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SAIL Strengthens Rural Marketing Plans
09/07/2011 - SAIL has updated its retail marketing strategy with the aim of ensuring the furthest possible penetration of its branded products SAIL-TMT and SAIL-JYOTI in the country's rural regions.
Steel Authority of India Ltd (SAIL) has implemented key policy changes in its retail marketing strategy with the aim of ensuring the furthest possible penetration of its branded products SAIL-TMT and SAIL-JYOTI in the country's rural regions.
The company considers the strategic initiative to be particularly important in view of the fact that rural consumption is likely to grow substantially from its present level of 10 kg per capita. As a result, SAIL’s Central Marketing Organization (CMO) has decided to extend attractive financial terms and conditions as well as incentives in order to popularize its newly launched Rural Dealership Scheme. SAIL has planned to appoint 1,000 rural dealers in taluka, blocks and panchayats under this scheme during the current financial year with the aim of increasing consumption of steel in rural India
SAIL will offer a number of attractive incentives to dealers in rural areas under the scheme. For example, dealers will not have to bear the burden of a monthly commitment/offtake of material from SAIL, which will help to encourage small retailers in the hinterland to deliver SAIL's materials to remote locations. In addition, dealers will be given an attractive incentive, regardless of the quantity they handle in a month, which will encourage prospective dealers to help promote the use of steel in the rural sector.
To help minimize the financial risk for rural dealers, SAIL has also done away with the provision of a security deposit for the offtake of material. This has been done to encourage rural dealers to do greater volumes of business with SAIL. To make the operations of the rural dealers smoother, SAIL will also give them appropriate credit facilities, since purchasing power is relatively low in rural areas.
Further, to support delivery of steel to the doorstep of rural customers, SAIL will arrange and bear the costs for transportation of steel products from its nearest warehouses to the dealers' outlets. SAIL has the country's largest retail network for marketing of steel with a ground force of over 2,500 dealers.
SAIL will offer a number of attractive incentives to dealers in rural areas under the scheme. For example, dealers will not have to bear the burden of a monthly commitment/offtake of material from SAIL, which will help to encourage small retailers in the hinterland to deliver SAIL's materials to remote locations. In addition, dealers will be given an attractive incentive, regardless of the quantity they handle in a month, which will encourage prospective dealers to help promote the use of steel in the rural sector.
To help minimize the financial risk for rural dealers, SAIL has also done away with the provision of a security deposit for the offtake of material. This has been done to encourage rural dealers to do greater volumes of business with SAIL. To make the operations of the rural dealers smoother, SAIL will also give them appropriate credit facilities, since purchasing power is relatively low in rural areas.
Further, to support delivery of steel to the doorstep of rural customers, SAIL will arrange and bear the costs for transportation of steel products from its nearest warehouses to the dealers' outlets. SAIL has the country's largest retail network for marketing of steel with a ground force of over 2,500 dealers.
"The dynamic changes initiated in SAIL's retail marketing will go a long way in meeting our long-term strategy of further spreading the network and making it more robust in terms of easy procurement and supply in the rural hinterland," observed SAIL Chairman Mr. C.S. Verma.
According to SAIL, leveraging its retail channel is critical to the company's plans for expansion and growth. SAIL expects to commission a number of new production facilities in 2012, and this is expected to increase availability of SAIL-TMT (construction rebars) by over a million tonnes in the market.
SAIL's retail channel has been a success story since its re-launch in 2006. In Q1 of 2011-12, SAIL achieved 21% growth in sales through its existing dealer network. Likewise, sales of branded products, SAIL-JYOTI and SAIL-TMT, witnessed growth of 57% and 9.5%, respectively, through the retail channel.
