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INTRODUCTION
ITI Ltd is India’s largest and first public sector unit developed to manufacture
telecommunication products with the latest technology. ITI was established on 25 th January 1950
in Bangalore. This is bedrock upon which India is launching its contribution to the world’s
telecommunication revolution.
ITI Ltd is the premier public sector undertaking of the country. It was the first public sector unit
to be opened by the government of India after the independence in the year 1948-1949. It was
located in Bangalore. The activities of this public sector were manufacturing mechanical
telephone instrument and exchanges. Due to advancements in technology in the field of
electronics, ITI started its expansion program in the field of electronics in 1960s.
“Communication is our Business” was the motto adopted by ITI. With this motto in mind, ITI
started its business in communication field. From a small beginning, it has grown in to a
mammoth multiunit enterprise with manufacturing units at Doorvani Nagar and Electronic city
in Bangalore (Karnataka), Manakapur, Naini and Raibareilly in Uttar Pradesh, Pallakkad in
Kerala and Srinagar in Jammu & Kashmir. In addition to these manufacturing units located at
Bangalore for undertaking installation and maintenance of telecommunication equipments
through the country which is now renamed at Network Communication Business Group. The
company has a strong in house R&D infrastructure attached to the independent business groups.
The main R&D divisions are located at Bangalore and Naini. Looking forward at the technology,
the R&D is engaged in continuous development and absorption technology.
The company lays a strong emphasis on quality which is taken as corporate management
function under an independent Executive Director reporting to chairman and Managing Director.
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A large number of company’s product are covered under the “Self Certification Scheme” by the
major consumer i.e. Department of Telecommunications (DOT).
International quality management system:
The company has adopted ISO 9000, taking it as a “Tool for organizational Change and work
Design”. Naini unit has taken ISO 9000 certification for production of optical range of
communication equipments. This Naini unit of ITI Allahabad. Is a primer organization of
northern India that spearheads the task of manufacturing the entire range of telecommunication
trans mission equipment and telecom instrument the company .It is situated at the Mirzapur Road
at about 16 km farm the of Allahabad .Since its inception in 1971.The unit has been marching
ahead with the steady growth and has achieved the twin objective of producing and vital
Telecommunication equipment required for Country and sociologic development of the region.
Beginning with a modest production of Rs1. 66crore with staff strength of 2100 manpower
during 1997-72 Produced equipment worth Rs174.44 corer with staff about 4700 in 1991 - 92.It
manufactures compete range of multiplex equipments of range intercity and intercity
communication need of national telecommunication network. It has developed tree channels: 3
AX single channel, VHF and Multi-access Rural Radio (MARR) SYSTEM, which has taken
under collaboration the area of M/S KOKUSI of Japan. Simultaneously unit has entered the area
of optical fiber with the advanced in the tech. The unit meets the future needs of country. They
has also manufacture subscriber telephone instrument of DOT. As the production of the modern
telecommunication equipment is highly tech. Intense the unit is backed with the most modern
reach and development division. This unit has no raised the production level, but also improved
its profitability by improving productivity and efficient by reducing wastage. While maintaining
quality level of cost of improve and manufacturing process
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DIVISION OF ITI NAINI UNIT
TRANSMISSION EQUIPMENT DIVISION (TED)
TELE PHONE INSTRUMENT DIVISION (TID)
RESEARCH AND DEVELIOPMENT DIVISION (R&D)
TRANSMISSION EQUIPMENT DIVISION (TED)
It consists of the following hanger:-HANGER (machine shop) this shop has various machine like
CNC, Harriet punch press, and lathe m/s. Drilling& welding machine. Mostly working on
hydraulic system with well furnished fast room.
HANGER (RADIO HANGER)
Radio production shop manufactures the radio equipment like single channel and MARR
(4/30and 8/60) in the VHF range of frequencies, DLC, 2/8MUXOLTE, 2/34 Optimum.
VENTURE & CUATOMER I.T.I. JOINT VENTURE
India Sitcom Ltd Bangalore (with WPIC, USA Satellite
Communication)
I.T.I.COMMUNICATION provides Ltd. With valves, Singapur
Fib COM India Ltd, New Delhi with DSC communication
TECHNICAL COLLABORTION
I.T.I has collaboration with following companies:
ALCATEL of France.
BOSCH Telecom of Germany.
Siemens Branch of India.
3
I.T.I. GLOBAL CUSTOMER
Switzerland
Botswana
Zimbabwe
Costa Rica &other
I.T.I.CUSTOMER
BSNL
MTNL
DEFENCE
VSNL
RAILWAYS
ELECTRICITY BOARD
4
More about
PCB manufacturing facilities
Mechanical Fabrication / Machine Shop with modern CNC machines and Finishing shop
Mechanical Fabrication / Machine Shop with modern CNC machines and Finishing shop
SMT Line
Plastic Injection Technology
Through-Hole Component Assembly
Manufacturing facilities for Mechanical items
Fabrication of Towers and Shelters for GSM
Multi-location state-of-the-art electronic assembly & component manufacturing facilities
accredited with ISO 9001:2000
GSM / CDMA figure 1
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RESOURCES: Dedicated Network Systems Unit (Bangalore, New Delhi, Kolkata,
Bhopal Ambala). State-of-the-art Manufacturing Plants (Bangalore, Mankapur, Rae
Bareli, Naini, Palakkad, Srinaga Ambala). State-of-the-art Manufa~turing Plants
(Bangalore, Mankapur, Rae Bareli, Naini, Palakkad, Srinagar). R&D Centre r). R&D
Centre
Figure 2
Optical Transmission SMPS: Fabrication of 100 A - 150A Power Plants with 25A base Module for GSM.
Fabrication of 200A-3000A' Power Plants with 100A base Modules for telecom
installation
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Figure 3
PRODUCTS: Cellular Mobile Infrastructure-GSM, WLL-CDMASwitching-OCB-
283, ISDN EPABX, IP-TAX, SSTP. Transmission- Satellite, Optical, Microwave,
VHF /UHF. Broadband Equipment-ADSL, WIMAX, G-PON, EDW AS. Customer
Premises P-equipment-IFWT, ADSL Modem, CLI Phones. GSM-FCT (Fixed Cellular
Telephone),; WIMAX CPE
SERVICES: Systems Integration - Telecom, IT. Shared Hub V -SAT Services.
Customer Care Service. Installation & Commissioning of Telecom Eqpt like GSM,
CDMA, MLLN, Microwave, Optical Fibre, etc. Pre-warranty & Post-warranty
maintenance sef Yices for all Products/Projects. Services for all products/projects: .
Enterprise businesses like Data Centers etc
7
OBJECTIVE OF THE STUDY
The main purpose of the study is to know about the overall situation of the market for each
product line and for each product within the product line with regards to the pricing strategies
adopted by the ITI, Naini Unit. The economic conditions and technologies keep on changing
from time to time. These are very important for an organization to survive in the long run. They
help to suggest sales goal, opportunities and strategies that will yield desired market penetration.
This information are very important for new product selection and development. The objectives
of the study are:-
To get acquaintance with the marketing system of ITI.
To get information regarding the pricing methods adopted by ITI.
To get information about the present pricing structure of ITI.
To bring about the market positioning of the ITI products with regards to the price factor.
To bring forth the degree of brand awareness amongst the purchasers.
To get acquainted with the relatively preferred brands and the reasons behind the success
of these brands.
8
SCOPE OF THE STUDY
The project undertaken makes me able to improve my professional skills and expertise. It helps
me in getting an idea of Information Technology Industry and its importance in our life. It
increases my confidence on professional ground by dealing with high profile corporate that are
very hard to convince. As for as company’s benefit is concerned, this project helps company to
know its market condition and level of competition. Also it helps in creating awareness to
consumers regarding telecommunication and in promotion of their services.
In order to accomplish the objectives of the secondary data has been conducted amongst
customers of the tale communication market. The survey is based on past record of the company,
tender given by the company & analyzing the customer reaction to some parts of Allahabad city.
The secondary data is restricted to the information needed to show legal, technical and financial
transparency between project developer and customer.
9
ORGANIZATION PROFILE
I.T.I .Limited is one of leading manufacturer and supplier of telecommunication equipment in
our country. Since a long, It is contributing in the field of communication I.T.I. Ltd was the
premier public sector undertaking of the country established in 1948 in collaboration with
Automatic Telecom &Electricity Co. I.T.I .Limited is a India largest state enterprise devoted to
manufacture of telecommunication product using latest technologist established in 1948, as I.T.I.
Lid., a departmental undertaking under the Ministry of Post &Telegraph ,it was envisaged as an
indigenous manufacturing facility in the beginning .Today it is manufacturing emetic range of
the telecommunication equipment’s.
“Communication is our business”
With this motto in the mint, I.T.I. Ltd. started its base in Bangalore. In addition to these
manufacture units; it has installation and maintenance of telecommunication equipment
throughout country, which is renamed as ‘Network System Business Group’ .The company has a
network of sales and service offices regional offices located at Bangalore, Mumbai Kolkata,
Delhi, Lucknow and numbers of sub offices under each region to represents the company in
every significant town.
Aim of ITI Naini Unit
1. Regain status as largest indigenous manufacturer of telecom equipment and consolidate
share in new Technology.
2. Sustain its status of top turnkey in Telecommunication.
3. Respect External and Internal customers.
4. No liquidate damages.
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5. Reducing cycle time from dispatch to realization.
6. Work lines a team.
VISION OF THE ITI NAINI
I.T.I. will be perceived by our customers as the leading business partner for providing total
network solutions. I.T.I will offer innovative solution using leading technologies in a cost
competitive manner to help customers achieve their Business objective. I.T.I. will pursue new
opportunities arising from the convergence of information communication and entertain
business. I.T.I. will enhance shareholder value and will move up the value chain by expanding
knowledge based and service based business while simultaneously leveraging our manufacturing
business. In our manufacturing business will continuously drive down cost.
I.T.I. will leverage our telecom domain knowledge to build a telecom software business in India
catering to global requirements. We will apply R&D efforts in focused areas.
I.T.I will form strategic alliances with the equipment/technologies suppliers and services
providers to access technologies and market and to help us provide total solution.
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Company Profile
India’s first Public Sector Unit (PSU) - ITI Ltd was established in 1948. Ever since, as a
pioneering venture in the field of telecommunications, it has contributed to 50% of the present
national telecom network. With state-of-the-art manufacturing facilities spread across
six locations and a countrywide network of marketing/service outlets, the company offers a
complete range of telecom products and total solutions covering the whole spectrum of
Switching, Transmission, Access and Subscriber Premises equipment.
ITI joined the league of world class vendors of Global System for Mobile (GSM) technology
with the inauguration of mobile equipment manufacturing facilities at its Manakapur and Rae
Bareli Plants in 2005-06. This ushered in a new era of indigenous mobile equipment production
in the country. These two facilities supply more than nine million lines per annum to both
domestic as well as export markets.
The company is consolidating its diversification into Information and Communication
Technology (ICT) to hone its competitive edge in the convergence market by deploying its rich
telecom expertise and vast infrastructure. Network Management Systems, Encryption and
Networking Solutions for Internet Connectivity are some of the major initiatives taken by the
company. Secure communications is the company's forte with a proven record of engineering
strategic communication networks for India's Defence forces. Extensive in-house R&D work is
devoted towards specialized areas of Encryption, NMS, IT and Access products to provide
complete customized solutions to various customers.
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GOVERNMENT’S INVOLVMENT IN ITI
As ITI is a public sector undertaking therefore government influences the working of ITI. The
marketing system prevailing in ITI- Naini is quite different from General Marketing System
prevalent in Private Business Units.
NEED FOR THE ESTABLISHMENT OF ITI
Government was enthused for the establishment of ITI because of following reasons:-
1. Social and Economic development: - The first and the foremost reason for the
establishment of ITI was social and economic development. Government aimed at the
establishment of ITI in the backward areas of the country for their economic
development. More and more employees got employment opportunities in this way. This
upgraded their standard of living and provided them and their families with better living
conditions, better health facilities etc. this also led to establishment of economies of scale.
2. Taxes:- The second motive of the government for the establishment of ITI-Naini was
taxes. ITI being a public sector undertaking pays huge amount of taxes to the
government.
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OVERVIEW
Corporate Head Office:
ITI Bhavan,
Doorvaninagar, Bangalore- pin-560016 INDIA.
Manufacturing Units:
Bangalore
Naini (Near Allahabad UP)
Raibareilly (UP)
Mankapur (UP)
Pallakkad (Kerala)
Srinagar (Jammu & Kashmir)
Network System Unit:
Bangalore
Regional Offices:
New Delhi
Bangalore
Kolkata
Mumbai
Chennai
Hyderabad
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Bhubaneswar
Bhopal
Ahmadabad
Kochi
Supported by36 offices all over the country.
Manpower:
12,745
R & D Base :
Bangalore
Naini
Mankapur
Quality System:
ISO 9000:2000
ISO 14001:2004
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MANAGEMENT CHAIN
Ministry of Telecommunication
Chairman and Managing Director
Board of Directors
Executive Director (EDR)
General Manager (Head of Unit)
Additional General Manager
Deputy General Manager
Chief Manager
Manager
Deputy Manager
Assistant Manager
Engineer
Assistant Engineer
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Staff (Employees from category A to H)
Board of Directors
Shri K.L.Dhingra Chairman and Managing Director
Shri K.L. Dhingra joined ITI as Chairman and Managing Director on April 7, 2010. Shri Dhingra
is a Master in Commerce (M.Com), Bachelor in Law, Master in Business Administration (MBA
Finance) from Faculty of Management Studies (FMS), Delhi University. He has acquired
additional Banking qualifications from India (CAIIB) and UK (ACIB, London).
He holds the distinction of being the only Indian who passed A.C.I.B. (London) examination
globally in July 1997. He holds the rare distinction of being the Fellow of The Institute of
Banking and Finance, Mumbai, the Fellow of The Chartered Institute of Bankers in Scotland, the
Fellow of The Financial Services Institute of Australasia (Finsia) and also an Associate
Member Chartered Institute of Bankers, UK.He is also presently the Vice-Chairman of Standing
Committee on Public Enterprises (SCOPE), an Apex body of the PSUs. Prior to his joining ITI
Ltd., he was Chairman and Managing Director, Housing and Urban Development Corporation
Ltd. (HUDCO) and Director (Finance) in Mumbai Railway Vikas Corporation Limited (MRVC),
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a PSU under the Ministry of Railways and also in Indian Rare Earth Limited (IREL), a PSU
under the Department of Atomic Energy.
Shri B P Gupta Director (Finance)
Shri B.P. Gupta was appointed as Director – Finance and a member of the Board of Directors of
ITI Ltd. on December 31, 2007. Honours in B.Com. He qualified as Chartered Accountant in
1976. After several stints in private and public sector companies, Shri Gupta began his career
with ITI as Chief Manager – Finance in 1989. Working in different Plants, he acquired well-
rounded experience of over 33 years. Previously he held the position of General Manager –
Finance at the Corporate Office of the Company.
Shri K K Khurana Director (Human Resources)
Shri K.K. Khurana joined ITI as Management Trainee in 1973 soon after obtaining a B.Sc.
Engineering degree and Post Graduate Diploma in Electrical Engineering. In a career that spans
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over 35 years in the company, he has held several important positions. His vast experience
covers the diverse fields of manufacturing, marketing, turnkey projects and HR. He was a Project
Director for GSM-MTNL Network in Delhi (2002-04) and Circle Project Director for executing
of BSNL-GSM Network in Gujarat Circle (2005-06). Prior to his appointment on the company’s
Board he was General Manager of Bangalore Plant. Shri Khurana has been Director, Human
Resources of ITI Ltd. since April 4, 2008.
Shri R K Agarwal Director (Marketing)
Shri R K Agarwal took over as Director (Marketing) of ITI Ltd from March 9, 2010. Prior to
this, he was General Manager (Corporate Marketing). An industrial engineering graduate, Shri
Agarwal joined ITI Ltd in 1976 as an assistant executive engineer in the Company’s Bangalore
Plant. Shri Agarwal 33 year experience spans areas such as manufacturing, quality control and
marketing.
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Shri K.K. Gupta Director (Production) Shri K.K. Gupta took over as Director (Production) of ITI Limited on May 1, 2010. Prior to
this, he was General Manager, Corporate HR and GSM (South Zone). An Electronics and
Telecommunication Engineer, Shri Gupta joined ITI in 1977 as an Assistant Executive Engineer
at the Company’s Naini Plant. Shri Gupta’s 33 years of experience covers the diverse fields of
manufacturing - telephones and transmission, GSM projects and human resources.
Directors
Shri A.K. Shrivastava (Director)
Lt.Gen.P.Mohapatra (Director)
Company Secretary
Smt.Rachana Choudhary (Company Secretary)
Independent Directors
Shri A.K.Jain (Independent Director)
Shri V.H. Ron (Independent Director)
Shri A.S. Bansal (Independent Director)
Shri Keshav Saran (Independent Director)
Prof.M. Balakrishnan (Independent Director)
20
Shri T.S. Narayanasamy (Independent Director)
Dr. S.K. Chaudhury (Independent Director)
ITI ORGANIZATION CHART
21
CHAIN OF NEW UNITS
22
In addition to the present unit at Bangalore, manufacturing the telephone and transmission
equipment, it has grown in to a multi unit enterprise with order manufacturing enterprise with
other manufacturing units established Doorvani Nagar and Electronic city in Bangalore
(Karnataka), Mankapur, Naini and Raibareilly in Uttar Pradesh, Pallakkad in Kerala and Srinagar
in Jammu & Kashmir.
The company now manufactures the entire range of telecommunication equipment right from
telephone instruments to equipment for Satellite Earth stations catering to the DOT, MTNL,
Defiance services, Railways and State electricity boards. It also tries to meet the requirements of
the private purchaser for automatic exchanges.
Besides this ITI also produces the rood traffic signals of high quality reliability and variety of
telemetry and tele-control equipment’s. The latest production of ITI is SDH and WILL. In future
ITI is planning to switch over to ATM from SDH.
Apart from supplying to the domestic market ITI has also taken up Turnkey projects abroad and
has been exporting its products to as many as 20 other countries. The company has received
fewer tenders due to global competition. On the basis of its quality and price, it is striding
towards organizational excellence.
ITI today is a market oriented company, growing in to a total solution provider. It is striving
towards achievements of excellence.
SPECIAL ACHIEVEMENTS
During the year under review, the company has produced 3.06 million lines of switching
equipments that included 200 kl of new CDoT MAX- XL Exchange. Bulk production of SMPS
to tune of Rs. 28.70 crore and bulk production of digital Microwave (SDH) equipments were its
major achievements. Optical fiber systems (SDH), being newly inducted in the Indian network
23
were supplied for the first time. The company is placed first for supply of 1.69 million lines of
new technology exchanges and for the supply of 770 numbers of 2/140 Mbs Optimax along with
regenerators.
PLANTS
1. BANGALORE PLANT(Established in 1950 )
2. SRINAGAR PLANT(Established in 1970)
3. NAINI PLANT(Established in 1971)
4. RAEBAREILLY PLANT(Established in 1973)
5. PALAKKAD PLANT(Established in 1975)
6. MANKAPUR PLANT(Established in 1980)
AWARDS
Excellent performance PSE award in the year 1997-1998 given by INDIAN
INSTITUTE OF INDUSTRIAL ENGINEERING.
Best CHIEF EXECUTIVE GOLD AWARD by INTERNATIONAL GREEN L &
SOCIETY on September 17, 1998.
FACT MKK NAIR PRODUCTIVITY AWARD by KERALA STATE
PRODUCTIVITY COUNCIL.
INSPECTION SCHEME (AIS) of PALAKKAD plant has been certified under
APPROVER SUPPLEMENTORY OCB 283 crore equipment to DOT, MTNL.
INDUSTRIAL SAFETY AWARD by NATIONAL SAFETY COUNCIL.
JOINT VENTURES
24
Widening its area of operation, ITI teamed up with PACIFIC INTERTNATIONAL COMPANY
to manufacture micro earth stations. The result is ITI equatorial satam Ltd. (ISEL). Besides this
earth station IESL also undertakes turnkey projects in various parts of the world. ITI
Communication Pvt. Ltd. (ITIC) is a joint Venture company set up in Singapore with the main
objective of promoting exports of ITI to other Countries.
Fibcom India Ltd., New Delhi, has also made venture with NKT, Denmark for SDH fiber optical
product.
The ITI has collaborated with a number of foreign-based companies having the latest technology.
They are as follows
Name of the Company Country
M/s Siemens/Nee Japan
M/s Ericson Sweden
M/s AWA Australia
M/s Nee Japan
M/s Alcatel France
M/s Comedge Singapore
MAJOR LANDMARKS
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YEAR ACHIEVEMENTS
1971-72 Start of production.1973-74 Production of telephone developed in house.1980-81 Assoc ham awards for promotion of ancillary
industries.1981-82 Establishment of computer centre.1986-87 Collaborations.1987-88 Update telephone manufacturing
technology and establishment of P.C.B.1989-90 Single and double sized P.C.B. and
production of 140 milt optical line equipment and regenerator in collaboration with M/s Denmark.
1991-92 Introduction of 565- milt optical line equipment and manufacturing of in-house design telephone model ME-91 and TPS-90.
1994 Advancement of optical line instrument1995 Implementation of Q.D.C and ISO 9000.1996 Collaboration with M/s Fibcom India Ltd.
And manufacture of solar photovoltaic equipment.
1997 Development of MARR and its manufacture along with 8 ambits and a 40 mbit optic mix equipment.
1998 Production of DDF focus version.1999 Started in the world’s latest equipment i.e.
Digital Loop Carrier (PDH) and production of 2/15 single channel equipment.
2000 Development and production of DLC (SDH) and Access terminal along with the production of the central office terminal racks.
RESEARCH AND DEVELOPMENT
26
An important fact that helped ITI survive adverse circumstances and aided in grooving is its
research and development department. This department takes in account that all the ITI products
are technologically well-advancement and of superior quality. ITI has two R&D departments.
One of them is situated in Naini, (Allahabad) and other is situated in the electronic city
Bangalore.
The laboratories conduct various tests to see that only quality products go out in the Market.
R&D is manned with highly qualified engineers. Highly advanced technology and equipments
are also provided. These efforts have led to the successful commercialization of several products.
IMPLEMENTATION OF GOVERNMENT POLICY OF ECONOMIC
LIBERALIZATION AND ITS CONSEQUENCES
The monopoly of ITI was broken by Government of India in 1991 as by opening the door to the
private sector and thus completion emerged.
ITI has been selling its instruments since 1968 to the government sector. Previously the telecom
sector was under total control of Government. With the commencement of open-door policy of
government, the selling pattern changed. ITI therefore began to face stiff competition from other
players.
Some major problems faced by ITI are as follows
Missing good professionals in marketing area.
Lack of availability of raw materials on time.
Lack of autonomy to take decisions.
Need of more innovation and technology up gradation.
Need of more employee support.
27
Large quantity of waste product.
Lack of awareness in workers.
Fund crises.
Low market potential.
PURCHASERS
About 90% of ITI products are supplied to BSNL- “BHARAT SANCHAR NIGAM LIMITED”
(formally known as department of telecommunication (DOT)). The other significant purchasers
of ITI are as follows:-
Bharat Sanchar Nigam Limited (BSNL).
Maha Nagar Telephone Nigam Limited (MTNL).
Railways.
Defense.
Banks.
Corporate.
Factories/Offices.
Steel/Power/Oil sector.
General Public.
REASONS FOR THE PROBLEMS
Faulty government policy.
Lack of latest technology in communication.
Lack of latest technical knowledge among employees.
Non availability of orders.
28
Fund crises.
Excessive overhead expenditure.
Lack of publicity and advertisement.
Lack of sales promotion schemes.
Lack of up to-date features according to consumer’s demand.
THE MAJOR COMPETITORS OF ITI
COMPETITORS FOR TELEPHONE INSTRUMENTS
BPL
BEETAL
TATA
PANAPHONES
ORPAT
PUNWIRE
BEL
WETSON
SHYAMWIRE
COMPETITORS FOR TRANSMISSION EQUIPMENTS
HFCL
DSC(at present TELLABS)
NATALCO
UTL
BEL
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HTL
FUJITSU
ALCATEL
COMPETITORS FOR EPABEX SYSTEM
BPL TELECOM
L & T LIMITED
LG ELECTRONICS
NORTHERN TELECOM
TATA TELECOM
SIEMANS INFORMATICS SYSTEM LIMITED
SAMSUNG ELECTRONIC CORPORATION
GOVERNMENT ENDEAVOURS FOR UPLIFTMENT OF ITI
As already discussed, the monopoly of ITI was broken by Government of India in 1991 as by
opening the door to the private sector and thus completion emerged.ITI has been selling its
instruments since 1968 to the government sector. Previously the telecom sector was under total
control of Government. With the commencement of open-door policy of government, the selling
pattern changed. ITI therefore began to face stiff competition from other players. As a result, ITI
started incurring huge loss. To solve the above problem and to alleviate the poor condition of
ITI, Government provided 30% reservation quota to ITI whenever any order was floated by
BSNL/MTNL. Against 30% reservation quota orders 75% ordered value is given in advance for
procurement of raw materials. According to this, ITI was to supply BSNL/MTNL at the lowest
price which was opened at the bid. But ITI started to incur a loss because the price that used to
30
open at the bid used to be very less than the cost that ITI used to incur for the production of the
equipments. Therefore ITI was going in minus margin. To deal with the above problem, now the
government has given option to ITI to regret any order that causes it negative cash flows.
`
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Product Profile
This Plant was set up in 1971 for the manufacture of transmission equipment. The major
products are optic fibre systems of both PDH and SDH and telephone instruments of various
types. It has an R&D Centre and modern facilities for assembly and testing with Surface Mount
Technology. Environmental lab, metal parts manufacturing facilities and PCB plant are part of
the modern infrastructure.
STM 1
STM 4
Acces Node figure 4Telecom Equipment Manufacture for Defence and Civilians.
IT Services Diversified Products
32
Products
GSM Products BTS ,BTS SHELTER ,ROOF TOP TOWER ,TRANRECEIVER
Figure 5
EPBT/CLI Phones BTS SHELTER
Shelter is a portable sealed cabin made up of sandwiched insulated panels with polyurethane as
filler material between galvanized pre-coated steel sheets.
Floor is made up of 19mm thick marine plywood and is covered with PVC antistatic flooring.
MS tube is reinforced inside floor panel for higher floor load capacity.
Secondary slanting roof is provided to protect primary roof from direct sunlight and rainwater.
Door is fixed with heavy-duty hinges. It is equipped with hydraulic closer & three way locking
arrangement. Shelter is installed on suitable base frame of galvanized I-beam supported on
concrete pedestal. ITI LIMITED Rae Bareli is manufacturing Prefabricated Shelter for housing
of BTS & its accessories used in Telecom Mobile Service.
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Figure 6
PRODUCT RANGE
The following three types of shelter of internal dimensions (all in mm) are being manufactured:
Type I: 3000 L x 2000 x W x 2500 H
Type II: 4000 L x 3500 x W x 3000 H
Type III: 5000 L x 3500 x W x 3000 H
TECHNICAL SP ECIFICATION
Square Lattice type of RTT is manufactured as per GR No. GR/TWR-09 FEB. 2004 Design of
triangular type RTT is duly approved from Structural Engineering Research Center (SERC),
Chennai. All members of RTT are made up of structural steel as per IS2062 Grade A & hot dip
Zinc galvanized as per IS 4759. It can carry 6 Nos. GSM/WLL Antenna & 3 Nos. 0.6M dia
Microwave Antenna. Basic design of RTT is for wind speed 200 Km/h. It can survive wind
velocity up to of 210 km/h for short duration.
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Figure 7
TRANSCEIVER
Alcatel's new Twin TRX radio transceiver doubles the capacity of existing equipment, while
occupying the same space in the rack. The new Twin TRX is particularly adapted for densely
populated urban areas, with a maximum capacity of 24 TRX per Base Station cabinet. Twin
TRX transceivers can be installed in the full range of Alcatel’s indoor and outdoor BTS.
CDMA (code Division Multiple Access)
CDMA (Code Division Multiple Access) is a digital wireless technology to provide mobile
communication. CDMA works by converting speech into digital information, which is then
transmitted as a radio signal over a wireless network. CDMA uses a unique code to distinguish
each different call. The receiving device is instructed to decipher only the data corresponding to
a particular code to reconstruct the signal. This enables many subscribers to share the same
frequency band and, at the same time, without any cross talk or interference.
35
CDMA WLL technology provides option of limited as well as full mobility to the customers.
This helps to provide faster last mile connectivity, where lying of cables is difficult.
Figure 8
Transmission (Fiber Distribution Frame, FORDAR, 9.6 Kb/s IP Radio)
STM1 STM4 STM16 STM64
2/34 OPTIMUX, DDF
DWDM 2.5G (32CH), DWDM 10G (40CH)
Solar Panels
36
Defense Products
OWS -ORDERWIRE SECRECY
Order wire secrecy: (OWS) Order wire Secrecy encrypts and Decrypts Voice calls between
operators on Radio. During alignment of Radio and setting up of the link the voice information is
secured by this Encryptor. It uses state of the art Components with Proprietary algorithm. It has
additional feature of working in repeater and Regenerator mode during long hop working. It can
work in Broadcast mode as well as Voice call mode. It can be customized to work with any type
of radio. The system design also use of this in static as well as Mobile application.
Figure 9
Diversified Products
37
SMPS -Switched Mode Power Supply
FEATURES
• Low cost & light weight
• Controls up to three LVD
• Hot plug-in rectifiers
• Fan cooling
• Temperature compensated battery charging
• Intelligent battery health monitoring
• Wide AC Input range
• RS485 Compatible (Remote Monitoring)
Figure 10
38
Mil PCM Secrecy: MIL PCM Secrecy is a ruggedized Encryptor to encryprt and decrypts 2
Mbps / E1 data of PCM Format. It can accept various
Figure 11
Types of Signalling format like CAS, CCS, PRI, ADPCM, ATM etc., It can work from Internal,
External or Recovered clock. It uses Proprietary algorithm. It meets stringent Defence
Environmental Specifications of JSS 55555 and EMI/EMC Specifications of MIL STD 461C. It
works from 230V AC or -48v DC. Normally works from AC and in case of failure automatically
switches over to DC working.
Figure 12
ANANDA MK II BEU
39
ANANDA MK II: (Name to be corrected in WEB Page) ANANDA MK II encryptor to
encrypt and decrypt 2 Mbps / E1 data of PCM Format. It can accept various types of Signalling
format like CAS, CCS, PRI, ADPCM, ATM etc., It can work from Internal, External or
Recovered clock. It can also work with Framed / Unframed Data. It meets QM 333
Environmental Specifications. It works from -48v DC with duplicated power Supply. It is housed
in a standard 19" subrack and a main rack can house 4 such subracks. Each subrack carries four
independent 2 Mbps Channel effectively this can be used as 8 Mbps Encryptor.
Figure 13
STM1 ENCRYPTOR
STM 1 Encryptor encrypts/decrypts SDH formatted data at bit rates of 155Mbps. It accepts
either electrical / Optical Interface as clear data input and gives out encrypted data again as
Electrical or Optical Interface. Works with proprietary algorithm and Key management. The
encryptor provides NMS interface for monitoring and alarm indication. It is equipped in standard
19” sub rack. While working on long haul Optical lines it has in built facility of Optical
regenerators. Unit has low power consumption and works from -48v DC Power supply.
40
Figure 14
BEU IP
BEU IP is designed and developed by ITI to encrypt / decrypt Internet Protocol (IP) data
at layer 2 / layer 3 of OSI layer. It can work in either Tunnel mode or Transport mode.
Uses Proprietary algorithm and key Management. Designed to accept data from LAN /
WAN and give a throughput of 10/100 Base T. On media side it can work on Optical /
Satellite media. The unit is available as table top model or as standard 19” sub rack
construction in 1’U’ height.
Figure 15
FAX ENCRYPTOR
FAX Encryptor is terminal end Secrecy device designed to encrypt / decrypt Voice / FAX / data.
It accepts FAX data from either G3 FAX Machine or Super G3 FAX Machine and encrypted
data is sent on 2W PSTN line. When switched to Voice encryption it encrypts / decrypts analog
41
Voice data. It also can encrypt / decrypt digital data at 9.6 Kbps rate through RS 232 interface.
Uses Proprietary algorithm and key Management. The unit is available as standard 19” sub rack
construction in 1’U’ height. It works from either 230V AC supply or from -24V DC supple
Facilities
Environment testing
PCB Assembly and Testing
Card assembly and Testing including In circuit tester
Metal parts manufacturing
Mechanical Fabrication / Machine Shop with modern CNC machines and finishing shop
Moulding shop
Computer Centre
Component approval centre approved by BSNL
42
RESEARCH METHODOLOGY
Research in common parlance refers to a search for knowledge. Research is a scientific and
systematic search for pertinent information on a specific topic. In fact, research is an art of
scientific investigation. The meaning of research as” A careful investigation or inquiry specially
though search for new facts in branch of knowledge”
Rendmon and mory define research as a “systematized effort to gain new knowledge”
According to D. Slesinger and M. Stephenson - Research as “The manipulation of things,
concepts or symbols for the purpose of generalizing to extend, current or verify knowledge,
whether that knowledge aids in construction of the theory or in the practice of the art.”
ITI being in the Business for so long understand the ups and downs of this business very well.
Hence when the problem arose due to liberalization and also due to entrance of the competition
and ITI started losing its market share and incurring losses, it change its price strategies and new
policies were introduced. But still is continued to be in losses even though its profit was
increasing. Hence it was necessary to find out what the actual reasons was for the losses
incurred. For this reason this research was carried out to find out:
Whether the people were satisfied with the product or not?
Whether the price was the competitive or not?
Whether there was a demand of the product in the market?
Why there was a loss being incurred every year even when the company sales were
increasing? The apparent problem for losses being incurred was that the prices were not
competitive enough hence the company was going into loss. It was also necessary to find
out whether there was acceptance for the product in the market. It was also necessary to
43
find out whether repeat purchase was there or was also necessary to find out the strength
of competitors and how was it affecting ITI.
SOURCES OF DATA
There were two sources of data used. The first one was primary source and second was
secondary source.
1. Primary data
The primary data included the information collected from the
1. Questionnaire method
2. Schedules method
3. Observation method
4. Personal interview with customers
5. Other methods
2. Secondary data
Secondary data includes
a. Data from various magazines esp. Bank magazines.
b. Internet
c. Brochures
d. Books
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e. Newspapers etc
My whole project is based on secondary data that is collected through internet sources, tender
research papers and publish reports by various institutions.
This is In order to accomplish the objectives of the secondary data has been conducted amongst
customers of the tele communication market. The survey is based on past record of the company,
tender given by the company to analyze the customer reaction to some parts of Allahabad city.
45
46
MARKET
The popular meaning of the marketing refers to place where good or bought sold against the
price consideration between the buyers sellers from the of view of economics the refers who are
not a place but to a commodity and buyers and who are indirect competition with one anther
again, the modern concept of market, sellers and the commodity but also the buyer and the
commodity but also the prospectus are buyer seller meet in essence, a market is commodity
oriented as well as service oriented.
According to Philip Kotler, -A market consists of the entire potential customer sharing a
particular need or wants to customer satisfy that need or want
According to Cournot,- Economists understand by the market not any particular place in which
things are bought and sold but the whole of any region in which buyers and sellers are in such
free intercourse with one another that sellers price of same goods tend to be an equality.
So the size of the market depended upon the number of persons who have the unsatisfied needs
and are potentially capable of doing the exchange.
CONCEPT OF MARKETING
Generally, Marketing is understood to mean the purchase of goods and services but it is narrow
thinking to understand it also. The tern marketing is very wide. It does not mean only the sale
and purchase of goods and services .It means entire process of satisfying the needs of customers.
It starts with discovery of needs and of the consumers, and it is continuous, till these needs and
wants are satisfied. To understand the meaning of marketing clearly; it become necessary that
different concept of marketing must be understood.
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Marketing is the process of matching the resources of the business with identified customer
needs. In other words marketing is concerned with the focusing of the organization resource to
ensure that the customer is satisfied at a profit to the business.
MEANING AND DEFINITION OF MARKETING
Modern concept of marketing is a customer oriented concept. This concept is based on the
assumption that a business and industrial enterprises can achieve its object of maximization the
profits of its consumers and it tries the satisfaction of these needs and wants.
Therefore, according to this concept, marketing starts with the discovery of needs and wants of
consumers and ends with the satisfaction of these needs and wants.
According to William J. Staton:- Marketing is a total system of interacting business activities
designed to plan, price, promote and distribute want- satisfying product and service to the present
and potential customers.
CHARTACTERISTICS OF MARKETING
Important characteristic of this concept are as follows
1. According to this concept consumer is the key of the market and this needs and wants are the
goal of the business activity.
2. Marketing is the entire process of understanding and satisfaction the needs and wants of
customer.
3. Under this concept first of all the needs and wants of customers are discovery them these
needs and wants are converted into goals and service physically distributed from producer to
customer and after sale service are provide so that the needs of customer many be satisfied in
most effective manner
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4. This concept assumed that the object of earning the profit can be achieved only when the
needs of society are satisfied.
5. According to this concept marketing is creation and delivery of standard of living to the
society.
ELEMENTS OF MARKETING
1. Customer
2. Need, Want and Demand
3. Value
4. Exchange
5. market
6. Marketers
7. Desire
8. Profit
9. products
Component of modern of marketing
1. Customer oriented
2. Integrated marketing
3. Profit through the satisfaction of customer
4. Consumer welfare
Importance of modern concept of marketing:
Helpful in product development
2. More social satisfaction
3. Importance towards national economy
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ESSENCTIAL ELEMENT OF MARKETING
1. Productivity
2. Profitability
3. Circular
A. Productivity
Productivity means any company marketing the how many products in the fixed time are called
the productivity. In the other words productivity are manufacturing the quantity of product in the
financial year.
ESSENCTIAL ELEMENT OF PRODUCTIVITY
MONEY
Money is very important of productivity without money any productivity or not possible by the
money purchase the raw material, machine technology, manpower or other requirement.
MATERIALS
Material is very important element of the productivity raw material, semi fished goods, convert
into the finished goods
MANPOWER
Manpower operates the productivity, product quality, product quality, product quality product
size, product color or etc. Manpower controls the machine. Product manager control the function
related by the production.
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TECHNOLOGY
Productivity is depending upon the technology. Any companies use the new technology new
machine so company productivity is increases and product quality is very good.
PROFITABLITY
Profit is main objective of any business firm. Without profit any business firm’s value is not
increase because profit is most important part of business firms without profit any firm cannot
grouch. Profit is heart and head of any business firm. Profit is margin between cost of production
per unit and selling price per Unit. Cost is production in involve raw material, factory overhead,
office and administration over head and jointed other expenses.
CIRCULAM:-
Circular mean sale after services company sale his product his customer and provide the service
after sale I.T.I. Company cannot doing the direct marketing. ITI provide his marketing
BSNL/MTNL and none BSNL Company. ITI provide service after sale. If any product in born
defecting so ITI provide the facility of repair. First position customer reach the product for he
repair in the ITI send the specialist engineer to his customer company and customer company all
spent of engineer.
Modern concept of marketing stresses upon the satisfaction of needs and wands of consumers. It
start with the discovery of consumer needs and every activity of a business and industrial
consumer at reasonable price, at the time and place most suitable to the consumers, through
channels of distribution most convenient to the consumers and the best possible after sale –
service are provided. Thus, this concept provides for greater social satisfaction. In fact, it create
and delivers the standard of living to the society.
51
PRODUCTIVITY OF ITI SYSTEM
Decentralized marketing system
A.BSNL/MTNL MARKETING SYSTEM
B.NONE BSNL/MTNLMARKETING SYSTEM
TCR--- (Telecommunication Research Centre)
TSEC--- (Technical Specification Evolution Certificate) (Bangalore)
TAC--- (Type Approved Certificate)
GR--- (Generic Requirement by BSNL)
There are wings present in ITI centre Naini
1. Telephone Equipment Division
2. Telephone Instrument Division
3. Research and Development Division
52
TSEC describe product description:-
Product (x) only
Model no. 1, 2, 3
Date of issue 01/01/2010
Validity 31/12 2012
53
ITI MARKETING PROCESS
TENDERING PROCESS
First stage in new product
54
POST BID
Request for purchase order and showing the all activity in the post bid after sales &Service.
Present the warrantee period and present the engineer for the repairs and company provide the all
expenses for the engineer.
MANAGEMENT INGORMATION SYSTEM
Tender process sent the information for the company management.
ITI MARKETING IS NOT PROVIDE DIRECT MARKETING SYSTEM ITI LTD APPLY
THE TENDER MARKETING
TENDER:-Tender is a document are enquiry from a purchaser specify exact nature of
requirement of the material again shall which offer /quotation are inverted service for the
supplier.
TYPE OF TENDER:
A. SINGLE TENDER
B. LIMTED TENDER
C. OPEN TENDER
D. GLOBLE TENDER
SINGLE TENDER
Single tender supplier they are called single tender in the single tender producer and customer
are closely involved producer tender system all only two parties invoked buyer and purchaser.
Limited Tender: It is very popular tender limited tender enquiry issued to three or five supplier.
(ITI USED THE LIMITED TENDER) in the can no need for advertisement.
55
OPEN TENDER
Open tender is very competitive tender in the open tender is the most important of
advertisement.
EX — New paper, internet or other source. (OPEN TENDER IS USED BY BSNL)
GLOBLE TENDER
Global tender in the advertisement most important .Global tender area are very wildly trade
export Maggie in the floated.
EX.—Load in internet and economics time.
TENDER PROCESS
NIT- (Notice Inviting Tender)
RO- (Regional office)
56
FLOW CHART OF STABLISHED PRODUCT
Next……..
57
Next………
58
59
Tendering process for decentralized
TENDER
Next………
60
61
POST BIDDING SYSTEM
62
TENDERING PROCESS OF NEW PRODUCT
Next………
63
64
PRODUCTION OF ITI NAINI 2009-10
DDM 8102 UNIT
DIGITAL RACK 3000 UNIT
STM -1 25228 UNIT
STM -16 2633 UNIT
STM -64 WITH ADM 5 UNIT
DWDM (WITH SPARE) 2 UNIT
FORDER
Total =38970 /unit
STM –Synchronous Transport Model
DDM – Digital Distribution Model
65
TENDER MEANS BID DOCUMENTS
Sec. 1 –NIT (Notice Inviting Tender)
Sec. 2 – (Instruction of Bidder)
Sec. 3 – General (commercial) condition of control
Sec. 4 – Special condition of control
Sec. 5 – Deal with schedule of requirement
Sec. 6 – Deals with technical specification
Sec. 7 – Bid form and price schedule
Sec. 8 –Bid security form
Sec. 9 – Performance security form
Sec. 10 –Deals with letter of authorization for bid opening
Amexure (A) –Compliance (Closely clause)
(B) –No deviation certificate
(C) –No relation certificate
(D) –Check list
Sec. 1 of Bid document:
Tender Item & Quality
Specification of Generic Requirement
Estimated Amount
Tender Fee
Last date of Summation of Bid &date &Time of Bid
Opening Eligibility
66
Section 2 of Bid document:
Institutions to Builder:
Clause 1 – Definition:-
Preacher of BSNL
Bidder (Individual)
Surlier (Supply the goods under contact goods)
Purchase order –Writing documents
PO
APO
CONTRACT PRICE
A. BASIC PRICE
B. ED
C. CSY / VAT
D. FF & I
BASIC PRICE
1. FACTORY PRICE
2. MATERIAL COST
3. LAOAR CHARY OUT HAED
Clause4- Deal with details of bid documents
Clause5- Clarification of bid
Clause9- Bid price (this is composite of price or firm price)
67
Clause10- Eligibility criteria
Clause12- Bid security it in form of bank guarantee certificate.
Clause13- Bid validity (150 days to 180 days)
SECTION 2
INSTRUMENT TO BIDDER
Clause14- Format of bid
TYPS OF BID
1. TECHNICAL BID
2. FINANCIAL BID
TECHNICAL BID
1. Original
2. Duplicate
FINANCIAL BID
1. Price Schedule
2. Original Bin
3. Price of Bid Document
Submission of Bid
15 July 10at 11:30 am
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BID OPENING
15July 10 2:00 pm Bid security amount to be submitted by party.
PNC-Price Negotiation Committee
LOI- Letter of Intent
APO- Advanced Purchase Order
Repeat order—150 days
MAN POWER OF ITI NAINI
Officers 1259
Employees 866
TOTAL near about of ITI Naini in man power 2125
Sec: - General (commercial) condition of control.
PRODUCT COMPETITORSEPBT TELEPHONE 1.Pramod Telephone
Lucknow2.SRV TelecomBangalore3. BPL India Bangalore 4.Bharti TelecomHariana
69
Product Competitor Technology
STM- 1 ADM, CP
STM- 4 ADM
STM-16 ADM
STM- 16 MADM
1Prithvi telecom Co.
2.puncom
3. Ordine
4.Terracom
5.Siemence
6. ZTE
7. HFCL
8. ICOMM
HuawaiTechnology
Huawai tech.
Ordie tech.
Ordine tech.
Siemence tech.
ZTE tech.
WRI tech.
VT star tech.
Product Competitor Technology
STM-64 Puncom
Ericsson
Icon
Siemens
Huawai tech.
Ericsson tech.
UT star tech.
Siemens tech.
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Product Competitor Technology
DWDM VTL
Prithvi
Terrocom
NSN
Puncom
Siemence
Ad was tech.
Huawai tech.
Multiplex tech.
NSN tech.
Huawai tech.
Siemens tech.
71
72
Pricing is perhaps the most important component in the marketing mix. While all other element
in the marketing mix are cost factor, price is a revenue or income. Pricing determines he viability
of any business project because the demand and sales revenue depend on the price. It is equally
important for profit making and nonprofit making organizations. Fixing price is a problem for
both.
WHAT IS PRICE
Price is commonly known as the exchange value of a product or service expressed in terms of
money. Price is paid for whatever service or product we receive, such as rent fir a house fee for
the doctor, interest for the money etc. Whatever compensation we pay for a particular product or
service, we all the same as price in the strict sense of the term.
Price can be considered as the leveler between the buyer and the seller regarding what each must
get. Price is a device for translating into quantitative terms the perceived value of product/service
to the customer.
Throughout most of history, price was set by negotiation between buyers and seller. Fixed price
policies-setting one price for all buyers is a relatively modern idea that arose with the
development of large-scale retailing at the end of the nineteenth century. Now, some one
hundred years later, the internet promises to reverse the fixed pricing trend and takes us to an era
of dynamic customer and situation.
Price can be put in other words as:
Total market offerings=Bundle of expectation/Satisfactions =price.
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FACTORS AFFECTING PRICING
There are many factors, which would affect the pricing Decisions. These can be grouped into as
internal and external factors .most of the internal factors has a direct relationship with the
objective of pricing. For instance, the image if the company has a direct effect on the pricing, the
internal factors is the factors, which are form within the organization and are controllable by the
management. The external factors are those competitors and the market in particular. These
factors especially competition, government policy and control etc have to be taken care of while
formulating pricing strategies of the company.
INTERNAL FACTOR AFFECTING PRICING DECISIONS
Before setting price, the company must decide on its strategy for the product. If the company has
selected its target marketing and positioning carefully, then is marketing mix strategy, including,
will be fairly straightforward. Thus, pricing strategy is largely deterring mind by decisions on
market positioning. At the same time, the company may seek additional objective, the clearer the
firm is about is objectives, the easier it is to set price. Examples of common share leadership and
product quality leadership
MARKETING MIX STRATEGY
Price is only one the marketing mix tools that a company uses to achieve its marketing
objectives. Price decisions must be coordinated with product design, distribution and promotion
decisions to form a consistent and effective marketing program Companies often position their
products on price and then base other marketing objective. Price decision on the price they want
to charge. Here price is a crucial product-positioning factor that defines the product make
competition and design. Many firms support such price positioning strategies with a technique
74
called target costing a potent strategy weapon. Target costing reveres the usual process of first
designing a new product, that? Instead it starts with an ideal price based on customer
consideration, and target cost that will ensure that price is met.
Other companies de emphasize price and use other marketing mix tools to create non price
positions. Often the best strategy is not to charge the lowest price. But rather to differentiate the
marketing offer to make it worth a higher price. Thus the marketer must consider the total
marketing mix when setting prices.
EXTERNAL FACTOR AFFECTING PRICE DECISIONS
THE MARKET AND DEMAND
Whereas costs set the lower limit of prices, the Markey and demand set the upper limit. Both
customer and industrial buyers balance the price of a product or service against the benefits of
owing it. Thus before setting prices the marketer must understand the relationship between price
and demand for its product
COMPETITIORS, COSTS, PRICE
Another external factor affecting the company’s pricing decisions is competitor’s costs possible
competitor reaction to the company’s own pricing moves?
OTHER EXTERALF ACTORS
When setting prices the company also must consider other factors in its external environment.
Economic conditions can have a strong impact on the firms pricing strategy. Economic factors
such as boom or recession, and interest rates affect pricing decisions because they affect both the
costs of production a product and consumer perceptions of the products price and a value. The
company must also consider what impact and its price will have on parties in its environment.
75
Other how will resellers react to various price? The company should set prices that give resellers
a fair profit, encourage their support, and help them to sell the product effectively.
COST
Costs set the floor for the price that the company can change fob its products. The company
wants to charge a price that both covers call its costs for producing, distributing, and selling the
product and delivers cost many be an important element in its pricing strategy. Companies with
lower costs can set lower prices that result in greater sales and profits.
A company’s costs take two forms, fixed and variable costs. Fixed costs (also known as
overheads) are costs that to not very with production or sales level. Variable cost very
directly with the level of production. Total costs are the sum of fixed variable cost for any
given level of production. Management wants to charge a price that wills least cover the total
production costs at a given level of production.
Factors like overhead, material cost; laboratory cost excise duties etc. determine the price of
a product.
i. COST PRICE =MATERIAL+LAB. + OVERHEAD
ii. SELLING PRICE =COST PRICE +PROFIT
iii. EXCISE DUTY =8.24% OF SELLING PRICE
EX-FACTORY COST=SELLING PRICE +EXCISE DUTY FREIGHT &FOR WORDING
& INSURANCE= 0.5%
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PRICING POLICIES
The management may decide on the policies to be formulated for pricing its products. Pricing
can be based on the need of the consumers or the cost of production and marketing or on the
market conditions. Need-based pricing is adopted by the government for public services like
health education etc. Cost based pricing or mark up pricing is followed by many companies such
as supply of items on a periodic / contract basis, and products which have less competitors etc.
the market based pricing is necessary for consumer goods. Depending upon the products and
their position in the market, the management has to decide the policies to be followed in pricing.
The management has several pricing option in deciding the prices. Some companies may decide
to follow one price policy, or variable price policy, or to act a leader in the market as regards
price is concerned. The one price policy is found to be quite sound and reasonable. The company
follows a fair and fixed price policy in line with the normal market price, which ensures a
reasonable profit. Under the variable price policy the buyer / customers are discriminated and
bulk buyer and valuable customers are offered favorable terms while others are not given the
same. The leadership policy is followed by a few leading companies which are able to control
the market.
PRICING STRATEGIES
Pricing policies are general guideline for recurrent and routine issues in marketing. Strategy is
a plan of action to adjust with changing conditions in the demand special attention and relevant
adjustments in the pricing policies and the procedures. Pricing policies change from time to time
the type of strategies that a company may adopt may of the following types.
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MARKET SKIMMING PRICING
Many companies that invent new products initially set high price to “skim” revenues layer from
the market. Market skimming makes sense only under certain conditions. First the production
quality and image must support its higher price and enough buyers must want the product at
that price, second, the costs of producing a smaller volume cannot be so high that they cancel the
advantage of charging more. Finally, competitors should not be able to enter the market easily
and undercut the high price.
MARKET PENETRATION PRICING
Rather than setting a high initial price to off small profitable market segments, some
companies use market-penetration pricing. They set a low initial price in order to penetrate
the market quickly and deeply, to attract a large number of buyers quickly and win a large
market share.
Production of line pricing
This means setting the price steps between various products in a product line based on cost
differences between the products, customer evaluation on different features, and
competitor’s prices
PRICE ADJUSTMENT STRATEGIES:
The two popular types of price discounts are:
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Cash discount
A cash discount is a quantity reduction to buyer who pay their bills prompt. Such discounts
are customary in many industries and help to improve the seller’s cash situation and reduce
balk debts and credit-collection costs
Quantity discounts
A quantity discount is a price reception to the buyers who but large volumes. By low,
quantity discounts must be offered equally to all customers and must not exceed the seller’s
cost savant associated with selling large quantities. These saving include lower selling
inventory and transportation expenses.
PRICING STRUCTURE OF ITI
During 1996-97, the ministry of telecommunication decided that ITI would get 30% as a reserve
quota of any tender with L1 price of tender for the rest 70%, if ITI will also get order from
BSNL. As per the planning of communication ministry, ITI gets a least 1800 crores to 300 crores
(as reserve quota) plus share received through, tender (i.e. from 70%). But the problem with ITI
is that ITI will supply all the order in ITI rate of tender of each item. That is why profit margin
very low and at the same time it is on the on profit, no loss basis. As ITI is getting an advance of
75% against reserve quota of 30% so ITI is not facing at financial problem for the procurement
of material at least.
Factors like overhead, material cost, laboratory cost, excise duties etc. determine the price of a
product.
COST PRICE =MATERIAL + LAB + OVERHEAD
SELLING PRICE = COST PRICE +PROFIT
EXCISE DUTY = 8.24% OF SELLING PRICE
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EX-FACTORY COST = SELLING PRICE EXCISE DUTY
FREIGHT FORWORDING &INSURANCE =0.5% OF X-FACTORY COST
TECHNICAL COSTING OF THE TRANSMISSION EQUIPMENT
Product costing is done the database computer system. Whenever a new product is introduces,
technical costing section demands bill of materials from the computer enter for all the assemblies
and sub assemblies in order to list out various assembly components involved in that particular
product. The EDP department generates bill of material after receiving input data from system
engineering, which consists of parent codes and route codes.
After ascertaining that the complete bill of material is available with EDP technical
costing asks the EDP to like inventory rates with latest inventory rate master, who is
being update the latest weighted average rates (WAR). Whenever no purchases are made
doing the year, last year rates are taken. EDP givens a master list of not into technical
costing. The situation occurs due to the reason of either a substitute material being used
to the purchase order rate is not appearing for new item from purchase department. After
applying the normal levies, as the case may be in the purpose order, we calculate the
price of the material and feed in the not in the master.
After feeing the rates from penned figure in the not in master EDP complete bill of
material and linking with the inventory, rates are given to technical costing for checking
any discrepancies in the rates. Unit measures particularly the copper wires and other are
given in Kg and the unit measure with the bill of material in given in Gm. Extra care is
being taken by technical costing section in this regard For mechanical components, the
methods department is supplying the process sheets /layouts. The raw materials used, size
80
specification, and weight of raw material to make 1000 components are given in the
process sheet /layout we calculate the cost of mechanical components in following for
Component code → R.M. & specification → Size
Quantity WF /1000
Material ← War rates
EDP supplies us with the three statements of cost
Assembly and sub –assembly wise cost sheet
Valve added cost sheet
Assembly and sub-assembly wise cist statement for individual assembly item is given which
includes cost of all inventory items and mechanical component in That particular assembly or
sub-assembly. Value added in the main assembly cost. Final cost statement consists of the cost
of complete assembly and sub-assembly cost and added value is given. For labor cost calculation
the time standards of various assembly, mechanical components and main assembly of the
product is sought .Normally the standard hours are for 1000 numbers. The standard hours are fed
in the bill of material along with time standard. The shop average rates are calculated once in a
year taking into account the pay details of all operatives against whom DPR, s are booked which
is supplied by the EDP department . Since whom EDR only calculated one year material cost and
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the labor and overhead cost are calculated by feeding the information in the PC overhead percent
its applied based on the 1986 approved by DOT and BICP.
TECHNICAL COSTING OF THE TRASMISSION EQUIPMENT
Product costing is done with the database computer system. Whenever a new product is
introduces, technical costing section demands bill of material from the computer center for all
the assemblies and sub assemblies in order to lit out various assembly and mechanical
components involved in that particular product. The EDP department generates bill of material
after receiving input data from system engineering, which consists of parent codes and route
codes.
After ascertaining that the complete bill of material is available with EDP technical costing
asks the EDP to like inventory rates with latest inventory rate master, who is being updated
the latest weighted average rates (WAR). Whenever no purchases are made during the year,
last year rates are taken. EDP gives a master list of not into technical costing. This situation
occurs due to the reason of either a substitute material being used to the purchase order rates is
not appearing for new items from purchase department. After applying the normal levies, as
the case may be in the purpose order, we calculate the price of the material and feed in the
master.
After fleeing the rates from panned in the not in master EDP complete bill of material and
liking with the inventory, rates are given to technical costing for checking any discrepancies
in the rates. Unit measures particularly the copper wires and other are given in Kg and the unit
measure with the bill of material in given in Gm. Extra care is being taken by technical
costing section in this regard.
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PRICING STERTEGY OF ITI
Prices: The price of product in includes three costs in the factory.
1. Material cost
2. Labor cost
3. Overhead
Material cost:
Material is they things who use in the manufacturing of the product.
Material cost is two types:
1. Direct material cost
2. Indirect material cost
1. DIRECT MATERIAL COST
Direct material cost involve the directly manufacturing of the products it is very important for
any product.
Example:
Iron, Metal or etc.
1. Metal sheet or metal cable (it is decided by Landon metal exchange. (LME)
2. P.C. (Printed Circuit) it is very important part of any product. It is most commonly use in
the product
3. Component: it is very important part for products.
4. T.C. (Transistor Circuit Board) etc.
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2. INDIRECT MATERIAL COST Indirect material costs are they cost who are not directly showed but it is very important part
of any product. Without indirect material product has been not completed.
Example of indirect material cost: Nut & bolt,
Solder,
Wire price,
Welding & electrode
Paint
Polish
Chemicals for planting or etc. LABOUR COST
Labor cost is very important cost of the any product manufacturing because without labor any
product has not been progress.
Labor costs are two types:
1. Direct labor cost.
2. Indirect labor cost
DIRECT LABOUR COST
Manpower who involve the directly manufacturing in the product.
Example: Engineer, Employees, super wiser, feeders, helpers, tester
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INDIRECT LABOUR COST
Manpower that is not includes the directly manufacturing but he is very important of the
company.
Example:
Company management
Security guard
Inspector
Tester
3.OVERHEAD
Example:
1, Welfare expanses:
Company provides his workers many facilities.
A. Medical facility:
Company provides the medical facility for his employees and officers.
A. Canteen facility:
Company provides the canteen facility for his employees and officers.
B. Uniform facility:
Company provides his officers and employees company’s uniform facility.
C .Salary of non productive employees:
Company gives the salary of non productive employees.
C. Salary of officers & management officers:
Company gives the salary of management officers & officer’s salary.
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MATERIAL COST
Material cast department:
DD RACK
B. DDF
C. 2MB /120
D. 75 MODEL 8 /120MB
140 / 153 MB MODEL
PRICE:-
Material cost + Labor charge +pacing charge
100+Margine (In %not Rs.) = Basic Price or
(Ex-Factory Price)
Or All Exclusive Price
Basic Price =Excise Duty (ED) 8.24%
(Basic Price + ED) =CST (Central Sales Tax) 2% /VAT 4%
(Basis Price + ED +CST /VAT) 2% = 1.26%
FRIEGHT, FORWORDING &INSURANCE
(BASIS PRICE +ED + CST /VAT +FFI) = ALL INCLUSSIVE PRICE
1st case =8%Reduce Tax 8%
2st Case = High Structure Tax 10%
(INDUSTRIAL ENGINEERING DEPARTMENT DESIDED LABOR COST)
PRICE SCHEDULE:-
ED - 8% - 8.24%
CAT - 2% - 2%
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Sr TAX - 10% -10.3%
VAT - 4% -4%
FREIGHT FORWORRDING DWDM /SDH -0.5%&INSURANCE
FOR PROUCT (X):
Quality basis price ED/sr Tax CST FFI Inclusive of all
FOR 100 UNIT TOTAL 55478
H/W100 500 41.20 10.82 2.76554.78
H/W 100 300 30.90 - 1.65 332.55
FOR 100 UNIT TOTAL 33255.00
FOR PRODUCT (Y)
Quality Basis Price ED/sr Tax CST FFI Inclusive of all
H/W100 600 49.44 12.98 3.31 665.74
FOR 100 UNIT TOTAL 66574
S/H100 100 200 20.60 1.10 221.70
FOR 100 UNIT TOTAL - 22170
TOTAL FOR BULK PAGE = 177477.00
SUPPOSE PRODUCT (X) BASIS PRICE Rs. 100 ADD
ED /Sr TAX 8.24%
100 +8.24% =108.24 +CST 2.16%
108.24+2.16 =110.40+FFI 10.55%
110.40+0.55 =110.95
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110.95 /100 =1.10
PARTY L1 -168476.00
PARTYL2 -168790.00
PARTY L3 -177477.00 ITI
PARTY L4 -177698.00
PARTY L5- 187550.00
DELETED FACTOR =L1 /L2 FOR OTHER SITUATION
=L1 /L3 FOR ITI =168476/177477
553.78 - 526.64
332.5 - 315.68
FOR 100 UNIT PRICE =1684.75*100 =168475.00
PRICING STERTEGY FOR ITI
1. BSNL – Biggest telecommunication national network in India.
2 .MTNL – Mahanager telephone Nigam Limited.
It is India company not be foreign company that is said to be certified of incorporation it is
issued by government of India. January 25 on 1950 in ITI established.
1. certified of incorporation
2. Article of association & Article of memorandum
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3. Legal documents rules ®ulation follow the government of India ®istered by
government of India
4. That is said to be (SIA)
5. Sectarian for Industrial approval
6. TAC / TSCA
7. I /C Inspection certificate BPC bulk production certificate by BSNL. BSNL being a big
service provider in corers it means.
8. ANNUAL REPORT OF COMPANY – Annual report of company is indicating of whole
financial report is presented profit or loss of ITI.
9. Quality policy – It is very important part of any tender.
10. ISO certificate – ISO certificate is arsenical part of any company or fixed by BSNL
(criteria are fixed)
ELIGIBILITY OF ITI:
1. BID FEE –Submit bid fee celerity system by government of India.
2. BID celerity exemption letter on the demand drafts.
3. TAX CLEARANCE CERTIFICATE – This include sales tax, income tax, clearance tax
certificate.
VAT - State government tax
INCOME TAX -Central government tax
There is important part of pricing strategy of ITI:
1. Tender
2. Clarification of bid
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SWOT ANALYSIS
ITI is a public sector organization set up with the main objective of creating employment source
&to develop the telecommunication sector network .Therefore government has invested billions
of Rs. In it. It requires timely up gradation of technology, policies, and innovatively designed
cost effective product to meet new challenges.
Detailed study of ITI revealed that marketing department is only looking after job of tilling he
tender.
STRENGTHS OF ITI
Good will in the market.
Known for quality product.
Adequate employee.
Has got ISC -9002 (International Standard Certificate) which gives its product International
acceptance.
Got well equipped modern technology to produce quality products.
WEAKNESS OF ITI:
Too much time I requires for decision making by that opportunity flies away.
No trained staff especially in the marketing department.
Fund crises.
No proper coordination between sales and marketing department.
Not able to maintain delivery.
Unable to satisfy /customer inquiries.
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THREATS
Wrong government policy is the major cause of ITI falling profit.
Intense competition from MNC.
Small units are coming up with low quality products. Another major threat is for ITI is cost
reduction. Based on these strength & weakness the objective of marketing department
should be
Allocate marketing effort in relation to long run profit potential of the targeted segments.
Measure company image and customer satisfaction in continuous bases.
Continuously gather and evaluate ideas for new product, product improvement and services
to meet customer need.
Influence all company’s department &employees to be customer centered in their thinking
&practice.
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CONCLUSION
Based on data analysis ITI being the leader in telecommunication industry getting lot of orders
from various companies with department of telecommunication (DOT) as leader leading
customer.
There are vast market potentials in both household and offices (maximum product under specials
sector segmentation I. c. Railway, army etc)
1. Most of consumes are satisfied, sum which are not satisfied a complained about.
2. No modernization in product.
3. Design and model want innovation according market:
4. The biggest competitor of the ITI NAINI is UTL.
5. For equipment’s supplied to BSNL, its share is 30%
6. ITI depends highly on BSNL for orders.
7. Most of ITI’s collaborators have becomes its competitors.
8. As ITI is a public sector unit and largely depends upon BSNL for orders so it does not
Pay attention towards advertising and publicity.
9. Approximately 60% of its ultimate customers are satisfied from ITI’s equipment’s.
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SUGGESTIONS
Make better product According to result a great deal of improvement is required by ITI Ltd. In
the following described features in TID (Telephone Instrument Division)
(A) Easy detachable facility
(B) Better speaker phone facility
(C) Ringer tone variety
(D) Efficient hand ID & call duration
(E) Co lour & design
Advertise the new product in the newspaper, television and other sources.
To know the view’s of customer choices though the market research survey time to time.
Follow different sales promotion strategy like free gift hamper, coupons etc.
In TED (Transmission Equipment Division) section companies major problem is delay in
delivery according my delay belongs directly to our.
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BIBLIOGRAPHY
Kotler Philip- Marketing Management, Person Education (Singapore), thirteenth Edition,
2009.
Kothari.C.R. Research Methodology New age international publishers, New Delhi,
Second Edition: 2004.
Boyd W. & Harper, Marketing Research AITBS. Publishers, New Delhi, Seventh
Edition, 2004.
Magazines:
Business economics
Business Today
Website:
www.iti.ponier.com
www.itiltd-india.com
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