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MARKETING STRATEGIES
OF
BILT
UNDERTAKEN AT
“ BILT”
(06917003909)
HEAD OFFICE:
REGIONAL OFFICE:
PLANT LOCATIONS:
UNIT BALLARPUR
P.O. Ballarpur Paper Mills–442 901
Distt. Chandrapur, Maharashtra
UNIT KAMALAPURAM
Township - 506 172, Distt. Warangal,
Andhra Pradesh
UNIT SEWA
Gaganpur, P.O. Jeypore Railway Station,
Distt. Koraput - 764 002, Orissa
UNIT ASHTI
P.O. Ashti - 442707, Tehsil Chamorshi,
Distt. Gadchiroli, Maharashtra
GEOGRAPHICAL AREAS
MARKETING ANALYSIS
BILT, in the recent years has evolved as a more dynamic, knowledge-driven organization
with a singular focus on creating stakeholder value. Aimed at making the organization
more market-oriented and customer-centric, the following initiatives are to drive BILT
forward in the rapidly changing business environment:
Brand Building
Increasing brand involvement for the products amongst customers to reduce market
fragmentation and attain 'generic-brand' status for BILT via strategic branding.
Product-mix rationalization
Maintaining an intelligent product-mix based on value and demand curves to maximize
returns
Exploring global markets
Reaching out to international markets with world-class products while maintaining
leadership in India
Extending 'Touch-Points'
Building a wider and 'intelligent' distribution network that enables BILT to serve its
markets in a customized and localized manner and attain higher penetration, without
losing the economies of scale.
Physical Proximity
Company’s distribution network and understanding of local requirements is unmatched in
the Indian paper industry. Over the decades, BILT has transitioned from the 'metro'
concept to cross country distribution. While Company’s five manufacturing facilities
for paper and pulp are strategically spread across the country, we have assiduously
brought our products within physical proximity of the customers. Company’s network of
126 dealers - the largest within the industry in India - is present across the principal
consuming centers of the country and is the key fulcrum to this proximity.
As the leader in the Indian paper industry, BILT stands for certain fundamentals.
Some of these are performance led growth, proactively seizing opportunities. The
company has always thrived on a high utilisation of quality production assets,
implementation of cutting-edge technologies, a captive raw material base, flexi-
manufacturing as well as a continuous expansion in capacity through intelligent de-
bottlenecking.
In its attempt to stay ahead in the competition, the Company has been shifting
towards being a marketing – led organisation, under which they have taken several
progressive measures aimed at creating a brand synonymous with consistent quality
and convenient proximity to the customer. To achieve this, the Company has adopted
a four-pronged sales & marketing approach that includes Distribution, Customer
Focus, Branding and Exports.
The Company is taking innovative steps in all the aspects related to its products,
starting from R&D to Distribution.
Market Leader:
Ballarpur Industries Limited is the market leader in the Indian paper industry, with over
50% of coated wood free grade rolling out of its plant. The company enjoys near
monopoly in Bond Paper market and nearly 45% share of the hi-bright Maplitho market
in India.
Backward Integration:
BILT is planning to become a fully integrated paper player in the industry. For that BILT
has entered into 10 year contract with the Maharashtra government for ensuring cheap
and regular supply of Bamboo. The company has also initiated farm forestry for cheaper
raw materials and has cornered Indonesia and Malaysia for this activity due to its
strategic geographic location.
BILT is also involved into Farm Forestry for planting of tree species that are suitable for
industrial wood. BILT is currently operating its farm forestry programs in the states of
Orissa, Chhattisgarh, Andhra Pradesh and Maharashtra.
Capacity Expansion;
The company has nearly doubled its production capacity to over 1 million ton per annum.
It has taken aggressive steps to penetrate the market with new capacity. With the increase
in paper prices, company is placed well to encash on the increased capacity, which will
now come into play.
Value Unlocking:
The group company Avantha Power has filled DRHP for an Initial public offer for Rs
12500mn, BILT owned 5% in the company, going forward we expect the company to get
more value among the peers. BILT is also planning to get its Sabah’s Dutch Holding
company listed in overseas market, which will enable them to raise money from overseas
markets at a comparatively low cost. The company has 80% stake in Sabah Forest
Industries. It is the Malaysia’s largest pulp and paper mill.
FINANCIAL ANALYSIS
Financial highlights of year 1st July, 2008 to 30th June, 2009
Total Income
Decreased by 0.3 per cent from Rs. 2,847 crore in 2007-08 to Rs. 2,838 crore in 2008-09.
Paper Revenue
Increased by 9.3 per cent from Rs. 2,425 crore in 2007-08 to Rs. 2,651 crore in 2008-09.
LOGISTIC ANALYSIS
In order to become a globally competitive company, BILT has adopted the Total Quality
Management or TQM framework to continuously benchmark its processes against the
best in the world. BILT's TQM initiative has already started bearing results.
A culture of cross-functional, cross unit teamwork has been inculcated, which has
significantly increased efficiency. A scientific problem solving methodology has been
implemented across all functions. Process owners have been identified and positioned
across all the units. They, in turn, have created their own cross-discipline teams. This has
ensured on-going process up-gradation and continuity. Integration of cross-functional
disciplines like production and marketing has led to the development of more relevant
and more cost effective products.Constant monitoring at the shop floor level has led to
valuable learning on how to raise productivity and quality.India consumes about one-
sixth of the world average of 30 kgs of paper per capita, a figure that is likely to change
manifold due to the visible changes taking place in the Indian market context and
demographic dynamics. In addition, rising input prices will have to be matched with a
corresponding increase in realisations for the industry to maintain a competitive
advantage. In its attempt to reduce the cost of sourcing, the Company has initiated Farm
Forestry Program, which currently has approx. 21,900 hectares of land under plantation
in the captive areas of manufacturing locations. As per the projections made by Coal
India, the domestic demand supply gap of coal for the year 2001-12 would be around 95
million tones. Also, quality of coal is the issue for India. To reduce the impact of this
risk, the Company has started importing coal of higher quality leading to more cost
effectiveness.
INFORMATION
VISION
To become a leading creator of Shareholder Value in the Paper Industry and to
consistently outperform expectations and deliver superior value to both our Customers
and Stakeholders
MISSION
We will energise our people, with a positive culture that rewards innovation, breeds
initiatives and encourages intelligent risk taking and we will use the energy of our people,
develop and implement leading edge technologies and draw on both to deliver effective
world-class solutions to our customers
CORE VALUES
Honesty
To be principled, straight-forward and fair in all dealings
Integrity
Maintaining the highest standards of professionalism.
Flexibility
Adapting ourselves to always stay a step ahead of change.
Team performance
The team comes first; none of us is as good as all of us!
PRODUCT RANGE
Uncoated Woodfree
Hi-Brights
• Sunshine Super Printing
• Ta Maplitho Nsd Premium
• Ss Maplitho
• Sunshine Reprographic Printing
• Bilt Royal Print Plus
• Sunshine Envelop Printing
Creamwove
• Easy Print
• Ss Maplitho Nss (Ashti)
• Ta Creamwove
Coloured Printing
• Ta Coloured Printing
Duplicating Paper
• Ta Duplicating White
Business Stationery
Bonds
• Bilt Royal Executive Bond (Parent Sheets)
• Bilt Royal Executive Bond (Retail Packs)
• Sunlit Bond
• Super Lucky Criss Cross
Parchment
• Lucky Parchment
Bilt Matrix
• Bilt Matrix Premium Note-Pads
• Bilt Matrix 5 Subjects Note-Pads
• Bilt Matrix Writing Pads
• Bilt Matrix Conference Pads
• Bilt Matrix Executive Pads
• Bilt Matrix Office Pads
• Bilt Matrix Premium Multi-Purpose Paper
Copy Paper
Premium Copy Paper
• Bilt Copy Power
Cartridge
• Sunshine Super Cartridge
Ledger
• Ta Azuerlaid Ledger
Industrial Grades
Posters
• Ta White Poster
• White Poster Td Loaded 4%
• Ar Grade Poster
• Acid Free Poster
Electrical Grade
• Bilt Tertrans Transformer
• Bilt Elektra
Laminate Grade
• Print Base
• Barrier Paper
• Bleached Absorbent Kraft
• Coloured Base (Bluish Grey,Dark Ivory,Ss Grey,Dark Grey,Slate Grey,Signal
Red,Bfl Red,Violet Base,Teak Base,Gold Rust)
• Cta
SIZE OF ORGANISATION.
CHAIRMAN
↓
VICE PRESIDENT
↓
DY. GENERAL MANAGER
↓
GENERAL MANAGER
↓
DY. MANAGER
↓
MANAGER
↓
ASSISTANT MANAGER
↓
EXECUTIVES
↓
SUPERVISORS
↓
WORKERS
INTRODUCTION
Marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable
competitive advantage. A marketing strategy should be centered on the key concept that
customer satisfaction is the main goal. A marketing strategy combines product
development, promotion, distribution, pricing, relationship management and other
elements; identifies the firm's marketing goals, and explains how they will be achieved,
ideally within a stated time frame. Marketing strategy determines the choice of target
market segments, positioning, marketing mix, and allocation of resources. Marketing
strategy determines the:
Market segmentation
choice of target market segments
positioning
marketing mix,
Allocation of resources.
Marketing strategy is a method of focusing an organization's energies and resources on a
course of action which can lead to increased sales and dominance of a targeted market
niche. It is most effective when it is an integral component of overall firm strategy,
defining how the organization will successfully engage customers, prospects, and
competitors in the market arena. Corporate strategies, corporate missions, and corporate
goals. As the customer constitutes the source of a company's revenue, marketing strategy
is closely linked with sales. A key component of marketing strategy is often to keep
marketing in line with a company's overarching mission statement. A marketing strategy
can serve as the foundation of a marketing plan. A marketing plan contains a set of
specific actions required to successfully implement a marketing strategy. For example:
"Use a low cost product to attract consumers. Once our organization, via our low cost
product, has established a relationship with consumers, our organization will sell
additional, higher-margin products and services that enhance the consumer's interaction
with the low-cost product or service." A strategy consists of a well thought out series of
tactics to make a marketing plan more effective. Marketing strategies serve as the
fundamental underpinning of marketing plans designed to fill market needs and reach
marketing objectives.
"BILT is India's largest paper company with gross sales of 2368.8 crores and the only
Indian company to rank amongst the top 100 paper companies in the world"
Ballarpur Industries Limited (BILT), part of the US$ 3 Billion Avantha Group, is the
undisputed leader of the Indian paper industry. It is India's largest manufacturer and
exporter of paper, with a strong presence in all segments of the usage spectrum, including
writing and printing (W&P) paper, industrial paper and speciality paper. Complementing
this is a diversified production infrastructure with six manufacturing units spread across
the country.
PROBLEM STATEMENT
Bilt is by far the largest paper manufacturing company in India. The present research
would identify whether Bilt will be able to maintain its position at top through its
marketing strategies. Instead of using simple promotional techniques, the company
maintain its top position in the paper industry. In today time, the awareness of consumer
is increasing and the competition has become severe. There are various players in the
market which give neck to neck competition to the company so main problem which lies
in this company is “To maintain the top position in the industry.”
OBJECTIVE
1. To analyze the marketing strategies of Bilt in terms of Product, Price, Place,
Promotion and Packaging.
2. To identify the competitive advantage of Bilt in the Paper industry in terms of
a. Promotional activities
b. Brand value
c. Customer perception
d. Brand offerings
SCOPE
Functional Area -Marketing
Time of Study - Last 3 years marketing strategies
Geographical Area- Employees from company premises.
Dealers from NCR.
Ballarpur Industries Ltd. (BILT) is the leader in the fragmented Indian writing and
printing paper industry, with Rs.21.5 billion sales turnover and approximately 20 %
market share. BILT Did not have any focused marketing strategy nor a marketing
team and was interested only in pushing the stocks out of its plants prior to 1999. In
1999, the new Vice Chairman and Managing Director (VC & MD) appointed a
Marketing Head whose task was to turn the production oriented firm into a market
oriented firm as a proactive measure to develop competitive advantage before the
competition heats up.
During the period from 1999-2003, he set up a marketing team of seventy people,
designed and implemented necessary systems and procedures for improved service
delivery, undertook efforts in mapping the consumer and end user markets, invested in
branding BILT and its products and strengthened the distribution network to connect
better with its consumers and end users. In 2003, the V.C & MD was considering three
long term strategic options for BILT (i) develop BILT as a national writing and printing
paper distribution company (ii) forward integrate into printing (iii) continue the
traditional growth model. The V.P Marketing now finds it necessary to evaluate the
impact of the marketing initiatives made during 1999-2003, recommend the appropriate
strategic option and formulate marketing strategy for that can best leverage BILT’s
marketing strengths and help develop sustainable competitive advantage.
A marketing strategy combines product development, promotion, distribution, pricing,
relationship management and other elements; identifies the firm's marketing goals, and
explains how they will be achieved, ideally within a stated time frame.
Previous Research
The paper industry in India is more than a century old. At present there are over 600
paper mills manufacturing a wide variety of items required by the consumers.
These paper mills are manufacturing industrial grades, cultural grades and other
specialty papers. The paper industry in India could be classified into 3 categories
according to the raw material consumed.
1. Wood based
2. Agro based &
3. Waste paper based
While the number of wood based mills are around 20 and balance 580 mills are based on
non-conventional raw materials.
The Govt. of India has relaxed the rules and regulations and also delicensed the paper
industry to encourage investment into this sector and joint venture are allowed and some
of the joint ventures have also started in India. The paper industry in India is looking for
state-of-art technologies to reduce its production cost and to upgrade the technology to
meet the international standards.
It is estimated that the paper industry would be growing at the present rate of 7-8% of
compounded rate and would require 9.5-10 million MT by the end of the decade from the
existing production of around 6.7 million tonnes.
Paper industry in India is the 15th largest paper industry in the world. It provides
employment to nearly 1.5 million people and contributes Rs 25 billion to the
government's kitty. The government regards the paper industry as one of the 35 high
priority industries of the country.
The Indian Paper manufacturing Industry, which is highly power and capital intensive, is
broadly divided into paper, paperboards, and newsprint. Increased consumer spending
and improvement in conversion technology is expected to be the growth drivers for this
industry. The literacy level in India which is on the increase is further set to improve the
demand for paper. Indian Government’s policy for reducing the peak import tariffs for
paper each year, and pursuing the policy of actively entering into Regional Trade
Agreements (RTA) with ASEAN countries has further set up the momentum for growth
in this industry. These agreements along with further reduction in import duties are
expected to boost the demand for paper in the coming years.
India is the second most populous country in the world however, the per capita paper
consumption is among the lowest at 4.5 kg, while South Asian and global averages are 24
pounds and 117 pounds respectively. But the demand for paper is increasing given the
rising disposable incomes particularly of the expanding middle income group. The
literacy level in India which is on the increase is further set to improve the demand for
paper in the future. The Government of India’s increased budget allocation for education
sector is expected to further improve the literacy rates in both urban and rural areas,
resulting in increased demand for writing paper. Given the billion plus Indian population,
per capita increase in consumption will significantly increase the demand by one million
tons per year.
The healthy growth in the paper industry was driven by a strong growth in the economy,
increasing sophistication of the Indian consumer, and the emergence of packaging as a
key driver of product differentiation. Amongst the various sub segments value added
paperboards segment catering primarily to the packaging needs of the pharmaceuticals,
personal products and foods sectors, continued to grow at a substantially faster pace of 20
percent. The domestic newsprint market is likely to be bullish throughout 2006 in
anticipation of strong buying support from the newsprint consuming sectors. Both
English and vernacular newspapers are expanding the circulation leading to an increased
demand for paper
The Indian import of paper is expected to continue for the next five years and beyond to
meet the expanding local demand. Indian firms also import pulp from other countries.
The Indian paper manufacturers have started facing serious challenges. The major threat
faced by many Indian paper manufacturers is the shortage of quality raw material at
globally competitive rates. Noticeably due to the restricted availability of wood and
thereby pulp, prices have risen significantly which has affected the paper manufacturers.
Importantly for the paper companies pulp and energy are the two main components of
product cost. The supply situation is expected to remain tight in the coming time as well.
Another cause for concern is the consistent denial of permission by the central
government to allow paper manufacturers the development of degraded forestland, which
would enable them to source quality raw material at reasonable prices.
Major Players
Customers
End users of paper are both industrial and individuals. The Indian pharmaceutical
industry, Indian consumer products industry sector, processed food industry segment, are
the major end users of papers for packaging their products. Schools, colleges, offices are
also major end users of paper. Book publishing firms, print media and newspaper
publishers are another major industrial end users of paper. The expanding printing and
packaging sectors are the intermediate end users of paper.
The Rs 12,000 crore Indian paper industry is poised to see the clash of the titans in the
form of Ballarpur Industries Limited (BILT) versus JK Paper Ltd. The war-cry -‘building
brands’. While JK Paper is going to launch five branded products this year, BILT plans to
launch three to four branded products. Besides, both will focus on the key growth areas
including coated paper and branded copier paper. The strategy is also to climb the value
chain with specialised products.
JK Paper’s strategy is to increase the share of branded products in their stable from 35 per
cent to 50 per cent in the next two years. A key thrust area is the writing and printing
segment, which accounts for 37 per cent, in terms of volumes of the total paper industry.
The focus points within this segment are the branded copier segment which is growing at
10 to 15 per cent, coated paper growing at 9.5 per cent. Seen in comparison to the general
6 per cent growth in paper demand in the country, it is small wonder that the companies
are zeroing in on these focus areas.
The Rs 600 crore JK Paper has a multi-pronged approach. Says its vice president
(marketing & sales) Rajiv Sheopuri, “Our endeavour is to create new markets in paper.
The strategy is to span the paper industry in totality.” With this view, it is looking at
getting into coated paper as well as low quality paper, segments in which the company
does not have a presence. It is looking at outsourcing (either domestic or international) or
acquisition options to get into these categories within this year. BILT, on the other hand
has a market share of 53 per cent in the coated paper segment, while it is a major player
in the notebook paper category. JK Paper is also planning to rev up its activities in the
premium bond segment, where BILT’s Royal Executive Bond has a 62 per cent share. JK
paper is going to launch many value-added products including premium cheque paper.
The plans are to get into packaging paper which is a substitute for plastic.
BILT plans to double the volumes of its branded copier, Copy Power, in the next six to
nine months. JK Paper with its brands JK Copier and JK Easy Copier claims to be the
market leader in this category. BILT is also going to launch premium branded packaging
boards with graphic application soon — BILT Exelcia and BILT Oyster. Both the boards
are targeted at the high end cosmetics and garment companies. It also plans to launch
branded notepads and envelopes. Says Vice President (sales and marketing), BILT,
Yogesh Agarwal: “The idea is to identify the vacuum in the market and establish a
presence.”
Key Highlights:
• The Paper sector is in the midst of cyclical upswing driven by improved demand
and increase in the price of the products. BILT is the market leader in the Indian
paper industry and would be the key beneficiary from the positive outlook for the
sector.
• The improved performance of Bhigwan and Ballarpur plant will drive higher
volume and improved performance of the company.
• There is an expectation of increase in paper prices by 2000-2500 per ton; this will
further improve profitability of the company.
• Copiers and coated papers are the fastest growing segments, at an annualized rate
of 15-20 %, while high-quality packaging boards are growing at about 12%.
• The company is considering diversifying into manufacturing of container board
andcorrugated boxes, through brownfield expansion to cut on the acquisition
costs.