1 UNDERSTANDING MARKETING STRATEGIES AND MARKETING MIX USED IN SAIL-IISCO STEEL PLANT, BURNPUR A report submitted towards the partial fulfillment of the requirements of the two years Full-time Post Graduate Diploma in Management. Submitted by: UJJAL BANERJEE Post Graduate Diploma in Management (Marketing) Roll No: 2K91/M/62 Session: 2009-2011 ASIA-PACIFIC INSTITUTE OF MANAGEMENT 3 & 4, Institutional Area, Jasola, New Delhi-110025
"Understanding Marketing Strategies and Marketing Mix of SAIL IISCO, Burnpur" - Research Project during Summer Internship.
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1
UNDERSTANDING MARKETING STRATEGIES
AND MARKETING MIX
USED IN
SAIL-IISCO STEEL PLANT, BURNPUR
A report submitted towards the partial fulfillment of the requirements
of the two years
Full-time Post Graduate Diploma in Management.
Submitted by: UJJAL BANERJEE
Post Graduate Diploma in Management (Marketing)
Roll No: 2K91/M/62
Session: 2009-2011
ASIA-PACIFIC INSTITUTE OF MANAGEMENT
3 & 4, Institutional Area, Jasola, New Delhi-110025
2
3
4
STUDENT’S DECLARATION
I here by declare that the
Summer Internship Project Report titled
“Understanding Marketing Strategy and Marketing Mix of SAIL-ISP”
conducted at
ISP, Burnpur
Under the guidance of
Mr. M.K.A. Khan, DGM (Marketing)
From 12.04.10 to 05.06.10
Is my original work and the same has not been submitted for the
Award of any other Degree/ diploma/ fellowship or other similar titles
or prizes.
Place: Asansol Name: Ujjal Banerjee
Date: Roll : 2K91/M/62
5
ACKNOWLEDGEMENT
I am very thankful to my Institute Asia-Pacific Institute of
Management, New Delhi for having prescribed an Internship and a Project as a
part of the two year Post Graduate Diploma in Management (AICTE approved)
full time course.
I would also like to convey my sincere gratitude to “SAIL-ISP,
Burnpur” and all the people there for having given me the opportunity to be a
part of their esteemed organization. I also thank all the other people who helped
make me to this project possible.
I would specially like to thank my Project Guide Mr. M.K.A. Khan
(DGM-Marketing) of SAIL-ISP, and my faculty guide of my institute, Dr.
Mamta Kumari for their valuable guidance, time and patience, without whom,
this project would not have been a success. I would also like to thank AGM
(HRD) Mr.A.K.Mondal, Training Officer Mr. S. Roychowdhury & AGM of
(Sales & Order) Mr. A.K.Das of “ISP, Burnpur”, for giving me the chance in
this project & for their valuable suggestions and insights.
And I would also like to thank Mr. D.K. Banerjee, (Director) of Asia-
pacific Institute of Management, New Delhi for continuous guidance and support.
And finally, I am thankful to all my friends, my family and all the staff members of
“ISP, Burnpur”, for cooperating with me at every stage of the project. They acted
as a continuous source of inspiration and motivated me throughout the duration of
the project by helping me a lot in completing this project.
Thank you everybody.
Ujjal Banerjee
2K91/M/62
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Executive Summary
SAIL, Steel Authority of India Ltd., a Maharatna Company is a Public Sector
Unit is a real Steel Giant in India. It has five integrated steel plants within it, among
which one is the IISCO Steel Plant, at Burnpur.
IISCO Steel Plant was amalgamated with SAIL in February, 2006. The plant is
set to undergo-modernization-cum capacity expansion through which its hot metal
production capacity will be raised to 2.5MT by 2011-12.
The modernization programme is going on with full pace and is likely to
commence from 2012 after which its production capacity will be double with lesser
number of man power.
In ISP-SAIL, I was assigned the task to find out the different marketing
strategies which is being used in this company and also the marketing mix of ISP-SAIL.
In this report there is the whole marketing procedure which is being followed.
All the prime steel products are being marketed directly by Central Marketing
Organization, and the Secondary and by-products are being marketed by the respective
plants producing it.
I was given the role of observer by ISP Burnpur. My role was to collect
information about the strategies used by ISP to market its secondary products and also
to understand the Marketing Mix of ISP Burnpur, as a Management Trainee.
From this project, I have got an amazing live experience. As I am a fresh
Graduate, so I do not have any type of experience in a corporate work field. So, when I
went to different types of departments in ISP for asking about their way of conducting
their process, I was enjoying. I was quite surprised because of their friendly behavior.
Moreover during my plant visit programme, I was really thrilled to see the different
methodologies that are used to produce the material which is a necessary product in
every bodies life and also for a growing nation, i:e STEEL.
I am also really greatful to work with many officers in the Marketing
department, where I got my first practical knowledge in the field of marketing. I was
really excited to apply my theoretical knowledge in practicality.
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In the report, I have prepared two questionnaire formats, one for the executive
staff members and the other for the potential customers of ISP-SAIL. All the details of
interpretation have being discussed in the report.
The actual results came out after preparation of the questionnaires and really it
helped in sketching out a full detailed picture of the whole programme going in the
company.
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Table of Contents
Serial No. Subject Topic No. Page No.
1. Brief history of SAIL-IISCO Steel Plant 1 10
2. General Overview of SAIL-ISP 2 11
3. Functional Departments
Facilities at ISP-SAIL
Other Facilities
Other Supporting Units
3
3A
3B
3C
13
14
23
23
4. Expansion Programme
Production Plan
New Technology used
4
4A
4B
25
26
27
5. Marketing Mix of SAIL-ISP 5 33
6. Marketing Setup of ISP-SAIL
Before & After Merger
Organizational Structure
Marketing of Secondary Products
Sales Procedure
Marketing Process
Central Marketing Organization
Procedure of Order Procurement
Distribution Network
Handling Customer Complaints
6
6A
6B
6C
6D
6E
6F
6G
6H
6I
40
41
42
43
43
44
47
49
50
52
7. Discussion on Training
Contribution
Research design & Methodology
Data Collection Methods
Question for Understanding
Marketing Strategies
Analysis of data from
questionnaire prepared for customers
Summary Findings
7
7A
7B
7C
7D
7E
7F
53
54
55
56
58
62
67
9
8. Limitations 8A 68
9. Observations 8B 68
10. Suggestion 8C 69
11. Conclusion 9 70
12. Bibliography 10 71
13. Appendix 11 72
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1. IISCO STEEL PLANT-A BRIEF HISTORY
The origin of IISCO can be traced to 1874 when James Erskin founded the
Bengal Iron Works and set up a plant at Kulti (West Bengal) to produce pig
iron. Operations started with the help of two Blast-Furnaces.
In the year 1890 the third blast furnace came up and Martin and Company was
appointed as Managing Agent.
Kulti set its fourth blast furnace and the managing agents established IISCO at
Hirapur (Burnpur)-West Bengal in the year 1918.
BIW merged with IISCO in 1936.
In 1939 steel production at Burnpur started with a capacity of 2.5 ton of steel
ingot.
By the mid 1960‟s the plant under the chairmanship of Industrialist Sir Biren
Mukherjee was producing 1 million ton a year.
Government of India took charge of the company on July 4 1972.
In March 1979-it became a wholly owned subsidiary of SAIL.
IISCO continued to incur losses in spite of financial and other supports from
SAIL and the Govt. due to its high cost of operation, obsolete technology and
ageing equipments.
Referred to BIFR on June 22, 1994.
Installed First Twin hearth Furnace in 1999 to reduce cost of production of
liquid steel
Rehabilitation proposal submitted to BIFR in 2002 led to closure of Kulti
Works
On 20.11.03, total investment of Rs. 341 cr was sanctioned to sustain
production.
On June 16, 2005 union Cabinet approved the proposal for merger of IISCO
with SAIL.
IISCO amalgamated with its parent company on February 16, 2006 and thus
became the fifth integrated steel plant under this PSU Steel giant “SAIL” and
renamed as “IISCO Steel Plant (ISP)”.
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2. SAIL-IISCO STEEL PLANT, Burnpur
A general Overview of the entire plant:
IISCO STEEL PLANT (ISP) is an integrated steel plant in Burnpur. It has the
capacity to produce 4.26 lakhs of saleable steel and 2.54 lakhs tones of pig iron
annually. Earlier INDIAN IRON AND STEEL COMPANY (IISCO) was a
100% subsidiary of STEEL AUTHORITY OF INDIA LIMITED (SAIL) - has
been amalgamated with the parent company with effect from16th February
2006.
ISP produces a large number of steel structurals and special sections as well as
pig iron. It is this plant which pioneered the production of center – special Z-
section used in the fabrication of wagon and Z-type sheet pilling section used in
construction of barrages, bridge foundations and other projects and colliery arch
section used for roof support in collieries. The plant has also developed “slit
rolling” for small diameter rounds (10mm and 12mm), which are in high
demand in the domestic market.
The plant is set to undergo –modernization - cum capacity expansion through
which its hot metal production capacity will be raised to 2.5MT by 2011-12.
ISP is accredited with ISO – 9001: 2000 QMS for its Heavy Structural Mill and
Merchant and Rod Mill. It has also been awarded ISO 14001: 2004 EMS for its
entire Rolling Mill Complex.
ISP is situated at Burnpur near Asansol in the Burdwan district of West Bengal.
The Coke Ovens in ISP will be declared IMS and will be accredited 9001 (for
quality control), 14001 (for environmental control) and 18001 (for safety and
control).
The modernization work is going on with full pace and is likely to commence
from 2012, where production will be around twice that is being produced and
with a lesser number of manpower.
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IISCO’s Vision Statement:
To be a prosperous and respected world class corporation and the
leader in Indian Steel Business in terms of Quality, Productivity and Customer
Satisfaction, Cost and Delivery of products and services.
Quality Policy:
IISCO is a quality company committed to build and sustain itself
as an organization which is customer oriented, innovative and where excellence is
achieved in every function through continual improvement.
It is a company, committed to quality products and services for total customer
satisfaction and achieves market leadership through continual improvement of
processes and systems by active involvement of all employees.
The broad guiding principles of IISCO, Burnpur are as follows:
Build up customer confidence through meeting the requirements of the
customers.
Quality is achieved by involvement and commitment of every individual of
the organization.
Quality is built into the process by installing a quality management system
with defined objectives which are reviewed for continuing suitability.
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3. FUNTIONAL DEPARTMENTS OF THE ORGANIZATION
The organization has five major parts in its department. They are as follows-
Finance Department: The main & important function of this department is to
control & monitor all the financial transaction of an organization.
Marketing & Sales Department: The important function of this department is to
handle all kinds of marketing & sales related matters regarding the product of an
organization.
Human Resource Department: The major function of this department is to
select, recruit, transfer of staffs & handle all types of problems regarding staffs
in the organization.
Information Technology & Systems: The main function of this department is to
handle all types of problems in an organization technically & systematically.
Logistics & Legal Department: The main & important function of this
department is to protect the company or organization from illegal activities, &
obviously provide suggestions that how to solve problems in a legal & proper
way.etc.
Other Functional Areas
There are quite a number of other functional areas, which play a very vital role
to meet the various needs of the plant as well as its employees. They are as here under: -
Personal Department
Material Management Department
Medical Organization
Education Department
Town Administration
Purchase
Public Relation Department
Production Planning & Control Department
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These departments cater to the various needs of the plant personnel such as
salary, finance, personnel grievance, education, hygienic sanitary condition, good living
environment, selling the product & purchasing from outside parties, production
planning, training of manpower etc.
3A. Facilities/Infrastructure at SAIL-ISP, Burnpur
Coke Oven Plant:
The main functions of Coke Ovens are:
To produce Coke from Coal.
To supply coke to blast furnace.
To meet energy requirements of various departments of ISP by supplying coke
oven gas.
To recover valuable coal chemicals.
The main raw materials which are used are:
Coal, which is procured from the different places.
The different types of coal and procurement areas are as follows:
Primary Cooking Coal- from Chasnalla, Moonidih, Kakani, Bojudih, etc.
Medium Cooking Coal- from Bokaro west, Kedla, Swang, Kargali, Begunia,
Mohuda, Kathara.
Blendable Cooking Coal- from Chinakuri and Ramnagar Depots.
Imported Cooking Coal- from Broken Hill, South Australia through Haldia,
Paradwip and Vizag ports.
Coke ovens consist of the following sections:
Coal handling Plant
Batteries (2 nos.), 10 no. battery in being re-modified.
Heating Section
Coke handling Plant
By-product Plant
Refractory sections
15
Process:
Coal is received by trucks and wagons and then stored separately sources wise
in Stockyard.
It is then reclaimed from yard and is then processed in the coal preparation unit,
finally sent to the batteries through coal charging car (capacity of 20 tonnes of
coal at one time).
Here high temperature carbonization is done, i:e heating in the absence of air.
During this method, volatile matters are removed leaving behind residual mass,
Coke.
This coke is pushed out of ovens through Pusher car, quenched by water and
sorted out for different fractions in the Coke handling plant.
Coke oven gas is then passed through different recovery processes in the by-
product plant to get Coal chemicals.
Output:
Primary Output:
Hard Coke (25-80 mm)
Nut Coke (20-40 mm)
Pearl Coke (12-25 mm)
Fines Coke (0.12 mm)
Coke oven gas (used as an important
fuel in boilers, SMS, reheating
furnaces, Rolling Mills, etc.)
Secondary Output:
Coal tar
Dehydrated Tar
Ammonium Sulphate (used in
Fertilizer industry)
Naphthalene
Benzene products
16
Blast Furnace:
The main Functions of Blast Furnace are:
To produce Hot Metal (Iron) and PIG Iron from all the raw materials.
To produce Slag used in Cement factory.
The main raw materials which are taken as input are:
Iron Ore from Gua, Manoharpur, Bolani, and Barsua iron ore mines.
Limestone from Kuteshwar, Bhawanathpur, RSMNL depots.
Dolomite from Bisra, Tulsimar, Bhiringee, Srirum, Jigmi, etc.
Link Dolomil Slag from SAIL fraternity plants DSP and BSL.
Coke from Coke Handling Plant inside the plant.
Equipment:
Blast Furnace consists of four furnaces, out of which two are running now of
production capacity 600 tons/day and 1200 tons/day. It also consists of Blast Furnace
Stoves, Cast House, Ore handling Plant, Ladle House, Slag Bank and Gas cleaning
plant.
Process:
Blast Furnace is the most important part of iron section.
All the materials are put inside the blast furnace through the stripper cars in
COOCC charging sequence.
Hot air is injected into the furnace which reduces the iron ore into Molten Iron
at around (800-1300)*C and settles down at the bottom being heavier and the
Slag which is formed by reduction of the raw materials settle at the top of the
hot metal.
After that first the Slag is collected and then the hot metal is collected by two
different notches.
The whole process is controlled by software „PLC‟ (Process Logic Control).
Through this software, different instructions are given for the charging process.
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Output:
Pictures of Blast Furnace:
Primary Products Produced:
PIG Iron
Melted Iron
By-Products Produced:
Silicon and Calcium Oxide,
known as SLAG used in
cement factory.
Aluminum Trioxide
Blast Furnace gas.
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Steel Melting Shop:
The main function of Steel Melting Shop is:
To convert PIG Iron coming from Blast Furnace to molten Steel by
segregating the unwanted materials.
The main raw materials which are required are:
Melted Iron
Dolomite
Coke Breeze
Ferro Alloy
Limestone
Scrap
Oxygen
Manganese ore
Equipment:
Steel Melting Shop consists of two Twin Hearth Furnaces, one Mixer, casting
area, ladles, Ingots mould, etc.
Process:
Molten Hot metal from Blast Furnace is sent to the twin hearth Furnace
(comprising of two hearths, one left and one right; all under one roof.)
To heat a maximum of 1680*C is needed. When any one of the Hearth is full, a
certain amount f gas is let through specific outlets known as, „gates‟.
Each hearth comprises of specific pipes called „lungs‟. These lungs have two
pipes, one carries oxygen and the other contains water which helps to maintain
the normal temperature of the lung pipes and prevents them from bursting.
The pure form of steel is collected in „Thimbles‟. Then it is poured into the Ingot
Mould which after solidification moves to the rolling mills.
The scrap form is collected in ladles. The slag produced is of two types, one is
used in making Cement, and the other is of no use but contains minerals (mainly
Iron), which is sorted out and sold in the market.
Blast Furnace at ISP, Burnpur
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Output:
Primary products consist of Steel Ingots. Around 220 MT of Steel is produced
in a single working day.
Secondary products consist of Slag used in cement industry.
Pictures of Steel Melting Shop (SMS)
20
Rolling Mills:
The steel produced in the plants as discussed earlier would be of no use if it is
not given a final shape by making it a final finished product. Therefore, Rolling Mils is
the ultimate plant where the ingot is given a final shape.
It comprises of different sectors, which are as follows:
Soaking Pits (32 nos.)
Blooming Mill (0.9 Mtpa)
Billet Mill (0.25 Mtpa)
Heavy Structure Mill (0.25 Mtpa)
Light Structure Mill (0.12 Mtpa)
Merchant Mill (0.15 Mtpa)
Blooming and Billet Mill:
Input material: Steel Ingots produced in Steel Melting Shop.
Output Material: Blooms, Slabs, and Bloom Blanks, Billets.
Use of this Mill: the products generated in this Mill, forms the inputs of Heavy
Structure, Light Structure and Merchant Mill.
Process: The steel ingots are first soaked in soaking pits for attaining a rollable
temperature. After that these ingots are rolled in between two rollers under high
pressure where the ingots get converted into long blooms.
Pictures:
21
Heavy Structure Mill:
Input Material: Blooms and Bloom blanks.
Output Material: The range of products comprises of Joists, Channels, Angles,
Heavy Rails and special sections like Z-bar, Z-Pilling, Colliery Arch, etc.
Pictures:
Light Structure Mill:
It is also known as Morgan Mill, as it was set by Morgan and Company.
Input Material: Billets and Blooms.
Output material:
Rounds, used in Re-rolling Mills as axes, spindles.
30 lb Rail, a unique section used in Colliery for rolling trolleys.
Process:
The processesing includes various stands like roughing, intermediate and
finishing, cooling and straightening. The standard length is 10 metres and above.
Pictures
22
Merchant Mill:
Input Material: Billets imported from DSP and from Billet Mill
Output material: Plain Rods (of size 16mm to 40mm) and TMT rods (of size 16mm
to 32mm).
Process:
In the Merchant Mill, the billets which are received are generally 100sq.m. and
of 8.8-9 m in length. The cold billets are made usable through a reheating furnace.
There are 10 burners in the furnace. The various stages are housing, roughing,
intermediate and finishing.
Pictures:
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3B. Other Facilities:
Pollution Control:
All environmental parameters like SPM, SOX, NOX, water testing are regularly
undertaken to meet the Pollution Control Board norms. The department is equipped with
latest testing facilities.
Computer Services:
Computerized Integrated Maintenance and Materials Management System
(IMMMS) based on CA-Open Ingres RDBMS under HP-UX. A Sun Solaris network running
Oracle RDBMS in Finance department. Email and internet facilities.