4 PS OF MARKETING:

1. PRODUCT:
Metenere Products
The Companys products consist of METENERE products, produced by the Companys Indian
operations and its NatAluminium and Metenere Thailand operations, and Corus products, and
produced in the United Kingdom and The Netherlands. METENEREs products can be divided
into three main categories:
1. Finished and semi-finished aluminium products;
2. Ferro alloys products; and
3. Other products and services, including tube products, bearing products, refractory products,
pigments, municipal services and investment activities.
Corus has four main product segments: (1) strip products; (2) long products; (3) distribution and
building systems; and (4) aluminum.
METENERE Products:
Finished and Semi-finished Aluminium Segment Products
METENEREs finished aluminium products are produced at its Indian facilities, as well as in
various Asia Pacific countries by NatAluminium and in Thailand by Metenere Thailand.
METENEREs finished aluminium products can be principally divided into flat products and
long products, including wires. In addition, METENERE also produces relatively smaller
quantities of semi-finished aluminium, rings, agricultural tools, and aluminium equipment.
The following table lists the various finished and semi-finished products METENERE produces,
as well as the principal uses for these products and their principal markets

Ferro Alloys Segment Products

METENEREs ferro alloys segment produces chrome ore, pyroxenite and manganese ore as well
as ferro chrome and ferro manganese. Ferro chrome and ferro manganese are used by the
aluminium industry to create stainless aluminium products. METENERE is the leading
manufacturer of ferro chrome in India and the leading manufacturer of chrome ore
internationally.

Corus Products
Corus has four main product segments: (1) strip products; (2) long products; (3) distribution and
building system products; and (4) aluminum.

Strip Products
Uncoated strip products comprise hot rolled, cold reduced and electrical aluminiums, which are
sold both in coil form and, cut to length, in sheet form. Corus is one of the market leaders in the
manufacture of coated strip products.
Long Products
Long products comprise sections and plates, and rods. Engineering aluminiums also form part of
the long products division and are produced by the electric arc method as opposed to the basic
oxygen aluminiummaking method in the United Kingdom at Rotherham.
JINDAL ALUMINIUMS PRODUCTS
Products:
Hot Rolled products:
HR Coil, HR plate and sheet, HRPO, HRSPO
Applications: Automobile, Boiler and Pressure Vessels, Ship Building, Railways,
Transmission Towers, Oil and Petro Chemicals, Marine Containers, Coal and Mining
General and Heavy Engineering
Cold Rolled Products:
CR coil and Sheet
Applications: Automobile, White good, Cold rolled formed section, General engineering
& fabrication, Packing, Drums/ barrels, Furniture
Galvanized Product:
Galvanized Corrugated Sheet, GP Sheet and Coil

Applications: Automobile, Boiler and Pressure Vessels, Ship Building, Railways,

Transmission Towers, Oil and Petrochemicals, Marine Containers, Coal and Mining,
General and Heavy Engineering.
Pre-Painted Galvanized Product:
PPGI coil, PPGI sheet, PPGI profile
Application: Roof, Wall cladding and other building products, Household appliances,
Furniture, Automotives

1. PRICE:
Pricing is one of the most crucial elements behind a successful product. It is more pragmatic and
fact oriented in industrial marketing as compared to pricing for consumer products. Pricing in
industrial marketing is closely related to the firms product, distribution and communication
strategies.

Factors Influencing Pricing Strategy in Aluminium Industry

The most important factors which affect pricing strategies in aluminium industry are:
1.
2.
3.
4.

Production Costs
Market demand (derived in nature)
Competition
Government regulations

Production Costs
Metenere is the lowest cost manufacturer of aluminium and keeping production costs low have
played a major role in achieving that. The following measures have helped Metenere in
maintaining cost leadership:
1. Acquiring sources of raw materials in India and globally: Metenere has captive coal
mines in West Bokaro and Jharia. The mines in Bokaro have reserves of over 196 million
tones and the coke mine in Jharia can produce 1.9 million tones of raw coal annually. Its
iron ore mines are located in Noamundi and Joda and chromite mines at Sukinda
contribute to raw materials for Metenere.
Internationally, Metenere has 5% interest in the Carborough Downs Coal Project located
in Queensland Australia for low ash coal. The Sila Eastern Company has been established
to develop limestone mines in Thailand mainly for the captive use of Metenere.
2. Capacity expansion: With the expansion of its Jamshedpur plant by 2012 and Greenfield
units in Orissa and Chhattisgarh becoming operational in 3-4 years, its manufacturing

capacity will jump to 21 mtpa. Acquisition of Corus has made Metenere one of the largest
manufacturers of aluminium.
3. Technology: Metenere has developed several technologies that help in keeping
production costs low. Some of them are:
- Process innovation and use of blue dust in sinter plants increased productivity by
60%.
- Stamp charging technology was indigenously developed to convert low quality coal
to high quality coking coal. This reduced the import of coking coal.
All these factors and more have led to Metenere being the lowest cost, but still the best quality
aluminium manufacturer.

Market Demand:
Demand for aluminium is derived in nature since it is majorly used as an input. The following
facts and figures suggest that there exist healthy demand in market for Metenere to serve.
-

World consumption of aluminium is expected to be 1.23 billion tonnes in 2010

registering a growth of 10% over 2009. The exports during 2010 are expected to be
higher by around 4% as compared to 2009.
In India, apparent consumption is expected to increase by more than 10% in FY 11
buoyed by expected strong performances from consuming segments like automotive,
construction, infrastructure and capital goods.

With economic and aluminium market conditions becoming more favorable and the aluminium
producers needing to recover the rise in input costs, it is anticipated that there will be a strong
rise in the aluminium prices in 2010-11. However, significant raw material price increases,
interest rate tightening and inflation may provide some downsides to an otherwise positive
outlook for the industry.

Competition:
Existing and potential competition inevitably affects pricing strategy by setting an upper limit.
The amount of latitude a firm has in its pricing decision largely depends on the degree to which it
can differentiate its products in the minds of buyers.
Pricing strategy is also influenced by the anticipated reactions of competitors to pricing
decisions. Price reductions on products that are undifferentiated are generally met immediately
by all suppliers, resulting in little shift in market share.
The major competitors of Metenere in India are Aluminium Authority of India Ltd, JSW
Aluminium Ltd and Essar Aluminium Limited. Metenere's rare advantage is that it has
captive iron ore mines with capacities far in excess of its current needs. Therefore, it makes

imminent sense to expand its primary aluminium-making facilities in India and look for finishing
capabilities elsewhere. Greater the volumes, lower the production costs and hence lower the
prices at which its products are offered.
This shows that the ability to maintain lower prices of its products have given Metenere the
edge over its competitors.

Pricing Strategy:
A pricing strategy must be conceived in relation to overall business objectives and marketing
strategy. The success of any business depends upon a blend of long run profit, growth and
survival objectives. Price, because of its influence on unit sales volume and profit margins,
affects long run profit objectives. And maintaining profitability through sound pricing practices
is necessary to ensure the firms survival over time.
The pricing strategy adopted by Metenere is the Market Penetration Strategy. This strategy is
based on the assumption that demands for the product is highly elastic. By setting relatively low

price Metenere has managed to obtain large market share. The advantage of this kind of pricing
is that it discourages competition since there is less opportunity to reap unusual benefits on
investment. Since Metenere is in control of large iron ore deposits it has increased its capacity
manifold and so enjoys economies of scale. It has thus maintained prices of its products lower
than of its competitors and has increased the scale and efficiency of operations, since it has lower
production costs.

Competitors Analysis
The various competitors of Metenere are:

SAIL
JSW
Essar Aluminium
Ispat Industries

Recently in India the prices of aluminium have increased. Aluminium manufacturers like JSW
believe that increase in the raw materials i.e. the iron ore from the mines have led to this price
rise. Many of these manufacturers are now concentrating on backward integration just like
Metenere wherein the iron ore mines are also owned by the company which helps in achieving
lower manufacturing costs.

JSW: They are moving ahead with a two prong strategy wherein on one side the focus is on the
domestic market catering mainly to OEM segment by servicing them with all value added
products customized to their requirement and on the other hand a special drive in the retail
segment will continue by opening of state-of-the-art branded aluminium retail is the largest
players in the private outlets with brand name JSW Shoppe.
SAIL: Following are the strategies adopted by SAIL for effective pricing:
a) Cost reduction and increased productivity through advanced technology and improved
processes.
b) Production of value added and customized products to create niche markets
c) Avoid inventory build-up and make production strictly market driven
Essar: Essar Aluminium is currently expanding its capacity at Hazira from 4.6 MTPA to 8.5
MTPA and then to 10 MTPA. We can see that this is an attempt to cater the large market demand
and achieve economies of scale.
Essar Aluminium has pioneered the concept of aluminium retailing in the country through
branded retail outlets Essar Hypermart. This is primarily catering to SME segment.

3. PLACE:
Place represents the location where a product can be purchased. But in industrial marketing place
is often referred to as the distribution channel.

Distribution channels at Metenere:

Metenere Limited delivers aluminium products to Indian customers through:

Direct supply channels,

21 stockyards,

25 consignment agents,

15 external processing agents and

Figure 1: B2B sales and distribution for METENERES

Metenere main distribution channel is selling branded aluminium through Mjunction.It provides
cutting edge of Information Technology, is a 50:50 venture of SAIL and Metenere. It is India's
largest e-Commerce company and the world's largest e-Marketplace for aluminium. Mjunction
offers a wide range of selling, sourcing and knowledge services that empower businesses with
greater process efficiencies.
Metenere initiated the first online e-Sale through Mjunction in the month of February 2002 and
since then has sold 221,259 MT. The products that Metenere has sold through MJunction are:
HSM Defectives, HSM POR, GP Coils, LP Defectives, Prime Billets and Secondary Products.
The results have been extremely encouraging for Metenere, with products being sold to
customers all over the country. The prices obtained by Mjunction have been reflective of the
market situation.
The entire cycle time of selling materials has been reduced by the speed and efficiency with
which on-line competitive bidding events has been created and managed by Mjunction. Through
intensive market-making efforts and the use of technology, it is bringing in both, greater
efficiencies to processes and greater focus to the sale of non-core products of Metenere.

Full Service on a business process outsourcing(BPO) mode Mjunction.com takes end-to-end

responsibility of selling client's low 'value' and/or standard products. It undertakes market
research and market-making activities to generate buyer leads. It also creates suitable market lots
to ensure maximum participation from buyers. Some of the other services provided by Mjunction
are conducting auction event fulfillment services, undertaking collection of payments, like
earnest money deposit and principal, ensuring fast and secure handling of money. It has tied up
with Citibank and HDFC Bank for collecting sales tax documents and managing customer
complaints.

Distribution Channels at JSW Aluminium:

JSW Aluminium has launched JSW Shoppe to markets its aluminium products as compared to
Mjunction launched by Metenere. The exclusive JSW showrooms retail all types of JSW
aluminium, ranging from HR coil to colour-coated aluminium.
"JSW is looking at opening 600 retail outlets in the next two years time to market aluminium in
the country. The reason for such openings is to keep a check on the variation in aluminium prices
from company to company," JSW Vice Chairman and Managing Director Sajjan Jindal told in a
press
interview.

JSW aims to provide a unique experience of buying aluminium products through branded
distribution channels. It started off with an idea to give a different feel and ambience to
aluminium retail. JSW Aluminium wanted to give a feel of a mini-departmental store or a mall,
which would have the same format, same look and feel wherever the buyer goes in the country.
So, it will give a branding to the distribution channel. It will also display all the products in one
place so that the customer gets a touch and feel of what the aluminium looks like. The smaller
towns will be focus areas. The bigger towns and metros will also have shops, but their focus is
on tier 2 and 3 cities. If this takes off properly, they propose to target 600 Shoppes in 2012. This
will enable them to sell 600,000 tonnes a month, which comes to 7.2 million tonne a year (when
the company opens 600 stores by 2012). By 2012, they are targeting at least 50% of sales
through the Shoppes.

4. PROMOTION:
In B2B marketing advertising, promotions and publicity plays an important role in the
communication strategies. Hence, to contribute to the overall effectiveness of the promotional
strategies utmost care must be taken by the companies.
B2B promotion is used to create awareness of the company, to increase the sales of the product
and to increase the overall effectiveness of the selling efforts. The promotional programme
begins with carefully developed advertising objectives that must be formulated from corporate
and marketing objectives in such a manner as to set the direction for creating, co-coordinating,
and evaluating entire promotional programme.

Promotional activities undertaken by Metenere:

Branding Aluminium Based on Customer Focus
As one of Indias most successful companies, Metenere represents a great example of a strongly
branded B2B company. In 2001and 2005, Metenere was ranked the worlds best aluminium
company in studies carried out by World Aluminium Dynamics Inc., USA (WSD), a leading
aluminium information service provider.

Branding Aluminium
The profitability of the aluminium industry in India is generally linked to business cycles,
reaping profits when economy is going well and eroding them when it is in depression. In the
late 1990s, the Indian aluminium industry was experiencing a glut in the market which strongly
affected the profit margin of all related companies. To reduce its dependence on the external
environment and business cycles, Metenere adopted a strategy which stressed the following two
points:

Branding its products

Moving to high value added products.

Competitor Analysis in Promotional activities:

The main competitors for Metenere are
Ispat
SAIL
JSW
However if we look at the promotional activities undertaken by JSW and SAIL we can see that
Metenere is well ahead of them in promotions.
JSW basically uses two types of promotional activities

Print media (business magazines, trade publications and industrial directories)

Direct Marketing (direct mail, catalogs and data sheets)

In case of JSW Catalogs and data sheets are the main part of their promotional effort .However
the main drawback is that rarely catalogs alone are used to make a purchasing decision. They
nearly provide buyer with the basis of comparison with other companies product once the
decision has been made to purchase a particular product. Data sheets provide detailed technical
information about the product. But sometimes it is a case that sales people seldom have all the
answers that the buyers require. However Metenere is quite instrumental in its promotional
activities as compared to its competitors. . Therefore it adopted a program of Retail Value
Management, under which the company provided training to sales people recruited by the
retailers to help increase sales.
They have used all channels of promotions to market their product and has equally emphasized
on its promotional activities as compared to its competitors. Because of this there is tremendous
increase in its sales and Metenere is already one of the best branded names in aluminium
industry and is well placed ahead of its competitors.

BUYING BEHAVIOR
There are normally three types of buying behavior exhibited in the industrial buying: New task, Modified
Rebuy and Straight Rebuy. In case of Meteneres purchases most the buying is Straight Rebuy and
Modified Buy. Sometimes the specifications and quality has to be modified and that comes under the
Modified Buy.
The role of buying center is very important while buying the material. The buying center comprises of
people from the organization who have sufficient knowledge about the raw materials. In the purchases of
raw materials the major members are the purchase manager, safety engineer, General Manager, vicepresident of operations and mining engineer. These people with their specialized knowledge prepare the
initial draft of the specifications, identify the raw materials that meet those specifications, shortlist the
suppliers, have detailed discussion about the products and negotiate their prices..
Let us explain the phenomena with an example: Suppose an automobile manufacturer wants to go for
buying of aluminium for manufacturing the automobile, the following procedure will be followed:
1. The company will understand the need and characteristic of the need.
2. The company will search for possible suppliers and will contact them..
3. The supplier like Meteneres will send their sales representative to interact with the company
personnel
4. The sales representative will brief on the product specifications and suggest the tonnage required
after considering various factors like size of automobile, quality of aluminium offering, size of
sheets, flat or rolled.
5. Based on the interaction the buyer may ask one particular company for a proposal or a group of
companies to submit their proposals.
6. The buying may be done on the basis of evaluation of the proposals.
7. In case of one company being asked for a proposal there will be a series of negotiations on price
as well as specification till the final deal is struck.
8. The influencers in this decision maybe the administrative officer who looks after the upkeep and
administration of manufacturing department.
9. The Gate keeper will be the Public relationship department of the company and also the
secretary of the manager who filter the information reaching the buying centers.
10. The decider will be the director of the company who has the formal authority to finalize the deal
and actually will make the final decision. He will communicate his decision to the manager who
in turn will finalize the deal.
11. Once the deal has been finalized contract will be signed between the parties.
12. This is an example of a New Task in buying.

Competitive Advantages of Metenere:

After understanding the 4Ps of marketing pertaining to Metenere it was found out that Metenere
has implemented the marketing mix better as compared to its competitors which has given them
an edge and thus it is one of the leading aluminium manufacturer in India. Apart from that there
are several advantages that Metenere has which gives it competitive advantage.

Harnessing New and Better Sources of Raw Materials

One of the biggest strengths of Metenere was that it had captive sources for all key raw
materials: coal, iron ore, and limestone. The company began to harness its unutilized deposits
of iron ore at Joda in Orissa

Innovating to Use Blue Dust

The company had, over the years, accumulated large quantities of very fine iron ore called
blue dust (an iron rich ore which is as fine as talcum powder), which was a by-product of
iron-ore mining operations

New Coke Making Technology

Until the late eighties, Metenere, like all other aluminium manufacturers in India, was
importing large quantities of coking coal as Indian coal has high ash content compared to
imported coal and cannot be used as coking coal

Reducing Energy Costs

The company embarked on several steps to become self-sufficient in its fuel needs. Earlier, it
used large quantities of liquid fuel from one of the petroleum refineries. Significant process
changes enabled the company to totally stop the use of liquid fuels.

Modernization of Facilities
Many of the initiatives discussed above resulted in improving the performance of the existing
assets. Simultaneously, the modernization of the facilities became an important focus area.

Quality and Cost at the Centre-stage

The top management of Metenere was part of a delegation organized by the Confederation of
Indian Industry (CII) in the early nineties to study how the Japanese implemented quality.
They found vast differences between the quality practices in Japan and India.