TINPLATE COMPANY OF INDIA NEED A CONCEPTUAL FOCUS

Rahadian Anandianto Ridwan Riswandy Fiqi Dipowicaksono Felisia Noviana Mukti Wulan Cahyo Wening Imam Mashari

29110393 29110398 29110407 29110411 29110416 29110417

WHAT DO YOU KNOW ABOUT TCIL ?

Established in 1922, in Jamshedpur, India

Manufacture tinplate for packing kerosene

Jointly by 3 companies (Burmah Shell, Shaw Wallace & Tata Steel)

Adding a facility thickness (0.17-0.3 mm)

Started for baby food, processed food & tinplate for battery jackets

Raw material continued to be entirely imported

TCIL faced inherent disadvantages continuing import TMBP

Receive an uninterrupted supply of raw material

4 segments : Edible oil cans, soft drink crowns, processed food & batteries.

Rate of Growth of Import & GDP

40 30 20 10

0
-10 -20 -30

Imports

GDP

VA Industry

In 1997, Import of India and GDP is decrease. And finally in 19971998 there was a financial crisis in Asia

SITUATION ANALYSIS

Share of Comodity Group in Total Import (in percentage)

30

25

20

15

10

0 Edible oil Iron & Steel Petroleum Product Machinery & Equipment

1993-1994 0.2 3.4 24.7 23.8

1994-1995 0.7 4.3 21 23.1

1995-1996 1.8 3.9 20.5 24.1

1996-1997 2.1 3.5 25.6 22.1

1997-1998 1.8 3.4 19.7 19.2

Growth Rate of Total Import Industry in India 1997-1999

Machinery, transport equipment Growth Rate (%) -5.3 -17.08 -21.17 56 23.84 2.81 15.37 5.43 9982.87 Import (US $ Million) 1178.35 6434.72 2274.64 25.41 3.43 19.68 3.51 10541.79 Import (US $ Million) 1421.06 8163.91 1458.08 Iron and steel Petroleum crude and product Bulk consumption goods

% share 1998-1999

% share 1997-1998

THIS IS THE MARKETING MIX!

Characteristic of thin plate

Prime Grade
edible oil cans soft drink crowns Free from fisual defect processed food batteries Food packaging The customer hard high-speed can making equipment Banned for food packaging Non food product packaging Unsuitable for battery jacket

Secondary grade

Raw material : (TMBP)

Product

Place & Promotion

Dominated by personal selling

Place & Promotion

Factory in Jamshedpur India A sales team ( 20 personnels) interacted with customers other segments

Distributed by 15 agents throughout country in edible oil can.

Price
Caught between the highly price sensitive lower end customers : The high service expectation of high end customer.

High end customer more favorable perception on foreign companies Price Versus Profit TICL

Battery and processed food segment high profit margin but their sales was low

First, with price Rs.35.450 in segment Battery can generate higher profit margin 17%

Most of TICL sales came from eidible oil but less profit margin

Second, with price 25.850 in segment edible oil can generate profit margin 12%

Growth rate in volume

Financial year Tinplate Prime 1992-93 1993-94 1994-95 1995-96 31.543 35.953 38.712 40.654 Tinplate secondaries 71.110 74.300 76.065 79.751 81.432 84.323 86.756 79.105 Total 102.653 110.253 114.777 120.405 13,98 7,67 5,02 4,49 2,38 4,85 7,40 4,10 4,90 Tinpalte prime Tinplate secondary Total

1996-97
1997-98 1998-99 Average

41.189
43.976 44.496 39.503

122.621
128.299 131.252 118.609

1,32
6,77 1,18 5,99

2,11
3,55 2,89 3,38

1,84
4,63 2,30 4,20

Tinplate P & S Import

300,000 250,000 200,000 150,000 100,000 50,000 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 Tinplate Prime Tinplate secondaries Total 30.00 25.00 20.00 15.00 10.00 5.00 -

Growth Rate Import TP & TS

Total Tinplate secondary Tinpalte prime

CUSTOMER SATISFACTION
Segment Battery Edible oil Soft drink crown Processed food TCIL 20 18 17 20 FRITZ 33 22 SUKAI 30 22 20 TMN SAIL 13 UNORGANIZED 11

23

Customer Satisfaction
UNORGANIZED SAIL TMN SUKAI FRITZ TCIL 0 20 10 Battery 20 Edible oil 11 13 23 30 33 18 30 40 22 22 17 50 60 20 70 80 20

Soft drink crown

Processed food

GROWTH RATES
Segment Battery Edible Oil Crown Processed Food 1993 60,00 0,00 11,11 -12,50 1994 25,00 -14,29 20,00 14,29 1995 50,00 0,00 0,00 12,50 1996 Average 33,33 42,08 -16,67 -7,74 25,00 14,03 11,11 6,35

Growth Rates Thinplate In Segment

Processed Food

Crown Average Edible Oil

Battery -20 -10 0 10 20 30 40 50

MARKET SHARE
Market Share Edible oil
SAIL 18% TCIL 28%

Battery
SUKAI 45%

TCIL 10%

FRITZ 45% UNORGANI ZED 54%

Soft Drink Crown

SUKAI 45% FRITZ 45%

TCIL 10%

Processed Food
TCIL 22% TMN 78%

Joint venture with 3 companies : Burma shell, shaw wallace & tata steel

Uninterrupted supply of rawa material (Tata iron and steel company TISC)

STRENGTH

Four major product segment : edible oil cans, soft drink crowns, processed food and batteries

Quality problem Sufficient to meet domestic demand

Weak research and development facilities

Inadequate focus on control mechanism for preventing of lower grade import thinplates

WEAKNESS

OPPORTUNITY

Increase in GDP opportunity to growth Growth in the hotel industry Political climate showing sign of continuity in policies toward industries High industrial growth (9%) Changing food habits and health conciousness of next generation

THREAD

Lowering of customs tariff Household units becoming smaller

Regulating standarts lacking enforcement

threat of Substitutes: Plastics, PET, alumunium, blackplate, tetrapak and paper

Rising cost of tin which has to import from outside

Unorganized

MARKET SHARE

COMPETITIVE LANDSCAPE
Edibles Oil

CUST. SATISFACTION

SAIL

MARKET SHARE

Sukai

Fritz

CUST. SATISFACTION

COMPETITIVE LANDSCAPE
BATTERY

MARKET SHARE

FRITZ
SUKAI

COMPETITIVE LANDSCAPE
Soft Drink Crowen

CUST. SATISFACTION

TMN

MARKET SHARE

COMPETITIVE LANDSCAPE
PROCESSED FOOD

CUST. SATISFACTION

SO WHAT ARE THE PROBLEMS ??

Main Problem
Should it continue in the edible oil segment ?

Additional Problem
How can TCIL compete with foreign company ? What strategy can TCIL formulate based on organizational buying behavior concept ?

THEY SAID YOULL NEED A THEORY. WELL, THIS IS IT!

Buying Behavior in Edible Oil Market

Consumption Specifity Personality Traits

Response Tendency

Marketing Implication
Coupon & discount as primary method if it is a sizable segment

Deal Proneness

Seek the best bargain possible in shopping situation

PRICE SENSITIVE CUSTOMER

Buying Behavior in Other Segments

Consumption Specifity Personality Traits

Response Tendency

Marketing Implication

Need for tactile input

Inspect the product by exploring its impact, sticking, sliding, texture

Need of shopping medium

MORE ATTENTION ON CUSTOMER SATISFACTION

Measuring Customer Satisfaction

According to Exhibit 3
Customer Satisfaction

Edible oil market

(Battery and crown segment) foreign company

Customer Satisfaction

Use the components of American Customer Satisfaction Index (ACSI) understand how company can satisfied their customer.

ACSI Component of Customer Satisfaction

Perceived Quality Customer Satisfaction

Customer Complaint

Perceived Value

Customer Expectati on

Customer Loyalty

OTHER SEGMENTS SATISFACTION

BETTER PRODUC T

CHANGE CUSTOMER ATTITUDE

Willing to buy

TO DO LIST!

Attitude Components and Manifestation

Affective
TCIL Tinplate is a good product

Stimuli: Personal selling, brochure, and sample

Cognitive

TCIL Tinplate has followed the BIS standard

Behavioral

Customer prefer TCIL Tinplate than foreign competitor

Overall orientation toward object: TCIL Tinplate has change into better product and as good as or better than foreign company

ENJOY THE SOLUTIONS!

Should TCIL continue in edible oil segment ? Because :

Market leader with high market share (28%) and has perceive quality in edible oil segment (20) High consumption tinplate (148.000 metric tons), Comprises 76% of tinplate sales. There are opportunity of high Industrial growth(9%)-buoyant demand for packaged foods

TO DO LIST!

Monitoring of import for secondary grade Thinplate product

Political climate Industry oriented-customer focused companies.

Focus on control mechanism for prevention of usage of lower grade imported tinplate in health sensitive packaging Advertise, educate and make the consumer aware about ill-effects of secondary grade tinplate

Develop and extent market for packaging (EXPORT)

 Implement strategies in terms of innovating value

Invest in battery and crown R&D : High growth potential segments. Maintain high quality and adhere to specific requirements in these sectors. Increase customer satisfaction with delivering more value added

COMPETE WITH FOREIGN?

 Control customs duty for import product Enhance cost competitiveness Packaging solutions/ innovations Reduce cost due synergy in value chain Develop stronger delivery channels Make alliance with major can maker

DEVELOP STRONG DISTRIBUTION CHANNELS

Direct To End Customer Sell Through a VAR (Value Added Reseller)

Sell Through a Dealer Network

Internet, Catalog

Wholesaler, Consultant

I AM BUSINESS BUYERS

MY RATIONAL THOUGHT!

MONEY

PRODUCTIVITY

PROFITABILITY

INCREASING PROFITABILITY

REDUCING COST

ENHANCING PRODUCTIVITY

MARKETING DOLLARS

MARKETING PROGRAMS & MATERIALS

RATIONAL BUYING DESICION

QUALITY MATERIAL TESTIMONIALS OTHER ACTIVITIES

BUILD CREDIBILITY

THANK YOU