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SUMMER INTERNSHIP PROJECT
REPORT ON MARKETING STRATEGY&
PRICING ANALYSIS
A PROJECT REPORT SUBMITTED IN
PARTIAL FULFILLMENT OF THEREQUIREMENTS OF FOR
THE AWARD OF DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
G.L.A INSTITUTE OF BUSINESSMANAGEMENT
CORPORATE GUIDE :FACULTY GUIDE
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PREFACE
It is well evident that work experience is an indispensable part of every professional
course. In the same manner practical training in any organization is must for each and
every individual, who is undergoing management course. Without the practical
exposure one cannot consider himself as a qualified capable manager. Hence to fulfil
this requirement eight weeks training was completed at ITI LIMITED, NAINI,
ALLAHABAD. Entering in the organization is like stepping into altogether a new
world. At first everything seems strange and unheard but as the time passes one
understands the concept and working of the organization and thereby develop
professional relationship.
Initially it is felt as if classroom study was irrelevant and it is unless in any concern
working. But gradually it is realized that all basic fundamental concepts studied are
linked in one or other ways to the organization. But how and what can be done with
fundamentals depends upon the intellectual and applicability of the individual
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ACKNOWLEDGEMENTBob Briner says:
Praise those who work for you, Do it publicly! It is impossible to say thanks too
many times .
Believe in these words and I like to express my feeling of gratitude for your supportthat helped me in completing my project and making me to learn many good andresponsible things of personal and social conduct and professional attitude during mysix weeks training on the topic of
MARKET ANALYSIS & PRICING STRATEGIES IN ITI NAINI In fact, it
was just impossible for me to complete my training, preparing my report without
your help and guidance .It is too difficult for me to express my feelings in words for
their exclusive guidance and support that is so invaluable for me to replace only with
THANKS.
First of all I would like to express my deep and heartily gratitude to Mr. M Shahid
(Chief Manager), our training for giving priceless knowledge about the ITI Limited
Naini and giving so much help in making the project complete. I am highly grateful
for valuable advice in completing my project.
I specially would like to thanks Mr. Santosh Kr. Srivastava (Marketing Officer)for his expensive lectures and to making us aware about Market Situation, PricingStrategies . His teaching style was very interesting and attractive and was full of theconcepts and thank to Mr. C.K.Gupta (Engineer Marketing) for his humble
behaviour and good teaching.
I would also like to extend my thanks to my faculty guide Ms SWETA
AGRAWAL MAM and all faculty members of G.L.A Institute of BusinessManagement for their guidance & support.
AZAD KUMAR YADAV
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MBA 3 rd Semester
STUDENTS DECLARATION
I do hereby declare that the piece of dissertation report entitled MARKET
ANALYSIS & PRICING STRATEGIES has been prepared by me under the
avid guidance and supervision of MR. M. SHAHID, CHIEF MARKETING
MANAGER, ITI LIMITED NAINI, ALLAHABAD, as a part fulfilment for the
requirement of the degree in Master of Business Administration under M.
TECHNICAL UNIVERSITY during the session 2010-12.
To the best of my knowledge & belief, this is my own work and has not been
submitted anywhere earlier for any other degree.
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DATE: AZAD KUMAR YADAV
Place:
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Chapter Description Page No.
PrefaceAcknowledgementStudent DeclarationTable of Contents
1234
Chapter I
Introduction
1.1 Introduction1.2 Need & Relevance of Study1.3 Review of Literature1.4 Objectives of Summer Internship
5202122
Chapter II
Introduction toOrganization
2.1 Brief Profile of Company2.1.3 Management chain2.1.4 Product of ITI & Technology
242728
Chapter III
ITI Need marketingdepartment
3.1.1 What is Marketing3.1.1.7 Marketing system3.2 Tender ,3.2.1 Types of tender 3.2.2 Tender from BSNL/MTNL3.2.3 TESC
3237373840
Chapter IV 4.1 Pricing strategies 55
Chapter VResearch
methodology
5.1 Data Collection & Data Sources5.2 Sample Design & Sample Size5.3 Sample Selection
616161
Chapter VI
Data Analysis&Interpretation
Charts and Data Interpretation 62
Chapter VIIConclusion &
Recommendations
7.1 Findings & Conclusion7.2 Recommendations7.3 Limitations
757778
8 Appendix
9 Bibliography
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Table of contents
CHAPTER-I
AN
INTRODUCTION
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I TI: AT A GLANCE
Corporate head quarters ITI Bhavan, Doorvaninagar,Bangalore, 560016
Manufacturing Units Bangalore Naini (near Allahabad, UP) Raibareily (UP) Mankapur (UP) Palakkad (Kerala) Srinagar(Jammu and Kashmir)
Network System Unit Bangalore
Regional offices New Delhi Bangalore Kolkata Mumbai Chennai Hyderabad Bhubaneswar Bhopal Ahmadabad
Kochi Supported by 36 offices all over the
country
Manpower 13,000 approximately
R & D base Bangalore Naini Mankapur
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Quality system ISO 9000 compliant
1.1: Introduction of ITI
ITI Ltd is Indias largest and first public sector unit developed to manufacture
telecommunication products with the latest technology. ITI was established on 25 th
January 1950 in Bangalore. This is bedrock upon which India is launching its
contribution to the worlds telecommunication revolution. ITI Ltd is the premier
public sector undertaking of the country. It was the first public sector unit to be
opened by government of India after independence in the year 1948-49. It was
located in Bangalore. The activities of this public sector were manufacturing
mechanical telephone instruments and exchanges. Due to advancements in
technology in the field of electronics, ITI started its expansion program in the field of electronics in 1960s.
ITI Limited (ITI) is a telecommunication service provider in India. It is
principally engaged in development, production, and supply a comprehensive range
of telecom products that include transmission, switching, access and subscriber
premises equipments to its clients across the nation. In addition, it offers network
management systems along with encryption and networking solutions to its
customers for internet connectivity. The company along with BSNL has entered into
a strategic alliance for constructing a V-SAT based network in Ku band for IP-based
satellite broadband services. It holds six manufacturing facilities and three research
and development centers located across the nation. ITI is headquartered at Bangalore,
India.The company reported revenues of (Rupee) INR 17,853.20 million during the
fiscal year ended March 2009, an increase of 54.91% over 2008. The operating loss
of the company was INR 6,346.50 million during the fiscal year 2009, as compared to
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an operating loss of INR 3,572.30 million during 2008. The net loss of the company
was INR 6,355.20 million during the fiscal year 2009, as compared to a net loss of
INR 3,583.80 million during 2008.
Communication is our business was the motto adopted by ITI. With this motto in
mind, ITI started its business in communication field. From a small beginning, it has
grown in to a mammoth multiunit enterprise with manufacturing units at Doorvani
Nagar and Electronic City in Bangalore (Karnataka), Mankapur, Naini and
RaiBareily in Uttar Pradesh, Pallakkad in Kerala and Srinagar in Jammu and
Kashmir. In addition to these manufacturing unit located at Bangalore for
undertaking installation and maintenance of telecommunication equipments through
the country which is now renamed as Network Communication Business Group. The
company has a strong in house
R&D infrastructure attached to the independent business groups. The main R&D
divisions are located at Bangalore and Naini. Looking forward at the technology, the
R&D is engaged in continuous development and absorption technology.
The company lays a strong emphasis on quality which is taken as a corporatemanagement function under an independent Executive Director reporting to
Chairman and Managing Director. A large number of companys products are
covered under the Self Certification Scheme by the major consumer i.e.
Department of Telecommunications (DoT).
International quality management system: The Company has adopted ISO 9000,
taking it as a Tool for organizational change and work design. Naini unit has taken
ISO 9000 certification for design and production of telephones, digital multiplexingequipment and ISO 9000 certification for production of optical range of
communication equipments.
1.1.1: GOVERNMENTS INVOLVEMENT IN ITI
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As ITI is a public sector undertaking therefore government influences the working of
ITI. The marketing system prevailing in ITI-Naini is quite different from GeneralMarketing System prevalent in Private Business Units. The capital,
1.1.2: NEED FOR THE ESTABLISHMENT OF ITI
Government was enthused for the establishment of ITI because of the following
reasons:-
1. Social and economic development: - The first and the foremost reason for
the establishment of ITI was social and economic development. Government
aimed at the establishment of ITI in the backward areas of the country for their
economic development. More and more employees got employment opportunities
in this way.
This upgraded their standard of living and provided them and their families with
better living conditions, better educational facilities, better health facilities etc.
This also led to establishment of economies of scale.
2. Taxes: - The second motive of the government for the establishment of ITI-
Naini was taxes. ITI being a public sector undertaking pays huge amount of taxes
to the government.
1.1.3: PRODUCTS MANUFCTURED BY ITI-NAI NI
ITI primarily manufactures telecommunication equipments. They can be classifiedas:-
Landline equipments Mobile
Landline equipments can be further classified as under:-
Switching equipments
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Transmission equipments Instrument (telephone)
ITI-Naini mainly deals with the manufacture of transmission equipments andinstrument.
Table : 1.1 P RESENT FINANCIAL SCENARIO OF
PERFORMANCE FROM 2002-2008 (IN RS. CRORES)
Year 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10Sales(includingED)
1795 1257 1389 1749 1818 1210
Production 1689 1073 1362 1607 1797 1206Profit/loss aftertax
375 706 310 429 405 358
Growth inturnover
- - 10.54% 25.94% 3.94%
1.1.4 BAISE D ON A HOUSE JOURNAL
OF ITI LIMITED
ITI S TURNOVER REACHS HISTORIC HIGH
ITI Ltd has recorded the highest turnover in its history by clocking Rs.4732.43crores for the is more than double its previous high of Rs.2317.63 crores recorded in2001-02 year ended march 31,2010. this is a quantum jump of 271% when compared tothe previous years turnover of Rs. 1741crores .in fact, the provisional turnover achievedthis year
PROJECT UNDER IMPLEMENTATION (2010-11) Table : 1.2Total order for 2010-11 as on 01/04/10
SR. NO
PROJECTS/ PRODUCTS RS.CR(PROVL)
1 GSM Infra-9ML SZ 699.95
2 GSM Infra-9ML WZ 939.57
3 G Pon & GE-Pon 130.19
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4 IT Projects 2.13
5 STMs DDF 39.01
6 GSM-MTNL 59.23
7 ASCON+DEFENCE 2.82
8 ROs/cco/export 68.70
9 SSTP 4.29
10 Other misc. Product 10.66
11 DWDM 44.16
12 ADSL-CPE 75.88
13 MLLN 1.17
14 OCB-CSN MM/CORE&SPARES 0.14
15 NSU-I&C 9.84
16 Smart/sim card 6.50
17 C-DOT &SPRES 0.8418 DATA CENTER 3.67
19 RADIO Modem/SATCOM 10.11
1.1.5 MISSION:
To be the leader in the domestic market and an important global player in Voice, data
and Image communications by providing total solutions to purchasers. To build on
core competencies to enter new business areas.
MANAGEMENT CHAIN : Figure:
Ministry of Telecommunication
Chairman and Managing Director
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Board of Directors
Executive Director (EDR)
General Manger (Head of unit)
Additional General Manager
Deputy General Manager
Chief Manger
Manager
Deputy Manger
Assistant Manager
Engineer
Assistant Engineer
Staff (Employees from category A to H)
1.1.6 CHAIN OF NEW UNITS
n addition to the present unit at Bangalore, manufacturing the telephone and
transmission equipment, it has grown in to a multiunit enterprise with other
manufacturing enterprise with other manufacturing units established Doorvani Nagar
and Electronic City in Bangalore (Karnataka), Mankapur, Naini and RaeBareily in
Uttar Pradesh, Pallakkad in Kerala and Srinagar in Jammu and Kashmir.
I
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The company now manufactures the entire range of telecommunication equipment
right from telephone instruments to equipment for Satellite Earth Stations catering tothe DoT, MTNL, Defence services, railways and State electricity boards. It also tries
to meet the requirements of the private purchaser for automatic exchanges.
Besides this ITI also produces the road traffic signals of high reliability and variety of
telemetry and tele- control equipments. The latest production of ITI is SDH and
WILL. In future ITI is planning to switch over to ATM from SDH.
Apart from supplying to the domestic market ITI has also taken up Turnkey projects
abroad and has been exporting its products to as many as 20 other countries. The
company has received fewer tenders due to global competition. On the basis of its
quality and price, it is striding towards organizational excellence.
ITI today is a market oriented company, growing in to a total solution provider. It isstriving towards achievement of excellence.
1.1.7 PLANTS
1. BANGALORE PLANT( Established in 1950)
2. SRINAGAR PLANT( Established in 1970)
3. NAINI PLANT( Established in 1971)
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4. RAEBAREILY PLANT( Established in 1973)
5. PALAKKAD PLANT( Established in 1975)6. MANKAPUR PLANT( Established in 1980)
1.1.8 A WARDS
Excellent performance PSE awards in the year 1997-98 given by INDIAN
INSTITUTE OF INDUSTRIAL ENGINEERING.
Best CHIEF EXECUTIVE GOLD AWARD by INTERNATIONAL GREEN L &
SOCIETY on September 17, 1998.
FACT MKK NAIR PRODUCTIVITY AWARD by KERALA STATE
PRODUCTIVITY COUNCIL.
INSPECTION SCHEME (AIS) of PALAKKAD plant has been certified under
APPROVER SUPPLEMENTARY OCB 283 crore equipment to DOT, MTNL.
INDUSTRIAL SAFETY AWARD by NATIONAL SAFETY COUNCIL.
1.1.9 J OINT VENTURES
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idening its area of operation, ITI teamed up with PACIFIC
INTERNATIONAL COMPANY to manufacture micro earth stations. Theresult is ITI equatorial Satam ltd. (ISEL). Besides this earth station IESL also
undertakes turnkey projects in various parts of the world. ITI Communication Pvt.
Ltd. (ITIC) is a joint venture company set up in Singapore with the main objective of
promoting exports of ITI to other countries.
W
Fibcom India Ltd, New Delhi, has also made joint venture with NKT, Denmark for
SDH fibre optical product.
The ITI has collaborated with a number of foreign- based companies having the latest
technology. They are as follows:-
Name of the company CountryM/s Siemens/Nee JapanM/s Ericson SwedenM/s AWA AustraliaM/s Nee JapanM/s Alcatel FranceM/s Comedge Singapore
1.1.10 MAJOR LANDMARKS
YEAR ACHIEVEMENTS1971-72 Start of production1973-74 Production of telephone developed in
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house1980-81 Assoc ham awards for promotion of
ancillary industries1981-82 Establishment of computer centre1986-87 Collaborations1986-88 Update telephone manufacturing
technology and establishment of P.C.B.1989-90 Single and double sized P.C.B. and
production of 140 mibt optical lineequipment and regenerator incollaboration with M/s Denmark.
1991-92 Introduction of 565- mibt optical lineequipment and manufacturing of in-housedesign Telephone model ME-91 and TPS-90
1994 Advancement of optical line instrument1995 Implementation of Q.D.C and ISO 9000.1996 Collaboration with M/s Fibcom India Ltd.
and manufacture of Solar photovoltaicequipment.
1997 Development of MARR and itsmanufacture along with 8 mbit and a40mbit optic mux equipment.
1998 Production of DDF focus version.1999 Started in the worlds latest equipment i.e.
Digital Loop Carrier (PDH) and production of 2/15 single channelequipment.
2000 Development and production of DLC(SDH) and Access terminal along with the
production of the central office terminalracks.
1.1.11 RESEARCH A ND DEVELOPMENT
An important fact that helped ITI survive adverse circumstances and aided in
grooving is its research and development department. This department takes in
account that all the ITI products are technologically well-advanced and of superior
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quality. ITI has two R&D departments. One of them is situated in Naini (Allahabad)
and the other is situated in electronic city (Bangalore).
The laboratories conduct various tests to see that only quality products go out in the
market. R&D is manned with highly qualified engineers. Highly advanced
technology and equipments are also provided.
These efforts have led to the successful commercialization of several products.
IMPLEMENTATION OF GOVERNMENT POLICY OF
ECONOMIC LIBERALIZATION AND ITS CONSEQUENCESThe monopoly of ITI was broken by Government of India in 1991 as by opening the
door to the private sector and thus competition emerged.
ITI has been selling its instruments since 1968 to the government sector. Previously
the telecom sector was under total control of Government. With the commencement
of open-door policy of government, the selling pattern changed. ITI therefore began
to face stiff competition from other players. Some major problems faced by ITI are as
follows:-
Missing good professionals in marketing area Lack of availability of raw material on time Lack of autonomy to take decisions Need of more innovation and technology up gradation Need of more employee support Large quantity of waste product Lack of awareness in workers Fund crisis
1.1.12 PURCHASER S
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About 90% of ITI products are supplied to BHART SANCHAR NIGAM LIMITED
(formally known as department of telecommunication (DOT)). The other significant purchasers of ITI are as follows:-
Bharat Sanchar Nigam Limited
Maha Nagar Telephone Nigam Limited
Railways
Defence
Banks
Corporate
Factories/Offices
Steel/Power/Oil sector
General Public
1.1.13 REASONS FOR THE PROBLEM
Faulty government policy Lack of latest technology in communication Lack of latest technical knowledge among employees. Non availability of orders Fund crisis Excessive overhead expenditure Lack of publicity and advertisement Lack of sales promotion schemes Lack of up to-date features according to consumers demand
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1.1.14 THE MAJOR COMPETITOR S OF ITI:-
COMPETITORS FOR TELEPHONE INTRUMENTS:-
BPL BEETEL TATA PANAPHONES ORPAT PUNWIRE BEL WETSON SHYAMWIRE
COMPETITO RS FOR TRANSMISSION EQUIPMENTS
HFCL DSC(at present TELLABS) NATALCO UTL BEL HTL FUJITSU ALCATEL
COMPETITORS FOR EPABEX SYSTEM:- BPL TELECOM L & T LIMITED LG ELECTRONICS NORTHERN TELECOM TATA TELECOM SIEMENS INFORMATICS SYSTEM LIMITED SAMSUNG ELECTRONIC CORPORATION
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1.1.15 GOVERNMENT ENDEAVOURS FO R UPLIFTMENT OF ITI:
As already discussed, the monopoly of ITI was broken by Government of India in
1991 as by opening the door to the private sector and thus competition emerged.
ITI has been selling its instruments since 1968 to the government sector. Previously
the telecom sector was under total control of government. With the commencement
of open-door policy of government, the selling pattern changed. ITI therefore began
to face stiff competition from other players. As a result, ITI started incurring huge
loss.
To solve the above problem and to alleviate the poor condition of ITI, government
provided 30% reservation quota to ITI whenever any order was floated by
BSNL/MTNL. Against 30% reservation quota orders 75% ordered value is given in
advance for procurement of raw materials. According to this, ITI was to supply
BSNL/MTNL at the lowest price which was opened at the bid.
But ITI started to incur a loss because the price that used to open at the bid used to be
very less than the cost that ITI used to incur for the production of the equipments.
Therefore ITI was going in minus margin.
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1.2 : Need & Relevance of studyAccording to Redman and Mary Research is the systematic effort to gain new
knowledge. The main purpose of the study is to study the overall situation of the
market for each product line and for each product within the product line with regards
to the pricing strategies adopted by the ITI, Naini unit. The economic conditions and
technologies keep on changing from time to time. These are very important for an
organization to survive in the long run. They help to suggest sales goal, opportunities
and strategies that will yield desired market penetration. These information are very
important for new product selection and development.
The project will help us to understand how and the areas where the ITI
Company is influenced by its biggest competitors.
It will also help us to understand the consumer behaviour and perception toward
the ITI manufactured product & its competitors among the target segment.
The project also deals and will able to know the possible areas where these are
leading and where the improvement is required.
This research will also help in getting information which will influence sales of
the ITI product.
This research will also serve as a reference material for other researchers who
are going to conduct studies in fields related to the same as done by researcher.
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1.3: REVIEW OF LITERATURE -:
This research paper explores the manner in which state owned telecommunications
equipment manufacturer Indian telephone industries was affected by the radically
altered market conditions brought about by the opening of the economy and the loss
of its monopoly status. ITIs experience show that the governments market oriented
reform programme ended of creating anything but a level playing field for public
enterprise. On the one hand by eliminating its monopoly privileges but not the
constraints flowing from state ownership, and on the other hand, by imposing new
market-related constraints, deregulation had an extremely destabilising effect on the
operations of ITI.
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1.3: Objectives of summer Internship
A. To find out the demand of different product which manufactured by ITI, in
the market
B. To know satisfaction level of the customers with the products of ITI
C. To find out the market share of ITI among different competitors
D. To evaluate the competitiveness of the price of the products of ITI
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CHA PTER-II
Company profile
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2.1 : Glimpse of NAINI Unit ITI NAINE units is the lead unit in North India, situated about ,16 km away from the
holly city of Allahabad, which manufacturer the entire range of multiplexing
equipment to meet the need of country in vital area of telecommunication .In view of
priority of nation the organization had laid great emphasis on the development and
manufacturing of product for rural telecommunication .It produces most modern
optical terminal and line equipment and collaboration with TEJAS for SDH products
such as STM-1,STM -16,&STM -64 In collaboration with ZTE CHINE, keeping pace
with the advancement in the technology
It has incorporated state of art technology in area of product design manufacturing
and testing thus it has achieved self reliance in these areas. Beginning with moderate
product of RS 1.66 cores during 1971-72 the unit has achieved a trail blazing worth
RS 300cores 1992-93.It has got achieved annual growth rate of 70%during 1992
,which is a new land mark in the history of NAINI UNIT. It has got work force about
2338 people.
Sudden change in govt. telecommunication policy and entering of multinational
affected the stead progress of the company .an unhealthy competition from the fly-by
night private companies coupled with unrealistically cutthroat price quota of its
production value while there is quantitative growth.
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2.1.1 AI M OF ITI NAINI UNIT
1. Regain status as largest indigenous manufacturer of Telecom equipment and
consolidate share in new Technology.
2. Sustain its status of top turn key in telecommunication.
3. Respect External and Internal customers.
4. No liquidate damages
5. Reducing cycle time from dispatch to realization.
6. Work lines a team.
2.1.2 VISION OF THE ITI NAINI
We will be perceived by our customers as the leading business partner for providing
total network solutions.
We will offer innovative solution using leading technologies in a cost competitivemanner to help customers achieve their business objective.
We will pursue new opportunities arising from the convergence of information
communication and entertain business.
We will enhance shareholder value and will move up the value chain by expandingknowledge based and services based business while simultaneously leveraging our manufacturing business.
In our manufacturing business will continuously drive down cost.
We will leverage our telecom domain knowledge to build a telecom software business in India catering to global requirements.
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We will apply R&D efforts in focused areas.
We will form strategic alliances with the equipment /technologies suppliers andservices providers to access technologies and market and to help us provide totalsolution.
2.1.3 : MANAGEMENT CHAIN OF ITI NAINI UNIT Figure 2.1
General Manager (Head of unit)
Additional General Manager
Deputy General manager
Chief Manager
Manager
Deputy Manager
Asstt. Manager
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Engineers/Officers
Asstt. Engineers
Staff category A to H
2.1.4 PRODUCTS OF ITI NAINI ALLD
STM-1CPE STM-16ADM STM-16MADM STM-1ADM
STM-64(USA) DWDM (ZT) CHINA DDF EPBT (Telephone)
Where-
STM- Synchronous transport Module.
ADM- Add Drop Module.
CPE- Customer Promise equipment.
DWDM- Dense wavelength Division Multiplexing.
DDF- Digital Distribution Frame.
EPBT- Electronic Push ButtonTelephone.
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SDH- Synchronous DigitalHierarchy.
OFC- Optical Fibre Cable.
TECHNOLOGY
The Technologies used for various products manufactured ITI NAINI unit are as
following:
1) DDG Own technology
2) EPBT-Own technology
3) STM-1CPE, STM-1, STM -4, STM-16, ADM and MADM-Tejas .
Bangalore technology.
4) STM-64 Xalted, USA technology
5) DWDM-ZTE technology
2.1.5 THE MAIN CUSTOMER OF ITI LTD NAINI
ITI Naini has mainly the two types of customers-
1. BSNL
2. Non BSNL
In the case of BSNL to providing the product to BSNL the company (ITI) has to fulfil
the generic requirement. But in the case of non BSNL there is no need to fulfil the
generic requirements.
2.1.6 GENERIC REQUIREMENTS
1. Productivity
2. Size of the products.
3. Structure of the products.
4. Shape and design.
According to Marketing Officer Sri S.K. Shrivastava
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If the company is providing the products along with the generic
requirements to the customers then the products are accepted
otherwise rejected.
2.1.7 PRODUCT DESCRIPTION
Model NO.
Registration NO.
Date of manufacturing.
Validity.
Guaranty and warranty.
Features of the Product.
Others.
2.1.8 COMPETITORS OF ITI NAINI ALLD
Technofiber industries Bhopal
Pentagon industries Bhopal
Shakti Enterprises Bhopal
SRV Telecom Bangalore
Hindustan Telecom Allahabad
Promod Telecom Luck now.
DEC Kanpur
BPL India Bangalore
Prithvi (huawei technology)
Puncom (huawei technology)
Ordyne
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Terracom (ordyne)
Siemence ZTE (ZTE)
HFCL (WRI)
Eriksson
2.1.9 : LAST FIVE YEARS PRODUCTION Table: 2.1
years ITI NAINI UNIT
2009-10 1829 287.24
2008-09 1210 118.42
2007-08 1818 92.24
2006-07 1749 139.70
2005-06 1389 73.16
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ITI- NAINI PRODUCTION TARGET 2009-
10 :- Table: EQUIPMENT REVENUE EARNED (cr)
STM-1 ADM AND STM1 CPE 40.69
STM-16 AND STM 16 MADM 74.34
DDF 1.00
DWDM 85.00
New diversified products 50.00
TOTAL REVENUE EARNED260.08
(EXPECTED)
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CHA PTER-III
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3.1 MARKETING
Marketing boasts a rich array of concepts and tools
3.1.1 WHAT IS MARKETING?
satisfaction at a profit .
Two fold goal of marketing is to attract new purchasers by promising superior value
and to keep current purchasers by delivering satisfaction.
What does the term marketing means ? Many people think of marketing only as
selling and advertising. It is no wonder, that every day we are bombarded with
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television commercials, newspaper ads, direct mail campaigns, Marketing, more than
any other business function, deals with purchasers. Understanding, creating,communicating and delivering purchaser value and satisfaction is the heart of many
modern marketing thinking and practices. We may define marketing as, Marketing
is the delivery of purchaser internet pitches and sales calls. However selling and
advertising are only the tips of the marketing iceberg. Although they are important,
they are only two of the many marketing functions and often not the most important
ones.
Today, marketing must be understood not in the old sense of making a sale- telling
and selling , but in the new sense of satisfying purchaser needs. Selling occurs only
after the product is produced. By contrast, marketing starts long before a company
produces a product.
3.1.1.1 Social Definition Of M arketing :-We define marketing as a social and managerial process whereby individuals and
groups obtain what they need and want through creating and exchanging products
and values with others.
3.1.1.2 Managerial Definition:-Peter Drucker, an eminent management theorist puts it in this way- Marketing is the
process of planning and executing the conception, pricing, promotion and distribution
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of ideal goods and service to create exchanges that satisfy individual and
organizational goals.Till 1993-94, ITI enjoyed being the only producer in the field of telecommunication
in India.
It had the power of monopoly, which was snatched away as the governments policy
of liberalization was introduced. Previously ITI was producing the product and the
market was buying it at the price which was being offered by ITI. With the entry of
competitors, ITI felt the need of a Marketing department. Hence in 1994, in the
month of April the Marketing department was established. Its main challenge is to
bring back the lost glory of ITI.
For this reason they need to keep up to date with the changing answer of the
following five questions:-
What business we are in?
Who are our main purchasers?
What are our purchasers wants and desires?
How can we best distribute our products to them?
How can we make communication with the more effectively?
3.1.1.3 M I S S IONS AND OBJECTIVES:-
The company entered the New Year with an objective of achieving new horizons inthe year 2010.
The missions and objectives may be stated as under:- Creation of demand Creation of product image and personality Mass awareness about the product Provision of efficient after sales service
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Periodic arrangement of marketing research Product modification and diversification as per purchasers specification Increase in sales Profits through purchaser satisfaction Generate demand for telecom products through innovation To become a strong service provider with major business thrust in telecom
network operations and value added services. Strengthen the technology- scanning capabilities to benchmark their
products/services against global standards, identify new products, enable
better maker-buyer decisions and identify potential partners. Achieve global quality standards in all the products in the shortest time. Introduce effective planning and control system for achieving delivery
schedules, streamlining production over the whole year and better inventory
control. Create an environment that cares for the individuality and dignity of
employees. Create a sense of achievement and involvement in the company.
3.1.1.4 MARKETING PLAN:-
The marketing plan operates at two levels. The strategic marketing plan lays out the
broad marketing objectives and strategies based on an analysis of the current market
situation and opportunities. The tactical marketing plan outlines specific marketing
tactics including advertising, merchandising, pricing channels and services.
3.1.1.5 MARKET-ORIENTED MARKETING
STRATEGY:-
Market-oriented marketing strategy is the managerial process of developing and
maintaining a viable fit between the organization objectives, skills and resources and
its changing market opportunity. The aim of strategic planning is to shape the
companys business and product so that they yield target profits and growth.
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It is the marketing strategy that decides the success at the business unit level which in
turn decides the total corporations success. The linkage between marketing strategy
and overall corporate success is indeed direct and vital. And in this linkage lies the
significance of marketing strategy.
To understand strategic planning, we need to reorganize that most of the large
companies consist of four organizational levels. They are:-
Corporate level Division level
Business unit level
Product level
Corporate headquarter is responsible for designing a corporate strategic plan to guide
the whole enterprise to make decisions about which businesses are to be started and
which ones are to be eliminated .Each division establishes a plan covering allocation
of funds to each business unit within that division. Each business unit develops a
business unit strategic plan to carry that business unit into a profitable future. Finally,
each product level within a business unit develops a marketing plan for achieving its
objectives in its product market .
3.1.1.6: MOTTO OF MARKETING DEPARTMENT:-
Making Waves In Communication
Establishment of ITIs Marketing Department:-The marketing system of ITI is in its infant stage. The requirement of this very
section was realized when many rival companies entered in the same business area
due to adoption of liberalization policy by Government of India. Therefore this
department came into being in April, 1994. The other reason to establish marketing
division was to get series of ISO certificates so that products can be sold in global
market.
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3.1.1.7 MARKETING SYSTEM
There can be two types of marketing systems: -
1. Open / Direct/Field marketing system : According to this marketing
system there is a liberty for the suppliers to float the product anywhere in the
market.
2. Tender/ Quotation marketing system: - This is the marketing system
that is prevalent in ITI, Naini. In this the purchaser float tenders to the
suppliers and the lowest one(L1) is selected.
3.2 WHAT IS A TENDER?A tender document or simply tender is a document of inquiry from purchaser
specifying the exact nature of the requirement of materials against which
offers/quotations are invited from the suppliers. Each tender document has a price
which is in proportion with the tendered material.
3.2.1: TYPES OF TENDERS
There can be four types of tenders:-
1. Single tender: - In this, the inquiry is floated to only one particular supplier. The
price mentioned in the tender is cross checked against the previous orders. If the price
is considered legitimate then the purchase order is placed.
2. Limited tender: - Every company has a fixed number of approved suppliers. Inthis type, the tender is floated to only these limited numbers of suppliers.
3. Open tender: - In the case of new technology or large orders this type of tender
is floated. Information about the tender is floated on internet, magazines, newspapers
etc. Urgent requirement can be fulfilled through 30% reservation quota order which
can be placed upon ITI even before floating the tender.
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The L1 opened price of tender is made effective for 30% reservation quota order after
finalisation of L1 opened price.
Limitation of an open tender: -
i. It is time taking.
ii. It is costly.
Advantage of an open tender:-
i. Very useful in case of new technology.
ii. Offers a competitive price to the purchaser.
In the case of BSNL, a time period of 5 weeks is given to the bidders for the
submission of tenders. Regional offices are responsible for searching about the
tender in case of ITI.
4. Global tender : - This is similar to open tender, the only difference lies in the
fact that global tender are floated all over the globe. This is mainly floated for
imported, indigenous items.
As 90-95% of ITIs products are purchased by BSNL/MTNL therefore the entire
marketing process of ITI revolves around it
3.2.2: TENDER FROM BSNL/MTNL:-
A Tender from BSNL/MTNL contains 11 sections. These are:
1. Notice Inviting Tender
2. Instructions to Bidders
3. General Conditions of the Contract
4. Special Conditions of Contract
5. Schedule of requirements
6. Technical Specification
7. Bid form and price schedules
8. Performance Security Form
9. Bid security Form
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10. Letter of Authorisation for attending bid opening
11. Annexure
3.2.3 THELOCATION FOR COLLECTION OF TENDER
DOCUMENT:
In case of ITI, the tender document may be collected from:-
1. Directly from the circle offices of BSNL/MTNL after the payment of the
price of the tender document by the officers of concerned ROs.
2. Download from the internet. In this case the payment of price done through
demand draft which is submitted along with the filled tender document.
3.2.4 DOCUMENTS STABLISHING BIDDERS
ELIGIBILITY AND QUALIFICATIONThe bidder should furnish, as part of the bid documents establishing the bidders
eligibility, the following documents or whichever is required as per terms and
conditions of Bid Documents.
i. Certificate of incorporation: The bidder participating should belong to a
company and the company should be Indian. For this purpose, a certificate of
incorporation issued by government of India is required. ITI was incorporated on
25 th January 1950. It is the first PSU of free India.
ii. Article or Memorandum of Association: It deals with the provisions of rules
and regulations of the company.
iii. Partnership deed or proprietorship deed as the case may be .iv. Registration certificate from State Director of Industries or from Secretariat
for Industrial Approval (SIA) , Ministry of Industries, Government of India:
This is issued by the Government of India proving the physical fitness of the
company.
v. TSEC issued by QA circle /Type Approval Certificate (TAC) issued by
Telecom Engineering Centre or proof of having applied for TAC/TSEC
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3.2.5 TECHNICAL SPECIFICATION EVALUATIONCERTIFICATE (TSEC)Every supplier needs to obtain a TSEC without which it is not eligible to participate
in the tender for BSNL. The quality assurance wing of BSNL, which is located in
Bangalore, provides every supplier a TSEC after it undergoes the following
procedure.
STEPS TO OBTAIN A TSEC: -
1. A fixed amount of fees is paid to BSNL centre.
2. A request is made to the QA wing of BSNL for TSEC.
3. Inspectors from BSNL visit the supplier to test the product. In ITI, the test is
conducted in the climatic chamber where a temperature ranging from -50C to
150C can be provided. This to ensure that the equipment is viable to function
anywhere in the country.
4. Then the equipment is sent to BSNL centre for field trial. BSNL officers,
engineers and technicians then undertake the field trial of the equipment. If
any lacuna is found then suppliers engineers try to rectify it.
5. After the successful field trial approval is made by QA wing.
6. TSEC is provided to the supplier which makes it eligible for participation in
tender.
7. TSEC has its validity normally for a period of three years.
3.2.6 T YPE APPROVAL CERTIFICATE (TAC)
This is similar to TSEC, the only difference lies in the fact that TSEC is issued by the
QA wing of BSNL situated in Bangalore whereas TAC is issued by Department of
Telecommunication situated in New Delhi.
TSEC contains the following: -
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1. Product description
2. Model number of the product
3. Date of issue of TSEC
4. Validity of TSEC(normally ranging for a period of 3 years)
5. Specification that the TSEC is only valid for that particular supplier.
i. Inspection Certificate issued by BSNL (QA) for execution of
Educational/Commercial Order. (If applicable)
ii. Bulk production certificate: This certificate is issued by BSNL certifying that
the company is capable of bulk production.
iii. Annual Report and /or a certificate from its bankers as an evidence that he
has financial capability to perform the contract.
iv. Quality Policy: The bidder shall furnish documentary evidence about the quality
produced by the company necessary to perform the contract.
3.2.7 ISO CERTIFICATE:ISO 9000 is a family of standards for quality management systems. ISO 9000 is
maintained by ISO, the International Organization for Standardization and is
administered by accreditation and certification bodies. The rules are updated, the time
and changes in the requirements for quality, motivate change. Recently, on
November 15, 2008, has made changes to the requirements of ISO 9001 .
Some of the requirements in ISO 9001 (which is one of the standards in the ISO 9000
family) include
1. a set of procedures that cover all key processes in the business;
2. monitoring processes to ensure they are effective;
3. keeping adequate records;
4. checking output for defects, with appropriate and corrective action where
necessary;
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5. regularly reviewing individual processes and the quality system itself for
effectiveness; and
6. facilitating continual improvement and a better after sale service
A company or organization that has been independently audited and certified to be in
conformance with ISO 9001 may publicly state that it is "ISO 9001 certified" or "ISO
9001 registered". Certification to an ISO 9001 standard certifies that formalized
business processes are being applied.
i. Bid Security Exemption Letter: This is applicable for ITI only. ITI being a PSU
is exempted from payment of bid security fee. Bid Security Exemption Letter is aletter issued by BSNL certifying the above.
ii. Tax Clearance Certificate: This is documentary evidence certifying that the
company has no tax burden on its part. This includes Sales Tax (or VAT)
Clearance Certificate and Income Tax Clearance Certificate.
3.2.8 CLARIFICATION OF BID DOCUMENTS
To assist in the examination, evaluation and comparison of bids, the purchaser may,at its discretion ask the bidder for the clarification of its bid. The request for the
clarification and the response should be in writing. However, no post bid
clarification at the initiative of the bidder is entertained.
A prospective bidder, requiring any clarification on the bid documents needs to
notify the Purchaser in writing or by FAX at the Purchasers mailing address
indicated in the invitation of Bid. The Purchaser responds in writing to any request
for the clarification of the Bid Documents, which it receives not later than 10 days
prior to the date of opening of the Tenders . Copies of the query (without
identifying the source) and clarifications by the Purchaser are sent to all the
prospective bidders who have received the bid documents.
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Any clarification issued by BSNL in response to query rose by prospective bidders
forms an integral part of bid documents and it may amount to an amendment of relevant clauses of the bid documents.
3.2.9 AMENDMENT OF BID DOCUMENTS
At any time, prior to the date of submission of Bids, the Purchaser may, for any
reason, whether at its own initiative or in response to a clarification requested by a
prospective bidder, modify bid documents by amendments.
The amendments are notified in writing or by FAX to all prospective bidders on the
address intimated at the time of purchase of the bid document from the purchaser and
these amendments will be binding on them.
In order to afford prospective bidders a reasonable time to take the amendment into
account in preparing their bids, the purchaser may, at its discretion, extend the
deadline for the submission of bids suitably.
3.2.10 BID PRICES
The bidder has to mention two types of prices in the bid document. These are:-
1. Composite Price: - The bidder has to give the total composite price inclusive
of all Levies & Taxes i.e. Central Sales Tax/VAT & Excise Duty, packing,
forwarding, freight and insurance. Octroi/Entry Tax are paid in actual extra as the
case may be.
2. Basic unit price : - The basic unit price is exclusive of all levies and taxes.
That can be set as ex-factory price.
Prices of incidental services also needs to be quoted. The offer should be firm in
Indian Rupees. No Foreign exchange is made available by the purchaser.
3.2.11 BID SECURITY
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The bidder needs to furnish, as part of his bid, a bid security for a fixed amount.
The bid security is required to protect the purchaser against the risk of biddersconduct.
The bid security shall be in the form of a bank Guarantee issued by a scheduled bank
in favour of the purchaser, valid for a period of 180 days from the date of tender
opening .
A bid not secured in accordance with above conditions can be rejected by the
Purchaser being non-responsive at the bid opening stage and returned to the bidder
unopened.
The bid security of the unsuccessful bidder is discharged/returned as promptly as
possible but not later than 30 days after the expiry of the period of the bid validity
prescribed by the purchaser pursuant to clause 13.
The successful bidders bid security are discharged upon the bidders acceptance of
the advance purchase order satisfactorily and furnishing the performance security.
The bid security may be forfeited:
a) If the bidder withdraws his bid during the period of bid validity specified by
the bidder in the Bid form or
b) In the case of successful bidder , if the bidder fails :
i. to sign the contract
ii. to furnish performance security
a) In both the above cases, i.e (a) & (b), the bidder will not be eligible to participate
in the tender for same item for one year from the date of issue of APO. The
bidder can not approach the court against the decision of BSNL in this regard.
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b) The front bidder needs to submit an irrevocable undertaking duly signed by it
and its technology/consortium partner stating that both of them i.e the front
bidder and its technology/consortium partner will be liable for due performance
of the contract jointly and severally failing which both of them will be liable to be
barred from having any business dealing with BSNL for a period of 3 years.
c) However, ITI is exempted to submit bid security and bid security exemption letter
issued by BSNL corporate office has to be submitted along with the bid
document.
3.2.12 PERIOD OF VALIDITY OF BIDS
A Bid is generally valid for 150 days to 180 days from the date of opening of bids
prescribed by the purchaser. A bid valid for a shorter period can be rejected by
the purchaser being non-responsive.
In exceptional circumstances, the purchaser may request the consent of the bidder
for an extension to the period of bid validity. The request and the response thereto is
made in writing. The bid security is then also suitably extended. The bidder may
refuse the request without forfeiting his bid security. A bidder accepting the request
and granting extension is not be permitted to modify his bid.
3.2.13 S ELLLING AND MARKING OF BID:
1. The bid should be submitted in three covers. The first cover should contain the
original and four copies of Unpriced & Technical Bid dully marked ORIGINAL
© .The second cover should be contain priced financial original & four
copies of priced financial bid & third cover should contain Bid security as
mentioned in the Bid document. All the three covers should be sealed separately
by the seal of the bidder.
2. The envelope should be addressed to the purchasers at the address mentioned in
the bid document.
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3. The envelope should bear (the project name) the tender number and the words
DO NOT OPEN BEFORE THE GIVEN TIME.4. The inner and outer envelops shall indicate the name & address of the bidders to
enable the bid to the return unopened in case it is declared late or rejected.
5. Tender may be send b registered post or delivered in person on above mentioned
address.
3.2.14 OPENING OF BIDS BY PURCHASER
1. The purchaser opens the bids in the presence of bidders or their authorised
representatives who chose to attend at scheduled time of due date.
2. A maximum of two representative of any bidder are authorized and permitted
to attend the bid opening.
3.2.15 PRLIMINARY EVALUATION
1. Purchasers evaluates the bids to determine whether they are complete,
whether any computational errors have been made , whether required sureties
have been furnished , whether the documents have been properly signed and
whether the bids are generally in order.
2. If any discrepancies are encountered then those are rectified on the basis
being mentioned in the bid documents. If the supplier does not accept the
correction of the errors, his bid is rejected.
3. The purchaser will determine the substantial responsiveness of each bid to the
bid document. A substantially responsive bid is one which confirms to all the
terms and conditions of the bid documents without material deviations.
4. A Bid , determined as substantially non responsive will be rejected by the
purchaser and shall not subsequent to the Bid opening be made responsive by
the bidder by correction of the non- conformity.
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3.2.16 EVALUATI AND COMPARISION OF SUBSTANTIALLY
RESPONSIVE BIDS1. The purchaser evaluates in detail and compares the bids previously determined
to be substantially responsive.
2. The for detailed comparison of substantially responsive bids is mentioned in this
clause
3.2.17: PURCHASERRIGHT TO VARY QUNTITIES
This clause specified that purchasers receive the right to increase or decrease the
quantities of the goods and services up to a fixed quantity mentioned in the scheduled
of requirement without any change in the unit price.
PURCHASERS RIGHT TO ACCEPT ANY BID AND TO
REJECT ANY OR ALL BIDS
According to this clause , the purchaser reserve the right to accept or reject any bid
and to annual the bidding process and reject all bids, at any time prior to awards of
contract without assigning any whatsoever and without thereby incurring any liability
to the affected bidder or bidders on the ground of the purchasers action.
ISSUE OF ADVANCE PURCHASE ORDER
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1. The issue of an advance order constitutes the intention of the purchaser to
enter into contract with bidder.
2. The bidder shall within 14 days of issue of the advance purchase order, give
his acceptance along with performance security in conformity with section ix
provided with the bid document .
3.2.18 ANNULMENT OF AWARD
If the successful bidder fails with the requirement of above then purchaser
constitutes sufficient ground for the award and the forfeiture of the bid security, in the
case the purchaser may make the award to and other bidder at the discount of the
purchaser or call for new bids
3.2.18.1 SECTION-1
This section contains the special condition of the contracts that is needed to be singed
between the bidder and supplier.
3.2.18.2: SECTION -2
This section contains GENERAL (COMMERCIAL) CONDITIONS OF
CONTRACT
Some of the important clauses mentioned in this section are:-
3.2.18.2.1: PERFORMANCE SECURITY
All suppliers need to furnish performance security to the purchaser for an amount
equal to 5 % of the value of the purchase order within 14 days from the date of issue
of advance purchase order by the purchaser.
The proceed of the performance security are payable to the purchaser as
compensation for any loss resulting from the suppliers failure to complete its
obligations under the contracts.
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The performance security bond should be in the form of the bank guarantee issued by
a scheduled Bank in the form provided the bid document.
The performance security bond is discharged by the purchaser after completion of the
suppliers performance obligations including any warranty obligations under the
contract.
3.2.18.2.2 TRAINING :-
The bidder needs to provide training for installation and maintenance staff of the
purchaser free of cost where required. This clause contains the specifications related
to the above.
3.2.18.2.3: WARRATNY
This clause contains the details about the warranty conditions that the purchaser
expects from the supplier .
3.2.18.2.4 : PAYMENT TERMS
This clause contains the details regarding the payment terms. Normally
payment of95 % of the price is made on the receipt of the goods by consignee for
claiming this payment the following document are to be submitted to the paying
authority.
Invoice clearly indicating break up details of the composite price i.e. Basic,
E.D, Sales Tax, any Duties and Taxes, Freight/Packaging charge, Service Tax
etc. Delivery challan Supplier certificate for despatch
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Excise gate pass/invoice or equivalent document Consignee receipt The sea freight receipt as per the rates approved by the ministry of the water
and surface transport, if any Proof of payment of octroi/ entry tax if any.
If the supplier fails to furnish necessary supporting documents i.e. excise/customs
invoices etc. In the respect of duties/ Taxes which are cenvatable, the amount
pertaining to such duties/Taxes is deducted from the payment due the payment to the
firm
3.2.18.2.5: LIQUIDATED DAMAGES
This clause mentioned the penalties that are imposed on the supplier when the
deliveries are made after expiry of the contracted delivery period. Without prior
concurrence of the purchaser. Under such conditions the purchaser has right to
recover liquidated damage under. However, when supply is made within 21 days of
the contracted original period, the consignee may accept the stores and in such cases
the provision of clause 16.2 will not be apply.
If the supplier fails to deliver the store or any consideration thereof within the
period prescribed and agreed for delivery without prejudice to other remedies
available to purchaser is entitled to recover as agreed liquidated for breach of
contract, a sum equivalent to 0.5% of the value of the delayed supply and /or
undelivered material/ supply for each week of delay or part thereof for a period up to
10 weeks and thereafter a the rate of 0.7% of the value of the delayed supply and
undelivered material/supply for each week of delay or part thereof for another 10weeks of delay.
DP extension beyond 20 weeks is not being generally allowed. The extension
beyond 20 weeks may be decided in most exceptional circumstances on case to case
basis, by the CGM concerned in case of tender floated by Circles and by the
functional Director concerned in case tenders floated by Corporate office, stating
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reasons and justification for grand of extension of the delivery period beyond 20
weeks.
3.2.18.3: SECTION -3
This section is the TECHNICAL SPECIFICATION section that specifies from the
supplier.
3.2.18.4:SECTION -4
This section contains the SPECIAL CONDITIONS OF THE CONTRACTS that is
needed to be signed between the bidder and the supplier.
3.2.18.5: SECTION -5
This section contains the SCHEDULED OF REQUIREMENTS that is required by
the supplier from the supplier .
3.2.18.6: SECTION-6
This section is the technical specification section that specifies from the supplier.
3.2.18.7SECTION -7
This section contains the BID FORM AND THE PRICE SCHEDULE for the
supplier.
3.2.18.8: SECTION-8
This section contains the BID SECURITY FORM.
3.2.18.9: SECTION-9
This section contains the PERFORMANCE SECURITY FORM.
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3.2.18.10: SECTION-1 0
This section contains the LETTER OF AUTHORISATION FOR ATTENDINBID OPENING which authorises the representatives of the suppliers to attend the
bid opening for the tender mentioned above on behalf of requisite authority (Bidder)
in the order of preference as mentioned.
Maximum of two representatives are permitted to attend bid opening. In cases
where it is restricted to one, first preference is allowed, alternate representative are
permitted when regular representatives are not able to attend.
Permission for entry to hall where bids are opened may be refused in case
authorisation as prescribed above is not recorded.
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TENDERING PROCESS FOR STABILIZED PRODUCTS
Figure: 3.2
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Receiving of Notice Inviting Tender (NIT) through:-
Regional offices Internet Corporate office in Bangalore
Request letter send along with TSEC and supplier recordto concerned Regional Office.
On receipt of tender document, process starts.Management approval for participation is sought and
finalisation of rate to be quoted in the subject tender is
Management Assistance isrequired from
Technical Costingde artment for
Assistance is requiredfrom R & D forconfi uration of
Bid
Mostly tender bid isprepared by ROconcerned. Document with
rates are forwarded to RO.
Sometimestender bid isprepared by ITI
and submitted bC
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C
Process of bid
IndexPreparation of Power of
Preparationof commercial
Pricing and ceiling isdone. Original copy + 4
Bid
Bid opening.
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Figure: 3.4,
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FINISHEDPRODUCTS FROMITI LIMITED
BHARATE SANCHARNIGAM LIMITED(THROUGH TENDERS,BIDS & DIRECT
NON- BSNLPURCHASE
THROUGHREGIONAL OFFICES
DIRECTLY(THROUGH
REGIONAL OFFICES)
THROUGH DEALERS(MOSTLY FOR
TELEPHONEEQUIPMENTS)
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CHA PTER- IV
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4.1 PRICING STRATEGIES
One of the four major elements of the marketing mix is Price. Pricing is an important
strategic issue because it is related to product positioning. Further more, pricing
effects other marketing mix elements such as product features. Channel decision and
promotion.
While there is no single receipt to determine pricing the following is a general
sequence of steps that might be followed for developing the pricing of a new product.
Develop Marketing strategies-perform marketing analysis segmentation. Targeting
and positioning.
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1) Make marketing mix decision define the product. Distribution and
promotional tactics.
2) Estimate the demand curve-understand how quantity demanded varied with
price.
3) Calculate cost Include fixes and variable costs associated with the product.
4) Set pricing objectives for example .profit maximization revenue
maximization or price stabilization.
5) Understand environmental factors- Evaluate likely competitors actions,
understand legal constrains etc.
4.1.1 P RICING OBJECTIVES
1) Current Profit Maximization
2) Current Revenue Maximization
3) Maximize Quantity
4) Maximize Profit Margin
5) Quality Leadership
6) Partial Cost Recovery
7) Survival
8) Status quo
Figure: 4.1
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PRICE
Material cost Labour cost
DirectMaterial
IndirectMaterial
IndirectLabour cost
Direct Labourcost
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I ndirect Material Cos t- The indirect material cost is known as the cost of thingsthat is used indirectly in the production. For example the cost of-
-Nuts and bolts.
-Solder wire price.
-Welding electrode
-Paint and Police
-Chemicals for plating
Labour Cost-The labour is mainly of two types-
1. Direct Cost - This type of cost is related to manpower, printing andChemical treatment.
2. Indirect Labour Cost - the cost of the Supervisors, feeders, helpers,testers, Inspection (physical fitness) is known as the indirect labour cost.
OVERHEAD-The overhead is mainly related the cost of-
Medical facility Transport facility Canteen facility Uniforms and shoes to the workers Salary of non productive employees
Salary of officers and managementMaterial cost-
Material cost +Lab cost + Packing cost+ Margin cost = Basic Cost
Basic price +8.24% excise duty (ED)
(Basic price +ED) 2%or 4 %CST/VAT
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Overhea
IndirectOverhea
DirectOverhead
Material cost - Material cost basically known as thepreliminary cost that is use in the raw material for example cost of
metal sheet and cable etc.
Direct Cost Direct cost means the cost of things that is used
in production directly.
For example -metal sheet and metal cable
-Printed circuit
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(Basic cost +ED+CST/VAT) 1.26 % FF
(Basic cost +ED+CST/VAT+FF)= All inclusive cost
Where-
ED=Excise Duty
CST=Central sales Tax
VAT=Value Added Tax
FF= Freight Forward
Basic Price is also known as the Ex-Factory Cost or all exclusive cost.
Present Tax Structure-
ED..8.24%
CST2%
VAT.. 4%
For Example
There is a product which basic cost is 100 Rs.
ED of 100 @ 8.24% =8.24
Then the cost will be 100+8.24=108.24
Now the VAT @ 4% OF 108.24=4.32
The cost will be 108.24+4.32=112.56
Now the freight forwarding (FF) @1.26% OF 112.56=1.41
NOW the cost will be 112.56+1.41= 113.97
Hence the all exclusive cost of the product is .Rs. 113.97
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CHA PTER- V
RESEARCH
METHODOLO
G Y
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5.1 DATA COLLECTION
SOURCES OF DATA: There were two sources of data used. The first one was
primary source and the second was secondary source. The primary source consists
of questionnaire and observation magazines.
PRIMARY DATA is collected through questionnaire, search and research
through place where today's computer has been mostly used.
SECONDARY DATA is being search sites like magazines, newspapers,
journals, websites and the data has been collected through other approaches.
The design of questionnaire was follows:
Type of questions: Subjective question were used. Phrasing of the question: The following points we re taken into
consideration while phrasing of the questions :
1. Difficult and vague words are avoided.
2. Lengthy and unspecific questions were avoided.
3. Two questions were not combined together . Order of the questions: General questions were included first followed
by specific questions.
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Number of questions: The questionnaire consisted of 11questions.
5.3 . SAMPLE SELECTIONRandom sampling method was used and the sample size was 120.
TARGET POPULATION : The selected population consisted of people related to
the field.
DESCRIPTION OF STUDY : The survey was conducted in Allahabad in the monthof June and July of 2010.
CHA PTER- VI
DATAANALYSIS&
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INTERPRETATION
Data red uction Graphical representation
Q.1. Did you know name of two or more transmission equipment manufacturingcompanies?
Table: 6.1
No. Of respondents Percentage
YES 80 66.66
NO 40 33.33
Figure: 6.1
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6.1 INTERPRTATION : The survey showed that 67% respondent knowstransmission equipment manufacturing companies.
Q 2 .Could you please tell which company comes first to your mind when weask about transmission equipment manufactures?
Table: 6.2
Company Name No. Of respondents Percentage
ITI 18 15
UTL 27 22.5
PUNCOMM 15 12.5
TECHNOFIBER 12 10
PRITHVI 15 12.5
PROMOD 12 10
OTHERS 21 17.5
Figure: 6.2
: 6.2 ; INTERPRTATION :
The survey showed that the main competitors of ITI NAINI are: UTL, PRITHVI,
PUNCOMM, TECHNOFIBER, and PROMOD
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The preference among the purchasers was UTL 22.5 %, ITI 15 %, PRITHVI 12.5%
PUNCOMM 12.5 %, TECHNOFIBER 10 %, PROMOD 10.% and others 17.5 %.
Q3 . Have you ever used products being manufactured By ITI?
Table: 6.3
No. Of respondents Percentage
Yes 48 40
No 72 60
Figure: 6.3
6.3 INTERPRETATION: After survey, it is found that, the productmanufactured by ITI that ever used by purchaser 40%.because of after liberalizationmore company start working in this field.
Q4 .What is the products manufactured by ITI which are being used by you?
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Table: 6.4
Products No. Of respondents Percentage
DWDM 39 32.5
STM-16 33 27.5
STM-1 24 20
DDF 6 5
OTHER 18 15
Figure:6.4
1.4 INTERPRETATION : After survey, it is found that, the product
manufactured by ITI that were used by purchaser were 32.5 % DWDM,
27.5 %STM-16, 20 %, STM-1, 5 % DDF and 15 % others
.Q.5 Do you Satisfied with ITIs products quality?
Table: 6.5
No. Of Respondents Percentage
Yes 102 85
No 18 15
Figure:6.5
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6.5: INTERPRETATION : 85% of the customers that used ITI
equipments were satisfied with its quality.
Q.6 what are the probable reasons for not buying ITI products?
Table: 6.6
Reasons No. Of Respondents Percentage
Higher price 78 65
Delay in supply 24 20
Defects 12 10Weak after sales service 6 5
Figure:6.6
6.6: INTERPRETATION: Those who did not use ITI equipment
were 55 % due to delay in supply of the orders, 27.5 % due to presence of more
defects than other companies and 17.5 % due to weak after the sales service.
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Q7 While buying the telecom product did you consider any other product of anyother telecom company? Table :6.7
No. Of Respondents Percentage
YES 99 82.5
NO 21 17.5
Figure 6.7
6.7 Interpretation: The survey showed that in market many company exist so
respondent at the time of buying the telecom product easily consider any other
product of any other telecom company.
Q8 Do you like really think that there is different between quality andtechnology provided by ITI and that of other company?
Table : 6.8
No. Of Respondents Percentage
YES 66 55
NO 54 45
Figure: 6.8
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6.8 Interpretation : : After survey, it is found 55% respondent said thatthe quality & provide by ITI is different rather than other company. But technology
of another company is advance.
Q9 Do the ITI products need frequent after sales service?
Table : 6.9
No. Of Respondents Percentage
YES 29 24
NO 91 76
Figure:6.9
1.9 Interpretation : The survey showed that 76% respondent said thatthe ITI products not need frequent after sales service. It is show
products quality.
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Q. 10 Do you get the delivery of the products on time?
Table : 6.10
No. Of Respondents Percentage
YES 40 33
NO 80 67
Figure:6.10
1.9 Interpretation: 67% respondent said that they not get deliver
on time but 33% respondent said that they get deliver ontime.
Q. 11 what features/attributes are you looking for the transmission products whenyou purchase it? (Rate 1 to 8).
Table: 6.11
No. Of Respondents Percentage
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PRICE 24 20
OVERALL PRODUCT 21 17.7
QUALITY 21 17.7
COMPANY REPUTATION 18 14.7
GUARANTEE PERIOD 14 11.8
AFTER SALES SERVICE 11 8.9
MAINTENANCE 8 5.9
TIE UP 3 3.3
Figure:6.11
6.11: Interpretation : These features/ attributes that the customers look in the
equipment were as follows:20 % low price,17.7 % good after sales service,17.7 %
low maintenance cost,14.7 % good quality of the product,11.8 % technical
collaboration,8.9 % company reputation,5.9 % overall product and 3% tie up.
CHA PTER-V II
CONLUSION&
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R ECOMMENDATIONS
7.1 FINDINGS
1. The company that first comes to the mind of the people when asked about
people, when talked about transmission equipment manufacturers is UTL.
Therefore. UTL is the biggest competitor of ITI NAINI.
2. The other two major competitors of ITI NAINI are ZTE and ALCATEL.
3. The products manufactured by the ITI that are preferred the most are DWDM.
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4. The major reason behind the above is the quality. Reliability and durability of
the ITI products.
5. The probable reasons why the purchasers do not prefer ITI product are due to
higher price. Delay in supply of the orders. Presence more defects than the
others companies and weak after sales service.
6. Purchasers are satisfied with the quality of ITI products.
7. The major attributes being sought by the purchasers while purchasing
transmission
CONCLUSION
1. The biggest competitor of the ITI NAINI is UTL.
2. For equipments supplied to BSNL, its share is 30 %.
3. ITI depends highly on BSNL for orders.
4. Most of ITIs collaborators have becomes its competitors.
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5. As ITI is a public sector unit and largely depends upon BSNL for orders so it
does not pay attention towards advertising and publicity.
6. Approximately 80 % of its ultimate customers are satisfied from ITIs
equipments.
7. ITI S competitors have switched to better facilities.
ITI lags behind in terms of innovation.
7.2 RECOMMENDATIONS
P RODUCT:
New product those in demand in the market should be identified.
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Durability of the product should be further enhanced. Some of the existing product
should be further innovated.
PRICE:
ITI should try to reduced the price of its products for attracting new customers and to win
competitors .this can be done by decreasing manufacturing expense. Also company can
encourage discount and credit facility.
PROMOTION:
Perhaps it can be the key towards of the ITIS IN the present market. ITI should
encourage and adopt new sales promotion strategies .these strategies can be fruitful in
enhance the sales volume. Trade rebate. Discount guarantee etc. are tools of
promotion ITI should go for appropriate advertisement and publicity channels and
revive its old glory
ITI should adopt customer oriented market strategies .it should tr to establish direct
contact with the people to generate awareness about its products and to get an in
depth information about their requirement.
STRATEGIES FOR OTHER MODIFICATIONS:
1. Research and development should be encouraged.
2. Warranty should be replaced by replacement guarantee.
3. Young marketing professional should be recruited so that high tech marketing
environment is generated due to widening of marketing concepts and
technical ideas.
4. A more professional approach should be adopted to deal with the competitors.
5. ITI is mainly depended on BSNL for its sales. It should try to explore new
market for its products.
STRATEGIES FOR DEVE LOPMENT WITHIN THE
ORGANIZATION
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1. There should be proper motivation to employees for better performance.
2. Proper training should be induced for employees.
3. A well organized management information system should be established to
acquire a view of customers opinion.
4. A marketing research team should be established.
5. Essential measures should be taken to cut down the expenditure.
7.3 LIMITATIONS
Though utmost care was taking so that no aspect of the problem remains untouched
but still there were certain constraints that should not be overlooked.
There following were the main constraints in my project.
The topic was very delicate hence people were afraid to give their views
openly.
The secondary data was not very up to date.
Some of the respondents were not available.
Personal biases and perceptions of the respondent may have stopped him/her
form giving the right information.
The respondent may have not understood the actual implication of he subject.
Lack of time.
Respondent biases for giving the right information.
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BIBLIOGRAPHY
Philip Kotler-Marketing management-Analysis, Planning and
control, 13 th edition
Dilel , Simken ,Pride , Ferrel-Concept and strategies, second
European Edition.
ITI Annual Report
Bery G.C.-Marketing Research
Business world
Wikipedia
http://www.itiltd-india.com /
http://businessballs.com
http://www.economicstimes.com
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APPENDIX
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Q ESTIONNAIREI say thanks for agreeing to spare 5 minutes of your time for filling up this
questionnaire.
All details given by you will be kept strictly confidential.
1. Did you know name of two or more transmission equipment manufacturing
companies?
i) Yes ii) No
2 .Could you please tell which company comes first to your mind when we ask
about transmission equipment manufactures?
i) ITI. ii) UTL. iii) PRITHVI. iv) TECHNOFIBER. v) PUNCOMM. vi)
PROMOD vii) OTHER.
3. Have you never used products being manufactured By ITI?
i. Yes ii) No
4. If yes, then what are the products manufactured by ITI which are being
used by you?
i) DWDM
ii) STM-16iii) STM-1
iv) DDF
5. Did you satisfy with its quality?
i) Yes ii) No
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6. If no what are the probable reasons for not buying ITI Products?
i) Delay
ii) Defect
iii) Higher price
iv) Weak after sale service1. While buying the telecom product did you consider any other product of any
other telecom company?
i) Yes ii) No
1. Do you like really think that there is different between quality and technology
provided by ITI and that of other company?
i) Yes ii) No
1. Do the ITI products need frequent after sales service?
i) Yes ii) No
1. Do you get the delivery of the products on time?
11. What features/attributes are you looking for the transmission products when you
purchase it? (Rate 1 to 8).
Price Overall product Quality Company reputation Guarantee period After sales services Maintenance cost
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Tie up