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Branding a Commodity: The Tata Steel Way


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Branding a Commodity: The Tata Steel Way

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Branding a Commodity: The Tata Steel Way

  2. 2. Tata Steel •Established in 1907 by J N Tata at Jamshedpur in Bihar. •Started production in 1911 with a capacity of 0.1mn tonne of mild steel. •1958: capacity increased to 2mn tonnes. •1973: acquired flux mines near Jharia, West Bokaro. •1983: acquired Indian Tube Co. Ltd.
  3. 3. Tata Steel •Mid 1990s: became Asia’s 1st and India’s largest integrated steel producer in private sector. •2001: world’s lowest cost producer of steel. •2003: declared a turnover of Rs. 98.44 billion with PAT of Rs. 10.12 billion.
  4. 4. Branding Steel a) The profitability of the steel industry in India is strongly linked to variations in the business cycle b) To reduce its dependence on external environment – TATA Steel adopted a two-pronged strategy of c) Branding its products d) Moving to high value products
  5. 5. Branding Exercise i. Strong customer focus ii. 1990s – launched campaigns with taglines like iii. ‘Customer First – har haal mein’ iv. ‘Customer ki kasam – Hai tayyar hum’ v. 2000 – set up branding task force vi. Segregated market development, order generation and order fulfillment functions vii. Introduced Customer Account Managers
  6. 6. TATA Steel Brands Brand Type Brands Generic Brands TATA Bearings, TATA Pipes, TATA Agrico Product Brands TATA Shaktee, TATA Tiscon, TATA Steelium
  7. 7. Welcome to The Steel Show
  8. 8. Steeling the Show "Branding will give rise to a customized product in terms of value, performance and pricing; it will meet our customers' needs better. Branding will go a long way in meeting the challenge of gaining a sustainable competitive edge." - Mr. B. Muthuraman, Managing Director - Tata Steel, in February 2003.
  9. 9. Steeling the Show a) In February 2003, Tata Steel invited the media to Goa for the nationwide launch of a brand. b) Brand launches are a regular affair for companies, but this was different - it was the launch of a Steelium - a new brand of steel. c) Tata Steel has been launching branded steel products since 2000.
  10. 10. Steeling the Show Company sources felt that branding Steel would help Tata Steel in two big ways: 1) It would help stabilize the flow of revenues even during business downturns. 2) It would make premium pricing possible.
  11. 11. Brands Aimed at urban and semi-urban sectors, the brand promises 'trusted steel for your home‘ Tata Shaktee offers to the consumer GC Sheets that 'Lasts Longest'. Tata Agrico products are the most sought after hand tools and implements in the country. The brand has been regarded a the prima donna in its category.
  12. 12. Brands Tata Bearings is a leader in the auto ancillary two-wheeler market segment. It has firm foothold in a fiercely competitive market. A new dimension in Steel Tube Technology opened up in India in the early 50’s with the establishment of the Indian Tube Company Ltd. (ITC).
  13. 13. The 'steel with a soul, 'Tata Steelium' is the first branded Cold Rolled Steel product in India, if not in the world. The brand promises superior formability, flatness, surface quality, thickness consistency and strength. The country's vast auto ancillaries sector, which till date had to depend on overseas markets for its major needs, now has a credible option within the country.
  14. 14. Distribution Revamp •2002 – hired Booz Allen Hamilton •Hub and spoke Model •2003 – shut down 12 stockyards •Established first hub in Jamshedpur •Next hubs – Sankrail (Kolkata), Vijaywada (AP), •Nagpur (MH), Delhi
  15. 15. Benefits Reaped YEAR FLAT PRODUCTS (TATA Shaktee GC+ TATA Steelium) LONG PRODUCTS (TATA Tiscon) FP+LP FY 01 5 11 7 FY 02 6 15 9 FY 03 8 19 12
  16. 16. Future Prospects Co-branding initiatives with its high-end customers such as Telco, Ashok Leyland Improving its product mix by introducing high-end products Focus on OEM and Construction sector Extensive market research and channel management initiatives
  17. 17. In a nutshell You may have the most superior product offering in your market, but if your market does not believe it, or if they do not know who you are or what you stand for, this will go largely ignored. Ultimately, business prospects demand facts. However, they will also respond to an overt recognition of their human propensity for emotional stimulation. At the very least, in the B2B environment a powerful brand will hold the attention of your prospects and convince them to process the facts.