Analysis Of Strategic Communication Plan Communications Essay

2008-09 was an important year for JSW STEEL LTD as company’s evolution and growth was comprehensively tested their will to survive, succeed and flourish in the midst of an economic meltdown. The financial crisis that brought back the painful memories of the Great Depression of the 1930’s, affected the Indian economy as well. JSW Steel was no island in this crisis.

JSW Steel’s vision, mission and core values, policies and strategies in accordance with needs and expectations of stakeholders are developing balance and short term and long term needs of the company. In addition, plant-level policy making and strategy in mind from the external environment, internal capabilities would receive information, and performance. Involved in the process of planning a major step strategy is shown in the picture below:

Major source of macro environmental analysis for the National Steel Policy, technical reports published in leading journals, seminars and workshops. The marketing department at corporate office was primarily responsible for analyzing the external and internal environment. Information about markets and market segments is obtained from customer surveys, and various other means. Means for raising and customer needs and expectations of law index list given in Table below. Information about the internal atmosphere of plant was gathered by senior officials. Strengths, weaknesses, opportunities, analyzing relevant business practice, and threats are analyzed and the results of exercises with company leaders and senior management are as follows:

Strengths:

• Rich geological resource base (11 billon tonnes of iron reserves)
• Large consumer Base
• The only integrated steel plant producing flat products in southern India
• Low labour cost and high productivity
• Flexibility in adopting innovative technologies
• Growing skilled and technical human capital

Weakness:

• Indian economy , high reliance on services
• High cost of finance
• High cost of energy
• Deficit infrastructure
• High Ash Coal
• Socio-Political Intervention

Opportunities:

• Strong and growing Economy (@8% GDP growth/annum)
• Low per capita steel consumption of 47 kg/yr as compared to > 400 kg in develop countries
• Growth in steel exports and imports
• Growth in automobile sector
• Global manufacturing destination for steel

Threats

• Fluctuation in steel prices
• Green- field steel projects by international players
• Expansion of capabilities through green -field and brown -field players by by existing players

Input from Stakeholders for the formation of Policies and Strategies

Policies and strategies of the company’s construction is a systematic method for identifying input from stakeholders, and understand the needs and expectations of suppliers, employees, customers and other stakeholders. Review and analysis of requirements and expectations as to appropriate initiatives are in various stages shown in below table:

Area	Scope of information	Inputs from
People	HR practices / Skill & competence levels / Employee perceptions / Benchmark data / Employee development and training / Compensation and recognition systems	HR meet Employees Satisfaction Survey Consultants
Customers & Markets	Customer end user requirements, Price and commercial , Segment wise market growth / trends / expectations, New emerging markets, internal markets, Govt. regulations on imports, exports	Customer Survey Customers of Competitors Product Application Group
Competitive Environment	Competitors activities and their plans Global competitiveness Industrial analysis of competitiveness	Product Application Group Customer Services Group
Corporate Communications	Currents efforts on corporate communication Communication strategy and plan	Top management
Technology	Risks, Cost of capital, Profitability analysis, Cost forecast, Excise & sales tax regulations	VAI, Austria Technology Control Groups JFE, Japan

Corporate Communication Objectives:

Due to sudden Meltdown, steel prices went down drastically and made steel buyer‘s to relax for sometime thinking it will go even low and will create worst time for steel manufacturers. Similar consequences were faced by JSW Steel Ltd and it was time for them to act and act fast and strategically. Their main goal was either to:

To nurture JSW Steel Brands as an asset for the company.

Being 3rd largest steel producer in India, JSW Steel Ltd was facing heat from top two companies i.e. TATA Steel and ESSAR Steel Ltd as these two big guns were dropping their Export products prices with ease as they had better market share and doubled the price of Same products that are exported in other countries by JSW STEEL. The short term strategy adopted by these two big companies was to reduced the price of the steel for short period still managing to achieve the profit compare to other steel producer and can recover as time passes. But for JSW steel it was one decision to take to decrease the production all across units in India and wait for steel prices to go up and get back into race again.

To manage stakeholder perceptions to maximize business value.

JSW Steel also called as “The Challengers” in steel industry in India (Annual Reports). While steel Industries were trying to balance and hold their feet together globally and in India, it was time for JSW Steel to build the strategy which will help them to bounce back and keep them in competition and can win back shareholders trust.

The Eloquent drawing of the corporate strategy:

They should adopt the strategy that is based on the unparallel curves and they distinguished the atmosphere of depression and emerged as the real winners:

• Due to high involvement of cost and financial compaction, a drastic cut back in production was on priority for Marginal cost producers of steel in India.
• To go domestic as rural and semi – urban demand for steel was the opportunity to tap.
• To involve Indian fiscal systems as effective banking practices as they meant that India was doing better compared to US and European countries.
• The pro-active policies of the Government with its fiscal stimulus packages meant that the revival would be sooner than later in the Indian economy.

The communication approach adopted by JSW Steel to achieve above defined goals is DAGMAR Model approach. The approach involves advertising planning and the exact method to select the measuring goals and to use these objectives to measure the performance. The communication task contains advertising objectives which creates awareness; impart information by developing positive attitude and implementing action. The model suggests advertising goals which builds company image and credibility, and this are can be achieved by involving and interacting with customers, dealers and stakeholders. This approach also helps in allocating the cost in the effective way by help direct marketing.

So from the above defined objectives it is clear what JSW Steel has to achieve, and to achieve these goals setting of internal tangible targets will help them to measure their performance, there is also need of distinctive objectives for each group which is an inspirational, realistic and time scaled.

Planning of communication Strategy by JSW Steel

In a strategic role, marketing aims of JSW Steel is to transform corporate objectives and business strategy into competitive market position. So their Marketing communication Strategy should focus on the following areas:

• Maximising Value added products, Customisation, Import Substitution along with expanding Pan India Reach.
• Consistent product quality and timely deliveries enabled a long-term business relationship with its valued set of customers, both in the domestic as well as International markets.
• A prominent domestic supplier of Flat and Long steel products and a leading strategic exporter of coated products.
• Leveraging plant’s location advantages to increase market share strategically in Southern and Western regions.
• Growing focus towards rural and semi-urban domestic markets having a large demand potential.

So the estimated saleable steel will be targeted 3.2428 Mt tonnes and will be sub-divided this target all across marketing and sales department in all region.

Strengthening International presence to 100 countries, also increasing dealer base to over 300 numbers and to open more 50 JSW Shoppe outlets in the domestic market to get proper reach and serve the customer in the country. These marketing targets should be achieved in next 6 months following the promotional activities.

Communicating Strategy for creating awareness of the demanded products in domestic market was also high on their agend.

Hot rolled products:

Key business drivers

• Substituting imports with focus on product quality, Customisation and timely deliveries.
• Thrust on project based orders from sectors such as Oil & Gas conforming up to Grade API 5L X-70, water pipe-line projects and other infrastructure and construction projects.
• By virtue of its longstanding relationship, the Company emerged as a preferred supplier, leading to consistent and sustained orders, despite a downturn in the latter part of 2008-09.
• A prudent mix of long-and-short-term contracts to balance volumes with value.
• Leveraged retail market potential, compensating the volume drop from the automobile segment.
• Strong distribution network with close proximity and strategic focus in southern India, helped during the period of sagging demand in the latter half of 2009-10.

Cold rolled products:

Key business drivers

• Developing of well structured distribution network assuring easy flow of sales along with good reach.
• Approval process with Automobile majors helped to graduate the quality ladder along with other process and supply related parameters.
• South India being supply deficit region helped to achieve sales volumes through extended distribution network.
• Higher Sales in Semi-Urban and Rural areas.
• Extended presence by adding new dealers and opening new JSW Shoppe outlets (Branded Distribution Network).
• Entered into long-term contracts with suppliers for telecom and power which continue to grow at a rapid pace.
• Strategic foray into Pre-Engineered Building segment catering to growing demand for Industrial Construction.

The Marketing communication strategy thus adopted by JSW Steel are as follows

· Push Strategy:

A push strategy adopted by JSW Steel suggest heavy use of sales force and trade promotions, is best suited to situations where there is a low level of brand loyalty, as the choice is generally made at the point of purchase and the benefits are well understood by buyers. The other point was also to create good distribution channel.

Targeting Segments (customer wise and product wise):

JSW Steel strategy for targeting segments is to interact with customers, dealers and other distribution channels consistently.

Use of sound and creative media strategy:

Good use of promotional mix, methods and tools for delivering the messages by JSW Steel.

Moving towards strategy implementation, following are as follows:

The most important point was to reduce the cost.

This involved reducing their high cost on inventory of input raw materials as soon as possible. This is only possible by employing production logically in all quarter and adopting aggressive marketing strategy in the rural segment they can quickly overcome the dull and slow period. All this meant that a space was being created in supply and demand of steel in the Indian context.

Highly cost reduction was on their agenda. So use of amended techno-economics in the plant and the fall in input raw materials they could bring down the cost of production of steel by around 43% as compared to their past figures.

Branching out the Product hoop:

Keeping aside the cost reduction, JSW Steel should enter the long product segment strategically as there is an increased government spending in the infrastructure projects which will in turn provide them ready market to serve.In other product segment where the demand has not been affected drastically, like the flat product, they should concentrate judiciously on the value added product hoop.

Tapping the rural Indian market:

The essence of their strategy was to push aggressive Marketing activities in the domestic markets. Undertaking Direct marketing in to stride and meeting dealers, distributors face to face and persuading them to serve customers in rural and semi-urban areas. The benefit of this activity helps increasing JSW Steel reach in domestic and rural market. Apart from this the best part of this strategy help JSW Steel in adding 50 new dealers and distributors total numbers to 300 hundred in excess. Making availability of steel and also making steel more customers friendly, JSW Steel added more 50 JSW Shoppe outlets and opened in year 2008-09 all across India. The main intention behind this activity was to make “Pan India” presence of JSW Steel.

Growth during Meltdown:

The strategy adopted by JSW Steel in past yield results and showed positive effect for the company profitability in fourth quarter. They not only got rid of their excess inventories but also reinstated conventional production in all their production facilities and by February 2009 the new 2.8 MTPA project was also licensed. This growth of JSW Steel made them stand apart from the competitors in the steel sector as they recorded their crude steel production capacity at 7.8 MTPA. Thus growth in depression times motivated them in all possible way and they reached at the top tasting the profitability.

From the above defined marketing strategy, JSW Steel has used “Push strategy” as they have involved promoting heavily to distribution channel, this is, to dealers, agent on the assumption that they will in turn promote heavily on the end users. The Push strategy here means promoting the steel products which is targeted to different segments were pushed through different distribution channels to reach the end users. Push strategies tend to place emphasis on direct marketing (personal selling) and sales promotion.

JSW’s ability to see beyond the current scenario, induce them to embark on new Blast Furnace with confidence which is also incidentally India’s biggest. It is praiseworthy for the strategy implemented by JSW Steel is really commendable as they can forecast the profitability by 60% when other steel manufactures across the world were struggling back and cutting down their production. This achievement of reflection will be not only for JSW Steel’s productive strategy but also for underlying intensity and bouncing back of the Indian economy

Co-ordinated promotional mix for JSW STEEL

The communication tools and Promotional Methods applied by JSW Steel are as follows:

Co-ordinating with corporate communications department for creating awareness:

The corporate communications team facilitates communication to reinforce brand-building, enhance visibility and a long-term PR policy through the following initiatives:

• Building JSW’s brand equity
• Coordinating PR activities to strengthen the image
• Building a central team to create communication synergy
• Streamlining PR and promotional events
• Facilitating senior management’s participation in global corporate, spiritual philanthropic forums and foundation-related activities.

Media relations:

The Company maintains cordial relations with media professionals. Its media transparency is critical for correct and factual information dissemination, building a positive brand perception. The communication activities conducted during the fiscal under review comprised the following:

Press conferences:

The team should organized 10 press conferences to announce quarterly results, policy issues and key business decisions in 2009-10.

• Quarterly results
• Commissioning of India’s largest blast furnace in Vijayanagar Works
• Visit of Al Gore to India to establish ‘The Climate Project – India’
• Establishment of Earth Care Awards
• Inaugural ceremony for Steel plant in West Bengal

Financial communications:

The Company’s financial PR involved proactive two-way communications with global investors, analysts and securities professionals.

• Analyst’s meets will be organized every quarter.
• Analyst and Investors visits will be conducted to plant locations.

CEO’s media training workshop:

The corporate communication team should organized media training workshop for the top management covering media management, do’s and don’ts of media relations and inter-personal management with the media. The workshop will be attended by more than 20 top management team members.

Media visits:

Print and electronic media visits should be organized to all across and major branches.

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Positioning platforms:

The Company’s communication modes comprised the following: physical (print, poster, banner, gift, giveaway, face-to-face), digital (advertising, audio/visual), web (internet/ intranet) and experiential (events, exhibitions, associate gatherings, project execution, recruitment). It instituted communication guidelines as well as focused communications and commitment to deliver the brand promise.

Understanding the JSW Brand:

The Company’s branding strategy is to nurture the JSW brand as an asset and manage stakeholder perceptions to maximize business value. The crisscross patterns in the corporate logo represent a networked organization – networking across people, technology and skills. The base represents a strong foundation and the apex points towards continuous growth.

Internal communications:

The Company emphasizes internal communication to help employees interact with the senior management. The Company’s quarterly news journal called ‘Connect’ covers relevant organizational (including overseas Subsidiaries) information.

Website management

In a world where information is critical, the Company’s website is regularly updated to disseminate time-critical stakeholder information. The corporate communication team posts news briefings, minimizing paper use.

Daily news brief: The Company introduced an easy-to-access and paper saving communication mode for employees. The Daily News Brief covers all important news items published in newspapers. This strategy suggest the integrated marketing strategy triangle.

(CHRIS FILL:2006)

IMC STRATEGY TRIANGLE

Marketing communications is concerned with conveying the messages to a set of customer, distribution channel and stakeholders. As marketing also has to manage relationships with those people who are responsible for producing and distributing the goods and services. Thus

Marketing and Public Relations are very much interlinked and there is a public relation element in every aspect of marketing communications. However, PR extends beyond marketing in that it is concerned with the total communications of the organization, embracing the community as a whole, funding bodies and shareholders, political and legal interfaces, the media, the organization’s employees and their trade union.

The needs of PR strategy is there therefore based upon decisions in the three areas and same can be seen in JSW Steel Ltd.

• The extent and frequency of the communications with involved public.
• The degree of importance attached to the communications in terms of their ability to harm or help the organization.
• The effectiveness of these communications in achieving objectives.

Human Resources and financial planning

Intellectual capital

Employees Locations

7,669 5

Recruitment Process:

JSW Steel Process of recruiting fresh graduate and experienced executives is critical as they tend to get good knowledge students and having practice experience and good intership background. Experienced executives are recruited for the critical positions for which skills sets are not adequate in the existing teams.

Strategy Process:

Hiring of engineers and management graduates from premiere institutes is on their agenda. Hiring fresh and experience charted accountants for financial positions. This is done by sending recruiting team from HR, Technical, and Management visiting directly to reputed colleges. Company also conduct their entrance test for the shortlisted candidates for the final and interview called O.P. Jindal entrance test, also JSW Steel group lays programmes for recruiting students from campus and also sponsors various events and target alumni group of the premiere institutes.

JSW website for direct application Employee referral for experienced people Personal interview. The Company outsources certain routine jobs to contractors supplementing

the key functional areas.

Training

JSW consistently invest in training and development programmes, as they believe it is the most important asset and will provide sustainable growth to the company for long term. So they invested in growing the teams learning curve.

Induction Training includes:

 All new recruits for the company include a 15-day training program which provides compressed. The program includes in-depth technical and operational training at shop floor level. The practical visits to plant is followed by theory, are the activities which is commensurate in each class of the training. In addition, training for behaviour, safety and environmental aspects are given. As part of the installation program for new members of all steel making plant locations and the entire process is clarified, in addition they are provided information about the group. After training, involved appropriate locations for personal contact is made with new recruits. All team members completing the training module can easily access the uploaded module through Human Resources Portal.

Overseas Training:

The Company sends teams on regular basis to other reputed global steel companies so that they can enhance their skills and can deliver best for their organization. Training effectiveness is evaluated by comparing pre-training performance with the post training.

The above investments and strategy adopted by JSW Steel related to Human resources and finance planning shows they are fully equipped to undertake the campaign. In past the performance of JSW also shows the same results in fulfilling the achievement and conveying right message to targeted segments.

Scheduling and Implementation of communication plan by JSW Steel:

JSW Steel needs schedule their promotional activities on weekly basis and also implementing other plans on weekly basis during the campaign. The following below table give an appropriate scheduling and implementation of the activities undertaken by the company in rolling out the communication plan.

Integrated campaign schedule for JSW STEEL LTD

TIME 1 week 2 week 3 week 4week 5week 6 week 7week

ADV		XX		XX		XX
Sales	XX		XX		XX		XX
PR	XX	XX	XX	XX	XX	XX	XX
Merchandising
Direct Maktng	XX	XX	XX	XX	XX	XX	XX

• The above table represent the schedule weeks when the promotion will take place. The above results suggest that JSW Steel concentrate more on PR and Direct Marketing to ensure the objective to spread the awareness is done in every week. Apart from this they also concentrate on the advertising of their retail outlets by moving rural- semi urban areas on alternate weeks.
• To overcome the logistic problems and making availability of the products during the campaign, the implementation of the distribution plan is also on weekly basis as decided between the dealers and the distributors. The objective to be served by a distribution implementation will typically cover how, when and where the company market offerings should be made available to the targeted markets. The implementation of this activity by JSW will provide means to communication plans of the company as scheduled.

It is reasonable to suggest that implementation is often key determinant in the success or failure of any strategic activity. Therefore, it should be an integral part of any marketing communication plan. This view is supported by examining the history of corporate strategy. Recent times have seen a move away from corporate planning to the concept of the strategic management. The main difference is that strategic management addresses the issues of implementation.

Success Vs Failure

Strategy

Appropriate Inappropriate

SSS Good

Strategy and Execution (source: Adapted from Bonoma, 1984)

Evaluation and control

Prior to promotion, the objective of JSW to build the brand perception and build the long-term relationships with the dealers and distributors in domestic markets was fulfilled and the level of awareness and recognition was high. The evaluation of Public relation as a main promotional tool used by JSW Steel in overcoming the problems in domestic market was achieved. Good media coverage and product placement was also achieved during and after the campaign.

The graph shows the profitability of the JSW STEE LTD During Campaign and down – rise of the time lapse.

Methodology of evaluation and controlling the strategy at the coporate level is primarily based on

• Periodicity and effectiveness of the existing review mechanism
• Updating process from time to time
• Giving major emphasis on customer feedback and thrust on performance of equipments & process

Control is the simple way making sure what is supposed to happen actually haapens. The term itself – control- often appears to have negative connotations and is seen as limiting and coercive. This similar with the case of JSW Steel Ltd, the company management should or can develop effective control systems to monitor the campaign in future. Compare to their achievement of their objective in past JSW Steel is did well in time of recession and hoping to keep the pace going on to be the consistent challenger in the steel industries.

Feedback

The Communication planning strategy Adopted by JSW Steel Ltd was fair enough to convey their message to their targeted segments and other counterparts. The profitability achievement during the times of market being unfavourable corporate communications of JSW Steel was clear with their objective and how to achieve their goal by using proper promotional mix and other communication tools. Looking at the future of steel industries JSW Steel will be the market leader in coming future as they tends to adapt as per market change and deliver the quality products to consumers.

Reference and bibliography

Books

Chris Fill 5th edition (2009), marketing communication interactivity, communities and content

Richard M.S. Wilson and Colin Gillian 2nd edition (1997), Strategic Marketing management: Planning, implementation and control

Graeme Drummond, John Ensor, Ruth Ashford 2nd edition (2001 reprinted 2002,2003 (twice)): Planning and control

Jim Blyth 3rd edition (2006), Essentials of marketing communication

Patrick De Pelsmacker, Maggie Geuens, Joeri Van Den Bergh, (2005) Foundations of marketing communications (A European Perspective)

Websites and databases

http://www.jsw.in/ (accessed 21.11.2009)

http://www.jsw.in/companies/JSWSteel_aboutus.shtml (accessed 21.11.2009)

http://www.jsw.in/organization/overview.shtml (accessed 21.11.2009)

http://www.jsw.in/companies/company_JSWSteel.shtml (accessed 21.11.2009)

http://www.jsw.in/beyond_business/future_prospects.shtml (accessed 21.11.2009)

http://www.jsw.in/investor_zone/steel_presentation_analyst.shtml (accessed 22.11.2009)

http://www.jsw.in/investor_zone/financials_quarter.shtml (accessed 22.11.2009)