A Project Report On Nalco
A Project Report On Nalco
A Project Report On Nalco
A Project Report
On
Customer Satisfaction Strategy and Evaluation
By
This is to certify that Mr. Pinak Mohanty, a student of the Post-Graduate Diploma in Management, has
worked under our guidance and supervision. This Summer Project Report has the requisite standard and
to the best of our knowledge no part of it has been reproduced from any other summer project,
monograph, report or book.
Shri J. P. Dash,
Chief Manager, Marketing
National Aluminium Company Ltd.
Bhubaneswar
Date: July 08, 2009
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Abstract
National Aluminium Company Ltd truly a national venture to take the country forward in the world
Aluminium market, was incorporated on Jan 7 ,1981.NALCO is today a major player in the Alumunium
Industry in our country.In a major leap forward, NALCO has not only contributed to India’s need for self
sufficiency in Aluminium ,but has also given the technological edge in making this strategic metal at the
best of world standards ,there by increasing exports and earning valuable foreign exchange by competing
in the global market.
Thus NALCO heralded a new era of Aluminium making in the country as well as in the world acquiring the
5th position. Today, NALCO has emerged as the largest integrated bauxite-alumina-Alumunium complex
in Asia ,enabling India to witness a quantum jump in Alumina and Aluminium production.
But the very success of any enterprise depends largely on its ability to satisfy and retain its customers.
Successful enterprises know very well what the key drivers of customer satisfaction are and the areas
that will have the greatest impact in improving the customers overall perception of the product or service.
NALCO has its Corporate Office at Bhubaneswar and has four regional offices at Delhi, Mumbai, Kolkata
and Chennai. This study has been conducted on the Customer Satisfaction evaluation of those customers
of NALCO who deal directly with the Corporate Marketing Department i.e. those customers who buy
through the corporate office in Bhubaneswar. This study also gives an idea of the customer satisfaction
strategy followed by NALCO and how it carries out its own in-house customer satisfaction surveys.
Which parameter in the product and services offered by NALCO is perceived by the customers to
be most important
Whether customers are satisfied with the resolution of complaints as done by NALCO
What are the views of the customers regarding the method of customer satisfaction surveys
conducted by NALCO
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Acknowledgement
I wish to express my sincere gratitude to Mr. J.P.Dash, Chief Marketing Manager, NALCO for giving me
this opportunity to have an enriching learning experience in this company and also for his keen interest,
guidance, continuous encouragement, support and help throughout the period of the project. His
expertise has been extremely rewarding and has provided an opportunity for me to become accustomed
to the corporate world and take my knowledge beyond the boundaries of the classroom.
I also wish to extend my gratitude to Ms.Sumita Sahai and Mr.Gautam Mohapatra from the Marketing
Department of NALCO and to Mr.T.S.Rao from the Dispatch Section of Smelter Plant, Angul for their
never ending support during the course of the project. Their guidance has been extremely valuable, both
My special thanks to the staff of NALCO for their cooperation, support and camaraderie shown towards a
trainee.
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Table of Contents
Page
List of Figures 5
List of Tables 6
List of Appendices 7
List of Abbreviations 8
I Introduction 9
2 Research Problem 24
3 Customer Satisfaction 28
3.1 An Introduction 28
3.2 Major Customers of NALCO 29
3.3 Customer Satisfaction Strategy Overview 29
3.4 Tools For Tracking Customer Satisfaction Strategy 30
3.5 Customer Complaints 30
3.5.1 Customer Complaint Resolution in Domestic Market 31
3.6 Measuring Satisfaction Strategy 32
3.7 How NALCO gives importance to Customer Satisfaction 33
3.8 Customer Satisfaction Index 34
3.8.1 Initial Calculation of weightage 34
3.8.2 Determination of CSI 34
3.8.3 Review of CSI 35
3.8.4 CSI Improvement 35
3.8.5 Study of CSI for half year ending June 2008 36
3.8.6 Study of CSI for half year ending December 2008 37
3.9 Customer Satisfaction Survey 38
3.9.1 Analysis of the Survey 39
3.9.2 Findings from the Survey 50
4 Suggestions 51
5 Conclusion 52
6 References 53
5
7 Appendices 54
List of Figures
6
List of Tables
7
List of Appendices
8
Abbreviations
MW Mega Watt
MT Metric Tonne
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1. Introduction
Aluminium was not "discovered" until 1808 (about 200 years ago) although early civilizations used
aluminium-bearing clays to make pottery and aluminium salts were used in making dyes and medicines.
In 1854 people learnt how to produce aluminium commercially. Today, one can not live without it!
Aluminium is a metallic element with the symbol Al. Aluminium - in its metallic form - does not exist
naturally. It is found only in combination with other minerals in the form of silicate and oxide compounds
which make up about 8 per cent of the earth's crust. The primary ore mineral of aluminium is bauxite.
Bauxite contains all kinds of impurities - primarily metals such as iron - but consists of 45 percent to 60
percent aluminium oxide, or alumina.
Aluminium can be very strong, light (less than one third the specific gravity of steel, copper or brass),
ductile, and malleable. It is an excellent conductor of heat and electricity. Polished aluminium has the
highest reflectivity of any material - even mirror glass. It can be cast, rolled or extruded into an infinite
variety of shapes. It has unique barrier properties as a packaging material, it resists corrosion and it can
be recycled again and again and again, with no loss of quality or properties. Mixed with small, often
minute, quantities of other materials such as iron, silicon, zinc, copper, magnesium, tin, titamium, lithium,
chromium, tungsten, manganese, nickel, zirconium and boron, it is possible to produce an array of alloys
with very different physical properties.
A total of about 29 million tons of aluminium is needed to meet worldwide demand each year. About 22
million tons of the total is new aluminium and 7 million tons is aluminium scrap that is recycled for reuse.
The recycled material is equal to about 25% of the total amount of aluminium used worldwide.
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1.1. Industry Profile
First the global scenario in the Aluminium market is covered followed by the Indian scenario.
• The overall Aluminium demand is expected to rise by just 2.6% for CY09E as against 3.9%
growth for CY08E and 7.4% growth for CY07.
• Global demand growth for aluminium has reduced sharply from its peak of 7.4% y- o-y in CY07 to
3.9% y-o-y in CY08E and is expected to reach a new low 2.6% y-o-y in CY09E. China, which
accounts for 33% of global aluminium trade, is witnessing fall in demand from 39% y-o-y growth
in CY07 to 9% y-o-y growth in CY08E. While, the aluminium demand from rest of world has also
shown miniscule improvement over the pervious year. But, China still has drag effect on the rest
of the world because it was China that had driven about 80% of the incremental demand in
CY07.
• Global demand for rolled extruded products is projected to reach nearly 31.8 million tons by
2012, registering a CAGR of 8.5% for the period 2008-2012.
• The worldwide market for flat surfaced extruded products is estimated to cross 8.7 million tons in
2008-09.
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Fig 2 : Growth in world’s Aluminium demand
• Power shortage and transportation are the key bottlenecks that are currently undermining the
profitability of the global aluminium industry. In addition, increasing prices of raw material and
energy are pressurizing margins and are creating problems in production, cost reduction , and
operation of the aluminium.
• The aftermath of global slowdown has led to built up of inventory position to upwards of 2 mn
tonne in CY08; this in turn resulted in drastic fall in price of aluminium to $ 1500/tonne in Dec
08. A similar surplus of 4.6 mn tonne is expected in CY09.
• In order to rationalize the current scenario of increase in inventory position and fall in price of
aluminium have resulted in massive production-cuts and delay in capex plans by many
companies across the world. The total global aluminium production- cuts, which amount to
6.82 mn tpa, in which China accounts for 4.05 mn tpa of aluminium production-cuts and
balance by rest of the world has been undertaken. It is anticipated that such action of
production-cuts and capex plans delays across the world will help in filling the gap between
demand and supply situation. Thus, this may enable the world aluminium price to reach at its
rationale level.
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Fig 3 : Global Metal Balance for Aluminium
• Prices have fallen from $3305 per ton in July 2008 to $ 1254 per ton in March 2009.
• The price of Alumina has drastically fallen from all time high of $ 435/tonne in July ’08 to as low
as $ 225/tonne in Dec '08.
• The current Aluminium prices are below the cost of production of almost 70% of the producers in
the world.
• LME and NYMEX are the important international markets that provide direction to the aluminium
prices.
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Fig 4 : Aluminium Inventory and Price Trend
• Construction, Transport and Packaging industry accounts for about 65% of industry wise
consumption of Aluminium while Europe, N. America and China contribute 71% of the annual
consumption.
• Automobile and construction industries along with packaging industry are experiencing recession
due to the global economy slowdown. So, slump in these industries have directly impacted the
demand of aluminium sector at large. Further, to worsen the situation there has been a significant
decline in prices of aluminium.
Country Consumption in kg
Switzerland 32.5
Japan 30.9
Germany 30.1
USA 26.9
Sweden 25.3
Italy 20.9
Australia 17.9
France 17.7
UK 11.1
Venezuela 8.2
Malaysia 2.4
Thailand 0.9
India 0.7
FENIS ALUMINYUM
Alcan Inc (CANADA) Ningbo Fubang Jingye
(TURKEY)
Group Co., Ltd. (CHINA)
Global Alumina Products Ocean Grand Holdings
Alco Hellas SA (GREECE)
Corporation (CANADA) Limited (HONGKONG)
Aloymil-Milonas
Hindalco Industries PT Alakasa Industrindo
Aluminium Industry SA
Limited (INDIA) Terbuka (INDONESIA)
(GREECE)
Shandong Aluminium
Aluminiumwerk Unna AG Jiaozuo Industry Company Ltd
(GERMANY) Wanfangluminum (CHINA)
(CHINA)
Kaiser Aluminum Shandong Nanshan
Aluminum Corporation of
Corporation (UNITED Industrial Company Limited
China Limited (CHINA)
STATES) (CHINA)
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Namsun Aluminum Co., Yunnan Aluminium Co., Ltd.
Cymat Corporation Ltd (KOREA (SOUTH)) (CHINA)
(CANADA)
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Fig 6 : Industry-wise consumption of Aluminium in India
• Indian Aluminium players have not remained untouched by the current global scenario that
prevails in the aluminium sector Madras Aluminium Company Ltd, which belongs to Madras
Aluminium Company Ltd, which belongs to Vedanta Group, has temporarily shut down its 40,000
tonne of aluminium production. MALCO's marginal cost to produce a tonne of aluminium is
$1600/tonne, which is above the current LME price at which aluminium is trading, making it
difficult for Malco to continue production.
• The core players such as Hindalco and Nalco are producing at an average marginal cost of
$1450/tonne and $1500/tonne respectively. Both these companies are just able to keep their
neck above the water and do not anticipate any production-cuts in near future as long as LME
Aluminium is above $1500/tonne. Also, these companies are going ahead with their capex plans
for FY09E due to expectations of sustained domestic demand.
• As per the current capex plans, the Aluminium production capacity of India will double to 2.7 mn
tone per annum by FY12E and 3.2 mn tonne by FY13E.
• Indian aluminium players- Hindalco, Nalco & Sterlite have exhibited 98% as ratio of sales to
production for total Indian aluminium industry in H1 FY09E thus reflecting the strong domestic
demand. Total Indian industry's production has increased by 8%, while sales volume has
registered a jump of 12% as compared to pervious year of the same half year. Indian aluminium
industry is highly consolidated and it is a price taker- not a price marker. Indian Aluminium
Industry is priced at LME plus a small premium. Most of players in this industry have an average
cost of production of approximately $1500/tone.
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Fig 7 : Production and consumption scenario in Indian Aluminium Industry
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Company Vision
To be a reputed global Company in the Metals and Energy sectors
Company Mission
To achieve growth in business with a global competitive edge providing satisfaction to the customer,
employees, shareholders and the community at large
Corporate Goals
• To continually improve and redesign systems, processes and practices in order to ensure error
prevention and response time;
• To treat human resource as a key to quality excellence and ensure development, involvement and
satisfaction in employees;
Corporate Objectives
• To maximize capacity utilization.
• To maintain highest international standard of excellence in product quality, cost efficiency and
customer service.
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• To develop a strong R & D base and increase business development activities.
• To promote result oriented organizational ethos and work culture that empower employees and
helps realization of individual and organizational goals.
The various units that have been set up since 1985 include:-
Bauxite mine:
On Panch Patamali hills of Koraput District in Orissa, fully mechanized open cast mine of 24, 00,000 TPY
capacities is in operation since 1985, serving feed stock to alumina refinery located on the foothills. The
capacity has been expanded to the 48, 00,000 TPY.
Alumina refinery:
It is in operation since 1986, the 8, 00,000 TPY alumina refinery is located in the picturesque valley of
Damanjodi. The capacity has been expanded to 15,75,000 TPY which was dedicated to the nation by the
Hon’ble minister of Coal and Mines, Sri Ram Vilas Paswan on 18.04.2002 it was two parallel streams of
4,00,000 TPY capacity each being designed to:
• Provide 4, 00,000 tons of alumina to the company’s smelter at Angul.
• Export the balance 4, 00,000 tons to overseas markets through Visakhapatnam Port. The
technological features of alumina refinery are:
o Low temperature atmospheric pressure digestion process.
o Energy efficient fluidized bed calciness of 2x14, 000 Tpd.
Aluminium Smelter:
A 3,45,000 TPY capacity aluminium smelter is located at angul in Orissa. Based on energy efficient state
of art technology and smelting pollution control, the smelter is in operation since 1987. The capacity was
expanded to 3, 45,000 TPY and was completed by the end of 2003.
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Close to the aluminium smelter, a captive power plant of 960 MW. Capacity has been established to feed
this smelter. The capacity is being expanded to 1200 MW. The salient features are:
• Microprocessor based burner management system for optimum thermal efficiency.
• Computer controlled data acquisition system for on line monitoring.
• Automatic turbine runs up system. Specially designed barrel type high pressure turbine
• Waste disposal of ash
Port Facility:
On the inner harbor of Visakhapatnam port on the Bay of Bengal, NALCO has mechanized storage and
ship handling for export of alumina in bulk. The salient features are:
• Mechanized silo storage facility of 2x25, 000 tons capacity
• Mechanized mobile ship leader of 2200 TPY capacity.
• Capacity to handle maximum ship size 35, 000 Dwt.
The other two ports are Kolkata and Paradeep.
Stockyards:
Customers of NALCO can buy Aluminium directly from the smelter plant or from the nine stockyards that
are there across the country. The nine stockyards are in Baddi, Bhiwandi, Bangalore, Chennai,
Faridabad, Jaipur, Kolkata, Silvassa and Vizag. It is to be noted that the prices of Aluminium bought from
the smelter are different from those when bought from the stockyards.
Expanding capacity:
Nalco had embarked on massive expansion plan taking the capacity of Alumina
refinery to 2.1 mn tonne (an increment of 0.525 mn tonne) and Aluminium Smelting of 0.46 mn tonne (an
increase of 0.12 mn tonne) in its 2nd phase of expansion which is expected to be completed in Dec.’08 at
an expenditure of Rs 40 bn. With enhanced capacity Nalco would be in position to cash on the rising
domestic demand. The company is moving forward with other domestic expansions viz. third phase at an
expense of Rs 60 bn taking the refinery capacity to 3 mn tone and smelting capacity to 0.58 mn tonne by
Dec. 2011, 1.4 mn tonne refinery complex at Vizag at capex of Rs 70 bn, 0.5 mn tonne smelting capacity
at Jharsuguda at expense of Rs 85 bn along with 1260 MW power plant. Nalco has also undertaken 2
overseas projects viz. 0.5 mn tpa Smelter with 1250 MW power plant at Indonesia at the cost of Rs 140
bn and 0.33 mn tpa Smelter in Iran at expense of Rs 80 bn.
FINANCIAL
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Export Turnover Rs. In Crore 2,134 2,585
Gross Sales Rs. In Crore 5,474 6,515
Profit Before Tax Rs. In Crore 2,467 3,620
Profit After Tax Rs. In Crore 1,632 2,381
Earnings per Share In Rs 25 37
Book Value per share In Rs 137.73 119.43
Dividend In % 60 75
Aluminium Ingots
Sows
Billets
Wire Rods
Cast Strips
Zeolite A
(a) Ingots (b) Sows (c) Billets (d) Wire-rods (e) Cast Strips
The knowledge of the satisfaction levels of its own products helps the producer to be in tune with the
needs and demands of the consumers and an idea about the satisfaction levels of its
competitors makes the producer aware of opportunities lying ahead.
Satisfaction is further directly related to Loyalty. The more the satisfaction the more the loyalty, the more
the sales and the more the profits.
Also there were certain feedback sought by the company regarding the in-house customer satisfaction
strategy adopted by them
Thus we conducted a Market Research to reveal the insights buyers of NALCO and their satisfaction
levels to different parameters.
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2.2. Objectives of The Project
To initially make a brief study of the Aluminium industry both in the global scenario and in the
Indian scenario
To make study on the customer’s complaint resolution method carried out by NALCO
To study the customer satisfaction strategy as carried in-house by NALCO and to study about the
Customer Satisfaction Index
To analyze the CSI for half years ending June ’08 and December ‘08
To find the customers who buy through the Corporate Marketing Department of NALCO
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To evaluate Satisfaction levels of customers on the following grounds
o Overall Customer Satisfaction
o Complaint Resolution
o Customer Satisfaction Surveys conducted by NALCO
o Most important parameter in the products and services offered by NALCO
Marketing research is the systematic and objective identification, collection, analysis, discrimination, and
use of information for the purpose of improving decision making related to the identification and solution
of problem with respect to marketing. The following are the steps adopted:
The general methodology adopted for the project was a survey based approach where an attempt
was made to gather relevant information and feedback from the customers.
The objectives of the study were formulated. They have been outlined in the previous page.
The next step was to select the sample. Convenient sampling method was employed. Those
customers were selected who buy through the Corporate Marketing Department in Bhubaneswar.
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The customers were mainly from the state of Orissa but there were also few others who were from
neighbouring states.
Primary data was collected through questionnaires, telephonic interviews and personal interviews.
Those customers who were located in Bhubaneswar and the neighbouring city of Cuttack were
interviewed personally. The remaining customers were either interviewed over telephone or
questionnaires were sent to them by email.
Secondary data was collected from official manuals, journals, metal bulletin and company website.
The data collected were presented in the form of bar graph, pie chart, line graphs and other
graphs. They were processed and analyzed and the results were interpreted.
The findings were reported and suggestions were given to the organization.
2.4. Limitations
The present study is subjected to following limitations :
The sample was restricted to 14 respondents (customers), which may restrict the scope of study
The scope of study is restricted only to the customers who buy through the Corporate Marketing
Department. Therefore this will not be representative of the whole set of customers
Due to their busy schedule some customers did not give response to all the questions in the
questionnaire and some did not respond at all
Due to the time constraints all the customers were not covered.
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3.1. Customer Satisfaction: An Introduction
The very success of any enterprise depends largely on its ability to satisfy and retain their customers. Any
business without a focus on customer satisfaction is at the mercy of the market. Without loyal customers
eventually a competitor will take away your customers and your customer retention rate will decrease.
A successful enterprise knows very well what the key drivers of satisfaction are, the areas that will have
the greatest impact in improving customer’s overall perception of our service. Best practice companies
also monitor customer feedbacks over time and communicate a strong message about their commitment
to serve their customer.
As per the marketing concept, a firm can realize all its business goals by generating customer
satisfaction. The idea may sound somewhat utopian. In reality, it is an eminently workable proposition.
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The satisfaction is a function of perceived performance and expectations. If the performance falls short of
expectations , the customer is dissatisfied. If the performance matches the expectations , the customer is
satisfied. If the performance exceeds the expectations, the customer is highly delighted.
Many companies aim for high customer satisfaction, because the customers who are just satisfied find it
better to switch to other companies when a better offer comes along. Those who are highly satisfied are
much less ready to switch. High satisfaction or delight creates an emotional bonding with the brand. The
result is high customer loyalty. Xerox’s senior management believes that a very satisfied or delighted
customer is worth ten times as much to the company as a satisfied customer. A very satisfied customer is
likely to stay with Xerox many more years and buy more than a satisfied customer will.
NALCO plays a vital role in the Indian Aluminium industry. The Aluminium producing capacity of the
country has witnessed a quantum jump after the entry of NALCO. Through its quality products it gets
about 800 direct reputed customers and some of them are cited below:
When we talk about customer service or satisfaction, we talk about creativity. It allows us to handle or
diffuse problems at hand or later on in the process of conducting everyday business. We talk about how
or rather what the organization has to do to gain not only the sale but also the loyalty of the customer. He
wants to know the pay of the transaction both in the short and long term. We want to know what the
customer wants; we want to know if our customers are satisfied. Satisfaction of course means that what
we delivered to the customer met his / her approval. We want to know if the customer is delighted and is
willing to come back.
• It is expensive to win new customers and customer retention is critical for business success.
• It is less expensive to sell additional products and services to existing, satisfied customers.
• Problems encountered by customers negatively impact their loyalty; if we disappoint them they
may start looking for alternatives.
• The customer contact centre has significant impact on customer loyalty, and in many businesses
the call centre has more contact with the customer than any other part of the business.
• Most customers will not take the initiative to complain; they will not tell you, they will tell their
friends and co-workers how good or bad you were.
• “Word of Mouth” is the best and the least expensive way of advertising and customers are much
more likely to tell others about negative experiences than positive experiences.
Studies show that although customers are dissatisfied with one out of every four purchases, less than five
percent will complain. Most customers will buy less or switch suppliers. Responsive companies measure
customer satisfaction directly by including periodic surveys. While collecting customer satisfaction data, it
is also useful to ask additional question to measure repurchase intention and to measure the likelihood or
willingness to recommend the company and brand to others.
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A customer-centered organization makes it easy for customers to register suggestions and complaints.
Some customer-centered companies establish hotlines with toll free numbers. Companies are also using
websites and e-mails for quick two-way communication
Ghost Shopping:
Companies can have people to pose as potential buyers to report on strong and weak points experienced
in buying the company’s and competitor’s products. These mystery shoppers can even test how the the
company’s sales personnel handle various situations.
When you receive a customer complaint, you know exactly where you stand with the customer. This is
especially true if the organization broadly interprets “customer complaints” as any negative feedback that
the organization receives. Whether the complaint is justified or not is irrelevant; perception becomes the
customer’s reality.But trouble starts when organizations rely on customer complaints as their jointly gauge
of customer perceptions. The weakness inherent in relying solely on complaints is twofold.
First, many dissatisfied customers simply do not bother to complain. They have decided that it is not
worth the time and effort for them to communicate the problem. In fact, they might just decide that it is not
worth the risk of placing another order. The organization might lose a customer and not even understand
what went wrong. And it is much more expensive to regain a customer that to retain one.
Second, complaints, by definition provide only negative feedback. An organization cannot understand the
full range of customer perceptions based on negative feedback alone. A system for gathering customer
perceptions should present a balanced picture of where the organization stands, which does not happen
when customer complaints are isolated from other aspects of customer relations.
That being said, customer complaints can be an effective part of an overall system for gathering data on
customer perceptions. The trick is to pair this method with at least one other, the combination of which will
give an organization a more accurate view of its status in customers’ minds.
Two specific types of complaints can be especially useful in maintaining an organization’s success repeat
complaints (eg. Complaints about the same product, for the same reason or from the same customer) and
complaints that pose significant risk to the organization. Analysis of complaint data can identify these
phenomena, and management can then take appropriate action on the underlying issues. In these cases,
the complaint system becomes a critical survival barometer for the organization.
When complaints are not promptly resolved, frustrated customers seek redress in different agencies or at
different parts or levels of the same agency, resulting in duplicate effort and compounding costs.
There are costs associated with a poor complaint system and there are benefits associated with a good
one. Studies have shown that handling customer complaints well can be a critical part of a turnaround
strategy. If a complaint is handled well, it sustains and strengthens customer loyalty and the company’s
image as a leader. It also tells the customer that the company cares and can improve because of their
contact. In government agencies, it promotes public confidence in government services.
Customer complaints strategies also represent valuable information about recurrent problems. They can
point the way to understanding the root causes of customer problems and help an organization target
core processes that need improvement. If acted upon to improve core processes, customer complaints
can be a source of information that can reduce costs as other measures of contractor performance.
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3.5.1 Customer Complaints Resolution in Domestic Market
NALCO has a laid down system of quick redressal of customers complaints and to initiate action to
prevent recurrence of similar complains arising out of sales of Ingot, Sow, Billet, Wire Rod, Cast Strip and
Rolled Products in Domestic and International markets.
The responsibility for corrective and preventive actions lies with the respective DGMs of Corporate
Marketing Department for Domestic and Export sales. For Domestic Marketing section, respective
executives who are in charges of different categories of products are earmarked for collection of data or
information, coordination with the different agencies, analysis of the information as well as initiating
proposal for corrective actions.
On receipt of complaints from customers arising out of sales of NALCO’s finished products, such as
ingots, sows, wire-rods etc. , the complaint is entered in a complaint register and given a control number.
Customer is given an interim given on receipt of the complaint with assuarance of quick redressal. The
complaints received are sorted into different categories and are then referred to different to different
departments for their comments like, complaints relating to invoices/ payments are referred to Marketing-
Finance for their comments, complaints relating to late delivery to smelter port, stockyard and Marketing
Department, relating to quality to to documentation or information exchanges of correspondence to
Smelter and Marketing Department and relating to shipment to shipment( physical) to port and smelter.
On getting clarification from the respective departments, the concerned executive initiates proposal for
evaluation of the complaint, stating the comments and information received from various departments.
Suitable corrective as well as preventive actions are taken after proper investigation and interaction with
the customer involved. These corrective as well as preventive actions involved from the proposals, which
are taken accordingly, are communicated to the concerned agencies for compliance. Records of these
actions are maintained in the respective party files at the Corporate Marketing department. Records
maintained in the Domestic section of Corporate Marketing Dept. and Complaint registers, Complaint files
of four categories and Complaint Review files of Domestic sales.
In case of Domestic metal sales, complaints sorted into respective complaints categories (four numbers)
i.e. relating to late delivery, quality, quantity and documentation information exchange / correspondence
and the corrective actions taken there on are also kept in category wise complaints files. DGM ( Domestic
Marketing), in addition to his routine involvement in resolution of customer complaints , also reviews all
outstanding customer complaints in a monthly basis for suitable and effective managerial control. The
Domestic Marketing section carries out statistical analysis of the complaints with respect to different
causes and percentage compliance against number of complaints raised, suitable data completion is also
being conducted to have a more in-depth analysis of customer complaints to eliminate the root causes in
future.
3.6. Measuring Satisfaction Strategy
The customer-centered firms seek to create high customer satisfaction, which is not its main goal. If the
company increases customer satisfaction by lowering its price or increasing its services, the result may be
lower profits. The company might be able to increase its profitability by means other than increased
satisfaction (eg. By improving manufacturing processes or investing more in R & D). Also the company
has many stakeholders, including employees, dealers, suppliers and stock holders. Spending more to
increase customer satisfaction of other partners. Ultimately the company must operate on philosophy that
is trying to deliver a high level of customer satisfaction subject to delivering acceptable levels of
satisfaction to the other stakeholders, given its total resources.
When customers rate their satisfaction with an element of the company’s performance say, delivery the
company needs to recognize that customers vary in how they define good delivery. It could mean early
delivery, on time delivery, order completeness and so on. Yet if the company had to spell out every
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element in detail, customers would face a huge amount of questionnaire. The company must also realize
that two customers can report being “highly satisfied” for different reasons. One may be easily satisfied
most of the time and other might be hard to please but was pleased on this occasion. Now it can be
measured through CSI ( Customer Satisfaction Index ).
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Service is everyone’s business; hence not only they’re who work directly with the customers, but also
everyone else within the company need to be trained on customer service. In case of NALCO, these
factors are well satisfied
In its Mission statement, NALCO has clearly specified that its mission is to achieve growth in business
with global competitive edge providing satisfaction to customers, employees, shareholders and
community at large. Hence the importance of Customer Satisfaction is clearly understood.
In one of NALCO’s objectives, it has clearly been mentioned , “ To maintain highest international
standards of excellence in product quality, cost, efficiency and Customer Satisfaction”
In its Quality policy, NALCO has given importance to Quality, which it aims will form the core of their
business philosophy : “Meeting the needs and wants of Customers”.
Feedback from customers is obtained on regular basis twice a year i.e. June / July and December /
January for the half year ending June and December. The feedback form can be seen in Appendix 3.
Computation, analysis and review of CSI, rating obtained in respect of value categories / factors are
carried out by respective Regional Offices / Corporate Marketing.
Based on the finalized weight structure so arrived for each value category / factor product wise and
quality rating obtained from the customers for each product, the CSI is computed for each customer in
respect of each product.
CSI of each customer in each product category is arrived at as mentioned below:
Weightage (%) value categories / factors i.e. chemical composition, physical parameters etc based on
perceived importance of the factor by the customer. The weightage is applicable to total of all factors
under the same category, where more than one factor is indicated.
Ratings are given by the customers in respect of various value categories / factors. The ratings are in the
scales of 1 to 10.
CSI = ∑ (w * r) / ∑ (w*10)
Where,
w = weighage of value categories / factors
Respective in charge marketing of regions reviews the CSI and quality rating obtained from the customer.
If the index is found to be low , specific interaction is made with the concerned customer. The concerned
agencies and the plant personnel then take it up so that suitable corrective action is taken to improve the
same.
The respective in charge marketing of regions give periodic feedback to the corporate Marketing
regarding the CSI, rating of the value categories / factors, corrective actiona taken and the effect of the
same. Corporate Marketing reviews the process on quarterly basis and provide feedback to ED
(Marketing ). ED ( Marketing ), thereafter, reviews the entire process on quarterly basis and takes suitable
corrective action for improving the effectiveness of the same . Trend analysis, Histograms and other
statistical analysis tools are used for analysis and review, as necessary , from time to time.
36
3.8.4. CSI Improvement
Whenever percentage response is lower than 60 %, it may be taken up with customers’ so as to achieve
the above level. Thereafter, Head of Marketing / In charge Marketing review the CSI and ratings obtained
from the customers. If the CSI is less than 0.84, the reasons for assigning low ratings may be ascertained
by regional offices and corporate marketing from the customers through direct interaction with them and
communicated to the corporate marketing so that the same could be taken up with the concerned
agencies for corrective action to improve the same. Feedback from customers is obtained on regular
basis twice a year ending June and December. Based on the overall average weightage for each
category / factor and rating assigning by the customer to NALCO for each value category / factor, the
customer-wise, product-wise is calculated by each region and corporate marketing.
It is to be noted that the cut off CSI was 0.62 till December 2006 when it was increased to 0.75. It was
later increased to 0.86 from June 2008. The fraction is decided based on the minimum CSI achieved in
the previous year.
The trend graph showing the number of customers having CSI less than 0.6 and 0.7 from December 2006
and less than 0.85 from June 2008 is shown below.
Fig 9 : Trend Graph of Customers having CSI < 0.62 & < 0.75 from Dec ’06 & < 0.86 from June ‘08
37
Fig 10 : CSI for half year ending June ‘08
• The region-wise average CSI for half year ending June 2008 is shown below.
Table 7 : Region-wise average CSI for half year ending June 2008
• The product-wise average CSI for half year ending June 2008 is shown below.
Table 8 : Product-wise average CSI for half year ending June 2008
38
.
Fig 11 : CSI for half year ending Dec ‘08
• The region-wise average CSI for half year ending December 2008 is shown below.
Table 9 : Region-wise average CSI for half year ending December 2008
• The product-wise average CSI for half year ending June 2008 is shown below.
Table 10 : Product-wise average CSI for half year ending December 2008
• Out of the customers who have CSI less than the benchmark, most have given no non-credit sales
as one of the reasons of dissatisfaction
39
The CSI method of estimating customer satisfaction is an in house survey conducted by NALCO. The
survey which was conducted as part of the summer internship is an independent one and it includes only
customers which come directly under the Corporate Marketing head. The customers surveyed were
mainly from Orissa with exception of few who were from other states. The questionnaire is attached as
Appendix 4.
A. Customers were asked questions which helped us find out whether they were satisfied with NALCO.
Below are the graphical representations of some of the responses received.
100
80
60
40
20
0
Highly Slightly Neither Slightly Highly
Satisfied. Satisfied. Satisfied nor Dissatisfied Dissatisfied.
Dissatisfied
How likely is it that you will do business with NALCO again in the future?
41
Highly Likely. 10 100
Slightly Likely 0 0
Neutral 0 0
Slightly Unlikely 0 0
Highly Unlikely. 0 0
Total 10 100
1 00
80 How likely
is it that
60 you would
40
20
0
Highly Likely. Slightly Likely Neutral Slightly Highly
Unlikely Unlikely.
recommend NALCO to others?
100
80
60
40
20
0
Highly Likely. Slightly Likely Neutral Slightly Highly
Unlikely Unlikely.
How satisfied are you that the people at NALCO showed interest in you as an individual /
treated you as a valued customer?
100
80
60
40
20
0
Highly Slightly Neither Slightly Highly
Satisfied. Satisfied. Satisfied nor Dissatisfied Dissatisfied.
Dissatisfied
100
90
80
70
60
50
40
30
20
10
0
Higher About the same Lower Do not know
How satisfied are you with the clarity of information or advice provided by NALCO?
100
90
80
70
60
50
40
30
20
10
0
Highly Slightly Neither Slightly Highly
Satisfied. Satisfied. Satisfied nor Dissatisfied Dissatisfied.
Dissatisfied
How satisfied are you with the time taken by NALCO to respond to queries?
100
75
50
25
0
Highly Slightly Neither Slightly Highly
Satisfied. Satisfied. Satisfied nor Dissatisfied Dissatisfied.
Dissatisfied
How would you rate your overall relationship with NALCO, considering all your
experiences with them so far?
100
80
60
40
20
0
Excellent VeryGood Good Average Poor
B. The second part of the analysis is finding out the most important parameter as perceived by the
customers.In order to find out which is most important to them, customers were asked to rate different
parameters according to their perceived importance. The parameters are Quality of the product,
Timeliness of delivery, Customer Service, Price and Merchandising options. These parameters were to be
ranked from 1 to 5. For any parameter which was ranked 1st, it was assigned 5 points. Similarly
parameters ranked 2nd were given 4 points and so on. The findings were as follows:
45
Price Quality of Customer Timeliness of Merchandising
Product Service delivery Options
Total Points 44 39 20 42 24
Merchandisingoptions
Timeliness of delivery
Customer Service
Quality
Price
0 10 20 30 40 50
From the above, it is found out that customers give the most importance to the price of Alminium, closely
followed by the timeliness of delivery.
C. There are times when certain issues arise during or after a deal like issues regarding payment, issues
related to delivery , issues related to the return of goods purchased (which is very rare ) etc. The
feedback of the customers was sought regarding their past experiences in such situations. The third part
of the analysis was regarding the satisfaction of the customers as far as complaint resolution is
concerned.
46
Response Frequency Percentage
Excellent 3 30
Very Good 7 70
Good 0 0
Average 0 0
Poor 0 0
Total 10 100
100
90
80
70
60
50
40
30
20
10
0
Excellent VeryGood Good Average Poor
100
90
80
70
60
50
40
30
20
10
0
Excellent VeryGood Good Average Poor
47
Speed with which NALCO dealt with the issue
100
90
80
70
60
50
40
30
20
10
0
Excellent VeryGood Good Average Poor
Whether Satisfied with the way NALCO conducts its Customer Satisfaction Survey
100
75
50
25
0
Yes No
49
Whether more parameters be included in the Customer Satisfaction Surveys conducted by
NALCO
100
90
80
70
60
50
40
30
20
10
0
Yes No
50
3.9.2. Findings From The Survey
• Customers are satisfied with the way NALCO conducts its own Customers Satisfaction Surveys.
They are also mostly satisfied with the parameters based on which the surveys are conducted. But
60 % of the customers wish that the surveys should be conducted annually while 40 % prefer the
way it is conducted semi-annually.
• When it comes resolution of complaints, 10 % felt that it was excellent while 70 % found it to be
very good and 20 % found it to be good. This shows that customers are satisfied with it but they
are not extremely satisfied.
• There are scopes of improvement in this area mainly in the speed with which the complaint is
resolved. Most customers are not highly satisfied with the overall way the complaints are dealt
with. 70 % of the customers have not given the best ratings to the ease of contacting NALCO to
register a complaint.
• It is also found that price of the product and the timeliness of delivery are the two most important
parameters as perceived by the customers closely followed by the quality of the product. The
reason why quality comes next to the other two is probably because the customers are assured of
good quality products from NALCO.
• Most customers also feel that the price quoted by NALCO is lower than what is offered by other
producers which means they are satisfied with the price quoted by NALCO
• In general, the customers are highly satisfied with NALCO, they would like to do business with
NALCO in the future and they would also recommend NALCO to others.
• But when asked about the overall relationship with NALCO, there is a reduction in the percentage
of highly satisfied people. 40 % find it excellent while a majority 60 % find it very good.
• This reduction in percentage could be because there are certain areas where there is room for
improvement like customer service, clarity of information provided by NALCO and the time it takes
to respond to queries apart from the customer complaint resolution issues mention earlier.
51
4. Suggestions
From the previous observation it can be stated that NALCO is able to maintain the overall satisfaction of
its customers but in addition to that:
• NALCO needs to develop its customer relationship management (CRM). Though the customers
are satisfied, there is scope for improvement in the relationship part.
• Customers are not highly satisfied when it comes to contacting NALCO to register a complaint. An
online customer complaint section can be included in the official website of NALCO and a
dedicated operator for quick resolution of complaints.
• NALCO can have better evaluation of the customer satisfactions by using the database of
complaints so that organization could better align its products and services to meet customer
expectations.
• The knowledge base mentioned above could be integrated with all other functions and process of
the company with the help of a strong IT framework. This could help in taking care of customer
needs and expectations at all functional levels.
• NALCO should respond to customer complaints quickly which will improve customer loyalty. A
speedy response can add 25% to customer loyalty.
• Customers expect improvement in the clarity of information issued by NALCO. The information
could be related to pricing, MOU policies other terms and conditions.
• Selling on credit is not a policy of NALCO. If any buyer wants to buy products from NALCO, then
the payment is to be made in advance or through Letter of Credit including all taxes, which is
difficult for some buyers. So NALCO should allow some customers having good track record to
take in credit term.
52
• Though most customers (60%) feel that the CSI surveys conducted by NALCO should be
conducted annually, I would strongly recommend NALCO to continue with semi-annual method.
This is so because with the ever changing external business environment, the needs and
expectations of customers also keep changing. It is but necessary to keep track of these changes.
5. Conclusion
As National Aluminium Company Ltd. always tries to continuously improve upon their responsiveness in
all spheres of interaction, this project was a sincere effort to help NALCO in maintaining healthy
relationship with their customers. I hope that the data which were collected for NALCO and the
suggestions and recommendations given will help them in inventing new areas & restructuring old areas
in way of customer satisfaction management.
53
6. References
• NALCO at a glance
• Other websites
o www.metalworld.co.in
o www.indiainfoline.com
o www.wikipedia.org
54
7. Appendices
55
Appendix 1
56
Appendix 3
(A) GENERAL
PRODUCT CATEGORY: INGOT SOW BILLET WIRE CAST ROLLED
ROD STRIP PRODUCT
Note: 1. Rating : In 10 points scale, please tick in the appropriate box as per your ratings where 1 =
unsatisfactory and 10 = excellent.
2. Please go through the rating for your best supplier for same product, if other than NALCO.
VALUE CATEGORIES
1. Chemical Composition :
NALCO
1 2 3 4 5 6 7 8 9 10
Best Supplier
1 2 3 4 5 6 7 8 9 10
2. Physical Parameters:
NALCO
1 2 3 4 5 6 7 8 9 10
Best Supplier
1 2 3 4 5 6 7 8 9 10
Best Supplier
1 2 3 4 5 6 7 8 9 10
Best Supplier
57
1 2 3 4 5 6 7 8 9 10
5. Payment terms
NALCO
1 2 3 4 5 6 7 8 9 10
Best Supplier
1 2 3 4 5 6 7 8 9 10
6. Documentation
Factor a) Completeness
NALCO
1 2 3 4 5 6 7 8 9 10
Best Supplier
1 2 3 4 5 6 7 8 9 10
Best Supplier
1 2 3 4 5 6 7 8 9 10
7. Responsiveness
Best Supplier
1 2 3 4 5 6 7 8 9 10
Best Supplier
1 2 3 4 5 6 7 8 9 10
Best Supplier
1 2 3 4 5 6 7 8 9 10
Signature:
Official Seal:
58
Appendix 4
QUESTIONNAIRE
Dear Respondent,
We are students pursuing our MBA in the field of Marketing. Currently we are doing our Summer
Internship in National Aluminium Company Ltd.
The Objective of the study is to determine the Customer Satisfaction levels of the clients and customers
of NALCO with respect to various parameters.
This is purely an academic exercise and is meant to upgrade the knowledge in the field of Marketing. The
information obtained through this study will be kept strictly confidential. The research and summary report
will be prepared using aggregate data, but all individual responses will be kept confidential.
We request you to be a part of this study and help us collect and document the necessary information as
per the enclosed questionnaire. We thank you for your time, effort and support.
For any clarification, please feel free to contact us at the email address or cell numbers given below. We
will be thankful if you will send us feedback.
Thank you.
Email : mohantypinak@gmail.com
Mobile: +91-9769435406
59
Name of the Organization :
Name of Respondent :
Designation :
Email Address :
Telephone :
Date :
a. Highly Satisfied.
b. Slightly Satisfied.
d. Slightly Dissatisfied
e. Highly Dissatisfied.
2. How likely is it that you will do business with NALCO again in the future?
a. Highly Likely.
b. Slightly Likely
c. Neutral
d. Slightly Unlikely
e. Highly Unlikely.
a. Highly Likely.
b. Slightly Likely
c. Neutral
d. Slightly Unlikely
e. Highly Unlikely.
60
4. How satisfied are you that the people at NALCO showed interest in you as an individual /
treated you as a valued customer?
a. Highly Satisfied.
b. Slightly Satisfied.
d. Slightly Dissatisfied
e. Highly Dissatisfied.
5. Please rate the IMPORTANCE of each of the following services provided by NALCO.
a. Timeliness of Delivery 1 2 3 4 5
b. Quality of Product 1 2 3 4 5
c. Customer Service 1 2 3 4 5
d. Merchandise Options 1 2 3 4 5
1. Extremely Important
2. Important.
3. Indifferent
4. Little importance.
a. Higher.
c. Lower.
d. Do not know.
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7. In any past event of something going wrong, and we sincerely hope that it never happens, how
would you rate the following :
1. Excellent
2. Very Good
3. Good
4. Average
5. Poor
8. How satisfied are you with the clarity of information or advice provided by NALCO?
a. Highly Satisfied.
b. Slightly Satisfied.
d. Slightly Dissatisfied
e. Highly Dissatisfied.
9. How satisfied are you with the time taken by NALCO to respond to queries?
a. Highly Satisfied.
b. Slightly Satisfied.
d. Slightly Dissatisfied
e. Highly Dissatisfied.
62
10. How would you rate your overall relationship with NALCO, considering all your experiences
with them so far?
a. Excellent
b. Very Good
c. Good
d. Poor
11. Are you satisfied with the overall way the Customer Satisfaction Survey is conducted by
NALCO?
a. Yes
12. How often should the Customer Satisfaction Surveys be conducted by NALCO?
a. Annually
b. Semi Annually
c. Quarterly
d. Monthly
13. Should more parameters be included in the Customer Satisfaction surveys conducted by
NALCO?
a. Yes
b. No
15. Do you have any comments or suggestion that could help NALCO improve its product or
service?
63