SUMMER INTERNSHIP PROJECT REPORT ON MARKETING STRATEGY & PRICING ANALYSIS

A PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF FOR THE AWARD OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

G.L.A INSTITUTE OF BUSINESS MANAGEMENT

CORPORATE GUIDE: FACULTY GUIDE

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MR.M.SHAHID AGRAWAL (LECT.)

Ms.SWATI CM Mktg . SMITTED BY: AZAD KUMAR YADAV ROLL NO. 1025170032 MBA 3rd SEM, GLA-IBM

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PREFACE

It is well evident that work experience is an indispensable part of every professional course. In the same manner practical training in any organization is must for each and every individual, who is undergoing management course. Without the practical exposure one cannot consider himself as a qualified capable manager. Hence to fulfil this requirement eight weeks training was completed at ITI LIMITED, NAINI, ALLAHABAD. Entering in the organization is like stepping into altogether a new world. At first everything seems strange and unheard but as the time passes one understands the concept and working of the organization and thereby develop professional relationship. Initially it is felt as if classroom study was irrelevant and it is unless in any concern working. But gradually it is realized that all basic fundamental concepts studied are linked in one or other ways to the organization. But how and what can be done with fundamentals depends upon the intellectual and applicability of the individual

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Bob Briner says:

ACKNOWLEDGEMENT

Praise those who work for you, Do it publicly! It is impossible to say thanks too many times. Believe in these words and I like to express my feeling of gratitude for your support that helped me in completing my project and making me to learn many good and responsible things of personal and social conduct and professional attitude during my six weeks training on the topic of MARKET ANALYSIS & PRICING STRATEGIES IN ITI NAINI In fact, it was just impossible for me to complete my training, preparing my report without your help and guidance .It is too difficult for me to express my feelings in words for their exclusive guidance and support that is so invaluable for me to replace only with THANKS. First of all I would like to express my deep and heartily gratitude to Mr. M Shahid (Chief Manager), our training for giving priceless knowledge about the ITI Limited Naini and giving so much help in making the project complete. I am highly grateful for valuable advice in completing my project. I specially would like to thanks Mr. Santosh Kr. Srivastava (Marketing Officer) for his expensive lectures and to making us aware about Market Situation, Pricing Strategies. His teaching style was very interesting and attractive and was full of the concepts and thank to Mr. C.K.Gupta (Engineer Marketing) for his humble behaviour and good teaching. I would also like to extend my thanks to my faculty guide Ms SWETA

AGRAWAL MAM and all faculty members of G.L.A Institute of Business

Management for their guidance & support.

AZAD KUMAR YADAV

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MBA 3rd Semester

STUDENTS DECLARATION

I do hereby declare that the piece of dissertation report entitled MARKET ANALYSIS & PRICING STRATEGIES has been prepared by me under the avid guidance and supervision of MR. M. SHAHID, CHIEF MARKETING MANAGER, ITI LIMITED NAINI, ALLAHABAD, as a part fulfilment for the requirement of the degree in Master of Business Administration under M. TECHNICAL UNIVERSITY during the session 2010-12.

To the best of my knowledge & belief, this is my own work and has not been submitted anywhere earlier for any other degree.

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DATE: Place:

AZAD KUMAR YADAV

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Chapter

Description Preface Acknowledgement Student Declaration Table of Contents

Page No. 1 2 3 4

Chapter I Introduction

1.1 1.2 1.3 1.4

Introduction Need & Relevance of Study Review of Literature Objectives of Summer Internship

5 20 21 22

Chapter II Introduction to Organization

2.1 Brief Profile of Company 2.1.3 Management chain 2.1.4 Product of ITI & Technology

24 27 28

Chapter III ITI Need marketing department

3.1.1 What is Marketing 3.1.1.7 Marketing system 3.2 Tender ,3.2.1 Types of tender 3.2.2 Tender from BSNL/MTNL 3.2.3 TESC

32 37 37 38 40

Chapter IV

4.1 Pricing strategies

55

Chapter V Research methodology Chapter VI

5.1 Data Collection & Data Sources 5.2 Sample Design & Sample Size 5.3 Sample Selection

61 61 61

Charts and Data Interpretation Data Analysis &Interpretation Chapter VII Conclusion & Recommendations 7.1 Findings & Conclusion 7.2 Recommendations 7.3 Limitations 8 9 Appendix Bibliography

62

75 77 78

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Table of contents

CHAPTER-I

AN INTRODUCTION

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ITI: ATA GLANCE

Corporate head quarters Manufacturing Units

ITI Bhavan, Doorvaninagar, Bangalore, 560016 Bangalore Naini (near Allahabad, UP) Raibareily (UP) Mankapur (UP) Palakkad (Kerala) Srinagar(Jammu and Kashmir)

Network System Unit Regional offices

Bangalore New Delhi Bangalore Kolkata Mumbai Chennai Hyderabad Bhubaneswar Bhopal Ahmadabad Kochi Supported by 36 offices all over the country

Manpower R & D base

13,000 approximately

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Bangalore Naini Mankapur

Quality system

ISO 9000 compliant

1.1: Introduction of ITI

ITI Ltd is Indias largest and first public sector unit developed to manufacture telecommunication products with the latest technology. ITI was established on 25th January 1950 in Bangalore. This is bedrock upon which India is launching its contribution to the worlds telecommunication revolution. ITI Ltd is the premier public sector undertaking of the country. It was the first public sector unit to be opened by government of India after independence in the year 1948-49. It was located in Bangalore. The activities of this public sector were manufacturing mechanical telephone instruments and exchanges. Due to advancements in technology in the field of electronics, ITI started its expansion program in the field of electronics in 1960s. ITI Limited (ITI) is a telecommunication service provider in India. It is principally engaged in development, production, and supply a comprehensive range of telecom products that include transmission, switching, access and subscriber premises equipments to its clients across the nation. In addition, it offers network management systems along with encryption and networking solutions to its customers for internet connectivity. The company along with BSNL has entered into a strategic alliance for constructing a V-SAT based network in Ku band for IP-based satellite broadband services. It holds six manufacturing facilities and three research and development centers located across the nation. ITI is headquartered at Bangalore, India.The company reported revenues of (Rupee) INR 17,853.20 million during the fiscal year ended March 2009, an increase of 54.91% over 2008. The operating loss of the company was INR 6,346.50 million during the fiscal year 2009, as compared to
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an operating loss of INR 3,572.30 million during 2008. The net loss of the company was INR 6,355.20 million during the fiscal year 2009, as compared to a net loss of INR 3,583.80 million during 2008. Communication is our business was the motto adopted by ITI. With this motto in mind, ITI started its business in communication field. From a small beginning, it has grown in to a mammoth multiunit enterprise with manufacturing units at Doorvani Nagar and Electronic City in Bangalore (Karnataka), Mankapur, Naini and RaiBareily in Uttar Pradesh, Pallakkad in Kerala and Srinagar in Jammu and Kashmir. In addition to these manufacturing unit located at Bangalore for undertaking installation and maintenance of telecommunication equipments through the country which is now renamed as Network Communication Business Group. The company has a strong in house R&D infrastructure attached to the independent business groups. The main R&D divisions are located at Bangalore and Naini. Looking forward at the technology, the R&D is engaged in continuous development and absorption technology. The company lays a strong emphasis on quality which is taken as a corporate management function under an independent Executive Director reporting to Chairman and Managing Director. A large number of companys products are covered under the Self Certification Scheme by the major consumer i.e. Department of Telecommunications (DoT). International quality management system: The Company has adopted ISO 9000, taking it as a Tool for organizational change and work design. Naini unit has taken ISO 9000 certification for design and production of telephones, digital multiplexing equipment and ISO 9000 certification for production of optical range of communication equipments.

1.1.1: GOVERNMENTS INVOLVEMENT IN ITI

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As ITI is a public sector undertaking therefore government influences the working of ITI. The marketing system prevailing in ITI-Naini is quite different from General Marketing System prevalent in Private Business Units. The capital,

1.1.2:

NEED FOR THE ESTABLISHMENT OF ITI

Government was enthused for the establishment of ITI because of the following reasons:1.

Social and economic development: - The first and the foremost reason for
the establishment of ITI was social and economic development. Government aimed at the establishment of ITI in the backward areas of the country for their economic development. More and more employees got employment opportunities in this way. This upgraded their standard of living and provided them and their families with better living conditions, better educational facilities, better health facilities etc. This also led to establishment of economies of scale.

2.

Taxes: - The second motive of the government for the establishment of ITINaini was taxes. ITI being a public sector undertaking pays huge amount of taxes to the government.

1.1.3:

PRODUCTS MANUFCTURED BY ITI-NAINI

ITI primarily manufactures telecommunication equipments. They can be classified as: Landline equipments Mobile Landline equipments can be further classified as under: Switching equipments

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Transmission equipments Instrument (telephone) ITI-Naini mainly deals with the manufacture of transmission equipments and instrument.

Table: 1.1 PRESENT FINANCIAL SCENARIO OF

PERFORMANCE FROM 2002-2008 (IN RS. CRORES) Year Sales(including ED) Production Profit/loss after tax Growth in turnover 2004-05 1795 1689 375 2005-06 1257 1073 706 2006-07 1389 1362 310 10.54% 2007-08 1749 1607 429 25.94% 2008-09 1818 1797 405 3.94% 2009-10 1210 1206 358

1.1.4

BAISED ON A HOUSE JOURNAL OF ITI LIMITED

ITIS TURNOVER REACHS HISTORIC HIGH ITI Ltd has recorded the highest turnover in its history by clocking Rs.4732.43 crores for the is more than double its previous high of Rs.2317.63 crores recorded in 2001-02 year ended march 31,2010. this is a quantum jump of 271% when compared to the previous years turnover of Rs. 1741crores .in fact, the provisional turnover achieved this year

PROJECT UNDER IMPLEMENTATION (2010-11)

Total order for 2010-11 as on 01/04/10 PROJECTS/ PRODUCTS SR. NO 1 2 3
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Table: 1.2

RS. CR(PROVL) 699.95 939.57 130.19

GSM Infra-9ML SZ GSM Infra-9ML WZ G Pon & GE-Pon

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

IT Projects STMs DDF GSM-MTNL ASCON+DEFENCE ROs/cco/export SSTP Other misc. Product DWDM ADSL-CPE MLLN OCB-CSN MM/CORE&SPARES NSU-I&C Smart/sim card C-DOT &SPRES DATA CENTER RADIO Modem/SATCOM

2.13 39.01 59.23 2.82 68.70 4.29 10.66 44.16 75.88 1.17 0.14 9.84 6.50 0.84 3.67 10.11

1.1.5 MISSION:
To be the leader in the domestic market and an important global player in Voice, data and Image communications by providing total solutions to purchasers. To build on core competencies to enter new business areas.

MANAGEMENT CHAIN:
Ministry of Telecommunication

Figure:

Chairman and Managing Director

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Board of Directors Executive Director (EDR) General Manger (Head of unit) Additional General Manager Deputy General Manager Chief Manger Manager Deputy Manger Assistant Manager Engineer Assistant Engineer Staff (Employees from category A to H)

1.1.6 CHAIN OF NEW UNITS

n addition to the present unit at Bangalore, manufacturing the telephone and transmission equipment, it has grown in to a multiunit enterprise with other

manufacturing enterprise with other manufacturing units established Doorvani Nagar and Electronic City in Bangalore (Karnataka), Mankapur, Naini and RaeBareily in Uttar Pradesh, Pallakkad in Kerala and Srinagar in Jammu and Kashmir.
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The company now manufactures the entire range of telecommunication equipment right from telephone instruments to equipment for Satellite Earth Stations catering to the DoT, MTNL, Defence services, railways and State electricity boards. It also tries to meet the requirements of the private purchaser for automatic exchanges. Besides this ITI also produces the road traffic signals of high reliability and variety of telemetry and tele- control equipments. The latest production of ITI is SDH and WILL. In future ITI is planning to switch over to ATM from SDH. Apart from supplying to the domestic market ITI has also taken up Turnkey projects abroad and has been exporting its products to as many as 20 other countries. The company has received fewer tenders due to global competition. On the basis of its quality and price, it is striding towards organizational excellence. ITI today is a market oriented company, growing in to a total solution provider. It is striving towards achievement of excellence.

1.1.7 PLANTS
1. BANGALORE PLANT( Established in 1950) 2. SRINAGAR PLANT( Established in 1970)
3. NAINI PLANT( Established in 1971)

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4. RAEBAREILY PLANT( Established in 1973)

5. PALAKKAD PLANT( Established in 1975) 6. MANKAPUR PLANT( Established in 1980)

1.1.8 AWARDS
Excellent performance PSE awards in the year 1997-98 given by INDIAN INSTITUTE OF INDUSTRIAL ENGINEERING. Best CHIEF EXECUTIVE GOLD AWARD by INTERNATIONAL GREEN L & SOCIETY on September 17, 1998. FACT MKK NAIR PRODUCTIVITY AWARD by KERALA STATE

PRODUCTIVITY COUNCIL. INSPECTION SCHEME (AIS) of PALAKKAD plant has been certified under APPROVER SUPPLEMENTARY OCB 283 crore equipment to DOT, MTNL. INDUSTRIAL SAFETY AWARD by NATIONAL SAFETY COUNCIL.

1.1.9 JOINT VENTURES

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idening its area of operation, ITI teamed up with PACIFIC INTERNATIONAL COMPANY to manufacture micro earth stations. The

result is ITI equatorial Satam ltd. (ISEL). Besides this earth station IESL also undertakes turnkey projects in various parts of the world. ITI Communication Pvt. Ltd. (ITIC) is a joint venture company set up in Singapore with the main objective of promoting exports of ITI to other countries. Fibcom India Ltd, New Delhi, has also made joint venture with NKT, Denmark for SDH fibre optical product. The ITI has collaborated with a number of foreign- based companies having the latest technology. They are as follows:-

Name of the company M/s Siemens/Nee M/s Ericson M/s AWA M/s Nee M/s Alcatel M/s Comedge

Country Japan Sweden Australia Japan France Singapore

1.1.10 MAJOR LANDMARKS

YEAR 1971-72 1973-74
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ACHIEVEMENTS Start of production Production of telephone developed in

1980-81 1981-82 1986-87 1986-88 1989-90

1991-92

1994 1995 1996

1997

1998 1999

2000

house Assoc ham awards for promotion of ancillary industries Establishment of computer centre Collaborations Update telephone manufacturing technology and establishment of P.C.B. Single and double sized P.C.B. and production of 140 mibt optical line equipment and regenerator in collaboration with M/s Denmark. Introduction of 565- mibt optical line equipment and manufacturing of in-house design Telephone model ME-91 and TPS90 Advancement of optical line instrument Implementation of Q.D.C and ISO 9000. Collaboration with M/s Fibcom India Ltd. and manufacture of Solar photovoltaic equipment. Development of MARR and its manufacture along with 8 mbit and a40 mbit optic mux equipment. Production of DDF focus version. Started in the worlds latest equipment i.e. Digital Loop Carrier (PDH) and production of 2/15 single channel equipment. Development and production of DLC (SDH) and Access terminal along with the production of the central office terminal racks.

1.1.11 RESEARCH AND DEVELOPMENT

An important fact that helped ITI survive adverse circumstances and aided in grooving is its research and development department. This department takes in account that all the ITI products are technologically well-advanced and of superior
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quality. ITI has two R&D departments. One of them is situated in Naini (Allahabad) and the other is situated in electronic city (Bangalore). The laboratories conduct various tests to see that only quality products go out in the market. R&D is manned with highly qualified engineers. Highly advanced technology and equipments are also provided. These efforts have led to the successful commercialization of several products.

IMPLEMENTATION

OF

GOVERNMENT

POLICY

OF

ECONOMIC LIBERALIZATION AND ITS CONSEQUENCES

The monopoly of ITI was broken by Government of India in 1991 as by opening the door to the private sector and thus competition emerged. ITI has been selling its instruments since 1968 to the government sector. Previously the telecom sector was under total control of Government. With the commencement of open-door policy of government, the selling pattern changed. ITI therefore began to face stiff competition from other players. Some major problems faced by ITI are as follows:

Missing good professionals in marketing area Lack of availability of raw material on time Lack of autonomy to take decisions Need of more innovation and technology up gradation Need of more employee support Large quantity of waste product Lack of awareness in workers Fund crisis

1.1.12 PURCHASERS

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About 90% of ITI products are supplied to BHART SANCHAR NIGAM LIMITED (formally known as department of telecommunication (DOT)). The other significant purchasers of ITI are as follows:

Bharat Sanchar Nigam Limited Maha Nagar Telephone Nigam Limited Railways Defence Banks Corporate Factories/Offices Steel/Power/Oil sector General Public

1.1.13 REASONS FOR THE PROBLEM

Faulty government policy Lack of latest technology in communication Lack of latest technical knowledge among employees. Non availability of orders Fund crisis Excessive overhead expenditure Lack of publicity and advertisement Lack of sales promotion schemes Lack of up to-date features according to consumers demand

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1.1.14 THE MAJOR COMPETITORS OF ITI:COMPETITORS FOR TELEPHONE INTRUMENTS: BPL BEETEL TATA PANAPHONES ORPAT PUNWIRE BEL WETSON SHYAMWIRE

COMPETITORS FOR TRANSMISSION EQUIPMENTS HFCL DSC(at present TELLABS) NATALCO UTL BEL HTL FUJITSU ALCATEL BPL TELECOM L & T LIMITED LG ELECTRONICS NORTHERN TELECOM TATA TELECOM SIEMENS INFORMATICS SYSTEM LIMITED SAMSUNG ELECTRONIC CORPORATION

COMPETITORS FOR EPABEX SYSTEM:-

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1.1.15 GOVERNMENT ENDEAVOURS FOR UPLIFTMENT OF ITI:

As already discussed, the monopoly of ITI was broken by Government of India in 1991 as by opening the door to the private sector and thus competition emerged. ITI has been selling its instruments since 1968 to the government sector. Previously the telecom sector was under total control of government. With the commencement of open-door policy of government, the selling pattern changed. ITI therefore began to face stiff competition from other players. As a result, ITI started incurring huge loss. To solve the above problem and to alleviate the poor condition of ITI, government provided 30% reservation quota to ITI whenever any order was floated by BSNL/MTNL. Against 30% reservation quota orders 75% ordered value is given in advance for procurement of raw materials. According to this, ITI was to supply BSNL/MTNL at the lowest price which was opened at the bid. But ITI started to incur a loss because the price that used to open at the bid used to be very less than the cost that ITI used to incur for the production of the equipments. Therefore ITI was going in minus margin.

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1.2: Need & Relevance of study

According to Redman and Mary Research is the systematic effort to gain new knowledge. The main purpose of the study is to study the overall situation of the market for each product line and for each product within the product line with regards to the pricing strategies adopted by the ITI, Naini unit. The economic conditions and technologies keep on changing from time to time. These are very important for an organization to survive in the long run. They help to suggest sales goal, opportunities and strategies that will yield desired market penetration. These information are very important for new product selection and development. The project will help us to understand how and the areas where the ITI Company is influenced by its biggest competitors. It will also help us to understand the consumer behaviour and perception toward the ITI manufactured product & its competitors among the target segment. The project also deals and will able to know the possible areas where these are leading and where the improvement is required. This research will also help in getting information which will influence sales of the ITI product.

This research will also serve as a reference material for other researchers who are going to conduct studies in fields related to the same as done by researcher.

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1.3: REVIEW OF LITERATURE -:

This research paper explores the manner in which state owned telecommunications equipment manufacturer Indian telephone industries was affected by the radically altered market conditions brought about by the opening of the economy and the loss of its monopoly status. ITIs experience show that the governments market oriented reform programme ended of creating anything but a level playing field for public enterprise. On the one hand by eliminating its monopoly privileges but not the constraints flowing from state ownership, and on the other hand, by imposing new market-related constraints, deregulation had an extremely destabilising effect on the operations of ITI.

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1.3: Objectives of summer Internship

A.

To find out the demand of different product which manufactured by ITI, in the market

B. C. D.

To know satisfaction level of the customers with the products of ITI To find out the market share of ITI among different competitors To evaluate the competitiveness of the price of the products of ITI

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CHAPTER-II

Company profile

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2.1: Glimpse of NAINI Unit

ITI NAINE units is the lead unit in North India, situated about ,16 km away from the holly city of Allahabad, which manufacturer the entire range of multiplexing equipment to meet the need of country in vital area of telecommunication .In view of priority of nation the organization had laid great emphasis on the development and manufacturing of product for rural telecommunication .It produces most modern optical terminal and line equipment and collaboration with TEJAS for SDH products such as STM-1,STM -16,&STM -64 In collaboration with ZTE CHINE, keeping pace with the advancement in the technology It has incorporated state of art technology in area of product design manufacturing and testing thus it has achieved self reliance in these areas. Beginning with moderate product of RS 1.66 cores during 1971-72 the unit has achieved a trail blazing worth RS 300cores 1992-93.It has got achieved annual growth rate of 70%during 1992 ,which is a new land mark in the history of NAINI UNIT. It has got work force about 2338 people. Sudden change in govt. telecommunication policy and entering of multinational affected the stead progress of the company .an unhealthy competition from the fly-by night private companies coupled with unrealistically cutthroat price quota of its production value while there is quantitative growth.
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2.1.1 AIM OF ITI NAINI UNIT

1. Regain status as largest indigenous manufacturer of Telecom equipment and consolidate share in new Technology. 2. Sustain its status of top turn key in telecommunication. 3. Respect External and Internal customers. 4. No liquidate damages 5. Reducing cycle time from dispatch to realization. 6. Work lines a team.

2.1.2 VISION OF THE ITI NAINI

We will be perceived by our customers as the leading business partner for providing total network solutions. We will offer innovative solution using leading technologies in a cost competitive manner to help customers achieve their business objective. We will pursue new opportunities arising from the convergence of information communication and entertain business. We will enhance shareholder value and will move up the value chain by expanding knowledge based and services based business while simultaneously leveraging our manufacturing business. In our manufacturing business will continuously drive down cost. We will leverage our telecom domain knowledge to build a telecom software business in India catering to global requirements.
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We will apply R&D efforts in focused areas. We will form strategic alliances with the equipment /technologies suppliers and services providers to access technologies and market and to help us provide total solution.

2.1.3: MANAGEMENT CHAIN OF ITI NAINI UNIT Figure 2.1

General Manager (Head of unit)

Additional General Manager

Deputy General manager

Chief Manager

Manager

Deputy Manager

Asstt. Manager
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Engineers/Officers

Asstt. Engineers

Staff category A to H

2.1.4 PRODUCTS OF ITI NAINI ALLD

STM-1CPE STM-16ADM STM-16MADM STM-1ADM STM-64(USA) DWDM (ZT) CHINA DDF EPBT (Telephone)

WhereSTM- Synchronous transport Module. ADM- Add Drop Module. CPE- Customer Promise equipment. DWDM- Dense wavelength Division Multiplexing. DDF- Digital Distribution Frame. EPBT- Electronic Push ButtonTelephone.

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SDH- Synchronous DigitalHierarchy. OFC- Optical Fibre Cable.

TECHNOLOGY
The Technologies used for various products manufactured ITI NAINI unit are as following: 1) DDG Own technology 2) EPBT-Own technology
3) STM-1CPE, STM-1, STM -4, STM-16, ADM and MADM-Tejas .

Bangalore technology.
4) STM-64 Xalted, USA technology

5) DWDM-ZTE technology

2.1.5 THE MAIN CUSTOMER OF ITI LTD NAINI

ITI Naini has mainly the two types of customers1. BSNL 2. Non BSNL In the case of BSNL to providing the product to BSNL the company (ITI) has to fulfil the generic requirement. But in the case of non BSNL there is no need to fulfil the generic requirements.

2.1.6 GENERIC REQUIREMENTS

1. Productivity
2. Size of the products. 3. Structure of the products. 4. Shape and design. According to Marketing Officer Sri S.K. Shrivastava
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If the company is providing the products along with the generic requirements to the customers then the products are accepted otherwise rejected.

2.1.7 PRODUCT DESCRIPTION

Model NO. Registration NO. Date of manufacturing. Validity. Guaranty and warranty. Features of the Product. Others.

2.1.8 COMPETITORS OF ITI NAINI ALLD

Technofiber industries Bhopal Pentagon industries Bhopal Shakti Enterprises Bhopal SRV Telecom Bangalore Hindustan Telecom Allahabad Promod Telecom Luck now. DEC Kanpur BPL India Bangalore Prithvi (huawei technology) Puncom (huawei technology) Ordyne

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Terracom (ordyne) Siemence ZTE (ZTE) HFCL (WRI) Eriksson

2.1.9:

LAST FIVE YEARS PRODUCTION Table: 2.1

years

ITI

NAINI UNIT

2009-10 2008-09 2007-08 2006-07 2005-06

1829 1210 1818 1749 1389

287.24 118.42 92.24 139.70 73.16

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ITI- NAINI PRODUCTION TARGET 200910:- Table:

EQUIPMENT STM-1 ADM AND STM1 CPE STM-16 AND STM 16 MADM DDF DWDM New diversified products TOTAL 260.08 (EXPECTED) REVENUE REVENUE EARNED (cr) 40.69 74.34 1.00 85.00 50.00 EARNED

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CHAPTER-III

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3.1 MARKETING

Marketing boasts a rich array of concepts and tools

3.1.1WHAT IS MARKETING?
satisfaction at a profit.
Two fold goal of marketing is to attract new purchasers by promising superior value and to keep current purchasers by delivering satisfaction.

What does the term marketing means? Many people think of marketing only as selling and advertising. It is no wonder, that every day we are bombarded with
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television commercials, newspaper ads, direct mail campaigns, Marketing, more than any other business function, deals with purchasers. Understanding, creating, communicating and delivering purchaser value and satisfaction is the heart of many modern marketing thinking and practices. We may define marketing as, Marketing is the delivery of purchaser internet pitches and sales calls. However selling and advertising are only the tips of the marketing iceberg. Although they are important, they are only two of the many marketing functions and often not the most important ones.

Today, marketing must be understood not in the old sense of making a sale- telling and selling, but in the new sense of satisfying purchaser needs. Selling occurs only after the product is produced. By contrast, marketing starts long before a company produces a product.

3.1.1.1 Social Definition Of Marketing:We define marketing as a social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and values with others.

3.1.1.2 Managerial Definition:Peter Drucker, an eminent management theorist puts it in this way- Marketing is the process of planning and executing the conception, pricing, promotion and distribution

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of ideal goods and service to create exchanges that satisfy individual and organizational goals. Till 1993-94, ITI enjoyed being the only producer in the field of telecommunication in India. It had the power of monopoly, which was snatched away as the governments policy of liberalization was introduced. Previously ITI was producing the product and the market was buying it at the price which was being offered by ITI. With the entry of competitors, ITI felt the need of a Marketing department. Hence in 1994, in the month of April the Marketing department was established. Its main challenge is to bring back the lost glory of ITI. For this reason they need to keep up to date with the changing answer of the following five questions:

What business we are in? Who are our main purchasers? What are our purchasers wants and desires? How can we best distribute our products to them? How can we make communication with the more effectively? 3.1.1.3

MISSIONS AND OBJECTIVES:-

The company entered the New Year with an objective of achieving new horizons in the year 2010. The missions and objectives may be stated as under: Creation of demand Creation of product image and personality Mass awareness about the product Provision of efficient after sales service

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Periodic arrangement of marketing research Product modification and diversification as per purchasers specification Increase in sales Profits through purchaser satisfaction Generate demand for telecom products through innovation To become a strong service provider with major business thrust in telecom network operations and value added services. Strengthen the technology- scanning capabilities to benchmark their products/services against global standards, identify new products, enable better maker-buyer decisions and identify potential partners.

Achieve global quality standards in all the products in the shortest time. Introduce effective planning and control system for achieving delivery schedules, streamlining production over the whole year and better inventory control.

Create an environment that cares for the individuality and dignity of employees. Create a sense of achievement and involvement in the company.

3.1.1.4 MARKETING PLAN:The marketing plan operates at two levels. The strategic marketing plan lays out the broad marketing objectives and strategies based on an analysis of the current market situation and opportunities. The tactical marketing plan outlines specific marketing tactics including advertising, merchandising, pricing channels and services.

3.1.1.5

MARKET-ORIENTED

MARKETING

STRATEGY:Market-oriented marketing strategy is the managerial process of developing and maintaining a viable fit between the organization objectives, skills and resources and its changing market opportunity. The aim of strategic planning is to shape the companys business and product so that they yield target profits and growth.

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It is the marketing strategy that decides the success at the business unit level which in turn decides the total corporations success. The linkage between marketing strategy and overall corporate success is indeed direct and vital. And in this linkage lies the significance of marketing strategy. To understand strategic planning, we need to reorganize that most of the large companies consist of four organizational levels. They are: Corporate level Division level Business unit level Product level

Corporate headquarter is responsible for designing a corporate strategic plan to guide the whole enterprise to make decisions about which businesses are to be started and which ones are to be eliminated .Each division establishes a plan covering allocation of funds to each business unit within that division. Each business unit develops a business unit strategic plan to carry that business unit into a profitable future. Finally, each product level within a business unit develops a marketing plan for achieving its objectives in its product market.

3.1.1.6: MOTTO OF MARKETING DEPARTMENT:Making Waves In Communication

Establishment of ITIs Marketing Department:The marketing system of ITI is in its infant stage. The requirement of this very section was realized when many rival companies entered in the same business area due to adoption of liberalization policy by Government of India. Therefore this department came into being in April, 1994. The other reason to establish marketing division was to get series of ISO certificates so that products can be sold in global market.
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3.1.1.7 MARKETING SYSTEM

There can be two types of marketing systems: 1.

Open / Direct/Field marketing system: According to this marketing

system there is a liberty for the suppliers to float the product anywhere in the market.

2.

Tender/ Quotation marketing system: -This is the marketing system

that is prevalent in ITI, Naini. In this the purchaser float tenders to the suppliers and the lowest one(L1) is selected.

3.2

WHAT IS A TENDER?

A tender document or simply tender is a document of inquiry from purchaser specifying the exact nature of the requirement of materials against which offers/quotations are invited from the suppliers. Each tender document has a price which is in proportion with the tendered material.

3.2.1: TYPES OF TENDERS

There can be four types of tenders:1.

Single tender: - In this, the inquiry is floated to only one particular supplier. The
price mentioned in the tender is cross checked against the previous orders. If the price is considered legitimate then the purchase order is placed.

2.

Limited tender: - Every company has a fixed number of approved suppliers. In

this type, the tender is floated to only these limited numbers of suppliers.

3. Open tender: - In the case of new technology or large orders this type of tender
is floated. Information about the tender is floated on internet, magazines, newspapers etc. Urgent requirement can be fulfilled through 30% reservation quota order which can be placed upon ITI even before floating the tender.

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The L1 opened price of tender is made effective for 30% reservation quota order after finalisation of L1 opened price.

Limitation of an open tender: i. It is time taking. ii. It is costly.

Advantage of an open tender:i. Very useful in case of new technology. ii. Offers a competitive price to the purchaser. In the case of BSNL, a time period of 5 weeks is given to the bidders for the submission of tenders. Regional offices are responsible for searching about the tender in case of ITI.

4. Global tender: - This is similar to open tender, the only difference lies in the
fact that global tender are floated all over the globe. This is mainly floated for imported, indigenous items. As 90-95% of ITIs products are purchased by BSNL/MTNL therefore the entire marketing process of ITI revolves around it

3.2.2: TENDER FROM BSNL/MTNL:A Tender from BSNL/MTNL contains 11 sections. These are: 1. Notice Inviting Tender 2. Instructions to Bidders 3. General Conditions of the Contract 4. Special Conditions of Contract 5. Schedule of requirements 6. Technical Specification 7. Bid form and price schedules 8. Performance Security Form 9. Bid security Form
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10. Letter of Authorisation for attending bid opening 11. Annexure

3.2.3

THELOCATION

FOR

COLLECTION

OF

TENDER

DOCUMENT:
In case of ITI, the tender document may be collected from:1. Directly from the circle offices of BSNL/MTNL after the payment of the

price of the tender document by the officers of concerned ROs.

2. Download from the internet. In this case the payment of price done through

demand draft which is submitted along with the filled tender document.

3.2.4

DOCUMENTS

STABLISHING

BIDDERS

ELIGIBILITY AND QUALIFICATION

The bidder should furnish, as part of the bid documents establishing the bidders eligibility, the following documents or whichever is required as per terms and conditions of Bid Documents.
i.

Certificate of incorporation: The bidder participating should belong to a

company and the company should be Indian. For this purpose, a certificate of incorporation issued by government of India is required. ITI was incorporated on 25th January 1950. It is the first PSU of free India.

ii. Article or Memorandum of Association: It deals with the provisions of rules

and regulations of the company.

iii. Partnership deed or proprietorship deed as the case may be. iv. Registration certificate from State Director of Industries or from Secretariat

for Industrial Approval (SIA) , Ministry of Industries, Government of India: This is issued by the Government of India proving the physical fitness of the company.
v. TSEC issued by QA circle /Type Approval Certificate (TAC) issued by

Telecom Engineering Centre or proof of having applied for TAC/TSEC

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3.2.5

TECHNICAL

SPECIFICATION

EVALUATION

CERTIFICATE (TSEC)
Every supplier needs to obtain a TSEC without which it is not eligible to participate in the tender for BSNL. The quality assurance wing of BSNL, which is located in Bangalore, provides every supplier a TSEC after it undergoes the following procedure.

STEPS TO OBTAIN A TSEC: 1. A fixed amount of fees is paid to BSNL centre. 2. A request is made to the QA wing of BSNL for TSEC. 3. Inspectors from BSNL visit the supplier to test the product. In ITI, the test is conducted in the climatic chamber where a temperature ranging from -50C to 150C can be provided. This to ensure that the equipment is viable to function anywhere in the country. 4. Then the equipment is sent to BSNL centre for field trial. BSNL officers, engineers and technicians then undertake the field trial of the equipment. If any lacuna is found then suppliers engineers try to rectify it. 5. After the successful field trial approval is made by QA wing. 6. TSEC is provided to the supplier which makes it eligible for participation in tender. 7. TSEC has its validity normally for a period of three years.

3.2.6 TYPE APPROVAL CERTIFICATE (TAC)

This is similar to TSEC, the only difference lies in the fact that TSEC is issued by the QA wing of BSNL situated in Bangalore whereas TAC is issued by Department of Telecommunication situated in New Delhi. TSEC contains the following: -

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1. Product description 2. Model number of the product 3. Date of issue of TSEC

4. Validity of TSEC(normally ranging for a period of 3 years)

5. Specification that the TSEC is only valid for that particular supplier. i. Inspection Certificate issued by BSNL (QA) for execution of Educational/Commercial Order. (If applicable)
ii. Bulk production certificate: This certificate is issued by BSNL certifying that

the company is capable of bulk production.

iii. Annual Report and /or a certificate from its bankers as an evidence that he

has financial capability to perform the contract.

iv. Quality Policy: The bidder shall furnish documentary evidence about the quality

produced by the company necessary to perform the contract.

3.2.7 ISO CERTIFICATE:

ISO 9000 is a family of standards for quality management systems. ISO 9000 is maintained by ISO, the International Organization for Standardization and is administered by accreditation and certification bodies. The rules are updated, the time and changes in the requirements for quality, motivate change. Recently, on November 15, 2008, has made changes to the requirements of ISO 9001. Some of the requirements in ISO 9001 (which is one of the standards in the ISO 9000 family) include 1. a set of procedures that cover all key processes in the business; 2. monitoring processes to ensure they are effective; 3. keeping adequate records; 4. checking output for defects, with appropriate and corrective action where necessary;
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5. regularly reviewing individual processes and the quality system itself for effectiveness; and
6. facilitating continual improvement and a better after sale service

A company or organization that has been independently audited and certified to be in conformance with ISO 9001 may publicly state that it is "ISO 9001 certified" or "ISO 9001 registered". Certification to an ISO 9001 standard certifies that formalized business processes are being applied.
i.

Bid Security Exemption Letter: This is applicable for ITI only. ITI being a PSU is exempted from payment of bid security fee. Bid Security Exemption Letter is a letter issued by BSNL certifying the above.

ii. Tax Clearance Certificate: This is documentary evidence certifying that the

company has no tax burden on its part. This includes Sales Tax (or VAT) Clearance Certificate and Income Tax Clearance Certificate.

3.2.8 CLARIFICATION OF BID DOCUMENTS

To assist in the examination, evaluation and comparison of bids, the purchaser may, at its discretion ask the bidder for the clarification of its bid. The request for the clarification and the response should be in writing. However, no post bid clarification at the initiative of the bidder is entertained. A prospective bidder, requiring any clarification on the bid documents needs to notify the Purchaser in writing or by FAX at the Purchasers mailing address indicated in the invitation of Bid. The Purchaser responds in writing to any request for the clarification of the Bid Documents, which it receives not later than 10 days prior to the date of opening of the Tenders. Copies of the query (without identifying the source) and clarifications by the Purchaser are sent to all the prospective bidders who have received the bid documents.
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Any clarification issued by BSNL in response to query rose by prospective bidders forms an integral part of bid documents and it may amount to an amendment of relevant clauses of the bid documents.

3.2.9 AMENDMENT OF BID DOCUMENTS

At any time, prior to the date of submission of Bids, the Purchaser may, for any reason, whether at its own initiative or in response to a clarification requested by a prospective bidder, modify bid documents by amendments. The amendments are notified in writing or by FAX to all prospective bidders on the address intimated at the time of purchase of the bid document from the purchaser and these amendments will be binding on them. In order to afford prospective bidders a reasonable time to take the amendment into account in preparing their bids, the purchaser may, at its discretion, extend the deadline for the submission of bids suitably.

3.2.10 BID PRICES

The bidder has to mention two types of prices in the bid document. These are:1.

Composite Price: - The bidder has to give the total composite price inclusive
of all Levies & Taxes i.e. Central Sales Tax/VAT & Excise Duty, packing, forwarding, freight and insurance. Octroi/Entry Tax are paid in actual extra as the case may be.

2.

Basic unit price: - The basic unit price is exclusive of all levies and taxes.
That can be set as ex-factory price. Prices of incidental services also needs to be quoted. The offer should be firm in Indian Rupees. No Foreign exchange is made available by the purchaser.

3.2.11 BID SECURITY

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The bidder needs to furnish, as part of his bid, a bid security for a fixed amount. The bid security is required to protect the purchaser against the risk of bidders conduct. The bid security shall be in the form of a bank Guarantee issued by a scheduled bank in favour of the purchaser, valid for a period of 180 days from the date of tender opening. A bid not secured in accordance with above conditions can be rejected by the Purchaser being non-responsive at the bid opening stage and returned to the bidder unopened. The bid security of the unsuccessful bidder is discharged/returned as promptly as possible but not later than 30 days after the expiry of the period of the bid validity prescribed by the purchaser pursuant to clause 13.

The successful bidders bid security are discharged upon the bidders acceptance of the advance purchase order satisfactorily and furnishing the performance security. The bid security may be forfeited: a) If the bidder withdraws his bid during the period of bid validity specified by the bidder in the Bid form or

b) In the case of successful bidder , if the bidder fails : i. to sign the contract ii. to furnish performance security
a) In both the above cases, i.e (a) & (b), the bidder will not be eligible to participate

in the tender for same item for one year from the date of issue of APO. The bidder can not approach the court against the decision of BSNL in this regard.
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b) The front bidder needs to submit an irrevocable undertaking duly signed by it

and its technology/consortium partner stating that both of them i.e the front bidder and its technology/consortium partner will be liable for due performance of the contract jointly and severally failing which both of them will be liable to be barred from having any business dealing with BSNL for a period of 3 years.
c) However, ITI is exempted to submit bid security and bid security exemption letter

issued by BSNL corporate office has to be submitted along with the bid document.

3.2.12 PERIOD OF VALIDITY OF BIDS

A Bid is generally valid for 150 days to 180 days from the date of opening of bids prescribed by the purchaser. A bid valid for a shorter period can be rejected by the purchaser being non-responsive. In exceptional circumstances, the purchaser may request the consent of the bidder for an extension to the period of bid validity. The request and the response thereto is made in writing. The bid security is then also suitably extended. The bidder may refuse the request without forfeiting his bid security. A bidder accepting the request and granting extension is not be permitted to modify his bid.

3.2.13 SELLLING AND MARKING OF BID:

1. The bid should be submitted in three covers. The first cover should contain the

original and four copies of Unpriced & Technical Bid dully marked ORIGINAL &COPY .The second cover should be contain priced financial original & four copies of priced financial bid & third cover should contain Bid security as mentioned in the Bid document. All the three covers should be sealed separately by the seal of the bidder. 2. The envelope should be addressed to the purchasers at the address mentioned in the bid document.

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3. The envelope should bear (the project name) the tender number and the words DO NOT OPEN BEFORE THE GIVEN TIME. 4. The inner and outer envelops shall indicate the name & address of the bidders to enable the bid to the return unopened in case it is declared late or rejected. 5. Tender may be send b registered post or delivered in person on above mentioned address.

3.2.14 OPENING OF BIDS BY PURCHASER

1. The purchaser opens the bids in the presence of bidders or their authorised representatives who chose to attend at scheduled time of due date. 2. A maximum of two representative of any bidder are authorized and permitted to attend the bid opening.

3.2.15 PRLIMINARY EVALUATION

1. Purchasers evaluates the bids to determine whether they are complete, whether any computational errors have been made , whether required sureties have been furnished , whether the documents have been properly signed and whether the bids are generally in order. 2. If any discrepancies are encountered then those are rectified on the basis being mentioned in the bid documents. If the supplier does not accept the correction of the errors, his bid is rejected. 3. The purchaser will determine the substantial responsiveness of each bid to the bid document. A substantially responsive bid is one which confirms to all the terms and conditions of the bid documents without material deviations.
4. A Bid , determined as substantially non responsive will be rejected by the

purchaser and shall not subsequent to the Bid opening be made responsive by the bidder by correction of the non- conformity.
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3.2.16 EVALUATI AND COMPARISION OF SUBSTANTIALLY RESPONSIVE BIDS

1. The purchaser evaluates in detail and compares the bids previously determined to be substantially responsive.
2. The for detailed comparison of substantially responsive bids is mentioned in this

clause

3.2.17:PURCHASERRIGHT TO VARY QUNTITIES

This clause specified that purchasers receive the right to increase or decrease the quantities of the goods and services up to a fixed quantity mentioned in the scheduled of requirement without any change in the unit price.

PURCHASERS RIGHT TO ACCEPT ANY BID AND TO REJECT ANY OR ALL BIDS
According to this clause , the purchaser reserve the right to accept or reject any bid and to annual the bidding process and reject all bids, at any time prior to awards of contract without assigning any whatsoever and without thereby incurring any liability to the affected bidder or bidders on the ground of the purchasers action.

ISSUE OF ADVANCE PURCHASE ORDER

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1. The issue of an advance order constitutes the intention of the purchaser to enter into contract with bidder.
2. The bidder shall within 14 days of issue of the advance purchase order, give

his acceptance along with performance security in conformity with section ix provided with the bid document.

3.2.18 ANNULMENT OF AWARD

If the successful bidder fails with the requirement of above then purchaser constitutes sufficient ground for the award and the forfeiture of the bid security, in the case the purchaser may make the award to and other bidder at the discount of the purchaser or call for new bids

3.2.18.1 SECTION-1
This section contains the special condition of the contracts that is needed to be singed between the bidder and supplier.

3.2.18.2: SECTION -2
This section contains GENERAL (COMMERCIAL) CONDITIONS OF CONTRACT Some of the important clauses mentioned in this section are:3.2.18.2.1: PERFORMANCE SECURITY All suppliers need to furnish performance security to the purchaser for an amount equal to 5 % of the value of the purchase order within 14 days from the date of issue of advance purchase order by the purchaser. The proceed of the performance security are payable to the purchaser as compensation for any loss resulting from the suppliers failure to complete its obligations under the contracts.

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The performance security bond should be in the form of the bank guarantee issued by a scheduled Bank in the form provided the bid document. The performance security bond is discharged by the purchaser after completion of the suppliers performance obligations including any warranty obligations under the contract. 3.2.18.2.2 TRAINING:The bidder needs to provide training for installation and maintenance staff of the purchaser free of cost where required. This clause contains the specifications related to the above. 3.2.18.2.3: WARRATNY This clause contains the details about the warranty conditions that the purchaser expects from the supplier.

3.2.18.2.4:

PAYMENT TERMS

This clause contains the details regarding the payment terms. Normally payment of95 % of the price is made on the receipt of the goods by consignee for claiming this payment the following document are to be submitted to the paying authority. Invoice clearly indicating break up details of the composite price i.e. Basic, E.D, Sales Tax, any Duties and Taxes, Freight/Packaging charge, Service Tax etc.

Delivery challan Supplier certificate for despatch

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Excise gate pass/invoice or equivalent document Consignee receipt The sea freight receipt as per the rates approved by the ministry of the water and surface transport, if any Proof of payment of octroi/ entry tax if any.

If the supplier fails to furnish necessary supporting documents i.e. excise/customs invoices etc. In the respect of duties/ Taxes which are cenvatable, the amount pertaining to such duties/Taxes is deducted from the payment due the payment to the firm

3.2.18.2.5: LIQUIDATED DAMAGES

This clause mentioned the penalties that are imposed on the supplier when the deliveries are made after expiry of the contracted delivery period. Without prior concurrence of the purchaser. Under such conditions the purchaser has right to recover liquidated damage under. However, when supply is made within 21 days of the contracted original period, the consignee may accept the stores and in such cases the provision of clause 16.2 will not be apply. If the supplier fails to deliver the store or any consideration thereof within the period prescribed and agreed for delivery without prejudice to other remedies available to purchaser is entitled to recover as agreed liquidated for breach of contract, a sum equivalent to 0.5% of the value of the delayed supply and /or undelivered material/ supply for each week of delay or part thereof for a period up to 10 weeks and thereafter a the rate of 0.7% of the value of the delayed supply and undelivered material/supply for each week of delay or part thereof for another 10 weeks of delay. DP extension beyond 20 weeks is not being generally allowed. The extension beyond 20 weeks may be decided in most exceptional circumstances on case to case basis, by the CGM concerned in case of tender floated by Circles and by the functional Director concerned in case tenders floated by Corporate office, stating

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reasons and justification for grand of extension of the delivery period beyond 20 weeks.

3.2.18.3: SECTION-3
This section is the TECHNICAL SPECIFICATION section that specifies from the supplier.

3.2.18.4:SECTION -4
This section contains the SPECIAL CONDITIONS OF THE CONTRACTS that is needed to be signed between the bidder and the supplier.

3.2.18.5: SECTION-5
This section contains the SCHEDULED OF REQUIREMENTS that is required by the supplier from the supplier.

3.2.18.6: SECTION-6
This section is the technical specification section that specifies from the supplier.

3.2.18.7SECTION -7
This section contains the BID FORM AND THE PRICE SCHEDULE for the supplier. 3.2.18.8: SECTION-8

This section contains the BID SECURITY FORM.

3.2.18.9: SECTION-9 This section contains the PERFORMANCE SECURITY FORM.

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3.2.18.10: SECTION-10 This section contains the LETTER OF AUTHORISATION FOR ATTENDIN BID OPENING which authorises the representatives of the suppliers to attend the bid opening for the tender mentioned above on behalf of requisite authority (Bidder) in the order of preference as mentioned. Maximum of two representatives are permitted to attend bid opening. In cases where it is restricted to one, first preference is allowed, alternate representative are permitted when regular representatives are not able to attend. Permission for entry to hall where bids are opened may be refused in case authorisation as prescribed above is not recorded.

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TENDERING PROCESS FOR STABILIZED PRODUCTS

Figure: 3.2 Receiving of Notice Inviting Tender (NIT) through: Regional offices Internet Corporate office in Bangalore

Request letter send along with TSEC and supplier record to concerned Regional Office.

On receipt of tender document, process starts. Management approval for participation is sought and finalisation of rate to be quoted in the subject tender is done.

Assistance is required from R & D for configuration of

Management approval of

Assistance is required from Technical Costing department for

Bid Preparation

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Mostly tender bid is prepared by RO concerned. Document with rates are forwarded to RO.

Sometimes tender bid is prepared by ITI and submitted by

Process of bid preparation.

Preparation of Power of Attorney.

Index preparation.

Preparation of commercial compliance

Pricing and ceiling is done. Original copy + 4 copies are prepared.

Bid submission.

Bid opening.

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Figure: 3.4,

FINISHED PRODUCTS FROM ITI LIMITED

BHARATE SANCHAR NIGAM LIMITED (THROUGH TENDERS, BIDS & DIRECT PURCHASE)

NON- BSNL PURCHASE

THROUGH REGIONAL OFFICES

DIRECTLY (THROUGH REGIONAL OFFICES) 61 | P a g e

THROUGH DEALERS (MOSTLY FOR TELEPHONE EQUIPMENTS)

CHAPTER-IV

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4.1 PRICING STRATEGIES

One of the four major elements of the marketing mix is Price. Pricing is an important strategic issue because it is related to product positioning. Further more, pricing effects other marketing mix elements such as product features. Channel decision and promotion. While there is no single receipt to determine pricing the following is a general sequence of steps that might be followed for developing the pricing of a new product. Develop Marketing strategies-perform marketing analysis segmentation. Targeting and positioning.

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1) Make marketing mix decision define the product. Distribution and promotional tactics. 2) Estimate the demand curve-understand how quantity demanded varied with price. 3) Calculate cost Include fixes and variable costs associated with the product. 4) Set pricing objectives for example .profit maximization revenue maximization or price stabilization. 5) Understand environmental factors- Evaluate likely competitors actions, understand legal constrains etc.

4.1.1 PRICING OBJECTIVES

1) Current Profit Maximization 2) Current Revenue Maximization 3) Maximize Quantity 4) Maximize Profit Margin 5) Quality Leadership 6) Partial Cost Recovery 7) Survival 8) Status quo

Figure: 4.1

PRICE

Material cost

Labour cost

Direct Material

Direct Labour cost

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Indirect Material

Indirect Labour cost

Overhea Indirect Material Cost- The indirect material cost is known as the cost of things ds
that is used indirectly in the production. For example the cost of-Nuts and bolts. -Solder wire price. -Welding electrode -Paint and Police -Chemicals for plating Labour Cost-The labour is mainly of two types1.

Direct Overhea d Indirect Overhea d

Direct Cost-This type of cost is related to manpower, printing and

Chemical treatment.

2. Indirect Labour Material cost-

Material cost basically known as the testers, Inspection (physical fitness) is known as the indirect labour cost. preliminary cost that is use in the raw material for example cost of OVERHEADmetal overhead is mainly related the cost ofThe sheet and cable etc.

Cost- the cost of the Supervisors, feeders, helpers,

Direct Cost Direct cost means the cost of things that is used Transport facility
in Canteen facility production directly. Uniforms and shoes to the workers Salary of non productive employees For example -metal sheet and metal cable Salary of officers and management

Medical facility

Material cost-Printed circuit

Material cost +Lab cost + Packing cost+ Margin cost =Basic Cost Basic price +8.24% excise duty (ED) (Basic price +ED) 2%or 4 %CST/VAT
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(Basic cost +ED+CST/VAT) 1.26 % FF (Basic cost +ED+CST/VAT+FF)=All inclusive cost

WhereED=Excise Duty CST=Central sales Tax VAT=Value Added Tax FF= Freight Forward Basic Price is also known as the Ex-Factory Cost or all exclusive cost. Present Tax StructureED..8.24% CST2% VAT.. 4% For Example

There is a product which basic cost is 100 Rs.

ED of 100 @ 8.24% =8.24 Then the cost will be 100+8.24=108.24 Now the VAT @ 4% OF 108.24=4.32 The cost will be 108.24+4.32=112.56 Now the freight forwarding (FF) @1.26% OF 112.56=1.41 NOW the cost will be 112.56+1.41= 113.97

Hence the all exclusive cost of the product is.Rs. 113.97

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CHAPTER-V

RESEARCH
METHODOLO GY
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5.1 DATA COLLECTION

SOURCES OF DATA: There were two sources of data used. The first one was primary source and the second was secondary source. The primary source consists of questionnaire and observation magazines.

PRIMARY DATA is collected through questionnaire, search and research through place where today's computer has been mostly used.

SECONDARY DATA is being search sites like magazines, newspapers, journals, websites and the data has been collected through other approaches.

The design of questionnaire was follows:

Type of questions: Subjective question were used.

Phrasing of the question: The following points were taken into

consideration while phrasing of the questions :

1. Difficult and vague words are avoided.
2. Lengthy and unspecific questions were avoided. 3. Two questions were not combined together.

Order of the questions: General questions were included first followed

by specific questions.

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Number of questions: The questionnaire consisted of 11questions. SAMPLE SELECTION

5.3.

Random sampling method was used and the sample size was 120. TARGET POPULATION: The selected population consisted of people related to the field. DESCRIPTION OF STUDY: The survey was conducted in Allahabad in the month of June and July of 2010.

CHAPTER-VI

DATA ANALYSIS &

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INTERPRETATI ON

Data red uction Graphical representation

Q.1.

Did you know name of two or more transmission equipment manufacturing

companies? Table: 6.1 No. Of respondents YES NO 80 40 Percentage 66.66 33.33

Figure: 6.1
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6.1 INTERPRTATION: The survey showed that 67% respondent knows

transmission equipment manufacturing companies.

Q 2 .Could you please tell which company comes first to your mind when we
ask about transmission equipment manufactures? Table: 6.2 Company Name ITI UTL PUNCOMM TECHNOFIBER PRITHVI PROMOD OTHERS No. Of respondents 18 27 15 12 15 12 21 Figure: 6.2 Percentage 15 22.5 12.5 10 12.5 10 17.5

: 6.2; INTERPRTATION:
The survey showed that the main competitors of ITI NAINI are: UTL, PRITHVI, PUNCOMM, TECHNOFIBER, and PROMOD
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The preference among the purchasers was UTL 22.5 %, ITI 15 %, PRITHVI 12.5% PUNCOMM 12.5 %, TECHNOFIBER 10 %, PROMOD 10.% and others 17.5 %.

Q3. Have you ever used products being manufactured By ITI?

Table: 6.3 No. Of respondents Yes No 48 72 Percentage 40 60

Figure: 6.3

6.3 INTERPRETATION: After survey, it is found that, the product manufactured by ITI that ever used by purchaser 40%.because of after liberalization more company start working in this field.

Q4.What is the products manufactured by ITI which are being used by you?
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Table: 6.4 Products DWDM STM-16 STM-1 DDF OTHER No. Of respondents 39 33 24 6 18 Figure:6.4 Percentage 32.5 27.5 20 5 15

1.4

INTERPRETATION:

After survey, it is found that, the product

manufactured by ITI that were used by purchaser were 32.5 % DWDM, 27.5 %STM-16, 20 %, STM-1, 5 % DDF and 15 % others

.Q.5 Do you Satisfied with ITIs products quality?

Table: 6.5 No. Of Respondents Yes No 102 18 Figure:6.5 Percentage 85 15

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6.5:

INTERPRETATION: 85% of the customers that used ITI

equipments were satisfied with its quality.

Q.6 what are the probable reasons for not buying ITI products?
Table: 6.6 Reasons Higher price Delay in supply Defects Weak after sales service No. Of Respondents 78 24 12 6 Percentage 65 20 10 5 Figure:6.6

6.6:

INTERPRETATION:

Those who did not use ITI equipment

were 55 % due to delay in supply of the orders, 27.5 % due to presence of more defects than other companies and 17.5 % due to weak after the sales service.

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Q7 While buying the telecom product did you consider any other product of any
other telecom company? Table:6.7 No. Of Respondents YES NO 99 21 Percentage 82.5 17.5 Figure 6.7

6.7 Interpretation: The survey showed that in market many company exist so
respondent at the time of buying the telecom product easily consider any other product of any other telecom company.

Q8

Do you like really think that there is different between quality and

technology provided by ITI and that of other company? Table: 6.8 No. Of Respondents Percentage

YES NO

66 54
Figure: 6.8

55 45

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6.8 Interpretation: : After survey, it is found 55% respondent said

of another company is advance.

that

the quality & provide by ITI is different rather than other company. But technology

Q9 Do the ITI products need frequent after sales service?

Table: 6.9 No. Of Respondents YES NO 29 91 Percentage 24 76 Figure:6.9

1.9

Interpretation: The survey showed that 76% respondent said that

the ITI products not need frequent after sales service. It is show products quality.

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Q.

10 Do you get the delivery of the products on time?

Table: 6.10
No. Of Respondents Percentage 33 67

YES NO

40 80

Figure:6.10

1.9

Interpretation: 67% respondent said that they not get deliver on time but 33% respondent said that they get deliver on time.

Q. 11 what features/attributes are you looking for the transmission products when
you purchase it? (Rate 1 to 8). Table: 6.11 No. Of Respondents
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Percentage

PRICE OVERALL PRODUCT QUALITY

COMPANY REPUTATION

24 21 21 18 14 11 8 3

20 17.7 17.7 14.7 11.8 8.9 5.9 3.3

GUARANTEE PERIOD AFTER SALES SERVICE MAINTENANCE TIE UP Figure:6.11

6.11:

Interpretation: These features/ attributes that the customers look in the

equipment were as follows:20 % low price,17.7 % good after sales service,17.7 % low maintenance cost,14.7 % good quality of the product,11.8 % technical collaboration,8.9 % company reputation,5.9 % overall product and 3% tie up.

CHAPTER-VII

CONLUSION
&
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RECOMMENDATION S

7.1 FINDINGS
1. The company that first comes to the mind of the people when asked about people, when talked about transmission equipment manufacturers is UTL. Therefore. UTL is the biggest competitor of ITI NAINI. 2. The other two major competitors of ITI NAINI are ZTE and ALCATEL.
3. The products manufactured by the ITI that are preferred the most are DWDM.

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4. The major reason behind the above is the quality. Reliability and durability of the ITI products.
5. The probable reasons why the purchasers do not prefer ITI product are due to

higher price. Delay in supply of the orders. Presence more defects than the others companies and weak after sales service. 6. Purchasers are satisfied with the quality of ITI products. 7. The major attributes being sought by the purchasers while purchasing transmission

CONCLUSION
1. The biggest competitor of the ITI NAINI is UTL. 2. For equipments supplied to BSNL, its share is 30 %. 3. ITI depends highly on BSNL for orders. 4. Most of ITIs collaborators have becomes its competitors.
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5. As ITI is a public sector unit and largely depends upon BSNL for orders so it does not pay attention towards advertising and publicity.
6. Approximately 80 % of its ultimate customers are satisfied from ITIs

equipments. 7. ITI S competitors have switched to better facilities. ITI lags behind in terms of innovation.

7.2 RECOMMENDATIONS
PRODUCT:
New product those in demand in the market should be identified.

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Durability of the product should be further enhanced. Some of the existing product should be further innovated.

PRICE:
ITI should try to reduced the price of its products for attracting new customers and to win competitors .this can be done by decreasing manufacturing expense. Also company can encourage discount and credit facility.

PROMOTION:
Perhaps it can be the key towards of the ITIS IN the present market. ITI should encourage and adopt new sales promotion strategies .these strategies can be fruitful in enhance the sales volume. Trade rebate. Discount guarantee etc. are tools of promotion ITI should go for appropriate advertisement and publicity channels and revive its old glory ITI should adopt customer oriented market strategies .it should tr to establish direct contact with the people to generate awareness about its products and to get an in depth information about their requirement.

STRATEGIES FOR OTHER MODIFICATIONS:

1. Research and development should be encouraged.
2. Warranty should be replaced by replacement guarantee.

3. Young marketing professional should be recruited so that high tech marketing environment is generated due to widening of marketing concepts and technical ideas. 4. A more professional approach should be adopted to deal with the competitors.
5. ITI is mainly depended on BSNL for its sales. It should try to explore new

market for its products.

STRATEGIES FOR DEVELOPMENT WITHIN THE ORGANIZATION

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1. There should be proper motivation to employees for better performance. 2. Proper training should be induced for employees.
3. A well organized management information system should be established to

acquire a view of customers opinion.

4. A marketing research team should be established.

5. Essential measures should be taken to cut down the expenditure.

7.3 LIMITATIONS
Though utmost care was taking so that no aspect of the problem remains untouched but still there were certain constraints that should not be overlooked. There following were the main constraints in my project. The topic was very delicate hence people were afraid to give their views openly.

The secondary data was not very up to date. Some of the respondents were not available. Personal biases and perceptions of the respondent may have stopped him/her form giving the right information.

The respondent may have not understood the actual implication of he subject. Lack of time. Respondent biases for giving the right information.

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BIBLIOGRAPHY

Philip Kotler-Marketing management-Analysis, Planning and control, 13th edition

Dilel , Simken ,Pride , Ferrel-Concept and strategies, second European Edition.

ITI Annual Report

Bery G.C.-Marketing Research

Business world Wikipedia

http://www.itiltd-india.com/ http://businessballs.com

http://www.economicstimes.com

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APPENDIX

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QESTIONNAIRE
I say thanks for agreeing to spare 5 minutes of your time for filling up this questionnaire. All details given by you will be kept strictly confidential. 1. Did you know name of two or more transmission equipment manufacturing companies? i) Yes ii) No

2 .Could you please tell which company comes first to your mind when we ask about transmission equipment manufactures?

i) ITI. ii) UTL. iii) PRITHVI. iv) TECHNOFIBER. PROMOD vii) OTHER.

v) PUNCOMM. vi)

3. Have you never used products being manufactured By ITI?

i. Yes

ii) No

4.

If yes, then what are the products manufactured by ITI which are being

used by you? i) ii) iii) iv) 5.

i)

DWDM STM-16 STM-1 DDF Did you satisfy with its quality? Yes ii) No

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6. If no what are the probable reasons for not buying ITI Products? i) ii) iii) iv) Delay Defect Higher price Weak after sale service

1. While buying the telecom product did you consider any other product of any

other telecom company?

i)

Yes

ii) No

1. Do you like really think that there is different between quality and technology

provided by ITI and that of other company?

i) i)

Yes Yes

ii) No ii) No

1. Do the ITI products need frequent after sales service? 1. Do you get the delivery of the products on time?

11. What features/attributes are you looking for the transmission products when you purchase it? (Rate 1 to 8). Price Overall product Quality Company reputation Guarantee period After sales services Maintenance cost

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Tie up

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