DIRECT MARKETING

Gas Cylinder Division

of

M/s XYZ Organization

M/s XYZ Overseas
Mumbai
India

ACKNOWLEDGEMENT
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Completing a project like this is a learning experience in its own right.

At the very outset I wish to thank Narsee Monjee Institute of
Management Studies for giving this opportunity to carry out a project
of this nature.

I am grateful to the professionals, who were kind enough to take out

time from their busy schedule to complete this project in all respect

I also wish to thank the Library assistants of Narsee Monjee Institute

of Management Studies for guiding me to get the appropriate books.

I would also like to thank our colleagues who helped out throughout the
project.

Naresh Khamkar
Roll No.24, Div : A
PTMBA - Mktg

TABLE OF CONTENTS

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Chapte Topic Page

r
No.

1. What is Direct Marketing 4

2. Types of Direct Marketing 4
3. Need of Direct Marketing 4
4. Introduction of XYZ Organization 5
5. Introduction of Products 6, 7, 8
6. Application of Direct Marketing 9
7. Need of Direct Marketing 9, 10
8. First Mover strategy 11
9. Types of Direct Marketing for XYZ 11
10. Direct Mail 11, 12,13
11. Catalogs 14
12. Websites 14, 15
13. Quantified direct marketing tools 16,17

What is direct Marketing

Direct Marketing is the use of consumer –direct channels to reach and

deliver goods and services to customers without using marketing
middlemen.

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Direct Marketing is the planned implementation, recording, analysis and

tracking pf customers direct response behaviour over time in order to
derive future marketing strategies for developing long-term customer
loyalty and insuring continues business growth.

Types of Direct Marketing

• Direct Mail
• Catalogs
• Telemarketing
• Interactive TV
• Kiosks
• Web sites
• Mobile Devices

Need of Direct Marketing

Direct marketing can be timed to reach prospects at the right moment
and receive higher readership because it is sent to more interested
prospects. Direct Marketing permits the testing of alternative

Introduction of Organization

XYZ ORGANIZATION, the Engineering Division of M. K. XYZ Group of

Companies commenced manufacture of Industrial Gas Plants for
producing Oxygen, Nitrogen and Acetylene Gases in the mid 80’s
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XYZ ORGANIZATION is a leading manufacturer of Industrial gas plants

such as Oxygen plant / Nitrogen plants / Air separation plants
and Allied equipments. Its engineering and fabrication division is
located around 20 kms away from Mumbai (Bombay).

The sprawling complex has a line up of modern facilities including

machinery, tooling and assembly. The main product range includes
Oxygen Plant / Nitrogen plants / Air separation plants ranging
from 40 to 1000 Cu.m./hr. capacity, Acetylene Plants of 45 and 200
Cu.m./hr. capacity and Nitrous Oxide Plants ranging from 8 to 24
Cu.m./hr. capacity.

XYZ ORGANIZATION has established over 400 such projects within

India and at various locations overseas. In 1991, its export division,
XYZ OVERSEAS, started exporting projects on turnkey basis and has
already setup projects in over 70 countries worldwide including
Malaysia, Indonesia, Mauritius, Gambia, Iran, Sharjah, Abu Dhabi, Qatar,
Nigeria, Dubai, Syria, Uganda, Tanzania, Argentina, Peru, Ecuador,
Sultanate of Oman, Saudi Arabia, Nepal, Egypt, Honduras, Kenya, Chile,
Cyprus, Egypt, Ghana, Guatemala, Portugal, Romania, Sri Lanka,
Zimbabwe, Libya, Zambia, Sudan, Morocco etc.

Introduction of Products

OXYGEN / NITROGEN PLANT

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The XYZ-ORG Oxygen / Nitrogen Plant, is safe and economical to

operate. It comes with an efficient expansion engine, which lowers the
operating pressures remarkably to as low as 32-35 kg/cm2 and also cut
down power consumption.

A Molecular sieve Battery drier unit for separation of moisture and

carbon dioxide is another money-saving device in the XYZ-ORG plant. It
removes acetylene and other hydro-carbons from the process air, thus
eliminating the need for separate acetylene absorbers, and moreover it
eliminates recurring caustic soda costs.

The XYZ-ORG Oxygen Plant is capable of simultaneously producing

high purity Oxygen Gas and Nitrogen Gas. It also has an internal
compression Liquid Oxygen Pump to fill dry gaseous oxygen in
cylinders.

XYZ ORGANIZATION also undertake supervision of Installation and

Commissioning of the XYZ-ORG Oxygen Plant.

DISSOLVED ACETYLENE GAS PLANT

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The Acetylene Plants from XYZ ORGANIZATION are of indigenous

manufacture. Every part has been carefully designed by experienced
engineers. These parts are made of the best material. Every part has
been accurately made and carefully inspected before assembly. Each
unit, after assembly is charged and worked continuously to check its
performance.

This Acetylene Plant from XYZ ORGANIZATION is of an advanced

design, incorporating several features not ordinarily found in other
generators. This one is a fully automatic plant with twin hoppers (and
needs an operators' attention for only ten minutes in an hour).

All operations are performed by pneumatically controlled valves,

assisted by highly sensitive sensors, integral with the temperature
control instruments. These in turn open the water inlet valve or residue
drain valve etc. Two hydraulic pumps help to open and close the supply
of calcium carbide. This is fed into the generator by screw feed
conveyors. The screw feed mechanism and the agitator is operated by
flameproof motors and fittings.

NITROUS OXIDE PLANT

Safe and economical, the Nitrous Oxide plant from XYZ

ORGANIZATION is a plant with an efficient Generation system which
reduces power consumption and adds on to safety. A storage battery

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assembly for separation of Nitrogen is another safety feature with the

XYZ ORG plant. The gas manufactured conforms to Indian Pharmacopia,
US & European standards and is stored in liquid state which can be
directly filled into cylinders.

CARBON DI-OXIDE PLANT

The process of purifying CO2 is obtained from burning of fuel, using

MEA (Monoethanolamin) in a aqueous solution which has been known
for quite some time. The plant uses a modernized process by which
high purity and food quality CO2 can be obtained. The plant has the
latest automatic control equipment and is easy to operate and requires
very little maintenance.

The CO2 containing combusion gases passes through a pre-cleaning

stage and is brought into contact with an aqueous MEA solution, which
absorbs CO2. Afterwards, the CO2 gas is desorbed from this solution
and compressed to the required pressure using special compressors.
This is followed by cleaning, drying and final cleaning stages of CO2 gas
that is then liquefied and filled in a storage tank.

Direct Marketing for XYZ ORGANIZATION (SOG)

Products like Industrial gas plants and cylinders are Capital Equipment
product and can not be marketed as any other FMCG (Fast Moving
Consumer Goods) products.

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In India SOG is the leading manufacturer and exporter of Industrial Gas

Plant and same in Overseas Market. They have occupy the same image
in the mind of overseas consumers.

The main marketing efforts are the quality and the after sales service
provided by the organization. It has helped them to retain their
customers more than one decade. Mouth to mouth publicity and the
repeated customer order are the key for the success and growth of
SOG.

SOG is known for their premium pricing and quality product and service
in both Domestic as well as International Market.

Now SOG is planning to use the same customer confidence for their
newly launch division which will be doing the trading of Industrial Gas
Cylinders.

Need of Cylinder Division (Imports - Exports)

1) Vertical Integration: SOG is a leading manufacturer and exporter

of Industrial Gas Plant. They receive the enquiries from domestic
as well as world market. 90% of the enquires are with the cylinder
bank (Cylinder in Volume), because for the customer who setting
up of Industrial Gas plant need to have at least a bank of
minimum 1000 cylinders initially

2) Volume of Business: Because SOG can not provide cylinders along

with the gas plant customer has to split their orders with SOG and
Cylinder manufacturer, also there are always more chances of
loosing of order.

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3) Overseas Import Regulation / Trade restriction: In most of the

overseas market obtaining the Import License is a very
cumbersome activity which also cost good amount of money. So
customers are not willing to apply for two different license of
Import (one for gas Plant & second for Cylinders)

4) Foreign Exchange Regulation: In countries like Nigeria and some

other African countries it is very difficult to remit / transfer the
amount or open the Letter of Credit for more than one time,
because these governments not allowing them to transfer the
foreign exchange out of the country

Options available for Souring of Cylinder

Indian Origin: In India there are only few manufacturers who

manufacturer export quality, the Cylinders under ‘Made in India’ brand
are costly compare to the international market.

Chinese Origin : As the entire world is moving for everything to China,

Industrial Cylinder market is also getting heated by ‘Made in China’
factor, for e.g. One ‘Made in India’ Oxygen gas Cylinder costing US$
180 vis a vis US$ 100 to ‘Made in China’. Also china has more number
of manufacturer and trader for Industrial Cylinders. This reduces the
power of suppliers as per Porter’s five forces model.
As the result SOG has tied-up with one of the Chinese manufacturer for
supply of Oxygen and Nitrogen Gas Cylinders on yearly contract basis.

First Mover Advantage

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According to industrial information SOG is the first manufacturer of

Industrial Gas Plants who will be supplying the Cylinders along with the
Gas plants under one umbrella.

This entire move will be given the First Mover advantage to capture the
market share of this particular segment

Types of Direct Marketing

• Direct Mail
• Catalogs
• Telemarketing
• Interactive TV
• Kiosks
• Web sites
• Mobile Devices

Out of the types listed above only few can be applicable in case of SOG
as the product is Industrial Product and more of B2B in nature.

Available option of Direct Marketing

• Direct Mail
• Catalogs
• Web sites

Direct Mail:
Direct-mail marketing involves sending an offer, announcement,
reminder or other item to a person. Direct mail is a popular medium

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because it permits target market selectivity, can be personalized, is

flexible, and allows early testing and response measurement. Although
the cost per thousand people reached is higher than with mass media,
the people reached are much better prospects

Stages of Direct Mailing

1) Carpet Bombing
2) Database marketing
3) Interactive marketing
4) Real-time personalized marketing
5) Lifetime value marketing

Application of Direct mails for SOG

The initial business of SOG gas plants at beginning has started with the
help of Direct mails only. So the results of the system has already
proven, only thing is that now the strategy of application has to modify
slightly.

SOG will be using the Database marketing and Real time personalized
marketing as a tool for Direct mailing. This means at the initial stage of
Cylinder division they will be only concentrating on their existing Gas
plant customer’s data base and try to capitalize on the same.

Rod-map of Direct mailing Application

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1) Data mining from the existing data base of Oxygen and Nitrogen
Plant customers.
2) Filtering the data further country wise.
3) Updating the data base if any
4) Categorize the data base with R-F-M formula
(Recency, Frequency , Monetary amount) :
- First target the customers who have purchase the gas plant
recently.
- Second target is the customers who is a repeated customer
for your product
- Third is the customers who has spend a good amount for
your product.
5) After filtering with R-F-M, print the mailing material with following
- Congratulating and thanking the customer for choosing
your product (Gas Plant)
- Informing them about the new launch of the cylinder
division
- Informing the various variants available
- Also inform about the contact details and the contact
person for the new enquiry about cylinders
- As a part of customer loyalty program, inform them about
the offered discount specially for the existing customer like
him
6) Inserts: Apart from the above mentioned format of Direct Mailing,
SOG also sends Greeting Card and Calendar to their customers,
domestic as well as overseas, on some occasion/festivals like
Diwali, New Year, Eid. At this time some Inserts will be use as
direct mailers to inform the customer about the new launch of the
Cylinder Division

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Catalogs:
Catalog marketing include sending full-line merchandise catalogs,
specially consumer catalogs, and business catalogs, usually in print
form but also sometimes as CDs, videos or online.

In hierarchy of Modes of marketing in Direct marketing, catalog

marketing will be on rank two for SOG.

Combined catalog for Industrial gas plant and Cylinders will be prepared
in presentable manner along with the corporate CDs which also
included the Launch of New Cylinder division.

This material will be especially handed over to:

1) The customer who will be visiting to India
2) SOG’s engineer who will be carrying the catalogs with CDs to
customer site while on the job of commissioning of the gas plant
overseas.
3) Marketing team will be carrying the same along with them during
their visit to overseas and during the participation in International
trade fairs and Exhibitions
4) Some set of these special catalogs will be Air freighted /
Couriered to the overseas agent.

Websites:
As the entire world has become a Village due to the IT industry, it will
be very easy for any organization to target the potential and
prospective customer by using the Websites and email

This method of Direct marketing is highly accountable and its efforts

can be easily traced

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Rod-map of Web sites Application.

1) Link to the existing website www.XYZorganization.com

2) A Insert of New Launch of Cylinder division has to continuously
move / blink on the home page of the website to get attraction of
the web visitors
3) Good quality of pictures along with the readable technical
specification of the cylinder will be there on cylinder web page
4) Enquiry form along with the auto-response option will
acknowledge the interest shown by the visitor immediately.
5) Data base will be linked from enquiry and contact us form which
will generate the date base for cylinder enquiry automatically.

Quantified the Direct Marketing tools

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• The tools use by any organization as Direct Marketing, has to be

quantified their application or use.

• Anything which is adopt in the business process as marketing tool

will cost to the organization and has to come out with some kind
of effects in the market either positive or negative.

• In case of SOG they are only adopting the following techniques.

- Direct Mail
- Catalogs
- Web sites

• Direct Mailing, Catalogs and websites are costing with respects to

printing of marketing material, inserts and also to design the
websites.

• Direct mailing will provide the list mailers of which the enquiries
can be count country wise or month wise data of Direct mailing.

E.g. Location wise: If marketing team of SOG send direct mailing

letters to their existing gas plant customers in Middle East
countries in the month of January 2008 to March 2008. They will
keep the data of entire communication. Once they started
receiving the enquiries from particularly this region they shall
updated the previous data along with reply received from
overseas in connection with mailers.
This will help them to quantified this Direct Mailing option as the
effective tools of Direct Marketing also the same can be quantified
with monthly report of the entire data

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• Catalogs Marketing can be quantified by the way of putting of

inserts of Enquiry form in the Catalogs which will give some kind
incentive to the customers who will booked the order through that
forms.

• Website Marketing : Web site marketing is the easiest and

cheapest mode of Direct marketing, also it is easy to track or
quantified these tool.

Direct link of data base of website with enquiry form will be stored
and monitor upon receipt of the order.

At the end of the quarter or the period of six moths all the tools will be
monitor by the way of comparative analysis between them, and the
most successful tool will be given the extra funding or interest for the
next coming period.

Bibliography

1) www.XYZoverseas.com

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2) www.XYZorganization.com
3) www.aiigma.org
4) www.tradeindia.com
5) Technical review
6) African review

Thank you

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