EXECUTIVE SUMMARY

The report consists of the details on SIMPLEX CASTINGS LIMITED. It is one of the most
effluent companies of India for Steel Products. The main aim of it is the welfare of the society
by providing quality Steel to its consumers and service to nation. This report also contains the
detailed information about the rise in production of Steel. The Steel industry has being studied
in detail, so that can be converted into information which can be used by SIMPLEX
CASTINGS Ltd for strategizing its marketing distribution and channel areas.

It has various Product, such as flat product and long product. SIMPLEX CASTINGS LTD is
Indian manufacturing units are located at Raipur and Bhilai. This report is detailed in nature
and contains vital data of the Distribution Channel at Simplex Castings Ltd. This report will
help Simplex to make strategies for their long term objective. Distribution channels are behind
every product and service that consumers and business buyers purchase everywhere. Usually,
combination on institutions specializing in manufacturing, wholesaling, retailing and many
other areas join force in Distribution channels. A Distribution channel is a set of interdependent
organization involved in the process of making a product or service available for use or
consumption. Distribution channels decisions play a role of Strategic importance in the
overall presence and success a company enjoys in the market palace. The study starts with
an introduction of the Distribution Channel, company profile, important of the Study
and objectives are set out for the study. Data analysis, findings and suggestions of the study
follow.

This will enable the company to take appropriate decision as needed to increase as well as to
enhance the distribution channel system and further development needed in accordance with
changing business scenario. The data has been analysed by presenting it in the form of graphs
and tables and based on it; the interpretations have been made for the same. The results and
findings have also been made for the organization to help management in their decisions. Lastly
the recommendations have also been made for the organization.

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 CHAPTER 1

INTRODUCTION

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1.1 ABOUT STEEL INDUSTRY

Introduction:

Steel is essential to the modern world, and its use is critical in enabling man to move towards
a sustainable future. Whether in lighter, more efficient vehicles or renewable energy
generation, steel is a fundamental part of a greener world. India’s Steel Industry has a history
of more than a century. Before the liberalization, the Indian steel industry was a predominantly
synchronized one with the public sector industry. Tata Steel was the only major private player
involved in the production of steel. SAIL and Tata Steel have been the major steel industries
of India. The liberalization of the India economy directed to the opening up of many steel
industries, consequently, increased production capacity. Since 1990, a huge investment has
been made into the industry. From 1997 to 2001 when the overall global steel industry was
facing a depression, Indian Steel Industry also went through a rough phase but improved after
2002. India has now emerged as one of the largest producers of steel in the entire world. Almost
all varieties of steel are now being produced in the country. India has also emerged as a net
exporter of steel and Indian steel is being increasingly accepted in the global market.

Steel Industry Introduction: Steel plays a vital role in accelerating growth and development of
a nation. It is used as a basic material in the manufacture of metal products, electrical
machinery, transport equipment textile, etc. and thus considered to be the backbone of the
human civilization. It is a product of large and technologically advanced industry having strong
forward and backward linkages in terms of material flow and income generation. In other
words, the production and per capita consumption of steel is a major contributor to a country’s
gross domestic product "#$%& and an indicator of its industrial and economic strength. Iron
ore, manganese ore and chrome ore are the critical raw material inputs for the steel industry
their timely and assured availability in adequate quantity and quality, on long term basis, is
a prerequisite for the rapid and orderly growth of the sector. India is the eighth largest crude
steel producing country in the world. It is endowed with richest iron and coal ore mines. Its
cost of production of steel is comparatively much lower than that in other countries. It
has several advantageous features which gives the dominant position to its steel industry on the
world map. Some of these are:

(I.) Establishment of new state of the art steel plants in the country with lesser
dependence on external aid.

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 (II.) Continuous modernization as well as implementation of de-bottlenecking and
technology up gradation schemes in the older plants.
(III.) Improvement in energy efficiency of the plants in terms of coke rate and power
consumption.
(IV.) Utilization of better quality raw materials, such as imported coking coal, accessed
from global sources.
(V.) Optimum processing of raw materials like washing of coal, beneficiation and
sintering of iron ore.

1.2 Definition of Steel:

Crude steel is defined as steel in its first solid (or usable) form: ingots, semi-finished products
(billets, blooms, slabs), and liquid steel for castings. This is not to be confused with liquid steel,
which is steel poured. Hot rolled products long products, flat products, seamless tubes are
products of first transformation. These products may be further worked to produce cold rolled-
, coated-, and tubular products (except seamless tubes) - Steel Statistical Yearbook 2012.

Properties of Steel:

 Luster: It is a shiny metal, and is used in architecture, cutlery and various appliances.

 Conductivity: It is used in saucepans for its ability to transfer heat and electricity.

 Malleability: It can be rolled into thin sheets, rods, and bar or beams and used in roofing,
buildings or forged into different shapes like gears and tools.

 Ductility: It can be stretched and drawn out into thin wires (wire fences) or pressed into
various shapes (e.g. auto body panels).

 Strength: It is a strong metal, resistant to breakage (used in building frames, security doors,
trains, ships).

 Durability: Is a durable and long lasting material and hence is used to construct buildings,
rail lines, and bridges. Its resistance to wear makes it ideal for machines and equipment.

 Alloying: Stainless steel contains chromium, nickel and molybdenum that make it rust
resistant. It is used in kitchens. Manganese is added to steel to increase its toughness, while
steel rods have tungsten and cobalt to keep it hard, even when heated.

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 Coating: Steel can also be coated with substances such as tin, plastics, paint and zinc.

Use of Steel:

Steel has the widest range of applications among metals. Steel is used in power transmission
towers, natural gas pipelines, machine tools, military weapons, etc. the list is endless. Its usage
ranges from industry applications to everyday tools and materials. Some of the applications of
Steel are:

 Home: Domestic appliances such as fridges, washing machines, ovens, microwaves, sinks,
radiators, cutlery, electronic equipment, razors, and pins.

 Travel, Transport and Construction: Car bodies, engine components, wheels, axles, trucks,
transmission equipment, trains, rails, ships, anchor chains, aircraft undercarriages, and jet
engine components. Buildings, sports stadiums, railway and bus stations, reinforcing bars for
concrete, bridge deck plates, piers and suspension cables, cladding and roofing, office, tunnels,
security, and coastal and flood defences.

 Packaging: Food and beverage cans, promotional materials, aerosols, paint and chemical
containers, and bottle caps.

 Power and Energy: Oil and gas wells/ platforms, pipelines, electricity power turbine
components, electricity pylons, and wind turbines.

 Electrical and Magnetic: Electromagnets, transformer cores, and electromagnetic shields.

 Yellow Goods: Earth-moving and quarrying equipment, cranes, and fork-lift trucks.

 Agriculture and Industry: Farm vehicles and machinery, storage tanks, tools, structures,
walkways, and protective equipment.

Steel for Social Cause There is more to an assessment of sustainability of a material than just
looking at the use of natural resources. The positive and negative effects of the application of
any material also play a role. In this context, steel is currently in the process of positive
developments. For example, in power stations new steel materials that can be exposed to higher
pressures and temperatures are making a significant contribution towards increasing efficiency,
thereby reducing CO2 output to help society. The development of new steels for thick-walled
high-performance components for boilers and pipes has begun. Pipelines made of steel have
proved the ideal solution for the bulk transport of oil and natural gas over long distances before

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they are used by customers. High-strength steels with superior cleanliness and greater
resistance towards corrosion have found widespread use, for example, in sea-water desalination
plants. There has been remarkable progress in the area of eco-efficient light-weight steel
constructions, which is a classic example of the synergetic advantage that can be gained by
society at large from disciplines like construction, material science, and production technology
coming together.

Structure of the Indian Steel Industry:

The Indian steel industry is divided into primary and secondary sectors. The primary sector
comprises a few large integrated steel providers producing billets, slabs and hot rolled coils,
among others. The secondary sector comprises small units focused on the production of value
added products such as cold rolled coils, galvanized coils, angles, columns, beams and other
re-rollers, and sponge iron units. Both sectors cater to different market segments. On the basis
of ownership, the Indian steel industry is broadly divided into private and public sector
enterprises. The private sector dominates production— accounting for almost 78 percent of the
finished steel output—while the public sector has higher capacity utilizations.

Figure No. 1.

Structure of the Steel Sector

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Types of Steel:

Based upon its composition, steel is classified as plain carbon steel and alloy steel.

 Carbon Steel: It is also known as non-alloy or plain carbon steel. It is composed simply of
iron and carbon, and is the most commonly produced variant of steel (90 per cent of global
steel output). It contains carbon in varying proportions (up to 1.7 per cent) along with
manganese (up to 0.9 per cent) and silicon (up to 0.3 per cent). Change in the composition of
carbon affects the properties of carbon steel. Mild steel is the most widely used variety of steel.

 Alloy Steel: It comes in different grades, which have varying proportions of carbon and other
elements. These elements determine the property of the steel. Different types of alloy steel have
different applications. For instance, hard abrasion resistant steel is used to make industrial
tools; heat resistant steel is used in high-temperature applications; and fatigue resistant steel is
for mechanical applications. The composition of alloy steels depends upon application and
cannot be generalized as a single commodity, i.e. it cannot be categorized as in the case of HR
and CR sheets, etc. Although this category consists of high-value steel alloys, volumes of this
segment are very low as compared with those of the carbon steel products. The most widely
used alloy steel is stainless steel. It is a corrosion-resistant metal and contains chromium and
nickel as major alloying elements.

The Types of Steel Products:

Steel makers primarily produce three types of steel products: flat products, long products and
stainless steel. The mother product in flats is slabs, from which sheets or plates are produced.
The mother products in longs are blooms and billets, from which bars, rods and structural
shapes are rolled.

Flat Products:

Slabs: They are semi-finished steel products. They are obtained by the continuous casting of
steel or rolling ingots on a rolling mill and cutting them into various lengths. They are used as
a starting material in the production process of other flat products.

Hot-Rolled Sheets: Hot rolling involves passing a slab through a multi-stand rolling mill to
reduce its thickness to less than 12 millimetres. Hot-rolled sheets are used in no surface
applications like automobile suspension arms, frames, wheels, and other unexposed parts in

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auto and truck bodies, agricultural equipment, construction products, machinery, tubing, pipes
and guard rails.

Cold-Rolled Sheets: Cold-rolled sheets are hot-rolled sheets processed through an acid bath
that removes scaling from steel's surface, and then passed through a rolling mill without
reheating until the desired thickness is achieved. They can be further treated to achieve
uniformity, ductility and various surface finishes and textures. They are used in surface
applications like exposed automobile and appliance panels. They are usually coated or painted
before sale to an end-user. Prices of cold-rolled sheets are higher than the prices of hot-rolled
sheets.

Coated Sheets: They are cold-rolled steel that have been coated with zinc or aluminium for
corrosion-resistance and paint ability. They are also the highest value-added sheet products
because they require the greatest degree of processing and have the strictest quality
requirements. They are used in exterior applications such as automobile chassis, household
appliances, roofing and siding, heating and air conditioning equipment, air ducts and switch
boxes, as well as in certain packaging applications, such as food containers.

Plates: They are produced by hot-rolling reheated slabs. They are used as a structural material
for bridge construction, storage vessels, tanks, shipbuilding, line pipe, industrial machinery and
equipment.

Long Products:

Billets and Blooms: They are semi-finished steel products. Blooms are basically larger billets.
They are obtained by the continuous casting of steel or rolling ingots on a rolling mill. They
are used as a starting material in the production process of other long products.

Bars: They are rolled from billets. Merchant bar and reinforcing bar (rebar) are two common
categories of bars. Merchant bars include rounds, flats, angles, squares, and channels that are
used by fabricators to manufacture furniture, stair railings, and farm equipment. Rebar is used
to strengthen concrete in highways, bridges and buildings.

Special Bar Quality (SBQ) Steel: This steel is the highest quality long product. It typically
requires customer approval for strength, life and other engineering parameters and is generally
sold under contract to long-term customers. It is used in safety-critical applications such as
axles, crankshafts, transmission gears, bearings and seamless tubes.

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Wire Rods: These ring-shaped coils. They are used in the automotive, construction, welding
and engineering sectors.

Wire Products: They are produced by treating wire rods with a series of dies to improve
surface finish, dimensional accuracy and physical properties. They are used in fasteners,
springs, concrete wire, electrical conductors and structural cables.

Structural Sections: They are shapes produced in a rolling mill from reheated blooms or
billets. They include wide-flange beams, bearing piles, channels, angles and tees. They are used
mainly in the construction industry.

Stainless Steel: It is steel alloyed with carbon, chromium and even other elements such as
nickel, molybdenum, titanium, niobium, manganese, nitrogen, copper, silicon, aluminium and
vanadium. Stainless steel has properties like resistance to corrosion in highly aggressive
elements, resistance to oxidation at high temperatures, toughness and ductility at very low
temperatures, strength and ease in fabrication. Overall, the construction sector is the biggest
user of steel. Within the construction sector, the residential segment accounts for nearly half
the demand. Transportation, capital goods and infrastructure are the other large users of the
commodity.

Table No: 1

Sector-Wise Steel Consumption in 2013

Sector Share
Infrastructure 63%
Engineering and fabrication 22%
Autos 10%
Packaging 3%
Transportation 2%

1.3 Global Scenario of Steel:

Global Perspective: The industry directly employs about more than two million people
worldwide, with a further two million contractors and four million people in the supporting
industries. Considering steel’s position as the key product supplier to industries such as
automotive, construction, transport, power and machine goods, and using a multiplier of 25:1,

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the steel industry is at the source of employment for more than 50 million people. World crude
steel production has increased from 851 mega tonnes (Mt) in 2001 to 1,527 Mt in 2011. (It was
28.3 Mt in 1900).World average steel use per capita has steadily increased from 150 kg in 2001
to 215 kg in 2011. India, Brazil, South Korea and Turkey have all entered the top 10 steel
producers list in the last 40 years. Indian Steel Industry also went through a rough phase but
improved after 2002. India has now emerged as one of the largest producers of steel in the
entire world. Almost all varieties of steel are now being produced in the country. India has also
emerged as a net exporter of steel and Indian steel is being increasingly accepted in the global
market. Steel is the back bone of human civilization, it is very crucial in development of a
modern economy. The per capita consumption of steel shows the living standard of people in
any country.

World Steel in Figures 2012:

The World Steel Association (world steel) has published the 2012 edition of World Steel in
Figures.

World Steel in Figures provides essential facts and statistics about the global steel industry.
The book contains comprehensive information on crude steel production, apparent steel use,
pig iron production, steel trade, iron ore production and trade, and scrap trade.

Table No: 2

Major steel-producing countries

2011 2012
COUNTRY MT COUNTRY MT
China 683.9 China 716.5
Japan 107.6 Japan 107.2
United State 88.4 United State 88.7
India 71.3 India 77.6
Russia 68.9 Russia 70.4

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Graphical Representation of Global Steel Production:

GRAPH NO: 1- GLOBAL STEEL PRODUCTION - MARKET SHARE

(2011)

CHINA JAPAN UNITED STATES INDIA RUSSIA

Graph No. 1

GRAPH NO: 2-GLOBAL STEEL PRODUCTION - MARKET SHARE (2012)

CHINA JAPAN UNITED STATES INDIA RUSSIA

Graph No. 2

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1.4 DISTRIBUTION CHANNEL AND DEVLOPMENT:

WHAT IS DISTRIBUTION?

The main purpose of distribution channel is to supply goods and services to the consumers
living in far off places. Distribution channel acts as nerve between the producer and end
customer. A farmer in Srinagar has an apple orchard. Once the apples are ripened he sells the
apples to an agent of Delhi. The agent collects the apples from Srinagar, packs them, and sells
them to a wholesaler at New Delhi market. The wholesaler then distributes them to various
retail fruit vendors throughout Delhi by selling smaller quantities. Finally, we purchase apples
from those vendors as per our requirement. Thus we find that the product travels through
several hands before reaching to the end customer. Thus distribution channel has the
responsibility of buying, transporting, storing, protection of good, sales of goods into the
market.

Distribution channel can differ from sector to sector i.e. distribution channel of FMCG products
involves a complex distribution channel, whereas the distribution channel in Iron and Steel
industry have less complex distribution channel.

Thus in short it can be defined as:

The route taken by goods from producer to consumer is known as distribution channel

Figure No: 2

Distribution Channel

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1.5 TYPES OF DISTRIBUTION CHANNELS:

There are two types of distribution channels:

Figure No: 3

Types of Distribution Channel

Direct Distribution Channel:

In this channel, producers sell their goods and services directly to the consumers. There is no
middleman present between the producers and consumers. The producers may sell directly to
consumers through door-to-door salesmen and through their own retail stores. They can also
be said that a distribution system is said to be direct when the product or service leaves the
producer and goes directly to the customer with no middlemen involved. This occurs, more
often than not, with the sale of services. This can occur with organizations that sell tangible
goods, such as the jewellery manufacturer who sells its products directly to the consumer.
Proper interaction is possible.

Figure No: 4

Direct Distribution Channel

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For Example:

Bata India Ltd, HPCL, Liberty Shoes Limited has their own retail shops to sell their products
to consumers. For certain service organizations consumers avail the service directly. Banks,
consultancy firms, telephone companies, passenger and freight transport services, etc. are
examples of direct channel of distribution of service.

Indirect Distribution Channel:

If the producer is producing goods on a large scale, it may not be possible for him to sell goods
directly to consumers. As such, he sells goods through middlemen. These middlemen may be
wholesalers or retailers. A wholesaler is a person who buys goods in large quantities from
producers; where as a retailer is one who buys goods from wholesalers and producers and sells
to ultimate consumers as per their requirement, the involvement of various middlemen in the
process of distribution constitute the indirect channel of distribution.

The most common channel used in distribution channel is

PRODUCER WHOLESALER RETAILER CONSUMER

Figure No: 5

Indirect Distribution Channel

WHOLESALER:

Wholesalers are one of the important middlemen in the channel of distribution who deals with
the goods in bulk quantity. They buy goods in bulk from the producers and sell them in
relatively smaller quantities to the retailers.

Characteristics of Wholesalers:

The followings are the characteristics of wholesaler:

 Wholesalers buy goods directly from producers or manufacturers.

 Wholesalers buy goods in large quantities and sells in relatively smaller quantities.

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  They sell different varieties of a particular line of product. For example, a wholesaler
who deals with paper is expected to keep all varieties of paper, cardboard, card, etc.
 They may employ a number of agents or workers for distribution of products.
 Wholesalers need large amount of capital to be invested in his business.
 They generally provide credit facility to retailers.
 He also provides financial assistance to the producers or manufacturers.

FUNCTION:

Following are the functions, which a wholesaler usually performs.

(a) Collection of goods: A wholesaler collects goods from manufacturers or producers in large
quantities.

(b) Storage of goods: A wholesaler collects the goods and stores them safely in warehouses,
till they are sold out. Perishable goods like fruits, vegetables, etc. are stored in cold storage.

(c) Distribution: A wholesaler sells goods to different retailers. In this way, he also performs
the function of distribution.

(d) Financing: The wholesaler provides financial support to producers and manufacturers by
sending money in advance to them. He also sells goods to the retailer on credit. Thus, at both
ends the wholesaler acts as a financier.

(e) Risk taking: The wholesaler buys finished goods from the producer and keeps them in the
warehouses till they are sold. Therefore, he assumes the risks arising out of changes in demand,
rise in price, spoilage or destruction of goods.

RETAILER:

Retailers are the traders who buy goods from wholesalers or sometimes directly from
producers and sell them to the consumers. They usually operate through a retail shop and sell
goods in small quantities. They keep a variety of items of daily use.

Characteristics of Retailers:

Following are the characteristics of retailers:

 Retailers sell goods not for resale, but for ultimate use by consumers. For example, you
buy fruits, clothes, pen, pencil etc. for your use not for sale.

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  Retailers buy and sell goods in small quantities. So customers can fulfil their
requirement without storing much for the future.
 Retailers require less capital to start and run the business as compared to wholesalers.
 Retailers generally deal with different varieties of products and they give a wide choice
to the consumers to buy the goods.

Functions of Retailers:

All retailers deal with the customers of varying tastes and temperaments. Therefore, they
should be active and efficient in order to satisfy their customers and also to induce them to buy
more. Let us see what the retailers do in distribution of goods.

(a) Buying and assembling of goods: Retailers buy and assemble varieties of goods from
different wholesalers and manufacturers. They keep goods of those brands and variety which
are liked by the customers and the quantity in which these are in demand.

(b) Storage of goods: To ensure ready supply of goods to the customer retailers keep their
goods in stores. Goods can be taken out of these stores and sold to the customers as and when
required. This saves consumers from botheration of buying goods in bulk and storing them.

(c) Credit facility: Although retailers mostly sell goods for cash, they also supply goods on
credit to their regular customers. Credit facility is also provided to those customers who buy
goods in large quantity.

(d) Personal services: Retailers render personal services to the customers by providing expert
advice regarding quality, features and usefulness of the items. They give suggestions
considering the likes and dislikes of the customers. They also provide free home delivery
service to customers. Thus, they create place utility by making the goods available when they
are demanded.

(e) Risk bearing: The retailer has to bear many risks, such as risk of:

 Fire or theft of goods.

 Deterioration in the quality of goods as long as they are not sold out.
 Change in fashion and taste of consumers.

(f) Display of goods: Retailers display different types of goods in a very systematic and
attractive manner. It helps to attract the attention of the customers and also facilitates quick
delivery of goods.

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 CHAPTER 2

LITERATURE REVIEW

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2.1 History of Steel:

The art of steelmaking was known to Indians since ancient times as is evident from the famous
iron pillar in Delhi, which dates back to AD 350. The first attempt to produce iron and steel on
modern lines was made in 1830 at Porto Novo (Tamil Nadu). But this mill was closed down in
1866. A humble beginning of the modern steel industry was reached in India at Kulti in Bengal
in 1870. But the conception of larger production became visible with the establishment of steel
plant in Jamshedpur in Bihar in 1907. It started production in 1912, and then came Burnpur
and Bhadravathi Steel plants in 1919 and 1923 respectively. It was, however, only after
Independence that the Steel industry was able to find a strong foothold. Excluding the
Jamshedpur plant of the Tata’s, all are in the public sector and looked after Steel Authority of
India Ltd (SAIL). The Indian steel industry is more than 100 years old now. Till 1990, it
operated under a regulated environment with insulated markets and large-scale capacities
reserved for the public sector. Production and prices were determined and regulated by the
Government. SAIL and Tata Steel were the main producers, the latter being the only private
player. The industry took its first faltering steps in 1907 with the setup of the first integrated
steel plant in Jamshedpur by TISCO. Since, then the Indian steel industry has emerged as one
of the core sectors in the Indian economy with a very significant impact on economic growth.
It is generally believed that the original crucible steel making technique was developed
primarily in India leading to wootz steel. The use of iron was well established in south Indian
megalithic cultures by at least about 1100 BC at sites such as Hallur in Karnataka. It is
significance for the evolution of the South Indian process of wootz crucible steel. Furthermore,
the process of wootz crucible steel making seems to have been one which was so much more
associated with the South Indian part of the subcontinent including Sri Lanka and was not really
well known from the Northern Indian context. The megalithic site of Kodumanal, CA 300
BC12, in Tamil Nadu may have been a site for ferrous crucible processing. There is a
preliminary identification of a sample of high carbon steel of the composition of wootz of
around 1.5% carbon from megalithic Andhra Pradesh. These are tentatively the earliest known
identifications for high-carbon crucible steel in the world. It remains a matter for speculation
whether Huntsman knew about the Indian crucible steel making. In an authoritative book on
Steel Making before Bessemer (1984) K. C. Barraclough13 describes the history of the crucible
steel process in Britain but makes no mention of the Indian process. P. T. Craddock14, the
British Museum, London has observed that there is circumstantial evidence for a number of

18
transfers of technology including crucible steel making at the dawn of the European Industrial
Revolution.

At the time of independence, India had a small Iron and Steel industry with production of about
a Million tonnes (MT). In due course, the government was mainly focusing on developing basic
steel industry, where crude steel constituted a major part of the total steel production. Many
public sector units were established and thus public sector had a dominant share in the steel
production till early 1990s. Mostly private players were in downstream production, which was
mainly producing finished steel using crude steel products. Capacity ceiling measures were
introduced. Basically, the steel industry was developing under the controlled regime, which
established public sector steel companies in various segments. Till the early 1990s, when
economic liberalization reforms were introduced, the steel industry continued to be under the
control of Indian regulation were constituted such as large plant capacities were reserved only
for public sector under capacity control measures; price regulation; for additional capacity
creation producers had to take license from the government; foreign investment was restricted;
and there were restrictions on imports as well as exports. But after liberalization many reforms
and regulation were changed which brought the new era for development in steel industry.

Some of the major developments were:

1. Large plant capacities that were reserved for public sector were removed;

2. Export restrictions were eliminated;

3. Import tariffs were reduced from 100 percent to 5 percent;

4. Decontrol of domestic steel prices;

5. Foreign investments was encouraged, and the steel industry was part of the high priority
industry for foreign investments implying automatic foreign equity participation up to 100
percent.

6. System of freight ceiling was introduced in place of freight equalization scheme. Due to this,
the domestic steel industry has since then, become market oriented and integrated with the
global steel industry. This has helped private players to expand their operations and bring in
new cost effective technologies to improve competitiveness not only in the domestic but also
in the global market.

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The Indian steel industry comprises of the producers of finished steel, semi-finished steel,
stainless steel and pig iron. Indian steel industry, having participation from both public sector
and private sector enterprises, is one of the fastest growing markets for steel and is also
increasingly looking towards exports as driving the growth of the industry.

2.2 Indian steel Industry Structure:

Indian iron and steel industry can be divided into two main sectors: Public sector and Private
sector. Further on routes of production it can be classified as: Integrated producer which
convert iron ore into steel e.g. SAIL, TISCO, etc. and Secondary producer which make steel
from sponge iron or scrap e.g. ISPAT Industries, Essar.

2. PEST Analysis

Political Factors:

It includes a lot of policies given by the Indian steel ministry; it includes industrial policies,
electricity policies, national mineral policies, foreign trade policies, environmental policies,
etc. there are also other factors including government ownership at local and national levels
and other legislations and licenses involved.

The Government has approved the National Steel Policy (NSP) in November 2005.The long
term goal of the NSP is for India to have a modern and efficient steel industry of world
standards. The focus of the policy is to achieve global competitiveness not only in terms of
cost, quality and product-mix but also in terms of global benchmarks of efficiency and
productivity. The policy targets to increase steel production at a compounded annual growth
rate of 7.3% to 110 MT by 2019-2020. It projects domestic consumption to grow at annual
growth rate of 6.9% to 90 MT during this period. The policy envisages the share of exports to
increase to 25% from present share of 10% and 100% FDI is allowed under the automatic route
for metallurgy and processing of all metals.

Economic Factors:

Inflation: the inflation has grown to about 7.25 percent so there is rise in price of all the goods,
and also production efficiency has decreased. Currency fluctuation and exchange rates: With
increase in the value of dollar, the industry needs to give a large amount in exchange rates.
Moreover there is a rise in price of crude oil and has cost transportation charges to increase

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Economic Crisis:

Due to economic crisis in Europe led to decrease in demand of finished goods in the foreign
market and has led to a trade deficit.

Consumer expenditure:

Due to high inflation rate the prices of product has increased leading to more expenditure of
the customer.

Social Factors:

Shift in value and culture of people, a positive attitude towards work, green environment issue,
product safety issue and employment and safety laws.

Technological Factors:

There is a need for new government investment policies. New patents and products for
extracting ores, manufacturing purpose should be implemented where ever necessary to rapid
the pace and improve quality of the products. The current level of investment in R&D in the
Indian Steel Plants is less than 0.24% of their total turnover. In order to encourage R&D
activities in Iron and Steel sector, Ministry of Steel is providing financial assistance.

3. Competitor Analysis:

The Major competitors to steel industry are plastic industry, aluminium industry and cement
industry. Though their cheap prices they cannot replace steel in essential products like
automobile, machineries and in construction of bridges and other infrastructure. Although a
small sector of steel is affected by plastic industry as steel is replaced by plastic in some
kitchenware articles, and furniture’s.

4. SWOT Analysis

Strengths-

Availability of iron ore and coal:

India has abundance of iron ore, coal & other raw materials required for iron & steel making.
It has 4th largest iron ore reserves (13 tons) in the world.

Low labour wage rates:

India has low unit labour cost, this gets reflected in low cost of production

21
Abundance of quality manpower:

It has 3rd largest pool of technical Manpower, next to United States and erstwhile USSR,
capable of understanding and assimilating new technologies.

Weakness-

Unscientific mining:

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.

Low productivity:

According to an estimate crude steel output at the biggest Indian steel maker is roughly 150
tonnes per worker per year, whereas in Western Europe the figure is around 600 tonnes.

Power shortages:

Steel production in India is also hampered by power shortages.

Inadequate infrastructure:

Insufficient freight capacity and transport infrastructure hamper the growth of Indian steel
industry

Low R&D investments:

There are inadequate investments in infrastructure.

Lack of best quality and trained professionals has been a major drawback.

High cost of debt:

Since huge capital investment is required therefore cost of these debts is very high.

Lack of best quality and trained professionals has been a major drawback.

High cost of debt:

Since huge capital investment is required therefore cost of these debts is very high.

22
Export Market Penetration:

It is estimated that world steel consumption will double in next 25yrs. Quality improvement of
Indian steel combined with low cost advantages will definitely help in substantial gain in export
market

Consolidation:

As global companies have realized the threat of excess supply, they are looking at M&A
(mergers and acquisitions) option to retain market share and improve margins.

Threats-

Technological change:

Technological changes force the industry structure to change. In India where capital itself is
costly, technological obsolescence is a major threat.

Price sensitivity & Demand volatility:

The demand for steel is derived demand and the purchase quantity depends on end-use
requirements. The traders are price sensitive and buy when there are discounts.

Dumping of steel by developed countries:

High quality products for developed countries available for import at competitive price

Slow Industry Growth:

Slowing industrial growth in the country poses a constant looming threat to the steel industry.

2.3 Distribution Channels Organization and Structures

Marketing channel decisions are among the most important decisions that management faces
today. Indeed, if one looks at the major strategy of the marketing mix (product, price,
promotion and distribution), the greatest potential for achieving a competitive advantage now
lies in distribution (Obaji, 2011).

Distribution, as one of four elements of marketing complex, is an inseparable part of marketing

decisions which involves all the decisions about distribution of products to the end user. The
issues of distribution were analysed by a number of marketing specialists (Berman, 1999; Kim,
1996; Delton, 1997; Frazier, 1999; Kotler, 2003; Rosen bloom, 1999; Stern, 2006; etc.), paying

23
a big attention to the elaboration of the procedures of marketing channel
design (Gudonaviciene & Alijosiene, 2008).

Distribution still offers a new frontier for competing successfully, especially if the emphasis is
placed on the design and management of superior marketing channel systems to provide
excellent customer services. Yet designing optimal marketing channel systems to boost sales,
formulating innovative distribution strategies and managing channels system effectively is no
simple task. (Obaji, 2011)

The very earliest formal conceptions of marketing channels focused on the functions performed
by a distribution system and the associated utility of these functions and the overall system.
Reflecting their presence in industrial and transitional economies, marketing channels
gradually came to be viewed as the set of interdependent organizations involved in the process
of making a product or service available for use or consumption (Coughlin, Anderson, Stern,
& El-Ansary, 2001). This institutional oriented perspective draws attention to those members
(e.g. wholesalers, distributors, retailers, etc.) comprising the distribution system and engaged
in the delivery of goods and services from the point of conception to the point of
consumption (Anderson & Coughlan, 2002). The management of such institutions through
marketing channel management involves the planning, organizing, coordinating, directing and
controlling efforts of channel members (Gundlach et al, 2006).

In general, the concept of distribution refers to where and how product and services are to be
offered for sale, all essential mechanism and logistical supports for the transfer of goods and
services as well as ownership of goods and services to the customers (Stern et al, 2006). A
successful marketing channel ensures that a desired product is distributed in a desired amount
to a desired channel to satisfy the desired consumer (Kotler & Keller, 2009).

One of the initial problems encountered when the area of integrated distribution is discussed is
the problem of definition. No single "model" distribution system can be tailored for all business
firms. The distribution function, like other functions of the firm, must be developed within the
framework of management philosophy and available resources of the individual firm. During
the 1960s, three characteristic or identifiable approaches to integrated distribution management
have emerged. They are: physical distribution management, materials management and
business logistics. (La Londe, Grabner, & Robeson, 1993).

Research devoted to channel management has played an important role in the marketing
discipline for over 40 years. Two main areas of channels research in marketing have evolved.

24
First, how channels are organized or structured has been a focal point, cantering on the level
of channel integration, reliance on multiple channels, distribution intensity and organizational
policies relating to centralization, formalization, standardization, and surveillance (cf.
Dwyer & Oh, 1988; John & Weitz, 1988; Fein & Anderson, 1997; Shervani, Frazier &
Challagalla, 2007). Second, how ongoing channel relationships are coordinated in a
behavioural sense has been even more prominent, dealing with methods of channel governance,
including the impact of contracts, the development and application of inter firm power,
communication approaches, levels of control and conflict, and the attainment of trust and
commitment (cf. Frazier, 1983; Anderson & Weitz, 1992; Boyle, Dweyer, Robicheau and
Simpson, 1992; Morgan and Hunt, 1994; Kumar, Sheer and Steenkamp, 1995; Lusch and
Brown, 1996).

2.4 Development of Channel Structure

A channel of distribution can be defined as the collection of organization units, either internal
or external to the manufacturer, which performs the functions involved in product marketing.
These functions are persuasive and include buying, selling, transporting, storing, grading,
financing, market risk bearing and providing marketing information. A channel member is an
individual organization unit institution or agency that performs one or more of the marketing
functions and by doing so has an active role in the channel of distribution (Lambert, 1978).

The marketing channels literature has given considerable attention to the study of channel
structure. Early researchers discussed channel structure in terms of the functions performed by
channel members (Mallen, 1973). The basic idea was that these functions could be allocated in
different mixes among the various channel members depending on the characteristics of the
channel. As structure research evolved, several common elements emerged, which were seen
as varying across different channels, including: the number of channel levels (i.e., number of
intermediaries involved), the intensity at the various levels (the number of intermediaries at
each level of distribution), and the types of intermediaries at each level (i.e., retailers,
wholesalers, distributors) (Rosenbloom B.1987). Thus, channel structure was essentially
treated at a micro level, rather than examining the more macro issues such as: how firms decide
who will perform what activities, the costs and trade-offs involved in using various channel
strategies, and various extraneous factors affecting channel relations. Starting from the 70’s,
tremendous strides have been made in the understanding of how firms should organize and

25
manage their channels of distribution. Still, the researchers have barely touched the surface of
all the managerial issues that have been addressed. Furthermore, many issues of managerial
importance relating to the organization and management of channels of distribution have
received no attention in empirical research (Frazier, 1999).

More recent research in channel structure examines both macro and micro issues. The majority
of the current research on channel structure focuses on one of two broad operationalization’s
of structure: transactional form or bureaucratic form. Though it could be argued that the degree
of rationalism also reflects the structure of the relationship, transactional form and bureaucratic
form are the most widely accepted (Brent, 2007).

Physical distribution

Physical distribution has been acknowledged as being an important component of channel

management (cf. Frazier, Spekman & O’Neal, 1988; Coughlan Anderson, Stern & El-ansary,
2006). However, relatively little attention has been paid to physical distribution function in
channels research within the marketing literature. The general topic has received more
emphasis in other literatures, such as in operations management, logistics, transportation,
purchasing and information technology, with a general focus on how product orders can be
efficiently and effectively processed, and then delivered to channel members and end-
customers. Among the main areas of interest have been inventory management, the number
placement, and design of warehouses or distribution centres, the use of technology to aide in
processing orders, delivery options to customers, and customer payment methods(cf. Innis and
laLonde, 1994; Emerson and Grimm, 1996; Giannakis and Groom, 2004; Giunipero, Hooker,
Joseph-Matthews, Yoo and Brudvig, 2008).

The lack of attention to physical distribution in channels research in marketing is unfortunate.

Physical distribution functions will impact both channel organization and the manner in which
channel relationships are coordinated over time. More clarity is necessary on the role of
physical distribution functions within the general domain of channel management (Frazier,
2009).

26
The role of power in distribution channels

Channels of distribution can be viewed as social systems comprising a set of interdependent

organizations, which perform all the activities (functions), utilized to move a product and its
title from production to consumption (Stern & Neskett, 1969; Stern, 1971). Because of this
interdependency there arises a need for some form of co-operation between channel members
and co-ordination of activities. This co-operation and co-ordination is necessary in order to
ensure predictability and dependability between members which will allow individual
organizations to plan effectively. Also, conflict arises in channels, because members sometimes
have incompatible goals, differing ideas as to the functions each should perform, and differing
perceptions of reality. This conflict needs to be controlled so that it does not disrupt channel
functioning (Wilkinson, 1996).

Power or, rather, the use of power by individual channel members to affect the decision making
and behaviour of one another (whether deliberate or not), is the mechanism by which the
channel is organized and orderly behaviour preserved. This is not meant to imply that
organizations necessarily set out deliberately to organize the channel, but that this organization
of the channel arises out of individual organizations adjusting their behaviour to one another
in relation to the power they each have and use. However, in some channels, firm may assume
a leadership role and make deliberate attempts to organize the channel, making use of their
power. Power is the means by which cooperation between individual channel members'
activities are coordinated and the means by which any conflict between firms is
controlled (Stern & Neskett, 1969; Stern, 1971; Wilkinson, 1973).

Strategic choice in distribution channels

Though the field of marketing, in general, has adopted a strategic perspective, one particular
area, distribution channels, has been relatively slow to embrace this perspective. Besides
research on the manipulation of power and influence attempts, little attention has been given
to the study of channel strategies. The importance of marketing channel strategy decisions is
highlighted by 1) their inherent long-term consequences and 2) the constraints and
opportunities that they represent (Dwyer & Welsh, 1985). The development of relationships in
a marketing channel often takes a great deal of time and effort. Therefore, any decisions made
concerning these relations take on added strategic importance. Given this, the incorporation of

27
strategic management theory is very relevant to the study of distribution channels (Brent,
2007).

Multiple channels

The use of multiple channels of distribution is now becoming the rule rather than the exception,
given the fragmentation of markets, advancements in technology, and heightened inter brand
competition, among other things. While multiple channels potentially increase the firm’s
penetration level and raise entry barriers, interbred competition and intra channel conflict may
become major problems, leading to lowered levels of support in the firm’s direct and indirect
channels. Such possibilities remain largely unexplored. While John and Weitz (1988) and Klein
et al. (1990) examined the use of multiple channels to a degree, only Dutta et al. (1995) have
focused an empirical study on the construct. Their major finding is that augmenting an indirect
channel with a direct channel improves the manufacturer’s ability to manage the indirect
channel (Frazier, 1999).

The literature on marketing channels has given a good deal of time and effort to understanding
the many interrelationships which develop between channel members. In this effort, topics such
as channel structure, power/conflict, environmental issues, and relational dimensions have
been studied thoroughly. However, the concept of channel strategy, as well as other aspects
related to distribution management have received little attention (Brent, 2007).

Channels research has typically taken a manufacturer perspective. That is, how channels should
be organized and ongoing channel relationship should be managed are normally addressed
from the manufacturer’s point of view, such as whether or not to use integrated channels and
how power should be used to coordinate exchanges. Furthermore, a large amount of research
on retailing exists (Frazier, 1999).

Nowadays, marketing channels which provide the institutional structure that connects firms to
the markets they serve have not escaped the global environment. On the contrary, in today's
world, marketing channel structure and strategy must be formulated in the context of
globalization (Rosenbloom & Larsen, 2008). Thus, managers responsible for developing and
managing the distribution channels that make products and services available to literally
billions of customers around the world face a more complex challenge than the previous
generation of channel managers. Not only do today's channel managers need to think globally.

28
 CHAPTER 3

COMPANY PROFILE

29
3.1 COMPANY PROFILE:

Simplex Castings Limited is an ISO 9001:2015 Company with four manufacturing units
engaged in manufacturing equipment’s and spares for core industrial sectors like Steel,
Railways, Power (Thermal, Hydel and Wind), Mining, Cement, Material Handling,
Hydrocarbons, Defence, Sugar, Road making and Construction. Simplex provides complete
range of services to heavy industry: Concept to Detail Design, Manufacturing, Installation,
Commissioning and Maintenance.

Centrally located in India, in the industrial town of Bhilai in Chhattisgarh, Simplex is well
connected through Road and Rail network to all parts of the country. In addition to its
manufacturing facilities, Simplex has an effective network of marketing offices and
representatives to cater to the requirements of a wide cross section of clients in India and
abroad.

COMPANY EXPANSION PLAN:

In addition to its 3 manufacturing existing units, Simplex is presently in the process of

developing a fourth unit with full facilities for fabrication, machining and equipment building.
A Heavy H-Beam Line is under installation which will start production from September 2009
with a capacity of 2000 Tons per month. A CNC Drilling Machine is also under planning for
Heavy Structures. With these addition/modernising, the company has developed a capability
and competence to manufacture 6000Ton of structures and equipment per month.

3.2 COMPANY HISTORY:

Simplex was founded by Late Shri Bhanji Monji Shah in Jabalpur, Madhya Pradesh in 1941,
as a unit manufacturing Agricultural Implements, Steel Structure & Castings. In the 1950’s,
with the decision of Government of India to construct India’s first One Million Ton capacity
Public Sector Steel Plant at Bhilai, Simplex moved to Bhilai to be closely associated with the
building of the Steel Plant at Bhilai.

Simplex continued to be associated with the operation and expansion of and other SAIL Plants
by way of manufacture and supply of critical spares including import substitution activities,
components & equipment. The 1970's saw Simplex not only consolidating itself in the domestic

30
Steel sector, but also making its presence felt in the international market with its products. The
company started exporting its products to quality conscious technologically advanced markets
of Japan, USA, CIS Countries, Australia, Egypt, Germany and France etc.

In the 1980's Simplex started working on the execution of Turnkey Contracts with international
associates. This period also saw the Company entering into a host of collaborations with world
leaders in diverse fields from countries like Germany, France and United Kingdom, etc.
The 1990's saw simplex diversifying from primarily Steel Sector work to Railways, Mining,
Power, Hydrocarbons, etc. During the 2000's, Simplex continued executing Turnkey contracts
and developing various products for the areas it had already diversified into. Additionally,
Simplex enhanced its manufacturing capacity by adding large sophisticated imported machine
tools including CNC machines to meet the high quality norms of its rapidly growing foreign
customer base.

Vision

 To be a continuously growing world class company we shall.

 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; to produce steel at international standards of cost
and quality; and to meet the aspirations of the stakeholders.

Objectives
 Expand plant capacity to 6.3 Mt by 2008-09, with the mission to expand further in
subsequent phases as per the corporate plan.
 Sustain gross margin to turnover ratio>25%.
 Be amongst top five lowest cost liquid steel producers in the world by 2009-10.

31
  Achieve higher levels of customer satisfaction than competitors.
 Install right attitude amongst employees and facilitate them to excel in
their professional, personal and social life.
 Be recognized as an excellent business organization by 2008-09.
 Be proactive in conserving environment, maintaining high levels of safety and
addressing social concerns.

3.3 COMPANY PRODUCT:

Simplex offers a wide range of standard and differentiated products for different and
demanding markets worldwide such as ultra-high strength steel for Automotive, speciality
steels for Aerospace and ultra-high hardness steels for Railways Its Product can be
differentiated as below:

FLAT PRODUCTS:

Flat products include slabs, hot-rolled coil, cold-rolled coil, coated steel products, tinplate and
heavy plate. They are used in automotive, heavy machinery, pipes and tubes, construction,
packaging and appliances. Long products include billets, blooms, rebar’s, wire rod, sections,
rails, sheet piles and drawn wire. Flat steel products consist of sheets and plates. They are rolled
from slabs, which are a semi-finished steel product. These products are used in a wide range
of industries such as automobile, domestic appliances, shipbuilding, and construction. Let’s
now see how flat products are further segregated. Hot rolled sheets are used in automobiles,
construction, agricultural equipment, and machinery. We’ll discuss these products in greater
detail in our next part. Cold rolled sheets are used to make domestic appliances and other
products that require precision. The above chart shows the various flat steel products. Coated
sheets are a subcategory of cold rolled steel. Coated sheets are coated with aluminium and zinc.
This enhances the anticorrosion properties of steel. As discussed previously, since steel is
highly corrosive, it is mixed with other elements to enhance its quality. Plates are generally
made to specific customer specifications. They are used in construction, shipbuilding, and
industrial machinery.

1. Cable Tapes
These Tubes are widely used for Power and Industrial boilers, Transformers, Super heaters,
Automobiles and Bicycles, Railway Electrification, Furniture and General Engineering
Applications etc.

32
2. GP Coils

These Tubes are widely used for Power and Industrial boilers, Transformers, Super heaters,
Automobiles and Bicycles, Railway Electrification, Furniture and General Engineering
Applications etc.

3. Steel Coils

These Tubes are widely used for Power and Industrial boilers, Transformers, Super heaters,
Automobiles and Bicycles, Railway Electrification, Furniture and General Engineering
Applications etc.

4. GP Coil Sheets

Applications: Galvanised Coils and Sheets are used to make Boxes, Containers, Ducting,
Cooler Body, etc.

5. Corrugated Sheets

Corrugated sheets are extensively used for Industrial sheds, housing, temporary structures etc.

LONG PRODUCTS:

Wire Rod and Bar Mill

With the introduction of most technologically advanced special and alloy steel long product
rolling complex for manufacture of value added bars and coils, a new dimension has been
added in BPSL's long history in the steel business. The Long Product Rolling Complex consists
of a most modern 0.5 million multiproduct Wire Rod and Bar Mill (18 pass Horizontal &
Vertical Continuous Mill) supplied by Danieli Morgard shammar, Italy and KOCKS, Germany
(4 pass mill). The state of the art Wire Rod & Bar Mill, one of the most modern plants of this
type in the world, will produce:

 Straight Bars

 Bar in Coil form

 Wire rods

33
3.4 MARKETING DEPARTMENT OF SIMPLEX CASTINGS LIMITED

THE FOLLOWING STEPS ARE FOLLOWED FOR PROCEEDING WITHANY SALE

1. Maintaining of database of materials, specification of materials , storage facilities,
loading facilities, pricing , duties, levies, complaints, test certificates, formats etc. in
respect of iron & steel products.
2. Build up of customer database through market information, journals,
information on Competitors, applications of the products etc. And maintain adatabase
of prices of our competitors.
3. Study and analyse the customer requirements and give feedback to production unit
regarding product specifications quality.
4. Formulate annul production plan based on customer requirements by the middle
of February for the next financial year.
5. Formulate annual production plan based on annul marketing plan by the end of Febru
ary, for the next financial year by giving monthly mill wise break ups.
6. Dispatch of materials to branch stockyards as per their requirements to meet
their monthly targets.
II. MODE OF SELLING:

Selling the finished/semi-finished products by any one of the following modes.

 Free sales
 Short/long term contracts.
 Tender sales.
 Sales under approved marketing tools(discount/credit sales)
 Sales on negotiated basis.
 e- auction sales
 DLD scheme
 CSA scheme

III. SERVICE OF CONTRACTS/SALES:

Based on production plan, stock holdings and long term contracts on hand, offer letters are sent
to the long term customers. For the balance materials, intimation letters are sent
to prospective customers regarding the availability of the materials and issue offer letters, if
the customers are interested to lift the material. The offer indicates the price of the material and

34
also indicates concessional rate of sales tax available on submission of statutory forms and
full rate of sales tax applicable otherwise.

IV. DELIVERY ORDER:

The customer pays the amount by way of demand draft /pay order/ cheque etc. to finance
executive of branch sales office. Once the finance executive is satisfied with the financial
arrangement he issues money receipt to customer. In case of letter of credit / Bank guarantee,
the executive scrutinizes it for acceptability and communicates to marketing executive for issue
of delivery order.

V. COORDINATION WITH PPM AND PRODUCTION DEPT:

Marketing dispatch planning section holds meeting with the personnel of PPM/Traffic and
mills at the shop floor every day. The stocks, dispatches, wagon availability, clearances
required for materials at shop floor are discussed. Rail indents are indicated to PPM &Traffic.
Traffic in turn raises indent on Railways on daily basis. Dispatch of material by road movement
to various stockyards also discussed. Internal movement of material to BC.
Gate, NEY and NSY are also discussed. Besides the above, weekly coordination meeting isco
nducted at the level of ED (Works) along with GM (Marketing).

VI. CUSTOMER SATISFACTION:

At Bhilai, customer satisfaction is no longer the ultimate watchword. Bhilai’s business

strategies to-day focus on developing customer loyalty. Customer satisfaction is just the
beginning of this process. Bhilai focuses on a few critical issues in pursuit of this new loyalty
centred approach, which help in satisfying customer and achieving profitability for the
company. The combination of product quality, supporting services and the ability to provide
innovative and quality products and services define value .Bhilai strives to efficiently control
and strike a balance between the price, quality innovation and image, which go a long way in
determining customer loyalty as well as company’s financial performance .besides these, Bhilai
Also takes into consideration external factors such as business environment and customer
characteristics.

35
VII. DISTRIBUTION NETWORK:

Bhilai has branch offices and stockyard at all major consuming centres in India, manned by
experienced marketing professionals. The field personnel undertake extensive
customer contact programmes including frequent visits to customer premises in the area for
discussion and assessing their immediate and future requirements. The branch manager’s
regularly organizes customer meets at branch offices and these meets are attended at least once
in three months by regional managers and Sr. Executives from HQ. The branches, through this
exercise, send regular feedback to HQ regarding the current and emerging requirements and
demand patterns in their respective areas. Quarterly and monthly production and dispatch plans
are made based on these projections as well export orders.

VIII. NEW MARKETS:

Simplex continuously interacts with structural designers / fabricators and consultants all over
the country and projects and construction authorities of central and state government. For broad
banding customer base as well as assess the market for construction steel in the country. An
inter disciplinary group has been constituted for the development of special steel grades to meet
the specific requirements of selected customers. Thus Simplex funnels information on
customer requirements into the business systems and culture of the organization. Lastly, with
a view to ascertain the effectiveness of initiatives, customer’s opinion survey is carried out
every year through an external reputed agency. These surveys bring awareness about the
strength and weaknesses of Simplex with regard to key areas determining customer satisfaction
level. Concerted efforts are taken to improve on the required areas. Besides this,
VSP also keeps track of competitor’s efforts towards customer satisfaction.

IX. STOCKYARD – ITS ORGANISATION & FUNCTIONS

Stockyards play and important role in the marketing operations. They help storing the
Company’s materials at specific locations and subsequent distribution so that maximum
number of customer could be served easily. They help in prompt movement of materials from
the plant to the customer, thereby ensuring continuous production and availability of materials.

36
BROAD OBJECTIVES OF STOCKYARD:

A) To ensure movement of material produced at the plant, thereby ensuring

continuous production at full capacity.
B) To facilitate economic rolling at the plant as per the plan and movement of materials in
bulk from the plant to consumption centres.
C) To store materials received from the plant and supply to consumers in convenient lots
and in the mix required by them.
D) To avoid waiting time of the customer and to ensure prompt fulfilment of demand.

TYPE OF STOCKYARDS

i) Own stockyards- the company procures land, developments it, arranges

for railway siding, weighbridge and other facilities and generally opts for a handling
contractor. In such cases the handling agent is responsible for receipt, storage
delivery and custody of materials.
ii) Stockyard with consignment agents – In this case the consignment agents
arranges for land and facilities for handling and storage of materials including safe
custody materials.
iii) Stockyard with consignment sales agents –In this case, the consignment sales
agents is responsible for receipt, storage, selling, of materials. This stockyard and
infrastructure belongs to him.

HANDLING OF MATERILAS IN STOCKYARDS

Handling of materials in stockyards is generally done by a handling contractor / consignment

agent using his own equipment and labour. Aspects considered in handling:
 Type of the product - Shape, size, length, bundle dimensions, weight per piece packet,
quality etc.
 Layout of siding and its capacity.
 Possible deterioration during storage.
 Type of wagons likely to be received.
 Average daily deliveries
 Shape and size of stockyard area.

37
  Need to ensure availability of siding at all times to receive in coming consignments.
 Location of approach road to the stockyard.

FUNCTIONS CARRIED OUT IN THE STOCKYARD

1. Receipt of materials from the plant, or from other stockyard by rail/road.

2. Sorting of materials.
3. Stacking in easily identifiable and orderly manner, product wise, lot wise, size and
quality wise.
4. Weighment and delivery of materials to customers.
5. Production of materials from damaged / deterioration in storage.
6. Utilization and maintenance of assets.
7. Control of operating cost in the stockyard.
8. Maintaining records \accounts of receipts, delivery and stock of materials.
9. Physical verification of stocks.
10. Implementation of various statutory acts and rules.
11. Furnishing periodical reports\returns.
12. Security of the materials

RECIEPT OF MATERIALS THROUGH OWN SIDING

1. Activities prior to arrival of wagon: Marketing HQ sends tentative monthly dispatch

plan and weekly dispatch advice to branch through region. With these documents
delivery can be taken even without original documents by executing indemnity bond
with the railways.
2. Pending wagons
3. Arrival of wagons
4. Unloading of materials
5. Weighment of incoming materials in stockyard

RECIEPT OF MATERIALS THROUGH PUBLIC SIDING

1. Activities prior to arrival of wagons.

2. Unloading at public siding

38
 3. Transportation of materials to stock yard.

STACKING OF MATERIALS
 Preparation of stacking plan
 Method of stacking
 Minimising cost of stacking
 Demurrage
 Internal transportation for stacking
 Sign board/painting
 Sorting
 Documentation

3.5 DISTRIBUTION CHANNEL OF SIMPLEX CASTINGS LIMITED:

Selection of distribution is a very strategic decision and is very vital for the organisation, thus
a very strict norm are followed before choosing a distributor at Simplex Castings Ltd Types of
Channel Intermediaries: There are many types of intermediaries such as wholesalers, agents,
retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user
without an intermediary), and many others. The main modes of distribution will be looked at
in more detail.

1. Channel Intermediaries - Wholesalers

Wholesalers they break down 'bulk' into smaller packages for resale by a retailer. They buy
from producers and resell to retailers. They take ownership or 'title' to goods whereas agents
do not. They provide storage facilities. For example, cheese manufacturers seldom wait for
their product to mature. They sell on to a wholesaler that will store it and eventually resell to a
retailer. Wholesalers often reduce the physical contact cost between the producer and consumer
e.g. customer service costs, or sales force costs. A wholesaler will often take on the some of
the marketing responsibilities. Many produce their own brochures and use their own telesales
operations.

2. Channel Intermediaries - Agents

Agents are mainly used in international markets. An agent will typically secure an order for a
producer and will take a commission. They do not tend to take title to the goods. This means

39
that capital is not tied up with the goods. However, a 'stockist agent‟ will hold consignment
stock (I.e. will store the stock, but the title will remain with the producer. This approach is used
where goods need to get into a market soon after the order is placed e.g. foodstuffs). Agents
can be very expensive to train. They are difficult to keep control of due to the physical distances
involved. They are difficult to motivate.

3. Channel Intermediaries – Retailers

Retailers will have a much stronger personal relationship with the consumer. The retailer will
hold several other brands and products. A consumer will expect to be exposed to many
products. Retailers will often offer credit to the customer e.g., electrical wholesalers, or travel
agents. Products and services are promoted and merchandised by the retailer. The retailer will
give the final selling price to the product. Retailers often have a strong 'brand' themselves e.g.
Ross and Wall-Mart in the USA, and Ali super, Modelo, and Jumbo in Portugal.

4. Channel Intermediaries –Internet

The Internet has a geographically disperse market. The main benefit of the Internet is that niche
products reach a wider audience e.g. Scottish Salmon direct from an Inverness fishery. There
are low barriers to entry as set up costs are low. 38 Use e-commerce technology (for payment,
shopping software, etc.) There is a paradigm shift in commerce and consumption which
benefits distribution via the Internet.

5. Distribution Network Opted by Simplex

There are mainly two major networks by which the product moves through into the market At
Simplex we have both channel of distribution i.e. direct and indirect distribution channel
Within the Distribution category, the business is categorized as OE or Retail, based on whether
the customer is serviced directly, or through the Retail / Distribution network. In OE, there are
sub-segments like OEM distribution, and in Retail sub-segments like GC/GP retail distribution,
CR retail distribution, and geographic segmentation. In OEM distribution, the customers
specify the grade of steel that they require and the company takes responsibility to supply them
the same grade of steel in the agreed cut to size condition. In retail distribution, companies
maintain stocks of material for feeding its retail chain and provide Value for money products.
Thus further the business channel is categorized as below

6. E-Bidding:

40
E-bidding is all new concept developed by BPSL for sales of its product to end consumer in a
more transparent and convenient manner. The adoption of internet technologies to create
efficiencies for the Steel industry continues to grow. The latest innovation being made available
to the industry is the ability to create tenders and submit bids online. The idea of online
transactions is not a new concept with everything from online banking to purchases of major
items such as vehicles all being transacted safely and securely. The challenge that makes the
management of bidding for steel products online so difficult is the many complicated pricing
options such as separate, alternate, unit, combined and other pricing options. Add to that the
need to handle items such as cash allowances, bid bonds, required time to perform the work
and schedules such as lists of Subcontractors and other details. Over the years these challenges
have been handled by creating what are often complex and detailed tender packages that need
to be completed and submitted in hard copy by a specified closing time. Thus electronic bidding
concept was more transparent in the way, such that the bidders are allowed to bid at same price.

3.6 Distribution Network of Simplex Castings Ltd:

SIMPLEX has selected 28 distributors and 39 sales offices in different location across India.
Every distributor is given 2 days training session, after which they become confident about the
product and learn how to differentiate its product from its competitor product. Aggressive
distribution strategy needs to be adopted for covering large rural area. Distributors keep active
sales force to cover all the retailers in their geographical area. Their sales force visits different
rural and urban areas to attract retailers so that they can maximise their sales. Also, the sales
force comes up with attractive schemes for the retailers to help them achieve their target sales.
Dealers keep RSU vans which is used for transportation and advertising. All the distributors
have upgraded warehouse with weighing machine.

SIMPLEX's marketing set up consists of a wide marketing network both in India and abroad
with highly qualified and experienced sales & technical personnel, who have had rich exposure
in reputed steel industries and understand the customer's needs. The modern communication
systems ensure that the enquiries and orders generated from customers are transmitted without
delay to in-house service departments viz., Technical Competence Canter and Supply Chain
Management for further auctioning. SIMPLEX's supply chain system is fully integrated in
terms of both organization & information system all the way from selection of raw materials
to delivery of the products to customers. Marketing, production planners and logistics experts
work closely together, using the same information system. Employees based at local Sales

41
Offices all over India & abroad are given specialized training to enable them to understand and
meet customer's needs by ensuring cost effective and reliable supplies. The company serves a
wide variety of consumers, ranging from reputed contractors to retail users from the private
sector organisation to the public sector undertakings. These consumers can be classified into 3
major groups:

1) Government

2) Retailer (B TO C)

3) Private sector consumers (B TO B)

To cater to the needs of all its consumers, the company does both (B to B selling) and retail
outlets (B to C selling). Bulk orders come under direct selling and small order from retail
outlets.

DESIGN AND ENGINEERING:

The Company have successfully commissioned a 2.8 Million TPA Greenfield Steel Plant with
HR Coil making facility. For this plant, technology and equipment’s were sourced from leading
world-renowned companies’ viz., Lurgi, ABB Ltd., SMS Siemag, SMS Meer Danieli, LOI
Tenova, Kocks etc.

A. Employment Opportunities

At full operational stage, now Simplex plant has employed about 1736 technical staff. The
indirect employment due to various ancillary units Development and other services is much
more.

B. Training and Development

Simplex believes that the employees are its assets and strives to realize their potential in full
for mutual advantage. Simplex has trained workforce of about 870 employees in direct contract
with the organisation a trained cadre of technical operative personnel and managerial cadre are
provided for the successful commissioning and operation of a large steel plant. A training and
development centre with facilities is available to develop trained cadre of technical personnel
and managerial cadre. Employees are sent to other steel plants on short duration tours to find
solutions to the various issues facing the company. Employees are also sent to suppliers
manufacturing units. Simplex provides training programme for enhancing their knowledge.

42
C. Township

A Modern township with all amenities has been developed adjacent to the steel plant site, to
house the plant employees. The township is having protected drinking water supply, water
borne sanitation, black top roads, hospitals, welfare centres, community facilities, parks etc.

D. Water supply

Operational water requirement of 36 mgs is being met from the Kharun Dam.

E. Power supply

Operation power requirement of 390 MW is being met through captive power plant. The
capacity of the power plant is 286.5mw.

F. Advertising

Simplex Castings Ltd is also following advertising, which is one among the promotional
strategies.

 Print media

 Brochures and booklets

 Posters and leaflets

 Directories

 Symbols of logs

 Bill boards

 Displays

SWOT ANALYSIS OF COMPANY

The SWOT analysis of Simplex brings forth the opportunities and threats facing Simplex, with
a view to buildings up on the strengths, exploiting the opportunities improving upon the
weakness and converting threats into opportunities. The strengths, weakness, opportunities and
threats of Simplex are as under.

43
S- Strengths
1. State of-the technology
2. High commitment to achieve capacity levels
3. Areas of excellence
4. Economies of scale
5. High expansion potential
6. Strong commitment to conserve environment
W-Weaknesses
1. High capital rated charges.
2. Low return product mix.
3. Productivity below international levels.
4. Practices not as per with international standards.
O-Opportunities
1. Shore based
2. Sizeable export markets
3. Access to import resources
4. Proximity to southern markets
5. Increasing domestic demand due to thrust on infrastructure development.
T-Threats
1. Availability of iron ore and coal,
2. Rising input and costs.
3. Increasing competition.
4. Sensitive to exchange rate variation
5. Possibility of import duties declining further.
6. Excise duties continue to be high.
7. Lack of alternatives sources for major raw materials.
8. Major market place (north-west) located far off.
9. Infrastructure continues to be inadequate.

3.7 MARKETING ACTIVITIES:

Under integrated marketing some of the important activities of the marketing management are
as follows:
 Collection of necessary information regarding marketing

44
 Analysis of the data and drawing conclusion
 Search and development stage of new marketing techniques
 To chalk out detailed marketing programme
 To implement that marketing programme
 To coordinate between the wants of the customers and their satisfaction.

COMPANY HIGHLIGHTS AND ACHIVEMENTS

 The first Indian company to export steel plant equipment’s to Russia.
 First Indian company to enter into technical tie-up with Tyazhprom Export (TPE),
Russia for executing Turnkey Projects in India.
 First Indian Company to commission Slag Granulation Plant on Turnkey for Blast
Furnace of SAIL Bhilai and SAIL Bokaro Steel Plants.
 First Indian company to bring Japanese Technology of Sinter making in India. Executed
complete Sinter Plant - III of SAIL Bhilai Steel Plant on Turnkey contract basis in
consortium with Mitsui/Kawasaki & Hitachi Zosen of Japan.
 Developed critical castings of SG Iron Pallets for Sinter Plants.

45
 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

46
4.1 METHODOLOGY

SIGNIFICANCE OF THE STUDY

 The study is very significant to understand the distribution channels.

 The study is important to know the dealers satisfaction level for the dealership.
 The study is important to know the dealers satisfaction level in the price of the steel.
 The study is important to know the dealers preference for the quality.
 The study is very important to know the sales volume.
 The study is also analyses the effective media for improving the sales.
 The study is important to know availability of the steel
 The study is important to know margins in the steel industries

4.2 OBJECTIVES OF THE STUDY

 To find out the distribution channels of Simplex Castings Limited plant in Raipur.
 To compare the distribution system of Simplex Castings Limited with other steel
companies.
 To find out the advertisement efficiency of Simplex Castings Limited.
 To find out the marketing strategy of Simplex Castings Limited from others.
 To find out the present problems faced by dealers.
 To give valuable suggestions to the company for increase the sales volume.

4.3 Limitation of Study:

 One of the important of the study was lack of time though the respondent to the study
was vast due to the time constraints the sample size was limited.
 The researcher has difficulty with most of the respondents who was not willing to
cooperate with study, as they were very busy with their own work.
 The research had also difficulty with the respondents because they did not fill up the
questionnaire in proper time.
 Another limitation of the study was confined with not only retailers but also
consumers for survey of this study.

47
  The dealer and wholesaler were very reluctant to answer the question and the
response may be biased.

4.4 DATA ANALYSIS:

RESEARCH DESIGN:
Since the population runs into several thousands, it is not possible to conduct a census survey.
Therefore a sample survey is conducted using a quota sampling.

SAMPLE SIZE
The total sample size is 50.

SOURCES OF DATA
To pursue the mentioned objectives, required data had been collected through
a) Primary Data.
b) Secondary Data.

Primary Data
Is the data, which is collected directly by direct personal interview, interview, indirect oral
investigation, Information received through local agents, drafting a schedule, drafting a
questionnaire?

Secondary Data
Is the data, which is collected from the various books, magazine end material, reports, etc. The
data which is stored in the organization and provide by the HR people are also secondary data,
various information were taken out regarding that subject as well other subject from various
sources and stored.

48
4.5 ANALYSIS OF THE STUDY
TABLE NO: 3
STEEL DEALERSHIP TAKEN BY DEALERS

BRAND NO. OF RESPONDENTS PERCENTAGE

Rourkela Steel Plant 6 12
Bhilai Steel Plant 9 18
Durgapur Steel Plant 8 16
Bokaro Steel Plant 9 18
Simplex Castings Limited 18 36
Total 50 100

Analysis:
From the above table, it is analysed that 12% of the respondents are having the Rourkela
steel plant dealership, 18% of the respondents are having the Bhilai steel plant dealership, 16%
of the respondent are having the Durgapur steel plant dealership, 18% of the respondents are
having the Bokaro steel plant and 36% of the respondents are having the Simplex Castings Ltd
‘S dealership.

GRAPH NO:3 -STEEL DEALERSHIP TAKEN BY DEALERS

40

35

30

25

20

15

10

0
Rourkela steel Plant Bhilai Steel Plant Durgapur Steel Plant Bokaro Steel Plant Simplex Castings
Limited

49
INTERPRETATION:

After comparing with the other industries Dealers are more interested in taking dealership of
Simplex Castings Ltd than other industries. 36% of the respondents are having the Simplex
Castings Ltd.’s dealership. It is analysed that 12% of the respondents are having the Rourkela
steel plant dealership, 18% of the respondents are having the Bhilai steel plant dealership, 16%
of the respondent are having the Durgapur steel plant dealership, 18% of the respondents are
having the Bokaro steel plant and 36% of the respondents are having the Simplex Castings Ltd
‘S dealership.

TABLE NO: 4

HIGH SALES VOLUME IN STEEL INDUSTRY

BRAND NO. OF RESPONDENTS PERCENTAGE

Rourkela Steel Plant 7 14
Bhilai Steel Plant 15 30
Durgapur Steel Plant 7 14
Bokaro Steel Plant 10 20
Simplex Castings Limited 11 22
Total 50 100

Analysis:

From the above table, it is inferred that 14% of the respondents feel that Rourkela steel plant
is getting high sales volume, 22% of the respondents feel that Bhilai steel plant is getting high
sales volume, 14% of the respondents feel that Durgapur steel plant is getting high sales
volume, 20% of the respondents feel that Bokaro steel plant is getting high sales volume
and30% of the respondents feel that Simplex Castings Ltd is getting high sales volume.

50
 GRAPH NO: 4-
HIGH SALES VOLUME IN STEEL INDUSTRY
35

30

25

20

15

10

0
Rourkela Steel Plant Bhilai Steel Plant Durgapur Steel Plant Bokaro Steel Plant Simplex Castings
Limited

INTERPRETATION:

From Graph it is cleared that after Bhilai Steel Plant Simplex Castings Limited ranks second
in high sales volume in Steel Industry. It is inferred that 14% of the respondents feel that
Rourkela steel plant is getting high sales volume, 22% of the respondents feel that Bhilai steel
plant is getting high sales volume, 14% of the respondents feel that Durgapur steel plant is
getting high sales volume, 20% of the respondents feel that Bokaro steel plant is getting high
sales volume and30% of the respondents feel that Simplex Castings Ltd is getting high sales
volume.

TABLE NO: 5

MOST VALUABLE SUPPLIERS

BRAND NO. OF RESPONDENTS PERCENTAGE

Rourkela Steel Plant 5 10
Bhilai Steel Plant 10 20
Durgapur Steel Plant 11 22
Bokaro Steel Plant 9 18
Simplex Castings Limited 15 30
Total 50 100

51
Analysis:

From the above table, it is analysed that 10% of the respondents feel that the Rourkela
steel plant is most valuable supplier, 20% of the respondents feel that the Bhilai steel plant is
most valuable supplier, 22% of the respondents feel that the Durgapur steel plant most valuable
supplier, 18% of the respondents feel that the Bokaro steel plant is most valuable supplier
and30% of the respondent feel that the Simplex Castings Ltd is most valuable supplier.

GRAPH NO: 5-
MOST VALUABLE SUPPLIERS
35

30

25

20

15

10

0
Rourkela Steel Plant Bhilai Steel Plant Durgapur Steel Plant Bokaro Steel Plant Simplex Castings
Limited

INTERPRETATION:
From the graph it is cleared that Simplex Castings Limited is the most valuable suppliers of
Steel products than other steel industries. It is analysed that 10% of the respondents feel that
the Rourkela steel plant is most valuable supplier, 20% of the respondents feel that the
Bhilai steel plant is most valuable supplier, 22% of the respondents feel that the Durgapur steel
plant most valuable supplier, 18% of the respondents feel that the Bokaro steel plant is most
valuable supplier and30% of the respondent feel that the Simplex Castings Ltd is most valuable
supplier.

52
 TABLE NO: 6
QUALITY OF THE SIMPLEX CASTINGS LIMITED

OVERALL RATE NO. OF RESPONDENTS PERCENTAGE

EXCELLENT 14 28
VERY GOOD 8 16
GOOD 14 28
AVERAGE 8 16
POOR 6 12
TOTAL 50 100

Analysis:
From the above table, it is inferred that 28% of the respondents feel that quality of the product
is excellent, 16% of the respondents feel that quality of the product is very good, 28% of the
respondents feel that quality of the product is good, 16% of the respondents feel that quality of
the product is average and 12% of the respondents feel that quality of the product is poor.

GRAPH NO: 6 - QUALITY OF THE SIMPLEX CASTINGS LTD

30

25

20

15

10

0
EXCELLENT VERY GOOD GOOD AVERAGE POOR

INTERPRETATION:
From graph it is cleared that the customers Satisfaction for the quality of steel at Simplex
Castings Ltd is very high. That is 28% are saying that excellent is the Quality of Simplex.
53
 TABLE NO. 7
PRICE OF THE SIMPLEX CASTINGS LIMITED

LEVEL OF NO. OF THE PERCENTAGE

SATISFACTION RESPONDENTS
HIGHLY SATISFIED 14 28
SATISFIED 11 22
AVERAGE 6 12
DISSATISFIED 8 16
HIGHLY DISSATISFIED 8 16
TOTAL 50 100

Analysis:
From the above table , it is inferred that 28% of the respondents are highly satisfied with price,
22% of the respondents are satisfied with price , 12 % of the respondents feel that average,
22% of the respondents are dissatisfies with price and price of the respondents are highly
dissatisfies with price.

GRAPH NO: 7- PRICE OF THE SIMPLEX CASTINGS LTD

30

25

20

15

10

0
HIGHLY SATISFIED SATISFIED AVERAGE DISSATISFIED HIGHLY DISSATISFIED

54
INTERPRETATION:
From graph it is cleared that 28% of customers or clients are highly satisfied with the price of
Simplex Castings Limited Than other Industries. It is inferred that 28% of the respondents are
highly satisfied with price, 22% of the respondents are satisfied with price , 12 % of the
respondents feel that average, 22% of the respondents are dissatisfies with price and price of
the respondents are highly dissatisfies with price.

TABLE NO. 8
FAST MOVING BRAND IN STEEL INDUSTRY

BRAND NO. OF RESPONDENTS PERCENTAGE

Rourkela Steel Plant 7 14
Bhilai Steel Plant 7 14
Durgapur Steel Plant 10 20
Bokaro Steel Plant 9 18
Simplex Castings Limited 17 34
Total 50 100

Analysis:
From the above table, it is inferred that 14% of the respondents feel that Rourkela steel plant
is fast moving in steel industry, 14% of the respondents feel that Bhilai steel plant is fast moving
in steel industry, 20% of the respondents feel that Durgapur steel plant is fast moving
in steel industry, 18% of the respondents feel that bokaro steel plant is fast moving insteel
industry and 34% of the respondents feel that Simplex Castings Ltd fast moving in steel
industry.

55
 GRAPH NO: 8- FAST MOVING BRAND IN STEEL INDUSTRY
40

35

30

25

20

15

10

0
Rourkela Steel Plant Bhilai Steel Plant Durgapur Steel Plant Bokaro Steel Plant Simplex Castings
Limited

INTERPRETATION:
From graph it is cleared that Simplex Castings Ltd is the most top fast moving Brand as
compared to other Steel Industries. 34% customers are saying that Simplex is the fast moving
brand.

TABLE NO: 9
ORDER AND REPLACEMENT WITH SIMPLEX CASTINGS LIMITED

LEVEL OF NO. OF THE PERCENTAGE

SATISFACTION RESPONDENTS
HIGHLY SATISFIED 17 34
SATISFIED 6 12
AVERAGE 11 22
DISSATISFIED 8 16
HIGHLY DISSATISFIED 8 16
TOTAL 50 100

Analysis:
From the above table, it is inferred that 34% of the respondents are highly satisfied with
order and replacement of the Simplex Castings Ltd, 12% of the respondent are satisfied with
56
order and replacement of the Simplex, 22% of the respondents feel that average with order and
replacement of the Simplex Castings Ltd, 16% of the respondents are dissatisfied with order
and replacement of the Simplex castings Ltd and 16% of the respondents are highly dissatisfied
with order and replacement of the Simplex Castings Ltd.

GRAPH NO: 9 - ORDER AND REPLACEMENT WITH SIMPLEX

CASTINGS LTD
40

35

30

25

20

15

10

0
HIGHLY SATISFIED SATISFIED AVERAGE DISSATISFIED HIGHLY DISSATISFIED

INTERPRETATION:

From graph we can clearly know that Simplex is the customer oriented company. Which totally
give importance to customer’s order replacement of products. It is inferred that 34% of the
respondents are highly satisfied with order and replacement of the Simplex Castings Ltd, 12%
of the respondent are satisfied with order and replacement of the Simplex, 22% of the
respondents feel that average with order and replacement of the Simplex Castings Ltd, 16% of
the respondents are dissatisfied with order and replacement of the Simplex castings Ltd and
16% of the respondents are highly dissatisfied with order and replacement of the Simplex
Castings Ltd.

57
 TABLE NO. 10
AVAILABILITY OF THE SIMPLEX CASTINGS LTD

LEVEL OF NO. OF THE PERCENTAGE

SATISFACTION RESPONDENTS
HIGHLY SATISFIED 12 24
SATISFIED 14 28
AVERAGE 8 16
DISSATISFIED 8 16
HIGHLY DISSATISFIED 8 16
TOTAL 50 100

Analysis:
From the above table it is inferred that 24% of the respondents are highly satisfies with
availability of the product, 28% of the respondents are satisfies availability of the product, 16%
of the respondents are average with availability of the product, 16% of the respondents are
dissatisfied with availability of the product and, 16% of the respondents are highly dissatisfied
with availability of the product.
.

GRAPH NO: 10 - AVAILABILITY OF THE SIMPLEX CASTINGS

LTD
30

25

20

15

10

0
HIGHLY SATISFIED SATISFIED AVERAGE DISSATISFIED HIGHLY DISSATISFIED

58
INTERPRETATION:
From the graph it is cleared that the availability of products is satisfied. Which is good for any
industry for their growth. It is inferred that 24% of the respondents are highly satisfies with
availability of the product, 28% of the respondents are satisfies availability of the product, 16%
of the respondents are average with availability of the product, 16% of the respondents are
dissatisfied with availability of the product and, 16% of the respondents are highly dissatisfied
with availability of the product.

TABLE NO. 11
MARGINS OFFERED BY SIMPLEX CASTINGS LIMITED

LEVEL OF NO. OF THE PERCENTAGE

SATISFACTION RESPONDENTS

HIGHLY SATISFIED 15 30

SATISFIED 8 16

AVERAGE 13 26

DISSATISFIED 8 16

HIGHLY DISSATISFIED 6 12

TOTAL 50 100

Analysis:
From the above table it inferred that 30% of the respondents are highly satisfied with margins
offered by the product, 16% of the respondents are satisfied with margins offered by
the product, 26% of the respondents are average with margins offered by the product, 16 % of
the respondents are dissatisfied with margins offered by the product, 12% of the respondents
are highly dissatisfied with margins offered by the product.

59
 GRAPH NO: 11- MARGINS OFFERED BY SIMPLEX CASTINGS
LTD
35

30

25

20

15

10

0
HIGHLY SATISFIED SATISFIED AVERAGE DISSATISFIED HIGHLY DISSATISFIED

INTERPRETATION:
From Graph it is cleared that Margins Offered by Simplex Castings Ltd Highly Satisfying the
customers.

TABLE NO. 12
SATISFIED WITH SIMPLEX CASTINGS LTD DEALERSHIP

SATISFIED NO. OF RESPONDENT PERCENTAGE

YES 28 56
NO 22 44
TOTAL 50 100

Analysis:
From the above table, it is analysed that 56% of the respondents satisfied with the Simplex
Castings Ltd dealership, and other 38% of the respondents not satisfied with the Simplex
Castings Ltd.

60
 SATISFIED WITH SIMPLEX CASTINGS LTD DEALERSHIP
60

50

40

30

20

10

0
YES NO

INTERPRETATION:
From Graph it is cleared that, 56% of customers are satisfied with the Dealership of Simplex
Castings Ltd. Which shows the positive image of Industry in the Market which will directly
increase the growth.

TABLE NO. 13
ADVERTISEMENT OF THE SIMPLEX CASTINGS LTD

ADVERTISMENT NO. OF THE PERCENTAGE

RESPONDENT
TOO HIGH 15 30
HIGH 9 18
MODERATE 8 16
LOW 9 18
TOO LOW 9 18
TOTAL 50 100

61
Analysis:
From the above table it is inferred that 30% of the respondents feel that advt. offered by
Simplex Castings Ltd is too high, 18% of the respondents feel that advt. offered by Simplex
Castings Ltd is high, 16% of the respondents feel that advt. offered by Simplex Castings Ltd is
moderate, 18% of the respondents feel that advt. offered by Simplex Castings Ltd is low, 18%
of the respondents feel that advt. offered by Simplex Castings Ltd is too low.

GRAPH NO: 13- ADVERTISEMENT OF THE SIMPLEX

CASTINGS LTD
35

30

25

20

15

10

0
TOO HIGH HIGH MODERATE LOW TOO LOW

INTERPRETATION:
Graph Shows That Advertisement of Simplex Castings Ltd is too high. Which will help the
organization for attracting the new customers. Which is directly proportional tp the growth of
Simplex. It is inferred that 30% of the respondents feel that advt. offered by Simplex Castings
Ltd is too high, 18% of the respondents feel that advt. offered by Simplex Castings Ltd is high,
16% of the respondents feel that advt. offered by Simplex Castings Ltd is moderate, 18% of
the respondents feel that advt. offered by Simplex Castings Ltd is low, 18% of the respondents
feel that advt. offered by Simplex Castings Ltd is too low.

62
 TABLE NO. 14
SALES PROMOTIONAL EFFORTS OF THE SIMPLEX CASTINGS
LTD.
OVERALL RATE NO. OF RESPONDENTS PERCENTAGE
EXCELLENT 14 28
VERY GOOD 7 14
GOOD 11 22
AVERAGE 7 14
POOR 11 22
TOTAL 50 100

Analysis:
From the above table it is analysed that 28% of the respondents feel that sales promotional is
excellent, 14% of the respondents feel that sales promotional is very good, 22% of the
respondents feel that sales promotional is good, 14% of the respondents feel that
sales promotional is average, 22% of the respondents feel that sales promotional is poor.

GRAPH NO: 14
- SALES PROMOTIONAL EFFORTS OF THE SIMPLEX
CASTINGS LTD
30

25

20

15

10

0
EXCELLENT VERY GOOD GOOD AVERAGE POOR

63
INTERPRETATION:
From Graph it is cleared that the sales promotional efforts taken by the Simplex Castings Ltd
is Excellent helps in expanding the business and increasing the clients. It is analysed that 28%
of the respondents feel that sales promotional is excellent, 14% of the respondents feel that
sales promotional is very good, 22% of the respondents feel that sales promotional is good,
14% of the respondents feel that sales promotional is average, 22% of the respondents feel
that sales promotional is poor.

TABLE NO. 15
LIFETIME OF THE OVERALL STEEL.

BRAND NO. OF RESPONDENTS PERCENTAGE

Rourkela Steel Plant 7 14

Bhilai Steel Plant 13 26

Durgapur Steel Plant 4 8

Bokaro Steel Plant 10 20

Simplex Castings Limited 16 32

Total 50 100

Analysis:
From the above table, it is inferred that 14% of the respondents feel that Rourkela steel is
having more life time, 26% of the respondents feel that Bhilai steel is having more life time,
8% of the respondents feel that Durgapur steel is having more life time, 20% of the respondents
feel that Bokaro steel is having more life time, 32% of the respondents feel that Simplex
Castings Ltd is having more life time.

64
 35

30

25

20

15

10

0
Rourkela Steel Plant Bhilai Steel Plant Durgapur Steel Plant Bokaro Steel Plant Simplex Castings
Limited

INTERPRETATION:
From graph it is cleared that the life time of the steel manufactured at Simplex is very high.It
is inferred that 14% of the respondents feel that Rourkela steel is having more life time, 26%
of the respondents feel that Bhilai steel is having more life time, 8% of the respondents feel
that Durgapur steel is having more life time, 20% of the respondents feel that Bokaro steel is
having more life time, 32% of the respondents feel that Simplex Castings Ltd is having more
life time.

TABLE NO. 16
RELIABILITY OF THE SIMPLEX CASTINGS LTD

OVERALL RATE NO. OF RESPONDENTS PERCENTAGE

EXCELLENT 15 30
VERY GOOD 9 18
GOOD 11 22
AVERAGE 7 14
POOR 8 16
TOTAL 50 100

65
Analysis:
From the above table, it is inferred that 30% of the respondents feel that reliability of
the product is excellent, 18% of the respondents feel that reliability of the product is very good,
22% of the respondents feel that reliability of the product is good, 14% of the respondents feel
that reliability of the product is average, 16% of the respondents feel that reliability of the
product is poor.

GRAPH NO: 16- RELIABILITY OF THE SIMPLEX CASTINGS LTD

35

30

25

20

15

10

0
EXCELLENT VERY GOOD GOOD AVERAGE POOR

TABLE NO. 17
PAYMENT TERMS OF THE SIMPLEX CASTINGS LTD.

OVERALL RATE NO. OF RESPONDENTS PERCENTAGE

EXCELLENT 16 32
VERY GOOD 8 16
GOOD 8 16
AVERAGE 11 22
POOR 7 14
TOTAL 50 100

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Analysis:
From the above table it is inferred that 32% of the respondent feel excellent with payment terms
of the Simplex Castings Ltd, 16% the respondent feel very good with payment terms of the
Simplex Castings Ltd, 16% the respondent feel good with payment terms of the Simplex
Castings Ltd, 22% the respondent feel average with payment terms of the Simplex Castings
Ltd, 14% the respondent feel poor with payment terms of the Simplex Castings Ltd.

GRAPH NO: 17-

PAYMENT TERMS OF THE SIMPLEX CASTINGS LTD.
35

30

25

20

15

10

0
EXCELLENT VERY GOOD GOOD AVERAGE POOR

INTERPRETATION:
From graph it is cleared that the payment termed of the Simplex casting is excellent. Which
pays important role in the development of industry. It is inferred that 32% of the respondent
feel excellent with payment terms of the Simplex Castings Ltd, 16% the respondent feel very
good with payment terms of the Simplex Castings Ltd, 16% the respondent feel good with
payment terms of the Simplex Castings Ltd, 22% the respondent feel average with payment
terms of the Simplex Castings Ltd, 14% the respondent feel poor with payment terms of the
Simplex Castings Ltd.

67
 TABLE NO. 18
MARKET RESEARCH IN THE STEEL INDUSTRY

BRAND NO. OF RESPONDENTS PERCENTAGE

Rourkela Steel Plant 9 18
Bhilai Steel Plant 10 20
Durgapur Steel Plant 8 16
Bokaro Steel Plant 10 20
Simplex Castings Limited 13 26
Total 50 100

Analysis:
From the above table it is inferred that 18% of the respondents feel that Rourkela steel plant is
doing market research in steel industry, 20% of the respondents feel that Bhilai steel plant is
doing market research in steel industry, 16% of the respondents feel that Durgapur steel plant
is doing market research in steel industry, , 20% of the respondents feel that Bokaro steel plant
is doing market research in steel industry, and 26% of the respondents feel that Simplex
Castings Ltd is doing market research in steel industry.

GRAPH NO: MARKET RESEARCH IN THE STEEL INDUSTRY

30

25

20

15

10

0
Rourkela Steel Plant Bhilai Steel Plant Durgapur Steel Plant Bokaro Steel Plant Simplex Castings
Limited

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INTERPRETATION:
From graph it is cleared that, market research at Simplex Castings is very high other than other
steel industries. It is inferred that 18% of the respondents feel that Rourkela steel plant is doing
market research in steel industry, 20% of the respondents feel that Bhilai steel plant is doing
market research in steel industry, 16% of the respondents feel that Durgapur steel plant is doing
market research in steel industry, , 20% of the respondents feel that Bokaro steel plant is doing
market research in steel industry, and 26% of the respondents feel that Simplex Castings Ltd
is doing market research in steel industry.

TABLE NO. 19
DELIEVERY PERIOD BY SIMPLEX CASTINGS LTD.

DELIEVERY PERIOD NO. OF THE PERCENTAGE

RESPONDENT
1-3 DAYS 14 28
3-5 11 22
5-10 8 16
10-13 8 16
13-15 9 18
TOTAL 50 100

Analysis:
From the above table it is inferred that 28% of the respondents answered that within 1-3 days
they are getting their product, 22% of the respondents answered that within 3-5 days they are
getting their product, 16% of the respondents answered that within 5-10 days they are getting
their product, 16% of the respondents answered that within 10-13 days they are getting
their product, 18% of the respondents answered that within 13-15 days they are getting
their product.

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 GRAPH NO: 19- DELIVERY PERIOD BY SIMPLEX CASTINGS
LTD.
30

25

20

15

10

0
1-3 DAYS 03-05 DAYS 05-10 DAYS 10-13 DAYS 13-15

INTERPRETATION:
From graph it is cleared that, the delivery period of simplex is less. Time for delivery attracts
the customer and increases the demand and growth of Simplex Castings Ltd Is possible. It is
inferred that 28% of the respondents answered that within 1-3 days they are getting their
product, 22% of the respondents answered that within 3-5 days they are getting their product,
16% of the respondents answered that within 5-10 days they are getting their product, 16% of
the respondents answered that within 10-13 days they are getting their product, 18% of the
respondents answered that within 13-15 days they are getting their product.

70
 CHAPTER – 5
FINDINGS, SUGGESTIONS AND CONCLUSIONS

71
5.1 FINDINGS OF THE STUDY
 36% of the respondents are having Simplex Castings Limited dealership.
 30% of the respondents feels that Simplex Castings Ltd is having high sales volume.
 30% of the respondents are considering most valuable suppliers from the dealer’s point
of view.
 28% of the respondents feel that quality of the product is excellent. And 12%of the
respondents feel quality is poor.
 28% of the respondents satisfied with price of the product. And 16% of the respondent
not satisfied with the price of the products.
 34% of Simplex Castings Ltd is moving fast brand in steel industry.
 34% of the respondent feel that order and replacement is highly satisfied and 16% of
the respondents feel that highly dissatisfied.
 28% of the respondents satisfied with availability of the product and 16% of the
respondents are highly dissatisfied.
 30% of the respondents highly satisfied with margins offered by the product. And 12%
of the respondents feel that margins of the product are highly dissatisfied.
 56% of the respondents satisfied with Simplex Castings Ltd dealership and 44% of the
respondents not satisfied.
 30% of the respondents feel that advertisement offered by Simplex Castings Ltd is too
high. And 18% of the respondents feel that advertisement is low.
 28% of the respondents feel that sales promotional efforts of the Simplex Castings Ltd
are excellent. 22% of the respondents feel that poor.
 32% of the Simplex Castings Ltd products are having more life time. And 8% Durgapur
steel plant product has less life time from others.
 30% of the respondents satisfied with reliability of the Simplex products. And 16% of
the respondents not satisfied.
 32% of the respondents satisfied with the payment terms of the Simplex Castings Ltd
and 14% of the respondents not satisfied.
 28% of the respondents satisfied with delivery period of the product within 3days. And
16% of the respondents not satisfied.

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5.2 SUGGESTION
 Simplex Castings Limited should concentrate in credit facility of the dealers.
 Simplex Castings Limited should concentrate on sales man visit for wide marketing.
 Simplex Castings Limited should do more market research and get feedback.
 Simplex Castings Limited plant should concentrate to fulfil the service for the dealers
required.

5.3 CONCLUSION:

From the data analysis and survey conducted, I arrived at the following conclusions:-
• Simplex has a huge technological advantage to those against its competitor.
• It has huge product differentiation as compared to its competitors.
• One of the major drawbacks of Simplex Castings is its less no of retail outlet in India
and abroad.

• The major problem faced by the distributor is the shortage of supply.

• Distributor functions just as order takes; they should contribute me and communicate
to the retailers.

• It should be checked that whether our products is reaching to the outlets timely and
regularly or not.

73
BIBLIOGRAPHY

74
TEXT BOOKS
 Philip Kotler (2002), “Marketing Management” Prentice Hall of India, New Delhi,
Eleventh Edition.
 Kotler and Armstrong (2001),”Principles of Marketing” Prentice Hall of India, New
Delhi.
 Samars and Barner (1987), “Fundamentals of Marketing” Mc Graw Hill Company,
Ryerson, Eight Edition.
 C.R.Kothari (2003), “Research Methodology” Wishwa Prakashan, Mumbai.
 Leon G.Schiffman & Leslie Lazar Kanuk (2003), “Consumer Behaviour” Pearson
Education, New Delhi.

Websites Visited:
www.simplexcastings.com
www.indianindustry.com
www.wikipedia.com
www.google,com

75
ANNEXURE

76
 Questionnaire
(Tick whichever applicable)
CONTACT INFORMATION:
Name: Mr. Ms.________________________________________
Address:_________________________________________________
City:____________________________________________________
Phone :( O) _________________________ (R)__________________

OTHER INFORMATION:
Age:
Marital status: Single Married

Occupation: (tick one)

Businessman
Executive
Government Service
Academics
House-Wife
Self-employed
Student
Others ________________________ (Please Specify)

77
This questionnaire is entirely for the purposes of educational research; its contents will be kept
strictly confidential, will not be made known to anyone known outside of the research study,
and will not otherwise be disclosed or published except in an aggregated form in which
individuals cannot be identified.

1. NAME OF THE DISTRIBUTORS:

2. ADDRESS:

3. WHICH STEEL DEALERSHIP DO YOU HAVE?

A.ROURKELA STEEL PLANT ()

B.BHILAI STEEL PLANT ()
C.DHURGAPUR STEEL PLANT ()
D.BOKARO STEEL PLANT ()
E.SIMPLEX CASTINGS LIMITED ()

4. WHICH COMPANY GETS HIGH SALES VOLUME IN STEEL INDUSTRY?

A.ROURKELA STEEL PLANT ()

B.BHILAI STEEL PLANT ()
C.DHURGAPUR STEEL PLANT ()
D.BOKARO STEEL PLANT ()
E.SIMPLEX CASTINGS LIMITED ()

5. I N YOUR POINT OF VIEW WHO IS THE MOST VALUABLE SUPPLIERS?

A.ROURKELA STEEL PLANT ()

B.BHILAI STEEL PLANT ()
C.DHURGAPUR STEEL PLANT ()
D.BOKARO STEEL PLANT ()
E.SIMPLEX CASTINGS LIMITED ()

6. WHAT IS YOUR OPNION ABOUT SIMPLEX CASTINGS LIMITED?

78
A. EXCELLENT ()
B. VERYGOOD ()
C. GOOD ()
D. AVERAGE ()
E. POOR ()

7. KINDLY GIVE YOUR SUGGESTION RELATED TO THE PRICE OF SIMPLEX

CASTINGS LIMITED?

A. HIGHLYSATISFIED ()
B. SATISFIED ()
C. AVERAGE ()
D. DISSATISFIED ()
E. HIGHLY DISSATIFIED ()

8. WHICH IS THE FAST MOVING BRAND IN YOUR TOWN?

A.ROURKELA STEEL PLANT ()

B.BHILAI STEEL PLANT ()
C.DHURGAPUR STEEL PLANT ()
D.BOKARO STEEL PLANT ()
E.SIMPLEX CASTINGS LIMITED ()

9. PLEASE RATE THE ORDER AND REPLACEMENT OF SIMPLEX CASTINGS LIMITED?

A. HIGHLYSATISFIED ()
B. SATISFIED ()
C. AVERAGE ()
D. DISSATISFIED ()
E. HIGHLY DISSATIFIED ()

10. PLEASE RATE THE AVAILABILITY OF SIMPLEX CASTINGS LIMITED?

79
A. HIGHLYSATISFIED ()
B. SATISFIED ()
C. AVERAGE ()
D. DISSATISFIED ()
E. HIGHLY DISSATIFIED ()

11. AREYOUSATISFIED WITH THE MARGINSOFFEREDBYSIMPLEXCASTINGSLIMITED?

A. HIGHLYSATISFIED ()
B. SATISFIED ()
C. AVERAGE ()
D. DISSATISFIED ()
E. HIGHLY DISSATIFIED ()

12. ARE YOU SATISFIED TO TAKE THE SIMPLEX CASTINGS LIMITED DEALERSHIP?

A.Yes ()
B. No ()

80