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M A N A G E M E N T
C A S E TATA Steelium A Success Story in B2B Branding
Kaushik Bhattacharya and Biplab Datta
describes a real-life situationfaced, a decision or action
taken by an individualmanager or by an
organization at the strategic,functional or operational level
KEY WORDS
Business-to-Business
Branding
Value Proposition
Relationship Building
COMPANY BACKGROUND
TATA STEEL is the largest private sector steel marketer in India. Presently, its
Jamshedpur (India) Works has a crude steel production capacity of 6.8 mil-
lion tonnes per annum. The company has been successful in maintaining its
dominant position among key segments in the Indian steel market and has also es-
tablished a significant presence in the international markets through both tie-ups
with customers and mergers and acquisitions. The company is aiming at enhancingits domestic steel capacity to about 30 million tonnes per annum by 2015 (TATA
STEEL, 2005-06).
TATA STEEL is regarded as a visionary company and is widely acknowledged and
admired as the industry leader in India. In May 2002, the company launched the
Vision Architecture 2007 (Tisco News, 2002); and, it can be justly said that the com-
pany has been able to transform its vision into reality. Vision Architecture 2007 is
shown in Figure 1. Each element of the strategy was clearly identified, carefully
framed, properly defined, and exhaustively communicated to give the core customer
and the organizational issues an organization-wide clear and tight focus. Fulfillment
of goals like successful branding of steel, production of lowest cost steel, economicvalue creation and expansion have all contributed to companys growth (TATA
STEEL, 2004-05). The first strategic goal in the architecture for Vision 2007 was to
move from commodities to brands. The company had also articulated the intention
of achieving a turnover of Rs. 5,000 crore by the year 2012, through the brands pre-
vailing at that time (Figure 2). During the period 20022006, the company had
launched and successfully established many more brands. In a nationwide study
conducted by ORG-MARG in 2005, all brands of TATA STEEL emerged as leaders
having the highest brand equity amongst all brands in their respective categories
(TATA STEEL, 2005-06).
Historically, the TATA group is the oldest, largest, and the most respected group ofcompanies in India. They are Indias largest employer and also the largest foreign
exchange earner in the private sector. TATA is perhaps the most internationally
recognizable Indian business house, largely due to the role that the TATAs have
played since its inception. Over the years, TATAs have been known for producing
quality products and for living up to their commitments. The TATA group in gen-
eral, has a strong reputation of having a good relationship with everyone in the
trade as well. Like other TATA group companies, TATA STEEL uses interim names1
for their brands to capture part of the customers mind and heart (Figure 3). The
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corporate brand, TATA, acts as a co-driver in gaining
power in the Indian market (Kotler and Pfoertsch, 2006).
Today, the name TATA is perceived as a global, authen-
tic brand with a strong heritage.
TATA STEEL, the flagship company of the Tata group,
has several awards and recognitions to its credit (See
Figure 4). In addition, during 2004-05, in the TNS IndiaCorporate Reputation Study, both the financial com-
munity and the general public rated TATA STEEL as
the No. 1 company with impeccable reputation. Only
among business managers did Infosys beat TATA
STEEL by a margin of a single point (Tisco News, 2004-
05). They are one of the lowest cost producers of steel in
the world and the global benchmark in corporate social
responsibility activities. They have a strong distribution
network in the Southeast Asia and with the introduc-
tion of cold rolled steel, they are now the leading sup-
plier to the Indian auto industry.
In general, TATA STEEL proceeds with a master plan
called, Branding Blueprint, focusing on all the existing
brands that the company sells through its distribution
channel. The brand management groups act as an inte-
grator across all the business processes of the company.
They also help create communications which correctly
embody the companys brand position (Tisco News,
2002).
Mr. A Sen,2 Chief of Marketing and Sales (flat products)of TATA STEEL said that the companys emphasis is on
branding for credibility and comfort. The idea was to
put in place a physical and accountable distribution
system. The Managing Director, Mr. B Muthuraman
said that companys marketing focus is on branding
by de-commoditizing steel. About 1 per cent of the to-
tal revenue from sales of branded products is spent on
branding initiatives (blonnet.com, 2007). The sales per-
formance of TATA STEEL brands are given in Table 1.
TATA STEELIUM
On February 27, 2003, TATA STEEL launched the
worlds first branded cold rolled steel (CRS) called
TATA Steelium in Goa. Speaking at the launch, Mr. B
Muthuraman, said Branding will give rise to a custom-
ized product in terms of value, performance, and pric-
ing that will meet our customers needs better. Branding
will go a long way in meeting the challenge of gaining a
sustainable competitive edge. It will add value to the
product and help in highlighting it in the otherwise frag-
mented market for cold-rolled steel. It will not only help
in product identification, but will also boost the element
of brand recall, thereby creating a niche (tata.com, 2007).
It was clarified that the name Steeluim connoted both
strength and a feeling of being a world class brand. Mr.
Sen, said that the sales target for the financial year 2004-
05 had been fixed at Rs. 700 crore and with the nation-
wide distribution network, the company was confident
of achieving the target easily (sify.com, 2007). During
2005-06, the sales of brand Steelium increased from 0.355
million tonnes to 0.392 million tonnes recording an in-
crease of 10 per cent over the previous year.
Over the years, TATA STEEL has invested in a number
of branding activities to build its brand equity with the
retail segment of cold rolled steel. TATA Steelium fo-
cused on product mix enrichment by making suitable
grades and sizes available for different applications and
sustaining price premium by strengthening product
support services through distributors and dealers.3
TATA STEEL ensured that the TATA Steelium distribu-
tors handle the brand exclusively and because these dis-
tributors focused on servicing the identified set of major
customers, they were encouraged to cultivate the rela-
tionship and the local ties and also contribute towards
brand building. At TATA STEEL, efforts are continu-
ously on for enhancing the capabilities of distributors
and dealers by installing dedicated service centres, pro-fessional training to distributors/dealers salespersons,
implementing quality management systems at the dis-
tributors, and through office automation of the dealers,
etc. (TATA STEEL, 2005-06). Brief description of service
centre facilities of a distributor, M/s Vijay Enterprise,
can be found at their website vijayentps.com (2007). One
of the Steelium distributors, M/s Kummachery Steels
claimed, ...our relationship with TATA STEEL provides
our customers with a level of service, product availabil-
ity, and competitive pricing rarely found in our indus-
try (kummachery.com, 2007).
One member of the TATA Steelium brand management
team explained, Our primary value proposition is the
concept of providing a small customer total peace in
purchase and consumption of CRS. Once, it was a dream
for them, but today every customer has his own inter-
pretation of what it means. For some, it is about assured
availability; for others, it is about customization of size,
and for still others, it is about dealing with a professional
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organization. At TATA Steelium, we offer it all. It was
also explained that since TATA Steelium is bought only
by small businesses who are concerned about their prof-
itability and company image, the brand has the primary
responsibility to protect their customers interest. Fur-
ther, the brand must also take care of the interest of the
intermediaries. However, TATA Steelium comes at a
price. Today the brand is selling at a premium of Rs.
1,000-1,200 per tonne over competing products. Several
advantages of TATA Steelium are illustrated in Figure 5.
By engaging in branding of CRS, TATA STEEL could
create value primarily in two areas. It could positively
position CRS in the retail market against others in the
industry and could achieve more market leverage re-
lated to pricing and negotiations. In this manner, the
firm could influence customers and intermediaries so
that they remain loyal to the brand. The sales perform-
ance of brand Steelium is given in Table 2. Today the
brand has about 3,350 identified customers and among
them about 1,800 customers are involved in active buy-
ing at any point in time. The brand is sold only through
the distributor-dealer network where about 80 per cent
of the total brand sales are made by the distributors di-
rectly to the customers and 20 per cent of the total sales
are handled by the distributor-dealer chain.
Prior to brand launch, TATA STEEL brand management
team had to acquire a very clear understanding and a
deep insight into what TATA Steelium should repre-
sent for the retail customers and how to differentiate
the brand well from the competitive products. The
branding exercise has taken into account customers
behaviour and expectations, feedback from potential
intermediaries, and other necessary insights from the
marketplace (tata.com, 2007).
Thus the roots of brand TATA Steelium arch all the way
back to the marketing study revealing the customers
unfulfilled needs and a strong passion of TATA STEEL
for creating and capturing value by fulfilling those needs.
Factors that play an important role prior to brand launch
are described below.
Technology Selection
TATA STEEL was having the capacity to produce hot
rolled coils (HRC) but not the facility to add further value
by rolling it in room temperature that produces CRS.
The marketing study, undertaken prior to any technical
feasibility study on the cold rolling mill, assessed the
nature of domestic demand (in terms of sizes, grades,
applications) and gaps available (Kharkar, Chatterjee
and Muthuraman, 1997). As it was found that the mar-
ket for high-end use of CRS (automobile, appliance,
panel, etc.) is likely to have above average growth in
demand and not enough capacity to supply, the com-
pany decided to target the high-end sector of the CRS
market (Tisco News, 1999). Each critical facility at Tatas
cold rolling mill was selected in a manner that provides
many advantages to the customers over the competi-
tors (See Table 3).
Importance for Retail Market of CRS and Branding
The minimum yearly capacity of 1.2 million tonnes of
finished product was a techno-economically viable op-
tion for an integrated steel plant with tandem mill and
other technology parameters chosen by TATA STEEL.Out of this, the CRS capacity (based on annealing ca-
pacity) was fixed at about 0.8 million tonnes per annum.
Further, such mills were required to produce a wide
variety of sizes and grades for economical production.
With such a large capacity, it was necessary that the com-
pany targeted several segments that used different kinds
of steel.
Volume-wise, the Indian CRS market was almost equally
divided between small (say less than 60 tonne a month)and large (say above 60 tonne to 1,500 tonne a month)
customers. While most of the competitors attempted
selling directly to a few large customers and invested
much of their efforts on the same, the large number of
small customers were generally neglected and served
by a few wholesalers. Moreover, the environment was
changing rapidly. Many small customers of CRS (mainly
manufacturers and fabricators) were becoming key sup-
pliers to the large volume prestigious customers of CRS
who used to procure steel directly from steel majors.
These small but growing customers could afford to pay
higher prices for better materials and service.
TATA STEEL wanted to become the leader in CRS in
domestic market by commanding the largest share of
mind and heart and by achieving the highest profitabil-
ity. They saw two ways of accomplishing this goal, but
they could not undertake either directly. First, they had
to market their product (about 50% of the total produc-
tion) with their own sales force to the large institutional
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productivity; it has made the life of our workers easy
and has taken away many of our agonies.
Our business was not going in the right direction
and then we got the opportunity to change it with
TATA CR.
After taking the Steelium CR for a few months, we
realized that it is quite different from what we used
to get from the market.
Overall Business Environment
Prior to the brand launch, small customers were usually
dealt with by retailers in the local trading market. Tra-
ditionally, these retailers do not buy directly from manu-
facturers. They procure CRS from wholesalers who in
turn buy from manufacturers. The contact between these
wholesalers and local retailers are mostly through bro-
kers who connect both sides based on the availability
and take part in the transaction price.
With increasing demand of CRS, the number of retail-
ers was increasing at major trading locations. However,
the number of wholesalers procuring from manufactur-
ers was mostly constant. They were mostly unwilling to
extend the scope of their business beyond the major trad-
ing locations to avoid complexity. Thus the presence of
retailers at certain consumption centres (other than ma-
jor trading locations) was negligible. Buyers in those
areas had to depend on the nearby trading centre and
were often uncomfortable with the multiple handling
and logistics associated with the purchase of each con-
signment.
All retailers and wholesalers were guided by the simple
principle of buying cheap and selling dear. They were
largely indifferent about the buyers preferences and
compromises. They were disinterested about providing
value added services and considered that to be a losing
proposition. The key success factor was the ability to
buy cheap from the manufacturers. Most of the old and
successful wholesalers/retailers had risen through ag-
gressive buying and selling efforts and lacked a proper
appraisal of potential benefits from value added sup-
port services to the customers.
Wholesalers and retailers were free to set their own sell-
ing prices and there used to be hard bargaining between
manufacturers and wholesalers and between wholesal-
ers and retailers on discounts and purchase volume.
Confidential deals and discriminatory pricing were com-
mon phenomenon. Rivalry between wholesalers and
retailers were always putting downward pressure on
market prices. Sometimes wholesalers and retailers
bought larger quantity than they could sell and when
manufacturers reduced their prices further, wholesal-
ers and retailers would start panic selling depressing
the market more and more. Customers knew that retail-
ers rarely pass through all the trading incentives and
were accustomed to substantial price difference among
retailers operating in the same location.
Wholesalers were uncertain about the demand; they
preferred to stock minimum quantities, were reluctant
in committing their purchase well in advance, and
waited for month-end price relaxation. Manufacturers
were rarely concerned about the actual demand in the
market, or possible difficulties of the wholesalers/re-
tailers but were concerned about selling an aggregate
quantity every month. Price was considered as the only
lever and a loaded (overstocked) wholesaler used to be
considered as a loyal customer. Manufacturers sales
offices forecasted the monthly demand of these whole-
salers with large forecasting errors and frequent mis-
match between production and the forecast were quite
common. Retailers suspected that wholesalers did not
disclose the price relaxations being received from manu-
facturers. When a wholesaler bought a considerable
quantity of CRS, the retailers took the opportunity tobargain hard for the best price and terms. Similarly,
when the wholesaler was able to buy items that were in
high demand, he dictated terms to the retailers. In short,
such perceived asymmetry in relationship between the
manufacturer, wholesaler, and retailer was not condu-
cive to the formation of trust between these parties.
Towards the end of 2002, the price of steel in all catego-
ries started to stabilize and it was predicted to remain
firm over a long period of time. This necessitated much
higher investment by each retailer to trade at similarvolume and to maintain similar margins. They were now
looking for assurances from the manufacturers regard-
ing sustained business and margins.
A Steelium distributor during our interaction said, We
could never think of the business proposition which we are
now handling profitably. Intimacy with a company like TATA
STEEL and repeat business from so many satisfied custom-
ers. these are very rewarding experiences for us.
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Critical Action Areas
It was understood that distributors, dealers, and their
salespeople held the key to customers perception about
the brand. Most important was the creation of an envi-
ronment where TATA STEEL, distributors/dealers, and
customers had trust on one other. Since people with
widely different background (experience, education, age,communication skills, etc.) are involved in selling, it was
an enormous task to bring a minimum level of profes-
sionalism and consistency among the dealing persons.
It was a Herculean task as bringing simultaneous change
(marketing orientation,5a brand care,5b brand ethics,5c
etc.) was necessary among the independent distributors/
dealers and their salespersons who had little customer
orientation.
It was important for the company to monitor and have
control over retail prices so that customers got fair anduniform prices at every location and the total channel
profit was maximized.
Improvement of service (level and quality) was long
overdue in the retail sales of CRS. Once again distribu-
tors and dealers were to be convinced for delivering the
number of value added services with assured quality
standard. Further, service improvement must continue
and service excellence over competition must persist.
This is because it was understood that similar techno-
logy can be installed by other firms later and differen-tiation in the physical product may not be a determinant
of the purchase decisions in the future but imitating the
intangible benefits may not be possible and thus service
advantage for the brand can be sustained.
BRAND ENGINEERING FOR TATA STEELIUM
Product
The company introduced choice of grade and size in a
manner that best influenced the customers perception
of value. Customized Steelium grades are available for
varying applications TR15 for furniture, AU03/AU02
for ordinary drawing applications, PN01 for panel fab-
rications, and AU05/AU09 for extra deep drawing ap-
plications. This supported the wide variety of
applications undertaken by small customers. Steelium
coils are available in thickness of 0.4 mm to 3 mm and in
width of 1,000 mm to 1,540 mm. Coil weights vary as
per the coil width. Steelium sheets are available in packet
weights of 2.5 to 3 tonnes. A customer can choose from
the wide variety of standard thickness, width, and grade
combinations.
All Steelium CRS have absolutely flat spread, accurate
thickness, superior formability, and surface finish. To-
gether all these mean cost savings to the customer dur-
ing processing, premium price for the end product byensuring superior performance, and premium look to
the ultimate customer during use. The TATA Steelium
logo embossed on the CRS, every one metre of its length,
ensures the authenticity of the material.
Packaging
Packaging of Steelium is unique in the industry. It is
completely impermeable and highly protective under
normal circumstances. This is mainly due to the tech-
nology specially selected for packaging. Steelium CRSis wrapped in VCI paper with HDPE laminate, metal
packed with galvanized steel. As customers want pro-
tection, performance, information, and assurance from
the packaging, Steelium packets are usually painted in
blue and there are distinct identifiable TATA STEEL tags
and unique blue seals on the packaging which help iden-
tify the source of the material. Packaging uniqueness as
described in Steelium brochure is reproduced in Fig-
ure 7. The label fixed on each packet/coil carry the brand
name and a great deal of important information like
grade, size, weight, number of pieces/coil length, and
bar code. The competitors did not have such packaging.
Pricing
Since TATA Steelium was to be positioned as a high
quality pioneer brand sold only through well-equipped
distributors and dealers with value added services,
TATA STEEL decided to charge premium price over
competition. But steel items were traditionally seen as
raw materials that could never justify a premium price.
Also the steel price has operated as the major determi-nant of buyer choice whenever sufficient suppliers are
available. So, the price premium of the brand must be
supported by the customers perceived value. To ensure
this, the brand management team regularly monitors
competitors prices, market dynamics, and components
like quality premium, service premium, and relation-
ship premium at different locations against the various
grades supplied under TATA Steelium.
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To ensure that customers are not required to negotiate
the price with the channel members at the time of pur-
chase, and also to avoid conflict between the channel
members (within a territory and between territories) on
selling price, each grade of TATA Steelium has a loca-
tion-wise floor price, below which the item cannot be
sold by the distributors or dealers. Charges for various
standard processing are also fixed. Moreover, distribu-
tors are taught to charge fair prices to reinforce relation-
ship intention among customers. The distributors
margin is ensured through the floor price.
Communication
TATA Steelium has been a widely published brand since
its launch. Being the worlds first branded cold rolled
steel, it could draw sufficient media attention for quite
some time. The brand features and brand achievements
appear in the news time and again. Leading news chan-nels and publications from several stock research firms
report various important events related to the brand and
consider the brand success as one of the key factors in
their predictions. For example,Moneycontrol. com (2007),
says, Tata Steels world-class facilities and the state-of-
the-art production processes ensure superior properties
like formability and unbeatable flatness.
Traditional advertising methods were not used for build-
ing brand awareness for Steelium. TATA STEEL decided
that the key to their B2B brand strategy would not be
through brand preference or brand image advertising,
but by communicating its product and service strategy
to a large number of small customers of cold rolled steel,
mainly through the well-established network of distribu-
tors and dealers. Brand management teams carry out
elaborate studies of customer segments and send cus-
tomized direct mail, brochures, and other relevant in-
formation through distributors to position the brand
favourably in the minds of the customers. A portion of
one such brochure made for furniture manufacturers isshown in Figure 8. It carefully highlights the advantages
of brand Steelium over the competing products.
TATA STEEL regularly organizes meetings of distribu-
tors, dealers, and customers. Once in a year, the com-
pany organizes fabricators and OEMs meet. Also the
distributors are required to organize customers meet at
least twice a year. These are attended by senior com-
pany officials and brand management team and detailed
presentations are made. Further, account managers and
application engineers of TATA STEEL meet selected
customers once in a quarter along with the distributor.
These account executives also meet some of their deal-
ers customers during their quarterly retail run.
The website of TATA STEEL carries a lot of information
about the brand. One can download the brochure anddetailed specification from the website. Interested per-
sons can also post their enquiry or suggestions to the
company directly. Enquiries of prospective customers
are thus efficiently handled through company website.
In addition, the brand also has a toll-free helpdesk to
answer the queries over phone and an e-mail service for
the detailed written enquiries.
Salespersons
TATA STEEL takes special interest in the recruitmentand development of the distributors salespeople so that
they support the formation of consistent brand culture.
It ensures that all Steelium distributors have a minimum
number of salespersons according to their business vol-
ume and they are knowledgeable about the product,
systems, procedures, and customers. Training of dis-
tributors and dealers salespersons on how to manage
the brand has been a regular feature since the beginning
(authorstream.com 2007).
Distributors are considered as the key customers and asales team is responsible for satisfying the transaction
and relationship needs of the distributors. Account man-
agers spend a lot of time with distributors and remain
accessible to them for problem solving. Personal rela-
tionships with the distributors are developed through
regular visits when account managers study and help
distributors/dealers to improve their operations.
Channel Design
Based on the consumption pattern and strategic busi-ness volume, TATA STEEL decided to go for selective
distribution in each major location. The primary job of
the channel is to provide value added support services
to the customers. TATA STEEL appoints distributors
who in turn appoint dealers based on the guidelines is-
sued by the company. Steelium products are sold both
by distributors and their dealers and not by TATA STEEL
directly. Each distributor and dealer needs to operate
strictly within the specified territory. TATA STEEL be-
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lieves in developing customer acquisition and retention
plan jointly with the distributors. Thus, in the course of
four years of operation, most of the important custom-
ers have been specifically attached to a distributor or a
dealer for sales and service. All distributors are required
to submit monthly details of their sales including their
dealers sales to the company. Information thus received
remains available for further analysis and validation by
brand managers and brand sales team. Distributors are
provided mutually agreed targets (sales volume, level
of support services, and customer satisfaction scores
which is not below 80%) for improving the quality of
their sales and are required to report their performance
in those areas.
All distributors and most of the dealers are web-ena-
bled for the purpose of communication, data exchange,
and tracking order execution online. In addition, a pass-
word-protected community website, TATA Steelium
Parivaar, has been designed to cater to the needs of the
distributors and dealers who as Parivaar members can
freely interact with each other. Since the members are
dispersed geographically, the website binds them closer
by offering a uniform platform to express themselves
and their commitment to the branding and growth of
Steelium (allindia.com, 2007).
Distributor Selection
In general, TATA Steelium distributors and dealers have
high market reputation, premium business location, and
superior capabilities to serve the customers. Distributor
selection is done through a three-step process. The com-
pany selects a few distributors for each consumption
centre from a large number of applicants. Level-1 screen-
ing is based on the combination of objective and subjec-
tive criteria like investment capabilities, interest in
exclusive dealership, registration with statutory authori-
ties, and market reputation. Level-2 screening is again
based on the combination of objective and subjectivecriteria where the compensatory6 decision rules are usu-
ally applied. The criteria considered in this phase are
business experience, turnover, knowledge, and quan-
tum of sales. Finally, in level-3, nominated senior offic-
ers of the company take decision about distributor
selection based on their ratings and scores in level-1 and
level-2. The process is illustrated in Figure 9.
Distributors Capability Improvement
A member of the TATA Steelium brand management
team stated, There were a lot of misconceptions about
the small customers of CRS. For instance, there was a
notion that small customers only see price, and hardly
care for service and business relationship. So, a lot of
our job was meant for educating the intermediaries onexactly what they are required to do and how they will
be rewarded.
TATA STEEL has taken multi-pronged action for im-
proving their channel members ability to serve custom-
ers better while improving the profitability of the entire
channel. These actions are detailed below.
Improvement of supply chain efficiency and effective-
ness through the theory of constraints (TOC): Accord-
ing to the proposed scheme of continuous replenishment
programme, the decision making authority for determin-
ing shipments of Steelium from TATA STEEL to a dis-
tributor would transfer from the distributor to TATA
STEEL. Instead of fulfilling orders provided by distribu-
tors, TATA STEEL would monitor the flow of its prod-
uct through the distributors warehouses, and decide
what to ship to the distributor, and when to ship it. All
the distributors of Steelium have agreed to implement
this new scheme and are in the process of investing in
infrastructure. Distributors would benefit through re-
duced investment in inventory, increased return on as-sets, and enhanced ability to serve the dealers and
customers. In 2006-07, the average distributor inventory
of TATA Steelium Cold Rolled Sheets and Tata Shaktee
Galvanised Sheets came down by as much as 20 per cent
(prdomain.com, 2007). Wherever implemented, TOC has
given TATA STEEL the visibility and control over in-
ventory levels at distributors and helped distributors on
how different grades and sizes should be stocked. Si-
multaneously, TATA STEEL educates their distributors
about efficient inventory management and advises them
to hold optimum inventory as they can depend on reli-
able supply from TATA STEEL. TOC is a part of com-
panys commitment to provide the best support for
Steelium distributors.
Human resource development initiatives for employees
working with channel partners: TATA STEEL organ-
izes training on sales management for all employees of
distributors through reputed business schools or other
corporate training organizations. Distributors are reco-
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mmended to organize customized training on advanced
sales management topics required by them. In addition
to professional training, distributors are required to im-
plement standard HR practices for remuneration, yearly
performance evaluation, recognition and rewards. The
companys HRD department provides full support for
problem solving (if any) and consultancy to distribu-
tors free of cost. In 2006, through its Steelium service
centre, TATA STEEL Limited trained through 29 ses-
sions in eight different languages, approximately 550
dealers on various selling techniques (sebi.gov.in, 2007).
Implementation of key account management (KAM)
process among distributors: Each distributor is required
to identify its key customers according to profitability/
relationship criteria and submit a valid account devel-
opment plan for each such customer. Distributors bring
out account-wise sales plan for the year which is closely
monitored. In addition, each distributor is required to
establish a customer-friendly procedure for handling
quality complaints and order management (receipt to
fulfillment) and implement a system of no-haggle pric-
ing and periodical monitoring of customers satisfaction
on the established criteria. Further, an initiative has been
taken to recognize the key employees of distributors
customer through a special programme called Vijeta
programme. Based on the purchase quantum and coop-
eration during a given period, some of these identified
employees get recognition and reward from distribu-tors/TATA STEEL. In medium-to-large organizations,
this fulfills the individuals (in DMU) recognition and
emotional needs.
Retail value management, a programme extended to all
the major brands of TATA STEEL, has successfully cre-
ated long-term positive memory among its customers,
and this has redefined the selling of steel by streamlin-
ing channel structure, introducing product improve-
ments, and changing the look and feel of steel shops
(highbeam.com, 2006). Optimal structuring of the retailnetwork has ensured higher capacity and reach, high
visibility across the retail chain, systematic measurement
of intangibles like distributors and dealers capability,
their involvement and brand care, customer account
managers capability, etc. Several dedicated outlets are
designed to ensure that the customers experience of
buying a brand is convenient, shopping time is reduced
and the visibility of companys brands are enhanced.
Along with these developments, the company has been
working to reduce transaction costs by using e-com-
merce for distributors and major dealers. In the next
phase, distributors and dealers will be able to transact
with their key customers using e-commerce. Awards to
the distributors and dealers are given based on specific
performance parameters and benchmarks. Dealer-meets
are organized for A category distributors and dealers
under each segment. Separate meets for B and C cat-
egory dealers and distributors are also organized. Thus,
many new ideas are generated towards strengthening
the channel, creating brand ownership, and enhancing
involvement of channel partners.
Evaluation of Distributors
TATA STEEL measures the performance of Steelium
distributors periodically, using scorecards prepared on
performance and capability parameters. Such sample
scorecards are illustrated in Figure 10.1 and 10.2 respec-tively. The dimensions of performance scorecard in-
clude:
Sales compliance
Quality of feedback
Inventory management
Market receivable management
Customer visits
Margin monitor
The dimensions of capability scorecard include: Market understanding
Quality of service centre
Service capability
Quality of HRM practices
Implementation of quality management systems
Work on special projects
The capability scorecard constitutes around 40 per cent
of the weight in the evaluation, indicating the impor-
tance of service to customers. Besides evaluation, TATA
STEEL always actively helps distributors to improve andprovide superior services. And this is one of the reasons
why TATA STEEL could develop very strong relation-
ship with their distributors.
In addition to the above, the distributors performance
is also monitored through surveys among regular cus-
tomers. Surveys include questions on steel supplied and
the support services provided. This gives TATA STEEL
an indication of the services available and overall im-
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Fair and professional treatment
Caring parent company
Complete peace of mind in dealing with or using the
brand.
As a consequence, a large number of customers today
ask for TATA Steelium despite the premium it com-
mands over generic CRS available from competition.
Distributors Characteristics
Selling TATA Steelium is different from selling other CRS
that are available in India. We know we have to respond to
our customers needs much more than any reseller of steel
does in India. Our customers have got special attention; they
expect a different level of service which we think is unique to
our brand, TATA Steelium, said the owner of a distribu-
tor firm. As another distributors manager summed it
up: We attach greatest importance to the services to be de-livered to our customers, and we are to take whatever actions
that may be necessary and appropriate. It is clear that the
distributors of TATA Steelium strongly identify the
brand with their social grouping and they view the brand
as a means to their increased profitability and growth.
The relationship between TATA STEEL and the steelium
distributors and also the relationship between these dis-
tributors and their regular customers is intense and ac-
tive, which TATA STEEL has fostered over the years
through its grass-root marketing activities. As one of the
distributors expressed, Since the beginning, working with
TATA STEEL has been like working with a business partner.
It is very rewarding. Distributors dedication to customer
satisfaction has created a notable impression with the
TATA Steeliums customers:
My Steelium distributor is one of the most profes-
sional steel dealers we have ever worked with. They
are very much committed to our satisfaction.
Our distributors staff is committed to our satisfaction
and well being. It is great and they must keep it up.
Whenever I call I get somebody at distributors
premises to help me with an answer. They always try
to solve our problems. That is what I like most.
TATA Steelium distributors clearly know what the
brand represents and how it has been established and
based on that they feel that they know where the brand
can or can not go. The key characteristics are indicated
below:
There has been a large improvement in the capabil-
ity of many distributors across India. Distributors
have undergone major changes in mindset, business
knowledge, and skills with exposure to best practices
and growth among peers.
Most distributors are willing to invest more in estab-
lishing facilities and infrastructure for the future re-
alizing the benefits of growing with the TATA
Steelium brand. The company is taking up with dis-
tributors the installation of at least one service centre
with adequate facilities at every location. During
2007-08, it was expected that 15 distributors would
have their own service centres at an investment of
Rs. 50 crore in total.
Each distributor has willingly taken a target of Rs.
70-100 per tonne of steel to be sold by him during the
year towards brand promotion activities.
Distributors are committed to establish professionalorganization and systems. With growing demand
from customers for certified suppliers, many distribu-
tors have established quality management systems
in their organization and gone ahead with ISO certi-
fication. So far 14 distributors have been certified with
ISO 9001-2000 and it was expected that a total of 21
distributors would be ISO certified within 2007-08.
A strong sense of customer ownership has been in-
voked among distributors. Distributors have identi-
fied segment-wise key customers and developed a
micro plan for sales during 2007-08. They had
planned sales of 337 lakh tonnes of Steelium to key
customers against a target of 420 lakh tonnes during
2007-08. Clearly, there has been a paradigm shift from
random sales to planned sales approach.
Having established infrastructure, systems and facilities,
many competent distributors are looking for the next
level of excitement. Fulfilling the growth aspirations of
distributors continue to be the main concern in the long-
term as the production capacity of Steelium may not
increase substantially in the immediate future. Thus the
companys ability to satisfy the distributors growth
needs would be the key determinant of the ongoing re-
lationship between TATA STEEL and their Steelium dis-
tributors.
Dealers Characteristics
The role and influence of the dealers are most impor-
tant in areas where distributors capabilities are yet to
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be developed completely.
In most of these areas, the present dealers ensure dis-
tribution of Steelium to the widely dispersed small
furniture manufacturers.
Dealers are also doing the financing to most of the
small customers tied to them and are having revolv-
ing credit with them. While outlets were mostly multi-brand in previous
years, channel development activities have led to the
establishment of many exclusive Steelium dealers in
most of the major consumption areas.
Also more and more applications are being received
continuously by the distributors for further appoint-
ment of exclusive dealers.
CHALLENGES AHEAD
The competitive landscape of the Indian CRS market has
disturbing implications for the brand TATA Steelium
in 2007-08 and afterwards. TATA STEEL is faced with
the challenge of maintaining the sales and growth of its
brand TATA Steelium in an increasingly competitive
marketplace.
To achieve high levels of customer satisfaction and com-
mitment, TATA Steelium relied mostly on two elements:
largely superior steel quality and extraordinary cus-
tomer services through distributors and dealers. There
were ranges of subjective attributes that defined the
quality of TATA Steelium, like its surface finish, pack-
aging, labelling and distributors capabilities but it was
the consistently superior functional quality that uniquely
contributed to the brand equity of TATA Steelium. How-
ever, this value proposition confronted the brand TATA
Steelium with a challenge: competitors are about to bring
CRS of equal or superior functional quality to the do-
mestic market soon.
Because of the company image, number of years of ex-
istence in steel market, size, other product features, and
segment diversification, so far SAIL-Bokaro was the only
comprehensive competitor of TATA Steelium. The func-
tional quality of TATA Steelium was still unmatched.
Thus many small customers who purchase competing
products have shown preference for TATA Steelium. But
now Essar Steel was likely to enhance its volume of
equivalent quality CRS from 25,000 tonnes per month
to 40,000 tonnes per month in 2007-08 and Jindal South
West was on the verge of bringing new age CRS in the
market. These competitors are likely to focus their ef-
forts in their local markets first for maximizing margins.
With Steeliums focus gradually shifting to the more or-
ganized customers and higher growth segments, the
major competition will be for these segments. In spite of
this, the challenging target taken by Steelium for 2007-
08 is given in Table 5. Strengths and weaknesses of most
of the important suppliers of CRS are given in Table 6.
Secondly, because of the increased supply, there is a
strong probability that the overall market sentiment will
decline and it will not be easy to sustain the price pre-
mium and sales growth in a falling market. Further, these
new entrants are quite unlikely to invest in establishing
a brand name and they may try to offer customers just
the basic product without any service component so that
they can keep their cost as low as possible. Some of the
brands dealers and distributors may consider taking
part in trading competitors CRS in a different name in
order to fulfill their growth needs.
Customers
Brand has always played a critical role in steel purchas-
ing decision. When selecting cold rolled steel, retail cus-
tomers considered several factors: yield, availability,
cost, support service, company image, product authen-
ticity, brand culture, brand values, and above all rela-
tionship with the dealers or distributors. One customer,
during recent interaction, seemed to have spoken formany, One salesman contacts us almost everyday to find
out our requirements. We get the steel packets as per our re-
quirement on the desired date and time from the Tata dis-
tributor if we inform them about our requirements in advance.
This is a huge benefit to us.
Over time, however, customers have become very vo-
cal, especially after they developed intimacy with the
TATA Steelium distributors and dealers. Many custom-
ers personally know the TATA STEEL account manag-
ers and brand managers. They talk to all of them veryopenly about the quality of steel and that of additional
services where they want the company to improve fur-
ther. In brief these are as follows:
Expectations of service centre facility in terms of cus-
tomized blanks, sizes, etc., are increasing.
Expectation for technical support is increasing.
With India gradually becoming a global hub for
outsourcing for many industries especially auto an-
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cillaries and panel (Metals, 2006), small customers
demands in terms of product quality and service lev-
els are becoming more stringent. They are demand-
ing product development and new product introduc-
tion.
With increasing price and reduced availability con-
tinuing since 2004, customers felt a kind of power
shift to TATA STEEL and brands distribution net-
work. Some of the very small customers demanded
fixed price contract and long-term supply contract.
TATA STEEL recognizes that such a feeling can be det-
rimental to the ongoing business relationship and spe-
cial care has been taken to ensure timely supplies to the
distributors. Also the distributors and dealers have been
advised to maintain service quality and enhance their
capabilities so that additional services and ready avail-
ability is ensured to the customers. This will alleviate
the felt effect of power shift by creating more goodwill.
It was TATA STEEL that first manufactured exceptional
grade of cold rolled steel with a great brand name; they
have never lost sight of their customers and distribu-
tors. Company-intermediaries-customers all trusted
each other in an ongoing relationship. The debate and
dilemma lie in whether or not the present relationship-
oriented branding strategy will continue to the benefit
of the brand under the changing market scenario or the
company should think of reframing its marketing strat-
egy.
Industry Structure
In order for TATA Steelium to develop an effective
appraisal of the present market situation and success-
fully develop its future plan, it is necessary to examine
its strengths, weaknesses, opportunities, and threats. To
do so, we first take a structured look at the industry us-
ing Porters five forces model. For this purpose, data was
collected through various interactions with industry
experts comprising of the executives of SAIL, TATA
STEEL, Essar, Jindal, Bhusan, etc.
Intensity of Rivalry Increasing
There are a limited number of firms competing in
the retail market of CRS with the top quality pro-
duct like Steelium. But competitors like Essar and
Jindal are also eyeing the retail market with compa-
rable quality and capacities. Essar was increasing its
supply from October-November, 2007 while the sup-
ply from Jindal was likely to commence only from
the end of 2007 or beginning of 2008. The supply from
SAIL-Bokaro is likely to remain at the same level till
it adds further capacity which is expected in another
two years time.
For the trade segment, earlier there used to be gen-
tlemens agreement between manufacturers regard-
ing monthly prices, but such agreements may not be
feasible now with so many firms likely to operate in
the near future.
Though most of the sectors served by TATA Steelium
are expected to grow at a healthy rate (Table 4), this
growth rate may not sustain for a long time and over-
all market may fall substantially if economic woes
plague again. This means that all these firms will be
competing for a larger share of a shrinking pie. At present stand-alone cold rollers are concentrat-
ing on exports for better realizations. But the drop in
international/domestic prices will force them to
refocus on domestic retail market putting further
pressure on price levels.
Over a period of about four years, however, the typi-
cal Steelium buyers have learned to buy CRS not
just on price. They are interested in other attributes
like service comfort, brand assurance, and the rela-
tionship with the Steelium distributors/dealers.
They look for customized shapes and sizes from the
distributors service centres and other value added
services. In spite of competition, therefore, brand
Steelium has an opportunity to build on its unique
capabilities in the retail CR market of India.
Threat of New Entrants Increasing
Global players like POSCO and Mittal Steel with
a long experience of supplying CRS in international
market have already announced their arrival in the
Indian market. These MNCs and the new domestic players like Essar
and Jindal have good corporate image. Some of the
brand loyal customers of Steelium may be taken
away by these firms.
These new entrants have no dearth of funds and can
establish large and capable distribution network in a
short time.
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Threat of Substitutes Mixed
In general, the thicker CRS is getting substituted by
the thinner hot rolled steel (HRS).
Fibre glass, aluminum, plastics, etc., are becoming
suitable substitutes of CRS in many applications like
car body, furniture, etc.
CRS from competitors may remain unbranded. Butany such effort may result in a large impact upon the
long-term performance of TATA Steelium and it will
require significant change in decision making.
As Steelium serves the complex use and consump-
tion needs of the customers, the large number of sat-
isfied users are likely to pose considerable resistance
to substitution by other brands or other materials.
Threat from Buyers Medium to High
So far the small retail buyers of CRS are not well or-
ganized.
Sometimes small customers bargain on the retail
prices but usually they do not pursue this aggres-
sively as often the credit provided by the trade chan-
nel is more important to them than the price.
Small customers often do not have much knowledge
about market dynamics and they are less likely to
initiate purchase action from other sources unless
they are properly identified, approached, and per-
suaded by a new supplier.
Some small customers are now able to import CRSeasily and many such customers are demanding new
product development/customized production.
Threat from Suppliers Weak
Since TATA STEEL is having its own hot rolled coil
production, there is no threat to the input materials
for the production of Steelium.
Summary
There are three strong forces worth considering. Rivalryand threat of new entrants are on the increase. Buyers
can become very powerful as an equivalent grade CRS
could be easily available in future. TATA Steelium can
stay ahead of competition by leveraging its unmatched
distribution network and customer service culture. To
be able to do so, TATA STEEL must be able to maintain
and enhance its relationship quality with channel mem-
bers and must sustain its strong and clearly differenti-
ated brand image.
SWOT Analysis of Brand TATA Steelium
The source of this analysis is the data collected in vari-
ous interactions with industry experts comprising the
executives of SAIL, TATA STEEL, Essar, Jindal, Bhusan,
etc.
Strengths
High functional quality of the product and grades
suitable for different applications of CRS
High awareness and preference among retail custom-
ers in all locations
Established, highly capable and motivated channel
partners supported by able Tata employees (account
managers and application engineers)
Value addition through dedicated and high quality
service centres
Long emphasized service culture in all stages like pre-
sales, sales, and after-sales Enduring relationships with customers already es-
tablished by the distributors/dealers
Major supply chain improvement initiatives through
TOC will help improvement of supply chain effec-
tiveness
Association with TATA name brings special trust
among the Indian customers.
Weaknesses
Limited availability with increasing demand may
force the existing customers and channel members
to look for other sources
Production being located at only one place
(Jamshedpur in India), logistics disadvantage is likely
for supplying to certain parts of India
Brand identity (logo) of Steelium is lost when proc-
essed further (like slitting, blanking, etc.) in a service
centre.
Opportunities
Contract production by maintaining quality stand-ard and other parameters can enlarge customer base
and sales volume.
Within the present market size, there exists consid-
erable room for Steelium to expand and enhance prof-
itability.
Improvement of sales and realization potential is
possible by increasing the supply of drawing and
deep drawing grades.
Further value can be created and captured by inno-
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vative marketing strategies like production and sales
of exclusive and branded furniture. If the existing dis-
tributors are inducted, this will fulfill their growth
needs too.
Continual improvement in service will help in sus-
taining competitive advantages.
Threats
By far the most significant threat Steelium faces is
that of losing some of the important customers and
distributors in the hand of competitors like Essar and
Jindal that can also become a quality national sup-
plier.
On the back of this uncertainty, Steelium has to con-
tinue investing on relationship with channel mem-
bers and customers.
In absence of any real differentiation in material qual-
ity, Steelium will have to compete solely on thestrength of intangibles.
SUMMARY
Today the brand TATA Steelium has the best customers
in its portfolio and gets the best chance to sell in the
market. Compared to the other steel producers, TATA
STEEL is viewed by customers and intermediaries as
much more collaborative. In comparison to Essar, the
price of TATA Steelium works out cheaper, after con-
sidering the service and relationship value to the cus-
tomers. This is illustrated in Figure 12. In view of the
large demand-supply gap that exists in the CRS market,
TATA STEEL can afford to sacrifice some of its casual
customers and maintain its premium position with serv-
ice-sensitive customers.
New Strategy?
A large number of small customers and steel merchants
are now familiar with the TATA Steelium brand and
hold a favourable, strong, and unique brand association
in their memory. The brand is also distributed in a veryeffective way. It is true that the brand is being driven by
the sophisticated service seekers who are also coopera-
tive customers. Price-sensitive customers are not the
regular buyers and cost is the primary reason for their
not going for a repeat purchase. Though brand building
through relationship and service has always been the
primary focus of the company, it is important to con-
sider the other reasons that customers bought the brand
for, which included brands functional quality and avail-
ability constraint from competitors.
Today, the brand holds a dominant market position and
an excellent long-term profit potential in view of the
likely growth in the consumption of CRS and further
improvement of market prices. However, the potential
for the volume growth of the brand is limited due to
fixed production capacity.
Under such circumstances, the first and foremost con-
cern of the brand will be to achieve customers percep-
tion as the fairest-priced CRS with its brand features and
associations. Should the brand premium be reduced or
the company must find avenues to add more value
through tangibles or intangibles? Reduction of price will
surely mean reduction in profit for the whole chain while
adding new values will require further research and
possibly new competencies. The next important concern
is to protect the distributors and dealers loyalty. Whilecompetitors may entice away some of the existing part-
ners, few others may be tempted to start a parallel busi-
ness of distributing competitors product for higher
turnover and growth. Should the company motivate
these distributors and dealers to sell its other brands or
should it start a new venture of manufacturing and
market its own range of high quality, innovative line of
stylish yet affordable steel furniture using Steelium, for
home and office? The existing distributors and dealers
can install manufacturing facility and open a chain of
retail furniture stores. In selling other brands, the dis-
tributors and dealers will have to serve different cus-
tomers and will be subjected to different guidelines. In
the business of related end product like furniture, the
market will be new to the company as well as to the
distributors. All participants will require new skills and
a proper understanding of the product, market, custom-
ers, collaborators, and competitors. Also, the new busi-
ness will consume the raw material; and to maintain the
current market share, the company will require capac-
ity addition.
Capacity addition will take a little more time but it is
forthcoming as all the existing steel majors including
TATA STEEL have taken definite steps towards the
same. In fact, the Indian CRS market of small customers
may witness yet another revolution with the entry of
multinationals as they will not only bring good quality
steel but also extraordinary support services. This may
result in acute competition for the brand Steelium. The
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new entrants would be vying for the same service-sen-
sitive segment of the CRS customers. Measuring the
success of relationship initiative and customer intimacy
under the changed marketing environment will be ex-
tremely difficult. At this stage, therefore, the company
may seriously think whether the current relationship-
oriented initiatives are worth reinvesting in or whether
the company should prepare to launch a stripped-down
version of the brand in standard specifications offering
lower prices and only essential services. This second
option may also make the Indian CRS market little un-
attractive to the new entrants. Importantly, in continuing
with the current strategy, continual improvements will
be required and the evolutionary path, that will help the
brand to sustain its competitive advantages, will have to
be made clear to the company in a very short time.
Table 1: Sales Performance of Branded Products
Rs. Crore
2003-04 2004-05 2005-06 2006-07
Sale of branded products 2,365 3,362 3,848 4,604
Growth over previous year (%) 42 14 20
Total sale of products 11,332 15,251 16,521 17,700
Growth over previous year (%) 35 8 7
Brand sales w.r.to total sales (%) 21 22 23 26Source: TATA STEEL Annual Reports
Table 2: Sales Performance of TATA Steelium
Lakh Tonnes
2003-04 2004-05 2005-06 2006-07 2007-08(E)
Steelium Sales Volume 2.83 3.55 3.92 3.71 4.2
Growth over previous year (%) 25 10 -5 13
Source: TATA STEEL Annual Reports
Table 3: Technology Parameters and its Advantages
Key Facilities Advantage over Competition
Coupled shallow bath Lower idle time and improved productivityhydrochloric acid pickling Less damage of the strips
Uniform product quality Low acid and energy consumption
Tandem cold rolling mill Better gauge and shape accuracy No damage during storage Lower cost in terms of investment, manpower, and consumables Less off-gauge and higher yield
Batch annealing Can take care of orders in small lots which is the characteristic of Indian retail market Can get close to customers requirement of draw- ability, ductability along with strength
Skin passing Precise amount of surface roughness is imparted, Possibility of surface defects like stretch marks, etc., are eliminated No need for the customer to prepare the coil before deformation
100% inspection under strobe lights 100% performance at customers end and not merely a specification guaranteeby trained inspector and with Matching precise oil requirement of the customer and thus ensuring smooth operationelectrostatic oiling capability at customers end.
Machine packing with thin No damage due to moisture or loss of oilplastic film Increased protection to handling damage
Electrolytic cleaning Removes dirt or contaminations from the grooves and deepening on strip surface
Electro discharge texturing machine Matte, bright and mirror bright finish depending on the customers end use requirements
Source: Tisco News, 1999 and Kharkar et al., 1997.
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Table 4: Segment-wise Sales of TATA Steelium
Segments % Sales in Sectoral Growth2006-07 Rate Estimated(%)
Automotive 38 18
Panel 34 16
Gen Engg 16 9
Furniture 5 10
Tube 3 N.A
Stamping 2 N.A
Packaging 1 9
Others 1 N.A
Source: Company records
Table 5: Sales Target of TATA Steelium
2006-07 2007-08Actual Plan
Market Size 21.79 24.21
Growth (%) 11
Steelium Sales 3.71 4.2
Growth (%) 13
Market Share (%) 17 17
Premium (Rs./Ton) 800 1300
Source: Company records
Table 6: Strengths and Weaknesses of Major Competitors of Steelium
Competitors Name Strengths Weaknesses
SAIL Large capacity; operates through financially strong CRS quality not suitable for higher-end
traders all over India; supplier of many other applications; do not have authorized sellingcategories of steel in retail market; sales tax (VAT) agents; little control over traders; focus onadvantage due to many number of own stockyards low-end segments; sells large quantity ofacross India. CRS in standard grade.
Essar Steel High volume, superior technology, good quality No organized distribution network for retailproduct, good distribution network existing for marketing of CRS; no experience oftheir hot rolled items; ability to supply number of providing technical support to the channelflat products to the distributors, location advantage members and customers; attempt to sellfor western and southern parts of India; targeting CRS through multiple channel creatinghigh end sectors like auto, appliance, etc. dissonance.
Bhusan Steel & Power Good product quality; supplies in customized Not an integrated steel plant (howeverand Bhushan Steel & blanks; focus on high margin customers like auto captive HR is coming up) not having strong
Strips and appliance; good quality service centre in the distributors network, availability of CRS ismill; can supply small quantities of deep drawing not regular and mostly opportunistic ingrades to retail segments. nature based on price differential between
domestic and export market.
Uttam Galva Excellent tie-up both domestic and international Not an integrated steel plant and depend onfor hot rolled steel as input material; doubling the import for input materials; availability ofproduction capacity; good quality of product; CRS is not regular.concentrates on local sales with better service andhigher margins; controls the thinner CR marketin western region.
Hero Cycles Narrow mill; 60% own consumption; can supply High input cost, small volume.customized sizes; good product quality.
Source: Authors
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Figure 1: Vision Architecture 2007
Source: Tisco News, 2002.
Figure 2: Brand Revenue Target
Source:Tisco News, 2002.
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Figure 3: Branded House of TATA STEEL
Creating Value by Branding
Source: TATA STEEL Annual Reports
Figure 4: Awards and Recognitions for TATA STEEL
Source: TATA STEEL Annual Reports
Figure 5: TATA Steelium Advantages
Source: Steelium Brochure.
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Figure 6: Targeting Retail Customers with TATA Steelium
Source: Authors
Figure 7: Highlighting the Packaging Features
Source: Steelium Brochure
Large Customerserved directly
(About 0.4 MT/year)
ALL CUSTOMERS
Small Customersserved through
Distribution(About 0.4 MT/year)
Tailored strategy and communicationfor long-term relationship
Cannot sell more than 0.4 MT/year
with large customers only
Brand Management Relation with channel members Value for customers
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Figure 8: Brochure Showing Steelium Advantages for Furniture Segment
Source: Steelium Brochure
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Figure 9: Steps in Distributor Selection
Source: Company records
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Figure 10.1: Step 1 in Distributor Evaluation
Source: Company records
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Figure 10.2: Step 2 in Distributor Evaluation
Source: Company records
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Figure 11: Value Proposition for TATA Steelium
Source: Authors
Figure 12: Utility of Price Comparison Potential Benefit of Customers in buying TATA Steelium
Source: Customer interviews
NOTES
1. Interim names: Company trade name combined with in-dividual product names. TATA STEEL ties its group nameto an individual brand name for each product.
2. Mr. A Sen designated as Chief of Marketing and Sales, is asenior level marketing executive of TATA STEEL handlingflat products of the company. At TATA STEEL, brandmanagement including the initiatives of internal branding
falls under the responsibility of Chief of Marketing andSales, flat products and long products. They report to thecompany Managing Director, Sri B Mutturaman.
3. Dealers: At TATA Steelium, retailers are called dealers.They are appointed by the distributors as per companyguidelines.
4. Cutters act as a service centre for steel coils. Here the coilsare decoiled, cut into specific sizes, sometimes silted andrecoiled depending on the customers requirements. TATASTEEL encourages their distributors and major dealers toinstall such facilities and beyond.
5a. Marketing orientation is an organizational orientation thatcentres its activities on achieving success by satisfying the
needs and wants of its customers.5b. To safeguard brand power, all brands require some care
(judiciousness in avoiding harm or danger) such as mak-ing sure that all marketing activities undertaken by thedistributors and dealers send a consistent message aboutthe brand.
5c. Ethics (a general enquiry into what is good) is an inescap-
able part of brand management. All marketing decisionsand actions of distributors and dealers must be consistentwith the brands stated ethical intentions and in all suchactions, ethical issues must be taken into account so thatthe actions are culturally good and there is no harmful ef-fect on customers, employees, company, other partners,the community and the world as a whole.
6. In compensatory decision rule, the weakness of a distribu-tor on one attribute can be compensated for by strength onanother, and the scores are summed up to determine thehighest scoring (most favourable) and the lowest scoring(most unfavourable) distributor.
Excellent
FunctionalQuality
Dream Customer Service
Customer Intimacy
Price of TATASteelium
Includes freight)
Loss for nosupport service
Impact ofrelationship with
distributors
Value of CRS fromnew entrants
Essars current price(includes freight)
Rs.42,700
Rs.700
Rs.400 550
Rs.42,150
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Kaushik Bhattacharya is a Ph.D candidate at the Vinod GuptaSchool of Management, Indian Institute of Technology,Kharagpur. He has over 15 years of experience in marketingand sale of Indian steel industry.
e-mail: [email protected]
Biplab Datta, a Ph.D from the Indian Institute of Technology,Delhi, is currently an Assistant Professor of Marketing at theVinod Gupta School of Management, Indian Institute of Tech-nology, Kharagpur. His teaching and research interests includerelationship marketing, customer relationship management,
brand management, consumer behaviour and e-business. Hehas worked on various management projects and co-authoredseveral articles for Indian as well as international journals.
e-mail: [email protected].