Professional Documents
Culture Documents
ON
STUDY OF
GUIDED BY :
PREFACE
Realizing that the practical experience is an academic for all round development of a personal, as a part of the course Curriculum for Master of Business Administration, the student has to undergo practical training for 45 days. The objective of training is to provide the student with an insight to the practical aspects of organizational working and environment. Such type of training helps students to work on real industrial environment, and to gain practical knowledge and build confidence. I have much pleasure in submitting the project report on STUDY OF MARKETING PROCESS OF INSTRUMENTATION LIMITED adopted in Instrumentation Limited, Kota.
ACKNOWLEDGEMENT
As we move on, I express my immense gratitude to those whose contributions gave shape to this project. Firstly, I am grateful to Mr. K.C. Khatri (DGM, HRD) providing facilities for desertion work at the organization. I acknowledge the valuable guidance and help rendered by Mr. P.K. Vashist, Sr. Manager (Mktg.) for the Marketing Department. I even express my sincere acknowledgement to all the personnel of different department whose informative guidance motivated me to understand various dynamics of the company. Not to mention my sincere thanks to .. , who was always there to assist me in the project work .
Last but not the least I would like to thanks my lecturars without whose feedback and encouragement, this project would not have been possible. Their help has gone a long way in successful completion of my project.
TABLE OF CONTENTS
NAME THE OBJECTIVE OF THE STUDY SCOPE OF PROJECT WORK EXECUTIVE SUMMARY JUSTIFICATION FOR CHOOSING A PARTICULAR TOPIC COMPANY PROFILE METHODOLOGY (MARKETING PROCESS) RESEARCH METHODOLOGY DATA INTERPRETATION
PAGE NO. 6 7 8 - 12
13 14 - 31 32 - 56 57 - 59 60 - 66
67 68 69 - 70
71 72 - 73
FOR A RESEARCHER :
1. The object is to provide the individual with an insight to the practical aspects of organizational working and environment, such type of study & its consequent exposure helps students to prepare for working in real industrial environment and to gain practical knowledge & build confidence.
2.
3.
As a Student: To see the extent to which research methodology is used in practical aspect or not. To see how the marketing process is implemented.
EXECUTIVE SUMMARY
The Instrumentation Ltd. a Govt. of India Enterprises was set up at Kota in April 1964 in collaboration with Russia with a provision to setup second unit at Palghat in Kerala. The production was started in October 1968. It holds good rank in India in the field of Process control instruments. Whatever the capacity of field may be one can only rely on I.L. board based engineering capability expertise for instruments for requirements
Marketing means to identity customer needs and then providing them for satisfying them. It is an important aspect of the business. The project has been made to know the different aspect of industrial marketing. The project emphasizes on the fundamental study of industrial marketing method. Research has described in this project how does the company receive & their execute the orders to industrial marketing consists of all activities the involved in the marketing of products to organization.
The aim of the company to maintain leadership in turnkey execution of Instrumentation system for power & steel projects and do improve market share in fertilizer, cement and other allied industries as well as to improve retail sale.
Kota office basically a co-ordination office which is to co-ordinate between Marketing head quarter, branch offices and various department at Kota for timely execution of order and complete customer satisfaction. Kota office is also responsible for booking of orders for all telecom products. I.L. specializing in the turnkey Process Control Instrumentation to record, monitor and control process parameters in process industries. Instrumentation Ltd. takes total responsibility for engineering, manufacturing, erection and commissioning of instruments with a back up of after sales services. So under this project the whole procedure for completing the order of customer has described.
Research Comprises defining and redefining problems, formulasting hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions; and atlast carefully testing the conclusions to determine whether they fit the formulating hypothesis. -Clifford Woody Research is an academic activity and as such the term should be used in technical sense. Research is the systematic approach concerning, generalization & formulation of theory.
RESEARCH DESIGN
It is an exploratory research design. studies are also termed as formulative research studies. The main purpose of such studies is that of formulating a problem for more precise investigation or of developing the working hypothesis from an operational point of view. The major emphasis in such studies is on the discovery of ideas and insights. As such the research design appropriate for such studies must be flexible enough to provide opportunity for considering different aspects of a problem under study.
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DATA COLLECTION
The task of data collection begins after are research problem has been defined and research design/plan chalked out. While deciding about the method of data collection to be used for the study, the researcher should keeps in mind two types of data (a) (b) Primary Data Secondary Data
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TYPE OF SAMPLING
Simple random sampling technique was used.
SAMPLE SIZE
While preparing the project report I will take the response to certain questionnaire from IL employees. The sample of 15 employees has selected randomly.
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RATIONALE BEHIND THE STUDY Now a days the impact of globalisation is very vast and it becomes the need of an hour. It is not possible for a company to survive alone. Globalisation not only provides a platform for fair competition but open gateway for more and more Research & Development. In the whole process what ultimately gained are better products at competitive prices. If we get better products then we can provide our customers better equipments and can satisfy to them. This is not only provides scope of betterment and sophistication of techniques i.e. method of production but broadens the horizon of business. Marketing is an important aspect of the business. Marketing means to identify customer needs and then providing them. It is very difficult to move global. Financial success often depends on marketing ability. Finance operations. Accounting and other business functions will not really matter if there is not sufficient demand for products and services so the company can make a profit. To sell the product in a global market is not an easy task. Marketing managers must make major decisions such as what features to design into a new product, what prices to offer customers, where to sell products and how much to spend on advertising. For this a complete understanding related to marketing and stores is must.
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COMPANY PROFILE
* Vision of the company
* Objectives of the company * History of the Company * Organisation Structure * Board of Directors of I.L. * Kota Unit * The Organisation * Products of Instrumentation Ltd. * Customers of Instrumentation Ltd. * Present Status of Instrumentation Ltd. * .Future of I.L. * Achievements & Awards.
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Corporate Vision
To become a leading world class Engineering Organization focused on customer satisfaction in the field of Control Instrumentation; Automation for Core Sector viz. Power, Steel, Refineries & other Process Industries; Telecommunication; Railway Signalling, Industrial UPS, Knowledge based systems such as IT & Software and Services; Electrical Transmission & Distribution; GIS/GPS,SCADA system.
2.
Business : * * * To undertake financial restructuring of the company to be more competitive. To endeavor to achieve reasonable return on investments. To further increasing its contribution in the companys value of production and profitability. * To maintain 10% annual growth in the turnover of the company excluding the bought out items. * To revaluate the corporate plan for higher growth and dividend objective.
3.
Customers : * To achieve and maintain high degree of customer satisfaction with timely delivery of quality, products and services at competitive rates and also establish customer feedback system.
4.
Employees : * To upgrade the quality of human resources and strengthen the technical and managerial competence for growth. * * To achieve higher levels of safety standards. To restructure the manpower by rationalization. 15
Instrumentation limited is a Govt. of India Enterprise set up in 1964 with the prime objective of attaining self-reliance in the field of Control & Automation for the process industry. Today IL is manufacturing & supplying state of the art control equipments on turnkey basis to the various sectors of the industry viz. Power, steel, fertilizer, chemical and petrochemical.
Instrumentation limited is headquartered at Kota along with its Commercial Division specialization in power and steel sectors. The regional & field offices, at different sites look after the installation work. The marketing division is based in New Delhi with branch offices in Calcutta, Chennai & Mumbai. IL has its plants at Kota & Jaipur.
With over 35 years of experience & a dedicated workforce, IL has mastered all complexities of control systems requirements & can lead right through any industrial project from system designing, to detailed engineering , manufacturing , installation ,final commissioning to after sales service & customer training. IL is now diversifying in to the field of Telecommunication, Power Electronics & Railway signaling systems.
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KOTA UNIT
This plant is located at Kota-Jhalawar Road Kota-5 (Raj.). It is the birth place of Instrumentation Ltd. This production unit was setup in collaboration with M/s Premmash Export USSR. This plant commenced its sophisticated process control instruments in various ranges. The Kota plant cater the need of industrial process control instruments required by various Thermal Power Station, Electricity Boards, Steel and Chemical Plants, Chemicals industries, Paper industries and other Heavy Engineering units. Just from the first year of production the company has been successfully supplying instrumentation and control equipments and has achieved all time high record of production, turn over in profit. It has continued to play its vital role in speedy development of process industries through out the countries in such a brief period and the company has achieved a leading, reputable and important position not only in India but in abroad also.
Today, the Corporate R&D center of the company is an independent wing like other units of the company with its own proto-type development shop, various laboratories and other amenties, manned by well qualified technical personnel and headed by Executive Director. I.L. has its registered and corporate office at Kota (Raj.). Manufacturing facilities accredited with ISO 9000 series. Quality System Certification are located at Kota & Palakkad (Kerala).
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PERFORMANCE AT A GLANCE
In the year 2005-06 through sustained efforts of the company for performance enhancement and with the support of Govt. of India and all other concerned stakeholders, the company has been successful in achieving a higher turnover of Rs. 21,998/- lacs as compared to previous years turnover of Rs. 17,585/- lacs. The company has also been successful in recording operating profit of Rs. 1,304.92 lacs for the year 2005-06 as compared to previous year operating profit of Rs. 1,091.74 lacs. The net loss for the year 2005-06 was Rs. 2,450.84 lacs as compared to previous year loss of Rs. 1,697.81 lacs Instrumentation Limited has been able to maintain its operations despite various constraints, mainly the shortage of working capital. In recent years despite challenges the company has been implementing its BIFR approved sanctioned scheme and displayed resilience to adopt new economic scenario. Since the implementation of this scheme from 1st April 1999 the business has been upbeat. In fact, the current year i.e. 2001-02 has been better than previous year for the corresponding period. The company has been able to address the main constraints of high wage bill due to surplus manpower and high interest cost. Both these factors have been brought down by way of rationalization of manpower and financial restructuring and repayments to creditors. The company has been receiving excellent support from the owner, i.e. Government of India. Further, State Government of Rajasthan has also extended support for raising funds through sale of surplus land at Kota complex. With all these achievements that companys business is growing. In the power sector also the company has secured and executed some prestigious orders like Santhaldih project of WBSEB, Obra 6 & 7 project of UPRVUN during the year 2000-01 I.L. is finalizing a major order for Roper Power Station of Punjab State Electricity Board. The company is enjoying technical & business support from business partners. The companys capability could also be gauged by other business segments, as it has performed well in supply of state-of-art equipments by way of MAX-XL Telephone Exchanges supplied at over 250 locations throughout the country. The diversified field of Railway signaling and Defence Electronics is also yielding good response. The company continues to maintain cutting edge of competition through adherence to international quality standards, high standards of customer service in its business strong hold of control Instrumentation and Telecommunications.
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PRESENT STATUS OF INSTRUMENTATION LTD. IL has incurred additional cash losses because of delay in implementing of sanctioned revival scheme. Due to acute shortage of working capital the company has suffered badly in terms of business. The company has, therefore, submitted a proposal for consideration to the Administrative Ministry. The Administrative Ministry i.e. Department of Heavy Industry, Ministry of HI & PE, has been kind enough to consider the proposal for (a) Government Guarantees for rising funds from Banks/Financial Institutions for reimbursement of additional cash losses (b) reservation of order by 1 for 10% of Annual requirement of BSNL for MAXXL Telephone Exchange with 50% advance for a period of 3 yours (c) steps for JV formation of holding unit. (d) and for VRS. The committee of Ministers has recommended the proposal for consideration of cabinet. The Ministers has recommended the proposal for consideration of cabinet. The cabinet has also approved this proposal recommended by the committee of Ministers in the third week of September 2001. The cabinet approval of the proposal will enable the company to utilize its manufacturing capacity infrastructure, manpower and get over the working capital shortage. Rationalization of manpower will be ensured by funds for VRS. Reimbursement of additional cash losses will enable the company in bridging the working capital deficit. JV formation is expected to provide technology, finance and marketing input to the company for its long terms viability.
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Future of I.L. The company is posed for better growth in the coming years in view of the following * The sanctioned revival envisages liquidation of substantional portion of the liabilities out of the proceeds as loans from sale of surplus land available with the company at Kota. The government of Rajasthan through Urban Improvement Trust, Kota has invited offers and principal approval has been given in the favour of the highest bidder. The company has achieved the target for manpower rationalization as per sanctioned scheme. However process of rights sizing of manpower strength in commensurate with the business potential will be continued. * The sanctioned revival scheme is in its third year of implementation. Joint venture formation of Palakkad unit is at an advance stage. Qualified interested parties have completed due diligence activity. Integration of Jaipur unit with Kota unit is also being taken up. * The company has also undertaken various measures for further improvement in its working such as reduction in cost, reduction in salary and wages through right sizing of manpower, closures of unviable sites, sale of land and building etc. at Sitapur, Jaipur integration of Jaipur unit with Kota and improvement in working capital management. The company is also pursuing actively the plans for introduction of new products to ensure optimum utilization of existing facilities. * With the implementation of revival package and restructuring business of the company with assured from BSNL for next few years the company is hopeful of turn around. * With recent approval by cabinet for reservation of Telecom order from BSNL will help the company to improve its net worth and financial position.
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Important Milestones Achieved 1964 1965 1975 1982 1988 1998 2001 2002 2003 order) Established with Registered Office at Kota C&I Production Commenced Control Value Production Commenced Special Temp. Sensor (RTD) for Nuclear Plant Major Diversification in Telecommunication Diversification in Defence Products Production of firing device (Defence order) Production of large size Telephone Exchanges Production of special solenoid values for nuclear application (Defence
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ORGANISATION STRUCTURE
Board of Director
Procurement
Manufacturing Facilities
Projects DDC Unit Exports Division Corporate F&A Corporate P&A Corporate R&D
CP & IT
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2.
011- 23061622
3.
011- 23061563
4.
5.
0744 2427278
df@ilkota.in
6.
0744 2426376
dc@ilkota.in
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PRODUCT RANGE OF IL
Instrumentation Limited is an ISO 9002 certified multi-unit, multi-product Company that are manufacturing those product which are used by any Industry so there are Industry based marketing. The main products which are manufacture by Instrumentation Ltd. Are given as under.
Fault tolerant control system, being manufactured in technical collaboration with AUGUST SYSTEM, UK is an ultra reliable control designed for use in critical industrial, control, safely shutdown and monitoring application. It can be used as a stand alone control system or be part of a distributed process control system
CONTROL SYSTEM-FICS 2. MICRO PROCESSOR BASED DISTRIBUTED DIGITAL CONTROL SYSTEM STARDIC
The STARDIC microprocessor based Distributed Digital Control System manufacture in collaboration with M/s Toshiba Corporation; Japan caters to need of flexible and comprehensive process plant instrumentation and controls to obtain energy conservation, improved productivity and quality, increase yield and safe innovative operational techniques. The STARDIC Distribution System is flexible and can be utilized in small, medium or large scale application. The system architecture dually fits process automation .Where a plant expands physically and functionally involving several phases while still maintaining single loop integrity.
3. ELECTRONIC TRANSMITTERS
ELECTRONIC CELL TRANSMITTER, being manufacture in technical collaboration with M/s Fuji, Japan, is of capacitance type, used for measuring pressure, differential pressure, flow rate, liquid level and other process variables. It employs a unique floating cell structure and is available in various compact models with wide measuring ranges.
ELECTRONIC TRANSMETER
It manufactures GAS ANALYSERS and POLLUTION MONITORING INSTRUMENTS in technical collaboration with M/s MANNESMANN HAREMANNAND RAUN, WEST GERMANY. The range covers almost all types of online gas analyzers viz. paramagnetic, infrared, thermal conductivity and pH analyzer- ILS gas concentration robust design allows these to withstand the stress and strain of everyday industrial operation and can be employed to identify noxious concentration s in environmental atmosphere. IL also offers: Zirconium Probe Oxygen Analyzers in collaboration with WESTINGHOUSE. Dissolved Oxygen & Hydrazine analyzer Model Oxyflux-4 in collaboration with Dr. THIEDING & Co. WEST GERMANY. iii. Steam and Water Analyzers & systems (SWAS) i. ii.
IL now offers microprocessor based recorders in technical collaboration with M/s ABB KENT, UK. The microprocessor based strip chart recorder is designed to provide recording of up to six input channels in a compact instrument with improved accuracy, reliability and 27
ease of programming. Besides strip chart recorder this range also includes circular chart and digital display controller.
6. CONTROL VALVES
IL manufactures a wide variety of control valves viz. globe, butterfly, angle, three-way, below sealed, flowing, micro flow, top and bottom guided, double seated, low noise, etc. to cover all conceivable application in technical collaboration with world renowned m/s YAMATAKE HONEYWELL, JAPAN. Pneumatic and electric actuators are also available.
Confirming to American Water Works Association Standard, these valves are the best choice as isolation valves for water and gas application. Ensuring bubble tight closure, due to soft seating, these are available in wide range of sizes up to 2400 mm and materials to suit any process requirements.
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CONTROL PANELS
11.ANNUNCIATIORS
CMOS based Annunciators, based on its in house R&D, are available in integral, wall mounting and remote configuration featuring all standard requirements.
The digital switching systems being manufactured are based on indigenously developed CDOT technology. ELECTRONIC PRIVATE AUTOMATIC BRANCH EXCHANGE (EPABX). The system includes 128 and 256p exchange, working in digital environment which ensures high reliability and speed.
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Atomic Energy (a) (b) (c) Nuclear Power Corporation India, Ltd. Department of Atomic Energy (DAE) Bhabha Atomic & Research Centre
V.
Fertilizers (a) (b) (c) The Fertilizer Corporation of India Ltd. Shriram Fertilizer, Kota Hindustan Fertilizer Corporation Ltd.
VI.
Railway (a) (b) (c) Western Railway Central Railway National Thermal Power Corporation Ltd. 30
(d) VII.
RITES
Defence Products (a) (b) (c) (d) Defence Laboratory, Jodhpur ARDE, Pune DRDL, Hyderabad Ministry of Defence, New Delhi
VIII.
Textile (a) (b) (c) Grasim Industries Gwalior Rayon Silk Mfg. Co. Ltd., Nagda Baroda Rayon Corporation Ltd.
IX.
Pharmaceuticals (a) (b) (c) Indian Drugs & Pharmaceuticals Ltd. Hyderabad, A.P. Indian Drugs & Pharmaceuticals Ltd., Rishikesh Hindustan Antibiotics Ltd.
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Product Exchange :
The characteristics of the product or service involved have a significant effect on the industrial exchange process. The ease of exchange depends upon the ability of the seller to identity the buyers need and the products potential to satisfy those needs.
Information Exchange :
Information Exchange often consists of answering technical, economic and organisational questions regarding pre and postsale maintenance and servicing. Products must be planned and designed to serve customers. To accomplish this, buyers and sellers tend to work together, exchanging product specific information over long period of time.
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Financial Exchange :
Financial exchanges may involve such considerations as the granting of credit or the need to exchange money from one currency into another when dealing with foreign buyers.
Social Exchange :
Social exchange is important in such areas as reducing uncertainty between buyer and seller, avoiding short term difficulties, and maintaining the exchange relationship over a length transaction period. Many aspects of an agreement between buyers and sellers in the industrial market are not fully formalized or based on legal criteria until the end of the transaction period. Rather, much of the process of exchange is based on mutual trust. Industrial Marketing deals with marketing of specialized industrial products and is quite different from conventional marketing of FMCG goods. The main characteristics of industrial marketing are 1. 2. 3. It deals in sale of industrial products. It requires in depth technical knowledge of the product being sold. In industrial marketing Mass advertisement/vigorous advertising through electronic and Print Media is not done. Instead, Personal one to one contact with customer are made. 4. 5. 6. No or very small distribution channels are in this marketing. In most of the cases the seller and buyer know each other. The sale is done through the proper marketing process of tender enquiry, quotation, techno-commercial discussions etc. Difference in Industrial Marketing V/s Consumer Marketing Area Market Structure Industrial Marketing Consumer Marketing
Geographically concentrated Geographically dispersed Mass relatively few buyers markets monopolistic 33
Area
Products
Technical complexity Standardized services, delivery customized service, delivery and availability somewhat and availability very important important Functional involvement rational/task motive predominante technical expertise stable relations interpersonal relationships reciprocity Distinct, observable stages Family involvement, social/ psychological motives predominate, less technical expertise non personal relationships.
Buyer behaviour
Shorter, more direct, fever Indirect, multiple linkage linkage Emphases on personal selling Emphasis on advertisement Competitive bidding, List prices negotiating on complex purchase, list prices on standard items.
Promotions Price
Advertising
Practically nil advertising in It heavily dependent on mass mass media in this marketing media advertising
Contact
Totally dependent upon one No one to one contact with to one contact users Selling requires in depth Selling requires no technical knowledge. product knowledge. depth
Knowledge
Effective and responsive industrial marketing strategy rests on the industrial marketers knowledge of how organizational buying behaviour is affected by forces within the organization. Seldom does an organizational buyer make a decision in isolation. Purchasing decision are influenced by organizational, group and individual forces as well as force within the external environment.
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MAREKETING ORGANISATION
Marketing Origination consists of head office at Bombay & wide network of regional & branch offices at following places. Calcutta , Delhi , Chennai , Bombay , Durgapur , Guahati , Pune , Vadodra , Visakhapatnam , Ahmadabad , Secundrabad . Orders are booked by their offices &supplies are made from factory. MARKETING ORGANISATION OF SUPPLIERS FOR EQUIPMENT OTHER THAN PROCESS CONTROL INSTRUMENTATION
Other suppliers in this category also follow the same line i.e. maximum officers for concentrating on follow up with individual customer & order booking. There are very large numbers of suppliers in this category vary from very big one like M/s L&T to very small one like M/s RTPL. Most of the suppliers are ready in market for other unrelated &related products with their network of sales services offices which they utilize for this product range also. Marketing Strategy: This differs from supplier to supplier. Big ones like M/s L&T, M/s Ind. Chem. Etc. are trying to cover all over India, while some ones like M/s Kalindi, M/s RPTL are concentrating one or two areas for effective marketing. Rule of the game for this type of product is low price, fast delivery & efficient after sales services. To achieve this, many companies like M/s L&T are using to fullest extent their large network of stockiest. Dealers, service centre, which already exists for other proud range. Most of the companies are setting up more & more sales offices for regular contacts are following up with potential customers. Some suppliers of EPABX like M/s L&T & M/s Uptron are trying to attract customer by supplying complete system i.e., both exchange & telephone of their own make with package or erection commissioning.
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MARKETING PROCESS
Marketing is everywhere. Formally or informally, people and organizations engage in a vast number of activities that could be called marketing. Good marketing has become an increasingly vital ingredient for business success. And marketing profoundly affects our dayto-day lives. Financial success often depends on marketing ability. Marketing deals with identifying and meeting human and social needs. Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders. The aim of marketing is to make selling superflows. The aim of marketing is to know and understand the customer so well that the product or services fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available. In business markets companies selling business goods and services often face well-trained and will informed professional buyers who are skilled in evaluating competitive offerings. Business buyers buy goods in order to make or resell a product to others at a profit. Business marketers must demonstrate how their products will help these buyers achieve higher revenue or lower costs. Advertising can play a role, but a stronger role may be played by the sales force, price and the companys reputation for reliability and quality.
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PDDC Unit
Marketing Unit
Kota and Palghat units are production units, PDDC and Marketing units are Business Acquisition Units.
Marketing Units : Since incorporation of the company all selling activities was done by commercial unit. In 1988-89 commercial units was bifurcated into two units. (i) (ii) (i) PDDC Unit Marketing Unit
PDDC Unit : This unit handle all turnkey project of control & instrumentation in segments like steel, plants and Thermal Power Station. In this method production is done accordingly to requirement of customer.
(ii)
Marketing Unit : The company has product range that include retail industrial products like Transmitters, UPS, SDDS, C-DOT (MAX/XL), Mobile Tower etc. solenoid valves, control panels & desks, Defence products.
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This unit of the company looks after the sales of retail products. The marketing unit is headed by General Manager (Marketing) and its organizational structure is shown as below : GM Marketing
Delhi Branch
Kolkatta Branch
Chennai Branch
Mumbai Branch
Jaipur Branch
Each branch is headed by Branch Manager and has officials looking after various products. They contact the customers (Existing and Potential) in their region through various means like personal contacts fax, telephone, E-mail etc. Since IL is making industrial products and not customer durables, the company knows its customers well and customers also know the product range of IL. Moreover company is more than 43 years old, they have very old and strong relationship with its customers IL enjoys lot of goodwill with its customer & this results in repeat orders to the company. Officials of each branch get enquiries from customers for their requirements and quotations are submitted.
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Chart No. 4 FLOW CHART OF MARKETING PROCESS IS ADOPTED IN INSTRUMENTATION LTD. This process is explained in details in flow chart. Each step is explained in below paragraph.
Submitting Quotation
Branch allots O.P. No. (Order Processing Number) and makes MDS (Manufacturing Data sheet) and CDS (Commercial Data sheet) & sends to Kota marketing Co-ordination
Kota Marketing Co-ordination makes PP (Production Programme) and sent to PPC (Production Planning & Control)
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Receiving Quotation
After receipt of all material required to manufacture the produce PPC Deptt. makes PP to Production Shop & gives MWV (Material Withdrawl Voucher) to Production
If NO Inspection
inspection
Customer inspection OK
not OK
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Marketing Department sent bills to customer & its banker & collection of payment
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DETAILS OF MARKETING PROCESS IN IL 1. Receiving Tender Enquiry : Enquiry is floated by purchaser to it known suppliers of the product he requires to purchase. In this enquiry all technical requirements are mentioned by purchaser and he also mention commercial terms & conditions in this document like payment terms, taxes an duties, security deposits for EMD and performance etc. 2. Submitting Quotation Tender : According to the requirements of the tender enquiry the company submitting quotation mention in this document all technical specifications of the product and also mentions the prices and commercial terms and conditions i.e. excise duty, P&F, sales tax, freight, insurance charges etc. Seller also mentions special terms and conditions regarding payments through Bank/Advance payment. 3. Techno Commercial Discussions : Purchaser receives quotation from many suppliers and evaluates them as per technical specifications required by them and prices quoted by sellers. 4. Selected lowest price technically accepted offer : After techno commercial discussion the user selects the lowest priced technically accepted offer. After selecting the offer, the user finalizes the terms and conditions with supplier by means of telephonic discussion writing letters meetings etc. 5. Issuing Purchase Order : After receiving the satisfactory reply from the seller the user issues a purchase order to supplier to supply the material as per technically accepted specifications mentioned in the purchase order. Purchaser also mentions the commercials terms and conditions in the purchase order. Purchase order is a document after which manufacturing process starts.
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6.
Branch Function : After receiving Purchase Order, Branch registers the order and allots a order processing file no. and prepare manufacturing data sheet and commercial data sheet and sends to Kota Marketing Co-ordination. Order processing file no. is an eight digit number as mentioned below there after this OP No. is used in all codependence processing inside I.L. 91307005 The significance of each digit is explained below : 9 = The first digit specifies the unit and 9 is the digit of marketing unit, 8 is for
project DDC unit & so on. 1 = The second digit specified the branch by which order is procured. 1 denote Delhi branch 2 denote Chennai branch 3 denotes Kolkatta branch 4 denotes Mumbai branch 5 denotes Defence Marketing Kota 6 denotes Marketing Co-ordination Kota 7 denotes Jaipur branch 3 = The third digit specify the order is for the retail order or spare items order. 1 denotes retail supply 2 denotes spare items supply 07 = This digit shown the year of the receiving purchase order. For financial year
2007-2008, 07 is used. 005 7. = This number denotes order processing file number.
Kota Marketing Co-ordination makes production programme and sent to production planning and control :
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After receiving purchase order Mktg. Co-ordination Kota, sent MDS and CDS to production planning control department on online computer system. There is an online system for controlling the manufacturing process. So a production programme is made on online system which is received by PPC Department 8. PPC makes Material purchase Requisition to purchase department : After receiving the production programme from marketing co-ordination the production planning and control department checks the items that are not available in stock. Then PPC make MPR for not available items and sends to the purchases department for purchasing the required material. This is also done in online system using PPC module. 9. Purchase department floats enquiry to its vendors : After receiving MPR from PPC Department the purchase department floats enquiry to its vendors for the supply of material. 10. Receiving Quotation : After floating enquiry the purchase receives quotations from various suppliers and processes it. 11. Techno commercial discussion : After receiving quotations techno commercial discussions are done by purchase department. 12. Selected lowest price technically accepted offer : After techno commercial discussion the purchase department selects the offer which is suitable according to the technical specifications and prices. 13. Function of PPC Department : After receipt of all material required to manufacture the product, PPC Department makes Production Programme to Production shop and gives the Material Withdrawal Voucher (MWV) to production and production shop gives MWV to stores and gets all material for making product. 44
14.
Product Manufacturing : After receiving all components from store the production shop starts its manufacturing process.
15.
Quality Assurance Department : After manufacturing the items the production shop offers it to quality assurance department for checking the manufactured items as per specification of purchase order. Quality Assurance checks the items and if it found OK they issue a quality tag number and if the item is not found OK then the QA Deptt. returns the item to Product Mgf. Department for rectification as suggested by the QA Department. The production deptt. after rectification, offers the product back to QA deptt.
16.
Gives Quality Assurance Tag : When the Quality Assurance Department Satisfied for the quality of the manufactured item then it gives QA Tag to the manufactured item. If customer inspection is required then production Department informs to marketing co-ordination for calling the customer for inspection.
17.
Product finishing and makes production Credit Voucher : After QA certification production department finishes the product and makes production credit voucher document in on line computer system.
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18.
Deposit in Finished goods store through PCV : After preparing Production Credit Voucher all the finished goods are deposited in FG store through PCV.
19.
Inform to Marketing Co-ordination Department : When the Finished product is deposited in store the store department informs to mktg. coordination deptt. for giving challan.
20.
Mktg. Gives challan to finished goods store : When the clearance information received by marketing department, it prepares the challan giving all specifications of materials and mention all commercial terms in the challan.
21.
Finished Goods stores gives material for packing and Despatch : After receiving the delivery challan, FG store issues the material to packing department for packing the material and to despatch them.
22.
Dispatch the material and gives all documents to Billing Department : When all the documents i.e. delivery challan, packing list, excise gate pass, copy of Railway Receipt/Goods Receipt Voucher etc. are available it is send to Billing Deptt. for raising invoices on customers.
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Then billing department raised the bills as per delivery challan and send all documents to marketing co-ordination department. 23. Marketing Department sent bills to customer/its banker for collection of payment : When bills copies is received by Mktg. Co-ordination it is sent to customer/its banker / branches office for collection of payment as per commercial terms and conditions, of the purchase order.
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PURCHASE DEPARTMENT All material is purchased by purchase department in I.L. When company receives order from customer Kota Marketing co-ordination makes production programme and sent to Production Planning and Control (PPC). PPC makes Material Purchase Requirement and sends to Purchase Department for purchasing the required material. In this way procurement action is taken by the purchase department of the company. Purchase department is divided into two parts Purchase Department
Indigenous Purchase
Import Purchase
1.
Indigenous Purchase : When purchase made from within the country for fulfilling the order it is known as indigenous purchase.
2.
Import Purchase : When purchase made from outside the country for fulfilling the order which the company receives it is known as import purchase.
3.
While preparing the payment voucher, all the terms & condition of P.O. is verified with the PI/Confirm Invoice and with the IRL. After verification of the PO terms, the payment particulars are recorded in purchase order as well as in suppliers advance register (manually). Format of advance register is enclosed and thereafter payment voucher is prepared in online ERP System and is sent to cash section for preparation of cheque/DD and controlling the voucher in online system. (format of payment voucher is enclosed)
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Where the payment to supplier is to be release through Letter of Credit, in such cases, a request for LC opening is sent by procurement to store accounts and LC is opened in bank accordingly. Either the payment is to the supplier is released through bank on retirement of LC documents from bank or on due date, it depends on the nature of LC (I.E. sight or usance LC). LC opening, payment and retirement of dispatch details from the documents retired from bank, are recorded in the LC register. (LC register format is enclosed). 4. When input material is received in IC&S Store, various input details are entered in material module in online system, then receipt voucher and CENVAT voucher (D3) is prepared. Some samples of input material is sent to QA, after approving the quality, the samples are returned to the IC&S store, thereafter R.V. is controlled in IC&S store and the copy of the same is sent to the store accounts (A copy of RV is enclosed). After verification of P.O. terms, the input material details are recorded in P.O. as well as in supplier is advance register and thereafter purchase voucher (RV voucher) as well as payment voucher (if payment is due) is prepared in online system and both the voucher are sent to book section and cash section respectively of their needful action. 5. A statement of completing items purchased, containing the input details is prepared periodically by procurement/mktg. Unit/comm. Unit (if PO series is pertaining to KU) and is sent to store Group-I (if invoicing of subject item is done by billing section) and to the store accounts respectively. Further (despatch) sale particulars of the input is incorporated in the statement of completing items and is sent to store accounts. After verification of input details from the PO, necessary details are recorded in PO and voucher for consumption and suppliers account are prepared for onward sending the same to book section. Where the invoicing of completing items is done by other units as stated above and the PO is placed in KU series, then store accounts sends the fund/other transfer advice to the respect unit. 6. When input material bought for manufacturing has rejected at shop, then QAD form containing the information in respect of rejection of the input, is prepared in nine copies by QA department and a copy of the same is sent to the store accounts, based on the information containing in the QAD, store accounts debits the suppliers account and credit the consumption of indg. material other than W.O. account. (format of
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QAD is enclosed). When replacement/refund is received, then suppliers account is credited accordingly. 7. Sale tax forms are issued in the name of suppliers (in case of inter state sale only) on receipt of their periodical statement of material and delivered the same to procurement. The S.T. forms are issued after reconciliation of suppliers statement with our sub-ledger and clearance (outstanding) debit balance lying in suppliers account.
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Chart No. 5
Imports Department
Financial bid vetting of Technically Ok suppliers Financial bid vetting of Technically Ok suppliers
A
Advance payment Letter of credit Sight draft Direct payment
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A
Bank confirmation
Foreign Supplier
Documents Materials
Bank
Custom Documents
Material air/ship
Kota
Bill of Entry
FRV
Destination (Mumbai/Delhi)
Rejected Material
GR waiver request
Quality check
Approved
Pricing
Shop
Production
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Import Department of Instrumentation Ltd. Product planning dept. decides for a product to be manufactured. They list out the raw materials needed and the request for material purchase is sent to purchase dept. In case the raw material or components are to be imported the procedure is as follows:
Procurement 1. 2. Material purchase request comes from indenter. A public notification in media like newspapers is given inviting tenders from suppliers as per mentioned specification. The Tenders can be of three types: Open tender : Any supplier fulfilling specified conditions may apply. Limited tender : When only limited suppliers are there. This is the most common type with IL. Single source : When there is only one supplier who is in accordance with our need. Sometimes we receive quotations from only one supplier then in such a case it comes a single source tender.
3. 4.
Tenders received are opened A comparative statement is prepared. The various quotations are compared with each other in terms of price, quality, period of delivery, basic rate, loading rate, transport cost, compatibility, etc. and the best are marked as L1, L2, and L3 and so on.
5.
The most reasonable party is negotiated with for deciding payment mode, transport medium and other related areas.
6.
PAYMENT METHODS This involves a multi stage process. First of all a material purchase request come from the purchase dept. to foreign purchase deptt. The deptt. invites various quotations from foreign suppliers and the best one is selected. A purchase order is placed accordingly. The mode of payment is decided with the supplier. It can be done in the following ways:
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# # #
LETTER OF CREDIT Letter of credit (L/C) is a commercial letter of credit opened for imports of goods by a banker at the instance of his importer customer in favour of overseas seller. A L/C may be commercial or non-commercial one. When it relates to a mercantile transactions, buying and selling of goods, it is called a commercial letter of credit, when it does not relate to any mercantile transaction, but only conveys an order of the opening banker to his overseas correspondent to pay to third party named in the order within the specified period of time against draft drawn upon him by that party up to stated amount, it is noncommercial letter of credit. This is the most common mode of payment.
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Advance payment This is done by way of demand draft or telegraphic transfer (now a days transfer through SWIFT system). Method is usually used for dealings involving small amounts and with known parties where delivery period of goods is short. This reduces the delays in getting the materials due to letter formalities. This also saved the bank charges paid to foreign banks which are usually quite high.
SIGHT DRAFT This method is rarely used. When the formalities of method of payment are completed the foreign supplier dispatches the good by air/sea route to Delhi/Mumbai where they are received and forwarded to the concerned unit. Meanwhile the payment is done within the period as specified in the contract which can be up to 120 days. This can be called as L/C at sight. Insurance This is a kind of security against losses via fire, theft and flood. In the words of Justice Tindall, Insurance is a contract in which a of sum of money is paid to the assured as consideration of insurers incurring the risk of paying a large sum upon a given contingency.
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Research Comprises defining and redefining problems, formulasting hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions; and atlast carefully testing the conclusions to determine whether they fit the formulating hypothesis. -Clifford Woody Research is an academic activity and as such the term should be used in technical sense. Research is the systematic approach concerning, generalization & formulation of theory.
RESEARCH DESIGN
It is an exploratory research design. studies are also termed as formulative research studies. The main purpose of such studies is that of formulating a problem for more precise investigation or of developing the working hypothesis from an operational point of view. The major emphasis in such studies is on the discovery of ideas and insights. As such the research design appropriate for such studies must be flexible enough to provide opportunity for considering different aspects of a problem under study.
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DATA COLLECTION
The task of data collection begins after are research problem has been defined and research design/plan chalked out. While deciding about the method of data collection to be used for the study, the researcher should keeps in mind two types of data (a) (b) Primary Data Secondary Data
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TYPE OF SAMPLING
Simple random sampling technique was used.
SAMPLE SIZE
While preparing the project report I will take the response to certain questionnaire from IL employees. The sample of 15 employees has selected randomly.
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DATA INTERPRETATION
PRODUCTS
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DEMAND IN %
11
15
INTERPRETATION :FROM THE ABOVE CHART WE CAME TO KNOW THAT THE DEMAND OF I.L. PRODUCTS IS MODERATE = 45% EXCELLENT= 15% LESS= 29% VERY LESS=11%
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MARKET POSITION
2 15
38
INTERPRETATION :FROM THE ABOVE PIE CHART WE CAME TO KNOW THAT MARKET POSITION OF I.L. GOOD = 15% MODERATE = 45% POOR= 38% CANT SAY= 2%
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(D)
0% 6% 14%
High Better Moderate Low
80%
INTERPRETATION : From this we can know that the material being used is of high quality and only in some rare cases they go for moderate and better one but never for the low quality material. This shows that the company pays attention to the quality of the material also.
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(E)
Respondents Response 33 53 14 0
60 50 40 30 20 10 High
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33
14 0
Better
Moderate
Low
INTERPRETATION : From this data we can interpret that the price at which the material is being procured is better. So its clear that purchasing is made in economical way. By this they can have high quality material at better and moderate price so its a smart purchasing.
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(F)
Respondents response against the source from where the Material is Procured
60 50 40 30 20 10 0 0 Local Indigenous Import Import & Indigenous All 27
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13 7
s INTERPRETATION : By this can say that company applies all the sources in procuring the raw material. As it can be seen that it gives more importance to the Import & indigenous purchase only. So by this we can interpret that company works globally. But is increasing there expenditure on material and finally decreasing their profit margin.
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(G)
80%
7%
13%
INTERPRETATION : By this we can interpret that company uses all the mode of payments while purchasing and sale. But most of the trade is done through Letter of Credit (L/C) or sight payment as the graph shows. So by this we can say that most of the trade outside the country.
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RECOMMENDATIONS
After analyzing the whole marketing procedure in I.L. following suggestion can be summarized
Steps should be taken to train the employees in training institutes or calling training institutes in Instrumentation Ltd.
Marketing personnels should visit potential customer and appraise them about its product range and study their requirements.
Incentive schemes should be provided to create interest in oneself to capture more orders.
They must try to maintain the good relation with the supplier and try to have relations with new suppliers too.
They must try to have a smart purchasing of raw material imported as they purchase goods at a higher rate, so they must try to check for next supplier.
The payment must be paid at said time so that there can be healthy relations among the traders.
There must be a proper flow of communication which must be adopted as many time because by poor communication company need face loss and loose the goodwill in the market.
People in an organization must try to cooperate with each other in attaining the goal.
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68
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CONCLUSION
Proper marketing is very necessary for any organization to have a good relation with its suppliers and customers. It is indispensable to managers and workers are doing work with cooperation. Healthy industrial relation is a backbone of industries. Trade union is also essential part of organization. It plays role of mediator between management and workers participation in management is essential for proper management in any industry. Following points are specially noted : * Low awareness in use of technology- The employees are unable to full exploit the use of new technology like E-mail, Electronic tenders, latest marketing techniques etc.
Low awareness on competitors information- During my project work researcher observed that the marketing unit was not having adequate market intelligence and there was no well established procedure for gathering competitors information.
The company is overly dependence on landline orders in telecom field- Major portion of the order booking is from BSNL land line exchange, which is reducing. No customer oriented approach customer sends enquiry of their own & Instrumentation Ltd. quotes but they do not approach customer make them aware of our products. Product Information No seminar, advertisement etc. to make the customer to Know its product range.
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All contents and result show that good and harmonious industrial relation and effective, efficient workers participation is great essential factor of any companys prosperity.
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BIBLIOGRAPHY
1.
2. 3.
Annual Reports of Instrumentation Ltd. 2004-05 and 2005-06. Kothari C.R. Research Methodology (Methods Techniques) 2nd revised Edition, 2004, New Age International Publishers, New Delhi.
Webliography :
1. 2. www.ilkota.in www.google.com
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QUESTIONNAIRE
This questionnaire is being circulated for surveying the extent of information the employees of Instrumentation Ltd. have about their company, their level of satisfaction and the opinion they have about IL. All information and details of the survey will be kept confidential only consolidated result will be used for MBA project report. 1. 2. 3. 4. Q.1 Employees Name Organisation Name : _____________________ : _____________________
Which type of products are manufactured by I.L.? (a) Control Panels (b) Telecom Exchange (c) Gas Analyser (d) All of these How is the demand of I.L. products in the market? (a) Moderate (b) Excellent (c) Less (d) Very Less What is the market position of I.L.? (a) Good (b) Moderate (c) Poor (c) Cant say
Q.2
Q.3
Q.5
What is the quality of material used in production ? (a) High Quality (b) Moderate Quality (c) Better quality (d) Low Quality
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Q.6
What about the price level of material procured for production? (a) Very price competitive (b) High priced (c) No concern about price (d) Dont know From which source majority of the material is purchased for production? (a) Indigenous all ones India (b) Imported (c) Within state (d) All of these Which mode of payment is mostly used for purchase ? (a) Advance payment (b) Letter of credit or sight (c) All of these
Q.7
Q.8
Q.9
Are you satisfied with the marketing procedure adopted in I.L.? Say yes or no. if no please give comments in 20 words. _________________________________________________ Are you satisfied with the companys production and turnover? (a) Yes (b) No (c) Yes, but need for further increase (d) Cant say Please write in 20 words your ideas/suggestions for improving the performance of the company. _________________________________________________
Q.10
Q.11
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