Professional Documents
Culture Documents
(The OCP Report has been prepared for the Partial Fulfillment of the Degree
of Master of Business Administration with a Major in Finance & Banking).
(The OCP Report has been prepared for the Partial Fulfillment of the Degree
of Master of Business Administration with a Major in Finance & Banking).
Dear Sir,
I am writing this report regarding the topic "Marketing mix analysis of steel
companies in Chittagong: A study on KY Steel Mills Ltd." I started my OCP
program 1st February and completed on 31st March of 2008.I feel great
pleasure to the OCP report on KY Steel Mills Ltd. I think the OCP program is
very useful, informative and realistic method to gather practical experience
about a company's activities. For the assigned job I have worked in two
phases. In first step I have collected primary data from market place; where I
have used a questionnaire to collect information through face-to-face
interview with wholesalers and retailers. In second step I have collected
secondary data from the company personnel, annual report, general report
and magazine. After collecting necessary information I have tabulated and
analyzed that information. Finally this report has been made.
I therefore, pray and hope that you would be kind enough to accept my report
and oblige thereby.
Sincerely your’s,
______________________
At the very beginning of this OCP report, I would like to thank Allah the
almighty, without his help my effort would not come in to shape.
I would like to thank and offer my gratitude to Mr. Rizwan Hassan, Asstt.
Professor, International Islamic University Chittagong for supervising me
throughout my OCP program and providing various guidelines for preparing
this report.
I would like to extend my heart felt thanks to the contributors of generous help
I have received from many sources of KDS Group - Steel Division., I like to
express my tributes and gratitude to Mr. Munir Hussain, Honorable Executive
Director of KY Steel Mills Ltd. for encouraging me to complete the OCP
program .
In this report I also want to acknowledge the guidance of Mr. Arfanul Islam
Khan, Executive (Marketing & Sales), Mr. Nasrullah Karim Chowdhury,
Coordinator (Marketing & Sales), Mr. M. A. Chowdhury, General Manager
(Marketing & Sales).
I will also never forget the contribution of all managers and staffs of KY Steel
Mills Ltd. who have spared their valuable time to me. I would like to thank
them and other personnel who helped me.
Thanking All
______________________
S. M. Yousuf Chowdhury
Matric no- M062003
MBA (Finance & Banking)
Autumn-2008
The report deals with an important topic described "Marketing mix analysis
of steel companies in Chittagong: A study on KY Steel Mills Ltd." The
principal objective of the report is to analyze the marketing mix of different
steel (C.I. Sheet) companies in Chittagong and also evaluate the overall
performance KY Steel Mills Ltd. On the basis of OCP program, I have
prepared this report. This practical knowledge has been brought under five
major sections. The very short first section contains introduction, objective of
the study, methodology of the study, scope of the study, and limitations of the
study.
Interview of total 100 dealers, sub dealers, retailers and company officials was
taken to accomplish the study. But both primary and secondary data has been
used to write report properly. I have tried my best to depend on the source of
data that is more reliable and rational. All the information and data included in
the report were updated and from a reliable source and so little assumption
was made which helps make this report further praiseworthy and reliable in
order to use it by anybody for any research. On the top of that the interview
was fair and I have tried my best to hold all the interviews with important
clients of KY Steel Mills Ltd. so that the information is more relevant.
After analyzing all the secondary and primary data I came in to solution that
there are huge competitor in the steel market. Three companies are
competing with the KY steel they are:
It is also found that all the dealers, retailers, and customers of KY steel mills Ltd. Is
not totally satisfied. They desire more affordable and reasonable pricing policy than
the present one. From the study it has been revealed that the factor influences the
customers of KY steel mills Ltd. Most is the syndicated price of its products. If the can
be reduced more, the market of KY steel mills Ltd. will expand further.
A number of suggestions are given for the betterment of KY steel mills Ltd. at the end
of this report. There has been also some important information about the competitors
presented as well. Although it is not the market leader, it is hoped that if the proposed
recommendation are followed, surely the company will be benefited.
CHAPTER-1: INTRODUCTION
1.1 Introduction
1.2 Objective of the Study
1.3 Methodology of the Study
1.4 Scope of the Study
1.5 Limitation of the Study
CHAPTER-2: COMPANY PROFILE
2.1 History of KDS Group
2.2 Success of KDS Group
2.3 Company Profile
2.4 Company Address
2.5 Company Mission
2.6 Financial Performance
2.7 Organization Structure
2.8 Department of KY Steel
2.9 SWOT Analysis
2.10 Product Outline
CHAPTER-3: FINDINGS AND ANALYSIS
3.1 Product
3.2 Price
3.3 Distribution
3.4 Promotion
3.5 Findings
CHAPTER-4: RECOMMENDATION & CONCLUSION
4.1 Recommendation & conclusion
4.2 Reference
4.3 Appendix
The basic purpose of this experience is to expose the students to the real business
situation and make him accustomed to the practices of modern business world. This
exposure is very rewarding for one-self to see how things move and to find the gap
ape as well as the similarities between theoretical knowledge and practical
operations.
Primary Data
Primary data consists of information collected for the specific purpose at hand. To
gathering the primary data I used questionnaire. Through this questionnaire I
conducted with the dealers, sub dealers and retailers.
Data Collection
There are many sources by which data such as competitors' information, consumer
information, market condition, market size, promotional data, and company
information is collected. Most of the data was available to the company, while
questionnaire was to be developed to make the survey to have some particular
information. However, the table 1.1 below shows an overview of collecting data.
Research Description
Type of research:
After the problem has been defined carefully the manager and researcher must set
research objectives. Research might have one of three types of objectives. The
objectives of exploratory research is to gather preliminary information that will help to
define the problem and suggest hypothesis Descriptive research is to describe
marketing problems, situation and position or markets such as the market potential
for a product, price, distribution and promotion or the demographics and attitudes of
consumers. Causal research is to test hypothesis about cause and effect
relationships. As our objective is to find out the marketing mix analysis and situation
and position of the company, our proposed research is Descriptive research.
Sample Design:
Sample: A segment of the population selected for research.
Sampling Unit:
Our sampling units are the 20 dealers, 30 sub dealers and 50 retailers because the
information needed to identify the market position belongs to those 100 people so
they are our proposed sampling unit. Sample Size:
How many people should be surveyed. In our study sample size is 100, i.e. we
surveyed two markets in Chittagong at Asadgonj and colonel hat. From both the
market we take 50 samples are surveyed.
Sampling Method:
There are two type of sampling procedure (1) Probability sampling (2) Non probability
sampling But the probability sampling costs too high and takes too much time. In the
research there always take non-probability sampling even though their sampling error
cannot be measured. Under non-probability sampling there are four kinds of
methods.
Convenience sampling
Judgment sampling
Quota sampling
Snow-ball sampling
Questionnaire
Mechanical device
As questionnaires are very flexible there are many ways to ask questions.
I have used questionnaire in collecting primary data.
Questionnaire Design
In preparing a questionnaire the marketing researcher must first decide what
questions to ask. Questionnaires frequently leave alit question that should be
answered and include questions that cannot be answered, will not be answered or
need not be answered.
The form of each question can influence the response. Researchers distinguish
between unstructured- questions and structured questions. In structured question
respondents can response in their own words but in unstructured question
respondents can't response in their own; words. Moreover a questionnaire may be an
open-end questions or close-end questions or close-end question or mixed end
questions.
The result shows the following rank ordering the position of the company is as
follows:
• The annual report of the KY was not provided much information that I need.
• Time is another constraint In a short period of time of few months it is very
difficult to prepare a research report.
• My personal limitation also contributes greatly in making the study less
perfect then desired.
• Most of the employees are loyal about their company for that they do not try
to disclose the data, which create bad impact about the company.
• It was really hard to manage every dealers and retailers to get answer to the
questions included in the questionnaire.
• The area was specified as well. The survey was conducted only based on
Chittagong city. As a result, this did not represent the overall situation I
throughout the country.
The iron and steel sector are vital in the economic and industrial development
of any country. With a view of these requirements, KY has introduced
themselves in the steel sector in Bangladesh. K and Y imply Khalil and Yasin.
The KDS group came in the industrial sector of Bangladesh to establish their
philosophy. They believe that their name is their mission; their slogan for the
future, a vivid realization, a goal and a commitment, to people, to country, this
is the promise.
Galvanized plain sheets and corrugated iron sheets (GP/CI) are value added
steel products, which are sturdy, lightweight, bright and corrosion resistant.
KY produces this product from their own raw materials that is CR coil under
their own factories and doing this purpose KY imports the HR coil mainly from
Japan, Korea and India etc. KY also sells this CR coil inside the country which
companies produce CI sheets. But in this report I want to give emphasis on CI
sheets, which is a corrugated iron sheet and it has a major application in
domestic and industrial roofing and negligible uses in rolling shutters. There
are several kinds of CI sheet companies in Bangladesh and KY steel mills ltd.
is one of them. It's completely an individual private Ltd. Company.
Al Hajj Khalilur Rahman as the chairman & managing director of KDS group
are always very pleased to employee who brings the organization to a strong
position. He has tested all roads and stayed ahead of the competition time
and time again. This has been possible by continuous capital investments in
the various sectors where the organization is involved. This not only proves
Getting to be the one of the largest & most diversified business group in
Bangladesh was a long & hard road to tread. KDS is still continuing on the
journey of growth, diversity & achievement. The growth has been one of the
most significant in each area of operation. This was made possible by the
strong drive of the management & continuous dedicated hard work of the rest
of its team. KDS employees are more than 13,000 people in all its operation.
This has been recognized as one of the largest employments & there by
making it's contribution in the socioeconomic structure of the country.
Thus, it was mainly with the perseverance of the few entrepreneurs, who
visualized the future of Garments industry; the path of the industry was laid in
Bangladesh. One of those visionaries was Mr. Khalilur Rahman the founder of
the KDS Group.
Recognizing that the basics that the industry required was available in
Bangladesh, Mr. Rahman set up one of the first garment manufacturing units
in Bangladesh, KDS garments industry Ltd. on sep. 11, 1983. 300 men and
women on one single floor worked eagerly to build a future together.
KDS set up its first accessories plant in a location just 5 minutes away from
the mother plant. Following that a series of accessories manufacturing units
were set up in the same location to support the mother industry, and soon it
formed an independent operational division, the KDS accessories division.
Apart from the accessories, KDS establish its own washing, Quilting and E
embroidery plants to meet its growing needs of the international market.
Export of readymade garments is mainly to the USA. But KDS identified
different markets around the world.
The KDS Textiles Mills was its latest ambition related to the mother industry,
which is gradually turning into a reality as it is now due to go into production
early 1999.
In 1985 KDS explored a completely different field. The steel industry, KIY
Steel Mills Ltd was an established producing Galvanized CI sheet mainly
consumed locally. With the immediate results of KIY, the Plant Was Expanded
To doubles Its Original Size By 1995.
With a steady growth, KDS has also made major investments in several
Financial Institutions (Bank) as well as insurance companies and even in
stocks and securities in the country and has acquired Directorship in each.
It remains to be the pride of KDS that it grew to be one of the largest groups
of industries in the country within only a decade.
Today, after 25 years of KDS, the group has a total turnover of over US $ 480
million. The entire Group has now around 13000 people in its different
division.
The group has got four major divisions with a number of group companies
within each division as mentioned below. Besides, company has got liaison
offices in abroad also.
Box 2.1
Garments Accessories Information Steel Division
Division Division Technology
Division
• KDS Garments • KDS Poly • KDS • KIY Steel
Industries Ltd. Industries Ltd. Information Industries Ltd.
• Five Star • KDS Plastic Technologies • KY Steel Mills
Corporation Industries Ltd. Ltd. Ltd.
• Shaindir • KDS Printing • KY CR Coil
Garments Industries Ltd. Industries Ltd.
• HN Garments • KDS Packaging
Ltd.
Industries Ltd.
• Moon Apparels
• KDS Label
• KHS Enterprise
Printing
• KS Apparels
Industries Ltd.
• KDS Quilting
• KDS Cotton
• Star Apparels
Poly Thread
• Modern
Industries Ltd.
Apparels,
• KDS Offset
• KDS Washing
Printing
Plant
Industries Ltd.
• KDS Textiles
Mills Ltd. • KDS Screen
• KDS Embroidery Printing
Plant Industries Ltd.
• KDS Knitting &
Dying Ind. Ltd.
• KDS Screen
Printing Ind. Ltd.
The Garment and Accessories divisions have integrated vertically all the
activities starting from textile fabrication to printing of labels and the group is
totally independent in manufacturing and exporting garments to abroad.
Venture in steel business is relatively new for this group but it has already
The Company being a member of Steel Division was established in the year
1992 with its factory at Kumira on the Chittagong-Dhaka highway about 30
Km from Chittagong City. The company is manufacturing corrugated
galvanized sheets from Cold Rolled (CR) Steel Sheets of varying thick
nesses. Presently the company has got four manuals and one automatic
galvanizing line with a total production capacity of about 6000 MT of
galvanized sheets of various sizes per month.
The Company being a member of Steel Division was established in the year
1989, 8th November with its factory at Kumira on the Chittagong-Dhaka
highway about 30 Km from Chittagong city. The company is manufacturing
corrugated galvanized sheets from Cold Rolled (CR) Steel Sheets of varying
thick nesses. Presently the company has got two manuals and one automatic
galvanizing line with a total production capacity of about 2,000 MT of
galvanized sheets of various sizes per month.
Head office
Box 2.4
Dhaka office
Box 2.5
Box 2.6
Registered Office
The mission of the company is to be the best company in our industry and it is
our policy to deliver Total Quality goods and services to all customers. We will
accomplish this by means of the following actions:
Educate, train and quality our employees so that they can perform their
tasks in accordance with the established quality standards and
contribute to improvement efforts.
Chairman
E.D.
HR &
Finance & Administr Quality Sales & Sales I.T.
Commercial
Accounts ative control Marketing Department Depart
Department
Department Departme Department Department (Tender & ment
nt Wastages)
Officers Officers
Stuffs Stuffs
KY steel mills Ltd. has divided its total organization into various departments
and dressed them with positions as required for smooth functioning and
achieving the target of the organization. KY steel has different departments-
Finance and Accounts Departments, Commercial Department, HR &
Administrative Department, Quality Control Department, Sales and Marketing
Department and sales Department (Tender & Wastage), IT Department
having a head. This has been clearly mentioned above.
Chairman of KDS group is the all in all in KY steel division. Worth mentionable
decisions are taken by him. KDS group director, KDS steel director, Managing
director; Executive director is the part and parcel of KY steel. So, they take
minor decisions. Each and every department has separate head or manager.
Managers operate their departments with the help of officers and staffs. So,
the responsibility of officers and staffs goes to the head of the department.
Similarly the responsibility of head of the department goes to the company
director as well as to the chairman.
Table 2.4
Strength Weakness
Durability of GL sheet. Distribution
Smooth waves Price is slightly more than competitors.
A company of high quality products. Low brand visibility.
Largest steel industry in Bangladesh. Low quality of CGL sheet.
European standard quality. Provides D/O lately.
One of the oldest brands in the market.
Opportunity Threat
High cost of concreter materials. • High visibility of major brands in terms
• Others competitor's products are not up of communication.
to the mark. • Competitors well developed
Still rural and undeveloped area. distribution system
Corrugated
Galvanized Galvanization Zinc for
Sheet Plant galvanization
Before going into the specific detail of company's product, some discussions
may be relevant about the technology of steel manufacturing for better
understanding of the sales team. The manufacturing process starts from the
raw materials, which are mainly iron ore lumps and fluxes such as limestone,
In the Cold rolling plant the HR Coils are rolled in the room temperature to
reduce the thickness. The degree of reduction depends on the number of
passes, i.e. the number of times the sheet is rolled. For example the 1.8 mm
HR sheet may be converted into CR sheet of following thickness in mm.
0.156 0.160 0.170 0.176 0.180 0.186 0.190 0.196 0.200 0.210
Now what would be the width of the sheet? There is no scope of change of
the original width i.e. 840 mm in this case and the original width of HR coil
would be carried throughout the entire transformation. So it is clear that width
of the galvanized sheet would be identical as that of the HR coil. Once
galvanization process is complete then the sheet is passed through the
corrugation machine and then some proportion as reduces effective width of
the coil explained below.
The reduction of width will depend of the depth of corrugation, but we can
assume a reduction of 12-15% of the original width. The depth of corrugation
is varied as per the requirements of the final width. However it may be
mentioned that for effectiveness, a minimum corrugation is required beyond
which the sheet will not serve its purpose of protection.
The range of thickness for the CR sheet starts from as low as about 0.11 mm
and ends at 0.4 mm depending on the thickness of original HR sheet used.
The lower thickness variety is generally used for sidewalls, boundaries etc.
whereas comparatively thicker materials are used for construction of roof.
Sheets are available in five lengths between 6 ft and 10 ft, with increment of 1
foot. Width of the sheet also varies from 27 inch to 32 inch as explained
above. Generally the width increases with the thickness as we can see that
1.6 mm HR has got a width of 777 mm whereas width of 2.0 mm HR sheet is
915 mm.
3.1 Product:
G.L.
20%
G.L.
C.G.L C.G.L
10% BOTH
BOTH
70%
The above findings can be explained by the product quality analysis, where it
is said that the zinc level in GL is higher than CGL.
The above findings can be explained by the product quality analysis, where it
is said that though the size of 30", 31" and 32" are highly demanded in the
market but due to the increasing price of CI sheets day by day the demand of
28", 29" and 30" increases.
S. A (COCK)
P.H.P (horse) 14%
27%
K. y. (hen) S. A (COCK)
21% K. y. (hen)
A. K.S (COW)
P.H.P (horse)
A. K.S (COW)
38%
Coporate Branding
40 36
35
30 28
25 21
20
15
15
10
5
0
AKS PHP KY S. Alam
So, it is observed that a very close relationship exist between the success of
corporate level branding and product level branding of different companies in
the market.
Pricing method:
Every company may follow any or more than one of the following pricing
method.
These are:
1. Markup pricing.
2. Targets return pricing.
3. Perceived value pricing.
4. Value pricing.
5. Psychological pricing.
And these pricing methods are stand upon some pricing approaches. These
are:
1. Cost based pricing
2. Buyer based pricing.
3. Competition based pricing.
PHP:
1 level channel
Factory Consumer
0 level channel
l level channel
90 85
80
70
60
50
40
30
20 15
10
0
Interested Not Interested
Although they are interested they don't purchase directly from the factory due
to huge capital. To buy from the factory directly customer has to purchase
bulk amount of products. It needs huge capital. So, it is not possible for all
parties to invest huge capital. Sometimes they buy from the factory or
sometimes from the second party. The reason behind that is from the second
party they get credit facility, quick delivery facility, low rate facility, and
emergency support facility.
55
60 45
50
40
30
20
10
0
Season (Dec.-Apr.) All Season
The above finding can be explained by the product storage system analysis
where it is said that at season the demand of CI sheet is higher than all
season. As we know in the CI sheet business it requires huge amount of
capital. Moreover the price of CI sheet increases 5 times more than the earlier
price due to the increasing rate of zinc & HR coil in the world market. At that
moment they depend on rolling. On an average those who have big business
store 200-500 ton and it's always keep rolling. On the other hand the small
sub dealer store 50-100 ton.
60
50
40
30
20
10
0
Wholesaler Retailer Retailer Cum
Wholesaler
The above findings can be explained by the nature of business store analysis
where it is said that the number of retailer cum wholesaler is in the highest
position in both Colonel Hat and Asadgonj market. Retailer and wholesaler
are in the second and third position consequently.
PHP:
There are 3 dealers in this market. Company sells their product only their
authorized dealers. In this way they help the dealers to the business in a
particular market. Other retailers take from the PHP dealer. Dealer gets rate
facility or commission from the company.
There are few KY dealers in the Asadgonj and Colonel Hat market. Dealer
gets the rate facility or commission from the company. Most of the dealers are
relatives of the chairman of KDS group. So, in this way company helps the
dealers to do the business. But any retailer can take products from the
factory. Moreover KY registered office is situated in the Asadgonj market.
Bank documents collection, handling complaints etc. activities are done by the
registered office. Company provides facility on C.G.L products. They don't
provide facility on G.L products. Because their G.L products are highly
demanded in the market. There always exists one sales & marketing
executive to monitor the Asadgonj and Colonel Hat market.
S. ALAM:
From the survey we have found that there are uncountable dealers in the
Asadgonj market rather than Colonel hat market. Dealer gets the rate facility
or commission from the company. People who had involved in job in S. ALAM
group before can get the dealership very easily. So, they help the dealers to
the business. But any retailer can take products from the factory. Moreover S.
ALAM head office is situated in the Asadgonj market. That's why if any
problem arises they can solve it very easily. S. ALAM steel is popular
especially to the local people than any other company. It's a traditional
company.
Figure 3.8: Channel Members Preference for Gift Item (Trade Promotion)
17%
Umbrella
43%
T-Shirt
Calendar
Desk Calender
Watch
34%
3.5 Findings:
Based on the study few possible recommendations have been made for the
betterment of the company. If these recommendations can be followed it can
be expected that in future the market of the KY Steel Mills Limited will expand
further earning more reliability and reputation.
Manager: Date:
A) GL B) CGL C) NOF
9) If you are wholesaler in how many outlets you worked? How many
credits exist in the market?
...........................................................................................................
10) In the market which brand is more preferable by the customer & why?
(Key competitor)
...........................................................................................................
11) If you get defective sheet from company then which company response
earlier?
...........................................................................................................
13) How do you maintain the fund arrangement during the season?
...........................................................................................................
14) What is your overall expectation from the company in your own point of
view?
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