The primary data was collected by contacting users directly and requesting them about the information related to the questionnaire designed. Following are the major questions asked and data was sought from them.
1. When was your company established?
(a), 0% (b), 10%
(c ), 30%(d), 60%
(a)
(b)
(c )
(d)
Inference:-
This graph indicated that most of the users of secondary products of steel
industry have been established during 90’s.
2. What is your annual requirement of secondary product?
(a) 1960-1970 0%(b) 1971-1980 10%(c) 1981-1990 30%(d) After 1990 60%
47
10%
30%
40%
20%
0%
5%
10%
15%
20%
25%
30%
35%
40%
(a) (b) (c ) (d)
Series1
Inference:- This graph shows the annual requirement of secondary product is evenly
distributed between 2500T to 10000T. The majority of the customers i.e. 40% of
surveyed companies buy secondary products between 5000 to 10000T
3. How many years your company was purchasing from BSP?
Inference:-This graph tells that 50% of the customers are regularly purchasing
steel scrap.
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CHEPTER - 7
CONCLUSION
CONCLUSION :
This project contains the study of Marketing & sales analysis of secondary
products. Secondary products are the scrap or defected material along with
the finished products.
The study has received very interesting facts above the secondary
products. Therefore from study & Analysis ( through questionnaire) I have
concluded on following points.
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While study the history of SAIL (Sail authority of India limited). BSP is a part
of SAIL. I also study history about BSP. It was established on 2nd Feb.1955
with capacity of 1 MT. Now its production is 4MT per year.In my study I had a
some objects, like that marketing of secondary product, it’s pricing policy &
use of this product and also why necessary for selling it.
Majority of the companies buy the steel scrab from BSP and also they buy
Iron scrap, melting scrap etc.
From the primary data collection we can conclude that most of the company
who are using secondary products of steel company have been established
during 90’s and their average consumption lies between 5000T to 10000T.
Most of the surveyed companies are dealing with BSP since last 10 years and
most of them buyers of secondary products from BSP only.
The customer are satisfy with order registration process and companies
policies in BSP, they also shown magurity preference of buying goods
through tender process.
Customer are also satisfy with payment & distribution policies of BSP. They
have also felt that there are very few instances from delay.
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CHEPTER - 8
LIMITATIONS
LIMITATION OF THE STUDY :
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Some data were confidential therefore were not available for analysis.
TIME FACTOR:- Time factor was the chief limitation of study. Limited
time
was allotted for the study.
COST FACTOR : Another major constraint was cost. The study involved
Substantial cost and was beyond the affordability of
theme
INFORMATION FROM RESPONDENTS :
Some biased response came from respondent and Finding stated in
the report was based on the answers from the questionnaire. So the effect of
misinterpretation and wrong answers may affect the outcome of the project.
The research has focused his attention mainly in and around Bhilai.
As the major customer of BSP products are not individual persons. It was
very difficult to formal feedback from them.
CHEPTER – 9
RECOMMENDATIONS :
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1. The pricing as well as the distribution policies should be framed by keeping in
mind the requirements of the complete ranges of manufacture and only the bulk
consumer. This will encourage the new re- rolling mills to approach BSP for the
materials.
2. Ensure delivery of the material for which the payment is received in advance.
3. Alternatively, if the material is not available, the BSP authorities should not
accept the payment so that the buyer can approach some other sources for
producing the material and should not unnecessarily wait for the material, which
is not available.
4. Many a times BSP is not in a position to supply the full quantity of material for
which the payment has been received. In such cases, the refund of the excess
amount should be thought a stream lined process so that it does not tack long
time.
5. Prices list made available to the various re-rollers every month by BSP.
6. The material being sold by marketing department should accompany test
certificate mentioning only the range of carbon content in it for which the
customers are ready to pay reasonably higher prices.
7. Generation of secondary products must be tried to minimize which will help the
BSP in optimum use of raw materials.
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CHEPTER - 10
APPENDICES
QUESTIONNAIRE
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A comprehensive study of marketing strategy for secondary products at
Bhilai Steel Plant
Name ----------------------------------------------------Address -------------------------------------------------- ---------------------------------------------------Contact No. ---------------------------------------------E-mail----------------------------------------------------
1. When was your company established?
(a) 1960-1970 (b) 1971-1980
(c) 1981-1990 (d) After 1990
2. What is the annual requirement of raw materials? -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
3. How many years you were purchasing from BSP?
(a) Less than 2 years (b) 2 to 5 years (c) 5 to 10 years (d) More than 10 years
4. Is your company purchasing raw materials from others companies, other than BSP?
(a)Yes (b) No
If yes please specify---------------------------------------------------- ----------------------------------------------------
5. What is your opinion about the registration procedure of the company for getting secondary product?
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(a) Easy (b) Hard
6. What mode your companies prefer to purchase material from BSP whether it is fixed price/ tender?