Sales division split helped Tata Steel buck slowdown

Jun 17 2014, 09:21 IST
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In fiscal 2014, Tata Steel sold 8,515 kilo tonne (kt) of steel products, 14% higher than the previous year. (Reuters) In fiscal 2014, Tata Steel sold 8,515 kilo tonne (kt) of steel products, 14% higher than the previous year. (Reuters)
SummaryTakeaway from Europe ops: Shift towards structure based on customers

Tata Steel has restructured its sales and marketing set-up for the country in a manner that has helped it maintain volumes amid a generally sluggish domestic market, the company says.

Earlier, Tata Steel’s sales and marketing division in India was divided into two verticals — flat products (such as corrugated sheets) and long products (like TMT bars). Under the earlier arrangement, the sales and marketing teams under the two verticals had to deal with clients across sectors that used these products respectively.

Since January, the sales and marketing division has been split into four main divisions — automotive and special products; branded products, retail and solutions (catering to the likes of construction companies and retail buyers in rural areas); industrial products, projects and export (catering to infrastructure companies and suchlike); and downstream transfers (consisting products like wires).

According to the company’s latest investor presentation, this “focus on further strengthening customer relationships and increasing market penetration” has been one of the main reasons for the firm’s ability to buck the trend of falling demand for steel in India and register volume growth across verticals.

In fiscal 2014, Tata Steel sold 8,515 kilo tonne (kt) of steel products, 14% higher than the previous year. Sales of steel products for the automotive sector, in particular, registered impressive 15% year-on-year growth despite the overall automotive steel products market falling 5%.

According to Atrayee S Sanyal, chief of marketing and sales, branded products, retail and solutions at Tata Steel, any product-centric marketing organisation tends to club different sets of buyers under the same product. For instance, in Tata Steel, earlier the same sales team selling long products would cater to both individual home-builders and large corporations. “This raises the question that should the sales manager focus on a large company that buys in greater volumes but at competitive prices, or should he connect with retail and small customers who buy in limited quantity,” Sanyal said in a phone interview from Jamshedpur.

“The focus was not sufficient given the existing bandwidth of the organisation.”

As part of its efforts to service customers better, Tata Steel is also laying greater emphasis on the professional background of team members while allocating customers. For instance, sales personnel catering to Tata Steel’s retail buyers, such as a homebuilder in a rural market, are being hired from diverse fields such as FMCG companies. A lot of people have also been recruited from IT companies to

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