| A Study of Marketing Strategies for NSPL | |

| A Study of Marketing Strategies for NSPL | |

1.1 DEFINITION OF STRATEGY
| SMU | MBA (Mktg.) | Project Report | Kanhaiya Lal Kejriwal | Page No . 1

The term “strategy” is drawn from the armed forces. It is a strategic plan that interlocks all
aspects of the corporate mission designed to overpower the enemy or the
competitor. An appropriate strategy is considered to be essential to face adverse
situations such as cut-throat competition.
Strategy may imply general or specific programmes of action outlining how the
resources are deployed to attain goals in a given set of conditions. If these
conditions change, the strategy also changes. Strategies give direction for the
achievement of objectives necessary through the deployment of resources. The
American Marketing Association defines marketing as "the process of planning
and executing the conception, pricing, promotion, and distribution of ideas, goods,
and services to create exchanges that satisfy individual and organizational
objectives." Marketers use an assortment of strategies to guide how, when, and where
product information is presented to consumers. Their goal is to persuade consumers to
buy a particular brand or product.
A marketing strategy is a plan or an approach for marketing your product and

services. Successful marketing strategies create a desire for a product. A marketer, therefore,
needs to understand consumer likes and dislikes. In addition, marketers must know
what information will convince consumers to buy their product, and whom consumers
perceive as a credible source of information. Some marketing strategies use fictional characters,
celebrities, or experts (such as doctors) to sell products, while other strategies use
specific statements or "health claims" that state the benefits of using a particular
product or eating a particular food.
1.2 PURPOSE OF STRATEGY

A strategy is an operational tool to achieve the goals, and thus, the corporate mission.
Strategies do not attempt to outline exactly how the enterprise is to accomplish its
objectives. A company may view downsizing as a strategy in a competitive market to
render cost-effective services. Thus strategy provides a framework to guide thinking and
action. Strategies are very much useful in organizations for guiding, planning and
control.
Strategy is a way of life both at the macro as well as micro levels for everyone,
whether it is a nation or a company. To win over in a given complex situation, the
organizations, even trans-nationals adopt strategies. They make changes, if
necessary, even to their global strategies. An individual company may formulate its
own strategy to bring out the desired results. The eventual success of the
organization depends upon strategy formulation and implementation.
The recently initiated moves such as globalization, privatization and liberalization

are strategies to attain a globally competitive economy.
Some marketing strategies are created for the purpose of capturing a certain
segment of the market, but the majority of small business strategies are more generic in
nature. Even so, it's important to understand what your strategy is trying to
achieve.
1.3 FACTORS INFLUENCING MARKETING STRATEGY

Environment
Economic /
Demographic
Communicators
Technological/
Competitors
Physical
Publics Product, Place,

Social /
Promotion, Price
Cultural Suppliers
TARGET CUSTOMERS
Political / Legal Marketing
Intermediaries
1.4 MARKETING STRATEGIES AND TARGET CUSTOMERS

The results of analyzing market segments lead the marketer to consider one of the
following target marketing strategies.
 Undifferentiated or Mass Marketing - Under this strategy the marketer

attempts to appeal to one large market with a single marketing strategy.
While this approach offers advantages in terms of lowering development and
production costs, since only one product is marketed, there are few markets
in which all customers seek the same benefits. While this approach was very
popular in the early days of marketing (e.g., Ford Model-T), few companies
now view this as a feasible strategy.
 Differentiated or Segmentation Marketing – Marketers choosing this

strategy try to appeal to multiple smaller markets with a unique marketing
strategy for each market. The underlying concept is that bigger markets can
be divided into many sub-markets and an organization chooses different
marketing strategies to reach each sub-market it targets. Most large
consumer products firms follow this strategy as they offer multiple products
(e.g., running shoes, basketball shoes) within a larger product category (e.g.,
footwear).
 Concentrated or Niche Marketing – This strategy combines mass and

segmentation marketing by using a single marketing strategy to appeal to
one or more very small markets. It is primarily used by smaller marketers
who have identified small sub-segments of a larger segment that are not
served well by larger firms that follow a segmentation marketing approach.
In these situations a smaller company can do quite well marketing a single
product to a narrowly defined target market.

 Customized or Micro-Marketing - This newest target marketing strategy
attempts to appeal to targeted customers with individualized marketing
programs. For micro-marketing segmentation to be effective the marketer
must, to some degree, allow customers to “build-their-own” products. This approach
requires extensive technical capability for marketers to reach individual customers
and allow customers to interact with the marketer. The Internet has been the catalyst
for this target marketing strategy. As more companies learn to utilize the
Internet micro-marketing is expected to flourish.
1.5 TYPES OF MARKETING STRATEGIES:
Marketing strategies may differ depending on the unique situation of the individual
business. However there are a number of ways of categorizing some generic strategies.
A brief description of the most common categorizing schemes is presented below:
 Strategies based on market dominance- In this scheme, firms are classified

based on their market share or dominance of an industry. Typically there are three
types of market dominance strategies:
o Leader
o Challenger
o Follower
 Porter generic strategies – strategy on the dimensions of strategic scope

and strategic strength. Strategic scope refers to the market penetration while
strategic strength refers to the firm’s sustainable competitive advantage.
o Product differentiation

o Market segmentation
 Innovation strategies – This deals with the firm's rate of the new product
development and business model innovation. It asks whether the company is on the
cutting edge of technology and business innovation. There are three types:
Pioneers
o Close followers
o Late followers
 Growth strategies – In this scheme we ask the question, “How should the firm
grow?” There are a number of different ways of answering that question, but the most
common gives four answers:
o Horizontal integration
o Vertical integration
o Diversification
o Intensification
1.6 MARKETING FUNCTIONS:
To achieve success in the marketing efforts, we need to have glimpse of the big
pictures and the activities we need to perform in achieving our set marketing
objectives, these activities is referred to as the function of marketing. It refers to

those specialize activities that a marketer must perform in order to achieve our set
marketing objectives.
(1) Research function: the research function of marketing is that function of

marketing that enables us to generate adequate information regarding our particular
market of target. We must carry out adequate research to identify the size,
behavior, culture, believe, genders etc. of our target market segment, their needs
and want, and then develop effective product that can meet and satisfy these
market needs and want.
(2) Buying function: the function of buying is performed in order to acquire

quality materials for production. When we design a good product concept, we
should also ensure we are buying the essential materials for the product. This
function is carried out by the purchase and supply department, but our
specifications of materials goes a long way in assisting the purchasing department
to acquire the necessary materials needed for production.
(3) Product development and management: product development is an essential

function of marketing since it was the duties of the marketing department to
identify what the market need or want and then design effective product based on
the identified need and want of the market. Product development passes through
some basic stages carried out by the marketers to develop a targeted market
specified product. And we can also manage our product by evaluating it
performance and changing them to fit the current market trend.

(4) Production function: production is the function performs by the production
department. Though, this is interrelated to the department of marketing, because
our product must possess the essential characteristics that can meet the target
market needs and want as identified during our market research, such
characteristics as in our product Test, Form, Packaging etc.
(5) Promotion function: promotion is one of the core functions of marketing since
our finish product must not remain in the place of production, hence, we as a
marketer must design effective communication strategies to informing the
availability of our product to our target market. We must be able to design
effective strategies to communicate our product availability and features to our
target market, such strategies as in; advertisement, personal selling, public relation
etc.
(6) Standardization and grading: the function of standardization is to establish

specified characteristics that our product must conform to, such standard as in
having a specify test, ingredient etc. That makes our product brand so unique.
Grading comes in when we sort and classify our product into deferent sizes or
quantities for different market segment while maintaining our product standard.
(7) Pricing function: we perform the function of pricing on our product offerings
by designing effective pricing systems base on your product stage and performance
in the product life cycle. Price is the actual value consumers perceive on your
product, so we as a marketer should ensure that our value of our product is not too
high or too low to that of our customers.

(8) Distribution function: the function of distribution is to ensure that our product
is easily and effectively moved from the point of production to the target market,
the kind of transportation system to employ e.g. Road, rail, water or air, and
ensures that the product can be easily accessed by customers. We as a marketer
should also design the kind of middlemen to engage in the channel of distribution,
their incentives and motivations etc.
(9) Risk bearing function: the process of moving a finished product from the
point of production to the point of consumptions is characterized with lots of risks,
such risks as in product damaging, pilferage and defaults etc. So we must provide
effective packaging system to protect our product, good warehouse for the storage
of our product until they are needed, effective transportation system to speedily
deliver our product on time.
(10) Financing function: financing deals with the part of marketing to providing
incomes for our business. It refers to how we can raise capital to start operation
and remain in business. It refers to your modes of payment for the goods and
services transferred to our customers.
(11) After sales-service: in a more complex and technical product, you as a

marketer should make provision in order to assist our customers after they have
purchased our product. In terms of machines or heavy equipment product that
requires installation or maintenance, most marketing organization renders such

services like installing the machine or maintaining it for stipulated periods on time
for free or by a little service charge.
After sales services is an effective marketing strategy to building a long lasting

customer relationship, staying ahead of our competitors while making profit for
our organization.
Adequate understanding of these functions enables us as a marketer to know what

is required to be done to having an effective transfer of ownership between
marketer and the costumers, creating a big picture of our business, while also
making profit for our organization.


2.1 INTRODUCTION – STEEL INDUSTRY:
2.2 PROFILE OF STEEL INDUSTRY
India’s economic growth is contingent upon the growth of the Indian steel industry.
Consumption of steel is taken to be an indicator of economic development. While
steel continues to have a stronghold in traditional sectors such as construction,
housing and ground transportation, special steels are increasingly used in
engineering industries such as power generation, petrochemicals and fertilizers.
India occupies a central position on the global steel map, with the establishment of
new state-of-the-art steel mills, acquisition of global scale capacities by players,
continuous modernization and up gradation of older plants, improving energy
efficiency and backward integration into global raw material sources.
Steel production in India has increased by a compounded annual growth rate

(CAGR) of 8 percent over the period 2002-03 to 2006-07. Going forward, growth
in India is projected to be higher than the world average, as the per capita
consumption of steel in India, at around 46 kg, is well below the world average
(150 kg) and that of developed countries (400 kg). Indian demand is projected to
rise to 200 million tons by 2015. Given the strong demand scenario, most global
steel players are into a massive capacity expansion mode, either through
Brownfield or Greenfield route. By 2012, the steel production capacity in India is
expected to touch 124 million tones and 275 million tons by 2020. While
Greenfield projects are slated to add 28.7 million tones, Brownfield expansions are
estimated to add 40.5 million tones to the existing capacity of 55 million tones.
Steel is manufactured as a globally tradable product with no major trade barriers

across national boundaries to be seen currently. There is also no inherent resource
related constraints which may significantly affect production of the same or its

capacity creation to respond to demand increases in the global market. Even the
government policy restrictions have been negligible worldwide and even if there
are any the same to respond to specific conditions in the market and have always
been temporary. Therefore, the industry in general and at a global level is unlikely
to throw up substantive competition issues in any national policy framework.
Further, there are no natural monopoly characteristics in steel. Therefore, one may
not expect complex competition issues as those witnessed in industries like
telecom, electricity, natural gas, oil, etc.
This, however, does not mean that there is no relevant or serious competition issue
in the steel industry. The growing consolidation in the steel industry worldwide
through mergers and acquisitions has already thrown up several significant
concerns. The fact that internationally steel has always been an oligopolistic
industry, sometimes has raised concerns about the anticompetitive behaviors of
large firms that dominate this industry. On the other hand the set of large firms that
characterize the industry has been changing over time.
Trade and other government policies have significant bearing on competition

issues. Matters of subsidies, non-tariff barriers to trade, discriminatory customs
duty (on exports and imports) etc. may bring in significant distortions in the
domestic market and in the process alter the competitive positioning of individual
players in the market. The specific role of the state in creating market distortion
and thereby the competitive conditions in the market are a well-known issue in this
country.
This report proceeds as follows. Section 2 of the report provides a brief over view
of the performance and structure of the Indian steel industry by analyzing
published secondary time series data on certain key indicators. Market structure is

analyzed using indicators such as number of players and their respective shares in
total production, share of public and private players in the total production/sales,
production capacity of major players, etc. Given the heterogeneous nature of the
product this analysis is done for the various segments of steel that constitute the
“relevant market”. This analysis is a precursor in identifying segments where
competition may be an issue of concern to allow for a pointed analysis.
Section 3 of the report documents policy and institutional structure governing the
steel industry in India and the role played by the Government in the development
of this industry.
Section 4 of the report examines issues of competition of steel industry in India, by

identifying the structurally inherent and the market determined positions of various
steel firms specifically to see their market power, vis-à-vis both their final
consumers as also those within the steel industry. The issues emerging out of the
size and market shares, specifically taking into consideration the investment
aspects are also discussed in this section. The other issue of significant importance
in the context of competition is the command over natural resources that a few
players possess and that enable a significant cost advantage over the rest in the
market. These are the result of government policies of the past, to support growth
of a particular industry. These preferential policies and their impact on competition
are also analyzed in this section.
Section 5 concludes with a discussion on state of the competition in the Indian

steel sector pointing to a few key recommendations for the Competition
Commission of India. Appendix I, II, III and IV provide data on the sector, and
briefly discuss international conditions, and provide an historical overview.

This study finds little evidence of any cartelization or joint pricing behavior on the
part of the incumbents. It finds that government intervention, and slow
responsiveness to changing conditions has contributed to shortages in the past,
which in turn leads to action by the incumbents that look like, but is not, anti-
competitive behavior. Unequal access to raw material, as well as export/import
curbs, are the key issues affecting the creation of a level playing field. It is the last
two as well as ready availability of information on costs and prices across the value
chain that could warrant some action by the regulator.
Steel is a versatile, constantly developing material that underpins all

manufacturing activity. If a product is not made from steel, then it is certainly
made using steel at some point in the manufacturing process.
2.3 OVERVIEW, PERFORMANCE AND STRUCTURE
2.3.1 Background
The establishment of Tata Iron and Steel Company (TISCO) in 1907 was the
starting point of modern Indian steel industry. Afterwards a few more steel
companies were established namely Mysore Iron and Steel Company, (later
renamed Vivesvaraya Iron & Steel Ltd) in 1923; Steel Corporation of Bengal (later
renamed Martin Burn Ltd and Indian Iron & Steel Ltd) in 1923; and Steel
Corporation of Bengal (later renamed Martin Burn Ltd and Indian Iron and Steel
Co) in 1939.1 All these companies were in the private sector.

Key Events
1907*: Tata Iron and Steel Company set up.
1913: Production of steel begins in India.
1918: The Indian Iron & Steel Co. set up by Burn & Co. to compete with Tata Iron and
Steel Co.
1923*: Mysore Iron and Steel Company set up
1939*: Steel Corporation of Bengal set up
1948: A new Industrial Policy Statement states that new ventures in the iron and steel
industry
are to be undertaken only by the central government.
1954: Hindustan Steel is created to oversee the Rourkela plant.
1959: Hindustan Steel is responsible for two more plants in Bhilai and Durgapur.
1964: Bokaro Steel Ltd. is created.
1973: The Steel Authority of India Ltd. (SAIL) is created as a holding company to
oversee most of
India's iron and steel production.
1989: SAIL acquired Vivesvata Iron and Steel Ltd.
1993: India sets plans in motion to partially privatize SAIL.

Source: * Government of India, Joint Plant Committee Report 2007, and rest of the dates from:
http://www.fundinguniverse.com/company-histories/Steel-Authority-of-India-Ltd-Company-History.html
At the time of independence, India had a small Iron and Steel industry with
production of about a million tons (mt). In due course, the government was mainly
focusing on developing basic steel industry, where crude steel constituted a major
part of the total steel production. Many public sector units were established and
thus public sector had a dominant share in the steel production till early 1990s.
Mostly private players were in downstream production, which was mainly

producing finished steel using crude steel products. Capacity ceiling measures
were introduced. Basically, the steel industry was developing under a controlled
regime, which established more public sector steel companies in various segments.
Till early 1990s, when economic liberalization reforms were introduced, the steel
industry continued to be under controlled regime, which largely constituted
regulations such as large plant capacities were reserved only for public sector
under capacity control measures; price regulation; for additional capacity creation
producers had to take license from the government; foreign investment was
restricted; and there were restrictions on imports as well as exports.
Undoubtedly there has been significant government bias towards public sector
undertakings. But not all government action has been beneficial for the public
sector companies. Freight equalization policies of the past were one example. The
current governmental ‘moral-suasion’ to limit steel price increases is another.
However, after liberalization—when a large number of controls were abolished,
some immediately and others gradually—the steel industry has been experiencing
new era of development. Major developments that occurred at the time of
liberalization and thenceforth were:
1. Large plant capacities that were reserved for public sector were removed;
2. Export restrictions were eliminated;
3. Import tariffs were reduced from 100 percent to 5 percent;
4. Decontrol of domestic steel prices;
5. Foreign investment was encouraged, and the steel industry was part of the
high priority
6. industries for foreign investments and implying automatic approval for
foreign equity

7. participation up to 100 percent; and
8. System of freight ceiling was introduced in place of freight equalization
scheme
As a result, the domestic steel industry has since then, become market oriented and
integrated with the global steel industry. This has helped private players to expand
their operations and bring in new cost effective technologies to improve
competitiveness not only in the domestic but also in the global market. Private
sector contribution in the total output has since been increasing in India.
Development of private sector has caused high growth in all aspects of steel
industry that is capacity, production, export and imports. During the last decade
more than 12 mt of capacity has been added in the steel industry, this is mostly in
the private sector. Recently, the steel industry is receiving significant foreign
investments such as POSCO—South Korean steel producer—and Arcelor-Mittal
Group—UK/Europe based steel producer—announcing plans for establishing
about 12 mt production units each in India.
The Indian steel industry, with a production of about 1 mt at the time of

independence, has come long way to reach the production of about 57 mt in 2006-
07. Moreover, the steel industry is showing promising future growth as major
players in the industry have announced their plans for significant investments in
expanding their capacities.
Impressive development of the steel industry with active participation of private

sector and integration of India steel industry with the global steel industry has also
induced the government to come up with a National Steel Policy in 2005. The
National Steel Policy 2005 was drafted with the aim of establishing roadmap and
framework for the development of the steel industry. The policy envisages steel

production to reach at 110 mt by 2019-20 with annual growth rate of 7.3 percent.
As later sections will show these expectations are not excessively high.
With increasing need for large investments in the industry private sector’s role
would be crucial in the development of the steel industry. The future, it appears,
will continue to be dominated by a few large players and the industry will remain
oligopolistic – as it is internationally. Moreover, as shown in Appendix I share of
fixed cost to total cost for selective steel producers in India is very high making it
prone to increasing returns to scale and the consequent market structure (See Table
A1.8). TISCO, public sector entities, POSCO, Jindal, Essar, and Arcelor-Mittal
will be among the major players accounting for the bulk of the 100 plus million
tons of production in the future.
There is a key factor behind the predominance of large units and oligopolistic
industry structure. And that is the production process. The following section
discusses the process and underlying technology.
2.3.2 Steel Production Processes
Blast furnace/basic oxygen furnace (BF/BOF): BF basically converts iron ore

into liquid form of iron. Iron produced by BF contains high amount of carbon and
other impurities, this iron is called pig iron. Pig iron due to its high carbon content
has limited end use application such as covers of manholes. To make steel products
out of pig iron it is further processed into BOF where its carbon content and other
impurities are burnt or removed through slag separation. Main inputs to BF are
iron ore and coal/coke. BOF is also called oxygen furnace because oxygen is the
only fuel used in the process. Generally, integrated milling use BF/BOF routes to
produce finished steel. Producers that use this technology include SAIL, RINL,
TSL and JSWL.

Electric Arc Furnace (EAF): Basic purpose of the EAF is re-melting sponge iron,
melting scrap, its main inputs, to produce finished steel. It uses electricity as much
as 400-500 kWh/ton. ISPAT, ESSAR, and the Jindal group are examples of
producers, which use this technology.
COREX or Cipcor Process: COREX is an advance process of making steel.

Though few use this process, it is possible to use non-coking coal directly in
smelting work and it also makes it possible to use lump ore and pellets as inputs.
These two advantages allow steel producers to eliminated coking plants and sinter
plants. Purpose of coking plant is to convert non-coking coal into more efficient
fuel and purpose of sinter plant is purify lump ore or pellets for further processing.
Basic inputs to COREX are iron-ore and coal. Jindal Iron & Steel Company
(JISCO) uses COREX technology to produce finished steel.
Induction Arc Furnace (IAF): is one of the most advance processes of making
steel. Like EAF it uses electricity as its main fuel. IAF is most environment
friendly and efficient way of producing steel. However, its lack of refining
capacity requires clean products as its inputs. Large numbers of small steel
companies use this technology. The high weight of the product significantly pushes
up transport and movement costs. Therefore large integrated plants are the norm
for cost efficient production. For specialized steel and alloys efficient production
by smaller plants is possible.
2.3.3 Steel Producers

Broadly there are two types of producers in India viz. integrated producers and
secondary producers. Integrated steel producers have traditionally integrated steel
units have captive plants for iron ore and coke, which are main inputs to these
units. Currently there are three main integrated producers of steel namely Steel
Authority of India Limited (SAIL), Tata Iron and Steel Co Ltd (TISCO) and
Rashtriya Ispat Nigam Ltd (RINL). SAIL dominates amongst the three owing to its
large steel production capacity plant size. Secondary producers use steel scrap or
sponge iron/direct reduced iron (DRI) or hot briquetted iron (HBI). It comprises
mainly of Electric Arc Furnace (EAF) and Induction Furnace (IF) units, apart from
other manufacturing units like the independent hot and cold rolling units, rerolling
units, galvanizing and tin plating units, sponge iron producers, pig iron producers,
etc.
Secondary producers include Essar Steel Ltd., Ispat Industries Ltd., and JSW Steel
Ltd. There are 120 sponge iron producers; 650 mini blast furnaces, electric arc
furnaces, induction furnaces and energy optimizing furnaces; and 1,200 re-rollers
in India.
The integrated producers constitute most of the mild steel production in India.
Their main products include flat steel products such as Hot Rolled, Cold Rolled
and Galvanized steel. They also produce long and special steel in small quantities.
On the other, secondary producers largely produce long steel products. Re-rollers
are the units that come under secondary producers’ category, and produce small
quantity of steel like long and flat products. These units either procure their inputs
from the market or through their backward integrated plants. They use sponge iron,
pig iron or combination to produce finished steel or ingots.
The integrated steel plants in India are:
 Rourkela Steel Plant

 Bhillai Steel Plant
 Bokaro Steel Plant
 Durgapur Steel Plant
 Tata Iron and Steel Company(TISCO)
 Visakhapatnam Steel Plant( VSP)
 ESSAR Steel Company
 JINDAL Steel Company
2.3.4 Types of steel
Steel is an iron based mixture containing two or more metallic and/or non metallic
elements usually dissolving into each other when molten. Since it is an iron based
alloy—as per its end user requirements—other than iron it may contain one or
more other elements such as carbon, manganese, silicon, nickel, lead, copper,
chromium, etc. For example, stainless steel (a type of steel) mainly contains
chromium that is normally more than 10.5 percent with/without nickel or other
alloying elements. Steel is produced using Steel Melting Shop that includes
converter, open hearth furnace, electric arc furnace and electric induction furnace.
There are broadly two types of steel according to its composition: alloy steel and
non-alloy steel. Alloying steel is produced using alloying elements like manganese,
silicon, nickel, chromium, etc. Non-alloy steel has no alloying component in it
except that are normally present such as carbon. Non-alloy steel is mainly of three
types viz. mild steel (contains up to 0.3% carbon), medium steel (contains between
0.3-0.6% carbons) and high steel (contains more than 0.6% carbon). All types of
steel other than mild steel are called special steel. It is mainly because a special
care is taken in order to maintain particular level of chemical composition in such
steel. This process gives different properties to the steel according to its

composition. In India, non-alloying steel constitutes about 95 percent of total
finished steel production, and mild steel has large share in it.
According to shape/size/form steel is categorized into different types such as liquid
steel, ingots, semis (semi-finished steel) and finished steel. Liquid steel is a first
product that comes out from Steel Melting Shop. Liquid steel further goes into
ingots, and then ingots advance to semis. Semis are called semi-finished steel
products because they are further subject to forging/rolling in order to produce
finish steel products such as flat steel products and long steel products. Crude steel
generally includes ingots and semis.
According to end use, steel is categorized into structural steels, construction steel,
deep drawing Steel, forging quality, rail steel, etc. The following chart depicts
various types of steel products according to different categories.

Chart 2.1: Categories/Types of Steel Products
Steel
Form/Size/
Composition End Use
Shape
Liquid Steel Alloy Steel Non-Alloy Steel Structural Steel
Crude Steel Stainless Steel Low Carbon or Construction Steel

Mild Steel
Ingots Silicon-electrical Medium Carbon Deep Drawing

Steel Steel Steel
Semis High Carbon

High Speed Steel
Steel Rail Steel
Finished Steel
Foreign Quality
Steel
Flat Products Non-flat Products
2.3.5 Production Data

During the last five years finished steel production (alloy and non-alloy) grew at
the rate of 8 percent (CAGR) to reach at 57.66 mt in 2006-07 from 39.22 mt in
2002-03 (Table 2.2). In 2006-07, the secondary producers alone contributed about
76 percent and the rest came from the main producers.
After liberalization, on the account of active participation of private sector in the

steel industry, public sector share in the total production started dwindling. In
2003-04, share of public sector in the finished steel production (alloy & non-alloy)
was 28 percent, which was reduced to 23 percent in 2006-07.
According to estimates of Ministry of Steel, Government of India—production

capacity of the steel industry will be 124 mt at the end of the year 2011-12. It is
mainly attributed to positive trends in the consumption. Main producers such as
TISCO, SAIL and JSW are aggressively investing in expanding their plant
capacities. TISCO has an installed production capacity of 7.5 to 8 mt with another
2.4 mt would be added by 2009. The TISCO is the front runner with an expansion
plan of about 30 mtpa by 2020. JSW and SAIL have expansion plans of about 27
mtpa and 24 mtpa, respectively.
2.3.6 Consumption
During last five years (2002-03 to 2006-07) the steel consumption has grown by
about 11percent, which was higher than the estimation of National Steel Policy
2005. Especially in last two years (2005-06 and 2006-07) consumption growth has
been quite impressive, 13.90 percent and12.91 percent, respectively. The
consumption has reached its ever highest level of 46.78 mt in 2006-07 (see figure
2.2). Some estimations state that this upturn trend in consumption will continue in
the future mainly owing to healthy economic growth and promising demand from

growth driving sectors such as infrastructure, construction, housing, consumer
durables, etc. India’s per capita consumption of steel stood at 46 kg, whereas world
average is 150 kg. Average for developed world is 450 kg. Thus, it is clear that
there is much scope for the growth of consumption in India. Major sectors which
contributed to steel consumption in 2005-06 are depicted in the figure below
(Figure 2.3). Infrastructure and manufacturing sectors together contributed almost
50 percent of total demand for the steel in 2005-06.
2.3.7 Trade
In last five years (2002-03 to 2006-07) imports are growing at much faster rate
than exports. As a result net trade in steel is getting narrower (see Table 2.1).
While imports have grown by CAGR of 24.49 percent, exports have grown just by
a CAGR of 2.16 percent in last five years. Overall net trade in steel has managed to
be in surplus till 2006-07.
2.3.8 Performance of the Indian Steel Industry
Data from a range of sources including Joint Plant Committee, Prowess Database,
as well as international trade data, all reveal that there is no single entity that
dominates either the sector as a whole, or any of the major product segments.
Tables are provided at the end of this chapter. But the key point is that this is not a
monopoly, either in its aggregate form, or in any of its components. Later chapters
will discuss whether there is any evidence of anti-competitive behavior by the
incumbents. In segment after segment, the pattern is very clear; the more
aggressive growth oriented firms have been capturing greater market shares. In
some cases, they may be relatively smaller secondary producers, and in others the

larger one. There is no evidence, of expansion of output or profitability, that anti-
competitive behavior of any of these firms, should have resulted in.
2.3.9 Production
As mentioned above, growth of the Indian steel industry has been quite rapid;
production growth CAGR was about 8 percent (see Table 2.2), very much in line
with economic growth during 2002-03 and 2006-07. The private sector constituted
77 percent of the total production in 2006-07, and its share has been rising for the
past few years. While SAIL is a major public sector undertaking, it is also the
largest producer of steel in the country accounted for 17 percent of the total
production in 2006-07, followed by TSL and RINL with shares 8 percent and 5
percent, respectively. At-least where market sizes are concerned, whether
individually or as a group, the public sector is no longer at the ‘commanding
heights’ of the steel sector. But a better understanding is received when we look at
the segment-wise break-up in later sections. In 2006-07 non-alloy steel constituted
95.6 percent of total finished steel production and rest was alloy steel. Out of total
non-alloy production non-flat products were 49.27 percent, and in the rest 48.34
percent were flat products and 2.39 percent were pipes (large dia). Of total finished
(non-alloy) productions of bars & rods (non-flat product) and hot rolling
Coils/skelp/strips (flat product) were 37.48 percent and 22.27 percent, respectively.
Together these two major products constituted for 59.75 percent of total finished
(non-alloy) steel production in 2006-07. This trend has been more or less constant
for last five years (see Table 2.3). The top six segments: Bars & rods, structurals,
HR coild/strips/skelps, cold rolling coils/strips, plates and GC/GP sheets,
contributed about 93.50 percent of total finished steel (non-alloy) production in
2006-07. About 70 percent of bars and rods production came from secondary
producers in 2002-03, which was increased to 72.3 percent in 2006-07. For HR

coils/sheets/strips/skelps the figure was 55 percent. Secondary producers
comprising ESSAR, JSWL, ISPAT and other small secondary producers have
experienced rise in their shares in total production of HR coils/sheets/strips/skelps.
Bars and Rods (BR)

BR is a major part of the total steel production (non-alloy) in the country. The
segment recorded a growth rate of about 6.3 percent the highest in last five years
prior to 2006-07 (later data are not yet available). Since the BR segment constitutes
76 percent of total non-flat steel production, it was a major contributor to the
growth rate of non-flat steel production overall. The main producers accounted for
30 percent and 27 percent of total BR production in 2002-03 and 2006-07,
respectively. The public sector RINL has a large share (17%) among main
producers in the production of BR. However, RINL’s share has recorded 2 percent
decrease in last two years. Secondary producers have seen increase in their share in
total BR production from 70 percent in 2002-03 to 73 percent in 2006-07.
Structurals
The two public sector undertakings, SAIL and RINL, are the major producers of
structurals. Both the companies constituted 36 percent of total production of
structurals in the country. However, the shares of SAIL and RINL have been
declining quite rapidly. In 2006-07 combined share of SAIL and RINL stood at 23
percent, which was 36 percent in 2002-03. As the accompanying tables later show,
the share of SAIL has declined more than RINL. However the share of secondary
producers in total structurals has been rising from 64 to 77 percent between 2002-
03 and 2006-07. This does not indicate any great advantages that these players
might have, but merely that the public sector entities have not been investing as
much.
Hot Rolling coils/plates/sheets

SAIL is the single largest producer of HR coils/plates/sheets, followed by TSL and
JSWL with the shares of 36 percent, 22 percent and 10 percent in 2003-04.
However, in 2005-06, shares of SAIL and TSL declined to 31 percent and 19
percent. And shares of other major producers: ESSAR, ISPAT and JSWL
increased.
CR coils/sheets
CR coils/sheets experienced CAGR of 5.13 percent between 2002-03 and 2006-07.
CR coils/sheets constitute 9-10 percent of total finished steel (non-alloy)
production. There are two main producers namely TSL and SAIL of CR
coils/sheets. These two producers accounted for 52 percent of total production of
CR coils/sheets in 2002-03. Market of CR coils/sheets is oligopolistic in nature as
top four producers were responsible for 85 percent of total production of CR
coils/sheets in 2006-07.
GP/GC sheets
GP/GC sheets segment has share of 8-9 percent in total finished steel (non-alloy)
production. For last two years (2005-06 and 2006-07), the top six producers
accounted for almost 49 percent of total GP/GC sheets production. Share of the
secondary producers, which include ESSAR, JSWL, ISPAT and other secondary
producers has been increasing. As in 2002-03 their contribution to total production
of GP/GC sheets was 76 percent, which reached to 82 percent in 2006-07. On the
other side, main producers’ (TSL and SAIL) share in the production of GP/GC
sheets has declined from 24 percent in 2002-03 to 19 percent in 2006-07.
Plates

Plates constitute 6-7 percent of total finished steel (non-alloy) production. SAIL
dominates the market for plates as it accounted for 71 percent of total plate’s
production in 2006-07. Even though SAIL’s share in total plate’s production has
declined from 86 percent in 2002-03 to 71 percent in 2006-07, it still dominates the
market for plates. Combine share of just two companies SAIL and ESSAR was
responsible for 90 percent of total plates production in India in 2006-07.
2.3.10 Imports
Top six steel products were responsible for 73 percent of total imports of steel in
India in 2006-07.Main contributors were HR coils/skelps/strips/sheets, Plates and
CR coils/sheets, which together constituted 56 percent of total imports in 2002-03,
which increased to 62 percent in 2006-07. Particularly in the last two years (2005-
06 and 2006-07) imports of BR and structurals have declined. Flat products such as
plates, CR coils/sheets and GP/GC sheets have seen positive growth from 2004-05
to 2006-07. Imports of HR coils/skelps/strips/sheets, a single largest import item,
have observed marginal decline in 2006-07. In general India is becoming net
importer and expected to be so in 2007-087. Imports grew at a CAGR of about 24
percent in last five years. This is mainly due to increase in domestic demand for
specific quality/size/grade of steel. Moreover, price considerations for specific
quality/size/grade of products have pushed imports upwards. Imports as percentage
of total consumption have grown in last five years. India imported 5.42 percent of
its total steel consumption in 2002-03, which rose to 10.64 in 2006-07.
2.3.11 Exports

GP/GC sheets constituted a single largest product in total exports of steel. Share of
GP/GC sheets were 30 percent in total steel export in 2002-03, which dipped by 5
percent in the following year. However, it recovered to reach at 37 percent in
2006-07. Although exports of three major segments: GP/GC sheets, HR
coil/strips/skelps/sheets and CR sheets/coils have declined in the last three, these
segments still formed 70 percent of total exports of steel in 2006-07. Overall
moderate growth of exports during the last five years has been mainly due to the
need to meet the growing domestic demand and to some extent appreciating rupee
was also responsible for the slow growth in exports9. During the last five years
share of exports in total finished steel (alloy & non-alloy) production has declined.
As can be observed from table 2.14, India exported 14.21 percent of total
production in 2002-03, which reduced to 11.24 percent in 2006-07.
2.3.12 Financials
The year 2006-07 was a good year for Indian steel industry as it registered positive
growth as a whole. During January-March 2007 PTA for the sector as a whole was
Rs. 4109.6 crores a growth of 14 percent over previous quarter10. Tables 2.14 and
2.15 show profitability of the major incumbents. PAT as a share of Capital
Employed varies greatly, as for the big players like SAIL, TSL and JSW Steel it is
around 16 percent, 15 percent and 14 percent respectively. For other secondary
main producers such as Essar Steel Ltd and Ispat Industries Ltd the figures were
4.84 percent and -0.12 percent. Even if we see figures on Return on Capital
Employed (ROCE), the picture remains same as Essar Steel and Ispat Industries
have performed badly compared to other three big steel producers (Table 2.15).
The later sections of this report will show that the government preferences towards
big steel players especially in the context of iron ore captive mining have put
smaller players at disadvantageous state in the market. Big players, with full or

partial captive facilities, do enjoy low cost of production and secure supply of raw
material. Nevertheless, inherent nature of the steel industry, which requires huge
initial investments to create production base and expand the capacities, is also
responsible for the oligopolistic nature of the industry.
Tables and Charts

Chart 2.2: Share of main and secondary producers in total finished steel
production (alloy and non-alloy)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2003-04 2004-05 2005-06 2006-07 2007*
Main Producers Secondary Producers

Source: www.indiastat.com
*Figures for April-December 2007.
Chart 2.3: Finished steel production (alloy & non-alloy)
45.00
40.00
35.00
30.00
In Million Tones
25.00
20.00
15.00
10.00
5.00
0.00
2002-03 2003-04 2004-05 2005-06
Source: Government of India, Ministry of Steel, Annual Report 2007-08.
Chart 2.4: Major consumer of steel in 2005-06 (in %)

Others
Infrastructure 27%
26%
Automobiles
7%
Manufacturing
23%
Construction
18%
Source: CARE Steel Industry Report
Table 2.1: India’s Trade in finished Steel (alloy & non alloy)
In million tons
Year Import Export Net
2002-03 1.77 5.28 3.51
2003-04 1.83 5.89 4.06
2004-05 2.60 4.97 2.36
2005-06 4.81 5.19 0.38
2006-07 5.30 5.91 0.61
Source: Joint Plat committee, Annual Report 2007-08.
Table 2.2: Producer-wise production of finished steel (alloy & non-alloy) for sale
(in ‘000tons)
Producers/Year 2002-03 2003-04 2004-05 2005-06 2006-07
Public Sector

SAIL 8312 (21) 8792 (20) 9153 (20) 9283 (18) 9806 (17)
RINL 2652 (7) 2834 (7) 2904 (6) 2980 (6) 3042 (5)
Other PSUs 193 (0) 222 (1) 262 (1) 329 (1) 343 (1)
A. Total Pub. 11157 (28) 11848 (27) 12319 (26) 12592 (25) 13191 (23)
Private Sector
TSL 3377 (9) 3535 (8) 3505 (7) 3821 (7) 4423 (8)
Majors 4917 (13) 5832 (13) 6786 (14) 9534 (19) 11629 (20)
Other Secondary 19765 (50) 22134 (51) 24255 (52) 25275 (49) 28418 (49)
Producers
B.Total Private 28059 (72) 31501 (73) 34546 (74) 38630 (75) 44470 (77)
Grand Total (A+B) 39216 43349 46865 51222 57661
(100) (100) (100) (100) (100)

Source: Joint Plant Committee; Figures in parenthesis indicate percentage of total; Production
figures include interplant transfers and own consumption.
Table 2.3: Segment-wise production of finished steel (non-alloy)
(in ‘000 tones)

Segment 2002-03 2003-04 2004-05 2005-06 2006-07
Bars & Rods 13850 (39) 14356 (37) 15347 (38) 16636 (37) 18811 (37)
HR Coils/Skelp/Strips 8385 (24) 8757 (23) 9215 (23) 9515 (21) 11181 (22)
Structurals/Spl.Sec. 2983 (8) 3944 (10) 4008 (10) 4484 (10) 4884 (10)
CR Coils/Sheets/Strips 3366 (10) 3557 (9) 3485 (9) 3989 (9) 4322 (9)
GP/GC Sheets 2790 (8) 3130 (8) 3672 (9) 3782 (9) 4391 (9)
Plates 1832 (5) 2182 (6) 2575 (6) 2974 (7) 3342 (7)
Others 2204 (6) 2658 (7) 2428 (6) 3010 (7) 3265 (7)
Total 35410 (100) 38584 (100) 40730 (100) 44390(100) 50196 (100)
Figures in parenthesis indicate percentage of the total.
Source: Joint Plant Committee.
Table 2.4: Producer-wise production of steel (non-alloy) Bars & Rods
(in ‘000 tones)

Year TSL SAIL RINLOther Secondary TOTAL
Producers
2002-03 709.4 (5) 1055.5 (8) 2353.1 (17) 9732 (70) 13850 (100)
2003-04 694.5 (5) 1150.3 (8) 2390.5 (17) 10120.7 (70) 14356 (100)
2004-05 705.7 (5) 1178.5 (8) 2612.1 (17) 10850.7 (71) 15347 (100)
2005-06 767.8 (5) 1175.2 (7) 2678.3 (16) 12014.7 (72) 16636 (100)
2006-07 1229.6 (7) 1178.9 (6) 2752.1 (15) 13650.4 (73) 18811 (100)
Source: Joint Plant Committee; and Steel Scenario Yearbook 2007, Spark Steel & Economy
Research Centre (p) Ltd.;
Figures in parenthesis indicate percentage of total.
Table 2.5: Producer-wise production of steel Structurals (non-alloy)
(in ‘000 tones)

Year SAIL RINL Other Secondary TOTAL
Producers
2002-03 761.3 (26) 299 (10) 1922.7 (64) 2983 (100)
2003-04 733 (19) 443.4 (11) 2767.6 (70) 3944 (100)
2004-05 751.2 (19) 292.1 (7) 2964.7 (74) 4008 (100)
2005-06 785.6 (18) 301.8 (7) 3396.6 (76) 4484 (100)

2006-07 813.9 (17) 289.9 (6) 3780.2 (77) 4884 (100)
Research Centre (p) Ltd.
Table 2.6: Producer-wise production of HR coils/sheets/plates

(in ‘000 tones)
Producers/Year 2003-04 2005-06
SAIL 4648 (36) 4830.4 (31)
TSL 2846 (22) 3030 (19)
JSW Steel Ltd. 1300 (10) 2148 (14)
ESSAR 1700 (13) 2580 (16)
ISPAT 1500 (12) 2143 (14)
Other Secondary 985 (8) 1052 (7)
Total 12979(100) 15783.4 (100)
Source: Estimated from Joint Plant Committee and specific company information.
Table 2.7: Producer-wise production of steel CR coils/sheets

(in ‘000 tones)
Other
Secondar
Year TSL SAIL ESSAR JSWL ISPAT Total
y
Producers
2002-03 854 (25) 912.6 (27) 1599.4 3366
(48)
2003-04 826.2 (23) 942.2 (26) 1788.6 3557
(50)
2004-05 919.9 (26) 923.1 (26) 0 355 (10) 0 1287 (37) 3485
2005-06 988.4 (25) 929.4 (23) 298 (7) 269 (7) 844 (21) 660.2 (17) 3989
2006-07 1003 (23) 933.2 (22) 859 (20) 295 (7) 846 (20) 385.8 (9) 4322
Research Centre (p) Ltd.; Figures in parenthesis indicate percentage of total.
Table 2.8: Producer-wise production of steel GP/GC sheets

(in ‘000 tones)
Other
Secondar
Year TSL SAIL ESSAR JSWL ISPAT Total
y
Producers
2002-03 363.8 (13) 301.8 (11) NA NA NA 2124.4 2790 (100)
(76)

2003-04 436 (14) 338.1 (11) NA NA NA 2355.9 3130 (100)
(75)
2004-05 525 (14) 278.8 (8) 0 370 (10) 0 2498.2 3672 (100)
(68)
2005-06 508 (13) 298.6 (8) 191 (5) 232 (6) 782 (21) 1770.4 3782 (100)
(47)
2006-07 520.5 (12) 292.3 (7) 339 (8) 301 (7) 742 (17) 2196.2 4391(100)
(50)
Table 2.9: Producer-wise production of steel Plates
(in ‘000 tones)

Other
Year TSL SAIL ESSAR JSWL ISPAT Secondary Total
Producers
2002-03 55 (3) 1572.4 (86) NA NA NA 204.6 (11) 1832 (100)
2003-04 89.6 (4) 1843.5 (84) NA NA NA 248.9 (11) 2182 (100)
2004-05 88 (3) 2160.2 (84) 253 (10) 0 0 73.8 (3) 2575 (100)
2005-06 82 (3) 2238.5 (75) 523 (18) 0 86 (3) 44.5 (1) 2974 (100)
2006-07 69.4 (2) 2380.8 (71) 638 (19) 0 182 (5) 71.8 (2) 3342 (100)
Table 2.10: Segment-wise imports of steel (alloy & non-alloy) in India

(in ‘000 tones)
Segment/ Year 2002-03 2003-04 2004-05 2005-06 2006-07
Bars and Rods 103.1(6) 71 (4) 128.6 (5) 375 (8) 290.1 (5)
Structurals 46.8 (3) 17.4 (1) 66.4 (3) 99.1 (2) 86.2 (2)
Plates 367.2 (21) 423.5 (23) 423.1 (16) 791.9 (16) 1124.5 (21)
HR Coils/Skelps 360.3 (20) 413.3 (23) 848.5 (33) 1583.5 (33) 1571.7 (30)
/Strips/sheets
CR Coil/Sheets 302.5 (17) 242.9 (13) 287.3 (11) 487.2 (10) 605.8 (11)
GP/GC Sheets 91.9 (5) 102.1 (6) 105.8 (4) 134.1 (3) 195.2 (4)
Others 499.1 (28) 562.6 (31) 743.8 (29) 1339 (28) 1421.9 (27)
Grand Total 1770.9 (100) 1832.8 (100) 2603.5 (100) 4809.8 (100) 5295.4 (100)
Source: Joint Plant Committee; Figures in parenthesis indicate percentage of total
Table 2.11: Imports as a percentage of consumption of steel (alloy & non-alloy)
(in ‘000 tones)

Category 2002-03 2003-04 2004-05 2005-06 2006-07
Bars and Rods 0.76 0.51 0.84 2.25 1.54
Structurals 1.54 0.51 1.66 2.21 1.76
Plates 18.73 18.50 14.90 22.19 25.87

HR Coils/Skelp/Strips/sheets 4.57 4.83 8.69 15.58 13.11
CR Coil/Sheets/TMBP 9.48 8.04 9.12 12.26 13.41
GP/GC Sheets 7.26 6.04 5.49 6.54 8.13
Others 27.54 29.88 38.86 51.62 50.40
Grand Total 5.42 5.27 6.70 11.05 10.64
Table 2.12: Category-wise exports of steel (alloy & non-alloy)

(in ‘000 tones)
Category 2002-03 2003-04 2004-05 2005-06 2006-07
Bars and Rods 514.9 (10) 499 (8) 162 (3) 387 (7) 329 (6)
Structurals 34.7 (1) 64 (1) 70 (1) 89.4 (2) 75 (1)
Plates 279.2 (5) 355 (6) 158 (3) 149.8 (3) 106.5 (2)
HR Sheets/ Coils 1392.5 (26) 1522 (26) 1328 (27) 1371.1 (26) 1580.3 (27)
CR Sheets/Coils 574.3 (11) 770 (13) 620 (12) 450.5 (9) 386.4 (7)
GP/GC Sheets 1610 (30) 1486 (25) 1843 (37) 1842.6 (36) 2173.3 (37)
Others 875.6 (17) 1195 (20) 785 (16) 898.7 (17) 1256.3 (21)
Grand Total 5281.2 (100) 5891 (100) 4966 (100) 5189.1 (100) 5906.8 (100)
Source: Joint Plant Committee; Figures in parenthesis indicate percentage of total
Table 2.13: Export as a percentage of total finished steel Production (alloy & non-alloy)
(in ‘000 tones)
Category 2002-03 2003-04 2004-05 2005-06 2006-07
Bars and Rods 3.72 3.48 1.06 2.33 1.75
Structurals/Spl.Sec. 1.16 1.62 1.75 1.99 1.54
Plates 15.24 16.27 6.14 5.04 3.19
HR Coils/Skelp/Strips/ Sheets 15.64 15.83 14.42 13.54 13.30
CR Coils/Sheets/Strips 17.06 21.65 17.79 11.29 8.94
GP/GC Sheets 57.71 47.48 50.19 48.72 49.49
Others 25.45 30.43 15.06 19.64 25.66
Total Production (Alloy & 14.21 14.47 11.41 11.14 11.24
Non-Alloy)
Table 2.14: Financial performance of major and other major producers 2006-07 – I
(Rs. Crores)
Company Name Sales PAT* Capital PAT/Cap. Sales/Cap.
Employed Employed Employed
(%) (%)
Essar Steel Ltd. 9006.57 435.52 10449.02 4.17 4.84
Ispat Industries Ltd. 8423.44 -10.26 9338.85 -0.11 -0.12
J S W Steel Ltd. 9297.26 1291.89 9412.5 13.73 13.90
SAIL 39312.59 6202.29 19684.28 31.51 15.78

Tata Steel Ltd. 27437.29 4165.61 37680.64 11.06 15.18
*Profit after Tax
Table 2.15: Financial performance of major and other major producers 2006-07 - II
(Rs. Crores)
Company Name Current liabilities & provisions Total PBIT# ROCE*
Assets
Essar Steel Ltd. 3612.99 16301.19 1320.29 10.41
Ispat Industries Ltd. 2180.01 14677.74 1031.74 8.26
J S W Steel Ltd. 2296.56 13140.94 2397.47 22.11
SAIL 11957.99 35270.45 9772.68 41.92
Tata Steel Ltd. 8714.83 50653.54 6949.8 16.57
*Return on Capital Employed; # Profit Before Interest & Tax.
2.2.13 Overview of Iron and Steel Industry

Steel is crucial to the development of any modern economy and is considered to
be the back bone of human civilization. The level of per capita consumption of
steel is treated as one of the important indices of the level of socio-economic
development and living standard of the people in any country. It is a product of a
large and technologically complex industry having strong forward and backward
linkages in terms of material flows and income generation. All major industrial
economies are characterized by the existence of a strong steel industry and the
growth of many of the economies has been largely shaped by the strength of their
steel industries in their initial stages of development.

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| A Study of Marketing Strategies for NSPL | |

1.1 DEFINITION OF STRATEGY

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A marketing strategy is a plan or an approach for marketing your product and

1.2 PURPOSE OF STRATEGY

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The recently initiated moves such as globalization, privatization and liberalization

1.3 FACTORS INFLUENCING MARKETING STRATEGY

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Publics Product, Place,

1.4 MARKETING STRATEGIES AND TARGET CUSTOMERS

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 Undifferentiated or Mass Marketing - Under this strategy the marketer

 Differentiated or Segmentation Marketing – Marketers choosing this

 Concentrated or Niche Marketing – This strategy combines mass and

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1.5 TYPES OF MARKETING STRATEGIES:

 Strategies based on market dominance- In this scheme, firms are classified

 Porter generic strategies – strategy on the dimensions of strategic scope

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1.6 MARKETING FUNCTIONS:

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(1) Research function: the research function of marketing is that function of

(2) Buying function: the function of buying is performed in order to acquire

(3) Product development and management: product development is an essential

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(6) Standardization and grading: the function of standardization is to establish

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(11) After sales-service: in a more complex and technical product, you as a

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After sales services is an effective marketing strategy to building a long lasting

Adequate understanding of these functions enables us as a marketer to know what

| SMU | MBA (Mktg.) | Project Report | Kanhaiya Lal Kejriwal | Page No . 11

| SMU | MBA (Mktg.) | Project Report | Kanhaiya Lal Kejriwal | Page No . 12

2.1 INTRODUCTION – STEEL INDUSTRY:

2.2 PROFILE OF STEEL INDUSTRY

Steel production in India has increased by a compounded annual growth rate

Steel is manufactured as a globally tradable product with no major trade barriers

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Trade and other government policies have significant bearing on competition

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Section 4 of the report examines issues of competition of steel industry in India, by

Section 5 concludes with a discussion on state of the competition in the Indian

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Steel is a versatile, constantly developing material that underpins all

2.3 OVERVIEW, PERFORMANCE AND STRUCTURE

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1907*: Tata Iron and Steel Company set up.

1913: Production of steel begins in India.

1923*: Mysore Iron and Steel Company set up

1939*: Steel Corporation of Bengal set up

are to be undertaken only by the central government.

1954: Hindustan Steel is created to oversee the Rourkela plant.

1964: Bokaro Steel Ltd. is created.

India's iron and steel production.

1989: SAIL acquired Vivesvata Iron and Steel Ltd.

1993: India sets plans in motion to partially privatize SAIL.

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The Indian steel industry, with a production of about 1 mt at the time of

Impressive development of the steel industry with active participation of private

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2.3.2 Steel Production Processes

Blast furnace/basic oxygen furnace (BF/BOF): BF basically converts iron ore

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COREX or Cipcor Process: COREX is an advance process of making steel.

2.3.3 Steel Producers

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 Rourkela Steel Plant

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2.3.4 Types of steel

| SMU | MBA (Mktg.) | Project Report | Kanhaiya Lal Kejriwal | Page No . 23

| SMU | MBA (Mktg.) | Project Report | Kanhaiya Lal Kejriwal | Page No . 24

Liquid Steel Alloy Steel Non-Alloy Steel Structural Steel

Crude Steel Stainless Steel Low Carbon or Construction Steel

Ingots Silicon-electrical Medium Carbon Deep Drawing

Semis High Carbon

2.3.5 Production Data