EXECUTIVE SUMMARY

LPG or Liberalization, Privatization and Globalization as it is referred in short today have changed the scenario of corporate world and management of enterprises in our country. It has now become more important to not just manage an organization but to achieve corporate excellence simultaneously as the future belongs to learning and performing organizations. As every business concern irrespective of its size, nature, and age needs an adequate level of marketing to carry out business operations and survive, sales and marketing becomes an important and integral part of business. Inadequate sales and marketing means interruption of production and sales operation whereas bad marketing means accumulation of idle funds and increase in carrying cost. Therefore, to manage marketing in any sector is a challenging job. The project report titled A STUDY OF MARKETING MIX OF THE CENTRALCOALFIELDS LTD. deals with this matter and is based on the in-house industrial training at central coalfields limited Ranchi, pertaining to the requirement for the 3rd semester of PGDM from ISBS,PUNE. Unless organization learn to manage its MARKETING MIX, success, will be elusive. Thus, the effectiveness of an organization depends much on the strength of its marketing mix which is an important part of the whole system. In the context of Indias C o a l Industry marketing management holds a greater significance because coal which is one of the major sources of fuel for any industry, in recent years has become more crucial for achieving rapid economic growth of our country. Keeping this background in view, an attempt is made to examine the sales and Marketing in CIL with special reference to central coalfields limited. The project contains the procedures for the analysis of marketing policy, ratios being used to define the efficiency of marketing management, its 4Ps, e-auction and the impact of shortcomings in the management of it. All this had been done to get a clear view of the techniques of marketing management in CCL.

COMPANY OVERVIEW
HISTORY
Central Coalfields Limited The Historical March Central Coalfields Limited is a Category-I Mini-Ratna Company since October 2007. During 200910, coal production of the company reached its highest-ever figure of 47.08 million tones, with net worth amounting to Rs. 2644 crore against a paid-up capital of Rs. 940 crore. Formed on 1st November 1975, CCL (formerly National Coal Development Corporation Ltd) was one of the five subsidiaries of Coal India Ltd. which was the first holding company for coal in the country (CIL now has 8 subsidiaries).

Early History Formation of NCDC (Pre-nationalisation)

CCL had a proud past. As NCDC, it heralded the beginning of nationalization of coal mines in India.National Coal Development Corporation Ltd. (NCDC) was set up in October, 1956 as Government-owned Company in pursuance of the Industrial Policy Resolutions of 1948 and 1956 of the Government of India. It was started with a nucleus of 11 old state collieries (owned by the Railways) having a total annual production of 2.9 million tonnes of coal. Until the formation of NCDC, coal mining in India was largely confined to the Raniganj coal belt in West Bengal and the Jharia coalfields in Bihar (now in Jharkhand), besides a few other areas in Bihar (now in Jharkhand) and a part of Madhya Pradesh (now Chattishgarh also) and Orissa.From its very beginning, NCDC addressed itself to the task of increasing coal production and developing new coal resources in the outlying areas, besides introducing modern and scientific techniques of coal mining.In the Second Five Year Plan (1956-1961) NCDC was called upon to increase its production from new collieries, to be opened mainly in areas away from the already developed Raniganj and Jharia coalfields. Eight new collieries were opened during this period and the production increased to 8.05 million tonnes by the end of Second Plan.During Third Five Year Plan (1961-1966), though the Corporation had built up a much larger production capacity, it could not be utilized due to a sluggish domestic coal market. Production had, therefore, to be pegged down and the development of several collieries undertaken from the early part of the Plan period, had to be suspended. By this time, the contribution of NCDC to the nations coal production (67.72 million tones) increased to around 9.6 million tonnes.With gradual rise in the demand of coal due to commissioning of new power plants and development of other coal-based industries during Fourth Five Year Plan (1969-1974), NCDCs production increased to 15.55 million tonnes by the terminal year of Fourth Five Year Plan, i.e, 1973-74.

Fig. Shovel loading a bottom discharge dumper in an opencast mine in 1977-78

Fig. Shovel loading a rear discharge dumper in an opencast mine 2009-10

NCDC played a pioneering role in Indias coal industry by introducing large-scale mechanization and modern and scientific methods of coal mining for promoting conservation of high grades of coal and exploiting deep coking coal seams necessitating heavy capital investment and sophisticated technical skill. NCDC went in for foreign collaboration with countries such as Poland and the USSR besides limited collaboration with Japan, West Germany and France. NCDCs role can be truly assessed by its contribution towards growth of new coal resources in, what are known as, the outlying areas. The opening of new mines in Madhya Pradesh, Orissa and Maharashtra brought about a significant change in these regions by creating new opportunities of industrialization and employment. Development of the Singrauli coalfields has brought coal almost to the door steps of northern India. With the development and application of improved mining techniques, emphasis on planning, design and research; introduction of modern mine management systems and an enlightened industrial relations policy, NCDC was able to provide the infrastructure for the total nationalization of coal industry in the country. Nationalization of Coal Mines: A major event in the history of Indian coal industry during the Fourth Plan Period (1969-74) was the nationalisation of the erstwhile privately owned coal mines in two phases. In the first phase, the management of coking coal mines was taken over by the Government of India on 17th Oct. 1971 and nationalization was effective from 5th January 1972. A state owned company, Bharat Coking Coal Ltd. was formed for managing coking coal mines. For convenience of management, BCCL collieries in the East Bokaro coalfields in Bihar (now Jharkhand) were transferred to NCDC, and its projects in Central Jharia region viz., Sudamdih and Moonidih deep shaft mines were handed over, in stages to BCCL.In the second phase of nationalisation, the management of non-coking coal mines in the country, excepting the captive coal mines of the two steel plants, viz, TISCO and IISCO, was taken over by the Government on 31st January 1973. These mines were subsequently nationalized with effect from 1st May 1973 and another state-owned company, Coal Mines Authority Ltd. (CMAL)

came into being with headquarters at Calcutta (now Kolkata) to manage and develop NCDC collieries and other newly nationalized units. NCDC itself, in this process, became a division of

CMAL which owned 36 collieries under commercial production in Bihar, Orissa, Madhya Pradesh and Maharashtra, besides four coal washeries, one by-product coke oven plant, two large central workshop and manpower of about 71,000. The formation of CMAL witnessed regrouping of the coal mines into three divisions, namely, Western, Central and Eastern. The regrouping had to be done for the convenience of management, keeping in view the geographical location of the collieries.

As a result, NCDC units located in the States of Maharashtra and Madhya Pradesh, with the exception of Singrauli coalfields, became a part of the Western Division. The Central Division consisted of all the old collieries of NCDC in Orissa and Bihar (except Sudamdih and Moonidih which had been handed over to BCCL) and those acquired by CMAL after take-over in Giridih, East Bokaro, West Bokaro, South Karanpura, North Karanpura, Hutar & Daltongunj Coalfields in Bihar. The Central Division consisted of 64 collieries, four coal washeries, one by-product coke oven plat, on bee-hive coke plant and one central workshop having a manpower of 1,11,500

Formation of CCL

The CMAL, with its three divisions continued upto 1st November 1975 when it was renamed as Coal India Limited (CIL) following the decision of Govt. of India to restructure the coal industry. The Central Division of CMAL came to be known as Central Coalfields Limited and became a separate company with the status of a subsidiary of CIL, which became the holding company.

Vision
Committed to create eco-friendly mining"

The Mission of CCL is to produce and market the planned quantity of coal and coal products efficiently and economically with due regard to safety, conservation and quality. The main thrust of CCL in the present context is to orient its operations towards market requirements maintaining at the same time financial viability to meet the resource needs.

MISSION
"To become a World class, Innovative, Competitive & Profitable Coal Mining Operation to achieve Customer Satisfaction as top priority."
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OBECTIVE OF THE COMPANY

Coal mining through efficiently operated mines. Besides fulfilling coal needs of the customer in terms of quantity, focus on quality, value addition and beneficiation to the satisfaction of the customers. Marketing of coal as main product

COMPANY PROFILE

Presently CCL has 58 Operative Mines (21 Underground & 37 Opencast mines) 7 Washeries 4 Coaking Coal Washeries (Kathara, Rajrappa, Kedla & Sawang) - throughput capacity of 9.35 MTPA Washeries 3 Non-Coking Coal Washeries (Piparwar, Kargali & Gidi) - throughput capacity of 11.72 MTPA 1 Central Workshop (ISO 9001) at Barkakana 5 Regional Repair/Workshops (3 w/s are ISO 9001) Repair/Workshops at Jarandih, Tapin North, Dakra, Giridih & Bhurkunda 6 Coalfields Operating Coalfields (East Bokaro, West Bokaro, North Karanpura, South Karanpura, Ramgarh & Giridih) Number of Mines Geological Coal Reserves in CCL Command Area up to 300m & above depth (As on 01.04.2009) Reserve Depth 0-300 m Depth 300-1200 m Total (BT)

Coking Coal Non-Coking Coal

Proved Indicated Inferred Total Proved Indicated Inferred Total (BT) (BT) (BT) (BT) (BT) (BT) (BT) (BT) 6.459 3.942 0.048 10.449 0.967 5.093 1.613 7.673 18.183 10.612 3.490 1.090 15.191 0.576
5

3.481

2.115

6.172 21.364

Total

17.041 7.432

1.138

25.641 1.543 65%

8.574

3.728

13.845 39.550 35%

CCL Reserve at Depth 0-1200 m Proved (BT) 18.614 Indicated Inferred Total (BT) (BT) (BT) 16.00 4.866 39.55

Coal Reserve Total India (BT) 267.210 CCL % in Total India Reserve 15%

CCL SPREAD

PRODUCTS OF CCL
COKING COAL These coals, when heated in the absence of air, form coherent beads, free from volatiles, with strong and porous mass, called coke.

These have coking properties Mainly used in steel making and metallurgical industries
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Also used for hard coke manufacturing

SEMI COKING COAL These coals, when heated in the absence of air, form coherent beads not strong enough to be directly fed into the blast furnace. Such coals are blended with coking coal in adequate proportion to make coke.

These have comparatively less coking properties than coking coal Mainly used as blend-able coal in steel making, merchant coke manufacturing and other metallurgical industries NEW COKING COAL This coal is not used in metallurgical industries. Because of higher ash content, this coal is not acceptable for washing in washeries. This coal is used for power utilities and non-core sector consumers. NON COKING COAL These are coals without coking properties.

Mainly used as thermal grade coal for power generation Also used for cement, fertilizer, glass, ceramic, paper, chemical and brick manufacturing, and for other heating purposes WASHED AND BENEFICIATED COAL These coals have undergone the process of coal washing or coal beneficiation, resulting in value addition of coal due to reduction in ash percentage.

Used in manufacturing of hard coke for steel making Beneficiated and washed non-coking coal is used mainly for power generation Beneficiated non-coking coal is used by cement, sponge iron and other industrial plants MIDDLINGS Middlings are by-products of the three stage coal washing / beneficiation process, as a fraction of feed raw coal.
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Used for power generation Also used by domestic fuel plants, brick manufacturing units, cement plants, industrial plants, etc. REJECTS Rejects are the products of coal beneficiation process after separation of cleans and / or middlings, as a fraction of feed raw coal.

Used for Fluidized Bed Combustion (FBC) Boilers for power generation, road repairs, briquette (domestic fuel) making, land filling, etc. These are the screened fractions of feed raw coal and LTC coke / CIL Coke respectively, obtained from the Dankuni Coal Complex and other coke oven plants.

Used in industrial furnaces as well as for domestic purposes CIL COKE / LTC COKE : CIL Coke / LTC Coke is a smokeless, environment friendly product of the Dankuni Coal Complex, obtained through low temperature carbonisation.

Used in furnaces and kilns of industrial units Also used as domestic fuel by halwais, hotels, etc. COAL FINES / COKE FINES These are the screened fractions of feed raw coal and LTC coke / CIL Coke respectively, obtained from the Dankuni Coal Complex and other coke oven plants.

Used in industrial furnaces as well as for domestic purposes

TAR / HEAVY OIL / LIGHT OIL / SOFT PITCH : These are products from Dankuni Coal Complex using low temperature carbonisation of non-coking coal in vertical retorts.

Used in furnaces and boilers of industrial plants as well as power houses, oil, dye, pharmaceutical industries, etc.

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Literature review/theoretical background

Marketing mix (Price, Place, Promotion, Product) THE GENERAL PERSPECTIVE
When marketing their products firms need to create a successful mix of:

the right product sold at the right price in the right place using the most suitable promotion.

To create the right marketing mix, businesses have to meet the following conditions:

The product has to have the right features - for example, it must look good and work well. The price must be right. Consumer will need to buy in large numbers to produce a healthy profit. The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation. The target group needs to be made aware of the existence and availability of the product through promotion. Successful promotion helps a firm to spread costs over a larger output.

For example, a company like Kellogg's is constantly developing new breakfast cereals - the product element is the new product itself, getting the price right involves examining customer perceptions and rival products as well as costs of manufacture, promotion involves engaging in a range of promotional activities e.g. competitions, product tasting etc., and place involves using the best possible channels of distribution such as leading supermarket chains. The product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not the responsibility of the marketing function. However, it is concerned with what the product means to the customer. Marketing therefore plays a key role in determining such aspects as:

the appearance of the product - in line with the requirements of the market The function of the product - products must address the needs of customers as identified through market research.

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The product range and how it is used is a function of the marketing mix. The range may be broadened or a brand may be extended for tactical reasons, such as matching competition or catering for seasonal fluctuations. Alternatively, a product may be repositioned to make it more acceptable for a new group of consumers as part of a long-term plan. The price Of all the aspects of the marketing mix, price is the one, which creates sales revenue - all the others are costs. The price of an item is clearly an important determinant of the value of sales made. In theory, price is really determined by the discovery of what customers perceive is the value of the item on sale. Researching consumers' opinions about pricing is important as it indicates how they value what they are looking for as well as what they want to pay. An organisation's pricing policy will vary according to time and circumstances. Crudely speaking, the value of water in the Lake District will be considerably different from the value of water in the desert. The place Although figures vary widely from product to product, roughly a fifth of the cost of a product goes on getting it to the customer. 'Place' is concerned with various methods of transporting and storing goods, and then making them available for the customer. Getting the right product to the right place at the right time involves the distribution system. The choice of distribution method will depend on a variety of circumstances. It will be more convenient for some manufacturers to sell to wholesalers who then sell to retailers, while others will prefer to sell directly to retailers or customers. The promotion Promotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The razzmatazz, pace and creativity of some promotional activities are almost alien to normal business activities. The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output. Though increased promotional activity is often a sign of a response to a problem such as competitive activity, it enables an organization to develop and build up a succession of messages and can be extremely cost-effective

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Detail Concept and components of marketing mix

Marketing involves a number of activities. To begin with, an organization may decide on its target group of customers to be served. Once the target group is decided, the product is to be placed in the market by providing the appropriate product, price, distribution and promotional efforts. These are to be combined or mixed in an appropriate proportion so as to achieve the marketing goal. Such mix of Product, price, distribution and promotional efforts are known as Marketing Mix. According to Philip Kotler Marketing Mix is the set of controllable variables that the firm can use to influence the buyers response. The controllable variables in this context refer to the 4 Ps [product, price, place (distribution) and promotion]. Each firm strives to build up such a composition of 4Ps, which can create highest level of consumer satisfaction and at the same time meet its organisational objectives. Thus, this mix is assembled keeping in mind the needs of target customers, and it varies from one organization to another depending upon its available resources and marketing objectives. Let us now have a brief idea about the four components of marketing mix.

Product :
Product refers to the goods and services offered by the organization. A pair of shoes, a plate of dahivada, a lipstick, all are products. All these are purchased because they satisfy one or more of our needs. We are paying not for the tangible product but for the benefit it will provide. So, in simple words, product can be described as a bundle of benefits which a marketer offers to the consumer for a price. While buying a pair of shoes, we are actually buying comfort for our feet, while buying a lipstick we are actually paying for beauty because lipstick is likely to make us look good. Product can also take the form of a service like an air travel, telecommunication, etc. Thus, the term product refers to goods and services offered by the organization for sale.

Price:
Price is the amount charged for a product or service. It is the second most important element in the marketing mix. Fixing the price of the product is a tricky job. Many factors like demand for A product, cost involved, consumers ability to pay, prices charged by competitors for similar products, government restrictions etc. have to be kept in mind while fixing the price. In fact, pricing is a very crucial decision area as it has its effect on demand for the product and also on the profitability of the firm.

Place:
Goods are produced to be sold to the consumers. They must be made available to the consumers at a place where they can conveniently make purchase. Woollens are manufactured on a large scale in Ludhiana and you purchase them at a store from the
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nearby market in your town. So, it is necessary that the product is available at shops in your town. This involves a chain of individuals and institutions like distributors, wholesalers and retailers who constitute firms distribution network (also called a channel of distribution). The organization has to decide whether to sell directly to the retailer or through the distributors/wholesaler etc. It can even plan to sell it directly to consumers. The choice is guided by a host of factors about which you will learn later in this chapter.

Promotion:
If the product is manufactured keeping the consumer needs in mind, is rightly priced and made available at outlets convenient to them but the consumer is not made aware about its price, features, availability etc, its marketing effort may not be successful. Therefore promotion is an important ingredient of marketing mix as it refers to a process of informing, persuading and influencing a consumer to make choice of the product to be bought. Promotion is done through means of personal selling, advertising, publicity and sales promotion. It is done mainly with a view to provide information to prospective consumers about the availability, characteristics and uses of a product. It arouses potential consumers interest in the product, compare it with competitors product and make his choice. The proliferation of print and electronic media has immensely helped the process of promotion.

PRODUCT
As stated earlier, product refers to the goods and services offered by the organization for sale. Here the marketers have to recognize that consumers are not simply interested in the physical features of a product but a set of tangible and intangible attributes that satisfy their wants. For example, when a consumer buys a washing machine he is not buying simply a machine but a gadget that helps him in washing clothes. It also needs to be noted that the term product refers to anything that can be offered to a market for attention, acquisition, or use. Thus, the term product is defined as anything that can be offered to a market to satisfy a want. It normally includes physical objects and services. In a broader sense, however, it not only includes physical objects and services but also the supporting services like brand name, packaging accessories, installation, after sales service etc. Look at the definitions by Stanton and McCarthy as given in the box.

William J. Stanton Product is a set of tangible and intangible attributes including packaging, colour, price, manufacturers prestige, retailers prestige and manufacturers and retailers services which buyer may accept as offering satisfaction of wants and services.
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Jerome McCarthy A product is more than just a physical product with its related functional and aesthetic features. It includes accessories, installation, instructions on use, the package, perhaps a brand name, which fulfills some psychological needs and the assurances that service facilities will be available to meet the customer needs after the purchase.

PRODUCT CLASSIFICATION
Product can be broadly classified on the basis of (1) use, (2) durability, and (3) tangibility. Let us have a brief idea about the various categories and their exact nature under each head, noting at the same time that in marketing the terms product and goods are often used interchangeably. 1. Based on use, the product can be classified as: (a) Consumer Goods; and (b) Industrial Goods. (a) Consumer goods: Goods meant for personal consumption by the households or ultimate consumers are called consumer goods. This includes items like toiletries, groceries, clothes etc. Based on consumers buying behaviour the consumer goods can be further classified as: (i) Convenience Goods; (ii) Shopping Goods; and (iii) Speciality Goods. (1) Convenience Goods : Do you remember, the last time when did you buy a packet of butter or a soft drink or a grocery item? Perhaps you dont remember, or you will say last week or yesterday. Reason is, these goods belong to the categories of convenience goods which are bought frequently without much planning or shopping effort and are also consumed quickly. Buying decision in case of these goods does not involve much pre-planning. Such goods are usually sold at convenient retail outlets. (ii) Shopping Goods: These are goods which are purchased less frequently and are used very slowly like clothes, shoes, household appliances. In case of these goods, consumers make choice of a product considering its suitability, price, style, quality and products of competitors and substitutes, if any. In other words, the consumers usually spend a considerable amount of time and effort to finalise their purchase decision as they lack complete information prior to their shopping trip. It may be noted that shopping goods involve much more expenses than convenience goods.

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(iii) Specialty Goods: Because of some special characteristics of certain categories of goods people generally put special efforts to buy them. They are ready to buy these goods at prices at which they are offered and also put in extra time to locate the seller to make the purchase. The nearest car dealer may be ten kilometres away but the buyer will go there to inspect and purchase it. In fact, prior to making a trip to buy the product he/she will collect complete information about the various brands. Examples of speciality goods are cameras, TV sets, new automobiles etc. (b) Industrial Goods: Goods meant for consumption or use as inputs in production of other products or provision of some service are termed as industrial goods. These are meant for non-personal and commercial use and include (i) raw materials, (ii) machinery, (iii) components, and (iv) operating supplies (such as lubricants, stationery etc). The buyers of industrial goods are supposed to be knowledgeable, cost conscious and rational in their purchase and therefore, the marketeers follow different pricing, distribution and promotional strategies for their sale. It may be noted that the same product may be classified as consumer goods as well as industrial goods depending upon its end use. Take for example the case of coconut oil. When it is used as hair oil or cooking oil, it is treated as consumer goods and when used for manufacturing a bath soap it is termed as industrial goods. However, the way these products are marketed to these two groups are very different because purchase by industrial buyer is usually large in quantity and bought either directly from the manufacturer or the local distributor. 2. Based on Durability, the products can be classified as: (a) Durable Goods; and (b) Non-durable Goods. (a) Durable Goods: Durable goods are products which are used for a long period i.e., for months or years together. Examples of such goods are refrigerator, car, washing machine etc. Such goods generally require more of personal selling efforts and have high profit margins. In case of these goods, sellers reputation and presale and after-sale service are important determinants of purchase decision. (b) Non-durable Goods: Non-durable goods are products that are normally consumed in one go or last for a few uses. Examples of such products are soap, salt, pickles, sauce etc. These items are consumed quickly and we purchase these goods more often. Such items are generally made available by the producer through large number of convenient retail outlets. Profit margins on such items are usually kept low and heavy advertising is done to attract people towards their trial and use.

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3. Based on tangibility, the products can be classified as: (a) Tangible Goods; and (b) Intangible Goods.

(a) Tangible Goods: Most goods, whether these are consumer goods or industrial goods and whether these are durable or non-durable, fall in this category as they have a physical form that can be touched and seen. Thus, all items like groceries, cars, raw-materials, machinery etc. fall in the category of tangible goods. (b) Intangible Goods: Intangible goods refer to services provided to the individual consumers or to the organizational buyers (industrial, commercial, institutional, government etc.). Services are essentially intangible activities which provide want or need satisfaction. Medical treatment, postal, banking and insurance services etc., all fall in this category.

PRICING AND FACTORS AFFECTING PRICING DECISIONS

As stated earlier price is the consideration in terms of money paid by consumers for the bundle of benefits he/she derives by using the product/ service. In simple terms, it is the exchange value of goods and services in terms of money. Pricing (determination of price to be charged) is another important element of marketing mix and it plays a crucial role in the success of a product in the market. If the price fixed is high, it is likely to have an adverse effect on the sales volume. If, on the other hand, it is too low, it will adversely affect the profitability. Hence, it has to be fixed after taking various aspects into consideration. The factors usually taken into account while determining the price of a product can be broadly described as follows: (a) Cost: No business can survive unless it covers its cost of production and distribution. In large number of products, the retail prices are determined by adding a reasonable profit margin to the cost. Higher the cost, higher is likely to be the price, lower the cost lower the price.

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(b) Demand: Demand also affects the price in a big way. When there is limited supply of a product and the demand is high, people buy even if high prices are charged by the producer. But how high the price would be is dependent upon prospective buyers capacity and willingness to pay and their preference for the product. In this context, price elasticity, i.e. responsiveness of demand to changes in price should also be kept in view. (c) Competition: The price charged by the competitor for similar product is an important determinant of price. A marketer would not like to charge a price higher than the competitor for fear of losing customers. Also, he may avoid charging a price lower than the competitor. Because it may result in price war which we have recently seen in the case of soft drinks, washing powder, mobile phone etc. (d) Marketing Objectives: A firm may have different marketing objectives such as maximisation of profit, maximisation of sales, bigger market share, survival in the market and so on. The prices have to be determined accordingly. For example, if the objective is to maximise sales or have a bigger market share, a low price will be fixed. Recently one brand of washing powder slashed its prices to half, to grab a bigger share of the market. (e) Government Regulation: Prices of some essential products are regulated by the government under the Essential Commodities Act. For example, prior to liberalization of the economy, cement and steel prices were decided by the government. Hence, it is essential that the existing statutory limits, if any, are also kept in view while determining the prices of products by the producers. METHODS OF PRICE FIXATION Methods of fixing the price can be broadly divided into the following categories. 1. Cost based pricing 2. Competition based pricing 3. Demand based pricing 4. Objective based pricing 1. Cost Based Pricing Under this method, price of the product is fixed by adding the amount of desired profit margin to the cost of the product. If a particular soap costs the marketer Rs. 8 and he desires a profit of 25%, the price of the soap is fixed at Rs 8 + (8x25/100) =Rs. 10. While calculating the price in this way, all costs (variable as well as fixed) incurred in manufacturing the product are taken into consideration.

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2. Competition Based Pricing In case of products where market is highly competitive and there is negligible difference quality of competing brands, price is usually fixed closer to the price of the competing brands. It is called young rate pricing and is a ver y convenient method because the marketeers do not have to worry much about demand and cost and effect the change as per the changes by the industry leaders. 3. Demand Based Pricing At times, prices are determined by the demand for the product. Under this method, without paying much attention to cost and competitors prices, the marketeers try to ascertain the demand for the product. If the demand is high they decide to take advantage and fix a high price. If the demand is low, they fix low prices for their product. At times they resort to differential prices and charge different prices from different groups of customers depending upon their perceived values and capacity to pay. Take the case of cinema halls where the rates of tickets differ for the different sets of rows in the hall. 4. Objective Based Pricing This method is applicable to introduction of new (innovative) products. If, at the introductory stage of the products, the organization wishes to penetrate the market i.e., to capture large parts of the market and discourage the prospective competitors to enter into the fray, it fixes a low price. Alternatively, the organization may decide to skim the market i.e., to earn high profit by taking advantage of a group of customers who give more importance to their status or distinction and are willing to pay even a higher price for it. In such a situation they fix quite high price at the introductory stage of their product and market it to only those customers who can afford it.

PLACE
You are aware that while a manufacturer of a product is located at one place, its consumers are located at innumerable places spread all over the country or the world. The manufacturer has to ensure the availability of his goods to the consumers at convenient points for their purchase. He may do so directly or, as stated earlier, through a chain of middlemen like distributors, wholesalers and retailers. The path or route adopted by him for the purpose is known as channel of distribution. A channel of distribution thus, refers to the pathway used by the manufacturer for transfer of the ownership of goods and its physical transfer to the consumers and the user/buyers (industrial buyers).Stanton has also defined it as A distribution channel consists of the set of people and firm s involved in the transfer of title to a product as the product moves from producer to ultimate consumer or business user. Basically it refers to the vital links connecting the manufacturers and producers and the ultimate consumers/users. It includes both the producer and the end user and also the middlemen/agents engaged in the process of transfer of title of goods.

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Primarily a channel of distribution performs the following functions: (a) It helps in establishing a regular contact with the customers and provides them the necessary information relating to the goods. (b) It provides the facility for inspection of goods by the consumers at convenient points to make their choice. (c) It facilitates the transfer of ownership as well as the delivery of goods. (d) It helps in financing by giving credit facility. (e) It assists the provision of after sales services, if necessary. (f) It assumes all risks connected with the carrying out the distribution function. TYPES OF CHANNELS OF DISTRIBUTION Generally we do not buy goods directly from the producers. The producers/manufacturers usually use services of one or more middlemen to supply their goods to the consumers. But sometimes, they do have direct contact with the customers with no middlemen in between them. This is true more for industrial goods where the customers are highly knowledgeable and their individual purchases are large. The various channels used for distribution of consumer goods can be described as follows:

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FACTORS AFFECTING THE CHOICE OF DISTRIBUTION CHANNEL

Choice of an appropriate distribution channel is very important as the pricing as well as promotion strategy are dependent upon the distribution channel selected. Not only that, the route which the product follows in its journey from the manufacturer to the consumer also involves certain costs. This in turn, affects not only the price of the product but also the profits. Choice of inappropriate channels of distribution may result in lesser profits for the manufacturer and higher price from the consumer. Hence, the manufacturer has to be careful while finalising the channel of distribution to be used. He should pay attention to the following factors while making his choice. (a) Nature of Market: There are many aspects of market which determine the choice of channel of distribution. Say for example, where the number of buyers is limited, they are concentrated at few locations and their individual purchases are large as is the case with industrial buyers, direct sale may be the most preferred choice. But in case where number of buyers is large with small individual purchase and they are scattered, then need may arise for use of middlemen.

22

(b) Nature of Product: Nature of the product considerably affects the choice of channel of distribution. In case the product is of technical nature involving a good amount of pre-sale and after sale services, the sale is generally done through retailers without involving the wholesalers. But in most of the consumer goods having small value, bought frequently in small quantities, a long channel involving agents, wholesalers and retailers is used as the goods need to be stored at convenient locations. Items like toiletries, groceries, etc. fall in this category. As against this in case of items like industrial machinery, having large value and involving specialised technical service and long negotiation period, direct sale is preferred. (c) Nature of the Company: A firm having enough financial resources can afford to its own a distribution force and retail outlet, both. But most business firms prefer not to create their own distribution channel and concentrate on manufacturing. The firms who wish to control the distribution network prefer a shorter channel. (d) Middlemen Consideration: If right kind of middlemen having the necessary experience, contacts, financial strength and integrity are available, their use is preferred as they can ensure success of newly introduced products. Cost factors also have to be kept in view as all middlemen add their own margin of profit to the price of the products. But from experience it is learnt that where the volume of sales are adequate, the use of middlemen is often found economical and less cumbersome as against direct sale.

PROMOTION
Promotion refers to the process of informing and persuading the consumers to buy certain product. By using this process, the marketeers convey persuasive message and information to its potential customers. The main objective of promotion is to seek buyers attention

towards the product with a view to arouse his interest in the product; inform him about its availability; and inform him as to how is it different from others. It is thus a persuasive communication and also serves as a reminder. A firm uses different tools for its promotional activities which are as follows: Advertising Publicity Personal selling Sales promotion These are also termed as four elements of a promotion mix. Let us have a brief idea about these promotion tools. 1. Advertising: Advertising is the most commonly used tool for informing the present and prospective consumers about the product, its quality, features, availability, etc. It is a paid form of
23

non-personal communication through different media about a product, idea, a service or an organization by an identified sponsor. It can be done through print media like newspaper, magazines, billboards, electronic media like radio, television, etc. It is a very flexible and comparatively low cost tool of promotion. 2. Publicity: This is a non-paid process of generating wide range of communication to contribute a favourable attitude towards the product and the organization. You may have seen articles in newspapers about an organization, its products and policies. The other tools of publicity are press conference, publication and news in the electronic media etc. It is published or broadcasted without charging any money from the firm. Marketeers often spend a lot of time and effort in getting news items placed in the media for creation of a favourable image of the company and its products. 3. Personal selling: You must have come across representatives of different companies knocking at your door and persuading you to buy their product. It is a direct presentation of the product to the consumers or prospective buyers. It refers to the use of salespersons to persuade the buyers to act favourably and buy the product. It is most effective promotional tool in case of industrial goods.

4. Sales promotion: This refers to short-term and temporary incentives to purchase or induce trials of new goods. The tool include contests, games, gifts, trade shows, discounts, etc. Sales promotional activities are often carried out at retail levels.

24

OBJECTIVE FOR STUDY

To analyze the MARKETING MIX of the central coalfields ltd. To know and understand the present sales and marketing system of Central Coalfield Limited (CCL), Ranchi. To know the present scenario of Central Coalfield Limited. To know the marketing and distribution strategies (method & problem) in Central Coalfield Limited (CCL) To know the initiative taken by the company for his/her employee working in the organization. To know the dispatches of coal to consumers. To study the competitors of the company. To know about e-auction To know the process of e-auction To know about New Coal Distribution Policy

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RESEARCH METHODOLOGY:
Research is the process of systematic and in depth study or search of any particular topic, subject by the collection, presentation and interpretation of relevant details or data. It is a careful search or enquiry into any subject or subject matter which is an endeavor to discover or to find out valuable facts which would be useful for further application or utilization. The research methodology that we have used is the survey method. Surveys represent one of the most common types of quantitative, social science research. A survey is a method of collecting information about a human population. In a survey, direct (or indirect) contact is made with the units of the study (e.g., individuals, organizations, communities) by using systematic methods of measurement such as questionnaires and interviews. Many surveys are conducted around the world each year. While the purpose, topics, and size of these surveys varies, similar steps are followed in the planning, development, and implementation of each. In our survey research, we have selected a sample of respondents from a population and administered a standardized questionnaire to them. The questionnaire or survey is completed by the person being surveyed. The process of our survey-

Identify the Purpose - To determine the purpose of a survey, two questions must be asked: (1) what information is wanted or needed, and (2) where can this information be found. A researcher may want to describe a population or program, plan a new program, or evaluate an existing one. Develop the Questionnaire- after finding the purpose of the survey and population of interest is determined, a questionnaire must be developed. The questionnaire will be designed to provide the information being sought. Identify the Setting- our Surveys will be conducted in worksites. It is important for us to pick the location where the population of interest can be accessed

26

Identify the Mode - Our mode is to get the response by making respondents fill our questionnaire that we have prepared for the respondents Select the Sample-The quality of the sample often determines the quality of the data. Samples of convenience or volunteer samples produce data representative only of persons who participate in the survey. Scientifically selected samples can be representative of a larger population and are used to generalize findings to persons beyond those who participate in the survey. Conduct the Fieldwork- we will conduct the field work keeping in mind the goal to standardize data collection as much as possible to assure quality control throughout the fieldwork, to obtain a high response rate, and, often, to protect the privacy of respondents. Enter, Edit, and Prepare Data for Analysis-we will enter the data, edit the data prepare the data and using excel sheet. Conduct Analyses- in this stage our aim will be to analyse the data collected in the survey done. We will use tools like MS word and MS excel to draw the data representation diagrams. Write Reports- The last part of the survey will be to write the report after proper analysis of the data collected in the survey. The report will be concise and will throw light on all the aspects of the survey.

Data collection:
Collection of data refers to a purposive gathering of information relevant to the subject matter under study and methods used depend mainly on the nature, purpose and scope of the enquiry to be undertaken as well as on the availability of resources and time. The researcher should keep in mind to types of data, primary data and secondary data. The primary data are those, which are collected fresh and for the first time, and thus happen to be original in character. The secondary data, on the other hand, are those which have already been collected by someone else and which have already been passed through the statistical process. Both, primary and secondary were used in accomplishment of objective of the research.

27

Tools of data collection:Primary data collection: Primary data is the data which is collected by the researcher directly from his own observation and experiences. This method is quite popular, particular in case of big enquires. Secondary data collection: All methods of data collection can supply quantitative data (numbers, statistics or financial) or qualitative data. Quantitative data may often be presented in tabular or graphical form. Secondary data are those which have already been collected by others, When it is not possible to collect data in primary form, the researches may take the help of secondary data. They are those which have already been collected with some other view in mind. They are collected for serving the objective other than what the researcher might have in mind the sources of secondary data are, Companys hand book, Surfing on internet to the related site, Study of books. The tool used for data collection for the topic is primary data and method used to conduct the survey is questionnaire. In our survey we have meet with the people and also companies with the face to face interaction we filled our entire questionnaire.

LIMITATIONS OF OUR SURVEY:

The sample size of our survey is a bit small. To get a better idea about the topic of survey we need a larger sample size. Sometime the respondents reply in haste .This causes lack of accuracy.

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SOURCE OF INFORMATION
The information is based on: Primary Data: primary data were gathered through personal interviews of CCL official.

Secondary Data: secondary data were collected from the various published report, circulars, journals and books relating to Coal and publication of different institution including foreign magazines on the topic.

Constraints in Data collection: Different Coal consumers belonging to public enterprises and private industries could not be interviewed due to shortage of time. Most of the executives of CCL, Consumers and railways officers are reluctant to give relevant information due to their internal policy of maintaining secrecy.

29

COMPANY SPECIFIC MARKETING MIX

CCL PRODUCT
COKING COAL These coals, when heated in the absence of air, form coherent beads, free from volatiles, with strong and porous mass, called coke.

These have coking properties Mainly used in steel making and metallurgical industries Also used for hard coke manufacturing

SEMI COKING COAL These coals, when heated in the absence of air, form coherent beads not strong enough to be directly fed into the blast furnace. Such coals are blended with coking coal in adequate proportion to make coke.

These have comparatively less coking properties than coking coal Mainly used as blend-able coal in steel making, merchant coke manufacturing and other metallurgical industries NEW COKING COAL This coal is not used in metallurgical industries. Because of higher ash content, this coal is not acceptable for washing in washeries. This coal is used for power utilities and non-core sector consumers. NON COKING COAL These are coals without coking properties.

Mainly used as thermal grade coal for power generation Also used for cement, fertilizer, glass, ceramic, paper, chemical and brick manufacturing, and for other heating purposes

30

WASHED AND BENEFICIATED COAL These coals have undergone the process of coal washing or coal beneficiation, resulting in value addition of coal due to reduction in ash percentage.

Used in manufacturing of hard coke for steel making Beneficiated and washed non-coking coal is used mainly for power generation Beneficiated non-coking coal is used by cement, sponge iron and other industrial plants MIDDLINGS Middlings are by-products of the three stage coal washing / beneficiation process, as a fraction of feed raw coal.

Used for power generation Also used by domestic fuel plants, brick manufacturing units, cement plants, industrial plants, etc. REJECTS Rejects are the products of coal beneficiation process after separation of cleans and / or middlings, as a fraction of feed raw coal.

Used for Fluidized Bed Combustion (FBC) Boilers for power generation, road repairs, briquette (domestic fuel) making, land filling, etc. These are the screened fractions of feed raw coal and LTC coke / CIL Coke respectively, obtained from the Dankuni Coal Complex and other coke oven plants.

Used in industrial furnaces as well as for domestic purposes CIL COKE / LTC COKE : CIL Coke / LTC Coke is a smokeless, environment friendly product of the Dankuni Coal Complex, obtained through low temperature carbonization.

Used in furnaces and kilns of industrial units Also used as domestic fuel by halwais, hotels, etc.

31

COAL FINES / COKE FINES These are the screened fractions of feed raw coal and LTC coke / CIL Coke respectively, obtained from the Dankuni Coal Complex and other coke oven plants.

Used in industrial furnaces as well as for domestic purposes

TAR / HEAVY OIL / LIGHT OIL / SOFT PITCH: These are products from Dankuni Coal Complex using low temperature carbonization of noncoking coal in vertical retorts.

Used in furnaces and boilers of industrial plants as well as power houses, oil, dye, pharmaceutical industries, etc.

MAJOR CONSUMERS OF CCL

A. Power Houses:
Jharkhand State Electricity Board Bihar State Electricity Board Damodar Valley Corporation N.T.P.C. P.S.E.B. G.S.E.B. Delhi Vidyut Board

B. Steel Plants:
SAIL VIZAG Steel TISCO

C. Railways

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D. Government Parties:
Defence H.E.C. Fertilizers B.H.E.L.

E. Private Parties:
Lemo Cement Company Indian Aluminum Company Ltd. Tata Sponge Iron Ltd. National Fertilizer Limited, etc.

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PRICE
DOMESTIC PRICE FIXATION
Government of India deregulated the price of Non-Coking Coal of grades A, B & C. Coking Coal and semi / weekly Coking Coal on 22.03.1996. Subsequently, on 12.03.1997 Government of India deregulated the price of non- coking coal of grade D, hard coke and soft coke and also allowed Coal India Ltd. to fix coal price of grade E, F & G till jan 2000 once in every six months updating cost indices as per escalation formula contained in the 1987 report of the Bureau of Industrial cost and price. With effect from 01.01.200, CIL is free to fix the prices of such grades of coal in relation to the market prices. Pursuant of the above, CIL fixed the prices of deregulated coal from time to time and last such revision has been made on 12.12.2007. Grade wise basic price of coal at the pit head excluding statutory levies for Run of mine (ROM) Non long flame Coal, Long Flame Coal, Cooking Coal, Semi Coking Coal & Weakly Coking Coal, Direct Feed Coal, Assam Coal for various subsidiaries of CIL are table below: Basic Price of Run of Mine Non-Long-Flame Non-Coking Coal (In Rupees/ Tone) Field/ Co. ECL(for 8 units vide Annex II) ECL / Mugma(for 16 units vide Annex IV) ECL / Rajmahal BCCL CCL NCL SECL MCL A 1710 1970 1660 1620 1490 1310 1280 B 1540 1750 1510 1460 1340 1220 1130 C 1290 1500 1250 1220 1100 1050 950 D 1040 1240 1040 1000 920 880 790 E 780 990 1020 830 790 740 730 620 F 610 740 870 660 630 580 570 480 G 430 480 700 470 450 430 430 350

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PLACE

35

New Coal Distribution Policy

The New Coal Distribution Policy was announced by the Government of India in October07. The Schematic presentation of the policy looks like as below:-

THE NEW POLICY - IN A NUTSHELL

FSA (100%)
FSA (75%) DIRECT FROM CIL
Imported Coal
FSA with State Nominated Agencies (8 mt)

POWER/CPP/FTZ/ DEF OTHER INDUSTRIES Spot auction Forward auction

Domestic Coal

E-auction (10% of Production.)

Policy provisions:

1. 2. 3. 4. 5.

The Core-Non Core classification done away with Defence & Railway to get full requirement at notified price. Power & FTZ Sector to get 100% of normative requirement through FSA at fixed price. All other to get 75% of normative requirement through FSA. Small & Medium Enterprise Sector having requirement up to 4200MT per year to get coal from Agencies to be nominated by States/UTs 6. All existing linkage holders required to execute FSA for continuation of coal supply. 7. Erstwhile Non-core consumers having less than 4200 MTPA requirement shall have option for FSA with Coal Company or to get coal from State Agency. 8. For new commitments to Power , Cement and Sponge Iron sectors -CIL to issue LoA after approval of applications by the SLC(LT) For other sector CIL will be responsible for issuance of LoA

9. LoA will have validity for 24/12 months for Power/other consumers respectively.
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10. Loads to be converted to enforceable FSAs after completion of stipulated milestones/conditions within the given time. 11. CIL, to meet full domestic requirement of coal under FSA, even by resorting to import, if feasible 12. Fresh e auction to introduce for providing source to consumers otherwise unable to procure from the available institutional mechanism. 13. 10% of the annual quantity to be earmarked for e-auction 14. Forward e-auction scheme for industrial consumer to be introduced for ensuring long term requirement 15. Supply of coal to Steel Plants on FSA- price on the basis 16. Of import parity pricing. 17. Discipline in economic use of coal is a thrust area.

Based upon above policy provisions following actions have been taken by CIL:-

1.

For Existing Linkage Holders

M/S CRISIL developed three Model FSAs based on annual coal requirements for other than Power Utilities and IPPs

Model A Model B Model C -

< 50,000 MT / Yr > 50,000 and < 400,000 Mt/Yr > 400,000 Mt/ Yr

a. SLC/LT category of consumers ( POWER/CPP/CEMENT/FTZ) Fertilizer /CPP/Cement/Sponge units fit into the above model as per their requirement the entitled annual qty. of 2007-08 shall be the ACQ ** for such units. FSA has also been developed for ongoing supplies to State Gencos/Power Utilities. FSA for existing Private Power Utilities also put in operation.

37

**.Norms for SLC/LT cleared units to be decided by MOC

b. Non SLC/LT category consumers The above A/B/C Model shall be applicable for the existing valid non/SLC LT consumers with ACQ of 75% of the normative qty. (till such time the normative Quantity is finalized the MPQ of such units shall be the ACQ). FSA for Sate Nominated Agencies to take care of coal supplies to such agencies from designated Coal companies developed by CRISIL and introduced after competent approval. The State nominated agencies to cater the need of coal for new/existing consumers having requirement up to 4200MT/PA. In 2008-09 8 mill ton of coal earmarked for distribution through state agencies making state wise apportionment keeping with the earlier supply to Sates through NCCF etc.

2. A.

For New Consumers coming through LoA route Letter of Assurance (LOAs):

All new consumers in both SLC/LT and non SLC/LT category are to apply for LoAs for which following LOA s are available: For SLC(LT) cleared Units IPPs & Private Gencos State Utlts. owned Power

Sponge Iron Units Cement Units CPP Units Fertiliser

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For Non SLC(LT) units Al/PAPER/ISP Aluminum Paper Integrated Steel plants Other Non-Core Industries Ceramic, Tiles and Glass Refractory Pharamceuticals Drugs Leather Dyeing and Printing Sugar Textile and Rayon Softcoke manufacturing units Distillery Engineering & Machinery and Foundry & Forging Coke ovens Chemicals Rubber Tea Lime Manufacturing Soap Tobacco The legally enforceable LoAs, are developed by M/s CRISIL .
39

and

On issuance of notice inviting application for LoA by the coal companys applicants have to submit Commitment Guarantee equivalent 10% of the base price of the Quantity applied for along with LoA application. Under the LoAs stipulated milestones to be achieved by the LoA holders within 24 month for Power Sector (Power Utilities, IPPs and CPPs) and 12 months for other consumers from the date of issuance of the LoA. Validity of CG to cover LoA period plus 4 months Additional CG of 10% is payable on each failure of achieving mile stones under the LOA up to a ceiling of original CG Value CG shall stand encashable in the event of o failure to achieve mile stones in six months time and fails to furnish additional CG or o failure to achieve listed miles stones in the stipulated period o failure to sign FSA within 3 months of expiry of stipulated period on achieving mile stones

For SLC(LT) cleared Units

SLC/LT cleared units shall be forwarded to CIL for allocation of Grade/Source. A Committee for Letter of Issuance (CLOA) is set up at CIL with member of subsidiary sales company and CSM/Commercial as the Convener of the committee. CLOA recommendations are ratified through CMDs meet and then the CLOA decision communicated to coal companies for issuance of Notice for LOA application.

For Non SLC/LT Units

o LoAs have been developed by M/s CRISIL but the mechanism for issuance of LoA is yet to be decided at CIL. A committee constituted for the purpose and the recommendation has got approval of the CMDs but CIL Board has directed to keep the issue on hold till the coal availability scenario is cleared after the pending FSA issue is settled with existing Power Utilities B. Fuel Supply Agreements (FSA)

M/S CRISIL developed three Model FSAs based on annual coal requirements for other Non-Power consumers but including CPPs

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Model A Model B Model C -

< 50,000 MT / Yr > 50,000 and < 400,000 Mt/Yr > 400,000 Mt/ Yr

a. SLC/LT category of consumers ( POWER/CPP/CEMENT/FTZ) Model FSA is in place for New SEBs and Power Utilities** Model FSA for New Private Power Utilities Other SLC/LT category units to be governed by A/B/C model of FSA as per annual requirement through LoA route

**The above also to cover the LoAs issued prior to NCDP and units to be commissioned after introduction of NCDP against old linkages.

b. Non SLC/LT category consumers The A/B/C Model shall take care of the new consumers in the non SLC/LT category subject finalization LOA issuance mechanism and applicable share of imported coal.

NOTES:

A)

Share of Imported Coal in the supply of commitment to consumers falling under New Category of consumers coming through LoA route.

As of now it is decided that a mix of indigenous coal up to 50% of ACQ and balance from imported coal be supplied under the FSA a MOU in this regard to be executed by the Loa holders which shall clearly delineate the supply through imported source and entitle supply under FSA for the indigenous part. The Condition Precedent in the FSA takes care of the obligation of supplier for imported supply.

B)

Existing Power utilities most of them is yet to execute FSA on issues of Trigger and higher level of ACQ. As per the meeting held between CEA Chairman NTPC
41

and CIL- Power Utilities to get 90% Trigger level in place of 60% for all supplies against existing linkages, however, there will be special price applicable after 90% of ACQ materialization. FSA shall be for 20 years tenure with a review clause of ACQ every five years. C) Time to time certain dispensations in the existing FSA/LoA have been approved by the CIL Board which are :a. Cokery Units :- In view of lesser availability of coking coal the trigger level for cookery units reduced to 20% of ACQ and consequently the security deposit is reduced to 2% of ACQ b. Option for taking coal either by road or rail under FSA is provided. c. FSA consumers have been given option to make payment through IRLC for supply by rail. Backed by advance deposit of coal value covering 15 days monthly program in multiple of rakes. d. FSA consumers drawing coal by road have been given option to make part payment commensurate to drawl of coal against monthly entitled Qty. e. For supply of coal by rail under FSA dispensation provided for making advance payment of coal value equivalent to 15 days ACQ by allowing 8 days equivalent of coal (ACQ) value by way of BG plus 7 days equivalent of coal (ACQ) value by way of Cash subject to a minimum amount equivalent to As delivered price of coal for one rake or multiple thereof. f. FSA consumers under Model A (up to 50,000 MTPA) is allowed to deposit SD in four installments (1 % of ACQ) subject to their compensation shall be derived on quarterly cumulated basis and SD shall stand encashable in case of the outstanding ever exceeds 1 % value of the SD.

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PROMOTION
Promotion is the development and discrimination of persuasive communication about the offer designed to attract customers and to persuade them to act. In its broadest sense it encompasses all selling activities, personal selling sales promotion and publicity. A company may have a well-designed product, with a price and a distribution system appropriate to its largest market hut if it is unable to reach that market then all its default will have been in vain. Too many consumers, promotion and selling are synonymous with marketing, but promotion certainly represents a large part of the marketing effort, but if it is of course only a part of the marketing mix. The way various element of marketing mix come together depends upon the marketing objective of the organization and therefore promotional strategies must be made with reference these objectives. This means that the rate of promotion in the marketing mix depends upon the role of the other element of the marketing mix. Therefore is a lot of promotional activities in GIL, in general and CCL in particular. From time to time, they do advertising through media regarding the quantity, quality, place and price of Coal available for sale. The different distribution medium is also notified to the consumers through media to make it convenient for them to buy the right type of coal from the right place and on right price according to the equipment. The company promotes the buyers be the services. The service provided to the customer at the time of bidding through spot e- auction and forward e-auction. Spot eauction held four times in a month & Forward e-auction held quarterly for long term requirement of the customer. Company registered in MSTC site according to term and condition. After e-auction date the product dispatch to their customer. Seven days before buyers have to pay money for the e- auction.

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MARKETING OF COAL BY RAIL :VALUE ADDITION BY CUSTOMER MANAGEMERNT

1.0 Any coal traffic that has been lost to the railways has been due to depletion of stocks of better quality coals in the country, and not due to any failure on Railways part. There is no case, therefore, for recovering lost coal traffic as such. This is, however, not to say that Railways are able to carry all the coal traffic that they are offered. Coal loading is subject to strong seasonal fluctuations, with inadequate coal traffic offering from May to October, and more than adequate traffic offering thereafter, which the Railways find hard to pick up. Such fluctuation has been a yearly phenomenon. Hence, instead of worrying over socalled lost-traffic, Railways should concentrate on lifting the traffic on offer that is expected to be almost double its current volume.

1.2

1.3

Railways may take the following steps to handle the traffic that will be on offer: (a) Improved Wagon Design and Better Load ability:

There is urgent need to increase the carrying capacity of wagons and improve tare to payload ratio, so that more quantity of coal may be carried by each trainload.. Action has been initiated in this regard by Railway Board, and RDSO in designing a 25t axle load wagon for carrying coal and iron ore upto a gross load of 100 tonnes. IR has also taken a decision to adopt 32.5t axle load wagons for carrying gross load of upto130 tonnes per wagon on the proposed DFCs. The current axle load on IR is 20.32 t, for carrying gross load upto 81.28 tonnes. It is of utmost importance that IRs efforts in improving the carrying capacity of wagons is suitably speeded up. Needless to say, along with improved carrying capacity of wagons, there is need to improve other infrastructure like track and motive power. But, wagons with much better carrying capacity is the key. It is important to vastly improve productivity of railway wagons from what they are today.

44

(b) Better Terminal Management:

Along with quicker transit time that the DFCs are expected to ensure, Railways have to vastly improve terminal management. Coal companies have to be persuaded to develop terminal facilities commensurate with loading potential. Coal sidings loading six to seven rakes per day would be well-advised to install rapid loading systems, as at Manuguru in Singereni Colliery Company Ltd, capable of loading a full rake in an hour and half. Similarly, unloading terminals will have to be vastly improved, especially in the new super and mega thermal power stations coming up., so that loaded wagons are released quickly and the wagons given back to the Railways expeditiously. This will need setting up of this requisite infrastructure by these customers at the unloading terminals. (c) Terminal Incentives-cum-Engine on Load Scheme (TIELS) :
This is an excellent scheme which, introduced by the railways recently,, will vastly improve in productivity of railway wagons, if seriously implemented by the zonal railways. This system allows engines to remain attached with the wagons when the process of loading is going on, instead of detaching it, and coming back later to collect the rake when the loading is complete. Serious implementation of this scheme, which envisages giving a large number of incentives to customers participating in the scheme, may result in very handsome servings, as a recent study by RITES has shown.

(d) Contract Marketing: This concept implies a contractual agreement between the Railways and its client pertaining to offering a certain volume of traffic by the customer, and supply of number of rakes, schedules of supply and target delivery time by the Railways. There are penalties for failure to meet obligations on both sides. East Central Railway (ECR), Hajipur, has recently concluded such a contract with Rose Power Supply Company in UP, which may be a model for other zonal railways to follow. (e) Wagon Investment Scheme: This is a scheme designed by the Railways which has so far received an enthusiastic response. Under this scheme, whenever a customer procures railway wagons for movement of raw materials as well as finished products, the railways, in return, commit to supply a guaranteed number of rakes per month for every rake procured, besides giving freight rebate of 10 percent over 7 to 15 years, depending on the type of the wagon procured. There is need to persuade more and more customers to adopt the scheme. It is seen from the above that Railways have initiated many actions to handle the higher volumes of coal traffic that will be an offer. There is need to pursue all these initiatives .

45

DATA ANALYSIS AND INERPRETATION

46

1)How would you rate the central coal field ltd as a company?
Good Bad Very Good

OBECTIVE- The objective of the question is to find about the image of the company and the
brand equity in the minds of the customers.

OPTIONS Good Bad Very good Total

FREQUENCY 16 0 4 20

PERCENTAGE (%) 80% 0% 20% 100%

How would you rate the central coal field ltd as a company?
Good Bad Very Good

0%

20%

80%

INTERPRETATION- The survey finds out that the company has a good image and is
respected by the customers.

47

2)

What is your view about the product of the company that is coal?

OBECTIVE- The objective of the question is to find the perception of the product of the
company that is coal.

OPTIONS Satisfactory good Very good Bad Total

FREQUENCY 5 10 5 0 20

PERCENTAGE (%) 25% 50% 25% 0% 100%

What is your view about the product of the company that is coal?
satisfactory good Very good bad

0% 25% 25%

50%

INTERPRETATION- The customers regard the product as a good product. The quality is
product is appreciated by the customers.

48

3) What do you think about the government pricing policy of the central coalfield ltd? OBECTIVE- The objective of the question is to find if the price of the coal set by the government is acceptable to them and if they are ok with it.

OPTIONS Good Bad Total

FREQUENCY 16 4 20

PERCENTAGE (%) 80% 20% 100%

What do you think about the government pricing policy of the central coalfield ltd?
Good bad

20%

80%

INTERPRETATION- Most of the customers believe that the pricing policy of the
government is good though a small percentage believe that is it is not good.

49

4) What do you think about the promotion policy of the company? OBECTIVE- The objective of the question is to find if the customers are happy with the
promotional activities of the government.

OPTIONS Satisfactory Good Bad Total

FREQUENCY 8 10 2 20

PERCENTAGE(%) 40% 50% 10% 100%

What do you think about the promotion policy of the company?

satisfactory good bad

10% 40%

50%

INTERPRETATION- Most of the customers believe that promotional activities of the

government is good but a small percentage think that its not ok.
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5) What is your view about the new coal distribution policy that is NCDP of the company? OBECTIVE- The objective of the question is to find if the new coal distribution policy
proposed by the government in the year 2012 is acceptable to them

OPTIONS Good Bad Total

FREQUENCY 16 4 20

PERCENTAGE (%) 80% 20% 100%

What is your view about the new coal distribution policy that is NCDP of the company?
good bad

20%

80%

INTERPRETATION- Majority agree with the NCDP while a small percentage of

customers dont appreciate it.

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6)

Is E auction of coal is a helpful tool for the consumer?

OBECTIVE- The objective of the question is to find the effectiveness of the new auction
policy of the company

OPTIONS Yes No Total

FREQUENCY 18 2 20

PERCENTAGE (%) 90% 10% 100%

Is E auction of coal is a helpful tool for the consumer?

yes no

10%

90%

INTERPRETATION- The survey finds out that the customers thinks that E- auction has
helped them in a big way.

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7)

How E-auction of coal helps you?

OBECTIVE- The objective of the question is to find in what way the new auction policy
helps the company.

OPTIONS Easy access Time efficient Transparent process Total

FREQUENCY 8 4 8 20

PERCENTAGE(%) 40% 20% 40% 100%

How E-auction of coal helps you?

easy access Time efficient Transparent process

40%

40%

20%

INTERPRETATION- The survey finds out that E-auction has helped them in more than
one way.They appreciate the difference made by the E-auction .

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8)

What do you think about the logistics of the company?

OBECTIVE- The objective of the question is to find what customer thinks about the logistic
of the company. Is it effective or it needs some improvement?

OPTIONS Satisfactory Good Bad Total

FREQUENCY 10 6 4 20

PERCENTAGE (%) 50% 30% 20% 100%

What do you think about the logistics of the company?

satisfactory good bad

20% 50% 30%

INTERPRETATION- The customer believe that the logistics of the company is generally
good.

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9) In which aspect would you like to see change in the company? OBECTIVE- The objective of the question is to find out changes in marketing mix that the customer thinks should be made by the company.

OPTIONS Product Price Place Promotion Total

FREQUENCY 2 4 6 8 20

PERCENTAGE (%) 10% 20% 30% 40% 100%

In which aspect would you like to see change in the company?

product price place promotion

10% 40% 20%

30%

INTERPRETATION-The majority of the customers want some improvement in promotion

and place aspect of marketing mix of the company.

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10) Are you a satisfied customer in the end? OBECTIVE- The objective of the question is to find whether the customers are satisfied after
doing business with the company

OPTIONS Yes No Total

FREQUENCY 18 2 20

PERCENTAGE (%) 90% 10% 100%

Are you a satisfied customer in the end?

yes no

10%

90%

INTERPRETATION-The majority of the customers that is as high as 90 % customers are

satisfied with the company and would always want to do business with the company.

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CONCLUSION

In our research we have found out that though the marketing mix aspect of the company is good and is improving year on year basis but there is always a need for more and more improvement. If we try to find in which area the customers expects improvements the most, it would be place and promotion aspects of the marketing mix. Though these aspects are good but we can improve it more for good. These improvements can mainly be brought under the promotional activities of the company along with the improved logistics of the company. The E-auction policy has worked wonder for the customers and we can improve it more and more by the making it more efficient for the customers. The Coal distribution Policy is very effective and auction is very interesting for the buyers. The company also takes positive decision that it not involves in service to the buyers like transport, material handling, and logistics supply chain etc. company gives time to receive the coal within 45 days.

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LIMITATIONS
Small survey sample size Limited time period No access of company documents

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RECOMMENDATIONS
Coal India Ltd resurrection and turnaround there has been revelation of some of the techniques used by the company. A daunting task of keeping the companys book in green has been made over several years. The mining giant has posted 68% increase in the profit for half year ended September 2011. We try to understand how a company which is a PSU (A Maharatna enterprise) turned its fortunes around in a matter of years. This is due to E-Auction Interest from Bank Account Deposits Reducing Head Count In Coal India case, this is clearly indicated, they are able to make huge money by e auction since there is no competition and demand of coal is such that its commanding that premium price. But this is not the way to improve companys health. They need to look at selling off huge stocks of coal in their stores at the earliest and also they need to look towards increasing efficiency plus increasing production. This is a tough problem for a PSU to crack and thats the reason as soon as competition hits the door, they will be first to fold

Technology and Outsourcing

This is an amazing story highlighting what technology can do to businesses. E-auction brings in huge amount of transparency into transactions and brings down inefficiencies in a tremendous way. Besides that, outsourcing deals bring in efficiency at the operational fronts. Still the companys comment is that stocks are getting piled up because of evacuation inefficiency which is why they do not want to increase coal production further.

Improved logistics
I believe that a lot of supply problems can be addressed through improved logistics and higher allocation to efficient plants. There are multiple options, based on the current rules/policies and aided by the new FSA directive that stipulates a minimum supply of 80 per cent. These include economical coal transportation, higher allocation to efficient plants and price pooling among similar grade users. These steps would translate into savings from rail freight and economies of scale, which would help reduce the impact from inevitable coal imports.

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APPENDIX
Dear Sir/Madam I am SAURABH PRATAP pursuing my PGDM from INDIRA SCHOOL OF BUSINESS STUDIES, PUNE. I am doing my internship from Central Coalfields limited (CCL), Coal India Ltd (CIL), Ranchi, Jharkhand. My project title is Marketing of Coal. I request you to kindly give your valuable opinion for the questionnaire related to the project. Please fill up the following details about yourself: Designation/Section Age (in years). . Work experience (in years)..

QUESTIONNAIRE
1) How would you rate the central coal field ltd as a company? Good Bad Very Good 2) What is your view about the product of the company that is coal? Satisfactory Good Very Good Bad 3) What do you think about the government pricing policy of the central coalfield ltd? Good Bad 4) What do you think about the promotion policy of the company? Satisfactory Good Bad 5) What is your view about the new coal distribution policy that is NCDP of the company? Good Bad 6) Is E auction of coal is a helpful tool for the consumer? Yes No 7) How E-auction of coal helps you? Easy access Time efficient

Transparent Process

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8) What do you think about the logistics of the company? Satisfactory Good Bad 9) In which aspect would you like to see change in the company? Product Price Place 10) Are you a satisfied customer in the end ? Yes No

Promotion

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BIBLIOGRAPHY
http://ccl.gov.in/biz/sales_market.htm http://www.coalindia.in/ContactUs.aspx?tab=2 http://coal.nic.in/ http://ccl.gov.in/ http://www.bccl.cmpdi.co.in/OB Sales&Mkt.htm http://www.google.com http://www.Managementparadise.com CIL & You, an in-house publication by CIL.

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