FACTORS AFFECTING BUYING

BEHAVIOUR OF CUSTOMERS OF COLD

ROLLED STEEL STRIPS/COILS IN
LUDHIANA
A Project Report

Submitted by
GURIQBAL SINGH
Reg. No. 80101317009

In partial fulfillment for the award of the degree

Of
MASTERS OF BUSINESS ADMINISTRATION
IN
MARKETING
At

GURU NANAK DEV ENGINEERING COLLEGE

LUDHIANA
AUGUST 2009
 ACKNOWLEDGEMENT

I take this opportunity to express my profound sense of gratitude & respect to all those
who helped me in this Research.

I would like to make special mention of help and encouragement that I received from Mr.
Anil Gupta & Mr. Jagmohan Syal (V.P. Marketing, Hero CRD), my project leader
Mr. Rajesh Vij (A.G.M. Marketing, Hero CRD) and special thanks to Mr. Manish
Kr. Singh (Dy. Marketing Manager, Hero CRD), Mr. Dhirendra Singh & Mrs. Lizu
Jagdish (Marketing Coordinator) which were critical in the development of this
project. I have profited immensely from working with many distinguished thinkers and
doers, who advised me at each step.

I would also like to thank the Marketing Department of Hero Cycles CR Division and
people in the organization for sparing their valuable time and providing useful insight’s
that have made my learning experience very fruitful.

Above all I want to thanks my parents, for their continuous involvement and constant
support.

Finally and most important I would like to thank to Faculty of GNDEC to

provide me with such an opportunity that has enhanced my learning horizon Last
but not least, I thank the almighty, may he stand with all of us.

GURIQBAL SINGH
REG. NO. 8010137009
MBA (2008-10)
 PREFACE

I feel delighted to present my project report on “ FACTORS AFFECTING BUYING

BEHAVIOR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN
LUDHIANA” is a matter of honor and pride for me that I got a chance to undergo my
Summer Training in a company like HERO CYCLE Ltd. (CR Division). In this period
of six weeks I got familiar to the real conditions of an organization and especially to the
work culture of such a big and prestigious group which has its name in the manufacturing
of Two Wheelers and many others products as well as Customer services.

The first task for me was to know about the concept on which my project was based.
Then I had to set criteria, on the basis of which the above concept was valued. The data
was collected for each of the parameter found responsible in influencing the purchase
decision of the customers through Marketing Research Program.

Hence, this project had to be completed in the Six weeks of time. As the time was
limited, so there is a possibility that some matters might not have been taken into
consideration, but every effort has been done from my side to include every necessary
parameter and include whole information that I got from the market during surveys as
well as the marketing Research Program.

GURIQBAL SINGH
 CERTIFICATION

This is to certify that the research project entitled “FACTORS AFFECTING BUYING
BEHAVIOUR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN
LUDHIANA” submitted for the partial fulfillment of requirement for the degree of
MASTERS OF BUSINESS ADMINISTRATION at GURU NANAK DEV
ENGINEERING COLLEGE, Ludhiana affiliated to PUNJAB TECHNICAL
UNIVERSITY, JALANDHAR is a bonafide research work carried out by Guriqbal
Singh of M.B.A under my supervision and that no part of this has been submitted for any
degree.

The assistance and help received during the course of the investigation have been fully
acknowledged.

Mr. PARAMPAL SINGH

ASSISTANT PROFESSOR
GURU NANAK DEV ENGINEERING COLLEGE
LUDHIANA
 DECLARATION

I hereby declare that the project titled “FACTORS AFFECTING BUYING

BEHAVIOUR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN
LUDHIANA” is an original piece of research work carried out by me.

The information has been collected from genuine & authentic sources. The work has been
submitted in partial fulfillment of the requirement of Master of Business Administration
to Guru Nanak Dev Engineering College Ludhiana affiliated to Punjab technical
university.

Place: Signature:
Date: Guriqbal Singh
M.B.A. (2008-10)
 EXECUTIVE SUMMARY
In the age of fast changing Marketing strategies, customer behavior, new market
segments and product opportunities along with sensitivity to changing customer needs,
the Hero group develops and adapts marketing strategy and philosophy. As the Hero
group is known for its completely customer- driven approach. For that very reason Hero
Cycles CRD undergoes this project.

The main aim of the project is to know the purchase criteria / Buying Behavior of
customers of the Cold Rolled Steel Strips/ Sheets provided by the Hero Cycle C.R.
Division and used in various industries (Automobiles, Bicycle etc.) in Ludhiana.

The customer’s perceive Quality as the most important factor while purchasing. More
customers will be attracted towards the products if quality parameters such as surface
finish, peeling off etc. are improved upon by getting continuous feedback on the quality
and other services provided by the company. The second most important factor is
delivery system and price. The price should be competitive with the other suppliers. The
third most important factor is Credit policy of the company. Better credit facility should
be given to the customers and payment norms should be simplified. Quality should be
used to cover the price. Improvement in quality, Services, Delivery and Rate reduction
should be made to further increase the market share and to attract the new customers of
C.R. Steel Strips/ Sheets.
 CONTENTS

CHAPTERS
CHAPTER-1
♦ INTRODUCTION OF THE PREOJECT
♦ REVIEW OF LITERATURE
♦ OBJECTIVE OF STUDY
♦ SCOPE OF STUDY
CHAPTER-2
♦ COMPANY PROFILE
CHAPTER-3
♦ RESEARCH METHODOLOGY
♦ UNIVERSE OF STUDY
♦ SAMPLING TECHNIQUES
♦ PERIOD OF STUDY
♦ LIMITATIONS OF STUDY
♦ SCOPE FOR FURTHER STUDY
CHAPTER-4
♦ ANALYSIS OF TOPIC
♦ CONCLUSIONS
♦ INFERENCES
♦ SUGGESTIONS & RECOMMENDATIONS
CHAPTER-5
♦ BIBLIOGRAPHY
♦ QUESTIONNAIRE
CHAPTER-1
 INTRODUCTION TO THE PROJECT

The project was given to me to study the “FACTORS AFFECTING BUYING

BEHAVIOR OF CUSTOMERS OF COLD ROLLED STEEL STRIPS/COILS IN
LUDHIANA”. So, the area of operation for me was the MARKETING
DEPARTMENT of the organization. The first task for me was to know about the
concept on which my project was based. Then I had to set criteria, on the basis of which
the above concept was valued. The data was collected for each of the parameter found
responsible in influencing the buying behavior of the customers though Marketing
Research Program.
 INTRODUCTION TO CONSUMER BEHAVIOUR

The Business market is comprised of organizations that in some form are involved in the
manufacturing, distribution or support of products or services sold or otherwise provided
to other organizations. The amount of purchasing undertaken in the business market
easily dwarfs the total spending by consumers. Because the business market is so large, it
draws the interest of millions of companies worldwide that market exclusively to
business customers. For these marketers understanding how businesses make purchase
decision is critical to their organization’s marketing efforts. In some ways understanding
the business market is not as complicated as understanding the consumer market. For
example, in certain business market, purchase decision hinge on the outcome of a bidding
process between competitors offering similar products and services. Thus unlike
consumer markets, where building a recognizable brand is very important, for many
purchase situations in the business market this not the case.

However, in many other ways business buying is much more complicated. For instance,
the demand by business for products and services is affected by consumer purchases
(called derived demand) and because so many organizations may have a part in creating
consumer purchases, a small swing in consumer demand can create big changes in
business purchasing. Automobile purchases are a good example. If consumer demand for
cars increases many companies connected with the automobile industry will also see
demand for their product and services increase. Under these condition companies will
ratchet up their operations to ensure demand is met, which invariably will lead to new
purchases by a large number of companies. In fact, it is conceivable that an increase of
just one or two percent for consumer demand can increase business demand for products
and services by five or more percent. Unfortunately, the opposite is true if demand
declines. Trying to predict these swings requires businesses to not only understand their
immediate customers but also the end user, which as we will discuss, may be will down
the supply chain from where the business operates.
 WHO MAKES UP THE BUSINESS MARKET?

There are millions of organizations worldwide selling their products and services to other
organizations. They operate in many industries and range in size from huge multinational
companies with thousands of employees to one-person small businesses. With such a
large number of originations and industries contained within the business market, a
marketer can obtain a better picture of who is involved by looking at popular business
classification systems set up by international governments, such as the North American
Industrial Classification system (NAICS), which covers Canada, Mexico and the United
States and the International Standard Industrial Classifications (ISIC), which is widely
used in Europe. These reports provide descriptions of hundreds of industry classification.

Supply Chain Members

The supply chain consists of mostly for-profit companies engaged in activities involving
product creation and delivery. Essentially the chain represents major steps needed to
manufacture a product that will eventually be sold as a final product. Each member of the
supply chain purchases products and services enabling them to carry out its business
objectives.
When making purchase decisions supply chain members may be motivated by such
factors as:

➢ Product cost
➢ Return on investment
➢ Assurance of consistent supply
➢ Reciprocity with supplying firm

An example of purchasing occurring in the supply chain includes:

 ➢ Manufacturing and Plant equipment
➢ Information Technology
➢ Offices Supplies
➢ Professional Business Services, etc.

Business User Markets

Besides selling final products and services to supply chain companies, several additional
User markets also make purchases either for their own consumption or they buy with the
intention of redistributing to others. In these purchase situations the buyer generally does
not radically change the product from it’s from when it was purchased from a products
manufacture.

BUSINESS MARKET V/S CONSUMER MARKET?

For marketers, the selling environment of business markets present uniquely different
circumstances when compared to selling to consumers. At the beginning of this tutorial
we saw two ways in which consumer and business markets differ:
1) Business markets are more likely to be price driven than brand driven, and
2) Demand in business markets tend to be more volatile than consumer markets.
However, the two markets are dissimilar in other ways requiring marketers to take a
different approach when selling to business customers than to consumers. These
differences include:
➢ How decisions are made.
➢ Existence of experienced purchasers.
➢ Time needed to make buying decision.
➢ Size of purchases.
➢ Number of buyers.
➢ Type of promotional effort needed to reach buyer.

How Decision Are Made

In the consumer market a very large percentage of purchase decisions are made by a
single person. There are situations in which multiple people may be involved in a
consumer purchase decision, such as a child influencing a parent to choose a certain
brand of cereal or a husband and wife deciding together to buy a house, but most of the
time purchases are individual decisions. The business market is significantly different.
While single person purchasing is not unusual, especially within a small company, a
significant percentage of business buying, especially within larger organizations, requires
of many. In the marketing literature those associated with the purchase decision are
known to be part of a Buying Centre, which consists of individuals within an
organization that perform one or more of the following roles:

➢ Buyer – Buyer is responsible for dealing with suppliers and placing orders (e.g.,
purchasing Agent).
 ➢ Decider – Decider has the power to make the final purchase decision. (e.g.,
C.E.O).
➢ Influencer – has the ability to affect what is ordered such as setting order
specifications (e.g., engineers, researchers, product manager).
➢ User - those who will actually use the product when it is received (e.g., office
staff etc).
➢ Initiator – any buying centre member who is the first to determine that a need
exist.
➢ Gatekeeper – anyone who controls access to other Buying Center members
(e.g., administrative assistant).
Experienced purchasers
As noted in the discussion of the buying center, organizations often employ purchasing
agents or professional buyers whose job is to negotiate the best deals for their company.
Unlike consumers, who often lack information when making purchase decisions,
professional buyers are generally as knowledgeable about the product and industry as the
marketer who is selling to them.

Decision Making Time

Depending on the product, business purchase decisions can drag on for an extensive
period. Unlike consumer markets where impulse purchasing is rampant, the number of
people involved in business purchase decisions results in decisions taking weeks, months,
or even years.

Larger purchases
For products that are regularly used and frequently purchased, businesses will often buy a
larger volume at one time compared to consumer purchases. Because of this business
purchasers often demand price breaks (e.g., discounts) for higher order levels.

Number of Buyers
While there are several million companies worldwide that operate in the overall business
market, within a particular market the number is much smaller. For example, while in the
United States there are 95 million households who may shop at a grocery store, there are
only a few thousands grocery stores with many of these centrally controlled as part of a
chain of stores. Additionally, within some industries buyers are highly concentrated in
certain geographic areas. Consequently, compared to consumer products, marketing
efforts are confined to a smaller targeted group.

Promotional Focus
Companies who primarily target consumers often use mass advertising methods to reach
an often widely dispersed market. For business-to- business marketers the size of
individual orders, along with a smaller number of buyers, makes P2P contact by sales
representatives a more effective means of promotion.

BUSINESS BUYING BEHAVIOR

To cap our discussion of the business market we now look at how purchasing decisions
are made. Business purchasing follows the same five-step buying process faced by
consumers:

1. Need Recognition
2. Search
3. Evaluate Options
4. Purchase
5. After Purchase Evaluation.

OBEJECTIVES OF RESEARCH

Primary Objective:
To study the purchase criteria of the customers and identify the factors that influence the
Customer Buying Behavior in respect of Cold Rolled Steel Strips/Sheets provided by the
Hero Cycles (C.R. Division) used in various industries (Automobiles, Bicycle) in
Ludhiana.

Secondary Objectives:
1. To find the major Specifications and Grades of Cold Rolled Steel Strips/ Sheets
used in various type of industries in Ludhiana.

2. To find out the requirements of various types of industries in Ludhiana in which

cold Rolled (C.R) steel strips/ sheets are used as a raw material.

3. To find out the market share of the Hero Cycle CR Division in Ludhiana Region.

4. To know about the future expansion plans of various organizations & ascertain
their increased buying from Hero Cycles CR Division.
 CHAPTER-2

HERO GROUP PROFILE

HERO GROUP - A name synonymous with the two wheelers in India began its journey
around four decades ago. Like every success story, Hero’s saga contains an element of
spirit and enterprise; of achievement through grit and determination, coupled with vision
and meticulous planning.

The Hero Group began with a simple philosophy: “To provide excellent transportation
to the common man, at a price he could easily afford”. It is this spirit which drives
Hero, even today the dream of providing total satisfaction in all its spheres of activities.

The saga of HERO started in 1956. Starting as manufacturer of bicycle components,

Hero has today grown into multi-unit, multi-product, geographically diversified,
manufacturing companies for bicycles, motor cycles, mini motor cycles, mopeds, cold
rolled steels and components. The flagship company of the group HERO CYCLES LTD.
entered into the “GUINNESS BOOK OF WORLD RECORDS” as the largest bicycle
manufacturers of the world in 1986 and continues to hold the envious record ever since
then. Currently it is producing 21500 bicycles per day.

Group Turnover is Rs. 20000 Crore in 2007-2008 of which EXPORT share is more than
15%. The exports are being made to all parts of the world including sophisticated markets
of Europe & US. Today Hero is the largest exporter of two-wheelers in India, besides
being the fastest growing Indian Two-wheeler Company.

One of the group companies, Hero Honda also awarded as Company of the Year by
Economic Times in 2009 as it increased its market share from 54% to 58 %.The main
component of all Hero group companies are CR Steel therefore growth in these
companies means growth in Hero Cycles CR Division.

The group has redefined the concept of ANCILLIARISATION by extending technical

& managerial support to the ancillaries. Consequently, HERO HONDA has managed to
achieve indigenization of over 95% - a Honda record worldwide.
Hero is proud to have a DEALER NETWORK of more than 4000, which has been
cemented with warmth of personal relationship, rapport & fraternity. With a deep sense
of belonging to the Hero fraternity, the Group’s dealers have catalyzed growth and act as
a strong bridge between the customers and the group.

More than 20,000 employees of the group have vividly and continuously demonstrated
that human endeavor can ceaselessly achieve excellence and distinction given a congenial
and conducive environment. This has been amply testified in very low employee turnover
and world-class productivity.

The flag ship company of the group HERO CYCLES LIMITED has been practicing
JUST-IN-TIME (JIT) INVENTORY since the period when the term was not widely
known. The practice is prevalent in all the group companies.

The group Chairman Mr. Brijmohan Lal, is one of the leading business personalities of
the country. He was awarded Businessman of the year award in 1994 by a leading
business journal of India. Mr. Brijmohan Lal is the former President of Association of
Indian Automobile Manufacturers (AIAM) as well as of Confederation of Indian
Industries (CII), the premier Industry Association of India.

On Enterprise Resource Planning, the Group has already started its journey and has
started working on SAP R/3 module in Hero Honda, Hero Cycles Ltd. and Hero
Cycles Ltd. (C. R. Division). With the expertise available in-house the group has
mustered to implement SAP in other Companies on its own.

COMPANY PROFILE
Hero Cycles Limited (Cold Rolling Division) has been promoted under backward
integration plan by Hero Cycles Limited, the world’s largest bicycle manufacturer. The
plant was commissioned in July, 1991 at Ludhiana at a cost of Rs. 320 million with an
installed capacity of 50,000 MT in consultation with MECON, Asia’s largest engineering
consultants which had a technical collaboration with WEAN UNITED, U.S.A.

An additional 6-HI COLD REDUCTION MILL based on a joint Engineering &

design by MECON & Hero Cycle Ltd. along with hydrogen annealing and Electro
cleaning line has been installed for better product quality and capacity enhancement to
1,30,000 TPA with an additional investment of Rs. 700 million.

The plant was commissioned primarily to cater to the group requirements. However the
product was soon accepted by major automotive and White Goods manufacturers and
today has been supplied to other market segment also, e.g. automobile sector, Maruti
Udyog Limited ancillaries/vendors for both formed and drawn components -in D. DD,
EDD, MC-11 and other medium and high carbon grades.

Towards realization of CUSTOMER DELIGHT, the plant has been investing constantly
in up gradation of Technology and Human Resources. Cold Rolling Division is
renowned for its tradition in maintaining high standards in the Product Quality
constantly, Reliability in customer servicing and is also committed to attune to the
changing quality standards through continuous up gradation of Product, Process and
Human Resources.

At the base of all Hero Group’s activities is one basic ingredient - cold rolled steel.
Cognizant of the importance to ensure perfect quality of the basic raw material, the
Group established its own cold rolling mill for steel processing in 1990. With an
installed capacity of 50,000 MT per annum, the mill has state-of-art equipment including
4-HI reversible cold rolling-cum-skin pass mill with rewinding line, C. R. Slitter, and a
modern close annealing facility to maximize the quality of its products.

The mill has several firsts to its credit, including hydraulic auto gauge controls,
computerized pass schedules, automatic slow down and a totally enclosed, semi
continuous pickling line; apart from effective anti-pollution and safety controls which
were incorporated from the very beginning.
The company has also implemented SAP R/3 with the assistance of SIEMENS &
MECON.

Hero Cycles Limited, C. R. Division has also entered into an agreement for technical
assistance to improve operation & maintenance of the plant with the help of technology
& know how from Kawasaki Steel Corporation, Japan. Kawasaki Steel Corporation will
help C. R. Division for improvement of Production Yield, removal of Defects, reduction
of Customer Returns & improvement of Maintenance Operations against certain
predetermined Targets.

Kawasaki Steel possesses expertise based on the wealth & experience and expertise
acquired through development, operation & maintenance of its own Cold Rolling Plant in
Chiba and Mizushima Works, Japan.

Primarily Cold Rolling is done for two purposes:

1) To improve the surface finish of the steel.

2) To improve the gauge accuracy.

THE QUALITY POLICY OF THE COMPANY

 TO
MEET
THE CUSTOMER NEEDS,
EXPRESSED AND IMPLIED
BY MAINTAINING
CONSISTENCY IN QUALITY
THROUGH
CONTINUOUS UPGRADATION
OF
TECHNOLOGY AND HUMAN ENDEAVOR
FOR
MAXIMIZING
THE RETURN ON INVESTMENT
TO THE STAKE HOLDERS
 SWOT ANALYSIS

STRENGTHS

➢ MANAGEMENT WITH VISION

➢ GOOD CORPORATE IMAGE

➢ LOCATION ADVANTAGE

➢ STRONG BRAND IMAGE

➢ MATERIAL QUALITY SATISFACTORY

➢ GOOD CUSTOMER BASE

➢ CAPTIVE CONSUMPTION

➢ 6 HI MILL WITH ADVANCED CAPABILITIES

➢ HYDROGEN ANNEALED FURNACE FOR BETTER FINISH

➢ SAP/ERP IMPLIMENTATION

➢ CAN PRODUCE SPECIAL GRADE MATERIAL

➢ INFRASTRUCTURAL FACILITIES FOR NORTHERN REGION

 WEAKNESSES

➢ INABILITY TO ACCOMMODATE CUSTOMERS IN URGENCIES

➢ INTER/ INTRA DEPARMENTAL COMMUNICATIONS NOT EFFECTIVE

➢ RECCURANCE OF SIMILAR PROBLEM

➢ INEFFECTIVE IMPLEMENTATION OF CORRECTIVE MEASURES

➢ DELAY & DAMAGES DURING TRANSPORTATION

➢ NEW DEVELOPMENTS, PERPETUAL DELAY

➢ UNPROFITABLE PRODUCT MIX

➢ NARROW WIDTH LIMITATION IN 760 MM

➢ PERCIEVED HIGH PRICE OF PRODUCT

➢ DELAY IN DELIVERY

➢ LESS CREDIT PERIOD

 OPPORTUNITIES

➢ GROWTH IN AUTO/ WHITE GOODS SEGMENTS

➢ GROWTH N ECONOMY WILL PULL THE DEMAND

➢ DIRECT/ INDIRECT EXPORT OPPORTUNITIES TO INCREASE THE

MARKET

➢ FORWARD INTEGRATION IN PRESS MENTAL COMPONENTS/ TUBES/

COATED/ WIDER WIDTH

➢ BACKWARD INTEGRATION LIKE TIE UP WITH SOME HR PRODUCER

➢ QUALITY SHOULD BE USED TO COVER THE PRICE

➢ BY SUPPLYING RIGHT QUANITY AT TIME , SATISFACTION OF THE

CUSTOMER CAN BE INCREASD

➢ THE COMPANY CAN INCRESE ITS MARKET SHARE BY INCRESING ITS

PRODUCTION CAPCITY

➢ INCREASE MARKET SEGMENTS TO CATER AND TO INCREASE

CUSTOMER BASE
 THREATS

➢ HUGE IDLE & ADDITIONAL CAPACITY IN EXPANSIONS IN NEW MILL.

➢ SHIFT OF CR MARKET TO HR, HR OILED AND PICKLED MARKET.

➢ EXISTENCE OF COMPETITION WILL CUT DOWN PROFITS

➢ REGIONALISATION DUE TO HIGH TRANSPORTATION COSTS.

➢ DECIMATION OF DD/ EDD GRADES.

➢ USAGE PATTERN CHANGING FROM CR TO GALVANIZED, COLOUR

. COATED STEEL

➢ MAJOR COMPITITORS OF HERO ARE IMPROVING THEIR QUALITY

AND DELIVERY

➢ SMALLER SUPPLIER ARE INCREASING THEIR CREDIT PERIOD

➢ THE POLICIES OF THE COMPETITORS ARE FLEXIBLE AS

COMPARED

TO HERO CYCLES CR DIVISON

 PROCESS ROUTE
Before the execution of a production orders the details of process route and product
specifications are sent to the shop floor in the form of a small rectangular card. This card
accompanies the coil through out its process life. The different work centers in HERO
CYCLES Ltd. C.R. Division are:
1). HR (Hot Rolled) SLITTER
The HR Coil is first sent to the HR Slitter, where it can be slit in maximum 4 widths. The
widths are decided based on factors like minimization of slit loss, order priority etc. This
activity is being done manually at present by PRODUCTION PLANNING &
CONTROL department, but the optimization package being developed by MECON will
calculate this, and suggest the most optimum-slitting pattern for the HR Coil. A 4 digit
unique code is assigned to the HR Coil, and a suffix of A, B, C and D is added to this
number after the coil is slatted. This identity of slatted coil is maintained till it reaches the
CR slitting stage.
The Pull through HR slitting line cuts the rough edges of the HR coils, slitting it into
narrower widths. The HR Slitter has a production capacity of 20 tonnes/hr.

2). PICKLING
After the HR slitting, the coil goes through the process of pickling that the coil is sent
through various chambers containing acids, which removes the surface impurities. The
pickling line uses three acid tanks and three rinse tanks. After the pickling operation, the
coil is sent for cold rolling. As it was mentioned above, the route, which the coil has to
take, is predetermined, and is displayed, on a card, which accompanies the coil. It offers
the following Advantages:

➢ Removes ferrous scales from the surface of the HR Coils.

➢ Minimum carryover of chloride.

➢ Minimal set–up, hence more adaptable to quick changeovers.

➢ A hot air blower at the end dries off the excess water on the strip.
3). ROLLING
Rolling can be done either in 6Hi mill or in 4Hi mill depending upon the desired
thickness, and available capacity. The rolled coils have to be rewound to decrease the
tension. This can be done either on 2Hi, 4Hi or 6Hi mill. Rolling also leads to increased
hardness, which makes the coils brittle.

The 6-Hi mill has automatic gauge control, pass schedule storage and auto intermediate
slow down. The mills give flat strip shape, minimized edge drops and thinner gauges.

4). ANNEALING
Annealing is a process of Heating, Soaking and Controlled cooling of a Coil in a non-
oxidizing atmosphere. This process renders the strip soft and restores the ductility and
formability.

There are two types of annealing:

➢ HYDROGEN ANNEALING.

➢ NITROGEN ANNEALING.

5). SKIN PASS

After Annealing the coil is sent for skin pass. This Process imparts a surface finish for
e.g. matte, mirror etc. to the coil, depending on the customer requirements. This process
can be carried out on all 3 rolling mills. It offers the following Advantages:

➢ Skin Passing removes stretcher strain or Luder Lines.

➢ It provides desired finishes such as Matt, Bright on the strip surface.

➢ Imparts flatness to the strip.

6). CR(Cold Rolled) SLITTER
After the skin pass the coil is sent to CR slitting machines. The slit coils are again allotted
a new number, and the previous identity is lost after this process. Other considerations
here are the inner and outer diameter and number of coils.

7). CUT TO LENGTH

If the customer requires strips as final goods then the coils are sent to Cut to Length
(CTL) machines which cut the coil in the desired length of the strips.The length can vary
from 400mm to 3500mm.

8). PACKING
The final process is packing of coils and strips, and subsequent dispatch. This is the
complete description of the process route. It is not necessary for the coil to go through all
the processes mentioned. Depending on the type of product and customer’s requirement
some of these processes can be skipped or repeated.
 PRODUCT APPLICATIONS
Cold rolled steel strips are manufactured by C.R. Division to meet a variety of uses.
Some of the common applications are detailed below:-

Automobiles & Auto Components.

Bicycle and bicycle components.

Pipes and Tubes.

Refrigerators.

Furniture.

Shutters.

Bearings.

Cable tape.

Transformers and Radiators.

Electric steel (Laminations, TV chassis, picture tube frames, meters, switch gears).

Domestic appliances (Washing machines, fans, stoves, sewing machines, ovens,

toasters, grills etc)

Office automation products (Computer components, typewriters, Photostat machine

components etc)
 MAJOR CUSTOMERS OF HERO CR DIVISION
1. MARUTI UDYOG LIMITED
2. ESCORTS LIMITED (MSD)
3. ESCORTS LIMITED (TRACTOR DIVISION)
4. ESCORTS LIMITED (YAMAHA MOTOR CYCLES DIVISION)
5. HERO HONDA MOTORS LIMITED
6. TECHNICO IINDUSTRIES (P) LIMITED
7. GABRIEL INDIA LIMITED
8. GODREJ GE APPLIANCES LIMITED
9. MANDAP INTERNATIONAL LIMITED
10. HERO CYCLES LIMITED
11. LOHIA MACHINES LIMITED
12. MOONLIGHT AUTO (P) LIMITED
13. BHURJEE MACHINE TOOLS
14. SHEET COMPONENTS/PIONEER AUTO (KAY JAY)
15. HAWKINS COOKERS LIMITED
16. RAIL COACH FACTORY, KAPURTHALA
17. INDO ASIAN FUSEGARS LIMITED
18. PGT COMPONENTS LIMITED
19. AGRO ENGINEERING WORKS/ASIAD ENGINEERS
20. HORIZON INDUSTRIES PRODUCTS
21. JAY YUSHIN LIMITED
22. DHANJAL ENGINEERING LIMITED
23. MULTITECH PRODUCTS
24. MITASO APPLIANCES LIMITED

25. PERFECT WHEELS

26. SETHI INDISTRIAL CORPORATION
27. R.R. AUTOMOTIVE COMPONENTS
28. SDL AUTO PVT. LTD. (FOR CAR SEAT COMPONENTS)
29. JBM TOOLS LIMITED
30. SHIVANI LOCKS (P) LIMITED
31. VENUS METALS/VENUS STAMPINGS
32. VICTORA TOOLS
33. OMAX ENGINEERS
34. EMM KAY INDUSTRIES
35. INTERNATIONAL ELECTRONIC DEVICES LIMITED (IEDL)
36. STEEL TUBES OF INDIA LIMITED
37. AUTO TECH
38. AUTO MAX (UNIT OF OMAX AUTO LIMITED)
39. HIMACHAL FASTENERS LIMITED (VENDORS FOR
PUROLATOR)
40. NATIONAL ENGINEERING INDUSTRIES LIMITED
41. BPL (INDIA) LTD.
42. ELECTROLUX INDIA LIMITED
43. TECUMSEH PRODUCTS INDIA LIMITED
44. BAJAJ TEMPO LIMITED
45. BAJAJ AUTO (ANCILLARIES)
46. INDICA (ANCILLARIES)
47. TECH AUTO LIMITED
48. DAEWOO MOTORS LIMITED (ANCILLARIES)
CHAPTER-3

RESEARCH METHODOLOGY
The Research Design is the basic framework, which provides the basic guidelines for the
Research process. It is a blue print according to which research is to be conducted.
For carrying out my research work, I carried out survey and respondents were contacted
at their places. The primary data is collected with the help of Questionnaire.

Survey Method:
The Survey Method was selected to obtain the needed information by asking the
questions to the respondents through the Questionnaire developed, and passed by our
HOD Marketing. As per Marketing Department this method was the suitable for the
project. Surveys are generally conducted both in qualitative and quantitative researches.
After decision about the sampling, the questionnaire was designed and the respondents
were contacted to answer the question. This process of getting answer is known as
interviewing.

Two significant factors affect the effectiveness of survey methods are:

1. Wording of questionnaire (It must be such that it extract desired information

accurately and unbiased.)
2. Ability and willingness of the respondent to give accurate and unbiased information.

Method Used in conducting survey:

Personal Interview:
Personal interview is the process of communication where face to face contact between
the investigator and the respondent is established. It is the conversation arranged for the
purpose of obtaining views of the respondent on the topic of interest to the interviewer.
Under this method the investigator presents the questionnaire in person at office of the
respondent. Being active participant, he establishes a close rapport with the respondent
and motivates him or her to answer all the question satisfactory.

Samples:
Since I have to make a survey of various type of industries in Ludhiana which are using
Cold Rolled (C.R.) Steel Strips/Sheets, thus I have taken a proper sample in proportion of
various industries giving due weight age to number of various type of industries using
C.R.Steel Strips/Sheets in Ludhiana.

NUMBER OF AUTOMOBILE INDUSTRY = 27

NUMBER OF BICYCLE INDUSTRY = 21

NUMBER OF OTHER INDUSTRY = 12

SUGGESTIONS & RECOMMENDATIONS

The customers of CR Steel Strips/Coils perceive quality as the most important factor
while purchasing. More customers will be attracted towards the products if quality
parameters such as surface finish, peeling off etc. are improved upon by getting
continuous feedback on the quality and other services provided by the company.

The second most important factor is delivery system and price. The price should be
competitive with the other suppliers. The third most important factor is Credit policy of
the company. Better credit facility should be given to the customers and payment norms
should be simplified. Quality should be used to cover the price. Improvement in quality,
Services, Delivery and Rate reduction should be made to further increase the market
share and to attract the new customers of C.R. Steel Strips/ Sheets. There are some
Suggestions, which should be considered in the future for better customer satisfaction.
These are: -

➢ Prices should be competitive.

➢ Delivery should be on time as per Quantity scheduled.

➢ Lifting of Material should quickly after the sale for better customer satisfaction

➢ Better credit facility should be given to the customers

➢ In future to attract the new customers Discount should be given.

➢ Communication channels should be improved for providing the maximum

satisfaction.

LIMITATIONS OF STUDY

➢ Presence of Human Error: - Some respondents have not given the proper
answers, they are not aware of the objectives undertaken for research purposes.
➢ Time Constraint: - Time has also affected the research due to less availability
of number of days; survey was conducted in few days.

➢ Technical Complexities: - There was no proper record maintained by the

customers about the consumption of C.R. Steel Strips/ Sheets.

➢ Non Co-operation of some Respondents: - Some Respondents did not properly

co-operated for giving answers, the basic reason was non-availability of time.

➢ Respondent Biasness: - Some companies were very much favor in one company
but they were unable to provide logic behind it.
 CHAPTER-3

Ques1. What type of products do you manufacture?

%AGE OF NO. OF
TYPE OF PRODUTS
RESPONDENTS RESPONDENTS
Automobile parts 45% 27
Bicycle parts 35% 21
Others 20% 12
INFERENCE
The graph represents that 45% of the industries that use cold rolled steel in Ludhiana are
manufacturing automobile parts, 35% of the industries manufacturing bicycle parts & rest
of them i.e. 20% industries are manufacturing Stampings, Radiators, White Goods etc.

Ques2. What is your status in supply chain?

STATUS IN SUPPLY %AGE OF NO. OF

CHAIN RESPONDENTS RESPONDENTS
1st tier 50% 30
nd
2 tier 23.33% 14
rd
3 tier 26.67% 16

1 tier 2 tier 3 tier

27%

23%

50%
INFERENCE
The major amount of industries using cold rolled steel (50%) in Ludhiana comes in 1 st
tier means they are direct vendors of the industries like Hero cycles, Hero Honda Motors
Limited, Maruti Udyog Limited etc.The 23.33% of industries comes in 2nd tier that are
vendors of 1st tier industries & 26.67 % industries comes in 3rd tier that are vendors of 2nd
tier industries.
 STATUS IN
AUTO BICYCLE OTHER
SUPPLY
INDUSTRY INDUSTRY INDUSTRIES
CHAIN
1st tier 19 8 3
2nd tier 6 5 3
3rd tier 2 8 6

INFERENCE
The graph indicates the distribution of various industries under different levels of supply
chain. This analysis will be further helpful in analyzing the impact of market fluctuations
among various industries.
Ques3. Do fluctuations in market affect your buying behavior?

%AGE OF NO. OF
OPTION
RESPONDENTS RESPONDENTS
Yes 60% 36
No 40% 24

INFERENCE
Out of the total number of respondents 40% of the respondents said that market
fluctuations do not affect their buying behavior while remaining 60% industries are
affected by fluctuations in market. This shows that if there are market fluctuations, then
there is a change in buying behavior i.e. while making purchase, the factors normally
kept in mind are ignored & some other factors are considered keeping in view the
prevailing circumstances.

1ST TIER 2ND TIER

3RD TIER

INFERENCE
The above graphs show the effect of fluctuations in market on various industries
classified according to their status in supply chain. Through these we can infer that most
of the industries in 1st tier are not very much affected by market fluctuations while 2nd tier
industries are less affected by the same. 3rd tier industries are the most affected ones when
market fluctuations take place.

Ques4. In which form do you buy steel?

FORM OF CR %AGE OF NO. OF

STEEL RESPONDENTS RESPONDENTS
CR Coils 25% 15
CR Strips 15% 9
BOTH 60% 36

INFERENCE
The graph shows that most of the companies use both CR steel strips as well as coils in
their manufacturing operations. CR strips are purchased by very less number of
companies I.e. most of those which do not have their own CTL (Cut to Length) machines.
So they specify their strip sizes according to their product requirements.

Ques5. Which grade(s) of steel do you purchase?

 GRADE PERCENTAGE
D 44
DD/EDD 36
MC-11,12 15
OTHERS 5

INFERENCE
The percentage share of D (Drawing) Grade steel is much higher because it is the main
material grade used in manufacturing of bicycles & Large amount of D Grade steel is
consumed by the Hero Cycles only. Moreover D grade steel is cheaper than other grades
as it has lesser carbon content. Other higher grade steels like DD, EDD, MC-11, 12, IF
etc are used in manufacturing other components that require more strength like auto parts,
stampings, white goods etc.

Ques7. Which factors do you consider the most while purchasing CR steel?
(Rank 1 – 5 in order of preference)

ATTRIBUTES AVERAGE RANKING

AUTO INDUSTRY BICYCLE INDU. OTHERS
PRICE 2.33 1.57 3.25
QUALITY 1.89 2.29 3.01
DELIVERY TIME 2.11 2.86 2.99
CREDIT PERIOD 4.44 4.01 2.98
AFTER SALES
4.22 4.28 2.77
SERVICE

INFERENCE
As the graph represents that most of the customers in Auto industry prefer Quality as the
major factor while making purchase decision. Delivery time is another factor influencing
their buying behavior followed by price and after sales service. It can be seen that in auto
industry credit period allowed by the seller is given the lowest rank. This does not mean
that this factor is not taken under consideration but it suggests that keeping in view the
other factors, this attribute is given the lowest preference.

INFERENCE
It can be seen very clearly that in bicycle industry highest preference is given to Price as
an attribute while making purchase. The other factor influencing choice of buyers is
quality followed by delivery time, credit period allowed & least preference is given to
after sales service.

INFERENCE
As the graph indicates that in other industries, after sales service & credit period allowed
by sellers are major factors that influence the minds of customers while making purchase
decision. Other factors are also closely held with all these attributes.
Ques8. From which supplier(s) you are buying presently?

INFERENCE
A major chunk of Ludhiana CR steel users purchase CR steel from Hero Cycles CR
Division. As per the graph Bhushan Steels is a major competitor of Hero CRD with
almost 30% of total sales. Followed by Avon Group, Atlas strips, TATA, SAIL, etc.

Ques9. Do you have any expansion plans in near future?

INFERENCE
As we know that bicycle as well as auto industry is expanding rapidly, so most of the
organizations have expansion plans to cater to the increasing future market demand.
80% of the companies said that they have expansion plans in near future i.e. within a
period of 1-2 years. The capacity is expected to increase by approx. 30%. This means that
the future of CR Steel industry is very bright.
Ques11. What are the major quality related problems that you face while
purchasing CR steel?

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INFERENCE
in
le
g
m
The above graph shows the major quality related problems as faced by customers. Most
of the customers do not face any kind of quality related problem. If at all, problems like
rusting, steel being pitted, improper lamination, inappropriate thickness etc are faced by
the customers. If encountered frequently, the customer may reduce the amount of
purchasing from that particular seller and may shift to some other source.

Rating of HERO CYCLES LIMITED CR DIVISION IN TERMS OF

FOLLOWING PARAMETERS
a. Company image
b. Delivery
c. Conformance with specifications
d. After sales services
e. Response time
f. Accommodation of urgencies
 ATTRIBUTES PERCENTAGE RATING

COMPANY IMAGE 81.66

DELIVERY 52.66

CONFORMANCE WITH
91.66
SPECIFICATIONS

AFTER SALES SERVICES 71

RESPONSE TIME 40

ACCOMMODATION OF URGENCIES 65
 INFERENCE
The graph indicates that HERO CRD enjoys a very good image from the
customers’ point of view. More than 80% customers believe that HERO CRD is a
well known and reputed company. This is a major factor considered while major
factor that customers consider while making their purchase decisions.
Delivery does not get much rating essentially due to recession as there has been a
shortage of raw material in the market since couple of months. It was seen that the
customers shifted to other suppliers owing to poor delivery by HERO CRD.
The company gets high rating in conformance with specifications i.e. delivering
the material having exactly same chemical as well as mechanical properties as
specified by the customers.
The company was given average rating in terms of after sales service i.e. it is
neither too good nor too bad.
The company is very poor in giving proper response to customer’s grievances.
This factor may affect the company in a bad way.
As the graph shows, HERO CRD is quite good in accommodating urgencies as
posed by the customers.

QUESTIONNAIRE
Company name: ______________________________________________
Contact person: ______________________________________________
Address : ______________________________________________
______________________________________________

Ques1. What type of products do you manufacture?

a. Automobile parts
b. Bicycle parts
c. Others
Ques2. What is your status in supply chain?
a. 1 tier b. 2 tier c. 3 tier

Ques3. Do fluctuations in market affect your buying behavior?

a. Yes b. No

Ques4. In which form do you buy steel?

a. CR Coil
b. CTL (Cut To Length)

Ques5. Which grade(s) of steel do you purchase?

a. D b. DD c. EDD
d. MC-11 e. MC-12 f. IF

Ques6. What is your monthly requirement of CR steel grade wise?

a. D _____________________________ MT
b. DD/EDD _____________________________ MT
c. MC-11/12 _____________________________ MT
d. Others _____________________________ MT

Ques7. Which factors do you consider the most while purchasing CR steel?
(Rank 1 – 5 in order of preference)
a. Price
b. Quality
c. Lead time
d. Credit facility
e. After sales services

Ques8. From which supplier(s) you are buying presently?

Please specify the quantity also.
a. ___________________________Qty __________ MT
 b. ___________________________Qty __________ MT
c. ___________________________Qty __________ MT

Ques9. Do you have any expansion plans in near future & what will be your
increased capacity?
a. Yes b. No
____________________________________MT (approx.)

Ques10. What quantity of your increased capacity of CR steel will you

purchase from HERO CYCLES Ltd (CR Division)?
____________________________________ MT (approx.)

Ques11. What are the problems that you face while purchasing CR steel?
a. ______________________________________________
b. ______________________________________________

Ques12. What are the suggestions that you can give to counter those problems?\
a. ______________________________________________
b. ______________________________________________

Rate HERO CYCLES Ltd (CR Division) in terms of following parameters:

(Give rating from 1-5) 1 = Poor & 5 = Excellent

a. Company image
b. Delivery
c. Conformance with specifications
d. After sales services
e. Response time
f. Accommodation of urgencies
Date: (Signature)