i Tata Steel Ppt

8/4/2019 i Tata Steel Ppt

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PRINCIPLES OF MANAGEMENT

Akash Shah-49

Binoy Mehta-50Siddhant shah-51Tirath Shah-52

Shivani Sodah-53Shweta tewani-54


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Most internationally recognizable IndianBusiness House

Largest private steel maker

Largest Foreign Exchange earner in Private

Sector Known for producing quality products and for

living up to their commitments

6.8 million tonnes crude steel output per

annum Aims to achieve 30 million tonnes per annum

Unleashed a Vision Architecture to achieve itsaim


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branding for credibility and comfort. branding by de-commoditizing steel.

Brands its various Steel products to capture

part of the customers mind and heart Branding Blueprint, focusing on all the

existing brands that the company sellsthrough its distribution channel.

Spends 1% of its Sales of Branded productsfor Brand Management


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Worlds first branded cold rolled steel (CRS)called TATA Steelium

Name Steeluim connoted both strength anda feeling of being a world class brand

Product mix enrichment by making suitablegrades and sizes available for differentapplications

Sustaining price premium by strengtheningproduct support services through distributorsand dealers.


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Sales target for the financial year 2004-05had been fixed at Rs. 700 crore

During 2005-06, the sales of brand Steeliumincreased from 0.355 million tonnes to 0.392million tonnes recording an increase of 10per cent over the previous year.


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Bought only by small customers Value Proposition of providing the customer

total Peace of Mind

Assured Availability

Customization of Size

Professional Dealings


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Positively position CRS in the retail marketagainst others in the industry and achievedmore market leverage related to pricing andnegotiations.

The firm could influence customers andintermediaries so that they remain loyal tothe brand

Attracts a premium of 1000-1200 per tonneover competing products


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Brand management Team acquired a clearvision of how they would position the product

Took into account customers behavior andexpectations, feedback from potential

intermediaries, and other necessary insightsfrom the marketplace

Marketing study revealing the customersunfulfilled needs

Technology Selection: Added CRS to ExistingHRC facility by gauging feasibility, nature ofdomestic demand and gaps available


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Volume-wise, the Indian CRS market wasalmost equally divided between small (sayless than 60 tonne a month) and large (sayabove 60 tonne to 1,500 tonne a month)

customers. The large number of small customers were

generally neglected and served by a fewwholesalers

These small but growing customers couldafford to pay higher prices for bettermaterials and service


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The product quality of competitors was notsufficient for high end usage and required manyprocesses to make it usable

Superior quality materials available from importwere beyond the reach of small customers.

Little access to manufacturers of CRS No procedure for Quality Complaint Identity and quality of CRS purchased from the

retailers were often doubtful Customers hated the power of dishonest retailers These customers were in fact willing to pay little

more to get the materials in the manner requiredby them


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Asymmetry in relationship between themanufacturer, wholesaler, and retailer.

Retailers not present at consumption centres aswholesalers grouped at major trading centers

Retailers bought cheap sold Dear No value added services

Discriminatory pricing based on quantity

Not enough stock available due to no knowledgeof demand

Conflict between wholesaler and retailerdepending upon who has the upper hand


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Customized Steelium grades are available for

varying applications

This supported the wide variety of applicationsundertaken by small customers

All Steelium CRS have absolutely flat spread,accurate thickness, superior formability, andsurface finish, which means cost savings to the customer during processing

premium price for the end product by ensuring

superior performance

premium look to the ultimate customer during use


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Unique in the industry

Completely impermeable and highlyprotective

Customers want protection, performance,

information, and assurance from thepackaging

Steelium packets are painted in blue andthere are distinct identifiable TATA STEEL

tags and unique blue seals on thepackaging


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TATA STEEL decided to charge premium price overcompetition so as to position it as a high qualitypioneer brand sold only through well-equippeddistributors and dealers with value added services

Price- major determinant of buyer choice wheneversufficient suppliers are available

Brand management team regularly monitorscompetitors prices, market dynamics, andcomponents like quality premium, service

premium, and relationship premium Each grade of TATA Steelium has a location- wise

floor price, below which the item cannot be sold bythe distributors or dealers


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Worlds first branded cold rolled steel

Drew sufficient media attention for quite sometime

Communicated its product and service strategyto a large number of small customers of CRS

through the well-established network ofdistributors and dealers Brand management teams carried out elaborate

studies of customer segments and sentcustomized direct mail, brochures, and other

relevant information through distributors


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Ensures that all Steelium distributors have aminimum number of salespersons according totheir business volume and they are knowledgeableabout the product, systems, procedures, andcustomers

Distributors are considered as the key customersand a sales team is responsible for satisfying thetransaction and relationship needs of thedistributors

Personal relationships with the distributors aredeveloped through regular visits when accountmanagers study and help distributors/dealers toimprove their operations


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TATA Steel

Distributors

Dealers

Dealers

Distributors

Dealers

Dealers


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Level 1 investment capabilities, interest in exclusive

dealership, registration with statutory authorities,and market reputation

Level 2 business experience, turnover, knowledge, and

quantum of sales

Level 3 nominated senior officers of the company take

decision about distributor selection based ontheir ratings and scores in level-1 and level-2.


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PerformanceParameters Sales compliance

Quality of feedback

Inventory management Market receivable

management

Customer visits

Margin monitor

Capability Parameters Market understanding

Quality of servicecentre

Service capability Quality of HRM

practices

Implementation ofquality management

systems Work on special

projects


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Excellent functional quality Dream customer service through highly capable

distribution

Customer intimacy

Consumption pattern Brand perceptions


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TATA Steelium Brand Equity build up on itssuperior steel quality & excellent customerservice

Competitors offering similar or evensuperior value preposition

Pricing pressures Price premium sustenancea tough task


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Expectations of service centre facility areincreasing. Expectation for technical support is increasing. With India gradually becoming a global hub for

outsourcing for many industries especially auto

ancillaries and panel, small customers demands interms of product quality and service levels arebecoming more stringent.

With increasing price and reduced availability,customers felt a kind of power shift to TATA STEEL

and brands distribution network. Some of the very small customers demanded fixedprice contract and long-term supply contract


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INTENSITY OF RIVALRY - increasing Competitors Essar, Jindal, SAIL-Bokaro - increasing their

supply. Trade segment gentlemens agreement regarding monthly

prices no more feasible. The healthy growth rate of Target sectors after the economic

downturn may not sustain for a long time. These firms will becompeting for a larger share of a shrinking pie.

The stand-alone cold rollers that are currently concentratingon exports will refocus to domestic retail because of the dropin international prices

Other attributes like service comfort, brand assurance, andthe relationship with the Steelium distributors/dealers,customized shapes and sizes and other value added services- opportunity for TATA to build on its unique capabilities


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Global players - POSCO and Mittal Steelhave announced their arrival in the Indianmarket.

These have good corporate image

Steeliums brand loyal customers may betaken. Have no dearth of funds and can establish

large and capable distribution network in a

short time


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Since TATA STEEL is having its own hot rolledcoil production, there is no threat to the inputmaterials for the production of Steelium.


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High functional quality of the product and grades suitable fordifferent applications of CRS High awareness and preference among retail customers in all

locations Established, highly capable and motivated channel partners

supported by able Tata employees (account managers andapplication engineers)

Value addition through dedicated and high quality servicecentres Long emphasized service culture in all stages like presales,

sales, and after-sales Enduring relationships with customers already established by

the distributors/dealers Major supply chain improvement initiatives through TOC will

help improvement of supply chain effectiveness Association with TATA name brings special trust among the

Indian customers.


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Limited availability with increasing demandmay force the existing customers andchannel members to look for other sources

Production being located at only one place(Jamshedpur in India), logisticsdisadvantage is likely for supplying tocertain parts of India

Brand identity (logo) of Steelium is lostwhen processed further (like slitting,blanking, etc.) in a service centre.


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Contract production by maintaining quality standard andother parameters can enlarge customer base and salesvolume.

Within the present market size, there exists considerableroom for Steelium to expand and enhance profitability.

Improvement of sales and realization potential is possible by

increasing the supply of drawing and deep drawing grades. Further value can be created and captured by innovative

marketing strategies like production and sales of exclusiveand branded furniture. If the existing distributors areinducted, this will fulfill their growth needs too.

Continual improvement in service will help in sustaining

competitive advantages.


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By far the most significant threat Steeliumfaces is that of losing some of the importantcustomers and distributors in the hand ofcompetitors like Essar and Jindal that can alsobecome a quality national supplier.

On the back of this uncertainty, Steelium hasto continue investing on relationship withchannel members and customers.

In absence of any real differentiation inmaterial quality, Steelium will have to competesolely on the strength of intangibles


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to achieve customers perception as thefairest-priced CRS with its brand featuresand associations price reduction or valueaddition?

To protect distributor/dealer loyalty motivate them to sell its other brands ormanufacture & market its own range ofstylish furniture

Capacity addition

Customer relationship initiatives in thewake of entry of MNCs superior quality ofproduct & services


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i Tata Steel Ppt