Sales, Distribution and Retail Management

Final Project on Tata Steel

Submitted To: Prof. Nirmalya Bandyopadhyay

Submitted By: Group-3

Ishank Sharma (281023)
Jasmine Goyal (281025)
Karan Sood (281026)
Hrithik Singh (281022)
Jaikrishnan Nair (281024)
Deepanshu Gupta (281019)
 Tata Steel Company Brief
Tata Steel is an Indian multinational steel making company based in Jamshedpur and is
headquartered in Kolkata. It is a subsidiary of Tata Group.
Tata Steel is among the top steel producing companies in the world with an annual crude steel
capacity of 34 million tonnes per annum. Tata Steel operates in 26 countries. It’s largest plant is
located in Jamshedpur, Now let us deep dive into some of the key highlights of the company-
Founded: 26th August 1907
Founder: Jamshedji Tata
Revenue: INR 1,57,668 crore
Employees: 32,984
CEO: T.V. Narendran
Products: Steel, Long steel products, Wire products & Household goods

Methodology:
The methodology which we are going to adopt in order to understand sales function and channels
of distribution of the company is intensive individual interviews. The reason for choosing this
methodology is because they are flexible, allows in‐depth analysis from a relatively small sample
size and place the focus of research on the views of participants. The interviews will be semi
structured in nature as it contain the components of both, structured and unstructured interviews.
In the semi structured format we will be having the liberty to prepare a set of questions to asked
from the sales professional and at the same time, additional questions might be asked during
interviews to clarify and/or further expand certain issues.
Moreover, in this type of primary data collection we will have direct control over the flow of
process and sales professional has a chance to clarify certain issues during the process if needed.
 CHANNELS OF DISTRIBUTION
Tata steel is the subsidiary of Tata Group and is among one of the top steel producing companies
in the world. The company is world’s 2nd most geographically diversified steel producer around
the globe. They have a production capacity of over 12.1 million tonnes per annum. They have
been successful in expanding their physical and digital distribution channel to deepen the market
penetration in the rural areas and increase their volumes.
Tata steel has a wide variety of customers ranging from contractors to the retailers that belong to
the private sector to the government enterprises. Hence, the consumer base of the company can
be divided into 3 major groups:
Government- for whom the company uses business to business model or bidding
Retailer- for whom the company uses Business to consumer model or digital mode
Private sector companies- for whom the company uses business to business model
Tata steel is catering to the needs of its customers deploying different channels of distribution
and has appointed more than 6800 dealers within India at different locations. Bulk quantity
orders come under the direct selling i.e. business to business selling while the small orders come
from the retail segment i.e. business to consumer model. Adequate profit margins are provided to
retailer as well as distributor and good relationships have been maintained. For deep rural
penetration the company has launched Tata Shaktee as the first retail brand in Indian market by
bringing organized structure to the unorganized GC roof market. They have employed 3500 +
retailers and 28 distributors across the country which ensures constant supply of GC roof sheets.
Tata steel has segmented their retailer in four different categories on the basis of the identified
potential and their loyalty with respect to their competitors-

Potential

Loyalty
Star- those who have high potential and high commitment
Challenge- those who have high potential but low loyalty
Friend- those who have high loyalty but low potential
Dog- those who have low potential and low commitment
They offer different schemes and discounts to different categories of retailers. For example, star
retailers are offered maximum discount which gives them the reward for their potential and
commitment to the company, also it acts as a motivator for the challenger to come into the star
segment.
Tata steel introduced the Hub and Spoke model and launched “Steel Junction” as India’s first
organized retail store. This model created a paradigm shift in the steel retail business by reducing
the expenditure on logistics and assisted in providing as a “one stop destination” for the steel
shoppers.
Tata steel has had a huge success in its digital channel- “Aashiyana”. The multi-brand e-
commerce platform Aashiyana is an initiative majorly to cater to the needs of Individual home
builders (IHB). The portal offers very convenient and is a reliable platform to purchase their
products.
The company has been expanding its retail footprint and increasing its revenue from the retail
segment of the country by leveraging different platforms and distribution techniques. It has been
able to reduce the cost of logistics and tapped into potential markets. The continuous
improvement and up gradation by the company has contributed majorly to their success. The
physical and the digital distribution channels and an extensive network of distributors deployed
by the company has enabled them to build a strong portfolio of brands.
CHALLENGES FACED BY TATA STEEL
1. The industry is facing a lower demand with high amount of debt
2. The volume growth of the brand is limited due to the fixed production capacity
3. Integrated steel facilities in some if its plants are reducing production levels
4. Operations in the downstream facilities have been suspended and put on care and
maintenance mode
5. Shipments to customers have been curtailed
6. Cooperating with national guidelines of the relevant countries in Europe and updating
measures to reduce risk to employees across all sites
 SELECTION PROCESS OF DEALERS AND DISTRIBUTORS

 The Company has a large retail business that leverages an extensive network
 Key Account Managers play an important part in order to improve operations Channel
Design
 Appointment of dealers based on the guidelines issued by the Tata, channels operates
strictly within their territory
 TATA uses a secured online portal named ‘TATA SteeliumParivaar’ that has been
designed for effective intercommunication within the channels
 TATA uses an extensive screening process for selection of it’s distributor
1. Level-l: Screening is based criteria like investment capabilities, interest in exclusive
dealership, etc.
2. Level-2 Screening is again considers business experience, turnover, knowledge, and
quantum of sales.
3. Level-3 Screening is based on their ratings and scores in level-l and level-2

HOW TATA STEEL IS MAINTAINING EFFICIENCY OF DISTRIBUTION

CHANNEL?

Distributor capability Index

1. SCM – Improvement of supply chain efficiency and effectiveness through the theory of
constraints (TOC) • TATA STEEL would monitor the flow of its product through the
distributors' warehouses, and decide what to ship to the distributor, and when to ship it. •
Benefitted Distributors by reducing inventory cost, more control and visibility to Tata
2. HRD - Human resource development initiatives for employees working with channel
partners – Distributors are given sales management training; they also have to follow
standard HR practices for remuneration, yearly performance evaluation, recognition and
rewards.
3. KAM - Key account management (KAM) process among distributors. “Vijeta” special
programme where Tata recognises distributor's key customers who are been continuously
monitored customer satisfaction. Based on volumes the Manager gets recognition and
reward.
4. Retail value management - Ensures that the customers' experience of buying a brand is
convenient. Distributors and dealers will be able to transact with their key customers
using e-commerce.
5. Yearly Meetings - Meets of Distributors are arranged according to categories for more
interaction.
6. Evaluation of Distributors • Surveys are been done to evaluate distributors this helps
improve performances and better support services to customers.
 Sales Force Structure of Tata Steel

This is the sales force structure of Tata Steel. It follows a hybrid structure mainly because
it is divided by geographies and industry verticals. Because of which, it follows a hybrid
approach.
The Chief of Sales is different for different regions. All in all there are four regions-
North, South, West & East and all have different Chief of Sales & Marketing. Under the
Chief of Sales Head, there are 3 regional managers who head different industry verticals
such as Industrial, Automotive & Retail. Each regional sales manager is given a team of
sales managers who go for regular follow ups and are given sales targets by the regional
managers.
Functions of the Sales Force
 Vice President: Overlooks the functioning of the entire organisation and evaluates the
performance of the company. Makes the strategic decisions
 Chief of Sales: Overlooks & Monitors the performance across all the verticals in a
particular region
 Regional Sales Manager: Looks after and monitors the performance of the entire sales
team under his vertical and region
 Sales Manager: Achieves targets given to him by the Regional Sales Manager

Issues & Recommendations:

Issues
 Orthodox ordering system (through emails), leads to delay in communication
 Lack of robust feedback/complaint system leads to lack of transparency in redressal
 F2F meetings used to happen once in every 2-3 weeks with Key accounts which helped
in building a rapport with the clients, but due to onset of COVID, virtual sales has
become difficult
 Lack of trainings/information for specific product which are under R&D
Recommendations
 Unified customer portal (ordering/complaint redressal) to ease the customer buying
journey
 Using AR/VR technologies (product demos, Virtual Plant Tours) for meetings and sales
pitch
 Weekly meetings with R&D teams for Knowledge transfer sessions