A SUMMER TRAINING REPORT

ON
MARKETING STRATEGIES
AT SHIKOKU TECHNOLOGY

Submitted to

STAREX UNIVERSITY, GURUGRAM

In Partial Fulfillment of the Requirement for the award of the degree of

Master of Business Administration
Session (2021-2023)

Under the Guidance of: SUBMITTED BY:

ASHISH DHAIYA NIKHIL
PROFESSOR

i
STUDENTS DECLARATION

I hereby declare that this Project Report titled “Marketing Strategies at Shikoku
Technology” student of Starex University, Gurugram is a bonafide work undertaken by
me and has not been submitted in partial fulfillment of the requirements for the Degree of
Master of Business Administration to Starex University, Gurugram is my original
work and the same has not been submitted for the award of any other
Degree/Diploma/Fellowship or other similar titles or prizes.

Nikhil
Enrollment No. 210602
MBA 3rd Semester

ii
 CERTIFICATE OF GUIDE

Mr. Nikhil, a bonafide student of Master of Business Administration, Starex

University, Gurugram has carried out the project report work on “Marketing Strategies
at Shikoku Technology” in partial fulfillment of the requirements for the Degree of
Master of Business Administration under my supervision and guidance.

I certify that this project report is a record of the work done by the candidate herself and
that to the best of my knowledge the contents of this project did not form a basis of award
of any previous degree of anybody else.

MR. ASHISH DHAIYA

PROFESSOR

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 ACKNOWLEDGEMENT

It is well-established fact that behind every achievement lies an unfathomable sea of

gratitude to those who have extended their support and without whom the project would

never have come into existence.

I express my gratitude to Starex University, Gurugram for providing me an opportunity

to work on this project as a part of the curriculum.

Also, I express my gratitude to Mr. Ashish Dhaiya for her kind cooperation.

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 CONTENTS

Chapter No. Topic Page No

Internship Certificate II

Certificate by Internal Guide III

Student Declaration IV

Acknowledgement V

1 Chapter – 1: Introduction 1

2 Chapter-2: Company Profile 4

3 Chapter-3: Literature Review 29

4 Chapter-4: Research Methodology 32

5 Chapter-5: Data Analysis 33

6 Chapter-6: Conclusion 44

7 Chapter-7: Recommendation and 46

Suggestions

8 Bibliography 49

9 Annexure 50

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 CHAPTER – 1: INTRODUCTION

MARKET OVERVIEW

The engineering sector is the largest segment of Indian Industry

The engineering sector is the largest segment of the overall Indian industrial sector. India has
a strong engineering and capital goods base. The important groups within the engineering
industry include machinery & instruments, primary and semi finished iron & steel, steel bars
& rods, non-ferrous metals, electronic goods and project exports. The engineering sector
employs over 4 million skilled and semi-skilled workers (direct and indirect).

The sector can be categorized into heavy engineering and light engineeringsegments. Heavy
engineering segment forms the majority of the engineering sector in India. In the year 2014-
15, out of the total engineering production of US$ 22 billion, the heavy engineering market
contributed over 80 per cent with the light engineering segment accounting for the remaining.
India has a well-developed and diversified industrial machinery/capital base capable of
manufacturing the entire range of industrial machinery. The industry has also managed to
successfully develop advanced manufacturing technology over the years. Among the
developing countries, India is a major exporter of heavy and light engineering goods,
producing a wide range of items. The bulk of capital goods required for power projects,
fertilizer, cement, steel and petrochemical plants and mining equipment are made in India.
The country also makes construction machinery, equipment for irrigation projects, diesel
engines, tractors, transport vehicles, cotton textile and sugar mill machinery.

The engineering industry has shown capacity to manufacture large-size plants and equipment
for various sectors like power, fertilizer and cement. Lately, air pollution control equipment
is also being made in the country. The heavy electrical industry in India meets the entire
domestic demand.

A large number of multinational companies like Cummins, Alfa Laval, Sandwik Asia, etc.
have also entered the engineering industry in India.

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The heavy and light engineering segments in this sector can be further classified as shown in
the table. As the sector demands a high level of capability and investment, it is dominated by
large organized players.

Heavy Engineering Industry

Industry segment No. of organized players

Cement machinery 18

Sugar machinery 27

Rubber machinery 19

Metallurgical machinery 39

Machine tool 125

Material handling equipment 50

Mining machinery 32

Dairy machinery 16

Light Engineering industry

Welded steel pipes & tubes 123

Process control instrument 26

Antifriction roller bearing 19

Plain paper copier 12

This industry comprises multinational companies, joint ventures, large domestic players,
regional players in the organized sector and large number of small players in the unorganized

2
sector. Some unorganized players also exist at lower levels where the technology required is
very basic.

Public sector enterprises play an important role in the heavy engineering sector in India.
There are 34 public sector enterprises in this segment.

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 CHAPTER-2: COMPANY PROFILE

SHIKOKU TECHNOLOGY are a trusted name in the market, which started its operations in
the field of erection and project management services five years back, which is engaged in
providing commissioning and other designing services to various industrial sectors. We are
the largest private sector company in our group on the basis of various financial parameters.
The services we have been offering to our clients include telecommunication towers,
prefabricated shelters, power transmission & distribution towers, erection & painting, project
management services, turnkey solutions, BTS Accessories, Fasteners.

Under the guidance of Mr. Ramesh Nagpal, we have evolved in to a successful engineering,
procurement and construction company, which is teaming up with world class companies to
further increase its market reach.

Our Belief

We opt a progressive attitude by believing on some of our pillars of success, which help us in
efficiently catering to the varied needs of market.

Integrity: Ours is a group of integrity and standard. Each and every business transaction we
made is the result of our honest and reliable business conduct that helps us in gaining
confidence of various clients.

Corporate Governance: Our sound principles of corporate governance help us in obtaining

and retaining the trust of share owners and employees.

Environment, Health and Safety: We have a continuous focus on how to make the world a
better place. Our company practice the best work environment and adopt various measures to
protect the environment from any sort of harm.

Quality: We adopt a customer focused, data driven philosophy and apply it to each and every
process we do. This also helps us in maintaining the quality of the services and products, we
offer.

Quality

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Being an ISO 9001:2000 certified company, which offers superior quality project
management and telecommunication services to our clients that provides a reputation to our
company in the market. With our expertise in the field, we have developed solutions, which
result in making the installed structures work faster and in a more cost efficient manner. Our
team is prepared to do installation work under any kind of environment condition. We follow
a step by step procedure in our installation and erection work, which results in providing a
risk free service to clients. These steps include:

* Laying of foundation of towers

* Fabrication of towers of all types

* Erection of towers

* Maintenance of towers

We have got a team of engineers, who carefully plan the installation and erection process so
that we are able to deliver fast as well as flawless services to our clients. Apart from offering
quality service, we also ensure that we adopt a safer work process from completing our task.
All the riggers working for us are trained before involving them in our work process so that
there is no danger or loss of life.

Sister Concerns

We are sister concerns of Group Shikoku, which is one of the pre-eminent business houses in
India. Our group is a dominant player in various operations and our sister concerns include :

Shikoku Technology. The company was incepted in the year 2009 and conduct the operations
of galvanizing and fabricating steel, which further caters to various industrial needs

o Fabrication unit

o Galvanization unit

o Quality control unit

o Proto establishment unit

1. Shikoku Prefab Shelters Pvt. Ltd. The company is engaged in the supply of pre-
fabricated integrated outdoor conditioned telecom enclosure system.

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 2. ShikokuTelelinks Pvt. Ltd. The company was established in the year 2009. It
manufacture and supply BTS installation kits, cable trays, wall entry plates, fire/
smoke detector and door open alarm switch for clients in domestic and international
markets.

3. C&M Constructions Pvt. Ltd. It is an organization, which consist of experienced and

qualified engineers, which conduct jobs such as:

o Site survey

o Civil foundation for towers

o Turnkey construction of site

Services Offered

With our client centric approach and most innovative work techniques, we are regarded as an
efficient and trustworthy partner for implementing of various development projects in power
generation, transmission and distribution, telecommunication high technology and projects
off-loads. Some of the services we offer include :

* Power Transmission Services

* Project Management Services

* Tower Erection Services

* TelecommunicationTowers

* Turnkey Solutions

* Prefabricated Shelters

* Galvanized Fasteners

* BTS Accessories

* Cable Racks

Team

We have got a large number of professionals, who are assigned with different tasks as per
their calibre so that we are able to offer world class services to our clients. Our team

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comprises of engineers, technicians, designing and consultant experts who have got vast
industry experience and provide the best services to our clients. We recruit industry's best
talents to work for our esteemed clients. They include:

* Cell site engineer

* Facilities engineer

* Design and integration engineer

* Installation/ commissioning engineer

* Operation manager

* Power engineers

* Transmission engineers

* Switch technicians

Clients

With our superior services, we have managed to earn a huge and reputed client base in the
industry. We offer installation and erection works to various clients in domestic market.

All the services are offered to clients’ at the most competitive prices and during any
environmental condition, which further provides a stronger reason to our customers to deal
with us. Some of the clients we are currently dealing with include:

* Vodafone

* Idea

* Hutch

* Bharti

* RPG cellular

* Power grid

* Escotel

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 * Reliance

* RRVPNL

* FLOVELL (BHEL)

* Best installation and erection services

* Use of latest technology while working

* Highly proficient engineers working

* Reputed client base

* Services provided in any environmental condition

* Fast work process

* Competitive prices

SHIKOKU TECHNOLOGY. based at Manesar (Gurugram) where we are engaged in the

manufacturing of Hot Dip Galvanised& Black Fasteners (Nut & Bolts) for Power Sector
requirement. We are having BIS approval for Transmission Tower Bolts (IS: 12427:2001).
We also manufacture Nuts & Bolts as per the requirement of our valuable clients as per the
standard. We welcome queries for Nut Bolts, Step Bolts, U Bolts, Washers required for
Power Sector.

MARKETING STRATEGY ADOPTED BY THE SHIKOKU

Clear objectives for an advertising campaign are essential. Do you want to generate leads or
encourage brand switching? It's important to decide before your campaign begins, so you can
design y0ur campaign to achieve your goals. In addition, the results should be measurable so
that you can be sure the campaign is worth the investment.

Advertising success should certainly be measured, but there may not be a direct correlation
between advertising and sales. Advertising may generate a large number of leads, as well as
increase consumer awareness of your products, but the sales force may not be able to convert
those leads to sales. You have to judge how much your advertising is boosting sales and how
much it is boosting potential.

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The trend toward judging agencies on measurable results has been driven partly by direct
marketing agencies that claim to be driven by results and partly by the desire of marketing
executives to increase accountability. Some agencies have gone so far as to base their fees on
results rather than charge traditional agency fees. Results are dependent on many aspects of
marketing; for example, an agency could claim that it has no control over the performance of
your sales force or your product quality. It is essential, therefore, that you agree on a
definition of success. Just keep in mind, as one advertising agency put it, that there should be
quantitative and qualitative measures—which should be set jointly.

Since my advertising budget is limited, can I set different objectives for the same advertising
campaign?

An effective campaign has a single focus with a specific measurable result. By mixing
objectives, you may achieve only part of the outcome you want.

Set the Right Objective

You must have clear objectives for your campaign. Advertising may have many purposes, so
identify a specific objective for a specific campaign. A campaign may be designed to do the
following:

 communicate the benefits of your product or service

 generate leads for the sales force

 solicit customers through a direct response campaign

 persuade prospective customers to switch brands

 support a marketing event, such as a sale or an exhibition

 inform customers where to obtain the product

 build confidence in your organization

Again, you should be clear in advance how much is dependent on advertising and how much
is dependent on other aspects of your marketing effort, such as the sales force.

Identify Measurable Objectives

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To insure that you’re advertising campaign delivers results; your objectives should be
translated into precise, measurable targets, as in the following examples.

Consumer Product

Target market: 100,000 prospects in the northern sales region

Marketing objective: achieve high level of product understanding in the target market
advertising objective: persuade 15% of targeted prospects to request a free sample

Business Product

Target market: 2,000 manufacturers who use electrostatic coating processes

Marketing objective: increase market share to 20%

Advertising objective: persuade 40% of prospects to request product fact file

Raise Awareness

Awareness advertising can be used if your company is entering new markets in which you do
not have an established reputation, if you are launching new products which appeal to
specific sectors of your market, or if research shows that customers and prospects are not
aware of the full extent of your products and services. For example, to raise awareness of its
new range, one company advertised in special interest consumer magazines designed for its
target audience. Advertisements included the telephone number of an information line.
Editorial articles in the same group of publications backed up the advertising by providing
more detailed information for consumers.

Awareness on its own will not sell products, however; if this is your objective, you must
integrate your campaign with other elements of your marketing. Likewise, awareness among
the general public is very different from awareness in a small, specialized market, so you
should be clear about whom you are trying to reach.

Communicate Benefits

Product advertising should focus on solving the needs of your customers; consequently, your
advertising should stress the product’s benefits. This type of advertising is important when

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research shows low awareness of product benefits, if your products have recently been
improved, or if you need to counter competitors who have introduced products with similar
or better benefits. For example, if research shows that your company’s products are
perceived as old-fashioned or poor value for the money, you need to take action to
communicate the real benefits of your products. The phrase “perception is reality” definitely
applies in advertising.

Generate Leads

The purpose of some types of advertising is to provide leads that can be followed up by a
field sales force or telemarketing team. Sometimes, customers or prospects have a complex
decision- making structure and you cannot identify the decision makers. Advertising that
generates inquiries can identify the right people and open the door for the sales team. It can
also be used to identify prospects in new market sectors in which you do not have an
established customer base. Finally, this type of campaign can generate leads for agents,
distributors, or retailers who handle your local marketing.

Solicit Customers through Direct Response

Direct response advertising is the most measurable form of advertising and provides a direct
return in terms of incremental sales. In an increasing number of markets, customers prefer the
convenience of buying direct, and you have to decide whether it is appropriate to bypass your
existing distribution channels. In the personal computer market, for example, products have
become increasingly regarded as commodities, and the resulting price competition put
pressure on margins. Manufacturers found that businesses and individuals were willing to
buy personal computers “off the page” or via the Internet. The result was a considerable
growth in the level of direct sales, and manufacturers could reduce prices by avoiding the
cost of selling through retail outlets.

Encourage Brand Switching

Advertising can play an important role in winning new customers as it encourages them to
switch brands. It helps you to increase market share or maintain share against competitive

11
actions and is also important if you are introducing new products that offer greater benefits
than those of your competitors.

Support a Marketing Event

This type of advertising helps to build traffic for your special event and insures that the event
attracts the right prospects. For example, a company that sponsors senior executive seminars
as a way of building its credibility could run advertisements in the business press to promote
such a seminar.

Inform Customers Where to Obtain the Product

Advertising can help to drive business to retail outlets and can improve the performance of
your distribution network by showing the range of services available from the outlets. It can
also counter competitive action, if, for example, customers are using other distributors to
obtain spare parts and service. In this case, advertising should show locations of retail outlets
and explain why the authorized distributor should be the first choice for customers.

Build Customer Confidence

Capability advertising or corporate advertising is sometimes dismissed because it is difficult

to measure, but it is important to use when a company has been undergoing significant
change or is entering new markets. It also provides support when a company is trying to win
key account business or if competitors are targeting your important current customers.

What to Avoid

You Set Objectives That Are Not Measurable

Advertising objectives should be measurable for two important reasons. First, to make sure
that advertising provides an adequate return on investment. Second, to measure the
effectiveness of the campaign itself, so that future advertising can be improved or modified
to deliver better results.

You Set Objectives That Are Too Broad

An objective such as raising awareness is important, but often it is seen as the sole objective.
Advertising objectives should be closely linked to marketing objectives so that advertising is
used to perform specific measurable tasks within an overall marketing framework. You

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should be sure that what you want to achieve is possible with advertising communications
and acknowledge the importance of other elements of your marketing, crucially, the product
itself or your pricing strategy.

Channel decisions determine how the firm will reach its target markets. The choice and
performance of the channel are major determinants of an organization’s success. Channel of
distribution decisions are of vital importance to all types of firms, including producers,
wholesalers, and retailers. The following figure shows different channels.

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A key factor in selecting a channel is economic performance- estimated revenue and cost
flows over the planning horizon. Qualitative factors are also important in selecting channels
of distribution. Given two channel alternatives that are similar in their estimated economic
performance, selection may rest on the extent of management control that the firm could
exercise in the two channels. The antitrust laws are of primary importance for channel
selection decisions.

Establishing the channel objectives and Constraints

The objectives include the desired level of customer service and the desired functions
intermediaries should perform. Each producer develops his own objectives:

 Customer characteristics: Channel design is greatly influenced by customer

characteristics. When trying to reach a large or widely dispersed customer population,
long channels are needed. If customers buy small amounts frequently, long channels are
needed because of the high cost of filling small and frequent orders.

 Middleman characteristics: Channel design reflects the strengths and weaknesses of

different types of intermediaries in handling various tasks. For example, manufacturers’
representatives are able to contact customers at a low cost per customer because the total

14
 cost is shared by several clients. But the selling effort per customer is less intense than if
the company’s sales representatives did the selling.

 Competitive characteristics: Channel design is influenced by competitors’ channels.

Producers may want to compete in or near the same outlets carrying the competitors’
products.

 Product characteristics: Perishable products require more direct marketing because of the
dangers associated with delays and repeated handling. Bulky products, such as building
materials or soft drinks, require channel arrangements that minimize the shipping
distance.

 Environmental characteristics: When economic characteristics are depressed, producers

want to move their goods to market in the most economical way.

 Company characteristics: Company characteristics play in important role in channel

selection. The company’s size determines the size of its markets and its ability to secured
desired dealers. Its financial resources determine which marketing functions it can handle
and which to delegate to intermediaries.

 Market characteristics: Geography is one factor; in most cases, the greater the distance
between the producer and its market, the less expensive is distribution through
intermediaries rather than through direct sales. Direct sales may be effective if a producer
has relatively few large buyers, but for larger markets middleman are required.

Following are the factors that impact the selection of a channel:

Characteristics of Short Channels Characteristics of Long Channels

Market factors Business users Consumers

Geographically concentrated Geographically diverse

Extensive technical knowledge and Little technical knowledge and

regular servicing required regular servicing not required

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 Large orders Small orders

Product factors Perishable Durable

Complex Standardized

Expensive Inexpensive

Producer factors Manufacturer has adequate Manufacturer lacks adequate

resources to perform channel resources to perform channel
functions functions

Broad product line Limited product line

Channel control important Channel control not important

Competitive Manufacturing feels satisfied with Manufacturer feels dissatisfied with

factors marketing intermediaries’ marketing intermediaries’
performance in promoting products performance in promoting products

Relationship building and management, or what has been labelled relationship marketing, is
one leading new approach to marketing which eventually has entered the marketing literature
in eighties. A paradigm shift is clearly under way. In services marketing, especially in
Europe and Australia but to some extent also in North America, and in industrial marketing,
especially in Europe, this paradigm shift has already taken place by that time. Books
published on services marketing and on industrial marketing as well as major research
reports published are based on the relationship marketing paradigm. (Berry; Ballantyne;
Gummesson; Gronroos; Hakkanson; Payne)

Relationship marketing has often been contrasted to Transaction Marketing (e.g., Baye,
1995; Jackson, 1985) which is about developing, selling and delivering products by means of
short-term, discrete economic transactions. Because the lifetime value of the customer is not

16
taken into account, customer attraction but not customer retention is at the heart of
transaction marketing exchanges. However, it is now proposed that closer attention is paid to
the long-term financial benefits, and other benefits, of retained customers the main reason
being that competition in the marketplace has intensified. To achieve growth, it is argued,
fabrication Company must change their paradigm to that of relationship marketing.

As RM is a term used in a broad manner, there is probably a need for the marketing
practitioner to understand what it is, its impact on the fabrication companies(not just on the
marketing aspects), its applicability to an organization, and its benefits to customers.

There is a need to understand that RM is an overall strategy for the fabrication Company and
not just a sales tool with a short-term orientation. RM requires a long-term plan, and anything
long-term requires a strong organisational commitment and appropriate investment.

Figure 1 truly depicts the fundamental difference between nature, scope and core dimensions
of transaction marketing approach and relationship marketing approach.

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Figure 1: Transaction Marketing Vs. Relationship Marketing

 There are several reasons why retaining customers is so profitable -

 Sales and marketing and set-up costs are amortized over a longer customer lifetime

 Customer expenditure increases over time and repeat customers often cost less to
service

 Satisfied customers provide referrals

 Satisfied customers may be prepared to pay a price premium

 The Success Mantra

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The relationship of marketing is based on a totally different philosophy from the marketing
mix management approach. The relationship philosophy relies on co-operation and a trusting
relationship with customers (and other stakeholders and network partners) instead of an
adversarial approach to customers, on collaboration within the fabrication Company instead
of specialization of functions.

Customer service faces a number of problems of implementation, such as the functional

separation of marketing from logistics. The marketing department, on the one hand, is the
service promise maker; the logistics function, on the other, is the service promise provider.
Also important is the personal commitment of individuals to provide service, which may be
variable due to misalignment of strategic intent, confusing communications, and ill-trained
and poorly-committed staff.

In order to execute relationship marketing, the Ps of the marketing mix, such as advertising,
pricing and selling, can and should be applied, but in addition, a host of other resources and
activities are needed. Most of these additional resources and activities, relating, for example,
to delivering, installing, updating, repairing, servicing and maintaining goods or equipment,
or to billing, complaints handling, customer education and other activities, are not considered
part of the marketing function. Most of the people involved in such activities are not part of a

19
marketing and/or sales department. Nevertheless, their attitudes towards customers and their
behaviours and ways of executing their tasks are imperative to successful maintenance and
enhancement of customer relationships and other types of market relationships. In many
situations, their impact is more important to long-term success in the marketplace than that of
the full-time marketers.

At present, the promise of RM remains just a promise. The concept is simple. We engage
with the customer, discuss their problems, wants and needs and create the product or service
that satisfies those requirements precisely.

Finally, the RM strategy starts with the commitment of the chief executive and the board. If
the attempt at improving relationships is left to one function within the firm - typically sales
or marketing - then it is unlikely that the firm will realize the full benefits. Indeed, such an
approach may even prove counter-productive as conflicts arise between parts of the firm that
orient towards internal production and operations and a sales team encouraged to develop
relationships and partnerships.

Marketing mix, as a general perspective, evolved because at one time it was an effective way
of describing and managing many marketing situations. Even before the marketing mix, there
were other approaches. Now time has made this approach less helpful other than in specific
situations. However, bearing in mind the long-term damages of the marketing mix as the
universal truth, we are going to need several approaches or paradigms to succeed in
marketing.

Marketing mix management with its four Ps is reaching the end of the road as a universal
marketing approach. However, even if marketing mix management is dying as the
dominating marketing paradigm and the Four P model needs to be replaced, this does not
mean that the Ps themselves, and other concepts of the managerial approach such as market
segmentation and indeed the marketing concept, would be less valuable than before.
Normally, advertising, distribution and product branding, or any other marketing application
tool for example, will still be needed, but along with a host of other activities and resources.

However, what marketing deserves is new perspectives, which are more market-oriented and
less manipulative, and where the customer indeed is the focal point as suggested by the
relationship marketing concept.

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The overall objective of relationship marketing, the facilitation and maintenance of long-term
customer relationships, leads to changed focal points and modifications of the marketing
management process. The common superior objectives of all strategies are enduring unique
relationships with customers, which cannot be imitated by competitors and, therefore,
provide sustainable competitive advantages.

Most certainly relationship marketing will develop into such a new approach to managing
marketing problems, to organizing the firm for marketing, and to other areas as well. Today,
it is still an exotic phenomenon on the outskirts of the marketing map. In the future, this will
change. In fact, this change has already started. New paradigms have to come. After all, we
live in the 21st Century, and we cannot for ever continue to live with a paradigm from the
1950s and 1960s or for that sake even 1990s or 2000s and so on.

By nature, human being is adventurous. It is in our blood and it all started with Adam; who
couldn't help himself from eating the Forbidden Fruit. So the fact is that we, as consumers,
like to try new things and do experiments with an inquisitive mind to just try and see "how it
feels". And this has always been the start of every new experience that we gain.

This human quality of experiencing and trying something new gives companies the
confidence to offer us new things, knowing that the consumers will try. It is only after once
we try a product that we make up our mind for a repeat consumption of the product or
service. But the punch-line for the trial is knowledge of that product. Unless we know that a
new product is available in the market, our adventurous nerve does not get excited to try.

So clearly, the start of any marketing is the urge to get noticed by the consumers.

Another aspect is, when a product is launched and it gets clicked and establishes its
consumer-base in the market; other companies also notice it and jump on the band-wagon to
share the profits. So the natural process is unfulfilled consumer needs that become the basis
for new product launch. If a product is successful, it brings more brands that generate
competition leading to Brand War.

Unfulfilled Consumers Needs => New Product Launch => Product Success => Competition
=> BRAND WAR.

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The Chinese goods invading the Indian goods market is the exclusive example of brand war-
fares. Manish Market, Crawford Market, Linking Road are the bazaars in Mumbai that sell
all manner of imported goods. Attractive watches for Rs. 150, wonderful toy-cars at one-third
the price, perfumes for Rs. 200 onwards, powerful torch-lights, which could illuminate a
whole room and at affordable prices, the garments, foot-wear which are very desirable, both
in terms of price and quality.

We all are aware that Chinese products don't last beyond six months. If this was right, then
the paranoia that all of us felt was quite needless. No consumer, especially the value-
conscious Indian consumer, would fall for any of this. After all, we are not a disposable
culture. But if the product does last, then why should the consumer not choose that which is
better and cheaper? If there is an emergency light available with a built-in watch at almost
the same price, why will the consumer not buy the product?

A recent India Today article on the subject "Enter the Dragon", got to the crux of the matter.
It said that the difficult choice before the government was, who to protect - the Indian
manufacturer or the Indian consumer. To this Rama Bijapurkar said, "He who pays the piper
must be allowed to call the tune."

The consumer is shelling out his hard-earned, scarce money and must be allowed to get the
best bang for his buck. The conceptual construct of 'bang for the buck' is 'customer perceived
value' from any goods or service, where Value is defined as Benefit minus Cost (V = B - C),
where Cost is not just the price but the total cost of usage.

What makes customers buy what they want?

The consumer has the right to decide how he wants to spend his own money, what constitutes
consumption prudence and what doesn't. Pre-liberalization was the era of 'no options' for the
consumers. Several things that people valued were not available. Consequently, it was easy
for manufacturers to believe that the consumer did not want them. The marketers lacked in
establishing the aesthetic and emotional values to the products along with the economical
benefits that has always bothered consumers. But in today's era, the aesthetically nice option

22
always came with a lower price tag from overseas. Not only does it have additional
functionality to make it work better, it looks and feels better.

The 'starved for goodies' Indian consumer has been highly enthusiastic about international
brands like Scotch, luxury cars, breakfast cereals, jeans, cosmetics. For example, the Korean
refrigerators, television and cars are winning against Indian brands, Kellogg's has well-
positioned its corn-flakes in Indian snacks category. Why? Better quality products at
affordable prices. The benefit-cost equation gives Indian consumers a value advantage.

Does this mean that Indian Brands are dyeing slowly?

Let's now look at Indian brands that are blockbuster success. All of them are clearly winners
in the value sweep-stakes, arising from a superior understanding of what drives consumer
value. Nirma is the epitome of this, and the pioneer of what is now acknowledged as the best
way to win in the Indian market, working with the 'low cost business model'. It created a
detergent market 10 times larger than that of the most marketing multinational in India, i.e.,
Hindustan Lever. It provided adequate quality at affordable prices, the genius being in
innovatively creating an entire business system that was low cost. Nirma is clearly the
pioneer of the high volume, low margin, low cost business system, which is perfect for
unlocking the potential of the Indian market, profitably.

Another example is Star TV which did not have much success to begin with. Its irrelevance
to most of the market with its English bouquet of programmes was a problem. Zee
understood the pulse of the Indian viewers better. Its benefit was far better than
“Doordarshan”.

Today, Zee's value delivered is perceived by consumers to be less than that of a revamped
Star Plus. Consumers have gravitated to where they see better value.

So, can Indian brands survive in this marketing warfare?

The answer lies in using innovation in products and business systems to deliver price-
performance that both sells and makes a profit. The value of building a strong brand is
incontestable. Brands allow the consumer to shop with confidence, and they provide a route
map through a bewildering variety of choices. The consumer does not have to be an expert
on the complexities of mobile tele-communication to choose between one service provider or

23
another. Brands with strong equity embed themselves deeply in the hearts and minds of
consumers.

Businesses, in this day and age, are faced with many questions about their brand: -

 Does my brand enjoy a positive, distinctive image?

 How is the image of my brand different from that of competitors?

 What does my brand stand for, and is it consistent with my brand's positioning?

Market research can provide the answers to these questions. Research can measure what
values and attributes are most relevant and believable to the consumer. It is important to
measure both the external and internal audiences' attitudes toward the brand along with the
brand equity which involves the utility estimation, measures the value (utility) of product
features, price levels, and measurement on the overall utility of a product. Aside from
utilities, contributing factors such as current awareness levels of each brand and overall
perceptions of each brand are also important parameters. Brand names are indeed company
assets which must be invested in, protected, and nurtured to maximize their long-term value
to the company.

Some brands get this right. Some brands speak to people. These are called as VISIONARY
BRANDS. Only if the marketers deliver a value advantage over the new brands entering the
country, either in terms of superior benefit or better costs or some combination of both
creating the brands as "Visionary Brands", will the Indian brands gain an advantage over the
overseas brands.

Brand is often identified with a name, logo, or corresponding characters, which mark the
product out from other competing products, but it is more than that. According to Laakso
(1999 p. 22)”brand is the additional value the consumer is prepared to pay compared with an
ordinary anonymous product yet fulfilling the same purpose. A non-branded product is only a
commodity. If a brand is not able to offer the consumer better advantage that the competitors,
it will turn into a commodity. The fate of a commodity is determined by the market price.” In
the fabrication business the customers are mainly the occupiers. It is important to recognize
the quality and value of the product the customer has experienced. We can roughly say that
the value of a built fabrication to the customer, i.e. the occupier, is formed by four factors:

24
services, location, immaterial characters, i.e. the images evoked by the fabrication, and the
premises themselves, their physical and operational functionality, the performance (Figure
1). These four factors form an entity by which the occupier evaluates the fabrication.
Correspondingly, shortcomings in one of the sectors have an impact on the occupier’s view
on the brand of the entire fabrication. It is therefore in the best of interest of the owner to
make an entity of these four factors for serving the customers in the best possible way. The
fabrication brand always forms a unique entity. No other fabrication have fully similar
characters, profile. The special characters of fabrication were formerly captured in the
concept”location, location, location”. Along with the brand concept this can be replaced
by”location, performance, services, image” The best possible entity’ is, however, not the
same for all customers, but the importance of different characters varies among the
customers. Due to this the fabrication owner shall know his customers as well as possible in
order to make the fabrication gain additional value for all parties. Familiarity with the
clientele makes it possible to consider the potential customers already in the planning and
construction phases of the fabrication. Although the final customer may not be known, the
clientele can be segmented so that the future fabrication meets the needs of a certain
customer group or groups in the best possible way, and the actual customer can be provided
with a fabrication product meeting his needs. (Riihimäki&Siekkinen 2002)

BRAND IN OFFICE PREMISES

The demands of the clientele and thereby the formation of brand factors were treated in the
study especially considering office premises. It is not insignificant for the operations of an
enterprise in what kind of premises, building and environment it is located. A solution
appropriate for the needs of an enterprise will support its core activities. Good operating
environment enables efficient work and well-being of the people. Both of these are important
factors for the profitability and earning power of the enterprise.

The requirements of a party in need of premises can be classified in many different ways, but
mostly they concern with the location of the premises, their technical condition and
functionality, services available, connections, and image factors (Figure 1). Considering the
fabrication owner, certain premises or building cannot alone stand for a brand, but the
question is of much more, i.e. the whole operating environment. The factors, which

25
according to the study are important for the Finnish enterprises and their employees are
described in the following. These matters are not, however, important just for the Finnish
people, but the corresponding aspects are prevalent in other countries, as well, e.g. Weber
2002. Most enterprises consider location as the most important single factor when choosing
the premises. The most essential factor in the location is good accessibility. Regarding the
characters of the site the parking arrangements are emphasised. Important factors in the
location are also the surrounding infrastructure, and the selection of services in the area.

Flexibility and adaptability are requirements for premises. Considering tenant enterprise a
good landlord is the one who can quickly offer various space arrangements for the converting
needs of the enterprise. In practice this means that the buildings and premises should be
easily convertible. On the other hand, the owner should also be able to meet the increasing
space requirements of the customer quickly, either by new building or subleasing extra space.

The premises must be safe, healthy and ecologically sustainable. In a well-built and
maintained property the people can rely on the fact that the building and the technical
systems are in good condition and meet the safety requirements set by regulations.

Increasingly many also want to be assured that the premises really are healthy, e.g. for the
indoor air High-quality telecommunications is today a basic demand for an enterprise looking
for premises. The enterprises appreciate the possibility of tailoring the telecommunications
individually just to meet their individual needs.

For the enterprises skilful employees are mostly their greatest investment. Pleasant
environment and well-being of the employees are factors the significance of which should
not be underestimated. We may caricature and claim that one of the most important tasks for
a landlord is to provide for circumstances for the well-being of the employees in the tenant
enterprise.

Brand is based on images and association, i.e. it is something, which is inside a person’s
head. It is pleasant for a person occupying premises if it is elegant and stylish. It is important
for the enterprises that “it is nice to bring customers to the premises”. Thus, elegant premises
support the business.

26
Moving into new premises is a big strategic matter for an enterprise. It is not insignificant
what other enterprises are located in the same building or neighbourhood. When choosing
between different options the enterprises carefully consider where to find the most
appropriate enterprise mix and the best networking potentials for their operations. Success
often attracts like a magnet. “It is fine to be among the winners, this is not a place for just
anyone”.

The fabrication where the enterprise is operating signals the company image and brand of the
tenant enterprises quite similarly as its own name, logo, or slogan. Company image is the
picture an outsider or a member of the company interest group gets of the operation, services
or mere existence of the enterprise. It is therefore not insignificant what kind of a signal does
the fabrication send.

BRAND AND BRAND CO-OPERATION

For the fabrication owner brand is always a strategic matter. The life cycle of a fabrication is
long, so it is important to the owner to take care of the functionality and value stability of the
fabrication throughout the life cycle.

The fabrication owner has several strategic choices to build up a brand. The owner may build
up the brand for an individual fabrication, entity of fabrication, some service related to the
fabrication, service entity, own performance, or some character of the fabrication (e.g. the
operating environment offered). The fabrication owner’s brand may also be to offer brands
produced by other parties.

In addition to the owners many other parties are also acting in the fabrication business:
investors, enterprises offering services, actual occupiers of the premises, customers of the
occupiers, etc. Each one of them has their own reputation or even brand. When the number
and significance of services of others than the owner increase, it may behove the fabrication
owner to ally with the other service producers in order to secure the future of his own
services and brand.

Considering brands, it is interesting to see how the brands of different actors are presented
and how they influence the brands of the fabrication, area, service producers, and other actors
or customers. Brand co-operation will bring synergic advantages and strengthen own brand

27
capital. Forms of co-operation are many from profound and close co-brand to free-form joint
marketing. The study considered matters related to the organisation of co-operation, but these
will not be discussed in this article.

BRAND BENCHMARKING

One of the objectives of the study was to develop methods for building up and analysing
fabrication brands. Benchmarking was chosen as the method. In the study benchmarking was
allocated to office premises and the brand survey was realised in three points of view: owner,
developer, and area. Benchmarking tool was developed first. The most difficult part in
developing the tool was the definition of the brand structure. The starting points for building
up the tool were the four factors of brand: location, services, performance and image. Each
factor was given several essential characters. The characters were described by three grades
(good, normal, bad). Comparison between the different characters was realised by setting the
brand characters equal. The characters included in the calculation may be chosen freely when
using the tool. In the study the entity was composed as follows:

 Location 30 characters

 Services 50 characters

 Performance 25 characters

 Image 49 characters

The tool was tested at one foreign object (Sophia-Antipolis), two domestic business parks
(HTC Ruoholahti, Helsinki and StellaBusinessPark, Espoo), and a fictional traditional office
building in the Helsinki Area. The objects were first given general data, after which the main
factors of the brand were evaluated on separate forms: the location, services, performance
and image. The results were available as graphic diagrams.

The outcome is an Internet-based solution meeting the requirements of the parties well suited
for benchmarking. Easy use and simplicity are evident advantages. Fabrication brand is
rapidly renewable and continuously draws new influence from its environment. Due to this
the tool is also flexible and formable. Computer-based solution supports the structure, as the
data is stored in one place, and alterations performed in the process are thereby

28
simultaneously realised everywhere. The computer-based solution will also facilitate the
management of fabrication portfolios.

The aim of the benchmarking tool was to point out the weaknesses and strengths of
fabrication brands considering the whole, and put them in a measurable form. The tool well
revealed the weaknesses of a brand, and the sensitivity of a brand towards negation was also
clearly noticed. Problems in increasing brand capital are avoided by minimizing the
weaknesses and negations. As the application is not bound to the life-cycle phase of the
object, a new profile, for example, can be drawn for it if the brand or the surrounding area
have developed, and the tool may be used as an instrument for profiling

CHAPTER-3: REVIEW OF LITERATURE

Authors such as Stanton, Etzel & Walker (1991:13); McCarthy & Perreault (1993:46); and
Kotler & Armstrong (1997:52) agree that the traditional marketing mix has been defined as a

29
set of controllable instruments to manage the uncontrollable and dynamic marketing
environment and consists of four major elements ("Ps"): price, product, promotion or
marketing communication, and place (distribution)

McCarthy’s original classification (of the 4Ps) is especially useful from a pedagogical point
of view. "Nevertheless, the feeling remains that some other classification, still to be born,
will develop better conceptual distinctions among the large variety of marketing decision
variables" (Kotler, 1989:10).

Other criticism against McCarthy‘s 4P-model exists. According to Liswood (1987:73-77)

and Grönroos (1994:4) the 4Ps focuses on consumer acquisition. Acquisition is important,
but marketing emphasis has to move to the retention of consumers and managing customer
loyalty - an important application to sport marketing is that sponsorships might be aimed at
increasing loyalty among fans, spectators and even participants towards events, teams and
individual athletes.

According to Donath (1991:14) there is an overemphasis on price and product as marketing

instruments and an under-emphasis on place and promotion. A danger exists that
organisations will therefor make a misallocation of organisational resources between the four
marketing mix instruments (Chintagunta & Vilcassim, 1994:87). The 4Ps of McCarthy was
acceptable in the past but increasing criticism places the need to review and extend
McCarthy’s model (Van Waterschoot & Van den Bulte, 1992:83-93).

Van Waterschoot & Van den Bulte (1992:83-93) did an evaluation on McCarthy’s 4Ps and
suggested a new classification which can be applied more effectively for theoretical
development, empirical research and management decision-making. The basic findings of
their evaluation are:

• The marketing mix consists of a basic mix (product, price, distribution, and
communication). The communication mix consists of mass communication, personal
communication, and publicity instruments or elements; and

30
• A promotion mix which consists of a product promotion mix, a price promotion mix, a
distribution promotion mix, a mass communication promotion mix, a personal promotion
mix, and a publicity promotion mix.

These views indicate some discomfort with McCarthy's traditional 4Ps-model. One of the
possibilities might be that the Ps need to be extended to enable management to adapt quicker
to a fast changing environment.

Mitchell (1991:21) says that “marketers have been groping towards a bigger whole - they
increasingly cross over into other functional specialisms". This is perhaps one of the reasons
why marketing texts differ on the exact compositionof the marketing communication mix.
Mitchell (1991:21) adds that marketers are also more and more concerned by the way the
whole organisation presents itself to its different stakeholders. It can therefor be expected that
corporate and brand image might be important sponsorship objectives and that the functional
cross-over will increasingly overlap between marketing and public relations.

This "groping" contributed to the proliferation of a conglomerate of “Ps” because in many

application fields additional marketing mix instruments have been developed to suit strategy
implementation and to make the application of marketing strategy more suitable to the
specific marketing situation in a given field or industry. A case in point is Mullin et al
(1993:203 & 247) who have added promotional licensing to the promotion mix and public
relations as a separate “P” to the four traditional “Ps” in an attempt to define a sport
marketing mix.

A brief review of literature by Herbst & Van Heerden (1995:1-15) identified a considerable
number of other Ps - as outlined in Table 2.1. Some of these newly identified Ps do not fall
into the ambit of the original 4P-model. Collier (1991:45) warns though, that any additional
Ps should have to broaden management perspectives towards a wider spectrum of service
delivery and product augmentation.

Newer marketing concepts are forcing marketers to realise that traditional marketing methods
are no longer as effective as they used to be, and the search is on for new and more
appropriate methods. Internet marketing and relationship marketing are some of the most

31
talked about “new concepts” judged by the increasing number of research reports in
reputable academic journals. Shani & Chalasani (1993:58) argue that the 4P-model suddenly
seems to be outdated.

Kotler (1992:50-52) coins the idea of “a new paradigm” in marketing - he emphasises that
organisations need to practice “wrap-around marketing”, which encompasses both getting
and retaining customers. Organisations should therefore build stronger relationships with
their profitable customers. Grönroos (1994:4-20) strengthens Kotler's suggestions by arguing
that trends in business and modern research into industrial marketing, services marketing and
customer relationship economics, demand a relationship oriented approach to marketing.
These views could be of relevance to sport marketing.

32
 CHAPTER-4: RESEARCH METHODOLOGY

SCOPE OF THE STUDY

This thesis will help in understanding the prospects of the Indian Fabrication Industry in
building up the Brand Equity and this will also help in rectifying any of the problems that
exists To analyze the Brand Equity of Different Fabrication Companies in India by using
concepts of Marketing Mix and to understand which company is playing the vital role in this
Industry and how they are building their Brand Equity regarding Branding.

 To find how can we create value for the customer so that the customer feel privileged
every time he/she visit us

 To illustrate how customer can be retained for longer period and attract his/her
loyalty towards us

RESEARCH METHODOLOGY:

My research will mainly based on information given by my external guide,. It is also based
on information collecting through primary and secondary data. Primary data through
questionnaire and secondary data will be collected through Internet, Various magazines,
Newspaper articles, books. Besides these I also use various Descriptive, Qualitative and
Quantitative methods in my research.

PRIMARY DATA:

 In this case I intend to make proper research on customers and Marketers.

 Interviews

 Questionnaires

SECONDARY DATA:

 Internet

 Books

 Articles

33
 CHAPTER-5: DATA ANALYSIS

1. Income per month of the respondents are calculated as follows:

Income of the respondents

2% 0-5000
6% 4% 5000-10000
20%
24% 10000-15000
15000- 20000
20000-25000
16% 28% 25000-30000
>30000

The income of the respondents is very much fluctuating. This is done so as to gain more
knowledge about the different strata of the society. Also from the survey 28 % are earning in
between 10000-150000 per Year salary which inc while 24 % earning in between of 5000-
10000 per year while this data we cannot say is not biased because Salary is a part everybody
is not very comfortable with telling you.

While 20 % people responded that his/her salary in between of 20000-250000 rupees.

34
2. What is your position within the company?

Grade Survey Result

Middle Management 20

Senior Management 25

No Answer 0

Other 15

Executive 40

Our survey result contributed out of 100 people 20 % people are working in cedar to Middle
management also 25% respondent from Shikoku company which is from sales & marketing
team working as a senior management major chuck which contributed in our survey is
executive i.e. 40% . Other signifies a junior level of employee in different fabrication
company.

35
3. For how long do you work for your company?

Out of 100 people for our survey 28% people responded that they serving to decision making
function of a particular company more than 3 years but there work tenure is less than of 5
years. Adding to this 17% respondent working with this company is more than of 3 months
which is basically junior management also 16% said they working with marketing & Sales
faction is more than with range of 3-6 Months.14% respondent said they working with
fabrication last 1-2 Years. While 8% respondent said they working with m/s Shikoku more
than 5 years which also includes most of senior management.

36
4 How you use Direct Selling team communicates and builds relationship with customer?

Grade Survey Result

Direct Mailer 35

Internet quotation help 25

Advertisement Pop Up 25

Service on request 15

This question gives an idea about how uses of Direct selling team working with Shikoku and
build relationship with customer,

According to our survey result 35 % respondent replies that they use direct selling because
they send direct mailer to end customer for their request purpose also 25% fabrication people
using direct selling team using internet using as a tools for increasing business , purpose also
15 % respondent said they using direct selling team providing service on demand service
which gives better satisfaction because of they provide Shikoku service to the customer like
sending to the customer also 25% respondent said out of 100 sample size they preferred
internet as a marketing tools for the fabrication item.

5. How direct selling team help provides the basis of relationship marketing of Shikoku
company to its customers

37
Factor Respondent

Lead Generation 36

Product Information 22

Advantage of the Product 14

Online form fill up 28

How direct selling team provides the basis of relationship marketing of Shikoku Company
and customers this question gives the insight of how direct marketing will maintain
relationship whit the customer.

Lead Generation is not a new form of gaining new business, but it now has a new approach.
Rather than sitting at a trade show table for hours on end, or sitting up a display in hopes that
targeted consumers will complete a form, you can have leads generated and sent to you using
the technology of the Internet

According to our survey result 36% respondent said they use lead generation through the
direct sells team also 22% responded said internet provide product information to the
customer and 28 % respondent said Direct selling concept will help fabrication consumer to
fill up there fabrication formalities or online query. Lead generation is a win-win for both the

38
buyer and seller. A buyer is able to request information from several businesses that offer the
product or service that they are looking for and the seller is given the opportunity to pitch
their product or service to someone who has given them permission

39
6. Identify factors those help and affect customer retention in the new economy

Factor Respondent

Advertisement 46

Good product 23

Availability 19

Customer Care 12

Identify factors those help and affect customer retention in the new economy Customer
retention is not only a cost effective and profitable strategy, but in today's business world it's
necessary. This is especially true when you remember that 80% of your sales come from 20%
of your customer and clients. With these statistics I am wondering why most marketing and
sales for fabrication company little value-add strategies that you can use include:

Welcome, acknowledgement, sales recognition, thank you statements.

According to our survey 46% people said out of 100 respondent Advertisement is the most
valuable thing to maintain customer relationship. While 23% respondent said Good product
and useful product also hard pressing for the customer retentions while 19% respondent reply
that Availability of the product will be key factor for Shikoku Company’s consumer.

7. How the consumers come to know about the Shikoku?

40
Here we come to know that 35% of the consumers came to know about the Shikoku product
through self research, and following of this 30% people get to know about Shikoku trough
advertisement i.e. quite effective advertisement point of view. Rest of 20% are influenced
though their friend and colleagues or by friends and a small number i.e. 10% by the
Hoardings and 5% by or any other means includes radio and magazine news paper article.

41
8. You like the advertisement pattern of the Shikoku of (currently).

According to our survey 78% respondent realize that they are associated with Shikoku
advertisement whenever they watching that advertisement in Television or News paper or
any mean also 22% still don’t think they are associated with that advertisement because the
subject line of that advertisement is not communicate the message what Shikoku trying to
reach them.

An opportunity of Shikoku to convert 22% of population to positive side so the brand

extension would be done in better and efficient manner.

42
9. Kindly select any one of the following way where Indian fabrication sector has leverage in
the global scenario?

Factor influence Shikoku

Globalization 42

Consolidation 12

Deregulation 18

Diversification 28

With further globalization, consolidation, deregulation and diversification of the financial

industry, the fabrication sector will become even more complex but how much it influence
Indian fabrication company to go global for this we just try to find out the influential factor.
42% of the people said that globalization would be the factor while 28% of the people said
diversification would be the Indian fabrication company get beneficial paradigm for the
coming days while 18% people felt deregulation in the financial market would be the key
area for the Indian bank to become a global player.

43
10. After experiencing the entire factor for consideration; what do you think direct selling
team is more important or costly marketing is more necessary?

Which is beneficial

Direct Selling 78

Marketing 22

This question gives us zest of the direct selling vs. marketing which is preferred for the m/s
Praveen fabrication. After the analysis of primary data it is clear that direct selling concept is
the more preferred way for the fabrication company for growing there demand, 78% of the
people out of 100 chosen of that while 22% of the customer suggested that they preferred
marketing for the best possible way to do increase there business.

So from this question it has been cleared that direct selling is more advantageous for the
fabrication company rather than marketing.

44
 CHAPTER-6: CONCLUSION

The fabrication and erection industry in the country will see bright prospects during the next
three to four years. This is because major sectors like housing, roads and bridges are
witnessing large-scale development. Add to this the current growth rate of 7-8 per cent and
the proposed Rs 35,000-crore infrastructure plan for Mumbai and the opportunities for the
industry are mind-boggling. Even cities like Pune and Patna are preparing for an
infrastructure overhaul.

India's steel production capacity is around 35 million tonnes and that of China is about 200
million tonnes. "There is huge potential for the fabrication industry in the steel sector," says
NarinderNayar, Managing Director, and Comcast (India) Ltd. The company manufactures
steel plant equipments. Some of its clients are Indian Seamless and Usha Martin Group.

At the same time, Nayar suggests that government should not interfere with price structure
and leave the fabrication industry alone, and speeding up of logistics services and clearance
procedures. For export, government must offer better financial packages, he adds. (India)
pioneered the continuous casting technology in India and today it commands a leading
position in the market. Some of the company's current orders for supply of continuous
casting machines are from Bhushan Steel, Osaka Steel, Nigeria, Baku Steel, Republic of
Azerbaijan and Haji Islam in Bangladesh. To date, Shikoku has installed nearly 115
continuous casting plants in India and abroad. The company has many "firsts" to its credit:
Multi-strand (6-strands) billet caster supplied to Tata Iron and Steel Co. Ltd, Jamshedpur,
and large bloom caster supplied to Kalyani Steels Ltd, Pune.

Export prospects for the company are equally bright, especially as development is taking
place throughout the world. Iraq offers a lot of opportunities in reconstruction. However, to
compete globally, there is a lot of room for improvement in quality and methods for the
Indian Fabrication industry. "Till now we were living in the closed economy. With
globalisation has come the competition and people have choices," opines Nayar. Established
in 1973, Shikoku (India) also manufactures electronic products to measure vibrations in
rotating machinery. The company also provides solutions for secondary metallurgy, fume
extraction system, ladle slide gates and material handling for the steel industry. The

45
company's associate companies are Conin Engineering Ltd, Shikoku, Janus Consultants Pvt.
Ltd and Mechanalysis (India) Ltd.

"To establish our name and brand was the biggest challenge for us," Nayar reveals. "In the
1970s, government was looking towards Russia and to get its approval to allow private
companies to venture into steel sector was another challenge for us."

46
 CHAPTER-7: RECOMMENDATION AND SUGGESTIONS

Let us now take a look at some of the factors that have propelled this business to rapid
growth for Shikoku

* Loyal & Captive Consumer Base of Distributors: Distributors have a personal stake in
“growing with the business”, so they are inclined to buy products themselves. They are
influenced to a great extent by the groups as well and are always encouraged to try the
product beforehand, to be able to sell it better (Wotruba 1990).

* Consumer-Distributor Word-of-Mouth Magic: Being a friend/relative of the consumer, the

distributor would be expected to share similar tastes and interests (Chen et al 1998).
Therefore, the distributor’s recommendations would be trusted and acceptable. Many a times,
it is just tough to say “no” to an old aunt or good friend.

* Products: Product quality has been acknowledged to be really good, and endorsements and
training from specialists at the supplier’s training centres builds positive perception as well.
Products are extremely expensive, and high prices are justified on the basis of quality and the
concentrated form of the product, which implies lower cost per use.

* More & More Subscription Revenues: The ever-growing urban Indian middle class is the
ideal pool for potential distributors, looking to make extra cash which denotes “success” and
“respect”. The margins seem extremely attractive in India, since some research revealed that
prices for many products are identical to those in the US. Thus on a pure PPP basis, Indian
distributors are much better off. Amway boasts of almost 3 lakh active distributors today.

Since a captive consumer base exists, trials and repeats are guaranteed to an extent, so
revenues are accelerated by launching a new product almost every month

* Aggressive Product Launch Strategy: Since a captive consumer base exists, trials and
repeats are guaranteed to an extent, so revenues are accelerated by launching a new product
almost every month.

* India Specific Initiatives: First-time initiatives for the Indian market have been taken up,
such as mass advertising (which is not a usual practice in direct selling), smaller SKU’s (such

47
as sachets) and tie-ups with big names such as BPCL and Standard Chartered through petro-
card/credit card schemes to add credibility to the business.

These factors have contributed tremendously to the huge success that players like Amway
have enjoyed in India. However, an important question still remains unanswered. Who are
the distributors and do they make any money from this business?

Distributors in India come from across the various SECs. They can be from the affluent to
the lower middle class in urban areas. The attractiveness of an easy alternative source or
income is universal, we would guess. It is difficult however, to get real data on distributor
incomes. Distributors tend to inflate their actual earnings when asked; disregarding the
money they spent on buying the expensive products themselves. The way commissions are
distributed, i.e., on the aggregate of all down line sales with higher commission on higher
total sales, implies a pyramidal structure of income distribution. What this means is that most
of the income accrues to the top senior distributors (rightly known as the crowns, rubies,
diamonds, etc.) while very few of the majority (who are at the bottom of the distributor
hierarchy) earn anything significant.

To conclude, the supplier earns significant revenues, not just from sale of goods, but also
subscription incomes and a more efficient cost structure with savings on significant expenses
such as distribution and mass advertising. This provides the business model a sustainable
competitive advantage, which when combined with the scale offered by India’s densely
populated urban centres, promises a healthy future.

Despite its evident strengths, some conventional marketers do not wish to enter network
marketing purely because it seems to involve mixing a bit of ‘false hope with good soap’. So
could there still be any takeaways? Seemingly there is a lot more to direct selling than meets
the eye and there is a wealth of consumer knowledge that can be derived from this model:

* Consumers demand sustained benefits in return for sustained loyalty: This point has been
made again and again in marketing theory. Distributors see points translating into cash in
each bottle of shampoo they purchase. This sustained benefit influences their decision
making to try as many products as possible under the mother brand (Reichheld 1996). Some
firms such as Britannia did a good job of implementing this learning. The loyalty points

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program provided consumers an excellent sustained benefit in each product they would
purchase with the Britannia brand name.

* Increased knowledge about product develops confidence and preference: Amway educates
distributors who pass on the information to other consumers about product attributes and
ingredients. This high level of awareness results in inclination to purchase, especially for
high involvement personal care products such as cosmetics.

* The power of word-of-mouth: When friends recommend a product, they do so without any
vested interest, and that increases the credibility. This action generates trials and awareness
and later becomes a great channel for consumer feedback on the product.

Though most of these aspects seem obvious and easy to reapply, yet it is necessary to point
out that the ultimate driving force remains hard cash. And that is a tough motivation to
substitute.

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 BIBLIOGRAPHY

Chen, Robert, Wang & Cheng, 1998; “The Success Factors for Direct Selling Business”,
1998 Asia Pacific Decision Sciences Institute Conference, Proceedings p.p. 17-23.

Reichheld, F. F., 1996, Ed.; “Quest for Loyalty: Creating Value through Partnership”;
HarvardBusinessSchool Press: Cambridge, MA.

Wotruba, Thomas R., 1990; “Full-Time vs. Part-Time Salespeople: A Comparison on Job
Satisfaction, Performance, and Turnover in Direct Selling", Intern. J. of Research in
Marketing 7, 97-108.

Marketing definition approved in October 2007 by the American Marketing Association: [1].

"The Concept of the Marketing Mix" from the Journal of Advertising Research, June 1964
pp 2-7

"Marketing Management: Strategies and Programs", Guiltinan et al, McGraw Hill/Irwin,

1996

"Swarming the shelves: How shops can exploit people's herd mentality to increase sales?".
The Economist. 2006-11-11. p. 90.

HBS (Harvard business review)

www.marketingtimes.com

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 ANNEXURE

QUESTIONNAIRE

1. Income per month of the respondents are calculated as follows:

(a) 0-5000 (b) 5000-10000 (c) 10000-15000

(d) 15000-20000 (e) 20000-25000 (f) 25000-30000

(g) >30000

2. What is your position within the company?

(a) Middle Management (Manager, Senior Manager, General Manager.)

(b) Senior Management(Above than General Manager)
(c) No answer
(d) Other
(e) Executive

3. For how long do you work for your company?

(a) Less than 3 months (b) Between 3-6 months

(c) Between 6-12 months (d) Between 1-2 years
(e) Between 3-5 years (f) More than 5 years
(g) No answer (h) Other

4. How you use Direct Selling team communicates and builds relationship with
customer?

(a) Direct Mailer (b) Internet quotation

(c) Advertisement pop up (d) service on request

5. How direct selling team help provides the basis of relationship marketing of Shikoku
Company to its customers

(a) Lead generation (b) Product Information

(c) Advantage of the product (d) online form fills up

6 Identify factors those help and affect customer retention in the new economy

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 (a) Advertisement (b) Good product

(c) Availability (d) Customer Care

7. How the consumers come to know about the Shikoku?

(a) Friend (b) Self Research (d) Advertisement

(e) Hoardings (f) Others

8. You like the advertisement pattern of the Shikoku of (currently).

(a) Yes (Because I think I am associated with that).

(b) NO (meaning less for me).

9. Kindly select any one of the following way where Indian fabrication sector has
leverage in the global scenario?

(a) Globalisation (b) Consolidation

(c) Dérégulation (d) Diversification

10. After experiencing the entire factor for consideration; what do you think direct selling
team is more important or costly marketing is more necessary?

(a) Direct Selling (b) Marketing

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