A STUDY ON

MARKETING MIX WITH SPECIAL REFERENCE TO

VISHAKAPATNAM STEEL PLANT (RINL), VISHAKAPATNAM,

A project Report submitted in the fulfillment for the award of the

MASTER OF BUSINESS ADMINISTRATION

By

DASARI KARTHIK

Under the guidance of

D. SRINATH REDDY

DY.GM,(Marketing)

RINL, Visakhapatnam

1

CERTIFICATE

This is certify that the project work entitled “A STUDY ON MARKETING MIX

WITH REFERENCE TO VISAKHAPATNAM STEEL PLANT (RINL), VISAKHAPATNAM

“is a project work done and submitted by DASARI KARTHIK in partial fulfillment of the

requirements for the award of MASTER OF BUSINESS ADMINISTRATION (M.B.A) , RAJIV

GANDHI COLLEGE OF MANAGEMENT STUDIES, RAJAHMUNDRY is a record of

bonafide work carried out by him under my guidance.

D. SRINATH REDDY

DY.GM, Marketing

RINL, Visakhapatnam

2

DECLARATION

I hereby declare that project work entitled “A STUDY ON MARKETING

MIX WITH SPECIAL REFERENCE TO VISHAKAPATNAM STEEL PLANT

(RINL), VISHAKAPATNAM” submitted in fulfillment for award of MASTER

OF BUSINESS ADMINISTRATION, RAJIV GANDHI COLLEGE OF

MANAGEMENT STUDIES, RAJAHMUNDRY is my original work and not submitted

to any other university/ institution.

Place:

Date: DASARI KARTHIK

3

ACKNOWLEDGMENT

I express my immense gratitude to the people who have contributed towards

the successful completion of this project work at visakhapatnam steel plant.

I am extremely grateful and I wish to express my profound sense of gratitude

with great administration to my guide D. SRINATH REDDY, DY.GM, Marketing

Visakhapatnam steel plant for allowing me to work in this department and

providing required facilities throughout my project work and for the valuable

guidance bestowed by him. He has been a constant source of inspiration and

motivation for the successful completion on this project work.

I would like to extend my deep gratitude to HUMAN RESOURSE

DEPARTMENT who provided the facilities for the completion of this project

work.

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CONTENTS

CHAPTER -1

Introduction to Marketing mix

CHAPTER -2

Industry profile

Company profile

CHAPTER -3

Product profile

Marketing system at RINL

CHAPTER -4

Marketing Mix on VSP

CHAPTER -5

Conclusion and suggestions

Appendix

Bibliography

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INTRODUCTION

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Marketing

The process of planning and executing the conception, pricing, promotion,

and distribution of ideas, goods, and services to create exchanges that satisfy

individual and organizational goals.

History of the Definition of Marketing

As early as 1935, the National Association of Marketing Teachers, a

predecessor of the American Marketing Association, conceived the original

definition for marketing. The American Marketing Association revisits the

definition every five years. The next review of will take place in 2012.

1935

As adopted by the National Association of Marketing Teachers, an

American Marketing Association predecessor organization: Marketing is the

performance of business activities that direct the flow of goods and services from

producers to consumers.

1985

8

Marketing is the process of planning and executing the conception, pricing,

promotion, and distribution of ideas, goods and services to create exchanges that

satisfy individual and organizational objectives.

2004

Marketing is an organizational function and a set of processes for creating,

communicating, and delivering value to customers and for managing customer

relationships in ways that benefit the organization and its stakeholders.

2007

Marketing is the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have value for

customers, clients, partners, and society at large.

‘Marketing is the human activity directed by satisfying needs and wants through

exchange process.’

- Philip Kotlar

Marketing mix

The mix of controllable variables that the firm/library uses to reach desired

use/sales level in target market, including price, product, place and promotion-

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Four P's

Product

Price

Place

Promotion

4 P’s. For a library this would be embodied in price of user’s time to access

goods, a product would be a book or story time, place is a branch or bookmobile,

and promotion is publicity, The term "marketing mix" was coined in 1953 by Neil

Borden in his American Marketing Association presidential address. However, this

was actually a reformulation of an earlier idea by his associate, James Culliton,

who in 1948 described the role of the marketing manager as a "mixer of

ingredients", who sometimes follows recipes prepared by others, sometimes

prepares his own recipe as he goes along, sometimes adapts a recipe from

immediately available ingredients, and at other times invents new ingredients no

one else has tried.[1] A prominent marketer, E. Jerome McCarthy, proposed a Four

P classification in 1960, which has seen wide use.

Product mix :-

“Product” refers to the goods and services you offer to your customers.

Apart from the physical product itself, there are elements associated with your

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product that customers may be attracted to, such as the way it is packaged. Other

product attributes include quality, features, options, services, warranties, and brand

name. Thus, you might think of what you offer as a bundle of goods and services.

Your product’s appearance, function, and support make up what the customer is

actually buying. Successful managers pay close attention to the needs their product

bundles address for customers. Your product bundle should meet the needs of a

particular target market. For example, a luxury product should create just the right

image for “customers who have everything,” while many basic products must be

positioned for price conscious consumers. Other important aspects of product may

include an appropriate product range, design, warranties, or a brand name.

Customer research is a key element in building an effective marketing mix.

Your knowledge of your target market and your competitors will allow you to offer

a product that will If you are considering starting a new business or adding a new

product, then make sure the product bundle will fit your business’s strengths and

weaknesses, and that it will provide an acceptable risk/return tradeoff. For

instance, if your business is very good at timely response to customers, then timely

service should be an important part of your product bundle. Think long term about

your venture by planning for the ways you can deepen and broaden your product

bundle. For instance, you may be able to take advantage of opportunities to add

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value through processing, packaging, and customer service. Other future growth

may allow you to offer your product to different customers. Start-up businesses are

most successful when they concentrate their efforts on one product or one market,

like a restaurant or a car service center does. Later growth may occur in the same

location or may be in different geographic regions. A different type of growth

would be a diversification of products, with your business offering related

products. Offering a whole range of products is most successful if the raw

materials, production processes, and distribution methods are similar, which means

you do not have to acquire new suppliers, skills and equipment, and distribution

methods.

Price mix :-

. “Price” refers to how much you charge for your product or service.

Determining your product’s price can be tricky and even frightening. Many small

business owners feel they must absolutely have the lowest price around. So they

begin their business by creating an impression of bargain pricing. However, this

may be a signal of low quality and not part of the image you want to portray. Your

pricing approach should reflect the appropriate positioning of your product in the

market and result in a price that covers your cost per item and includes a profit

margin. The result should neither be greedy nor timid. The former will price you

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out of the market; pricing too low will make it impossible to grow. As a manager,

you can follow a number of alternative pricing strategies. In the next column are

eight common pricing strategies. Some price decisions may involve complex

calculation methods, while others are intuitive judgments. Your selection of a

pricing strategy should be based on your product, customer demand, the

competitive environment, and the other products you will offer.

Cost-plus: Adds a standard percentage of profit above the cost of producing

a product. Accurately assessing fixed and variable costs is an important part

of this pricing method.

Value-based: Based on the buyer’s perception of value (rather than on your

costs). The buyer’s perception depends on all aspects of the product,

including non-price factors such as quality, healthfulness, and prestige.

Competitive: Based on prices charged by competing firms for competing

products. This pricing structure is relatively simple to follow because you

maintain your price relative to your competitors’ prices. In some cases, you

can directly observe your competitors’ prices and respond to any price

changes. In other cases, customers will select vendors based on bids

submitted simultaneously. In those cases, gathering information will be

more difficult.

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Going-rate: A price charged that is the common or going-rate in the

marketplace. Going-rate pricing is common in markets where most firms

have little or no control over the market price.

Skimming: Involves the introduction of a product at a high price for affluent

consumers. Later, the price is decreased as the market becomes saturated.

Discount: Based on a reduction in the advertised price. A coupon is an

example of a discounted price.

Loss-leader: Based on selling at a price lower than the cost of production to

attract customers to the store to buy other products.

Psychological: Based on a price that looks better, for example, $4.99 per

pound instead of $5.00 per pound. After you decide on your pricing strategy,

the amount of money you will actually receive may be complicated by other

pricing aspects that will decrease (or increase) the actual amount of money

you receive. You will also have to decide how to determine: • Payment

period: Length of time before payment is received.

Allowance: Price reductions given when a retailer agrees to undertake some

promotional activity for you, such as maintaining an in-store display.

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Seasonal allowances: Reductions given when an order is placed during

seasons that typically have low sales volumes to entice customers to buy

during slow times.

Bundling of products/services: Offering an array of products together.

Trade discounts (also called “functional discounts”): Payments to

distribution channel members for performing some function such as

warehousing and shelf stocking.

Price flexibility: Ability of salesperson or reseller to modify price.

Price differences among target customer groups: Pricing variance among

target markets.

Price differences among geographic areas: Pricing variance among

geographic regions.

Volume discounts and wholesale pricing: Price reductions given for large

purchases.

Cash and early payment discounts: Policies to speed payment and thereby

provide liquidity.

Credit terms: Policies that allow customers to pay for products at a later

date.

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The methods discussed here should be a base from which to construct your

price. Your options will vary depending on how you choose to sell your

product. For instance, if you make a product but don’t sell it directly to the

customer, then you will want to know who sets the retail price and what

margin they will require. Tracing the path of your product from production

to final purchase is a useful exercise to discover this information. The

research needed to understand the pricing along the distribution path will be

more than worth the time it takes.

Whatever your price may be, ultimately it must cover your costs, contribute

to your image by communicating the perceived value of your product,

counter the competition’s offer, and avoid deadly price wars. Remember,

price is the one

“P” that generates revenue, while the other three “P’s” incur costs. Effective

pricing is important to the success of your business.

Place:-

“Place” refers to the distribution channels used to get your product to your

customers. What your product is will greatly influence how you distribute it. If, for

example, you own a small retail store or offer a service to your local community,

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then you are at the end of the distribution chain, and so you will be supplying

directly to the customer. Businesses that create or assemble a product will have

two options: selling directly to consumers or selling to a vendor.

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Direct Sales:

As a producer, you must decide if supplying direct is appropriate for your

product, whether it be sales through retail, doorto- door, mail order, e-commerce,

on-site, or some other method. An advantage of direct sales would be the contact

you gain by meeting customers face to face. With this contact you can easily detect

market changes that occur and adapt to them. You also have complete control over

your product range, how it is sold, and at what price. Direct sales may be a good

place to start when the supply of your product is limited or seasonal. For example,

direct sales for many home-produced products can occur through homebased sales,

markets, and stands. However, direct sales require that you have an effective retail

interface with your customers, which may be in person or electronic. If developing

and maintaining this retail interface is not of interest to you or you are not good at

it, you should consider selling through an intermediary.

Reseller Sales (Sales Through an Intermediary)

Instead of selling directly to the consumer, you may decide to sell through

an intermediary such as a wholesaler or retailer who will resell your product.

Doing this may provide you with a wider distribution than selling direct while

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decreasing the pressure of managing your own distribution system. Additionally,

you may also reduce the storage space necessary for inventory. One of the most

important reasons for selling through an intermediary is access to customers. In

many situations, wholesalers and retailers have customer connections that would

not be possible to obtain on your own.

Market Coverage:

No matter whether you sell your product direct or through a reseller, you

must decide what your coverage will be in distributing your product. Will you

pursue intensive, selective, or exclusive coverage?

Intensive distribution is widespread placement in as many places as possible,

often at low prices. Large businesses often market on a nationwide level with this

method. Convenience products—ones that consumers buy regularly and spend

little time shopping for, like chewing gum—do better with intensive (widespread)

distribution.

Selective distribution narrows distribution to a few businesses. Often,

upscale products are sold through retailers that only sell high-quality products.

With this option, it may be easier to establish relationships with customers.

Products that people shop around for sell better with selective distribution.

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Exclusive distribution restricts distribution to a single reseller. You may

become the sole supplier to a reseller who, in turn, might sell only your product.

You may be able to promote your product as prestigious with this method, though

you might sacrifice sales volume. Specialty products tend to perform better with

exclusive distribution.

Other Place Decisions Product characteristics and sales volumes will dictate

what inventories to maintain and how best to transport products. Additionally, the

logistics associated with acquiring raw materials and ensuring that final product is

in the right place at the right time for the right customers can comprise a large

percentage of total costs and needs careful monitoring. You may decide to have a

combination of all the distribution methods. Whatever you decide, choose the

method which you believe will work best .

Promotion:-

“Promotion” refers to the advertising and selling part of marketing. It is how

you let people know what you’ve got for sale. The purpose of promotion is to get

people to understand what your product is, what they can use it for, and why they

should want it. You want the customers who are looking for a product to know that

your product satisfies their needs. To be effective, your promotional efforts should

contain a clear message targeted to a specific audience reached via an appropriate

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channel. Your target audience will be the people who use or influence the purchase

of your product. You should focus your market research efforts on identifying

these individuals. Your message must be consistent with your overall marketing

image, get your target audience’s attention, and elicit the response you desire,

whether it is to purchase your product or to form an opinion. The channel you

select for your message will likely involve use of a few key marketing channels.

Promotion may involve advertising, public relations, personal selling, and sales

promotions. A key channel is advertising. Advertising methods to promote your

product or service include the following.

Radio: Radio advertisements are relatively inexpensive ways to inform potential

local customers about your business. Mid-to-late week is generally the best time

to run your radio ad.

Television: Television allows access to regional or national audiences, but may

be more expensive than other options.

Print: Direct mail and printed materials, including newspapers, consumer and

trade magazines, flyers, and a logo, allow you to explain what, when, where,

and why people should buy from you. You can send letters, fact sheets,

contests, coupons, and brochures directly to new or old customers on local,

regional, or national levels.

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Electronic: Company Web sites provide useful information to interested

consumers and clients. Password-protected areas allow users to more 5 Purdue

extension

Knowledge to go intimately interact with you. Advertisements allow broad

promotion of your products. Direct e-mail contact is possible if you have

collected detailed customer information.

Word of Mouth: Word of mouth depends on satisfied customers (or dissatisfied

customers) telling their acquaintances about the effectiveness of your products.

Generic: Generic promotion occurs when no specific brand of product is

promoted, but rather a whole industry is advertised. For instance, generic

advertising is commonly found for milk, beef, and pork. Public relations (PR)

usually focuses on creating a favorable business image. Important components

of a good public relations program include being a good neighbor, being

involved in the community, and providing open house days. News stories, often

initiated through press releases, can be good sources of publicity. Personal

selling focuses on the role of a salesperson in your communication plans.

Salespeople can tailor communication to customers and are very important in

building relationships. While personal selling is an important tool, it is costly.

So you should make efforts to target personal selling carefully. Sales

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promotions are special offerings designed to encourage purchases. Promotions

might include free samples, coupons, contests, incentives, loyalty programs,

prizes, and rebates. Other programs might focus on educating customers

through seminars or reaching them through trade shows. Your target audience

may be more receptive to one method than another.

Additional sources of promotion may be attending or participating in trade

shows, setting up displays at public events, and networking socially at civic and

business organizations.

Final Comment

The four P’s—product, price, place, and promotion—should work together

in your marketing mix. Often, decisions on one element will influence the choices

available in others. Selecting an effective mix for your market will take time and

effort, but these will pay off as you satisfy customers and create a profitable

business. The worksheets that follow will help you construct your marketing plans.

Once you have a good marketing mix—the right product at the right price, offered

in the right place and promoted in the right way—you will need to continue to stay

on top of market changes and adopt your marketing mix as necessary.

Marketing is a part of venture that will never end.

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Extended Marketing Mix (3 P's)

More recently, three more Ps have been added to the marketing mix namely

People, Process and Physical Evidence. This marketing mix is known as Extended

Marketing Mix.

People: All people involved with consumption of a service are important. For

example workers, management, consumers etc. It also defines the market

segmentation, mainly demographic segmentation. It addresses particular class of

people for whom the product or service is made available.

Process: Procedure, mechanism and flow of activities by which services are used.

Also the 'Procedure' how the product will reach the end user.

Physical Evidence: The marketing strategy should include effectively

communicating their satisfaction to potential customers.

Four Cs:

CONSUMER

COST

CONVENIENCE

COMMUNICATION

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Robert F. Lauterborn proposed a four Cs classification in 1993.[2] The Four

Cs model is more consumer-oriented and attempts to better fit the movement from

mass marketing to niche marketing.

Product part of the Four Ps model is replaced by 'Consumer' or Consumer

Models, shifting the focus to satisfying the consumer needs. Another C

replacement for Product is Capable. By defining offerings as individual capabilities

that when combined and focused to a specific industry, creates a custom solution

rather than pigeon-holing a customer into a product.

Pricing is replaced by 'Cost' reflecting the total cost of ownership. Many

factors affect Cost, including but not limited to the customer's cost to change or

implement the new product or service and the customer's cost for not selecting a

competitor's product or service.

Placement is replaced by 'Convenience'. With the rise of internet and hybrid

models of purchasing, Place is becoming less relevant. Convenience takes into

account the ease of buying the product, finding the product, finding information

about the product, and several other factors.

25

Promotions feature is replaced by 'Communication' which represents a

broader focus than simply Promotions. Communications can include advertising,

public relations, personal selling, viral advertising, and any form of communication

between the firm and the consumer.

4ps 4cs

Product Customer needs and wants

Price Cost of the customer

Place Convenience

Promotion Communication

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Marketing Mix

Product Price Promotion Place

Product Sales promotion Advertising Coverage

Variety Discount Sales force Channels

Quality Allowances Public relations Assortment

Design Payment period Direct Location

Features Credit terms Marketing Inventory

Brand name

Packaging

Sizes

Services

Warranties

Returns

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INDUSTRY PROFILE

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The history of steel-making in India can be traced back to 400 BC when the

Greek emperors used to recruit Indian archers for their army who used arrows

tipped with steel. Many more evidences are there of Indians’ perfect knowledge of

steel-making long before the advent of Christ. Archaeological finds in

Mesopotamia and Egypt testify to the fact that use of iron and steel was known to

mankind for more than six thousand years and that some of the best products were

made in India. Among the widely-known relics is the Iron Pillar near Qutab Minar

in Delhi. The pillar, built between 350 and 380 AD, did not rust so far -----an

engineering marvel that baffles the scientists even today. Yet another engineering

feat is the famous Sun Temple at Konark in Orissa, built around 1200 AD, where

steel structurals were used for the first time in the world.

These were the halcyon days when India flourished in all directions and

when its prosperity was a matter of envy for the foreigners. But as ill luck would

have it, India’s prosperity gave way to poverty after the advent of the foreign rule.

India’s indigenous industry languished because of a deliberate policy of the

colonial rulers to make the country only a supplier of raw materials.

   

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Steel Role plays a vital role in the development of any modern economy.

The per capita consumption of steel is generally accepted as a yardstick to measure

the level of socio-economic development and living standards of the people. As

such, no developing country can afford to ignore the steel industry.

Beginnings

The first notable attempt to revive steel industry in India was made in 1874

when the Bengal Iron Works (BIW) came into being at Kulti, near Asansol in West

Bengal. However, forty-four years before that, in 1830 to be precise, a foreigner,

named Joshua Marshall Heath, had set up a small plant at Porto Novo on Madras

Coast. Heath produced in his plant pig iron at the rate of forty tonnes a week. His

method of iron-making needed approximately four tonnes of charcoal to produce

one tonne of low quality pig iron which proved to be too expensive for Heath to

carry on in the face of stiff competition from the British steel industry. The BIW

made considerable improvement in the process of iron and steel making. It used

coke as the fuel instead of charcoal. But the plant fell sick as the source of funds

dried up. It was taken over by the Bengal Government and was rechristened as

Barakar Iron Works. In 1889 the Bengal Iron and Steel Company acquired the

plant and by the turn of the century the Kulti plant became a success story. It

30

produced 40,000 tonnes of pig iron in 1900 and continued to produce the metal

until it was taken over by Indian Iron and Steel Company (IISCO) in 1936.

For modern India’s iron and steel industry August 27, 1907 was a red-letter

day when the Tata Iron and Steel Company (TISCO) was formed as a Swadeshi

venture to produce 120,000 tonnes of pig iron. The TISCO plant at Sakchi

(renamed Jamshedpur) in Bihar, started pig iron production in December 1908 and

rolled out its first steel the following year. TISCO had expanded its production

capacity to one million tonnes ingot by the time the country achieved freedom. The

Tatas, as Gandhiji said, represented the "spirit of adventure" and Jamsetji Tata, in

the words of Jawaharlal Nehru," laid the foundation of heavy industries in India".

The British rulers disfavoured this and other attempts to start indigenous industry.

It was chiefly with the help of American experts that the Tatas started their

industry. Its childhood was precarious but the war of 1914-18 gave it a fillip.

Again it languished and was in danger of passing into the hands of British

debenture holders. But nationalist pressure saved it. In 1918, soon after the war,

Indian Iron and Steel Company (IISCO) was formed. The then Mysore government

also decided to start an iron works at Bhadravati. While IISCO started producing

pig iron at Burnpur in 1922, the Mysore Iron and Steel Works took about 18 years

31

to start its plant. Meanwhile, the Bengal Iron Works went into liquidation and

merged with IISCO. The Steel Corporation of Bengal (SCOB) formed in 1937,

started making steel in its Asansol plant. Later in 1953, SCOB merged with IISCO.

Prime Minister Nehru firmly believed that "no country can be jpolitically

and economically independent unless it is highly industrialised and has developed

its resources to the utmost". Nehru’s ideas about India’s development were broadly

incorporated in free India’s first Industrial Policy Resolution adopted by the

Contituent Assembly in 1948. The resolution officially accepted the principle of

mixed economy. Industries were divided into four categories. In the first category

were strategic industries which were made the monopoly of the Government. In the

second category were six industries which included, among others, coal, iron and

steel.

It was decided that new units would be started exclusively by the

government in the public sector without disturbing the existing ones in the private

sector. Eighteen industries, including heavy castings and forings of iron and steel,

ferro alloys and tool steel were covered by the third category and the rest of the

industries by the fourth. In sum, the government committed itself to the

development of basic steel industry while the private sector was to benefit through

32

the establishment of downstream units which would use pig iron, billets, blooms

and flat products to be made by the public sector steel plants.

In keeping with the spirit of the resolution the Government decided to start a

chain of steel plants all over the country in the public sector. The first such plant

was set up at Rourkela in Orissa. The second came up at Bhilai in Madhya

Pradesh. It was followed by a third at Durgapur in West Bengal. Each of these

three plants had an initial production capacity of one million tonne ingot. Durgapur

was followed by a steel plant at Bokaro in Bihar. The onward march of Indian steel

did not stop at Bokaro. The fifth public sector steel plant was set up at

Visakhapatnam in andhra Pradesh. As a matter of fact, the country was dotted with

steel and steel-related plants in public and private sectors, like Alloy Steel Plant,

Salem Steel Plant, Kalinga Iron Works, Malavika Steel Ltd., Jindal Vijaynagar

Steel Ltd., to name only a few. About the same time TISCO launched its two-

million-tonne expansion programme.

The Government’s Industrial Policy had undergone changes ____ once in

1956 and then in 1991. The resolution modified in 1956 brought changes in the

category pattern and listed more industries for the public sector than did the earlier

one, though it was not harsher towards the private enterprise. In the new industrial

33

policy announced in 1991 iron and steel industry, among others, was included in

the list of industries reserved for the public sector and exempted from the provision

of compulsory licensing. With effect from May 24, 1992 iron and steel industry

was included in the list of ‘high priority’ industry for automatic approval for

foreign equity upto 51% (now 74%). Export-import regime for iron and steel has

also undergone major liberalisation. The freight equalisation scheme was

withdrawn removing freight disadvantage to States located near steel plants.

The new policy has already borne fruit. The finished steel pdroduction in India

has gone up from mere 1.1 million tonnes in 1951 to 23.37 million tonnes in 1997-

98 despite overall economic slow-down in the country.

It has been estimated that the demand for finished steel in 2001-02 would

touch 38.68 million tonnes and the projected availability of 38.01 tonnes is almost

adequate to meet the domestic demand along with export of six million tonnes.

Similarly, by 2006-07, the final year of the tenth plan, the demand for finished

steel would be around 48.80 million tonnes, providing adequate surplus for

meeting the projected export potential of nine million tonnes.

However, there is hardly any scope for complacence over the fact that India

continues to be the 10th largest steel producer in the world. In 1997 India’s per

capita steel consumption was only 22 kg which was much below the world average

34

of about 126 kgs. Even if the domestic demand grows up from 34.5 million tonnes

to 100 million tonnes in 2025 the industry is unlikely to catch up with the

production in the developed countries.

The redeeming feature is the cost competitiveness of Indian steel in the

global market. According to World Steel Dynamics, the total cost of steel

production in the USA is $510 per metric tonne while in Japan it is $550, in

Germany $557, in Canada $493 and in India it is $497. This is because of high

material cost due to high excise and import duties. Reduction of cost on these

accounts will make Indian steel more competitive in the world market. Indian steel

can reasonably expect a good market in the neighbouring countries now that the

Asian economy is looking up.

Before the economic reforms of the early 1990s the Indian steel industry was

a predominantly regulated one with the public sector dominating the industry.

India's steel industry went through a rough phase between 1997 and 2001

when the overall global steel was facing a downturn and recovered after 2002. The

major factors that led to the revival of the steel industry in India after 2002 was the

rise in global demand for steel and the domestic economic growth in India.

India has now emerged as the eighth largest producer of steel in the world

with a production capacity of 35MT. Almost all varieties of steel is now produced

35

in India. India has also emerged as a net exporter of steel which shows that Indian

steel is being increasingly accepted in the global market.

The growth of the steel industry in India is also dependant, to a large extent,

on the level of consumption of steel in the domestic market. Steel consumption is

significant in housing and infrastructure. In recent years the surge in housing

industry of India has led to increase in the domestic demand for steel.

More than 3500 different varieties of steel are available in the steel industry

of India. These can however be classified into two broad categories -

Flat Products:

Flat products include plates and hot rolled sheets such as coils and sheets.

Flat products are derived from slabs. One of the major uses of steel plates is in ship

building.

Long Products

Long products include bars, rods, wires, ropes and piers. These are called

long products due to their shapes. Long products are made from billets and blooms.

Long products are mostly used in housing and construction and also in rail tracks.

Steel Industry in India is on an upswing because of the strong global and

domestic demand. India's rapid economic growth and soaring demand by sectors

like infrastructure, real estate and automobiles, at home and abroad, has put Indian

36

steel industry on the global map. According to the latest report by International

Iron and Steel Institute (IISI), India is the seventh largest steel producer in the

world.

The origin of the modern Indian steel industry can be traced back to 1953

when a contract for the construction of an integrated steelworks in Rourkela,

Orissa was signed between the Indian government and the German companies

Fried Krupp und Demag AG. The initial plan was an annual capacity of 500,000

tonnes, but this was subsequently raised to 1 million tonnes. The capacity of

Rourkela Steel Plant (RSP), which belongs to the SAIL (Steel Authority of India

Ltd.) group, is presently about 2 million tonnes. At a very early stage the former

USSR and a British consortium also showed an interest in establishing a modern

steel industry in India. This resulted in the Soviet-aided building of a steel mill

with a capacity of 1 million tonnes in Bhilai and the British-backed construction in

Durgapur of a foundry which also has a million tonne capacity.

The Indian steel industry is organized in three categories i.e., main

producers, other major producers and the secondary producers. The main

producers and other major producers have integrated steel making facility with

plant capacities over 0.5 mT and utilize iron ore and coal/gas for production of

steel. The main producers are Tata Steel, SAIL, and RINL, while the other major

37

producers are ESSAR, ISPAT and JVSL. The secondary sector is dispersed and

consists of:

1) Backward linkage from about 120 sponge iron producers that use iron ore

and non-coking coal, providing feedstock for steel producers;

2) Approximately 650 mini blast furnaces, electric arc furnaces, induction

furnaces and energy optimizing furnaces that use iron ore, sponge iron and

melting scrap to produce steel; and

3) Forward linkage with about 1,200 re-rollers that roll out semis into finished

steel products for consumer use.

Structural Weaknesses of Indian Steel Industry

Although India has modernised its steelmaking considerably, however,

nearly 6% of its crude steel is still produced using the outdated open-hearth

process.

Labour productivity in India is still very low. According to an estimate crude

steel output at the biggest Indian steelmaker is roughly 144 tonnes per worker per

year, whereas in Western Europe the figure is around 600 tonnes.

India has to do a lot of catching in the production of stainless steel, which is

primarily required by the plant and equipment, pharmaceutical and chemical

industries.

38

Steel production in India is also hampered by power shortages.

India is deficient in raw materials required by the steel industry. Iron ore

deposits are finite and there are problems in mining sufficient amounts of it. India's

hard coal deposits are of low quality.

Insufficient freight capacity and transport infrastructure impediments too

hamper the growth of Indian steel industry.

Strengths of Indian Steel Industry

Low labour wage rates

Abundance of quality manpower

Mature production base

Positive stimuli from construction industry

Booming automobile industry

Role of Iron and Steel Industry in India

The Role of Iron and Steel Industry in India GDP is very important for the

development of the country. In India the visionary Shri Jamshedji Tata set up the

first Iron and Steel manufacturing unit called Tata Iron and Steel Company, at

Jamshedpur in Jharkhand. Iron and steel are among the most important

components required for the infrastructure development in the country.

39

Role of Iron and Steel Industry in India GDP-Facts.

The Iron and Steel Industry in India is one of the fastest growing sectors.

The demand drivers for the Indian Iron and Steel industry are increase in the

activities of the automobiles industry, real estates industry, transportation system,

aircraft industry, ship building industry, etc.

India ranks 5th in the world in terms of production of steel:

The amount of crude steel produced in 2006-07 was 50.71 million tonnes

The amount of finished steel produced in 2006-07 was 51.9 million tonnes

• The production of finished steel was increased by 16.52%.

• The production of finished carbon steel was 24.8 million tonnes in the year

2006-07.

• It is expected that India would become the second biggest producer of steel

within the year 2016 and the production per year would be 137 million

tonnes.

• The exports pertaining to the steel industry was 6.26 % during the period

2006-07.

40

Role of Iron and Steel Industry in India GDP-Consumption

• The domestic consumption of steel has grown by12.5% in the past three

years.

• The domestic steel consumption in the year 2006-07 was 41.14 million

tonnes

• The average growth rate of the Indian Iron and Steel Industry is 11.36%

• The construction projects all over India are major consumer of steel

• The per capita consumption of steel in India is 35kgs

• As the per capita consumption of steel is lower than other countries, so the

steel industry has huge opportunities in the future.

Role of Iron and Steel Industry in India GDP-Growth in Future

The Arcelor Mittal, which is the largest steelmaker in the world, has plans of

establishing two Greenfield steel projects with capacity of 12 million tonnes

annually, in India.

Acerinox SA, one of the important stainless steel manufacturers in

collaboration with Nisshin Steel, Japan is setting up a steel plant in India.

41

The Tata Steel ranks 5th in the world steel production and the company have

plans of expanding its capacity by the year 2015.

SAIL, India's biggest producer of steel has plans of increasing the

production to 24.98 million tonnes annually.

Sinosteel Corp, China are planning to invest US$ 4 billion to set up a 5

million tonnes capacity Greenfield steel plant.

The acquisition of the Corus, the Anglo-Dutch steel manufacturer by the

Tata Steel. The Algoma Steel, Canada was acquired by Essar Global for US$ 1.63

billion.

RINL has its registered office at Visakhapatnam. Visakhapatnam Steel plant,

under RINL, is the country's first shore-based and sixth public sector Integrated

Steel Plant.

SAIL with its corporate office in New Delhi operates and manages five

integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and Burnpur, a plant

of the Indian Iron and Steel Co. Ltd. (IISCO), which is a wholly owned subsidiary

of SAIL. SAIL also has four Special and Alloy Steel and Ferro-alloys units at

Durgapur, Salem, Chandrapur and Bhadravati. The plants at Chandrapur and

Bhadravati belong to the Maharashtra Elektrosmelt Limited and Visvesvaraya Iron

and Steel Limited respectively which are also subsidiaries of SAIL. The IISCO-

42

Ujjain Pipe and Foundry Company Limited, a subsidiary of IISCO, manufactures

cast iron spun pipes at its works at Ujjain. Besides, SAIL has seven Central Units

viz. Research and Development Centre for Iron and Steel, Centre for Engineering

and Technology, Management Training Institute, all located at Ranchi, Central

Coal Supply Organisation located at Ranchi, Central Coal supply Organisation

located at Dhanbad, raw materials Division, Growth Division and Environment

Management Division all located at Calcutta. The marketing of products of SAIL

plants is done through the Central Marketing Organisation, Calcutta which has a

country wide Distribution Network.

NMDC, with its headquarters at Hyderabad, is engaged in the business of

developing and exploiting mineral resources, other than coal, oil, natural gas and

atomic minerals. Presently, its activities are concentrated on mining of iron ore and

diamonds. NMDC operates the largest mechanised iron ore mines in the country at

Bailadila and Donimalai and the Diamond mines situated at Panna. J & K Mineral

Development Corporation Limited (J&KMDC) is a subsidiary company of

NMDC, incorporated for development of various minerals in the state of Jammu &

Kashmir.

The Tata Iron and Steel Company, located at Jamshedpur is the best known

symbol of India's industrial growth. The company has exported products worth

43

more than US $ 182.3 million in 1996-97. Tata Steel remains India's largest single

exporter of high quality, value added steel products. It is a blue chip company, and

has successfully raised US $100 million through Euro Bonds.

Tata Steel is India's single largest integrated steel works in the private sector

with a market share of over 13%. It has, over the years, employed state-of-the-art

know-how and processes to manufacture a wide range of steel and engineering

products as well as minerals and ferro-alloys. Its steel products include HR coils,

tubes, bars, rods, structurals, strips, sheets and bearings. The steel plant is

integrated with activities ranging from mining of raw materials to finished rolling

of steel. Over the years the company has promoted several associate companies in

related areas such as engineering, refractors and rolls.

OTHER COMPANIES IN INDIA

• Bhilai Steel Plant (BSP)

• Bokaro Steel Plant (BSL)

• Durgapur Steel Plant (DSP)

• Jindal Vijayanagar Steel Limited

• Lloyds SteeI Industries Ltd

• North Bengal Dolomite Limited

• Rourkela Steel Plant (RSP)

44

• Salem Steel Plant (SSP)

In conclusion, it can be said with a certain measure of confidence that

India’s iron and steel industry which had a glorious past and now look forward to a

bright future.

45

COMPANY PROFILE

SYMBOL OF RINL, VISAKHAPATNAM STEEL PLANT

46

Company Profile

Steel occupies the foremost place amongst the materials in use today and

pervades all walks of life. All the key discoveries of the human genius – for

instance .steam engine ,railway ,means of communication and connection,

automobile, aero place and computers, are in one way of other ,fastened together

with steel and with its sagacious and multitude of useful properties making it

indispensable for furthering and achieving continual growth of the – be it

construction, manufacturing, infrastructure or consumables. The level of steel

consumption has long been regarded as an index of industrialization and economic

maturity attained by a country. Keeping in view the importance of steel, the

following integrated steel plants with foreign collaborations were set up in the

public sector in the post-independence era:

S no steel plant Collaborated by

1. Durgapur Steel plant Britain

2. Bhilai Steel plant Erstwhile USSR

3. Bokaro Steel plant Erstwhile USSR

47

4. Rourkela Steel plant Germany

Vision

• Harness our growth potential and sustain profitable growth.

• Deliver high quality and cost competitive products and be the first choice of

customers.

• Create an inspiring work environment to unleash the creative energy of

people.

• Achieve excellence in enterprise management.

• Be respected corporate citizen, ensure clean and green environment and

develop vibrant communities around us.

Mission

To attain 16 million ton liquid steel capacity through technological up-

gradation, operational efficiency and expansion; augmentation of assured supply of

raw materials; to produce steel at international standards of cost and quality; and to

meet the aspirations of the stakeholders.

48

Objectives

• Expand plant capacity to 6.3Mt by 2011-12 with the mission to expand

further in subsequent phases as per Corporate Plan

• Revamping existing Blast Furnaces to make them energy efficient to

contemporary levels and in the process increase their capacity by 1 Mt, thus

total hot metal capacity to 7.5 Mt

• Be amongst top five lowest cost liquid steel producers in the world

• Achieve higher levels of customer satisfaction

• Vibrant work culture in the organization

• Be proactive in conserving environment, maintaining high levels of safety &

addressing social concerns

Core values

• Commitment

• Customer satisfaction

• Continuous Improvement

• Concern for Environment

• Creativity & Innovatio

49

Company Policies

Quality, Environment and Occupational Health &safety policy:

Visakhapatnam steel plant has committed to meet the needs and expectations

of customers and other interested parties,the occupational health and safety of our

work force and to preserve the environment .

• Supply quality goods and services to customer’s delight.

• Document , implement, maintain & periodically review the management

systems including the policy ,objectives and targets.

• Use resources efficiently and reduce waste &prevent pollution.

• Comply with all relevant legal regulatory and other requirements applicable

to products, activities and processes in respect of Quality, Environment

Occupational health &safety and also ensure the same by contractors.

Continually improve quality, environment, occupational health and safety

performance with respect to products, activities, processes, premises and services.

Encourage development and involvement of employees.

Maintain high level of quality environment, occupational health and safety

consciousness amongst employees and contract workers by imparting education

and training.

50

Customer policy

• VSP will Endeavour to adopt a Customer-focused approach at all  times with

transparency

• VSP will strive to meet more than the Customer needs and expectations

pertaining to Products, Quality, value for Money and Satisfaction

• VSP greatly values its relationships with Customers and would make efforts

at strengthening these relations for mutual benefit

HR policy

• Visakhapatnam Steel Plant, believe that employees are the most important

resources. To realize the full potential of employees, the company is

committed to :

• Provide work environment that makes the employees committed and

motivated for maximizing productivity.

• Establish systems for maintaining transparency, fairness and equality in

dealing the employees.

• Empower employees for enhancing commitment, responsibility and

accountability

51

• Encourage teamwork, creativity, innovativeness and high achievement

orientation

• Provide growth and opportunities for developing skill and knowledge.

• Ensure functioning of effective communication channels with employees

Energy policy

• Visakhapatnam Steel Plant, has committed to optimally utilize various forms

of energy in a cost-effective manner to effect conservation of energy

resources. To accomplish this …

• Monitor closely and control consumption of various forms of energy through

an effective Energy Management System.

• Adopt appropriate energy conservation technologies.

• Maximize the use of cheaper and easily available forms of energy.

IT policy

RINl/VSP is committed to leverage Information Technology as the vital

enabler in improving the customer-satisfaction, organizational efficiency,

productivity, decision-making, transparency and cost effectiveness, and thus

adding value to the business of steel making. Towards this, RINL shall follow best

practices in Process Automation & Business Processes through IT by in-house

efforts / outsourcing and collaborative efforts with other organizations / expert

52

groups / institutions of higher learning, etc, thus ensuring the quality of product

and services at least cost.

Follow scientific and structured methodology in the software development

processes with total user-involvement, and thus delivering integrated and quality

products to the satisfaction of internal and external customers.

Install, maintain and upgrade suitable cost-effective IT hardware, software

and other IT infrastructure and ensure high levels of data and information security.

Strive to spread IT-culture amongst employees based on organizational

need, role and responsibilities of the personnel and facilitate the objective of

becoming a world-class business organization.

Enrich the skill-set and knowledge base of all related personnel at regular

intervals to make employees knowledge-employees

Periodically monitor the IT investments made and achievements accrued to

review their cost effectiveness.

Expansion plans

In the vision in National Steel policy envisaging 124 MT steel by 2019-20,

Visakhapatnam Steel Plant has planned and proposed for increasing the capacity

from existing 3.6MT to 6.3MT. On 28th October 2005, clearance has been

53

obtained from Govt. of India in record time of 10months for Go-Ahead. On 11th

Feb.’2006. M/s MN Dastur Co was appointed as Consultant for the Expansion

Project. On 20th May, Honorable Prime Minister Manmohan Singh launched the

expansion project of Visakhapatnam Steel Plant from a capacity of 3.6MT to

6.3MT at a cost of Rs. 8,692 Crores (Base June 05).

Raw Material Handling Plant

54

55

Raw Material Handling plant is meant for transporting materials from

Raw material yard/Base mix yard to various process units of the plant. The

Major Raw materials required for Iron and Steel making are are Iron ore lump,

Iron Ore fines, Sized iron ore, Flux limestone / dolomite, manganese, Quartzite

coking coal, Non-coking coal ( for Boiler operation & For Pulverized coal

injection )and coke. Lump iron ores, iron ore fines and flux such as limestone

and dolomite received by railway rake are unloaded in wagon tippler and

stored in open storage yard with help of various stockyard machines.

Iron ore lump, flux such as limestone and dolomite, Coke is reclaimed by

suitable stock yard machine and are crushed in Ore crushing plant, Flux crushing

plant and coke crushing plant respectively to produce the size required.

The above material is proportionately stacked by suitable stacking

machine in base mix yard and blended while reclaiming by blender reclaimer,

while preparing base mix which then transported to Sinter plant for sinter

production. For feeding material to new blast furnace, sized ore and flux is

reclaimed by stock yard machine from respective yard and conveyed by

conveyor. Sinter produced in sinter plant and coke from existing/new coke ovens

is transported directly to BF-3 stock house by conveyor. Purchased coke and

necessary calcined lime from stock yard and new lime calcining plant

respectively is transported to SMS by Conveyor. The waste product from the

plant is mainly dust and method of their disposal is through dust suppression

Steel melt shop

Steel making capacity of the plant is correspondingly increased by utilizing

higher availability of Hot metal. The Raw materials required for manufacturing

process are – Hot Metal, Scrap,Flux, Ferro alloys. New Steel melt shop comprising

of two(2) converters each of 150 cu.m capacity. 2Nos. Laddle Furnaces were

envisaged to make the operation of the 2 converters independent of the

requirements of continuous casting machines thereby acting as buffer between the

converter and the caster.

The steel temperature and steel chemistry will be homonized in LF by inert

gases and 1 No. RH degaussing system is envisaged for production of special grade

with low gas contents. Three(3) 6 strand strand billet mill. Three casters are available

for 200 days in a year and two casters are available for 165 days in a year. Cast

Billets will be fed to new bar mill and wire rod mill. Part of rolled billets will also be

for sale. The other major facilities installed are – Hot Metal Desulphurization Plant,

Scrap Handling system,BOF Gas cleaning Plant, Secondary Emission control, Ferro

alloy Handling Facilities, Ladle & tundish prepation facilities. New technology –

Converter Shop - Combined Blowing, Secondary Fume Extraction system, Contour

& bath level measurement and benefits derived are reduced consumption of

56

Raw Material Handling plant is meant for transporting materials from

Raw material yard/Base mix yard to various process units of the plant. The

Major Raw materials required for Iron and Steel making are are Iron ore lump,

Iron Ore fines, Sized iron ore, Flux limestone / dolomite, manganese, Quartzite

coking coal, Non-coking coal ( for Boiler operation & For Pulverized coal

injection )and coke. Lump iron ores, iron ore fines and flux such as limestone

and dolomite received by railway rake are unloaded in wagon tippler and

stored in open storage yard with help of various stockyard machines.

Iron ore lump, flux such as limestone and dolomite, Coke is reclaimed by

suitable stock yard machine and are crushed in Ore crushing plant, Flux crushing

plant and coke crushing plant respectively to produce the size required.

The above material is proportionately stacked by suitable stacking

machine in base mix yard and blended while reclaiming by blender reclaimer,

while preparing base mix which then transported to Sinter plant for sinter

production. For feeding material to new blast furnace, sized ore and flux is

reclaimed by stock yard machine from respective yard and conveyed by

conveyor. Sinter produced in sinter plant and coke from existing/new coke ovens

is transported directly to BF-3 stock house by conveyor. Purchased coke and

necessary calcined lime from stock yard and new lime calcining plant

respectively is transported to SMS by Conveyor. The waste product from the

plant is mainly dust and method of their disposal is through dust suppression

ferroalloys, better yield and quality, Cleaner environment and measurement of

refractory lining. Continuous casting Machines - Auto mould level control & 100%

Billet casting and benefits derived are reduced in break outs and energy saving. LF &

RH - Electro magnetic stirrer and benefits derived are cleaner steel. Provision is

made and tendering activities for award of Consultancy is in process for installation

of 3rd converter and 4th caster.

Wire rod mill

The mill will produce 6 ltpy of plain rounds in coil form. The wire rod size

will be in range of 5.5 to 20 mm (dia). Provision is kept for the mill for producing

7.7 ltpy on the market demand. The rolling mill will use the cast billets of size

150 x 150 mm having length of about 12 m and rolled billets of size 125 x 125 x

9.7 to 10.2 M. The mill will roll Low carbon (85,000 tons/ yr), Medium carbon

(93,000 tons/yr), High carbon (93,000 tons/yr), spring steel (25,000 tons/yr), cold

heading (1,34,000 tons/yr), welding rod (85,000 tons/yr), Bearing steel (25,000

tons/yr), Free cutting steel (35,000 tons/yr) and case hardening (25,000 tons/yr).

The billet will be charged into 200 ton / hr capacity reheating furnance one by

one. The billets after heated upto 1200 deg C will be discharged. The billets will be

rolled down in the breakdown mill and passes through pre –finishing mill. The

57

finished product will come out of reducing and sizing mill in coil form. The output of

size wise product mix are - 5.5.mm dia(mm) – 1,50,000tons/ yr , 6.0-7.5 dia(mm) –

2,40,000 tons/ yr, 8.0-16 dia (mm) – 1,75,000 tons/ yr, 17-20.64 dia (mm) – 35,000

tons/ yr.

Award Purpose Year1st Steel Minister's Trophy for the year 2006-07

VSP’s excellent Overall performance

2010

Best Management Practices' Award by Govt. of AP

In recognition of VSP’s performance in the areas of Production, Productivity, Labour Practices, Industrial Relations and Corporate Social Responsibility

2010

Indira Gandhi Rajbhasha shield' given by His Excellency Vice President of India Dr. Hamid Ansari

For effective implementation of ‘Rajbhasha’, Hindi in VSP

2010

5S "Strong Commitment" Award by CII

for 5 S Excellence 2010

Viswakarma Rashtriya Puraskar Awards, 6th time in a row

National level awards instituted by Ministry of Labour, Govt. of India for the workmen in industries. Recognition for the innovative suggestions resulting in higher efficiency, productivity, quality, safety & working conditions, house-

2010

58

AWARDS & ACHEIVEMENTS OF VSP

keeping and import substitution at enterprise level.

5 No.s of the prestigious Prime Minister Shram Awards, 1'Shram Bhushan' and 4 'Shram Veer' awards,presented by Ministry of Labour and Welfare

Given annually to the excellently performing workers

2010

National Sustainability Award' Second prize amongst the integrated steel plants given by the Ferrous Division of Indian Institute of Metals

2010

"Excellent Water Efficient Unit" award by CII

for Excellence in Water Management- 2010 at National level

2010

Global HR Excellence award by World HRD Congress

"Change Agent & Leadership Award" in Global HR Excellence Awards 2010-11 given by World HRD Congress at Mumbai

2010

National Awards by Public Relations Society of India (PRSI)

1. The trilingual in-house magazine 'Ukkuvani' bagged the First and Second prize under the Best Newsletter category for different entries. 2. First Prize for VSP’s website under the 'Corporate Website' Category

2010

59

Gold Award for Outstanding Achievement in Training Excellence by Greentech Foundation, New Delhi

VSP has established World Class Training infrastructure since inception and continuously improved training facilities

2010

Great Places to Work Award By Great Places to work Institute and Economic Times, Mumbai

For inspiring Trust among its Employees, for instilling Pride in them and creating an environment in the work place that promotes camaraderie

2010

Town Official Language Implementation Committee Award, Visakhapatnam

For its exemplary Performance in Implementation of Official language

2010

INSSAN AWARD For Organizational Excellence in Suggestion Schemes, (in steel units category)

2010

The efforts of VSP have been recognized in various forms. Some of the

major awards received by VSP are in the area of energy conservation ,

environment protection , safety, quality, quality circles ,M O U ,sports related

awards and a number of awards at the individual level.

Some of the important awards are indicated bellow:

60

ISO 9002 for SMS and all the downstream units –a unique distinction in the

Indian steel industry.

Nehru Memorial National Award for pollution Control:1992-93&1993-94.

CII (Southern Region) Energy conservation Award :1995-96.

Golden Peacock (1 st prize) “National Quality Award-96” IIM in the

National Quality Competition 1996.

Selected for “world Quality Commitment Award- 1997 “ of J *BA N ,Spain.

ISPAT Surakha Puruskar(First prize ) for longest Accident free period 1991-

1994.

SCOPE A ward for vest turnaround for 2001.

Best enterprise award from SCOPE .WIPS for 2001-02, besides.

Indira Priya Darshini Vrishka Mitra Award: 1992-93.

61

COKE OVENS IN VSP SLINTER PLANT

PRODUCT PROFILE

62

Product Profile:

Rashtriya Ispat Nigam limited. The corporate entity of Visakhapatnam steel

plant is the only shore based integrated steel plant in the country.

Visakhapatnam steel plant popularly known as Vizag steel has been a

symbol of innovativeness and excellence right from its nascent stage and id=s

consistently producing will above 305 MTPY.

Basically along product manufactures Vizag steel pioneered several

technological trends in the Indian steel Industry, be it the 7 Mtr. tall coke oven

batteries 3200 cum. Blast furnaces. 100% continues casting , temporal and

Stanmore thermal treatment processes.

VIZAG Steel ‘s deep commitment to customers delight,quality health safety

and environment is reiterated by being the first integrated steel plant in the country

to certified for ISO 9001;2000,ISO 14001 and OHSAS standards.

Total automation, timely up-gradation and seamless integration of facilities

and processes enables VIZAG STEEL to produce a wide range of grades in

dibverse shapes like TMT bars ,wire rod coils angles, channels ,beams, rounds,

squares and villets to exaction natonal and international standards meeting the

stringent demands of the discerning customers.

63

The external waves of the Bay of Bengal have become an intrinsic part of

VIZAG STEEL culture to face the challenges of change through its technical know

how to produce tailor made special steels to suri the Automobiles , Engineering

and Qire drawing and railway sector.

Products of VSP

WIRE RODS

STRUCTURALS

WIRE ROD COILS

PLAIN ROUNDS

RE –BARS Fe 500

SQUARES

BEAMS

FLATS

ANGLES

CHANNELS

BILLETS

64

Re – BARS

Produced from fully killed steel

65

Size (mm) Sectional Wt. (Range) Kg/m

8 0.363 to 0.426

10 0.567 to 0.666

12 0835 to 0.941

16 1.501 to 1.659

*18 1.940 to 2.060

20 2.396 to 2.544

*22 2.891 to 3.069

25 3.735 to 3.966

28 4.685 to 4.975

32 6.121 to 6.499

ROUNDS

Special features:

Low carbon content and made fron fulyy killed steel

Higher yield strength & ulitimate tensile strength couples with Higher percentage

eolngation when compared to cold twisted bars Of same grade.

Easy bend ability ,weld ability and excellent ductility ensure economy

and safety of use.

Advantages

Combination of high strength and high ductility

Resistance to ageing

Superior corrosion resistance

Excellent bend ability and workability

66

WIRE ROD COILS

5.5,6,6.5,7.5,8,9,10,11,12,12.7,13,14mm

ROUNDS

16,*16.5,*17.5,18,20,*20.64,22,25,28,32,33.5,34,36,38,40,42,45

46.5,48,50,53,56,60,63,35,71,75,77,80mm

REINFORCEMENT BARS

67

AStandard Grade Remarks YieldStrength(N/mm^2)

UTS (N/mm^2)Min

%Elongation min

IS 1786_1985

IS 1786-1985

IS 1786-1985

Re-bars with Corresion Resistant element

FE 415

FE 500

FE 550

CRM

HSCRM

-

-

-

Cu-cr+p=0.75%Min

Cu-cr+p=0.75%min

415

500

550

415

500

485

545

585

485

545

14.5

12

8

14.5

12

8,10,12mm

16,*18,20,*22,25,28,32,36mm

ANGLES

*50 × 50 × 5/6 mm

*60 × 60 × 5/6 mm

*65 × 65 × 6 mm

75 × 75 × 6/8 mm

90 × 90 × 6/8 mm

100 × 100 × 8/10 mm

110 × 110 × 8/10 mm

CHANNELS

MC *40 × 32 × 5.0mm

MC *75 × 40 × 4.8mm

MC 100 × 50 × 5.0mm

68

MC 125 × 65 × 5.3mm

MC 150 × 75 × 5.7mm

BEAMS

IPE-BEAMS *180 × 91 × 5.3mm

HE-BEAMS *120 × 114 × 5.0mm

ISMB BEAMS 125 × 70 × 5.0mm

150 × 75 × 5.0mm

175 × 85 × 5.8mm

BEAMS

BLOOMS

245 × 245mm ----- 5.5 --- 6.08mts

315 × 245mm ----- 6.0 --- 6.40mts

BILLETS

125 × 125mm --- 8.0 --- 10.4mts

69

90 × 125mm --- 6.0 --- 12.0mts

75 × 75mm --- 6.0 --- 12.0mts

65 × 65mm --- 6.0 --- 12.0mts

GRADES

BLOOMS : Mild steel/Low, medium & High carbon steel, forging

Quality

BILLETS : Mild steel ,Low, medium& High carbon ,spring steel

High mm & forging Quality steels

ROUNDS : Mild steel ,Low, medium carbon ,bright bat & forging

Quality

REBARS : Thermo Mechanically treated (TMT) bars of different

yield strengths.

STRUCTURALS : Structural steel and High Tensile steel.

WIRE RODS : Low carbon, Wire drawing, bright bar, Electrode Quality,

Cold Heading Quality, Tyre – be an other High Carbon

70

Grades.

71

STRUCTURALS

Special features

Piling and automatic styling of the structurals ensure minimum damage

during handling and transport . Tension free rolling ensures closer tolerances and

negative sectional weight. Universal beam rolled in medium merchant & structural

mill is the most economical section which has got better sectional properties .has a

simple symmetrical cross section providing more flexibility to designer. Fabricator

and erector. This section can result in saving of 15% steel.

Export products

Angles

Size (mm) Section Weight Kg / metre

100 X 100 X 8 / 10 12.10 / 14.90, +5% -3%

90 X 90 X 6 / 8 8.20 / 10.80, +5% -3%

75 X 75 X 6 / 8 6.80 / 8.90,   +5% -3%

65 X 65 X 6 / 8 5.80 / 7.70,   +5% -3%

72

Beam

Size

(mm)Web Thickness  Sec. Wt Remarks

180 X 915.3 +/-0.7%  18.80 +/-

4%

Flance Thickness : 8.0 +/-

1.0%

120 X

114

5.0 +/-0.7%  19.90 +/-

4%

Flance Thickness : 8.0 +/-

1.0%

Billets

Size (mm) Chemistry

125 x 125 x 10,000 +/-400 See Note 2 below

65 X 65 X 6,000 +/-100 Is : 2830(C:0.12-0.23%; SI:0.40% Max

75 X 75 X 6,000 +/-100 Mn : 0.3-1.5 Mn:0.3-1.5

Channels

Size (mm) Sec.Wt Kg/mtr

50 X 75 X 5.71  16.8 +/-2.5%

125 X 65 X 5.3 13.1 +/-2.5%

100 X 50 X 5 9.56 +/-2.5%

75 X 40 X 4.8 7.14 +/-2.5%

73

74

Pig iron

CHEMISTRY :   C: 3.5 - 4.5%; Mn : 1% MAX; Si : 1.25% MAX; P : 0.15%

MAX;  S  : 0.05% MAX.

SIZE:   Pigs with upto two notches upto 45kgs in weight.chips/broken pieces

below 25mm not exceeding 5%. dust, dirt and moisture exceeding 0.5% deductible

from draft survey wt.

Hot rolled rebars

SpecificationGradeSize (mm)

JISG3112 SD35 16, 18, 20, 25

BS 4449 250 16, 18, 20, 25

BS 4449 460 16, 18, 20, 25

JISG3112 SD35 8, 10 

Wire rods

Specification Grade Remarks

ASTMA510.96SAE 1008 (Si-0.30%Max)Tensile Strength 430 N/mm2 Max

ASTMA510.96SAE 1010 (Si-0.40%Max)Tensile Strength 450 N/mm2 Max.

ASTMA510.96SAE 1012 (Si-0.40%Max)Tensile Strength 470 N/mm2

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Max.

ASTMA510.96SAE 1015 (Si-0.40%Max)Tensile Strength 510 N/mm2 Max

By products

Granulated slag

Lime fines

Ammonium sulphate

Crude coal tar

Coal tea fuel /pitch creosote mixture

Hot pressed naphthalene

Drained naphthalene oil

Phenol fractions

Light solvent oil benzene

Toluene

Coal tar wash oil

Anthracene oil

Sol-110(Non Aromatics)

76

MARKETING SYSTEM AT RINL

77

To market the products of VSP marketing department has got total

manpower of 301out of which108 manpower are at Head quarter and rest are in the

various regions and branches.

For facilitating the sales and increasing customer base by showing presence

all over ,the whole country is divided into five regions and for each region having a

regional office which coordinates with the branch sales offices in their respective

regions.

North (Delhi)

South (Chennai)

East (Kolkata)

West (Mumbai)

Andhra (Vizag)

Altogether have 24 branches.

Besides VSP has consignment sales agencies at three places….

Jammu

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Guwahati

Ranchi

It also exporting the products to various destinations such as ….

Srilanka

US

Bangladesh

Middle east

Singapore and other.

Export of materials also takes place for Nepal but through road only.

Various branches under various regions which are spread all over the country are as follows….

North

Agra, Chandigad, Delhi, GZB, FBD, LUD, Jaipur, Kanpur, Dehradun.

South

Chennai, Bangalore, Kochi, Coimbatore, Hubli.

East

Kolkata, BBSR, Patna.

West

Mumbai, Ahmadabad, Pune, Indore, Nagpur.

79

80

Andhra

Vizag, Hyd, By prod

Here in head quarter marketing dept has the following different sections and each

section has their own responsibility and area to look…

MANAGEMENT INFORMATION SYSTEM

SPECIAL STEEL & PRODUCT DEVELOPMENT

HEAD – QUARTER SALES

TENDER & SCRAP SALES DEPARTMENT

PROJECT SALES

BCSY

NSY

BC –GATE

SERVICES

EXPORTS

CRM

ADMINISTRATION.

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MIS

The main function of MIS is to give all information pertaining go marketing as

well as domestic and international sales data in desired format to the management .

They prepared a daily sales report for cumulative sales of al over India .

They prepare a marketing performance report in which following details they give

Sales performance

Movement of stock

Total sales Vs production

Month wise total sales report

Month wise domestic sales report

Region wise , month wise product wise sales

Branch wise month wise product wise sales

East, North, west ,south HQ sales

Region wise market share

Sales value

Saleable steel

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Beside that they prepare all the presentations,which is required by the

marketing department from time to time.

Special steel &product development

This section deals with the sales of special steel products. Various branches

send their requirement of special steel to special steel & product development

section and here they consolidate all the data after discussing with the PPM

department during the weekly coordination meeting, rolling plan is finalized. After

production they also look for the dispatches of the material according to the

requirement. road dispatch is looked by this section but for rail dispatch they co –

ordinate with the planning & dispatch section. For a new product development they

get the request from the branches and discuss with works dept.

Regarding the feasibility of the production and accordingly it is decided to

produce the grade. They also take the customer feedback about the new product

developed. To interact with the customers directly, a team will visit the customer.

Premises directly at regular intervals and take the feed back on the quality,

required product availability and other issues.

The section is also involved in the pricing of special steel product and

generation of special report as required regularly.

83

HQ _ Sales

Head quarter sales come under Andhra region. Customers bring her

requisition of material and contact the concern in – change. He will sanction it

according to material availability and then offer letter is given to the customer.

with the offer letter customer goes to finance section and deposit the money and

comes back with receipt again to get the delivery order.

At the start of the financial year they go in contract with existing as well as

new eligible customers for the year and they are called as LTC .

Tender & scrap sales department

In tender and scrap sales department two types of sales are being done:

1.Normal sales.

2.Tender sales.

Normal sales

Iron

PCM JAM , PCM M/F

Steel

CT of billets(0.5-3.0mm)

CE of billets (0.3-0.5mm)

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MR rounds> 25mm (0.5-3.0mm)

Tender sales

E –auction procedure

First customer has to register himself with VSP by opening the site.

Then he sends LOI( letter of interest) with EMD (earnest money deposit).

After that various report generation takes place like

1. Bid history

2. Customer name ,lot no., price.

3. Out of these eligible candidate list is prepared .

4. Then eligible candidate participate in the tender.

5. Highest bidder i.e. H-1 list for each lot is prepared

6. Their prices are compared with reserved committee prices and those who

qualify of 90% criteria are awarded with materials .

7. If for some lot there are no eligible candidates re –tendering is allowed .

Project sales

Since economy of India is growing and lot of investments is taking place in

infrastructure development and new projects are coming up in different sectors like

roads, housing, bridges, etc. to tap that market one special secton has been created

85

to increase the sales potential and to identify project customers. Some criteria are

laid down to identify the project customer. This section keeps an eye on the

ongoing projects and coming up projects through various newspapers, magazines,

& journals and in turn contact with the region in which it is coming up.

There are two modes of project sales:

1. Participating in tenders..

2. MOU (memorandum of understanding)

For participating in tenders various delegations of power is there depending on

the ranks.

BCSY

This stockyard is to facilitate the production taking place in mills area . for

identifying the special steel grade materials various color codes are there. There are

two modes of dispatch from BCSY:

1. Rail dispatch

2. Road dispatch

In case of rail dispatch indents come from planning &dispatch section which

first goes to PPM dept. which in turn raise indent to traffic dept.

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Traffic dept .in turn raises the indent to railways and gets the required rakes

according to availability.

After that the send an online placement memo for required material to

BCSY.

In BCSY print out of it is taken and given to handling contractor which

loads the material in the respective wagons which are mentioned in the placement

memo.

After loading is over ,all the wagons goes for weigh ment and if any

adjustment is needed an adjustment memo is raised by the traffic dept and the fake

goes to WRM by where necessary adjustment is made.

After that TXR clearance certificate is obtained which is issued by train

examiner then final weight is done.

Then after final weighing forwarding note os handed over to the railways on

the basis of which freight payment is made from finance dept.

Rail ways then issues RR which is handed over to BC gate by courier. They

inturn issue the STC (stock transfer challan) which goes to the respective branch

online as well as by courier also.

In case of road dispatch, BCSY gives the clearance of material availability

on the delivery orders. Then the vehicle in, inside the campus after getting LSGP

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(loading slip cum gate pass ) from BC gate and the initial weighment of vehicle is

done which is known as final challan and test certicicate is issued which is handed

over to the concerned person.

BC_gate

Function of BC –gate is of document generation for both rail and road

dispatch .

Incase of rail dispatch after getting the RR ‘s from railways STC s are

generated and in case of road dispatch first LSGP is issued for entry of vehicle and

then after loading final challan with test certificates are issued for exit of vehicle.

NSY

In new stock yard all the crop ends of all the mill products came through

internal wagons and all the defective materials like material containing surface

defects , surface irregularities,, over and under sizes . the main functions going in

NSY are receipts of materials and sales of materials.

Exports

This section looks for all the exports of the materials .at the start of the

financial year based on past data analysis and target set quantities are allocated to

various countries. Tenders are floated for the whole quantity allocated for the

particular countries.sizes ,grades and chemistry are not mentioned in the tender .

88

for participating in tender EMD is required which was earlier 1% now ,US $ 4 per

MT. accordingly the party is finalized by tender committee who qualifies all the

criteria and intimated. After getting the confirmation from the party contract is

sigend in which details about the quantity ,grade ,size and chemistry is mentioned

and after that rolling program is finalized in consultation with PPm dept. and

accordingly material is rolled . the buyer has to give L C (letter of credit) in the

prescribed format of VSP. This LC may be issued from any bank of buyer ‘s

choice which is called issuing bank but it should be advised from any Indian bank

which is known as LC advising bank. Then this LC comes to RINL which is send

to LC confirming bank .this LC confirming bank lodges its claim to LC

reimbursement bank. Balidity period of LC is normally given as 21 days payment

is made .

After loading the material following documents is generated:

Invoice

Packing list

Bill of loding from captain of vessel

Certificate of origin from local chamber of commerce

Inspection certificate by BSI

Woek test certificate from QATD

89

Shipping bill from customs

Beneficiary certificate

Copy of fax.

CRM (cumsomer relationship managenent)

To give thrust to customer service activities ,a central CRM cell is

constituted at HQ marketing along with CRM cell in region and branch.

They have adopted a customer policy and obtaining regular feedback from

customer is also introdured.

Some set guidelines and norms are adopted for various customer related

acticities like issue of offer letter / delivery order, loading at stockyard and refunds

etc.

For expediting settlement of customer quality compalints , E- system has

been inplelented on VSP’s intranet which eliminated lot of paper work in

processing of quality complaints.

For getting customer feed back one customer feed back form is there which

customer can get from the concerned branch sales office,fill it and can send it here.

On the basis of various parameters of feed back from customer’s satisfaction

is Analzed and necessary actions are taken to improve the level of satisfaction.

90

They have also introduced system of E poll from customer which is under

implementation .

System of replying to customer queries on VSP portal with in 24 hours has

also been implemented.

This section also looks for internal as well as external auditing, ISO

auditing ,&implementation and railway claims also taken care of by this section.

Marketing administration

Monitiring of the budget allocation ,expenditure and budget projection for

the subsequent year is looking after by this section. All the lease accommodation

proposals from branches and purchase of office premises proposals for various

branches are being processed by this section .attendance records of head quarters

as well as of branches are maintained by administrationsection. All the medical

bills of marketing department employes ,head quarter as well as branches are

collected and send to personal dept. for clearance by administration section.

Stationery requirement of all the branches as well as head quarter are consolidated

by the section and send to finance for approval.

91

Over due out standing related to credit sales for various branches are also

consolidated here and corresponding report is prepared .all the corrensondence i.e.

receiving and dispatching of couriers and posts are also done by this section.

Responsibility for the maintenance of conference halls and furniture is also on

this section.

92

93

THE MARKETING MIXOF

VIZAG STEEL PLANT

94

Marketing mix of Vizag steel plant The mix of controllable variables that the firm/library uses to reach desired

use/sales level in target market, including price, product, place and promotion-

Four P's

Product

Price

Place

promotion

4 P’s. For a library this would be embodied in price of user’s time to access

goods, a product would be a book or story time, place is a branch or bookmobile,

and promotion is publicity, The term "marketing mix" was coined in 1953 by Neil

Borden in his American Marketing Association presidential address. However, this

was actually a reformulation of an earlier idea by his associate, James Culliton,

who in 1948 described the role of the marketing manager as a "mixer of

ingredients", who sometimes follows recipes prepared by others, sometimes

prepares his own recipe as he goes along, sometimes adapts a recipe from

immediately available ingredients, and at other times invents new ingredients no

95

one else has tried.[1] A prominent marketer, E. Jerome McCarthy, proposed a Four

P classification in 1960, which has seen wide use.

Product mix :

“Product” refers to the goods and services you offer to your customers.

Apart from the physical product itself, there are elements associated with your

product that customers may be attracted to, such as the way it is packaged. Other

product attributes include quality, features, options, services, warranties, and brand

name. Thus, you might think of what you offer as a bundle of goods and services.

Your product’s appearance, function, and support make up what the customer is

actually buying. Successful managers pay close attention to the needs their product

bundles address for customers. Your product bundle should meet the needs of a

particular target market. For example, a luxury product should create just the right

image for “customers who have everything,” while many basic products must be

positioned for price conscious consumers. Other important aspects of product may

include an appropriate product range, design, warranties, or a brand name.

Customer research is a key element in building an effective marketing mix.

Your knowledge of your target market and your competitors will allow you to offer

a product that will If you are considering starting a new business or adding a new

product, then make sure the product bundle will fit your business’s strengths and

96

weaknesses, and that it will provide an acceptable risk/return tradeoff. For

instance, if your business is very good at timely response to customers, then timely

service should be an important part of your product bundle. Think long term about

your venture by planning for the ways you can deepen and broaden your product

bundle. For instance, you may be able to take advantage of opportunities to add

value through processing, packaging, and customer service. Other future growth

may allow you to offer your product to different customers. Start-up businesses are

most successful when they concentrate their efforts on one product or one market,

like a restaurant or a car service center does. Later growth may occur in the same

location or may be in different geographic regions. A different type of growth

would be a diversification of products, with your business offering related

products. Offering a whole range of products is most successful if the raw

materials, production processes, and distribution methods are similar, which means

you do not have to acquire new suppliers, skills and equipment, and distribution

methods.

97

Product Varity:

WIRE RODS

STRUCTURALS

WIRE ROD COILS

PLAIN ROUNDS

RE –BARS Fe 500

SQUARES

BEAMS

FLATS

ANGLES

CHANNELS

BILLETS

98

By products

Granulated slag

Lime fines

Ammonium sulphate

Crude coal tar

Coal tea fuel /pitch creosote mixture

Hot pressed naphthalene

Drained naphthalene oil

Phenol fractions

Light solvent oil benzene

Toluene

Coal tar wash oil

Anthracene oil

99

RE BARS:

Special features:

Low carbon content and made fron fulyy killed steel

Higher yield strength & ulitimate tensile strength couples with Higher percentage

eolngation when compared to cold twisted bars Of same grade.

Easy bend ability ,weld ability and excellent ductility ensure economy

and safety of use.

Advantages

Combination of high strength and high ductility

Resistance to ageing

Superior corrosion resistance

Excellent bend ability and workability

WIRE ROD COILS

5.5,6,6.5,7.5,8,9,10,11,12,12.7,13,14mm

ROUNDS

16,*16.5,*17.5,18,20,*20.64,22,25,28,32,33.5,34,36,38,40,42,45

46.5,48,50,53,56,60,63,35,71,75,77,80mm.

100

REINFORCEMENT BARS

8,10,12mm

16,*18,20,*22,25,28,32,36mm

ANGLES

*50 × 50 × 5/6 mm

*60 × 60 × 5/6 mm

*65 × 65 × 6 mm

75 × 75 × 6/8 mm

90 × 90 × 6/8 mm

100 × 100 × 8/10 mm

110 × 110 × 8/10 mm

CHANNELS

MC *40 × 32 × 5.0mm

MC *75 × 40 × 4.8mm

MC 100 × 50 × 5.0mm

101

MC 125 × 65 × 5.3mm

MC 150 × 75 × 5.7mm

BEAMS

IPE-BEAMS *180 × 91 × 5.3mm

HE-BEAMS *120 × 114 × 5.0mm

ISMB BEAMS 125 × 70 × 5.0mm

150 × 75 × 5.0mm

175 × 85 × 5.8mm

BLOOMS

245 × 245mm ----- 5.5 --- 6.08mts

315 × 245mm ----- 6.0 --- 6.40mts

BILLETS

125 × 125mm --- 8.0 --- 10.4mts

90 × 125mm --- 6.0 --- 12.0mts

75 × 75mm --- 6.0 --- 12.0mts

65 × 65mm --- 6.0 --- 12.0mts

102

GRADES

BLOOMS : Mild steel/Low, medium & High carbon steel, forging

Quality

BILLETS : Mild steel ,Low, medium& High carbon ,spring steel

High mm & forging Quality steels

ROUNDS : Mild steel ,Low, medium carbon ,bright bat & forging

Quality

REBARS : Thermo Mechanically treated (TMT) bars of different

yield strengths.

STRUCTURALS : Structural steel and High Tensile steel.

WIRE RODS : Low carbon, Wire drawing, bright bar, Electrode Quality,

Cold Heading Quality, Tyre – be an other High Carbon

Grades.

103

STRUCTURALS

Special features

Piling and automatic styling of the structurals ensure minimum damage

during handling and transport .

Tension free rolling ensures closer tolerances and negative sectional weight.

Universal beam rolled in medium merchant & structural mill is the most

economical section which has got better sectional properties .has a simple

symmetrical cross section providing more flexibility to designer. Fabricator and

erector. This section can result in saving of 15% steel.

PRODUCT BRANDING

Trade name: “a name given to a product or service” VSP started branding of

its products with a vies to creating an image for itself improvig realizations .the

rebar manufactured at VSP are at branding as Vizag TMT .

Packaging

Packing material

Any material used especially to protect something.

The enclousure of something in apackage or a box.

104

Carrying something in a pack on the back ;”the backpacking of oxygen is essential

for astronauts”.

Bundle weights 4.5 tones

Bundle weights 4.5 tones to 10 tones

Nested and interlocked

Compacted ,coil weight 1.2 MT approx..

Services

When the physical product cannot easily be differentained ,the key to

competitive success may lie in adding valued services and improving their quality.

The main service differentiators are Ordering ease , delivery, installation, customer

training, customer consulting , and maintenance and repair.

Delivery of goods of VSP

Delivery should be taken fron stockyard at ----on surrounded of order in

original Delivery will be made to the customer /his representative authority in

writing, on working days upto 4 pm providing this order is produced before

stockyard executive before 3 pm. If the materials are to be bent /cut the charges

thereon will be extra and required time should be given to enable the stockyard to

keep the materials ready.

105

Delivery will be made as far as possible as pe rthe quantity indicated, but if

there are any varition subject to maximum of 5 % the customer should accept the

same.

The customer shall be responsible for safe custody of the delivery order ,the

company shall not be responsible for any consequences arising out of the loss of

the delivery order by the customer and /or delivery against such delivery orders to

the holder of the same.

Warranties & returns

Complaints if any regarding quality may be lodged with the branch manager.

With in 15 days from the data of delivery of the materials. A specifie form for

filling cmpalints. Can be obtained from the branch office.VSP got a retail quality

related issues detail procedure is layout to deal with quality components received

from various customers in a time bound manner. All the quality components are to

be settled in a time frame given in the policy.

Price

. “Price” refers to how much you charge for your product or service.

Determining your product’s price can be tricky and even frightening. Many small

business owners feel they must absolutely have the lowest price around. So they

begin their business by creating an impression of bargain pricing. However, this

106

may be a signal of low quality and not part of the image you want to portray. Your

pricing approach should reflect the appropriate positioning of your product in the

market and result in a price that covers your cost per item andincludes a profit

margin. The result should neither be greedy nor timid. The former will price you

out of the market; pricing too low will make it impossible to grow. As a manager,

you can follow a number of alternative pricing strategies. In the next column are

eight common pricing strategies. Some price decisions may involve complex

calculation methods, while others are intuitive judgments. Your selection of a

pricing strategy should be based on your product, customer demand, the

competitive environment, and the other products you will offer.

Cost-plus: Adds a standard percentage of profit above the cost of producing

a product. Accurately assessing fixed and variable costs is an important part

of this pricing method.

Value-based: Based on the buyer’s perception of value (rather than on your

costs). The buyer’s perception depends on all aspects of the product,

including non-price factors such as quality, healthfulness, and prestige.

Competitive: Based on prices charged by competing firms for competing

products. This pricing structure is relatively simple to follow because you

maintain your price relative to your competitors’ prices. In some cases, you

107

can directly observe your competitors’ prices and respond to any price

changes. In other cases, customers will select vendors based on bids

submitted simultaneously. In those cases, gathering information will be

more difficult.

Going-rate: A price charged that is the common or going-rate in the

marketplace. Going-rate pricing is common in markets where most firms

have little or no control over the market price.

Skimming: Involves the introduction of a product at a high price for affluent

consumers. Later, the price is decreased as the market becomes saturated.

Discount: Based on a reduction in the advertised price. A coupon is an

example of a discounted price.

Loss-leader: Based on selling at a price lower than the cost of production to

attract customers to the store to buy other products.

Psychological: Based on a price that looks better, for example, $4.99 per

pound instead of $5.00 per pound. After you decide on your pricing strategy,

the amount of money you will actually receive may be complicated by other

pricing aspects that will decrease (or increase) the actual amount of money

you receive. You will also have to decide how to determine: • Payment

period: Length of time before payment is received.

108

Allowance: Price reductions given when a retaileragrees to undertake some

promotional activity for you, such as maintaining an in-store display.

Seasonal allowances: Reductions given when an order is placed during

seasons that typically have low sales volumes to entice customers to buy

during slow times.

Bundling of products/services: Offering an array of products together.

Trade discounts (also called “functional discounts”): Payments to

distribution channel members for performing some function such as

warehousing and shelf stocking.

Price flexibility: Ability of salesperson or reseller to modify price.

Price differences among target customer groups: Pricing variance among

target markets.

Price differences among geographic areas: Pricing variance among

geographic regions.

Volume discounts and wholesale pricing: Price reductions given for large

purchases.

Cash and early payment discounts: Policies to speed payment and thereby

provide liquidity.

109

Credit terms: Policies that allow customers to pay for products at a later

date.

The methods discussed here should be a base from which to construct your

price. options will vary depending on how choose to sell product. For instance, a

product is made but don’t sell it directly to the customer, then you will want to

know who sets the retail price and what margin they will require. Tracing the path

of product from production to final purchase is a useful exercise to discover this

information. The research needed to understand the pricing along the distribution

path will be more than worth the time it takes.

Whatever price may be, ultimately it must cover costs, contribute to image

by communicating the perceived value of product, counter the competition’s offer,

and avoid deadly price wars.

Price is the one “P” that generates revenue, while the other three “P’s” incur

costs. Effective pricing is important to the success of business.

VSP PRICES AND PRICING

PRICES

Prices of iron and steel materials are fixed by HQ pricing committee. VSP

collecting the information on regular basis market trends on regular basis and data

will be used on pricing , decision.

110

Pricing

The price and extra if any ,ruling at the time of delivery will be charged in

the invoices . the finance executive /assistant ,while preparing the invoice will

ensure that the following are charged.

1. Current stockyard prices ,as per stockyard pricelist circulated by the Head

quarters.

2. Applicable extra additive any on stockyard price in case of materials which

attract such extras.

3. Approved rebates whenever applicable under the approval of competent

authority.

4. Octroi , entry tax and /or any other levy at appropriate rates. Central and

state sales tax as applicable /concessional forms if any.

5. Surcharge on sales tax if any.

6. Bending and cutting charge as approved schedule of rates.

7. Forwarding charges in case of rail booking.

8. Siding charges.

Price revision

Whenever there is a price increase announced , all further deliveries should

be stopped ,simultaneously action should be immediately taken to collect

111

additional advances to the extend needed an all existing partially executed delivery

orders .if this is not possible , BM may advise stockyard to reduce the quantity to

be delivered , so that the value of the deliveries including taxes and levies are

within the advance collected .VSP following monthly based pricing system.

Payment period

Payment from the customers shall be received in advance ,by DD/ pay order

on any scheduled bank ,draw in favour of “RINL VSP Collection account” for the

full amount mentioned in the offer letter.

Cheques will be accepted only from those parties to whom the cheque

facilities have been extended. Normally delivery shall be arranged on realixation of

chequr. In exceptional cases, where deliveries are made on receipt of

cheque ,realization of such cheques should watched and ensured.

Payment by parties and scrutiny thereof.

The customer has to submit the following documents

1. The copy of the offer letter duly accepted by the customer.

2. Sales tax declaration form.

3. Authorization for collection of DD by the authorized representative of the

customer as provided in the offer letter.

112

4. DD/cheque as stipulated in the offer letter.

5. The dealing assistant shall accept only DD /PO tendered by the customer to

whom the offer is made or its authorized representatives. The documents

shall be put up for signature of concerned executive of the branch ,after the

assistant shall prepare the money receipt for preparation of delivery order

and to be furnished to the customer.

Acceptance of cheque

Payments will normally be accepted in the form of demkand draft or pay

order. How ever in the same case of specific parties, branch manager may with the

approval of the competent by cheque. The chequeshall be local .no out station

cheques will be accepted.

Extension of credit

Credit is often extended with approval of competent authority to affect sales

during ‘difficult’ times – lack of demand ,competition, wrong/or excess dispatches

leading to stock building up, genuine problems faced by valued customers who

temporaily seeks relief in the form of credit etc…

113

Credit is to be given only on approval by competernt authority. The period

limits should be strictly enforced. All such credits by the customer on facour of

VSP.

promotion

“Promotion” refers to the advertising and selling part of marketing. It is how

you let people know what you’ve got for sale. The purpose of promotion is to get

people to understand what your product is, what they can use it for, and why they

should want it. You want the customers who are looking for a product to know that

your product satisfies their needs. To be effective, your promotional efforts should

contain a clear message targeted to a specific audience reached via an appropriate

channel. Your target audience will be the people who use or influence the purchase

of your product. You should focus your market research efforts on identifying

these individuals. Your message must be consistent with your overall marketing

image, get your target audience’s attention, and elicit the response you desire,

whether it is to purchase your product or to form an opinion. The channel you

select for your message will likely involve use of a few key marketing channels.

Promotion may involve advertising, public relations, personal selling, and sales

promotions. A key channel is advertising. Advertising methods to promote your

product or service include the following.

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Radio:

Radio advertisements are relatively inexpensive ways to inform potential

local customers about your business. Mid-to-late week is generally the best time to

run your radio ad.

Television:

Television allows access to regional or national audiences, but may be more

expensive than other options.

Print:

Direct mail and printed materials, including newspapers, consumer and trade

magazines, flyers, and a logo, allow you to explain what, when, where, and why

people should buy from you. You can send letters, fact sheets, contests, coupons,

and brochures directly to new or old customers on local, regional, or national

levels.

Electronic:

Company Web sites provide useful information to interested consumers and

clients. Password-protected areas allow users to more

5 Purdue extension

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Knowledge:

Knowledge to go intimately interact with you. Advertisements allow broad

promotion of your products. Direct e-mail contact is possible if you have collected

detailed customer information.

Word of Mouth:

Word of mouth depends on satisfied customers (or dissatisfied customers)

telling their acquaintances about the effectiveness of your products.

Generic:

Generic promotion occurs when no specific brand of product is promoted,

but rather a whole industry is advertised. For instance, generic advertising is

commonly found for milk, beef, and pork. Public relations (PR) usually focuses on

creating a favorable business image. Important components of a good public

relations program include being a good neighbor, being involved in the

community, and providing open house days. News stories, often initiated through

press releases, can be good sources of publicity. Personal selling focuses on the

role of a salesperson in your communication plans. Salespeople can tailor

communication to customers and are very important in building relationships.

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While personal selling is an important tool, it is costly. So you should make efforts

to target personal selling carefully. Sales promotions are special offerings designed

to encourage purchases. Promotions might include free samples, coupons,

contests, incentives, loyalty programs, prizes, and rebates. Other programs might

focus on educating customers through seminars or reaching them through trade

shows. Your target audience may be more receptive to one method than another.

Additional sources of promotion may be attending or participating in trade

shows, setting up displays at public events, and networking socially at civic and

business organizations.

Advertising of VSP products

RINL following the advertising in a form of paper advertisement and it is

appointed the DLD’s (district level dealers ) development of VSP products in rural

areas also. DLD’s appointed throughout country under various branches. It is a part

of promoting different boarding’s in different junctions the main for DLD is

increasing the productivity in rural areas.

The boarding also contains details of the products being used in construction

field, as part of promoting VSP products in hording painting are made and possible

in different roots describing about the using of construction as TMT REBARS in

this place they are mention contract number and address of the senior branch

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manager, RINL promoting activities taken wild place in city’s also they are

establishing hordings in railway stations, bus stand, air port etc…

Public relations and publicity

Public relation encompasses a wide variety of communication efforts to

contribute to generally favorable attitudes and options an organization and its

product. Unlike advertising and personal selling, it does not include specific sales

manager. The targets may be customers, stock holders , the Government agencies

or special interest group.

Direct marketing

Direct marketing is any unsolicited contract business makes with existing or

potential customers in order to generate sales or raise awareness. VSP following

direct marketing system where as builders and constructers they are directly

approach to the company this system is called as direct marketing.

Place( distribution)

“Place” refers to the distribution channels used to get your product to your

customers. What your product is will greatly influence how you distribute it. If, for

example, you own a small retail store or offer a service to your local community,

then you are at the end of the distribution chain, and so you will be supplying

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directly to the customer. Businesses that create or assemble a product will have

two options: selling directly to consumers or selling to a vendor.

Direct Sales

As a producer, you must decide if supplying direct is appropriate for your

product, whether it be sales through retail, door to- door, mail order, e-commerce,

on-site, or some other method. An advantage of direct sales would be the contact

you gain by meeting customers face to face. With this contact you can easily detect

market changes that occur and adapt to them. You also have complete control over

your product range, how it is sold, and at what price. Direct sales may be a good

place to start when the supply of your product is limited or seasonal. For example,

direct sales for many home-produced products can occur through home based

sales, markets, and stands. However, direct sales require that you have an effective

retail interface with your customers, which may be in person or electronic. If

developing and maintaining this retail interface is not of interest to you or you are

not good at it, you should consider selling through an intermediary.

Reseller Sales (Sales Through an Intermediary)

Instead of selling directly to the consumer, you may decide to sell through

an intermediary such as a wholesaler or retailer who will resell your product.

Doing this may provide you with a wider distribution than selling direct while

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decreasing the pressure of managing your own distribution system. Additionally,

you may also reduce the storage space necessary for inventory. One of the most

important reasons for selling through an intermediary is access to customers. In

many situations, wholesalers and retailers have customer connections that would

not be possible to obtain on your own. However

Market Coverage

No matter whether you sell your product direct or through a reseller, you

must decide what your coverage will be in distributing your product. Will you

pursue intensive, selective, or exclusive coverage?

Intensive distribution

It is widespread placement in as many places as possible, often at low prices.

Large businesses often market on a nationwide level with this method.

Convenience products—ones that consumers buy regularly and spend little time

shopping for, like chewing gum—do better with intensive (widespread)

distribution.

Selective distribution

It narrows distribution to a few businesses. Often, upscale products are sold

through retailers that only sell high-quality products. With this option, it may be

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easier to establish relationships with customers. Products that people shop around

for sell better with selective distribution.

Exclusive distribution

It restricts distribution to a single reseller. You may become the sole supplier

to a reseller who, in turn, might sell only your product. You may be able to

promote your product as prestigious with this method, though you might sacrifice

sales volume. Specialty products tend to perform better with exclusive distribution.

Other Place Decisions Product characteristics and sales volumes will dictate

what inventories to maintain and how best to transport products. Additionally, the

logistics associated with acquiring raw materials and ensuring that final product is

in the right place at the right time for the right customers can comprise a large

percentage of total costs and needs careful monitoring. You may decide to have a

combination of all the distribution methods. Whatever you decide, choose the

method which you believe will work best .

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selling to the wholesalers:

There may be four or five sport articles wholesalers in Arizona. you sell

your fun boards to these big men. On turn the wholesalers se the fun boards to the

retailers which finally sell to their customers.

The choice of distribution channel heavily depends on your product and

place in the productive process.

Distributing channel:

VSP appointed the DLDs (district level dealers ) in every district. They are

distributing the VSP products in rural areas. Every district DLDs doing their

activities and this number will be increasing two or more then.

DLDs appointed only selling for TMT bars.

VSP also directly producing materials through yield users.

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VSP channels and distribution

Direct marketing Indirect marketing ↓ ↓

Seller seller

↓ ↓ Trader

user ↓

User

Inventory managements

Thrust will be on reduction of inventory at lease at the rate of 5% every year.

The aim would be to work towards just in time inventory for spares and

consumable. Tor high value and regular consumption items will be increased for

inproving reliability and reducing procurement cost. It is proposed to reduce the

number of indents through standardization.

Transport

The transportation logistics cover receipt of principal raw materials, dispatch

of finished products and internal transportation of in process material and other

products.

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Rail :

Barring a few minor raw materials, the bulk of the inward raw materials is

received by rail, at present the imported raw materials, received at the VPT, are

also moved to the plant by rail. Since railways had already acquired land to cater

up to 10 mt expansion of vsp no major changes are equired in their yards to meet

the enhanced plant requirements , however, for movement of iron ore from

bailadilla , some minor matching facilities are needed.

Port

Presently, the imported raw materials are received through VPT. As per the

government decision , construction of a port of gangavaram, adjacent to the

plant .this enable VSP to shift its imports and exports from VPT to gangavaram

port and avoid surface transportation. The material received at gangavaram port

transport into the plant through a conveyor system. The port at gangavaram help in

avoiding the rail transportation cost from VPT to VSP and also avoid cost og

tipping of imported coal and SMS limestone wagons.

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SUMMARY&

FINDINGS

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FINDINGS

The following are the findings from the project done in Vizag steel plant .

In production department VSP following high level technology.

The marketing conditions are very good.

VSP producing qualitative products with intermational standards and it is

producing wild verities of products.

Pricing of the done monthly basis .

Pricing of the products is quite satisfactory.

Customer care services are also recognizable.

There is regular interaction between the customer to company

Customer feedback system is existed

Present market conditions favor able to VSP products

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SUGGESTIONS:

Already sufficient demand in the market of the VSP products.

More utilization of available human resources & supply more products .

VSP introducing the new products and they want to produce different sizes

of products.

They producing Angles and they want to increase more sizes to increase

sales and set the market demand.

The market pricing feedback more reach basis users and middlemen’s in a

structured manner to make the pricing decision effectively and to ensure

competitive price.

More distribution centers like DLDs for various branches include TMT bars

are to be appointed. This will help to reach the rural markets.

They want increasing more publicity by way of advertisements ad using

various sources like media, radios newspapers to done in specific location

where VSP present is poor awareness level are look.

This helps to increase the production of VSP.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

1.Marketing Management By Philip Kotler

2.www.vizagsteel.com

3.Annual report of vizag steel plant

4.www.google.com

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