Marketing Mix Strategy of Ratanpur Steel Re-rolling Mills (RSRM)

1. Marketing Mix Strategy of Ratanpur Steel Re-rolling Mills Ltd. (RSRM) MD. Nasir Uddin Shushmita Chowdhury ID: 13102406 ID: 13102421 1

2. Presentation Outline Introductory part Organizational part Actual task part Project part Research part 2

3. Introductory Part 3

4. Objectives of the Study  Broad Objective: The broad objective of the study is to assess the marketing mix strategy of steel industry in Bangladesh focusing on Ratanpur Steel Re- rolling Mills Ltd. (RSRM).  Specific Objectives:  To know if product quality is getting priority over cost  To find out the pricing strategy  To find out the location coverage  To know the by-product utilization  To know if the Sales promotion policy of RSRM is affected due to competitor’s marketing strategy  To find out the relation of profit margin and competitive price  To know if the promotional schemes have impact on products demand 4

5. Limitation of the Study Lack of up-to-date data. Time constraint. Data constraint. Lack of perfect co-operation. 5

6. Organizational Part 6

7. Company Profile Head Office Nahar Mansion, 116 C.D.A Avenue, Muradpur, Chittagong Tel: +88-031-652255-57, Fax: 88-031-650001 Corporate Slogan Steel For The Nation Date of Incorporation April 22, 1986 Date of Starting It’s Operation July 1, 1986 Chairman of the Board Mrs. Shamsun Nahar Rahman Name of the Managing Director Mr. Maksudur Rahman Website www.rsrmbd.com 7

8. Background of RSRM  Ratanpur Steel Re-Rolling Mills Ltd. (RSRM) was established in January 1984.  The mill is situated in the progressive Baizid Bostami Industrial Area, Chittagong.  Leading steel manufactures  Incorporated on 22 April 1986  Commercial production in 01 July 1986  Production capacity to1000 tons per day  Principal product of the company is M. S. Rod 60 Grade  Installed production capacity of producing 3, 00,000 MT annually  Main raw materials of the company are M.S. Billet 8

9. Vision and Mission Vision: “To be the trend setter and the power force of the steel re-rolling industry” Mission: To be the first name in the region’s steel industry Harnessing our assets and resources to achieve profitable growth, Operational and organizational excellence and Good corporate citizenship 9

10. SWOT10 Strength:  Market Leader  Great Competitive Skill  Reliability  Strong employee bonding and belongingness  Modern Equipment & Technology  Strong Products Distribution Lineup  Strong Marketing Lineup Weakness:  High interest rates decline profit  Power crises Opportunities:  Market Dominance  Organizational Goal  Increased demand for the products  International Scope Threats:  New competitors  Economic crisis  Growing Competition  Labor Unions  Power Crisis

11. 11 Porters Five Forces New Market Entrants (Low) Bargaining Power Of Buyer (High) Bargaining Power of Supplier (Low) Rivalry Among Existing Firm (High) Threat of Substitute Products (Low) Capital Requirement Government Policy Economies of scale Increasing Demand for Steel Low per capita consumption Bargaining power of buyers Energy supply Labor union power Bargaining power Product differentiation Competition from Foreign Players  Aluminum

12. 12 PESTEL Analysis PESTEL Political Economical Social Technological Environmental Legal • National Steel Policy • Opportunities available in ppp • Foreign Direct Investment • Huge Gap between the Demand and Supply • Permanent Employment • Development in the Rural Areas • Online Trading • Planning to Use Latest Technology • Encouraging the eco Friendly System • RSRM is developing the Ultra-Low Carbon • various rules and regulations • Health policies of the employees • Special health incentives and rules

13. 13 Organogram Chairman Managing Director Director Independent Director Manager

14. Mrs. Shamsunnahar Rahman Chairperson Mr. Maksudur Rahman Managing Director Md. Younus Bhuiyan Director 14 Board of Directors Md. Mizanur Rahman Director Marzanur Rahman Director Mr. Md. Jahangir Miah Independent Director

15. Products i • RSRM X power TMT 500 bar ii • RSRM Gr. 60/ 400 Mpa and iii • RSRM Gr. 40/ 300 Mpa (Megapascal) 15 MS Bar or Round Bar Deformed Bar 01 02

16. BSRM KSRM BSIL AKS RRM 16 Competitors

17. 17 Actual Task Part

18. 18 Nasir’s task:  Collected information through web browsing about fire safety products  Made profile for the Fire safety products  Edited the pictures  Made a list of solar companies  Collected information through web browsing  Made profile for solar energy  Made a list on compressor companies domestically and internationally  Field work Tasks done by us at RSRM

19. Contd… Shushmita’s task:  Research on Vietnam:  Basic Data  Why invest in Vietnam  Why foreign investment in Vietnam is booming  Largest companies in Vietnam  RMG & textile in Vietnam  Tax rate in Vietnam  Vietnam Corporate Taxation & special sales tax  Other tax rates on resident individuals  Barrier to entry  Testing and Approvals  Export & Import  Garment manufacturing companies in Vietnam 19

20.  Research on Myanmar:  Basic Data  Myanmar GDP  Industry & Retail  Trades & Investment  Financial Services  Gerent, textile, and leather companies  Construction and real state companies  Chemical, cosmetics and health companies  Field work 20 Contd…

21. 21 Project Part

22.  Represents a blending of four elements  Also known as 4 P’s  Product, price, place and promotion  Basic purpose is to satisfy the needs of customers 22 Marketing mix Marketing Mix Product Price Place Promotion

23. Products of RSRM Deformed Bar Gr. 40/ 300 Mpa Gr. 60/ 400 Mpa RSRM X Power TMT MS Bar/ Round bar 23 Product Mix OF RSRM

24. Produced by the use of most advanced Heat- treatment technology Quality of this bar is more higher than MS bar Most used bar at present High durability High ductility High load bearing capacity High elongation 24 Deformed Bar

25. Load bearing capacity is 40000 psi or 40000 pound per square inch in 300Mpa Yield strength is more than 300Mpa per square inch Ultimate tensile strength is minimum 350Mpa per square inch Elongation is more than 6% 25 Gr. 40/ 300 Mpa Deformed Bar Gr. 40 Deformed Bar

26. More yield strength then RSRM MS bar Reasonable elongation Reduce 5% steel weigh from construction Reduce column size and quantity of Rod Resistance to fatigue behavior Have better bonding with concrete Safely weld-able 26 Specification of Gr. 40/ 300 Mpa Deformed Bar

27. Underground of the buildings Govt. construction Low budget concrete Basement of the building Slap over the drain Small Colbert Flooring of the basement 27 Use of Gr. 40/ 300 Mpa Deformed Bar

28. Load bearing capacity is 60000psi or 60000 pound per square inch of 400Mpa Yield strength is more than 400Mpa per square inch Ultimate tensile strength is minimum 450Mpa per square inch Elongation is more than 8% 28 Gr. 60/ 400 Mpa Deformed Bar Gr. 60 Deformed Bar

29. More yield strength then RSRM Gr. 40 bar Reasonable elongation Reduce almost 10% steel weigh from construction Reduce column size and quantity of Rod Resistance to fatigue behavior Response to tensile loading Resistance to corrosion behavior Safe 0.05% steel at welding 29 Specification of Gr. 60/ 400 Mpa Deformed Bar

30. Grand column of the building Over bridge Foot over Fly over Large size bridge Large size reinforced concrete 30 Use of Gr. 60/ 400 Mpa Deformed Bar

31. Branded this product as “RSRM X Power TMT 500 bar.” Load bearing Capacity is 75500psi or 75500 pound per square inch of 500Mpa Yield strength is more than 500Mpa per square inch Ultimate tensile strength is minimum 550Mpa per square inch Elongation is more than 12% 31 RSRM X Power TMT 500 Bar

32. High design yield strength of minimum 500 Mpa High elongation Reduce almost 25% steel weigh from construction Reduce the earthquake damage Reduce column size Resistance to fatigue behavior Response to tensile loading Resistance to corrosion behavior Reduce the wastage at welding more than 5% 32 Specification of RSRM X Power TMT 500 Bar

33. 500 TMT Bar 33 Fly over Multipurpose buildings Multipurpose bridges Skyscrapers Over bridges Foot over Grand column of the buildings All kind of mega structures Use of RSRM X Power TMT 500 Bar

34. It’s a low carbon steel where the amount of carbon is 0.08% to 35%. The shape of this bar is round. This bar produced directly from billet without use of heat- treatment technology. It is equivalent to ASTM (American Society for Testing and Materials) A615 Standard. Yield strength is 300 Mpa to 320 Mpa. Ultimate tensile strength is 350-360 Mpa Elongation is 4%-6% 34 MS Bar or Round Bar

35. Limited Capacity in yield strength and load bearing Required more in terms of quantity Minimum weld ability and bend ability Increase the weight of concrete not suitable in large construction 35 Specification of MS Bar MS Bar

36. Small reinforced concrete Small construction work Basement of the building Foot path and foot way Small Colbert Flooring of the basement 36 Use of MS Bar

37. High durability More accurate weight of the product Ensure high quality Strictly follows the international standards The bars conform to ISO 9001: 2008, BSTI, and ASTM Standard High ductility and high elongation 37 Feature of Product of RSRM

38. Oval Rubbish 38 By-Product of RSRM

39. Slogan: “Steel For The Nation” Logo: 39 Branding of RSRM

40. Factors influencing pricing decisions: Competitor analysis Media Seasonal factors Cost of production 40 Price Mix of RSRM

41. Pricing procedure of RSRM RSRM applied the following pricing strategy: Cost-based pricing Competition-based pricing Promotional pricing Segmented pricing Discount and allowance pricing 41 Price Mix of RSRM (Contd..)

42. Cost-Based pricing procedure of RSRM Cost-Based pricing of RSRM = (cost + profit) RSRM consider the following factors in cost-based pricing: Cost of raw material Customs cost of releasing raw material Production cost Procurement cost Cost of machine maintenance Cost of power Sudden incidental and accidental issue 42 Price Mix of RSRM (Contd..)

43. Competition-Based pricing procedure of RSRM RSRM applying this pricing strategy in two ways: Going-rate pricing Seal-bid pricing 43 Price Mix of RSRM (Contd..)

44. Promotional pricing procedure of RSRM RSRM offers the seasonal promotions offer for all customer such as: Sale on special discount rate of 500tk-1000tk for a certain period of time Dealers get the incentive quarterly on product lifting, storage and sales. 44 Price Mix of RSRM (Contd..)

45. Promotional pricing procedure of RSRM Segmented pricing of RSRM depends on the seasonal appearance such as: Price is reduced in rainy season and the discount rate is low at that time Again price is increase in winter season and the discount rate is high at that time 45 Price Mix of RSRM (Contd..)

46. Discount and allowance pricing procedure of RSRM: Dealers of RSRM get fix amount of 1000tk as discount per ton Corporate customers get the discount of 300tk-500tk per ton End user also get discount on special offers 46 Price Mix of RSRM (Contd..)

47. 47 Place Mix of RSRM Corporate Customer End userTraders Govt. construction/ projects Projects/ small dealers End user RSRM Dealers End users

48. Qualities of channel members of RSRM: Financial condition of the willing dealers Marketing experience and capability Previous back ground of the dealer as good payee Market reputation Location of shop Good will Negotiation power 48 Place Mix of RSRM (Contd..)

49. Name of distributors of RSRM Dealers: Al-Amir & Sons Amin trading Co Barik Brothers RSRM (Corporate, Chittagong) Cox’s Bazar Builders Store Joni Steel Corporation M. Rahman Enterprise M/S. Sarkar & Co. etc. 49 Place Mix of RSRM (Contd..)

50. Traders: Khan and Sons Progoti Metals Popular Steel Shop S & S Metal Works Minoti Traders Monsur Ali Traders 50 Place Mix of RSRM (Contd..)

51. Developers: ANZ properties Ltd. Equity properties Ltd. Ideal Development Ltd. BTI development 51 Place Mix of RSRM (Contd..)

52. Main Promotional objectives of RSRM: To face competition To educate the customers Survive in the completive market Introduce the product to whole world To maximize the sale To sustain and enhance the brand as well as corporate image 52 Promotion Mix of RSRM

53. Promotional tools of RSRM Advertising: RSRM uses the following media for advertising: Print media Local and national dailies TVC Notice Shop signs Hoarding boards Project sign board 53 Promotion Mix of RSRM (contd..)

54. Promotional tools of RSRM Sales Promotion: RSRM uses the following sales promotion: Discount Credit sales Allowance Incentives to dealers Gift for valuable customer Special offer for developers 54 Promotion Mix of RSRM (contd..)

55. Promotional tools of RSRM Public relation & Publicity: Public relation and publicity of RSRM are: Sponsorship to several workshops Donating to workshop, seminars Corporate social responsibility 55 Promotion Mix of RSRM (contd..)

56. Promotional tools of RSRM Personal Selling: The sales force of RSRM personally visits all customers to: Give idea about product Promote the product Influence by the product 56 Promotion Mix of RSRM (contd..)

57. Promotional tools of RSRM Direct Marketing: RSRM is practicing direct marketing by: Mass marketing with all types of customers One- to- one marketing with developers and group of companies 57 Promotion Mix of RSRM (contd..)

58. 58 Research Part

59.  Our report is based on marketing mix of Ratanpur Steel Re-rolling Mills Ltd. (RSRM). The focus of the study is analyzing the current marketing mix of RSRM. Based on the problem analysis recommendation is been given. 59 Problem Statement

60. 60 Methodology of the Study Primary Sources: • Face to face conversation • Interview with the Company manager, executives • Some data has been collected through the questionnaire. Secondary Sources: Secondary data are collected from the following sources: • Annual reports of RSRM • Official files • Data available with the website of RSRM

61. Sample size: A total of 40 respondents have been conducted, where were employees of RSRM. Questionnaires Scale:  Strongly Disagree ……………………..1  Disagree ……………………………..…2  Neither Agree nor Disagree ….…….3  Agree ……………………………...……4  Strongly Agree ……………….………..5 61

62. Hypothesis Test: Z test = µ = Mean value n = Sample size σ = Standard Deviation = Average Based on my analysis we have made findings, limitation, recommendation and conclusion. 62

63. Liker Scale H1 H2 H3 H4 H5 H6 H7 H8 H9 H10 1= Strongly Disagree 0 0 5 6 5 2 4 7 4 6 2= Disagree 5 3 22 5 4 4 6 2 5 5 3= Neither agree nor disagree 5 4 4 2 0 4 0 2 0 1 4= Agree 6 10 3 7 8 8 10 8 6 10 5= Strongly Agree 24 23 6 20 23 22 20 21 25 18 Total 169 173 103 150 160 164 156 154 163 149 Average 4.22 4.32 2.57 3.75 4 4.1 3.9 3.85 4.07 3.72 Standard Deviation 1.08 0.92 1.24 1.52 1.44 1.22 1.41 1.52 1.41 1.49 Z-test value 10.11 12.55 0.15 5.2 6.81 8.33 6.36 5.62 7.13 5.30 63 Methodology of the Study

64. 1. HO: Product quality is not getting priority over cost HA: Product quality is getting priority over cost. We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here, = 4.22 σ = 1.08 Z cal = ( –μ)/ (σ/√n) = 10.11 At 5% level of significance, follows Z distribution Z 0.05= 1.645 Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it can be said that the product quality is getting priority over cost. 64 Graphical Representation

65. 65 0% 13% 13% 15% 60% H-1 Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree

66. 2. HO: Market penetration has not been used as pricing strategy HA: Market penetration has been used as pricing strategy. We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here , = 4.32 σ = 0.92 Z cal = ( –μ)/ (σ/√n) = 12.55 At 5% level of significance, follows Z Distribution Z 0.05= 1.645 Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it can be said that the market penetration has been used as pricing strategy in RSRM. 66 Contd..

67. 67 0% 8% 10% 25%58% H-2 Strongly Disagree Disagree Neither Agree nor Disagree Agree Strongly Agree

68. 3. HO: Market skimming has not been used as pricing strategy. HA: Market skimming has been used as pricing strategy. We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here = 2.53 σ = 1.24 Z cal = ( –μ)/ (σ/√n) = 0.15 At 5% level of significance, follows Z distribution Z 0.05= 1.645 Since Z cal < Z tab, the null hypothesis is accepted. So at 5% level of significance, it can be said that the Market skimming has not been used as pricing strategy in RSRM. 68 Contd..

70. 4. HO: Segmented pricing has been used for products HA: Segmented pricing has been used for products We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here = 3.75 σ = 1.52 Z cal = ( –μ)/ (σ/√n) = 5.2 At 5% level of significance, follows Z distribution Z 0.05= 1.645 Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it can be said that the segmented pricing has been used for products in RSRM. 70 Contd..

72. 5. HO: RSRM is not covering the major city areas. HA: RSRM is covering the major city areas We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here = 4 σ = 1.44 Z cal = ( –μ)/ (σ/√n) = 6.81 At 5% level of significance, follows Z distribution Z 0.05= 1.645 Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it can be said that RSRM is covering the major city areas. 72 Contd..

74. 6. HO: RSRM is not covering the rural areas. HA: RSRM is covering the rural areas. We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here, = 2.55 σ = 1.64 Z cal = ( –μ)/ (σ/√n) = 0.02 At 5% level of significance, follows Z distribution Z 0.05= 1.645 Since Z cal < Z tab, the null hypothesis is accepted. So at 5% level of significance, it can be said that the Market skimming has not been used as pricing strategy in RSRM. 74 Contd..

76. 7. HO: By-products is not being utilized. HA: By-products is being utilized. We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here = 3.9 σ = 1.41 Z cal = ( –μ)/ (σ/√n) = 6.36 At 5% level of significance, follows Z distribution Z 0.05= 1.645 Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it can be said that the By-products is being utilized in RSRM. 76 Contd..

78. 8. Ho: The Sales promotion policy of RSRM is not affected due to competitor’s Marketing strategy. HA: The Sales promotion policy of RSRM is affected due to competitor’s marketing strategy. We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here, = 3.85 σ = 1.52 Z cal = ( –μ)/ (σ/√n) = 5.62 At 5% level of significance, follows Z distribution Z 0.05= 1.645 Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it can be said that the Sales promotion policy of RSRM is affected due to competitor’s marketing strategy. 78 Contd..

80. 9. Ho: Profit margin sometimes cannot be compromised to maintain competitive price HA: Profit margin sometimes can be compromised to maintain competitive price We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here = 4.07 σ = 1.41 Z cal = ( –μ)/ (σ/√n) = 7.13 At 5% level of significance, follows Z distribution Z 0.05= 1.645 Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it can be said that the profit margin of RSRM sometimes can be compromised to maintain competitive price. 80 Contd..

82. 10. Ho: The promotional schemes of RSRM does not stimulate the products demand. HA: The promotional schemes of RSRM stimulate the products demand. We want to test the null hypothesis HO: μ = 2.5 HA: μ > 2.5 n = 40 Since the sample size n > 30 so, we may use Z - test. Here = 3.72 σ = 1.49 Z cal = ( –μ)/ (σ/√n) = 5.30 At 5% level of significance, follows Z distribution Z 0.05= 1.645 Since Z cal > Z tab, the null hypothesis is rejected. So at 5% level of significance, it can be said that the promotional schemes of RSRM stimulate the products demand. 82 Contd..

84. 1. RSRM product quality is getting priority over cost as majority respondents are strongly agreed with this statement. 2. Market penetration has been used as pricing strategy in RSRM as most of the respondents strongly agreed with this statement. 3. Market skimming has been used as pricing strategy in RSRM, majority of employees are disagreed with this statement. So we can say Market skimming has not been used as pricing strategy in RSRM 4. Segmented pricing has been used for products in RSRM as majority of respondents are strongly agreed with this statement. 5. RSRM is covering the major city areas as most of the employees are strongly agreed with this statement. 84 Findings

85. 6. RSRM covering the rural areas, most of the respondents strongly disagreed with this statement. So we can say RSRM is not covering the rural areas. 7. By-products is being utilized as majority respondents are strongly agreed with this statement. 8. The Sales promotion policy of RSRM is affected due to competitor’s Marketing strategy as majority of employees are strongly agreed to this statement. 9. Profit margin sometimes can be compromised to maintain competitive price as majority of employees are strongly agreed to this statement. . 10.The promotional schemes of RSRM stimulate the products demand as majority respondents are strongly agreed with this statement. 85 Contd..

86. 1. We can recommend RSRM to use Market skimming as pricing strategy for some particular products as competitors are using this pricing strategy. They use Market penetration as pricing strategy and also they do segmented pricing for some specific products. 2. We have find out that RSRM only focus on major city areas. They are covering the major city areas. But not focusing on rural areas. So we can recommend RSRM should focus on covering the rural areas by promoting their products in rural areas. 3. We can suggest RSRM to increase their promotional quality and quantity as well. As the competitors of RSRM are very good in promotional activity. Also RSRM do not focuses on TV promotions. So they should increase their TV promotions and other promotional activities also. 86 Recommendation

87.  Establish and growing industry  In 1990s actual development began  Demand of steel is growing  RSRM covers 20% of the total steel market  Increasing their production from 8, 00,000 to 10, 00,000 M Tons  Promotion strategy is not that much innovative or new 87 Conclusion

88. 88 Do You Have Any Question???

89. 89 Thank You All

Marketing Mix Strategy of Ratanpur Steel Re-rolling Mills (RSRM)

Social Islami Bank Limited (SIBL)

Marketing Mix Strategy of Ratanpur Steel Re-rolling Mills (RSRM)