marketing mix strategy of ratanpur steel re-rolling mills (rsrm)

1

Marketing Mix Strategy of Ratanpur Steel Re-rolling Mills Ltd.

(RSRM)MD. Nasir Uddin Shushmita ChowdhuryID: 13102406 ID: 13102421

2 Presentation Outline

Introductory part

Organizational part

Actual task part

Project part

Research part

3

Introductory Part

4 Objectives of the Study

Broad Objective:The broad objective of the study is to assess the

marketing mix strategy of steel industry in Bangladesh focusing on Ratanpur Steel Re-rolling Mills Ltd. (RSRM). Specific Objectives:

To know if product quality is getting priority over cost To find out the pricing strategy To find out the location coverage To know the by-product utilization To know if the Sales promotion policy of RSRM is affected due to

competitor’s marketing strategy To find out the relation of profit margin and competitive price To know if the promotional schemes have impact on products demand

5 Limitation of the Study

Lack of up-to-date data.

Time constraint.

Data constraint.

Lack of perfect co-operation.

6

Organizational Part

7Company Profile

Head Office Nahar Mansion, 116 C.D.A Avenue, Muradpur, ChittagongTel: +88-031-652255-57, Fax: 88-031-650001

Corporate Slogan Steel For The Nation

Date of Incorporation April 22, 1986

Date of Starting It’s Operation July 1, 1986

Chairman of the Board Mrs. Shamsun Nahar Rahman

Name of the Managing Director Mr. Maksudur Rahman

Website www.rsrmbd.com

8 Background of RSRM

Ratanpur Steel Re-Rolling Mills Ltd. (RSRM) was established in January 1984.

The mill is situated in the progressive Baizid Bostami Industrial Area, Chittagong.

Leading steel manufactures Incorporated on 22 April 1986 Commercial production in 01 July 1986 Production capacity to1000 tons per day Principal product of the company is M. S. Rod 60 Grade Installed production capacity of producing 3, 00,000 MT

annually Main raw materials of the company are M.S. Billet

9 Vision and Mission

Vision:“To be the trend setter and the power force of

the steel re-rolling industry”Mission:

To be the first name in the region’s steel industry

Harnessing our assets and resources to achieve profitable growth,

Operational and organizational excellence and Good corporate citizenship

10 SWOTStrength: Market Leader Great Competitive Skill Reliability Strong employee bonding and belongingness Modern Equipment & Technology Strong Products Distribution Lineup Strong Marketing Lineup

Weakness: High interest rates decline profit Power crises

Opportunities: Market Dominance Organizational Goal Increased demand for the products International Scope

Threats: New competitors Economic crisis Growing Competition Labor Unions Power Crisis

11 Porters Five ForcesNew Market

Entrants (Low)

Bargaining Power Of

Buyer (High)

Bargaining Power of Supplier

(Low)

Rivalry Among

Existing Firm (High)

Threat of Substitute Products

(Low)

Capital RequirementGovernment PolicyEconomies of scale

Increasing Demand for SteelLow per capita consumptionBargaining power of buyersEnergy supplyLabor union powerBargaining powerProduct differentiationCompetition from Foreign Players

Aluminum

12 PESTEL Analysis

PESTEL

Political Economical Social Technological

Environmental Legal

• National Steel Policy• Opportunities available in ppp

• Foreign Direct Investment• Huge Gap between the Demand and Supply

• Permanent Employment• Development in the Rural Areas

• Online Trading• Planning to Use Latest Technology

• Encouraging the eco Friendly System • RSRM is developing the Ultra-Low Carbon

• various rules and regulations• Health policies of the employees• Special health incentives and rules

13Organogram

Chairman

Managing Director

DirectorIndependent DirectorManager

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Mrs. Shamsunnahar RahmanChairperson

Mr. Maksudur RahmanManaging Director

Md. Younus Bhuiyan Director

Board of Directors

Md. Mizanur Rahman Director

Marzanur Rahman Director

Mr. Md. Jahangir MiahIndependent Director

15 Products

i •RSRM X power TMT 500 bar

ii •RSRM Gr. 60/ 400 Mpa and

iii •RSRM Gr. 40/ 300 Mpa (Megapascal)

MS Bar or Round Bar

Deformed Bar

01

02

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BSRM KSRM BSIL AKS RRM

Competitors

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Actual Task Part

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Nasir’s task: Collected information through web browsing about fire

safety products Made profile for the Fire safety products Edited the pictures Made a list of solar companies Collected information through web browsing Made profile for solar energy Made a list on compressor companies domestically and

internationally Field work

Tasks done by us at RSRM

19 Contd…Shushmita’s task: Research on Vietnam:

Basic Data Why invest in Vietnam Why foreign investment in Vietnam is booming Largest companies in Vietnam RMG & textile in Vietnam Tax rate in Vietnam Vietnam Corporate Taxation & special sales tax Other tax rates on resident individuals Barrier to entry Testing and Approvals Export & Import Garment manufacturing companies in Vietnam

20 Research on Myanmar:

Basic Data Myanmar GDP Industry & Retail Trades & Investment Financial Services Gerent, textile, and leather companies Construction and real state companies Chemical, cosmetics and health companies Field work

Contd…

21

Project Part

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Represents a blending of four elements Also known as 4 P’s Product, price, place and promotion Basic purpose is to satisfy the needs of customers

Marketing mix

Marketing Mix

Product

Price

Place

Promotion

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Products of RSRM

Deformed Bar

Gr. 40/ 300 Mpa

Gr. 60/ 400 Mpa

RSRM X Power TMT

MS Bar/ Round bar

Product Mix OF RSRM

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Produced by the use of most advanced Heat-treatment technology

Quality of this bar is more higher than MS bar Most used bar at present High durability High ductility High load bearing capacity High elongation

Deformed Bar

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Load bearing capacity is 40000 psi or 40000 pound per square inch in 300Mpa

Yield strength is more than 300Mpa per square inch

Ultimate tensile strength is minimum 350Mpa per square inch

Elongation is more than 6%

Gr. 40/ 300 Mpa Deformed Bar

Gr. 40 Deformed Bar

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More yield strength then RSRM MS bar Reasonable elongation Reduce 5% steel weigh from construction Reduce column size and quantity of Rod Resistance to fatigue behavior Have better bonding with concrete Safely weld-able

Specification of Gr. 40/ 300 Mpa Deformed Bar

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Underground of the buildings Govt. construction Low budget concrete Basement of the building Slap over the drain Small Colbert Flooring of the basement

Use of Gr. 40/ 300 Mpa Deformed Bar

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Load bearing capacity is 60000psi or 60000 pound per square inch of 400Mpa




Gr. 60/ 400 Mpa Deformed Bar

Gr. 60 Deformed Bar

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More yield strength then RSRM Gr. 40 bar Reasonable elongation Reduce almost 10% steel weigh from construction Reduce column size and quantity of Rod Resistance to fatigue behavior Response to tensile loading Resistance to corrosion behavior Safe 0.05% steel at welding

Specification of Gr. 60/ 400 Mpa Deformed Bar

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Grand column of the building Over bridge Foot over Fly over Large size bridge Large size reinforced concrete

Use of Gr. 60/ 400 Mpa Deformed Bar

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Branded this product as “RSRM X Power TMT 500 bar.”

Load bearing Capacity is 75500psi or 75500 pound per square inch of 500Mpa




RSRM X Power TMT 500 Bar

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High design yield strength of minimum 500 Mpa High elongation Reduce almost 25% steel weigh from construction Reduce the earthquake damage Reduce column size Resistance to fatigue behavior Response to tensile loading Resistance to corrosion behavior Reduce the wastage at welding more than 5%

Specification of RSRM X Power TMT 500 Bar

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500 TMT Bar

Fly over Multipurpose buildings Multipurpose bridges Skyscrapers Over bridges Foot over Grand column of the buildings All kind of mega structures

Use of RSRM X Power TMT 500 Bar

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It’s a low carbon steel where the amount of carbon is 0.08% to 35%.

The shape of this bar is round. This bar produced directly from billet without use of

heat-treatment technology. It is equivalent to ASTM (American Society for

Testing and Materials) A615 Standard. Yield strength is 300 Mpa to 320 Mpa. Ultimate tensile strength is 350-360 Mpa Elongation is 4%-6%

MS Bar or Round Bar

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Limited Capacity in yield strength and load bearing

Required more in terms of quantity Minimum weld ability and bend ability Increase the weight of concrete not suitable in

large construction

Specification of MS Bar

MS Bar

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Small reinforced concrete Small construction work Basement of the building Foot path and foot way Small Colbert Flooring of the basement

Use of MS Bar

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High durability More accurate weight of the product Ensure high quality Strictly follows the international standards The bars conform to ISO 9001: 2008, BSTI, and

ASTM Standard High ductility and high elongation

Feature of Product of RSRM

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Oval Rubbish

By-Product of RSRM

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Slogan:“Steel For The Nation”

Logo:

Branding of RSRM

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Factors influencing pricing decisions: Competitor analysis Media Seasonal factors Cost of production

Price Mix of RSRM

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Pricing procedure of RSRMRSRM applied the following pricing strategy:

Cost-based pricing Competition-based pricing Promotional pricing Segmented pricing Discount and allowance pricing

Price Mix of RSRM (Contd..)

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Cost-Based pricing procedure of RSRMCost-Based pricing of RSRM = (cost + profit)RSRM consider the following factors in cost-based

pricing: Cost of raw material Customs cost of releasing raw material Production cost Procurement cost Cost of machine maintenance Cost of power Sudden incidental and accidental issue


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Competition-Based pricing procedure of RSRMRSRM applying this pricing strategy in two ways:

Going-rate pricing Seal-bid pricing


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Promotional pricing procedure of RSRMRSRM offers the seasonal promotions offer for all

customer such as: Sale on special discount rate of 500tk-1000tk

for a certain period of time Dealers get the incentive quarterly on

product lifting, storage and sales.


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Promotional pricing procedure of RSRM

Segmented pricing of RSRM depends on the seasonal appearance such as:

Price is reduced in rainy season and the discount rate is low at that time

Again price is increase in winter season and the discount rate is high at that time


46

Discount and allowance pricing procedure

of RSRM: Dealers of RSRM get fix amount of 1000tk as

discount per ton Corporate customers get the discount of 300tk-

500tk per ton End user also get discount on special offers


47 Place Mix of RSRM

Corporate Customer

End userTradersGovt.

construction/ projects

Projects/ small dealers

End user

RSRM

Dealers

End users

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Qualities of channel members of RSRM: Financial condition of the willing dealers Marketing experience and capability Previous back ground of the dealer as good

payee Market reputation Location of shop Good will Negotiation power

Place Mix of RSRM (Contd..)

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Name of distributors of RSRMDealers: Al-Amir & Sons Amin trading Co Barik Brothers RSRM (Corporate, Chittagong) Cox’s Bazar Builders Store Joni Steel Corporation M. Rahman Enterprise M/S. Sarkar & Co. etc.


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Traders: Khan and Sons Progoti Metals Popular Steel Shop S & S Metal Works Minoti Traders Monsur Ali Traders


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Developers: ANZ properties Ltd. Equity properties Ltd. Ideal Development Ltd. BTI development


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Main Promotional objectives of RSRM:

To face competition To educate the customers Survive in the completive market Introduce the product to whole world To maximize the sale To sustain and enhance the brand as well as

corporate image

Promotion Mix of RSRM

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Promotional tools of RSRMAdvertising:

RSRM uses the following media for advertising: Print media Local and national dailies TVC Notice Shop signs Hoarding boards Project sign board

Promotion Mix of RSRM (contd..)

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Promotional tools of RSRMSales Promotion:

RSRM uses the following sales promotion: Discount Credit sales Allowance Incentives to dealers Gift for valuable customer Special offer for developers


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Promotional tools of RSRMPublic relation & Publicity:

Public relation and publicity of RSRM are: Sponsorship to several workshops Donating to workshop, seminars Corporate social responsibility


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Promotional tools of RSRMPersonal Selling:

The sales force of RSRM personally visits all customers to: Give idea about product Promote the product Influence by the product


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Promotional tools of RSRMDirect Marketing:

RSRM is practicing direct marketing by: Mass marketing with all types of customers One- to- one marketing with developers and group

of companies


58

Research Part

59

Our report is based on marketing mix of Ratanpur Steel Re-rolling Mills Ltd. (RSRM). The focus of the study is analyzing the current marketing mix of RSRM. Based on the problem analysis recommendation is been given.

Problem Statement

60 Methodology of the Study

Primary Sources: • Face to face conversation • Interview with the Company manager, executives • Some data has been collected through the questionnaire.

Secondary Sources:Secondary data are collected from the following sources:• Annual reports of RSRM• Official files• Data available with the website of RSRM

61 Sample size:A total of 40 respondents have been conducted, where

were employees of RSRM.

Questionnaires Scale: Strongly Disagree ……………………..1 Disagree ……………………………..…2 Neither Agree nor Disagree ….…….3 Agree ……………………………...……4 Strongly Agree ……………….………..5

62 Hypothesis Test:

Z test =

µ = Mean valuen = Sample sizeσ = Standard Deviation = AverageBased on my analysis we have made findings, limitation,

recommendation and conclusion.

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Liker Scale H1 H2 H3 H4 H5 H6 H7 H8 H9 H101= Strongly Disagree 0 0 5 6 5 2 4 7 4 6

2= Disagree 5 3 22 5 4 4 6 2 5 5

3= Neither agree nor disagree 5 4 4 2 0 4 0 2 0 1

4= Agree 6 10 3 7 8 8 10 8 6 10

5= Strongly Agree 24 23 6 20 23 22 20 21 25 18

Total 169 173 103 150 160 164 156 154 163 149

Average 4.22 4.32 2.57 3.75 4 4.1 3.9 3.85 4.07 3.72

Standard Deviation 1.08 0.92 1.24 1.52 1.44 1.22 1.41 1.52 1.41 1.49

Z-test value 10.11 12.55 0.15 5.2 6.81 8.33 6.36 5.62 7.13 5.30

Methodology of the Study

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1. HO: Product quality is not getting priority over cost HA: Product quality is getting priority over cost.We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here, = 4.22σ = 1.08Z cal = ( –μ)/ (σ/√n) = 10.11At 5% level of significance, follows Z distribution Z 0.05= 1.645Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level

of significance, it can be said that the product quality is getting priority over cost.

Graphical Representation

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13%

13%

15%60%

H-1

Strongly DisagreeDisagreeNeither Agree nor DisagreeAgreeStrongly Agree

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2. HO: Market penetration has not been used as pricing strategy HA: Market penetration has been used as pricing strategy.We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here , = 4.32σ = 0.92Z cal = ( –μ)/ (σ/√n) = 12.55At 5% level of significance, follows Z Distribution Z 0.05= 1.645Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance,

it can be said that the market penetration has been used as pricing strategy in RSRM.

Contd..

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8%

10%

25%57%

H-2


683. HO: Market skimming has not been used as pricing strategy. HA: Market skimming has been used as pricing strategy.We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here = 2.53σ = 1.24Z cal = ( –μ)/ (σ/√n) = 0.15At 5% level of significance, follows Z distribution Z 0.05= 1.645Since Z cal < Z tab, the null hypothesis is accepted. So at 5% level of significance, it

can be said that the Market skimming has not been used as pricing strategy in RSRM.

Contd..

69

13%

55%

10%

8%

15%

H-3


70

4. HO: Segmented pricing has been used for products HA: Segmented pricing has been used for productsWe want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here = 3.75σ = 1.52Z cal = ( –μ)/ (σ/√n) = 5.2At 5% level of significance, follows Z distribution Z 0.05= 1.645Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of

significance, it can be said that the segmented pricing has been used for products in RSRM.

Contd..

71

15%

13%

5%

18%

50%

H-4


72

5. HO: RSRM is not covering the major city areas. HA: RSRM is covering the major city areas We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here = 4σ = 1.44Z cal = ( –μ)/ (σ/√n) = 6.81At 5% level of significance, follows Z distribution Z 0.05= 1.645Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of

significance, it can be said that RSRM is covering the major city areas.

Contd..

73

13%

10%

20%57%

H-5


74

6. HO: RSRM is not covering the rural areas. HA: RSRM is covering the rural areas.We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here, = 2.55σ = 1.64Z cal = ( –μ)/ (σ/√n) = 0.02At 5% level of significance, follows Z distribution Z 0.05= 1.645Since Z cal < Z tab, the null hypothesis is accepted. So at 5% level of

significance, it can be said that the Market skimming has not been used as pricing strategy in RSRM.

Contd..

75

45%

13%5%

18%

20%

H-6

Strongly Disagree

Disagree

Neither Agree nor Disagree

Agree

Strongly Agree

76

7. HO: By-products is not being utilized. HA: By-products is being utilized.We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here = 3.9σ = 1.41Z cal = ( –μ)/ (σ/√n) = 6.36At 5% level of significance, follows Z distribution Z 0.05= 1.645Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of

significance, it can be said that the By-products is being utilized in RSRM.

Contd..

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10%

15%

25%

50%

H-7


78

8. Ho: The Sales promotion policy of RSRM is not affected due to competitor’s Marketing strategy.

HA: The Sales promotion policy of RSRM is affected due to competitor’s marketing strategy.

We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here, = 3.85σ = 1.52Z cal = ( –μ)/ (σ/√n) = 5.62At 5% level of significance, follows Z distribution Z 0.05= 1.645Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance,

it can be said that the Sales promotion policy of RSRM is affected due to competitor’s marketing strategy.

Contd..

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18%

5%

5%

20%

53%

H-8


80

9. Ho: Profit margin sometimes cannot be compromised to maintain competitive price

HA: Profit margin sometimes can be compromised to maintain competitive priceWe want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here = 4.07σ = 1.41Z cal = ( –μ)/ (σ/√n) = 7.13At 5% level of significance, follows Z distribution Z 0.05= 1.645Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it

can be said that the profit margin of RSRM sometimes can be compromised to maintain competitive price.

Contd..

81

10%

13%

15%63%

H-9


8210. Ho: The promotional schemes of RSRM does not stimulate the products

demand. HA: The promotional schemes of RSRM stimulate the products demand. We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40Since the sample size n > 30 so, we may use Z - test.Here = 3.72σ = 1.49Z cal = ( –μ)/ (σ/√n) = 5.30At 5% level of significance, follows Z distribution Z 0.05= 1.645Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it

can be said that the promotional schemes of RSRM stimulate the products demand.

Contd..

83

15%

13%

3%

25%

45%

H-10


84

1. RSRM product quality is getting priority over cost as majority respondents are strongly agreed with this statement.

2. Market penetration has been used as pricing strategy in RSRM as most of the respondents strongly agreed with this statement.

3. Market skimming has been used as pricing strategy in RSRM, majority of employees are disagreed with this statement. So we can say Market skimming has not been used as pricing strategy in RSRM

4. Segmented pricing has been used for products in RSRM as majority of respondents are strongly agreed with this statement.

5. RSRM is covering the major city areas as most of the employees are strongly agreed with this statement.

Findings

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6. RSRM covering the rural areas, most of the respondents strongly disagreed with this statement. So we can say RSRM is not covering the rural areas.

7. By-products is being utilized as majority respondents are strongly agreed with this statement.

8. The Sales promotion policy of RSRM is affected due to competitor’s Marketing strategy as majority of employees are strongly agreed to this statement.

9. Profit margin sometimes can be compromised to maintain competitive price as majority of employees are strongly agreed to this statement. .

10.The promotional schemes of RSRM stimulate the products demand as majority respondents are strongly agreed with this statement.

Contd..

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1. We can recommend RSRM to use Market skimming as pricing strategy for someparticular products as competitors are using this pricing strategy. They useMarket penetration as pricing strategy and also they do segmented pricing forsome specific products.

2. We have find out that RSRM only focus on major city areas. They are coveringthe major city areas. But not focusing on rural areas. So we can recommend RSRM should focus on covering the rural areas by promoting their products in rural areas.

3. We can suggest RSRM to increase their promotional quality and quantity as well.As the competitors of RSRM are very good in promotional activity. Also RSRMdo not focuses on TV promotions. So they should increase their TV promotionsand other promotional activities also.

Recommendation

87

Establish and growing industry In 1990s actual development began Demand of steel is growing RSRM covers 20% of the total steel market Increasing their production from 8, 00,000 to 10, 00,000 M Tons Promotion strategy is not that much innovative or new

Conclusion

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Do You Have Any Question???

89

Thank You All

marketing mix strategy of ratanpur steel re-rolling mills (rsrm)

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