Introduction• Steel is an alloy consisting mostly of iron, with a

carbon content between 0.2% and 2.14% by weight.

• India is the 10th largest steel producer in the world, but with only a 2% share in the global trade.

• Sail and Tata Steel have traditionally been the major steel producers of India.

• Steel is mostly used for construction of bridges, buildings, automobiles production etc.

• The Indian economy is growing at a very high rate presently and the demand for steel is also showing an upward trend.

Segmentation

• Majority of Steel is consumed by business houses for constructions, automobiles etc.

• Minor portion of Steel is consumed directly by consumers such as nails, razor, blades etc.

• E.g.80% of Tata Steel’s revenues come from B2B customers (about 200 large business customers), while only 20% revenues come from B2C segment.

• Since maximum customers for Steel Industries are from B2B hence they need to have a relationship approach since Steel is required on a regular bulk basis.

Continued

• Steel Industries go for Targeted Marketing because their consumers are fixed. i.e. the business units. E.g. Automobile Sectors, Manufacturing Industries etc.

• The demand for Steel is steadily increasing with India marching towards rural infrastructural development. E.g. Construction of Townships, Dams, Bridges etc.

Geographic

• More & more steel is being demanded in urban areas for construction, automobiles. E.g. Steel is required for Metro in Delhi & Kolkata etc.

• These days more & more dams, bridges, railway stations are being constructed in rural areas for there upliftment. E.g. Madhavpur Railway Station, Narayanapura Dam over the river Krishna etc.

Demographic•Demand for Steel also demands on

the lifestyle people are following.

E.g. If more & more people demand for car the demand for Steel by the Automobile Industry would increase.

Drivers of the Industry• The Steel Industry is highly driven by business

units since the percentage consumed by them is the maximum.

E.g. If demand for automobiles increase the demand for Steel would also increase.

• However Government policies also play a major role in driving the steel industry.

E.g. if the Government reduces the import tax the Indian Steel demand would fall & if the import tax rises the demand for it would rise.

• Trade Regulations• Employment Laws prevailing in the country• Interest Rates• Pollution Norms

Marketing MixProduct

Types of Steel• Long Steel• Flat Carbon Steel • Stainless Steel• Crude Steel• Mild Steel

Continued

Tata Steel has essentially three generic products-

• Tata Bearings-Ball bearings, Ball Joints, Ball Screws, Bearing Bushes, Bearing housing etc.

• Tata Pipes-GI pipes, Iron & Steel pipes, Ductile Iron Pipes etc.

• Tata Agrico-Sickle, Crowbars, Axe, Bill Hook, Cane Chopper, Hoe, Shovels etc.

Place Distribution• Steel can be ordered online through internet. E.g. Steel can be ordered from Sail website-

www.sail.co.in

• Since major consumption is by business houses hence direct selling is often used by means of sending letters, proposals & participating in tenders etc.

• Some major players like TATA & SAIL also organize trade fairs to attract new/old business units.

Continued

• For B2B selling Steel Industries don’t drive the sales since they have their targeted industries where they supply Steel.

• However for B2C selling like nails, blades etc. the distribution channel is from Industries to the wholesalers & distributors & finally to retailers who sell it to the consumers.

Price

The pricing strategy depends on input prices like labour cost, cost of raw materials, transportation cost etc.

Domestic Steel prices are Rs.26000 to Rs.35000 per tonne whereas the international prices are $692.8/tonne.

Price Sensitivity

• Even if the price of Steel raises the demand will not fall because it is required by business units regularly for production of the ultimate products. Moreover there is no substitute for Steel.

• E.g. Construction industries will not stop consumption of steel if the steel prices would go up.

Promotion

• The pull strategy is used since steel is always in high demand.

E.g. Steel is regularly demanded for infrastructure development like Jawahar Gram Samridhi Yojana, Pradhan Mantri Gram Sadak Yojana (Madhya Pradhesh) etc.

• The B2B units are offered discounts on bulk purchase or on advance payment.

Significant Innovation

• Tata Steel decided to enter into organized steel retailing.

• Tata Steel is about to launch India’s first organized steel retail store selling steel with its first pilot store ‘Steel Junction’ in Kolkata.

• Tata Steel hopes that ‘Steel Junction’ would be a platform that would bring together vendors & manufacturers.

BrandingMajor Brands of the Major Steel Players:

• ELEGANT-Elegant bracelets, Elegant cufflinks, Elegant tie bars etc.

• TATA- Tata Shaktee in GC sheets and Tata Tiscon in rebars etc.

• SAIL- Sail H R Coils,Sail C R Coils etc.

• Steel Industries like Elegant Steels & Essar Steels go for regular hoardings & advertisements.

• Whereas Industries like Tata & Sail come up with advertisements on special occasions such as anniversaries, trade fairs, seminars etc.

• B2B units are not brand conscious since the units prefer quality product.

Sales Management• Since the major business of Steel Industries is

driven by Targeted Customers hence the scope for sales management has wide scope.

• Development of the customer relations and customer retention is important for business to succeed since they have to manage bulk buyers & large industries.

• Since the major players are the business units the compensation for the sales force is mostly on fixed salary basis rather than incentive driven unlike Insurance industries.

Key Account Management• Managing the accounts of customers who

produce most profit for a company or have the potential to do so or those who are of strategic importance.

• Particular emphasis is placed on analyzing which accounts are key to a company at any one time, determining the needs of these particular customers, and implementing procedures to ensure that they receive premium customer service and to increase customer satisfaction.