CHAPTER I: COMPANY’S PROFILE

1.1 OVERVIEW

Corporate head quarters ITI Bhavan, Doorvaninagar,Bangalore

560016

Manufacturing Units Bangalore Naini (near Allahabad, UP) Raebareily (UP) Mankapur (UP) Palakkad (Kerala) Srinagar(Jammu and Kashmir)

Network System Unit Bangalore

Regional offices New Delhi Bangalore Kolkata Mumbai Chennai Hyderabad Bhubaneswar Bhopal Ahmadabad Kochi

* Supported by 36 offices all over the country

Manpower 13,000 approximately

R & D base Bangalore Naini Mankapur

Quality system ISO 9000 compliant

1.2 ITI – A GLIMPSE

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TI 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 government

of India after independence in the year 1948-49. It was located in Bangalore. The

activities of this public sector were manufacturing mechanical telephone instruments and

exchanges. Due to advancements in technology in the field of electronics, ITI started its

expansion program in the field of electronics in 1960s.

I

“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), Mankapur, Naini and RaeBareily in Uttar Pradesh, Pallakkad in Kerala

and Srinagar in Jammu and Kashmir. In addition to these manufacturing unit located at Bangalore

for undertaking installation and maintenance of telecommunication equipments through the

country which is now renamed as 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 a corporate management

function under an independent Executive Director reporting to Chairman and Managing Director.

A large number of company’s products 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 design and production of telephones, digital multiplexing equipment and

ISO 9000 certification for production of optical range of communication equipments.

1.3 GOVERNMENT’S INVOLVEMENT IN ITI

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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. The capital,

1.4 NEED FOR THE ESTABLISHMENT OF ITI

Government was enthused for the establishment of ITI because of the 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 educational facilities, 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.

1.5 MISSION

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To be the leader in the domestic market and an important global player in Voice, data and

Image communications by providing total solutions to purchasers. To build on core

competencies to enter new business areas.

1.6 PRESENT FINANCIAL SCENARIO OF ITI

PERFORMANCE FROM 2002-2008 (IN RS. CRORES)

Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08Sales(including ED)

1795 1257 1389 1749 1818 1210

Production 1689 1073 1362 1607 1797 1206Profit/loss after tax

375 706 310 429 405 358

Growth in turnover

- - 10.54% 25.94% 3.94%

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1.7 MANAGEMENT CHAIN:

Ministry of Telecommunication

Chairman and Managing Director

Board of Directors

Executive Director (EDR)

General Manger (Head of unit)

Additional General Manager

Deputy General Manager

Chief Manger

Manager

Deputy Manger

Assistant Manager

Engineer

Assistant Engineer

Staff (Employees from category A to H)

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1.8 BOARD OF DIRECTORS

Sri S.K. Chatterjee Chairman and Managing Director

Sri Tejbir Singh Director(Marketing)

Sri K K Khurana Director(Human Resource)

Sri B P Gupta Director(Finance)

Sri Ravi Agarwal Director(Production)

Lt. Gen. S P Shreekumar Director

Sri A K Srivastava Director

Sri C K Koshy Special Director

Sri K T Mayuranathan Company Secretary

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1.9 CHAIN OF NEW UNITS

n addition to the present unit at Bangalore, manufacturing the telephone and

transmission equipment, it has grown in to a multiunit enterprise with other

manufacturing enterprise with other manufacturing units established Doorvani Nagar and

Electronic City in Bangalore (Karnataka), Mankapur, Naini and RaeBareily in Uttar Pradesh,

Pallakkad in Kerala and Srinagar in Jammu and Kashmir.

I

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,

Defence 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 road traffic signals of high reliability and variety of telemetry

and tele-control equipments. 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 achievement of excellence.

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1.10 SPECIAL ACHIEVEMENTS

uring 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 fibre systems (SDH), being

newly inducted in the Indian network were supplied for the first time. The company is

placed first for supply of 1.69 million lines of new technology exchanges and for supply of

770 numbers of 2/140 Mbs Optimax along with regenerators.

D

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1.11 PLANTS

1. BANGALORE PLANT( Established in 1950)

2. SRINAGAR PLANT( Established in 1970)

3. NAINI PLANT( Established in 1971)

4. RAEBAREILY PLANT( Established in 1973)

5. PALAKKAD PLANT( Established in 1975)

6. MANKAPUR PLANT( Established in 1980)

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1.12 AWARDS

Excellent performance PSE awards in the year 1997-98 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

SUPPLEMENTARY OCB 283 crore equipment to DOT, MTNL.

INDUSTRIAL SAFETY AWARD by NATIONAL SAFETY COUNCIL.

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1.13 JOINT VENTURES:-

idening its area of operation, ITI teamed up with PACIFIC INTERNATIONAL

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.

W

Fibcom India Ltd, New Delhi, has also made joint venture with NKT, Denmark for SDH

fibre 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

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1.14 MAJOR LANDMARKS

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

1986-88 Update telephone manufacturing

technology and establishment of P.C.B.

1989-90 Single and double sized P.C.B. and

production of 140 mibt optical line

equipment and regenerator in

collaboration with M/s Denmark.

1991-92 Introduction of 565- mibt optical line

equipment and manufacturing of in-house

design Telephone model ME-91 and TPS-

90

1994 Advancement of optical line instrument

1995 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 mbit and a40

mbit optic mux equipment.

1998 Production of DDF focus version.

1999 Started in the world’s latest equipment i.e.

Digital Loop Carrier (PDH) and production

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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.

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1.15 RESEARCH AND DEVELOPMENT

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-advanced and of superior quality. ITI has two R&D

departments. One of them is situated in Naini (Allahabad) and the other is situated in 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.

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1.16 PRODUCTS MANUFCTURED BY ITI-NAINI

ITI primarily manufactures telecommunication equipments. They can be classified as:-

Landline equipments

Mobile

Landline equipments can be further classified as under:-

Switching equipments

Transmission equipments

Instrument (telephone)

ITI-Naini mainly deals with the manufacture of transmission equipments and instrument.

The equipments produced by ITI-Naini are as follows:

1. STM

They can be of following types:

i) STM-1 CPE

ii) STM-1 ADM

iii) STM-4

iv) STM-16 ADM

v) STM-MADM

vi) STM-64

2. DDF

3. DWDM

4. EPBT

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1.17 TECHNOLOGY

The technologies used for various products manufactured by ITI-Naini are as follows:

1. DDF- Own technology

2. EPBT- Own technology

3. STM-1 CPE, STM-1, STM-4,STM-16 ADM and MADM – Tejas, Bangalore technology

4. STM-64 – Exaltec, USA technology

5. DWDM- ZTEE technology

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1.18 COMPETITORS

PRODUCT COMPETITORS

DDF Technofiber Industries, Bhopal

Penatagon Industries, Bhopal

Shakti Enterprises, Bhopal

SRV Telecom, Bangalore

Hindustan Enterprises, Allahabad

Dee Controls, Kanpur

EPBT Pramod Telecom, Lucknow

SRV Telecom, Bangalore

BPL India, Bangalore

Bharati Telecom

STM- I ADM, CPE

STM-4 ADM

STM-16 ADM

STM-16 MADM

Prithvi (Huawei technology)

Puncom (Huawei technology)

Ordyne (Ordyne technology)

Siemens (Siemens technology)

ZTEE(ZTEE technology)

HFCL(WRI technology)

ICOMM (UTSAR technology)

STM-64 Puncom (Huawei technology)

Ericsson (Ericsson technology)

ICOMM (UTSTAR technology)

Siemens (Siemens technology)

DWDM UTL(Adwas technology)

Prithvi (Huawei technology)

Terracom (Multiplex technology)

NSM (NSM technology)

Siemend (Siemens technology)

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1.19 PRODUCTION OF ITI-NAINI 2008-09

ITI-Naini produced following products during the financial year 2008-09:-

EQUIPMENT REVENUE EARNED(in crores)

STM -1 ADM and STM- 1 CPE 36.07

STM-16 ADM and STM-16 MADM 103.90

STM-64 ADM 5.58

DDF 4.21

DWDM 136.21

Spare sales and repair 1.11

Telephone(ETBT) 0.16

Total revenue earned 287.24

1.20 ITI-NAINI PRODUCTION TARGET 2009-10

EQUIPMENT REVENUE EXPECTED(in crores)

STM -1 ADM and STM- 1 CPE 40.69

STM-16 ADM and STM-16 MADM 74.34

DDF 1.00

DWDM 85.00

New diversified products 50.00

Total revenue expected to earn 260.08

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1.21 PURCHASERS:-

About 90% of ITI products are supplied to BHART SANCHAR NIGAM LIMITED (formally

known as department of telecommunication (DOT)). The other significant purchasers of

ITI are as follows:-

Videsh Sanchar Nigam Limited

Maha Nagar Telephone Nigam Limited

Railways

Defence

Banks

Corporate

Factories/Offices

Steel/Power/Oil sector

General Public

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CHAPTER II: MARKETING

STRETEGY OF ITI, NAINI

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MARKETING

“Marketing boasts a rich array of concepts and tools”

2.1 WHAT IS MARKETING?

Marketing, more than any other business function, deals with purchasers. Understanding,

creating, communicating and delivering purchaser value and satisfaction is the heart of

many modern marketing thinking and practices. We may define marketing as,”

Marketing is the delivery of purchaser satisfaction at a profit”.

Two fold goal of marketing is to attract new purchasers by promising superior value and

to keep current purchasers by delivering satisfaction.

What does the term marketing means? Many people think of marketing only as selling

and advertising. It is no wonder, that every day we are bombarded with television

commercials, newspaper ads, direct mail campaigns, internet pitches and sales calls.

However selling and advertising are only the tips of the marketing iceberg. Although they

are important, they are only two of the many marketing functions and often not the most

important ones.

Today, marketing must be understood not in the old sense of making a sale- “telling and

selling”, but in the new sense of satisfying purchaser needs. Selling occurs only after the

product is produced. By contrast, marketing starts long before a company produces a

product.

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2.2 MARKETING SYSTEM

There can be two types of marketing systems: -

1. Open / Direct/Field marketing system: According to this marketing system

there is a liberty for the suppliers to float the product anywhere in the market.

2. Tender/ Quotation marketing system: -This is the marketing system that is

prevalent in ITI, Naini. In this the purchaser float tenders to the suppliers and the

lowest one(L1) is selected.

2.3 WHAT IS A TENDER?

A tender document or simply tender is a document of inquiry from purchaser specifying

the exact nature of the requirement of materials against which offers/quotations are

invited from the suppliers. Each tender document has a price which is in proportion with

the tendered material.

2.3.1 TYPES OF TENDERS

There can be four types of tenders:-

1. Single tender: - In this, the inquiry is floated to only one particular supplier. The price

mentioned in the tender is cross checked against the previous orders. If the price is

considered legitimate then the purchase order is placed.

2. Limited tender: - Every company has a fixed number of approved suppliers. In this type,

the tender is floated to only these limited numbers of suppliers.

Open tender: - In the case of new technology or large orders this type of tender is

floated. Information about the tender is floated on internet, magazines, newspapers etc.

Urgent requirement can be fulfilled through 30% reservation quota order which can be

placed upon ITI even before floating the tender.

The L1 opened price of tender is made effective for 30% reservation quota order after

finalisation of L1 opened price.

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Limitation of an open tender: -

i. It is time taking.

ii. It is costly.

Advantage of an open tender:-

i. Very useful in case of new technology.

ii. Offers a competitive price to the purchaser.

In the case of BSNL, a time period of 5 weeks is given to the bidders for the submission of

tenders. Regional offices are responsible for searching about the tender in case of ITI.

3. Global tender: - This is similar to open tender, the only difference lies in the fact that

global tender are floated all over the globe. This is mainly floated for imported,

indigenous items.

As 90-95% of ITI’s products are purchased by BSNL/MTNL therefore the entire

marketing process of ITI revolves around it.

2.3.2 TENDER FROM BSNL/MTNL:-

A tender from BSNL/MTNL contains 11 sections. These are:

1. Notice Inviting Tender

2. Instructions to Bidders

3. General Conditions of the Contract

4. Special Conditions of Contract

5. Schedule of Requirements

6. Technical Specification

7. Bid Form and Price Schedules

8. Bid Security Form

9. Performance Security Form

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10. Letter of Authorisation for Attending Bid Opening

11. Annexure A-D

2.3.2.1 SECTION I: NOTICE INVITING TENDER

This section contains the following information

1. Tendered item and quantity

2. Specifications

3. Estimated amount

4. Tender fee

5. Last date of submission of bid

6. Date and time of bid opening

7. Eligibility

2.3.2.2 SECTION II: INSTRUCTIONS TO BIDDERS

The important information mentioned in this section are:

2.3.2.2.1 DEFINITIONS:

“The Purchaser” means the Bharat Sanchar Nigam Ltd. (BSNL), New Delhi

“The Bidder” means the individual or firm who participates in this tender and

submits its bid.

“The Supplier” means the individual or firm supplying the goods under the

contract.

“The Goods” means all the equipment, machinery, and/or other materials which the Supplier is required to supply to the Purchaser under the contract.

“The Advance Purchaser Order” means the intention of Purchaser to place the Purchase Order on the bidder.

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“The Purchase Order” means the order placed by the Purchaser on the Supplier signed by the Purchaser including all attachments and appendices thereto and all documents incorporated by reference therein. The purchase order shall be deemed as “Contract” appearing in the document.

“The Contract Price” means the price payable to the Supplier under the purchase order for the full and proper performance of its contractual obligations.

“Validation” is a process of testing the equipment as per the Generic Requirements

in the specifications for use in BSNL network. BSNL has laid certain norms according

to which it purchases products. It has laid down specifications for every equipment

according to which the equipment is manufactured. All these norms are mentioned in the

GENERIC REQUIREMENT (GR) of that equipment. Every aspect of every component (for

example size, weight, component specifications, drawings etc.) of equipment is being

mentioned in the GR of that equipment and no amendment can be done.

The supplier has to manufacture every equipment in accordance with the norms laid

down in the GR of that equipment.

Validation is carried out in simulated field environment and includes stability, reliability

and environmental tests.

Cost of Tender Document: Each Tender Document has a fixed cost which is mentioned

in the tender document.

The location for collection of Tender Document:

In case of ITI, the tender document may be collected from:-

1. Directly from the circle offices of BSNL/MTNL after the payment of the price of the

tender document by the officers of concerned RO’s.

2. Download from the internet. In this case the payment of price done through

demand draft which is submitted along with the filled tender document.

2.3.2.2.2 ELIGIBLE BIDDERS

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1. The eligible bidders should be Indian companies registered to manufacture the tendered

item(s) or Indian companies registered to manufacture the equipment, duly authorized

by the manufacturer of tendered item to submit the bid on their behalf and having

Memorandum of Understanding (MOU) with the manufacturer for maintenance support

of the equipment during the life span of the product, having clearance from Reserve Bank

of India wherever applicable.

Memorandum of Understanding (MoU) is a contract signed between the bidder and

the TOT partner (the partner of the bidder which provides technology to the bidder for

the manufacture of equipment) for maintenance support of the equipment.

2. The bidder should have obtained valid Technical Specification Evaluation Certificate from

the QA wing of BSNL or Type Approval Certificate from Department of Telecom (Telecom

Engineering Centre) for the tendered item in which the bidder is participating against

General Requirements and Technical Specifications given in the bid document and should

have successfully executed Educational /Commercial orders issued by DOT/BSNL for the

same item.

2.3.2.2.2.1 TECHNICAL SPECIFICATION EVALUATION CERTIFICATE (TSEC):-

Every supplier needs to obtain a TSEC without which it is not eligible to participate in the

tender for BSNL. The quality assurance wing of BSNL, which is located in Bangalore,

provides every supplier a TSEC after it undergoes the following procedure.

2.3.2.2.2.2 STEPS TO OBTAIN A TSEC: -

1. A fixed amount of fees is paid to BSNL centre.

2. A request is made to the QA wing of BSNL for TSEC

3. Inspectors from BSNL visit the supplier to test the product. In ITI, the test is

conducted in the climatic chamber where a temperature ranging from -50°C to

150°C can be provided. This to ensure that the equipment is viable to function

anywhere in the country.

4. Then the equipment is sent to BSNL centre for field trial. BSNL officers, engineers

and technicians then undertake the field trial of the equipment. If any lacuna is

found then supplier’s engineers try to rectify it.

5. After the successful field trial approval is made by QA wing.

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6. TSEC is provided to the supplier which makes it eligible for participation in

tender.

7. TSEC has its validity normally for a period of three years.

2.3.2.2.2.3 TYPE APPROVAL CERTIFICATE (TAC) is similar to TSEC, the only difference

lies in the fact that TSEC is issued by the QA wing of BSNL situated in Bangalore whereas

TAC is issued by Department of Telecommunication situated in New Delhi.

2.3.2.2.2.4 TSEC contains the following: -

1. Product description

2. Model number of the product

3. Date of issue of TSEC

4. Validity of TSEC(normally ranging for a period of 3 years)

5. Specification that the TSEC is only valid for that particular supplier.

Or

3. The bidder should have obtained valid Type Approval Certificate from Department of

Telecom (Telecom Engineering Centre) or TSEC from the QA wing of BSNL for the each

of the tendered item GR and Technical Specifications given in the bid document and

bidder or his collaborator should have successfully executed Educational/Commercial

orders for 25% of the quantity of the tendered items to any purchaser in the world

/government or semi government bodies in India.

Or

4. The bidder should have registered their product for TSEC in QA wing of BSNL along with

required fee, samples of the products etc., and enclosing copy of Form QF-103 with

registration number with the bid at least one day before the date of tender opening for

the tendered item in which bidder is participating and bidder or his collaborator should

have successfully executed Educational/Commercial orders for 25% of the quantity of

the tendered items to any purchaser in the world /government or semi government

bodies in India.

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5. The bidder shall collaborate with only that manufacturer who has collaboration with not

more than 2 parties including the bidder in India.

The proof of all the above eligibility criteriae should be attached with the tender

document.

2.3.2.2.3 DOCUMENTS ESTABLISHING BIDDER’S ELIGIBILITY AND QUALIFICATION

The bidder should furnish, as part of the bid documents establishing the bidder’s

eligibility, the following documents or whichever is required as per terms and conditions

of Bid Documents

.

i. Certificate of incorporation: The bidder participating should belong to a company and

the company should be Indian. For this purpose, a certificate of incorporation issued by

government of India is required. ITI was incorporated on 25th January 1950. It is the first

PSU of free India.

ii. Article or Memorandum of Association: It deals with the provisions of rules and

regulations of the company.

iii. Partnership deed or proprietorship deed as the case may be.

iv. Registration certificate from State Director of Industries or from Secretariat for

Industrial Approval (SIA) , Ministry of Industries, Government of India: This is

issued by the Government of India proving the physical fitness of the company.

v. TSEC issued by QA circle /Type Approval Certificate (TAC) issued by Telecom

Engineering Centre or proof of having applied for TAC/TSEC

vi. Inspection Certificate issued by BSNL (QA) for execution of

Educational/Commercial Order. (If applicable)

vii. Bulk production certificate: This certificate is issued by BSNL certifying that the

company is capable of bulk production.

viii. Annual Report and /or a certificate from its bankers as an evidence that he has

financial capability to perform the contract.

ix. Quality Policy: The bidder shall furnish documentary evidence about the quality

produced by the company necessary to perform the contract.

x. ISO Certificate: ISO 9000 is a family of standards for quality management systems.

ISO 9000 is maintained by ISO, the International Organization for Standardization and

is administered by accreditation and certification bodies. The rules are updated, the

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time and changes in the requirements for quality, motivate change. Recently, on

November 15, 2008, has made changes to the requirements of ISO 9001.

Some of the requirements in ISO 9001 (which is one of the standards in the ISO 9000

family) include

1. a set of procedures that cover all key processes in the business;

2. monitoring processes to ensure they are effective;

3. keeping adequate records;

4. checking output for defects, with appropriate and corrective action where

necessary;

5. regularly reviewing individual processes and the quality system itself for

effectiveness; and

6. facilitating continual improvement and a better after sale service

A company or organization that has been independently audited and certified to be in

conformance with ISO 9001 may publicly state that it is "ISO 9001 certified" or "ISO 9001

registered". Certification to an ISO 9001 standard does not guarantee any quality of end

products and services; rather, it certifies that formalized business processes are being

applied.

xi. Bid Security Exemption Letter: This is applicable for ITI only. ITI being a PSU is

exempted from payment of bid security fee. Bid Security Exemption Letter is a letter

issued by BSNL certifying the above.

xii. Tax Clearance Certificate: This is documentary evidence certifying that the company

has no tax burden on its part. This includes Sales Tax (or VAT) Clearance

Certificate and Income Tax Clearance Certificate.

xiii. Memorandum of Association (MoU): It is an undertaking duly signed by front

bidder and its technology/consortium partner stating that both of them shall be liable

for due performance of the contract jointly and severally.

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2.3.2.2.4 CLARIFICATION OF BID DOCUMENTS

To assist in the examination, evaluation and comparison of bids, the purchaser may, at

its discretion ask the bidder for the clarification of its bid. The request for the

clarification and the response should be in writing. However, no post bid clarification

at the initiative of the bidder is entertained.

A prospective bidder, requiring any clarification on the bid documents needs to notify the

Purchaser in writing or by FAX at the Purchaser’s mailing address indicated in the

invitation of Bid. The Purchaser responds in writing to any request for the clarification of

the Bid Documents, which it receives not later than 10 days prior to the date of

opening of the Tenders. Copies of the query (without identifying the source) and

clarifications by the Purchaser are sent to all the prospective bidders who have received

the bid documents.

Any clarification issued by BSNL in response to query raised by prospective bidders

forms an integral part of bid documents and it may amount to an amendment of relevant

clauses of the bid documents.

2.3.2.2.5 AMENDMENT OF BID DOCUMENTS

At any time, prior to the date of submission of Bids, the Purchaser may, for any reason, whether at its own initiative or in response to a clarification requested by a prospective bidder, modify bid documents by amendments.

The amendments are notified in writing or by FAX to all prospective bidders on the

address intimated at the time of purchase of the bid document from the purchaser and

these amendments will be binding on them.

In order to afford prospective bidders a reasonable time to take the amendment into

account in preparing their bids, the purchaser may, at its discretion, extend the deadline

for the submission of bids suitably.

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2.3.2.2.5 BID PRICES

The bidder has to mention two types of prices in the bid document. These are:-

1. Composite Price: - The bidder has to give the total composite price inclusive of all

Levies & Taxes i.e. Central Sales Tax/VAT & Excise Duty, packing, forwarding, freight

and insurance. Octroi/Entry Tax are paid in actual extra as the case may be.

2. Basic unit price: - The basic unit price is exclusive of all levies and taxes. That can be

set as ex-factory price.

Prices of incidental services also need to be quoted. The offer should be firm in Indian

Rupees. No Foreign exchange is made available by the purchaser.

2.3.2.2.6 BID SECURITY

The bidder needs to furnish, as part of his bid, a bid security for a fixed amount.

The bid security is required to protect the purchaser against the risk of bidder’s conduct.

The bid security shall be in the form of a bank Guarantee issued by a scheduled bank in

favour of the purchaser, valid for a period of 180 days from the date of tender opening.

However, ITI is exempted to submit bid security and bid security

exemption letter issued by BSNL corporate office has to be submitted

along with the bid document.

2.3.2.2.7 PERIOD OF VALIDITY OF BIDS

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Bid remains valid for 150 days to 180 days from the date of opening of bids prescribed

by the purchaser. A bid valid for a shorter period can be rejected by the purchaser

being non-responsive.

In exceptional circumstances, the purchaser may request the consent of the bidder for an

extension to the period of bid validity. The request and the response thereto is made in

writing. The bid security is then also suitably extended. The bidder may refuse the

request without forfeiting his bid security. A bidder accepting the request and granting

extension is not be permitted to modify his bid.

2.3.2.2.8 SEALING AND MARKING OF BIDS:

1. The bid should be submitted in three covers. The first cover should contain the original

and four copies of Unpriced Technical & Commercial Bid duly marked ‘ORIGINAL’ &

‘COPY’. The second cover should contain Priced Financial original and four copies of

Priced Financial Bid and third cover should contain Bid Security as mentioned in the

Bid Document. All the three covers should be sealed separately by the personal seal of

the bidder.

2. The envelopes should be addressed to the purchaser at the address mentioned in the bid

document.

3. The envelope should bear (the project name), the tender number and the words ‘DO

NOT OPEN BEFORE’(due date & time).

4. The inner and outer envelopes shall indicate the name and address of the bidders to

enable the bid to be return unopened in case it is declared ‘late’ or rejected.

5. Tender may be sent by registered post or delivered in person on above mentioned

address.

6. Venue of Tender Opening is also mentioned.

2.3.2.2.9 OPENING OF BIDS BY PURCHASER

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1. The purchaser opens bids in the presence of bidders or their authorized representatives

who chose to attend, at scheduled time on due date.

2. A maximum of two representatives of any bidder are authorized and permitted to attend

the bid opening.

2.3.2.2.10 PRELIMINARY EVALUATION

1. Purchaser evaluates the bids to determine whether they are complete, whether any

computational errors have been made, whether required sureties have been furnished,

whether the documents have been properly signed and whether the bids are generally

in order.

2. If any discrepancies are encountered then those are rectified on the basis being

mentioned in the bid document. If the supplier does not accept the correction of the

errors, his bid is rejected.

3. The Purchaser will determine the substantial responsiveness of each bid to the Bid

Document. A substantially responsive bid is one which confirms to all the terms and

conditions of the Bid Documents without material deviations.

4. A bid, determined as substantially non-responsive will be rejected by the purchaser and

shall not subsequent to the bid opening be made responsive by the bidder by correction

of the non-conformity.

2.3.2.2.11 EVALUATION AND COMPARISON OF SUBSTANTIALLY RESPONSIVE BIDS

1. The Purchaser evaluates in detail and compares the bids previously determined

to be substantially responsive.

2. The basis for detailed comparison of substantially responsive bids is mentioned in this clause.

2.3.2.2.12 PLACEMENT OF ORDER

The Purchaser considers placement of orders for commercial supplies only on those

eligible bidders whose offers have been found technically, commercially and financially

acceptable and whose goods have been type approved/validated by the purchaser. The

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Purchaser reserves the right to counter offer price(s) against price(s) quoted by any

bidder.

2.3.2.2.13 PURCHASER’S RIGHT TO VARY QUANTITIES

This clause specifies that purchaser reserves the right to increase or decrease the

quantity of goods and services up to a fixed quantity mentioned in the schedule of

requirement without any change in the unit price.

2.3.2.2.14 PURCHASER’S RIGHT TO ACCEPT ANY BID AND TO REJECT ANY OR ALL BIDS

According to this clause, the Purchaser reserves the right to accept or reject any bid, and

to annul the bidding process and reject all bids, at any time prior to award of contract

without assigning any reason whatsoever and without thereby incurring any liability to

the affected bidder or bidders on the grounds of purchaser’s action.

2.3.2.2.15 ISSUE OF ADVANCE PURCHASE ORDER

1. The issue of an Advance Purchase Order constitutes the intention of the Purchaser to

enter into contract with the bidder.

2. The bidder shall within 14 days of issue of the advance purchase order, give his

acceptance along with performance security in conformity with section IX provided with the

bid document.

2.3.2.2.16 SIGNING OF CONTRACT

1. The issue of Purchase order constitute the award of contract on the bidder.

2. Upon the successful bidder furnishing performance security the Purchaser

discharge the bid security.

2.3.2.2.17 ANNULMENT OF AWARD

If the successful bidder fails to comply with the requirement of above then purchaser

constitutes sufficient ground for the annulment of the award and the forfeiture of the bid

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security. In this case the Purchaser may make the award to any other bidder at the

discretion of the purchaser or call for new bids.

2.3.3 SECTION II

This section contains GENERAL (COMMERCIAL) CONDITIONS OF CONTRACT

Some of the important clauses mentioned in this section are:-

2.3.3.1 PERFORMANCE SECURITY

All suppliers need to furnish performance security to the purchaser for an amount equal to 5% of the value of purchase order within 14 days from the date of issue of Advance Purchase Order by the Purchaser.

The proceeds of the performance security are payable to the Purchaser as compensation for any loss resulting from the supplier’s failure to complete its obligations under the contract.

The performance security Bond should be in the form of Bank Guarantee issued by a scheduled Bank and in the form provided the Bid Document.

The performance security Bond is discharged by the Purchaser after completion of the supplier’s performance obligations including any warranty obligations under the contract.

2.3.3.2 TRAINING

The bidder needs to provide training for installation and maintenance staff of the purchaser free of cost where required. This clause contains the specifications related to the above

2.3.3.3 WARRANTY

This clause contains the details about the warranty conditions that the purchaser

expects from the supplier.

2.3.3.4 PAYMENT TERMS

This clause contains the details regarding the payment terms. Normally payment of 95% of the price is made on receipt of goods by consignee. For claiming this payment the following documents are to be submitted to the paying authority.

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(i) Invoice clearly indicating break up details of composite price i.e. Basic, E.D., Sales

Tax, any other Duties and Taxes, Freight /Packing Charges, Service Tax etc.

(ii) Delivery Challan

(iii) Supplier certificate for dispatch

(iv) Excise gate pass / invoice or equivalent document

(v) Inspection certificate of QA

(vi) Consignee receipt

(vii) The sea freight receipt as per the rates approved by the Ministry of Water and

Surface Transport, if any

(viii) Proof of payment of octroi/entry tax etc., if any.

“If the supplier fails to furnish necessary supporting documents i.e. excise/customs

invoices etc. in respect of the Duties/Taxes which are cenvatable, the amount pertaining

to such Duties/Taxes is deducted from the payment due to the firm.”

The balance 5% payment is released within 6 months from the date of supply of the

equipment in case there are no damage/shortages. In those cases where such

shortages/damages are intimated to the supplier in writing, the balance payment is

released only after the cases are settled in accordance with the provision of the P.O.

2.3.3.5 LIQUIDATED DAMAGES

This clause mentions the penalties that are imposed on the supplier when the deliveries

are made after expiry of the contracted delivery period, without prior concurrence of the

purchaser. Under such conditions the purchaser has right to recover liquidated damage

under. However, when supply is made within 21 days of the contracted original delivery

period, the consignee may accept the stores and in such cases the provision of clause 16.2

will not apply.

If the supplier fails to deliver the store or any consignment thereof within the period

prescribed and agreed for delivery, the purchaser, without prejudice to other remedies

available to the purchaser is entitled to recover, as agreed liquidated damages for breach

of contract, a sum equivalent to 0.5% of the value of the delayed supply and/or

undelivered material/ supply for each week of delay or part thereof for a period up to 10

(TEN) weeks, and thereafter at the rate of 0.7% of the value of the delayed supply and/ or

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undelivered material/ supply for each week of delay or part thereof for another TEN

weeks of delay.

DP extension beyond 20 weeks is not being generally allowed. The extension beyond 20

weeks may be decided in most exceptional circumstances on case to case basis, by the

CGM concerned in case of tenders floated by Circles and by the Functional Director

concerned in case tenders floated by Corporate Office, stating reasons and justifications

for grant of extension of delivery period beyond 20 weeks.

The total value of the liquidated damages as per above sub-clauses shall be limited to a

maximum of 12% (Twelve percent) i.e. LD shall be levied upto 20 weeks.

2.3.4 SECTION IV

This section contains the SPECIAL CONDITIONS OF CONTRACT that is needed to be

signed between the bidder and the supplier.

2.3.5 SECTION V

This section contains the SCHEDULE OF REQUIREMENT that is required by the supplier

from the supplier.

2.3.6 SECTION VI

This section is the TECHNICAL SPECIFICATION section that specifies the GR number

according to which the purchaser wishes to avail goods or services from the supplier

2.3.7 SECTION VII

This section contains the BID FORM AND THE PRICE SCHEDULE for the supplier.

2.3.8 SECTION VIII

This section contains the BID SECURITY FORM.

2.3.9 SECTION IX

This section contains the PERFORMANCE SECURITY FORM.

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2.3.10 SECTION X

This section contains the LETTER OF AUTHORISATION FOR ATTENDING BID OPENING

which authorises the representatives of the suppliers to attend the bid opening for the tender

mentioned above on behalf of requisite authority (Bidder) in order of preference as

mentioned.

Maximum of two representatives are permitted to attend bid opening. In cases where it

is restricted to one, first preference is allowed. Alternate representative are permitted

when regular representatives are not able to attend.

Permission for entry to the hall where bids are opened, may be refused in case

authorization as prescribed above is not recovered

2.3.11 Along with these sections there are certain annexure are included in the bid

document. These are:

2.3.11.1 Annexure A: Compliance (clause by clause)

This annexure specifies clause by clause compliance to the bid document on the part of

the bidder.

2.3.11.2 Annexure B: No Deviation Certificate

This annexure certifies that there is no deviation from the bid document.

2.3.11.3 Annexure C: No Relation Certificate

The bidder should give a certificate that none of his/her near relative is working in the

units where he is going to apply for the tender. In case of proprietorship firm certificate

will be given by the proprietor. For partnership firm certificate will be given by all the

partners and in case of limited company by all the Directors of the company excluding

Government of India/Financial institution nominees and independent non-Official part

time Directors appointed by Govt. of India or the Governor of the state and full time

Directors of PSUs both state and central. Due to any breach of these conditions by the

company or firm or any other person the tender will be cancelled and Bid Security will

be forfeited at any stage whenever it is noticed and BSNL will not pay any damage to the

company or firm or the concerned person.

The company or firm or the person will also be debarred for further participation in the

concerned unit.

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The near relatives for this purpose are defined as:-

(a) Members of a Hindu undivided family.

(b) They are husband and wife.

(c) The one is related to the other in the manner as father, mother, son(s) & Son’s wife

(daughter in law), Daughter(s) and daughter’s husband (son in law), brother(s) and

brother’s wife, sister(s) and sister’s husband (brother in law).

2.3.11.4 Annexure D: Checklist

This annexure contains a checklist of all the documents that are to be enclosed with the

bid.

2.4 TENDER MARKETING SYSTEM:-

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This is the marketing system that is prevalent in ITI.

STAGES IN A TENDER MARKETING SYSTEM PREVALENT IN ITI, NAINI

The whole marketing system in ITI, Naini is divided in to four broad categories. They are:

-

1. Tendering process

2. Post bid process

3. After sales service

1.4.1 TENDERING PROCESS

The tendering process can be described with the help of following flowchart: -

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Receiving of Notice Inviting Tender(NIT) through:-

Regional offices Internet Corporate office in Bangalore

Request letter send along with TSEC and supplier record to concerned Regional Office.

On receipt of tender document, process starts. Management approval for participation is sought and finalisation of rate to be quoted in the subject tender is done.

Management approval of prices.

Assistance is required from Technical Costing department for material costing.

Assistance is required from R & D for configuration of tendered item.

1.4.2 POST BIDDING PROCESS

The post bidding process can be described with the following flowchart:-

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Bid Preparation

Mostly tender bid is prepared by RO concerned. Document with rates are forwarded to RO. Bid is submitted by RO.

Sometimes tender bid is prepared by ITI and submitted by ITI or sent to RO for submission.

Process of bid preparation.

Index preparation.Preparation of Power of Attorney.

Preparation of commercial compliance and price schedule.

Pricing and ceiling is done. Original copy + 4 copies are prepared.

Bid submission.

Bid opening.

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Evaluation of technical bid

Evaluation of financial bid

L1 (lowest one) bidder sorted out

Price Negotiation Committee (PNC) meeting between supplier and purchaser

Counter offer of discounted price by the purchaser to the supplier (depends on the discretion of supplier to accept or regret it)

FIRM PRICE is fixed

Placement of order by the purchaser

Issue of Letter of Intent (LOI) or Advance Purchase Order by the purchaser

Acceptance letter send by supplier within 14 days

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Placement of Purchase Order (PO) by the purchaser

PO received by the supplier (ITI in this case)

PO verified by the supplier against the bid document

PO sent to the Production Planning department

Purchase requisition (PR) raised by the Production Planning department for raw materials

PR sent to the Purchase department

Purchase department obtains the required raw materials by TOT partner or by the approved vendors

Raw materials received by Inward Goods (IG) department

Raw materials inspected by Inspection Goods (IGI) department

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Production Planning department and store informed

Requisition made by store for manufacturing and send to Production Planning department for approval

Requisition made by store for manufacturing and send to Production Planning department for approval

Issue of raw material by the store to the shop

Manufacturing Process in the shop

Manufactured items send to store

Manufactured items prepared by shop and other items taken by the Assembly

Assembled product send to store

1.4.3 AFTER SALES SERVICE

ITI also provides efficient after sales service as and when required by the purchaser.

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Products send for final assembly

Products send for final testing

Payment made according to the conditions mentioned in the bid document after proper inspection by the purchaser

Despatch of finished product

Shipping of finished product

Finished product received by the purchaser

CHAPTER III: PRICING

STRETEGY OF ITI, NAINI

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PRICING STRATEGY OF ITI-NAINI

The pricing strategy of ITI-Naini can be discussed as below-

First of all, ITI-Naini takes in consideration the price opened in the tenders earlier for the

same product to avoid very high or very low prices.

The price is mainly composed of:

1. Material cost

2. Labour charge

3. Overhead

3.1.1 MATERIAL COST:

This is the main component of price. It is concerned with the price of raw materials. The

cost of raw materials keeps on fluctuating from time to time so latest and updated

material cost should be taken in consideration.

Material cost can be of two types:

1. Direct material cost

2. Indirect material cost

3.1.2 Direct material cost is the cost of raw materials that are used in the manufacturing

process. For example: metal sheets, printed circuits and other components like resistor,

integrated circuits etc.

3.1.3 Indirect material cost includes the cost of those materials that are indirectly used n the

manufacturing process. For example: nuts and bolts solder wire, welding electrodes, paint, polish

and chemicals for plating and ionodizing.

3.2 LABOUR CHARGE

This includes the following

1. Direct labour charge

2. Indirect labour charge

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3.2.1 Direct labour charge is the cost involved with the labour directly involved in the

manufacturing process.

3.2.2 Indirect labour charge is the cost involved with

i. Supervisors

ii. Feeders

iii. Helpers

iv. Testers etc.

3.3 OVERHEADS

These are the surplus expenses which include welfare expenses. These include expenses on:

1. Medical facility

2. Transport facility

3. Canteen

4. Uniform and shoes being provided to the employees

5. Salary of non productive employees

6. Salary of officers and management.

Before liberalisation overheads formed an essential part of the price. But now due to increased

competition, overheads are not included in the price.

3.4 DEPARTMENTS RESPONSIBLE FOR SETTING THE PRICE

1. MATERIAL COSTING DEPARTMENT: Material costing department is a part of finance

department in ITI and is responsible for setting up of material cost. As the price of raw

materials keeps on fluctuating therefore they are responsible for being updated with the

latest price.

2. INDUSTRIAL ENGINEERING DEPARTMENT: This department is responsible for setting

up the labour charge.

The following steps are undertaken to fix the price:

1. Add material cost, labour charges and packing charges to obtain the cost price

( overheads ignored due to competition)

2. Add margin percentage to the cost price to obtain the basic price.

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3. Add ED to basic price. At present, ED=8% of basic price. Then add CESS which at

present is 3% of ED. In case of service (for example software) add service tax in the

place of ED. At present ST=10% of basic price. After adding CESS, service tax=10.3%.

4. Add CST or VAT (in case of same state) to above. At present, CST=2% of basic

price+ED and VAT=4%of basic price+ED.

In case of service no CST is applicable.

5. Add the cost of freight, forwarding and insurance (which is expressed in terms of a

percentage of basic price + ED+CST/VAT) to the above.

6. The firm price is obtained.

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CHAPTER IV: MARKETING

RESEARCH REPORT

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RESEARCH METHODOLOGY

Research can be defined as “a scientific and systematic search for pertinent

information in any branch of knowledge’. It is the pursuit of truth with the help of study,

observation, comparison and experiment. Research is ,thus, an original contribution to

the existing stock of knowledge making for its advancement.

4.1 FORMULATING THE RESEARCH PROBLEM

At the very beginning the researcher, singles out the problem, he / she wants to study in specific terms.

ITI being in this business for so long understands the ups and downs of this business very

well. Hence when the problem aroused due to liberalization and also due to entrance of

competition and ITI started losing its market share and incurring losses, it changed its

pricing strategy and new policies were introduced. But still it continued to be in losses

even though its profits were increasing. Hence it was necessary to find out what the

actual reason 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 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 losses. Even when the pricing strategy was

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changed it was going into loss. It was also necessary to find whether there was

acceptance for the product in the market. It was also necessary to find out whether

repeat purchase was there or not. It was also necessary to find out the strength of

competitors and how was it affecting ITI.

With addition to the above problems, it was found out that there are certain problems

inside the company which lead to the drop in productivity. To check out these problems

there was another questionnaire prepared for the employees within the organization.

4.2 OBJECTIVE OF RESEARCH:

The research objective was to find out for the above problem. ITI being a pioneer in the

telecom business and therefore would like to hold its position. It therefore wanted to get

an in depth view of the above stated problem.

4.3 RESEARCH APPROACHES

There are two basic approaches to research, quantitative approach and the qualitative

approach. The former involves the generation of data in quantitative form, which

can be subjected to rigorous quantitative analysis in a formal and rigid manner. This

approach is further sub-divided into inferential approach is to form a database form

which to infer characteristics or relationship of a population. This usually means

survey research where asample of population is studied to determine it’s characteristics

and it is then inferred that the population has the same characteristics.

Qualitative approach to research is concerned with subjective assessment of attitudes,

opinions and behaviour. Research in such a situation is a function of researcher’s insight

and impressions. Such an approach to research generates results either in non-

quantitative form or in the form, which are no subjected to rigorous quantitative analysis.

This research follows both the inferential quantitative and qualitative approach. The

questionnaires circulated to collect the relevant information have been analyzed ion

the basis of rating given to each question and then, aggregate of the rating of all the

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questions of a group has been taken to find out the percentage of each response to

that group.

4.4 RESEARCH PROCESS FOLLOWED:

Research process consists of a series of actions or steps necessary to effectively

carryout research and the desired sequencing of these steps. The various steps involved

in a research process are not mutually exclusive, not are they separate or distinct.

However, the following order concerning various steps provides a useful procedural

guideline regarding the research process and has been used to carry out this research:

4.5 PREPAIRING THE RESEARCH DESIGN:

The function of research design is to provide for the collecting of the relevant information

and data with minimal expenditure of effort, time and money. But the way of achieving

all this depends mainly on the purpose of the research. Here, the purpose of the study is

both exploration and description.

4.6 INFORMATION

SOURCES OF DATA: There were two sources of data used. The first one was Primary source and the second was Secondary source. The primary source consists of questionnaires and observations. The secondary source consists of internet and magazines.

The design of questionnaire was as follows:

Types of questions: Subjective questions were used for questionnaire and questionnaire consisted of dichotomous questions .

Phrasing of the questions: The following points were taken into consideration while phrasing of the questions:

1. Difficult and vague words were avoided.

2. Lengthy and unspecific questions were avoided.

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3. Two questions were not combined together.

Order of the questions: General questions were included first followed by specific questions.

Number of questions: Both the questionnaires consisted of 12 questions.

TARGET POPULATION: The selected population consisted of people related to the field.

DESCRIPTIONS OF STUDY: The survey was conducted in Allahabad during June, 2009.

TIME AVAILABLE: The time available for research 15 days and for the completion of this research, the time limit was 25 days.

4.7 DETERMINATION OF SAMPLING DESIGN AND SAMPLE SIZE:

A sample design is a definite plan for obtaining a sample from the given population. It is determined before the data is collected.

Steps in sampling design:

Population: All items under consideration in the field of enquiry.

Sample: The respondents that have been selected for the purpose of the study.

Sampling unit: The individual unit of the selected sample

Sample frame: This contains the list of all the items of the universe.

Size of the sample: This refers to the number of items selected from the universe to constitute the sample. For the purpose of this study, a sample size of 40 was taken.

Sampling design:

Sample random sampling: Random sampling method was used. This design involves the use of lottery system or the random tables for the selection of the sample. Random sampling ensures the law of statistical regulatory i.e., the sample has the same composition and characteristics as a the universe.

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4.8 FINDINGS:

The survey from the customers showed that the main competitors of ITI-Naini are:

UTL

Prithvi

Puncomm

Technofiber

ZETEE

Pramod

The preference among the purchasers was UTL 22.5 %, ITI 15%, Prithvi 12.5%,

Puncomm 12.5%, Technofiber 10 %, ZETEE 10% , Pramod 10% and Others 17.5 %.

The products manufactured by ITI that were used by purchasers were 32.5% DWDM,

27.5 % STM-16, 20 % STM-1, 5% DDF AND 15% others.

The reasons that customers preferred ITI products were 85.7% due to quality of

products, 14.3% due to company’s reputation and 10.9% due to technical collaborations.

85.7% of the customers that used ITI equipments were satisfied with its quality.

Only 29.8% of total customers were satisfied with technology provided by the ITI

products.

Those who did not use ITI equipments were 35.2% due to high price, 18.8% due to

supply of orders, 17.5% due to presence of more defects than other companies and

17.5% due to weak after sales service.

The features/ attributes that the customers look in the equipments were as follows:

20% Low Price

17.7% Good After Sales Service

17.7% Low Maintenance Cost

14.7% Good Quality of Product

11.8 % Technical Collaboration

8.9% Company Reputation

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5.9% Overall Product

4.8.1 GRAPH SHOWING CUSTOMER’S PREFERENCE FOR DIFFERENT

COMPANIES MANUFACTURING TRANSMISSION EQUIPMENTS

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4.8.2 GRAPH SHOWING PREFERENCE OF CUSTOMERS FOR DIFFERENT

ITI EQUIMENTS

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4.8.3 GRAPH SHOWING WHY CUSTOMERS PREFER ITI PRODUCTS

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4.8.4 GRAPH SHOWING WHETHER THE CUSTOMERS ARE SATISFIED

WITH THE QUALITY OF ITI PRODUCTS

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4.8.5 GRAPH SHOWING WHETHER THE CUSTOMERS ARE SATISFIED

WITH THE TECHNOLOGY OF ITI PRODUCTS

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4.8.6 GRAPH SHOWING REASONS GIVEN BY CUSTOMERS FOR NOT

PURCHASING ITI PRODUCTS

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4.8.7 GRAPH SHOWING FEATURES CUSTOMERS LOOK IN EQUIPMENTS

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The survey among the employees gave the following results:

1. 55.5 % employees think ITI is missing good professionals in marketing area.

2. 45.5 % employees think there is lack of availability of raw material on time.

3. 85% employees there is need of more innovation and technology up gradation.

4. 66.6% employees think that the publicity and advertisements and sales promotion

schemes of ITI,Naini are inadequate.

5. 72.3% employees think there is a low market potential for ITI products.

6. 85% employees think there is a lack of latest technical knowledge among them.

7. 43.2% employees think there is need of more employee support.

8. 56.3 % think there is lack of latest technology in communication.

9. 78.2% think there is no availability of orders in ITI.

10. 85 % think there is a fund crisis in ITI.

11. 85 % think there is excessive overhead expenditure in ITI.

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4.8.8 GRAPH SHOWING REASONS FOR LOW PROFITABILITY WITHIN THE ORGANISATION

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4.9 INTERPRETATIONS:

1. The company that first comes to the mind of people when asked about people when

talked about Transmission Equipment manufacturers is UTL. Therefore, UTL is the

biggest competitor of ITI, Naini.

2. The other two major competitors of ITI, Naini are ZETEE and Alcatel.

3. The products manufactured by ITI that are preferred the most are DWDM.

4. The major reason behind the above is the quality, reliability and durability of ITI

products.

5. The probable reasons why the purchasers do not prefer ITI products are due to high

price, delay in supply of orders, presence of more defects than other companies and

weak after sales service.

6. Purchasers are satisfied with the quality of ITI products.

7. The major attributes being sought by the purchasers while purchasing transmission

equipments are low price and good after sales service.

8. ITI is missing good professionals in marketing area.

9. There is low market potential for ITI products.

10. There is lack of availability of raw material on time.

11. There is lack of autonomy to take decisions.

12. There is need of more innovation and technology up gradation.

13. There is need of more employee support.

14. There is large quantity of waste product.

15. There is a lack of awareness in workers

16. There is a crisis for fund in the organisation.

17. There is lack of latest technology in communication

18. There is lack of latest technical knowledge among employees.

19. There is non availability of orders.

20. There is excessive overhead expenditure.

21. There is lack of publicity and advertisement.

22. There is lack of sales promotion schemes.

23. There is lack of up to-date features according to consumer’s demand.

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4.10 RECOMMENDATIONS

Product: New products those in demand in the market should be identified. Durability of

products should be further enhanced. Some of the existing products should be further

innovated through exploitation of new technologies and technical collaberations.

Price: ITI should try to reduce the price of its products for attracting new customers and

to win competitor’s customers. This can be done by decreasing manufacturing expenses.

Also, company can encourage discount and credit facility.

Promotion: Perhaps, it can be the key towards ITI’s success in the present market. ITI

should encourage and adopt new sales promotion strategies. These strategies can be

fruitful in enhancing the sales volume. Trade rebate, discount guarantee etc. are tools of

promotion.ITI should go for appropriate advertisement and publicity channels and revive

its old glory.

ITI should adopt customer oriented market strategies. It should try to establish direct

contact with people to generate awareness about its products and to get an in depth

information about their requirements.

Strategies for other modifications:

1. Research and development should be encouraged.

2. Warranty should be replaced by replacement guarantee.

3. Young marketing professionals should be recruited so that high-tech marketing

environment is generated due to widening of marketing concepts and technical

ideas.

4. A more professional approach should be adopted to deal with the competitors.

5. ITI is mainly dependant on BSNL for its sales. It should try to explore new markets

for its products.

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Strategies for development within the organisation:

1. There should be proper motivation to employees for better performance

2. Proper training should be induced for employees.

3. Employees should be given autonomy to take decisions.

4. Relations with the vendors and suppliers should be strengthened.

5. A well organized management information system should be established to

acquire a view of customer’s opinion.

6. A marketing research team should be established.

7. Essential measures should be taken to cut down the expenditure.

8. More adequate marketing professionals should be employed.

9. More emphasis should be given on publicity, advertising and sales promotion.

10. Management should pay more attention for the up gradation of technology to

meet the global standard.

11. Adequate measures should be taken to meet the fund crisis in the organisation.

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4.11 CONCLUSION:

1. The biggest competitor of ITI, Naini is UTL.

2. For equipments supplied to BSNL, ITI’s share is 30%

3. ITI depends highly on BSNL for orders.

4. Most of ITI’s collaborators have become its competitors.

5. As ITI is a public sector unit and largely depends upon BSNL for orders so it does

not pay attention towards advertising and publicity.

6. Approximately 80% of its ultimate customers are satisfied from ITI’s equipments.

7. ITI’s competitors have switched to better facilities.

8. ITI lags behind in terms of innovation.

9. Employees in ITI lack technical expertise.

10. There is lack of funds in ITI.

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4.12 LIMITATIONS

Though utmost care was take so that no aspects of the problem remain untouched but stii

there were certain constraints that should not be overlooked.

The following were the main constraints in my project.

The topic was very delicate hence people were afraid to give their views openly.

The secondary was not very up to date.

Some of the respondents were not available.

Personal biases and perceptions of respondent may have stopped him/her from giving

the right information.

The respondent may have not understood the actual implication of the subject.

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4.13 SWOT ANALYSIS

Government of India undertaking. High quality. Market leader in DWDM products.

30 % reservation quota from government.

High price, delay in supply of orders, presence of more defects than other

companies and weak after sales service.

Lack of good professionals in marketing area.

Lack of availability of raw material on time.

There is need of more innovation and technology up gradation.

There is need of more employee support.

There is large quantity of waste product.

There is a lack of awareness in workers.

There is a crisis for fund in the organisation.

There is lack of latest technology in communication

There is lack of latest technical knowledge among employees.

There is non availability of orders.

There is excessive overhead expenditure.

There is lack of publicity and advertisement.

There is lack of sales promotion schemes.

There is lack of up to-date features according to consumer’s demand.

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WEEKNESSES WEEKNESSES

STRENGTHS STRENGTHS

Capturing new technologies. Improving the value chain.

Competitors New uncaptured technologies

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OPPORTUNITIESOPPORTUNITIES

THREATSTHREATS

CHAPTER V : APPENDIX

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5.1 QUESTIONNAIRE 1 (FOR CUSTOMERS)

I say thanks for agreeing to spare 5 minutes of your time for filling up this questionnaire.

All details given by you will be kept strictly confidential.

1. Could you please tell which company comes first to your mind when we ask about

Transmission Equipment Manufacturers?

2. Could you please name two or more companies manufacturing telecom

equipments?

3. Have you ever used products being manufactured by ITI? (Yes/No)

4. If yes, then what are the products manufactured by ITI which are being used by

you?

5. What are the reasons for choosing this product?

6. If no, what are the probable reasons for not buying ITI product?

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7. While buying the telecom product did you consider any other product of any other

telecom company?

8. Do you really think that there is difference between quality provided by ITI and

that of other company? (Yes/No)

9. Do you really think that there is difference between technology provided by ITI

and that of other company? (Yes/No)

10. Do the ITI products need frequent after sales service? (Yes/No)

11. Do you get the delivery of products on time? (Yes/No)

12. What features/attributes are you looking for in the transmission products when

you purchase it? (Rate 1 to 8)

Price

Overall product

Quality

Company reputation

Guarantee period

After sales service

Maintenance cost

Tie up

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5.2 QUESTIONNAIRE 2 (FOR EMPLOYEES WITHIN TNE COMPANY)

12. Do you think ITI is missing good professionals in marketing area?

Yes No

13. Do you think there is lack of availability of raw material on time?

Yes No

14. Do you think there is need of more innovation and technology up gradation?

Yes No

15. What are your views about the publicity and advertisements schemes of ITI,Naini?

Adequate Inadequate

16. What are your views about the sales promotion strategies of ITI,Naini?

Adequate Inadequate

17. Do you think there is a low market potential for ITI products?

Yes No

18. Do you think there is a lack of latest technical knowledge among employees?

Yes No

19. Do you think there is need of more employee support ?

Yes No

20. Do you think there is lack of latest technology in communication?

Yes No

21. Do you think there is non availability of orders in ITI?

Yes No

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22. Do you think there is a fund crisis in ITI?

Yes No

23. Do you think there is excessive overhead expenditure in ITI?

Yes No

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REFERENCES

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REFERENCES

Kotler Philip- Marketing Management-Analysis, Planning And Control, Tenth

Edition, 2000 Prentice Hall India

Dilel, Simken,Pride, Ferrel – Concepts and Strategies, second European Edition.

ITI Annual Report

Beri G.C.- Marketing Research

Business World

Wikipedia

http://www.itiltd-india.com/

http://www.msn.com/

http://www.google.com/

http://www.bawwrchi.com/

http://www.businessballs.com

http://search.ebscohost.com/

http://www.economictimes.com/

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