CMI7 7008 : Strategic Marketing

ASSIGNMENT

BY

MAZHER ABID MOHAMMED

Module Tutor: Ron Lawson

Word Count : 3,500

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 CONTENTS

INTRODUCTION 3

1. WHAT IS STRATEGIC MARKETING 4

2. STRATEGIC IMPACTS ON MARKETING PLAN 4

3. MARKETING PLAN 5

4. CONCLUSION 14

5. REFLECTIVE STATEMENT 15

BIBLIOGRAPHY

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INTRODUCTION

Pioneer steel is one of the leading steel company in Andrah Pradesh, Hyderabad
(India). Which is mainly involved in bar manufacturing and giving the strength to the
bar, which is called ‘TMT’ (Thermo Mechanical Treatment) steel.

Engineer's Choice, Builder's Pride is not just a slogan at Pioneer but is a reality.
Following stringent quality processes we at Pioneer ensure that what reaches to the
Engineer's & builders is nothing but 100% steel.

It's a statement defining the strength of satisfaction what we deliver, not just the
strength in TMT.

Pioneer TMT owes its success to committed and highly skilled workforce who gives
their best to the company and ensures that high quality standards are maintained.

Our ultra modern manufacturing facilities include a fully automatic rolling mill
complex and a facility to manufacture raw material for the finished product from our
Furnaces.

Pioneer steel has become one of the renown steel company in TMT bar manufacturing
in its region and it has implemented marketing strategies in its organization in 2001.

Marketing has been implemented in pioneer steel after 2001 and before it used to sell
its product by dealer and brokers in the market, later when pioneer steel started doing
marketing in its region with a new logo and the new slogan which has given more
benefit to company.

The sales of the company has increased and the demand of the product increased and
later it let to non-availability of stock which became problem to pioneer steel.

In today’s recession market pioneer steel has step back and has slow down its
marketing budget and is doing cost cutting in its plans of budget.

So, I am going to explain how the marketing strategies were implemented in pioneer steel during my
time in pioneer steel.

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1. WHAT IS STRATEGIC MARKETING?

“Marketing is a social and managerial process by which individuals and groups

obtain what they need and want through creating and exchanging products and value
with others.” (Kotler et al., 1999, in Dennis Adcock, Al Halborg, Caroline Ross,2001)

“…is simply a logical sequence and a series of activities leading to the setting of
marketing objectives and the formulation of plans for achieving them”(Ron
Lawson,2010)
“…is the overall purpose of marketing and its principle focus is the identification and
creation of competitive advantage.”(MacDonald 1984, in Ron Lawson,2010)

2. Pioneer steel’s strategic impacts on the marketing plan.

Pioneer steel's aim of marketing plan is to translate your locating statement into
recognizable and preferred brand(s), Which could consequence in increased gross
revenue or revenues and subsequent net income of the company.

To analyse the customer pioneer steel include four step analysis.

1.Within the marketplace finding your target people.

2.List the job titles of the various groupings doing the purchasing decisions within
this target audience.

3.Putting the most important groupings at the top, prioritize this list.

4.Major benefit, each one is seeking from your brand category, or infix next to the
name of each group, the hot button, Paying special attending to those groups at the top
of the list. You then ascertain whether your business strengths allow you to deliver
these key benefits.

Pioneer steel's marketing function is initially incorporated into a formal organizational

structure it is usually as a department with obligation for market research publicising,
promotion and sales support.

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Often this is structured in parallel to the gross sales department. Such arrangements are
likely to upshot in rivalry, rather than co operation, between gross revenue and
marketing.

The increase in marketing activities that incites such a new structure will usually, in
turn, be attributable to external changes such as increased competition or the increase
in merchandising activities that prompts such a new structure will usually, in turn, be
attributable to external changes such as increased competition, internal factors such as
increasing promotional activity or a need for more market research or marketing
planning support.

When economic and technical situations are stable, marketing planning might easily
become an annual task. In the turbulent economic and technical environment in which
organizations must now compete it has to be a continuing process.
It should be stressed, however, that this does not mean that programmes are changed
month by month. If the planning has been done effectively most, if not all,
programmes will remain valid in spite of the assumptions upon which they were based.
However, changing circumstances should be identified and analyzed early enough to
accommodate any needed modifications to the overall plan.These are point which
impact on pioneer steel’s marketing plan.

3. Components parts of the marketing plan in pioneer steel

3.1 Goal setting

a. Mission Statement

“Pioneer steel is one of the leading steel company in Andrah Pradesh, Hyderabad
(India) and its plan is to expand its production capacity. And spread its product and
service globally and maintain its trust in the market.”

b. Corporate objective

“Pioneer steel’s objective is to design and manufacture our merchandises in the most
cost efficient fashion for timely distribution to our regional network of suppliers and
furnish highest quality product and furnish outstanding level of gross sale and delivery
service, incapable of being corresponded by our competitors.” (Pioneer, 2010)

3.2 Situation review

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a. Marketing audit

Pioneer steel’s marketing audit is done by its directors of the company and they look into
the marketing plan and ask what has been done and what else should be done. They
examine each element of the firm's current marketing activity and achievements to
determine how well and cost-effectively each element helps the firm meet its overall goals.
Pioneer’s marketing audit is the current Marketing management and performance of the
organization. The company does both internal audit and external audit. Pioneer ‘s marketing
audit is not to criticize particular activities, but rather to identify whether there are any
working practices that could be more effective.

b. SWOT ANALYSIS

Pioneer steel has a strong market position that strengthens its brand image and
bargaining power. However, stringent government regulations would affect the
company's operating margins

STRENGTH WEAKNESS

-Strong market position - Third party suppliers

-Brand image - Religion
-Goodwill - No unity
-Best service - Culture
-Trust in market

OPORTUNITY TREATH

- Expansions of the plants. - Government regulation

- Nationally and internationally - Competitors

Spreading the product and Service.
- Market recession

STRENGTH

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Pioneer holds a strong market position in various markets in which it operates. It is one
of the Andhrah Pradesh’s TMT steel companies based on net sales and market
capitalization and one of the fastest growing private sector companies in south of
India.
Pioneer hold strong market position strengthens the company's brand image and
bargaining power.
Pioneer has a strong goodwill in the market and trust among its customers and the
market.
Pioneer gives best service in delivering the product to its customer in southern region
of India.

WEAKNESS

Pioneer steel has a strong market position and Fully-integrated steel plant but
dependence on third party suppliers. High dependence on Belary mine for iron ore
requirements, which is located in Karnataka (India) and dependence on raw material
for billets.
Pioneer’s main problem is with third party sifting to subsidiary companies.
The company face many religious feeling in the market and develop conflicts between
two companies.
There is lack of unity in the market when there is recession in the market.

OPPORTUNITY

Pioneer has entered the commercial power generation business through its subsidiary
Pioneer is currently constructing a 1,980 MW sponge iron plant which is coal-based at
cheguntta which is in the state of Andrah Pradesh in India. Which will produce 200mt
(matric ton) per day The project would be fully commissioned by May 2011.
And later in future this sponge iron plant can also be used as coal-based thermal power
plant which can produce electricity.
Therefore, the increasing focus on power generation provides opportunities for the
company to capitalize on the growth trend and penetrate into the market in future.
Expansion of TMT steel plant

Pioneer steel has been pursuing opportunities to expand its TMT steel business. The
company is investing INR 250 million ($5.3 million)(£3.5 millions) in expansion
projects to increase its total TMT steel capacity to 180,000 tones per annum with fully
integrated TMT steel plant.

The company will start mining activity at the Chittyal mine, which is located in
Warangal district in Andrah Pradesh (India) progressively from mid-2011. The mine is
expected to have a production capacity of 72,000 tpa.

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These investments will substantially expand TMT steel business. This will enable the
company to sustain its leading position in the industry in India.

Sustainable development is a key element of how we conduct our activities, and we

believe that businesses play an important role in tackling and driving sustainability and
climate change challenges.

Our focus in this area reflects our determination to pursue value-creating projects for
our shareholders that also effectively address our environmental, social, health and
safety opportunities and risks.

We are undertaking a process to ensure that our key stakeholders understand our
approach and performance in this important area. We intend over the coming months
to develop this process, and to continue our efforts to actively engage with our
stakeholders, concerning this integral aspect of our business philosophy.

Threats

Stringent government regulations, Intense competition and production risks.

Pioneer steel develops and manages a diverse portfolio of mining and metals
businesses.
The company operates through three business segments: Segment A, Segment B and
Segment C.
Segment A includes the corporate companies and multinational companies.
Segment B includes construction companies and government projects.
Segment C includes common people buying for there own home requirements.
The company against demand fluctuations in certain metal business segments and
provides it with cross-selling opportunities.

Any increases in the market prices of those raw materials relative to the market prices
of the metals that pioneer sells would affect the profitability and operating margins of
its TMT steel business.

High dependence on belary mines for iron ore requirements.Pioneer steel procures
majority of its iron ore requirement from belary mine.
Any interruption in operations at the mine could increase the operating costs of the
company and can have a material adverse effect on its results of operations and
financial condition.

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Pioneer steel has to comply with numerous governmental permits, approvals, and
leases for its operations as the industries in which it operates are subject to numerous
laws and extensive regulation by national, state, and local authorities in India Further,
new legislations or regulations may be adopted in the future that may materially and
adversely affect the company’s operations, its cost structure, or the customers’ ability
to use the company’s products.

Hence, these stringent regulations may impose new liabilities or increase operating
expenses, either of which could result in a material decline in profitability.

There is substantial intense competition in steel businesses both in India and

internationally. The company’s competitors in TMT steel markets outside India
include major international producers. Certain of these international producers have
significantly larger scale of operations, greater financial resources and manufacturing
and technological capabilities, more established and larger marketing and sales
organizations, and larger technical staffs.

In the Indian steel market, the company competes primarily against vizag steel plant,
Tirupati steels, Jai raj steel, Sujna steels, Dhanalaxmi steels and etc.. Many of the
company’s competitors are also expanding their production capacities.

If domestic demand is not sufficient to absorb these increases in capacity, its

competitors could reduce their prices, which may force the company to do the same or
cause the company to lose market share or sell its products in overseas markets at
lower prices. Such an intense competition threatens to erode the market share of the
company.

Pioneer steel is subject to operating risks in its mining and production activities. Due to
these risks, the company is liable to incur higher mining, transportation, or production
costs, disrupt or halt operations at its mines and production facilities permanently or
for varying lengths of time, or interrupt the transport of its products to the customers.

c. Assumptions

Pioneer steel assumption on future market is clear that it is going to face a lot of
problem when there is recession in the global market.
The company’s production plan, it is assumed that production plan will increase from
150mt per day to 500mt per day as new production plants come into operation.

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when price increase, few companies drop the price and increase there sale. A new
product will be launched in the market by major companies before the end of the
second quarter. The companies future Situation, will decide setting of marketing
objectives and strategies.

3.3. Strategy formulation

“Strategic formulation will involve estimating expected results, and considering

alternative ways forward and marketing mixes. When the strategies have been agreed,
the resources and activities required to deliver the strategies need to be costed out,
resulting in the budget.”(McDonald, Malcolm, 2008)

a. Marketing objectives

In a business like ours, people are at the centre of our operations and are key to
achieving our objectives and general objectives of Pioneer steel:

Specific: Pioneer steel’s clear objective is to grab more and more customer by the end
of this year.

Measurable: The Company check whether they have reached there target after
reviewing the marketing plan

Achievable: The company’s main resource is there people in the organization. Our
performance and results speak of the outstanding people we have across our
organisation. It is because of them that we have come a long way in a short time and
the money the company has invested in it.

Realistic: The company is very transparent in reaching its target and tries to reach its
target what it has assumed in its plan.

Time bound: The company aim is about getting more and more new customers within
the next 12 months.

“Businesses need to make sure they are marketing: The right product to the right
person at the right price in the right place and time.”(Charted Institute of Marketing
(CIM))

A growth vector matrix can be used to help determine the marketing objectives for the
division . These are concerned with the services and markets only. Advertising, pricing

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and other elements of the marketing mix are the means (the strategies) to meet the
marketing objectives
MARKET
EXISTING NEW

MARKET MARKET
EXISTING PENETRATION DEVELOPMENT

PRODUCT

NEW PRODUCT
DEVELOPMENT DIVERSIFICATION

Markets
There are four types of marketing objective:
1. Providing existing service to existing segments
2. Developing new services for existing segments
3. Extending existing services to new segments
4. Developing new services for new segments

The Pioneer steel’s mission statement and objectives are therefore:

To expanding its production units and giving the best quality of product and
service to its customers.

1 Market Penetration
Penetration in the market is more important in this kind of business because
there is a threat of new entrants in the market.

2 Market development
. To improve prospective customer awareness of the service and therefore see
an increase in the use of facilities. To improve prospective customer
consultation to determine needs and aspirations.

3 product development and diversification

Pioneer steel’s product development occurs when there is growth in the
company sales in its existing market by launching new product in the same
market segment.
Diversification of product is more and more important in the market, like
jumping into the sub product like Cement, so the company can sell a package to
the customer which include both TMT steel and the Cement.

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b. Marketing Strategy

The companies marketing strategy is to achieve the marketing objectives. It is,

essentially, the heart of the marketing plan. These are the "4Ps of marketing":
Product, Price, Promotion, Place (distribution)

The marketing strategy section includes:

Product: Pioneer steel is involved in manufacturing product like sponge iron, ms ingots
and TMT bars. The product like sponge iron and ms ingots is used in steel
manufacturing plants and TMT steel is used in construction of house, building and
dams. The company delivers the product to its customer with the best quality and
service within the given time.

Price: Price is one, which is not stable in this type of business, which has different
price for all its product. The product like sponge iron and ms ingots is used in steel
manufacturing plants, they have a different price and TMT steel is sold at best price
compare to the other competitors in the market. We have a price range from INR
30,000 to INR 31342 per ton (£411 to £430 per ton). The company gives discounts
offer for long-term customers, bulk purchases or prompt payment. The company
include the terms of sale, such as "net due in 30 days," extended payment plans, and
even except credit cards.
For instance: The major companies selling there product at the same rate and even
pioneer sells at the same rate till the mid day and if there is no sale in the market then
the company sells its product by reducing the price by very less margin.

Promotion: Pioneer steel does its product promotion by taking part in the exhibitions
held across the country and even in regional exhibitions. The is how we promote and
create awareness of your product in the marketplace and place the sign boards of the
product in the dealers shop.

.Place (Sales and Distribution):In this section, the company sees how the product
“meet” the customer.
The companies sales philosophies is on relaxed method where the emphasis is
on having customers feel comfortable to come back another time even if they
don't buy now? And the company does contract sales and prompt payments
sales. The company sells its product directly to the distributor and the company
has there own outlets.
Pioneer steel also takes the purchase order online through there website and
takes the feedback, response it immediately.

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The production is 50mt per slot and in a day it has 4 slots which can produce
200mt per day and we can store the product till it sells and there are cyclical
fluctuations or seasonal demands for the product.
For example, the sale decreases in the rainy season in India and when there is
fall in the real estate market and normally the sales is stable in the market when
there is boom in the real estate market and during some hindu’s festivals, which
they belief it is good to buy this product in this festival season. Then the
demand of the product is more in the market.

The company sells to individuals and the whole sellers. For instance, the company sell
directly to customers who place large orders but also sell to customers who buy small
quantities of the product through retail outlets.

4. Resource allocation and monitoring

a. Budget
pioneer steel allocate the budget of INR 60,00,000(£82,000)per annum to its marketing
department.

d. 1st year detailed implementation programme

The companies marketing plan in 1st year is implemented and monitored every month
and its audit weather it is going in a smooth way or not and check the sale of every
month weather the company has invested in the right place or not. The company
checks weather there investment on advertising plan, promotion plan is successful or
not.

CONCLUSION
Everyone in an organization needs to be aware of the importance to the organization of
the customers. If this does not happen the firm will fail to grasp the opportunity to
reach its full potential. One thing which is very important to remember, is that
marketing is not optional – for a company to succeed marketing has continued and will
continue to play a vital role. It remains to be seen what the full impact of the new
technology will bring to the world of marketing, but the marketing orientations are

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lessons well learned. All sizes of businesses need to put the customer first, not the
product nor the production: the customer is the key to success.

REFLECTIVE STATEMENT

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BIBLIOGRAPHY

1. www.pioneersteel.in

2. Dennis Adcock, Al Halborg, Caroline Ross,2001, Marketing: principles

and practice 4th edn.

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3. Luther, William M, 2001, Marketing Plan: How to Prepare and Implement It.

4. RON LAWSON, 2010.

5. Mazher Mohammed, 2010, Pioneer steel.

6. McDonald, Malcolm , 2008, Malcolm McDonald on Marketing Planning:

Understanding Marketing Plans and Strategy, kogan page.
7.

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