Market Study of Stainless Steel Plate

Presented By:Suraj K S Tanwar2015A141MBA

JSL Group Overview• Founded by Shri O.P Jindal in 1970, Jindal Stainless is one

of the largest stainless steel conglomerates in India and ranks amongst the top 10 stainless steel conglomerates in the world. It’s not only the magnitude of their operations that determines their credibility and name, but they remain inspired by their vision for innovation and enriching lives. Jindal Stainless Group has an annual crude steel capacity of 1.8 MTPA and the group has an annual turnover of Rs 14,500 cr.

• JSL growth has been backed by the excellence of their people, value driven business operations, customer centricity, adoption of one of the best safety practices in the stainless steel industry and a commitment for social responsibility.

JINDAL STAINLESS (HISAR) LIMITED

• The Hisar plant was established in 1975 when Shri O.P Jindal, envisioned a self reliant India for meeting its stainless steel demand. Stainless steel then was no less than a luxury metal and India was completely dependent on imports to fulfill its demand, which imports attracted duties of up to 300%. It was Shri O.P Jindal’s vision and his pioneering spirit that led to the establishment of the Hisar plant, India’s first stainless steel manufacturing unit. Today, it is a fully integrated Stainless Steel plant with a capacity of 800,000 TPA. It is also the world’s largest producer of Stainless Steel strips for razor blades and India’s largest producer of coin blanks, serving the needs of Indian and International mints.

APPLICATIONS• HOME: Kitchen sinks, pans, ovens & furniture.

• TOWN: Bus shutters, telephone booths, lifts, building facades, escalators, subway trains and station

infrastructure.

• INDUSTRY: Equipment for the manufacture of food products and pharmaceuticals, plant for the treatment of portable and waste water, Components of aero engines, fuel & chemical tankers, beverages, packaging machines, chemical tanks, boilers, railway industries, blades etc.

Market Study Of Stainless Steel Plate

• Market study is any organized effort to gather information about target markets or customers. It is a very important component of business strategy. The term is commonly interchanged with marketing research; however, expert practitioners may wish to draw a distinction, in that marketing research is concerned specifically about marketing processes, while market research is concerned specifically with markets.

• Market study is one of the key factors used in maintaining competitiveness over competitors. Market study provides important information to identify and analyze the market need, market size and competition. Market study techniques encompass both qualitative techniques such as focus groups, in-depth interviews, as well as quantitative techniques such as customer surveys, and analysis of secondary data.

OBJECTIVES OF THE STUDY

• To study the marketing stratergy of JSL

• To study the marketing channel of JSL• SWOT analysis of company • To gather the data and check out the

customers buying behaviour towards JSL products through questionnaire

REASEARCH METHODOLOGY

• Research methodology is way to systematically solution of the research problem. It include:Title of the study: Market Study of Stainless Steel PlateType of Research: Exploratory Research Time of Research: Research time is 45 days in JSL Hisar

SAMPLE DESIGNSAMPLE SIZE • The sample size has been 20 customers of JSL. Conclusions

had been arrived at using the response of the questionnaire.

SAMPLING METHOD • Judgment samples are taken through Non-probabilistic

sampling method

SAMPLE AREA • Area Sampling and the area of sampling is Hisar.

DATA COLLECTION METHOD• Primary Data via Structured Questionnaire.• Secondary Data via Company Books, Magazine etc.

LIMITATION OF THE STUDY

• Time constraint is one of the limitation.• Study is limited to only 20 customers of JSL • The accuracy of the analysis and

conclusion drawn entirely depends upon the reliability of the information provided by the employees.

• The time duration for the project is limited to eight weeks so it was difficult to analyse the trainings needs at micro level.

ANALYSIS OF

OBJECTIVES

THERE ARE TWO MAJOR COMPONENTS TO THEIR MARKETING STRATEGY:

How their enterprise will address the competitive market place.

How they will implement and support your day to day operations.

Strategy followed by JSL• COST LEADERSHIP is a concept developed by

Michael Porter, utilized in business strategy. It describes a way to establish the competitive advantage. Cost leadership, in basic words, means the lowest cost of operation in the industry.

• A FOCUS STRATEGY in which a company concentrates its resources on entering or expanding in a narrow market or industry segment. A focus strategy is usually employed where the company knows its segment and has products to competitively satisfy its needs.

PRICING STRATEGY The pricing strategy adopted by JSL is the

Market Penetration Strategy. This strategy is based on the assumption that demands for the product is highly elastic. By setting relatively low price JSL has managed to obtain large market share. The advantage of this kind of pricing is that it discourages competition since there is less opportunity to reap unusual benefits on investment.

PROMOTION STRATERGY• Product Family advertising

If your offering is part of a group or family of offerings that can be of benefit to the customer as a set, then the product family ad can be of benefit.

• Corporate advertisingWhen you have a variety of offerings and your audience is fairly broad, it is often beneficial to promote your enterprise identity rather than a specific offering.

Cont…• Product Benefits advertising

When you want to promote your offering without comparison to competitors, the product benefits ad is the correct approach. This is especially beneficial when you have introduced a new approach to solving a user need and comparison to the old approaches is inappropriate.

• Product Comparison advertisingIn a market where your offering is one of several providing similar capabilities, if your offering stacks up well when comparing features then a product comparison ad can be beneficial.

Competitors of JSL in INDIA

THERE ARE FOUR TYPES OF DISTRIBUTION CHANNELS

–Direct Sale– Through JSL Depot– Through Dealer network(agents,

traders)– Through Service centers of the

company. 

Cont…• Direct Sale: This Jindal Group has developed into a

multi-faceted organization mainly deals in direct marketing and branch network. Company dispatches their products directly from plant to customer. Direct marketing helps companies to focus their marketing efforts. To avoid intermediary conflicts and reach out to the customer, companies use the direct marketing route.

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• JSL Depot:A Company opens their depot in the major cities like Mumbai & Chennai, where there are more customers. Main purpose of opening the depots is to take order from the small customers of that region & to cater them on JIT concept basis.

• Through Dealer Network Individual or firm that buys goods from a

producer or distributor for wholesale and/or retail reselling. Unlike a distributor, a dealer is a principal and not an agent.

• Through Service Center Their service centers specialize in

the processing of steel for the purpose of fabricating, plating, or molding much needed parts such as steel bars, balls, tubing, gates, walkways, beams, coils, sheets, and strips.

A STRENGTHS• Jindal Stainless Ltd. has come very far from a single a single factory

establishment at Hisar, started in 1970. today become a multi location company having plants at abroad also. It is also the largest integrated manufacturer of stainless steel in India. It is single handedly meeting over a one-third of total demand for stainless steel in the nation with production capacity of more than 720,000 TPA.

• JSL introduced GPS system in their transportation trucks to track them.• By riding the experience curve, the 32 years old group has been able to

lower its project costs through in house design and fabrication.• Knowing the current shortage of power economy coupled with the fact that

steel is a power intensive sector, Jindal stainless Ltd. Increased their captive power in Hisar to ensure self-sufficiency and also ensure production through low cost captive power.

• Having service centers in place at three major locations like Gurgaon , Mumbai & Chennai gives JSL an extra edge to cater prime customer segment on JIT concept.

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Weaknesses• Transportation cost incurred on raw

materials & finished goods export being plant located away from major ports of the country.

• Delivery problem of goods is one of the major weaknesses.

• Relatively high production costs in comparison to international standards.

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Opportunities• Center of World Trade is shifting to Asia.• Export market can be tapped in an

extensive way.• Per capita consumption of stainless steel in

India is less. There is much scope for increase in consumption.

• Emerging demands in ABC & ART segments.• Can improve upon quality.

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Threats• Increase in domestic competition of

stainless steel.• Increase in volatility of prices of major raw

material like scrap, Nickel and other ferroalloys.

• Small production units penetrating into existing SS market of Jindal Stainless.

• Growth of imported stainless Steel market in India.

To gather the data and check out the customer buying

behaviour towards JSL products through questionnaire

Q.1 What is your total Consumption of Stainless Steel per month?(in

ton)

30%

40%

20%

10%

<250 250-500500-1000 >1000

• From this pie chart it is clear that around 40% consumption lie between 250-500 ton which is moderate, 30% below 250 ton, 20% between 500-1000 ton and not more than 10% consume above 1000 ton so overall steel consumption is moderate we can say.

Q.2 Forms of Stainless Steel consumed by you ?

10%

30%

40%

20%

H.R.S.S PlatesH.R.S.S CoilsC.R.S.S coils and sheetsAny other

• Here we can see that nearly half of the customer buy C.R.S.S coils and sheets and after them customers go for H.R.S.S Coils and rest types of steel are less consumed.

Q.3 From where do you purchase Stainless Steel products ?

85%

15%

India Oversea • In this it is very clear that buyers go for domestic steel industries which is also good for country’s economy and they also get rid of high abroad transportation cost. Only 15% buy the steel from abroad. I also found out mostly buyers buy steel from JSL and SALEM and those who buy from overseas go for Chinese Steel Industries.

Q.4 How much Quantity of Stainless Steel purchased by you from JSL per

month ?(in ton)

11%

11%

56%

22%

<250 250-500500-1000 >1000

• In this we can see that more than 50% of buyers purchase steel from JSL between the range of 500 to 1000 ton which shows that how JSL sales increasing day by day. Then there we have 22% buyers who cross the bar of 1000 ton and the rest of buyers equally purchase in range of 1 to 500 ton. So this pie chart shows that buyers get steel from JSL in huge quantity.

Q.5 How much Quantity of Stainless Steel you purchase from other than

JSL ?(in ton)

9%

18%

64%

9%

<250 250-500500-1000 >1000

• This pie chart show that buyers also buy steel from other than JSL too and 64% of them buy in the range of 500 to 1000 ton steel from other industries and rest look in chart.

Q.6 Reasons for not buying 100% of your requirement from JSL ?

60%15%

5%

20%

Price Factor

Quality Factor

Not covered in the exiting product range of JSL

Delivery Schedule

• It shows around 60% buyers told the price factor. JSL charges more for steel as compare to other industries. Then 20% buyers mentioned the delivery schedule problem as a reason. Then 15% doesn’t like the quality of the JSL steel so they don’t buy from them and the rest 5% mentioned that their need doesn’t existing product of range of JSL.

Q.7 Your feedback about Prices of JSL product.

30%

40%

20%

10%

CompetitiveHigher than otherModerateLower than other

• Here around 40% mentioned the price is higher than other, 30% mentioned the competitive price, 20% mentioned that prices are moderate and the rest said that prices are not high.

Q.8 Your feedback about Quality of JSL product.

45%

35%

15%

5%

Satisfactory Excellent Good Moderate

• Here about quality of JSL product 45% said the quality is satisfactory and 35% said excellent and rest of those opinion lies in good and moderate. So overall quality factor was better from their opinion.

Q.9 Your feedback about Delivery of JSL product.

50%

10%

35%

5%

On timeDelayed DelieveriesSatisfactoryBafore Schedule

• In this we can see around half of the buyer mentioned the delivery was on time and 35% depict that delivery was satisfactory and around 10% complaint about delayed delivery and the rest mentioned that delivery comes before time which is they likes.

Q.10 Your feedback about “After sale Services” of JSL ?

20%

55%

10%

15%

Satisfactory GoodFair Excellent

• In this chart we can see that 55% buyers said after sale service is good. Only 15% mentioned as excellent and rest of buyers opinion lies in satisfactory and fair option.

Q.11 Your feedback about brand image of JSL in the market ?

50%

25%

10%

15%

Satisfactory GoodFair Excellent

• In the last they were asked about brand image of JSL in which half of them mentioned satisfactory, 1/4th of them mentioned as good, 15% of them were really happy with the brand image of JSL and mentioned as excellent and rest of them said it’s just fair.

SUGGESTIONS• JSL should minimize their relatively high production cost so

that they can provide SS to their customer at reasonable price.• JSL can overcome to delivery problems by improving their

transportation structure.• Can reduce transportation cost by locating their plants to

nearby ports where they incur raw materials.• Can improve upon quality.• Create a system to evaluate the development of training. • Innovative training techniques should be adopted to improve

the effectiveness of training programs and to keep the interests of the participants intact. If possible multiple training techniques should be used.

• The trainee should be provided with personal assistance when he encounters any obstacle in the learning process.

CONCLUSION• Stainless Steel production in India is rapidly growing every year.

Today 75% of the end use market of stainless steel is still in Kitchen segment. Now 95% of our gas stove market uses only stainless steel, which until the late 80’s was using painted carbon steel bodies and later nickel-chromium plated ones. India has emerged as the largest producer of 200 series low nickel stainless steel in the world. Railways will completely switch over to manufacture of passenger coaches requiring 15 MT stainless steel per coach . In addition, the Delhi Metro Rail is also using stainless steel coaches. The government of India is using Ferretic cold rolled stainless steel strips for making coins. There is an increase in awareness on the use of stainless steel in the new emerging sectors like ABC ( Arch. Building and Construction) and ART( Automobiles, Railways & transportation)segment. SS demand will increase in such emerging sectors in future.