B2B Branding from Tata steel

B2B Branding from Tata steel

1. B2B Project Work




Branding
Of
Tata Steel











Group -2
Biswajit Das 1018038
Ritesh kumar 1020027
Abhinav Tushant 1018002
Archana Singh 13202071

2. TATA STEEL

Tata steel was founded by J.N. Tata in 1907 near a village called Sakchi (now Jamshedpur).
Asia's first integrated private sector steel company, Tata Steel Group is among the top-ten global
steel companies with an annual crude steel capacity of over 29 million tons per annum (mtpa). It
is now the world's second-most geographically-diversified steel producer, with operations in 26
countries and a commercial presence in over 50 countries. The Tata Steel Group, with a turnover
of US$ 24.82 billion in FY 13, has over 80,000 employees across five continents and is a Fortune
500 company. The Group's vision is to be the world's steel industry benchmark in "Value
Creation" and "Corporate Citizenship" through the excellence of its people, its innovative
approach and overall conduct. Underpinning this vision is a performance culture committed to
aspiration targets, safety and social responsibility, continuous improvement, openness and
transparency. In 2008, Tata Steel India became the first integrated steel plant in the world,
outside Japan, to be awarded the Deming Application Prize 2008 for excellence in Total Quality
Management. In 2012, Tata Steel became the first integrated steel company in the world, outside
Japan, to win the Deming Grand Prize 2012 instituted by the Japanese Union of Scientists and
Engineers. The Tata steel basically comprises with three main operations: Indian operations,
European operations and South East Asia Operation.

The Key Market segments: Steel is the backbone to countless products and services that shape
the everyday lives of people throughout the world. We offer total shape dependability,
innovation added value to customers in every market sector through our wide array of products.
 Automotive
 Construction
 Consumer Goods
 Engineering
 Packaging
 Material Handling
 Energy and power
 Agriculture

3. PRODUCTS & BRANDS

Tata Steel’s Jamshedpur Works produces hot and cold rolled coils and sheets, galvanized sheet,
tubes, wire rods, Ferro alloys and construction rebar. To differentiate its premium quality steel
products, Tata Steel has introduced brands such as Tata Steelium (the world’s first branded cold
rolled steel), Tata Shaktee (galvanized corrugated sheets), Tata Tiscon (re-bars), Tata Bearings,
Tata Agrico (hand tools and implements), Tata Wiron (galvanized wire products), Tata Pipes
(pipes for plumbing, irrigation and plant processes), Tata Structura (contemporary construction
material), Tata Sigcomag, Galvano and Tata Shaktee Ultima.

4. Tata Steel Ltd. is a Large Cap company (having a market cap of Rs 36998.45 Cr.) operating in
Iron and Steel sector.
Tata Steel Ltd. key Products/Revenue Segments include Saleable Steel which contributed Rs
36108.46 Cr to Sales Value (77.97% of Total Sales), Other Raw Materials which contributed Rs
3179.13 Cr to Sales Value (6.86% of Total Sales), Welded Steel Tubes which contributed Rs
2095.56 Cr to Sales Value (4.52% of Total Sales), Semi Finished Steel And Scrap which
contributed Rs 1376.20 Cr to Sales Value (2.97% of Total Sales), Charge Chrome which
contributed Rs 1103.72 Cr to Sales Value (2.38% of Total Sales), Power which contributed Rs
897.99 Cr to Sales Value (1.93% of Total Sales), Other Operating Revenue which contributed Rs
439.79 Cr to Sales Value (0.94% of Total Sales), By Products which contributed Rs 427.02 Cr to
Sales Value (0.92% of Total Sales), Ferro Manganese which contributed Rs 210.95 Cr to Sales
Value (0.45% of Total Sales), Bearings which contributed Rs 187.77 Cr to Sales Value (0.40%
of Total Sales), Other Agro Products which contributed Rs 159.52 Cr to Sales Value (0.34% of
Total Sales), Other Services which contributed Rs 86.96 Cr to Sales Value (0.18% of Total
Sales), Metallurgical Machinery which contributed Rs 36.27 Cr to Sales Value (0.07% of Total
Sales), for the year ending 31-Mar-2014.
For the quarter ended 30-Sep-2014, the company has reported Standalone sales of Rs. 10700.98
Cr., up 3.11% from last quarter Sales of Rs. 10377.73 Cr. and up 8.91% from last year same
quarter Sales of Rs. 9825.95 Cr. Company has reported net profit after tax of Rs. 2476.41 Cr. in
latest quarter.

5. Pricing of B2B Product
Most businesses follow the fundamental pricing strategy of cost-plus. That is, charging buyers
the cost of producing or purchasing and marketing a product or service, then adding on a
reasonable margin to allow for a measure of profit. Although pricing in B2B have different kind
of challenges. In B2B environment, companies make purchasing decisions to make profit so this
makes the purchasing decisions more risky. Thus, companies tend to form long-term
relationships and agree on a fixed-price with their suppliers.
Even though retail companies have a high transaction volume, they have a relatively simple
pricing calculation. In B2B markets, customer is a firm and organizational purchasing is
considered more complex than consumer purchasing. Thus, B2B environment requires a
combination of strategy, business process and technology so that firms can capitalize ahead of
their competitors and gain tremendous competitive advantage.
Pricing decision in B2B markets has to involve currency considerations, market share dynamics,
financial factors and the need that the price has to be predetermined by the quality and price
balance.
As described on the table above, B2B and B2C pricing differ from each other in many aspects. In
B2C, transaction volumes are high which in B2B is very volatile and may change from low to
high. Pricing data has accurate info in B2C which in B2B resides in many different systems.
Pricing calculation can be considered as simple in B2C environment but in B2B it is considered
as a complex process. In addition pricing authority is also centralized in B2C. However, In B2B
it is distributed as the sales team determines discounts in many cases. In addition to pricing data,
pricing levels reside in many systems in B2B as well which has very few levels in B2C
environment. Last but not least, pace of change is very low in B2C but in B2B pace of change
fluctuates from medium to high.

6. Branding Of B2B Product
Brands allow a producer or owner to distinguish his/her goods or services. Branding today is a
strategic tool that helps the supplier cut through the morass of the market, get noticed, and
connect with the customer on many levels and in ways that matter. A strong brand becomes the
customer’s “shorthand” for making good choices in a complex, risky, and confusing
marketplace. To stay alive and flourish in highly competitive environments, business-to-business
(B2B) companies spend more time and money on R&D. Suppliers focus on making their
products smarter, faster, and smaller, and more cost-effective and reliable, than the competition.
They also find ways to improve and add services so that they provide customers with a complete
and satisfying experience. Marketplaces are constantly changing, so companies have to adapt in
order to stay ahead.
But these B2B companies truly differentiate their offering and be relevant to customers over the
long-term. This is where brands is created by company. Brands matter in B2B markets. In fact,
they may matter even more in B2B than in B2C. Brands matter because companies act just like
people when it comes to evaluating what products or services to buy. Along with a number of
explicit rational criteria, a powerful irrational impulse is always present to influence the purchase
decision. A strong brand with an effective positioning strategy speaks to and taps into the totality
of these buyer needs. Brands matter when supplier teams are doing business with buyer teams.
Through effective internal branding efforts, the brand becomes the “glue” that binds the supplier
culture and organization together, enabling the brand to make good on its external promise.
Enterprise customers will reward a brand which delivers a unified, consistent and satisfying
experience with repeat business.
However, common beliefs in the B2B marketing universe overlook the importance of brands.
Consider the following thoughts: Consumer brands are defined and presented largely based on
emotive appeals—“warm and fuzzies.” In B2B, products and services, rather than “brands,” are
pitched, sold, and transacted through cold logic. Consumers are drawn to brands’ status, prestige,
affinity and self-security. Business customers specify and purchase based pricing, specifications,
product performance and metrics. Such thinking by B2B marketers is not only naïve (and defies
logic) but also undermines their ability to drive incremental business value and ROI.

7. BRANDING
In B2B marketing advertising, promotions and publicity plays an important role in the
communication strategies. Hence, to contribute to the overall effectiveness of the promotional
strategies utmost care must be taken by the companies. B2B branding is used to create awareness
of the company, to increase the sale of the product and to increase the overall effectiveness of
selling efforts. The promotional program begins with carefully developed advertising objectives
that must be formulated from corporate from corporate and marketing objectives in such a
manner as to set the direction for creating, co-coordinating, and evaluating entire promotion
programme.

BRANDING BY TATA STEEL
As one of India’s most successful companies, Tata Steel also represents a great example of a
strongly branded B2B company. In 2001 and 2005, Tata Steel was ranked the world’s best steel
company in studies carried out by World Steel Dynamics Inc., USA (WSD), a leading steel
information service provider. The ranking were based on a set of different criteria, ranging from
cash operating cost to stock market performance of the respective three years.
The profitability of the steel industry in India is generally linked to business cycles, reaping
profits when economy is going well and eroding them when it is in depression. In the late 1990s,
the Indian steel industry was experiencing a glut in the market which strongly affected the profit
margin of all related companies. To reduce its dependence on the external environment and
business cycles, Tata Steel adopted a strategy which stressed the following two points: Branding
its products and moving to high value added products.
The company soon realized that a strong customer focus is essential if any branding approach
was o be successful. It soon began to introduce internal campaigns in order to bring the customer
centric message to its employees. In the late 1990s, the company launched several internal
marketing programs to emphasize customer focus and service. The programs had taglines such
as, “customer first- her haal mein, her saal” (Customer comes first in every case, every year),
“customer I kasam – hain taiyaar hum” (We pledge to the customer that we are ready for him).
These are the mantras behind Tata Steel’s success. This transfer from producer logic to customer
logic was seen as the path to influence customer behavior for mutual gain.

8. Before jumping on to the brand wagon, Tata Steel Set up a branding task force in January 2000
to explore 2000 to explore the possibilities of branding that will manufacture zinc/ aluminum
metallic coated steel, painted steel and rolls formed steel products, and deliver pre-engineered
buildings and other building solutions. The new company will offer a comprehensive range of
branded steel products for building and construction application. Only three months later, the
task force evolved into a brand department. Within this department they created the distinct sub
functions “market development”, “order generation” and “order fulfillment”, which were
computerized, enabling Tata Steel to reduce its customer reponse time significantly. The
company also initiated the concept of “customer account managers” who were authorized and
empowered to solve specific customer grievances immediately. The company furthermore
sought to increase customer interaction in order to better understand customer needs and
expectations.
The Steel industry has been racing along at a surprisingly high speed during recent years, largely
due to the huge buying from China. Tata Steel has also done extraordinarily well as the industry
moved upwards, but the next big challenges are already seen on the horizon: global reach with
global branding.
The leader of the company had decided that branding the commodity steel would provide them a
unique selling proposition in a great way. Branding Steel would hold Tata Steel in two big ways:
 It would help stabilize the flow of revenues even during business downturns.
 It would make premium pricing possible.

CHALLENGES FACED:
At the beginning, one of the major obstacles Tata Steel had to overcome was its inexperienced
marketing personnel. Their knowledge of branding techniques was quite limited and moreover,
many of them had doubts about the feasibility of branding steel. As a solution they started
several training programs for them and organized seminars and workshops where experienced
people from sectors came and spoke to employees regarding various issues related to branding. It
also formed sparate required for both. The positioning reinforces especially the brand’s
leadership position, both in the market place and in the minds of the Indian consumer.

9. VALUE MANAGEMENT
Tata recognized early that their employees were essential assets in the course of becoming more
customer-focused. Therefore it adopted a program of Retail Value Management, under which the
company provided training to sale people recruited by the retailers to help increase sales. In a
region in northern India, for instance, sales teams trained by the company approached local
architechs and convinced them of the advantages of using more steel, resulting in a doubling of
the market share of Tata Tiscon in that region. One of the most important things in promotional
strategies is to know who you are actually messaging to. One of the major implications that Tata
under took in the course of their promotion efforts was a concise target group check and
distribution revamp. The company was actively involved in both B2B branding and promotion.
The B2B customer were mainly automakers Maruti, Telco and Ford, who with their knowledge
of steel helped the company to focus on product quality on a holistic way, negotiating for
specifications and discussing the advantages of using different grades of steel.
Tata Steel realized that only 200 large industrial customers were providing the big chunk of its
total sales – 80 percent – while the remaining 20 percent were contributed to by around 5,000 –
6,000 smaller customers. The logical consequence was to adopt different sales strategies for B2B
and B2C. For the 200 key accounts that made up for 80 percent of the sales, the company started
an extensive Customer Value Management Program. Under this Program they allocated a whole
team consisting of people from various department of the company to one customer.

BENEFITS FROM BRANDING
The branding and promotional initiative of Tata Steel showed impressive result. It was found that
the sale of branded product increased by 84 percent. The future xpectation and prospects of the
company are also very positive. Today, Tata Steel is already one of the best branded names in
steel industry and has already started initiatives in the co- branding arena with high end
customers like Ashok Leyland and Telco.
Looking to future, Tata Steel has announced that the company would be focusing on co-
branding initiatives with its high end. Company sources say that initially Tata Steel would be
focusing on the automobile sector and at later stage it will expand to the consumer durables
sector also

11. COMPETITOR ANALYSIS IN BRANDING ACTIVITIES

The main competitors for Tata Steel are
 ISPAT
 SAIL
 JSW
 Uttam Galva, etc.
However if we look at the branding activities undertaken by JSW and SAIL we can see that Tata
Steel is well ahead of them in promotions.
JSW basically uses two types of branding activities
 Print media (business magazines, trade publications and industrial directories)
 Direct Marketing (direct mail, catalogs and data sheets)
In case of JSW Catalogs and data sheets are the main part of their promotional effort .However
the main drawback is that rarely catalogs alone are used to make a purchasing decision. They
nearly provide buyer with the basis of comparison with other companies’ product once the
decision has been made to purchase a particular product. Data sheets provide detailed technical
information about the product. But sometimes it is a case that sales people seldom have all the
answers that the buyers require. However Tata Steel is quite instrumental in its promotional
activities as compared to its competitors. . Therefore it adopted a program of Retail Value
Management, under which the company provided training to sales people recruited by the
retailers to help increase sales.
They have used all channels of promotions to market their product and has equally emphasized
on its promotional activities as compared to its competitors. Because of this there is tremendous
increase in its sales and Tata Steel is already one of the best branded names in steel industry and
is well placed ahead of its competitors.

12. Technology Parameters and its Advantages for TATA Steel

Key Facilities Advantage over competition
1> Coupled shallow bath  Lower idle time and improved productivity

hydrochloric acid pickling
 Less damage of the strips
 Uniform product quality


 Low acid and energy consumption



2> Tandem cold rolling mill  Better gauge and shape accuracy


 No damage during storage


 Lower cost in terms of investment, manpower, and consumables
 Less off-gauge and higher yield


3>
Batch annealing

 Can take care of orders in small lots which is the characteristic of
Indian
retail market


 Can get close to customer’s requirement of draw- ability,
ductability along
with strength

4> Skin passing

 Precise amount of surface roughness is imparted,


 Possibility of surface defects like stretch marks, etc., are
eliminated
 No need for the customer to prepare the coil before deformation

5> 100% inspection under strobe
lights by trained inspector and
with electrostatic oiling
capability
 100% performance at customer’s end and not merely a
specification
guarantee


 Matching precise oil requirement of the customer and thus
ensuring

13. smooth operation at customer’s end.

6> Machine packing with thin  No damage due to moisture or loss of oil
plastic film

 Increased protection to handling damage

7>
Electrolytic cleaning
 Removes dirt or contaminations from the grooves and deepening
on strip
surface

8>
Electro discharge texturing
machine
 Matte, bright and mirror bright finish depending on the
customer’s
end use requirements


Strengths and Weaknesses of Major Competitors of TATA Steel

Competitior
Name
Strength Weakness
SAIL
Large capacity; operates through financially
strong
Steel quality not suitable for higher-end

traders all over India; supplier of many other
categories of steel in retail market; sales tax
(VAT) advantage due to many number of
own stockyards across India.
applications; do not have authorized
selling agents; little control over traders;
focus on low-end segments; sells large
quantity of steel in standard grade.

Essar Steel
High volume, superior technology, good
quality
No organized distribution network for
retail

product, good distribution network existing
for their hot rolled items; ability to supply
number of flat products to the distributors,
marketing of steel; no experience of
providing technical support to the
channel members and customers; attempt

14. location advantage for western and southern
parts of India; targeting high end sectors like
auto, appliance, etc.
to sell steel through multiple channel
creating dissonance.

Bhusan
Steel &
Power
Good product quality; supplies in
customized
Not an integrated steel plant (however
and
Bhushan
Steel &
Strips
blanks; focus on high margin customers like
auto and appliance; good quality service
centre in the mill; can supply small
quantities of deep drawing grades to retail
segments.
captive HR is coming up) not having
strong distributor’s network, availability
of steel is not regular and mostly
opportunistic in nature based on price
differential between domestic and export
market.

Uttam
Galva
Excellent tie-up both domestic and
international
Not an integrated steel plant and depend
on

for hot rolled steel as input material;
doubling the production capacity; good
quality of product; concentrates on local
sales with better service and higher margins;
controls the thinner CR market
import for input materials; availability of
steel is not regular.
in western region.

Hero
Cycles
Narrow mill; 60% own consumption; can
supply
High input cost, small volume.

customized sizes; good product quality.