Distribution Channel in Steel Industry

Distribution Channel in Steel Industry

Within the Distribution category, the business is categorized as OE or Retail, based on whether the customer is serviced directly, or through the Retail / Distribution network. In OE, there are sub-segments like OEM distribution, and in Retail sub-segments like GC/GP retail distribution, CR retail distribution, and geographic segmentation. In OEM distribution, the customers specify the grade of steel that they require and the company takes responsibility to supply them the same grade of steel in the agreed cut to size condition. In retail distribution, companies maintain stocks of material for feeding its retail chain and provide Value for money products.

TATA STEEL
DISTRIBUTION CHANNEL
G C sheets:
Traditionally G C sheets were considered as a commodity. Over time, TISCO has succeeded in differentiating its product and becoming a market leader. Presently it has 32% market share in the G C sheets industry.
The company serves a wide variety of consumers, ranging from reputed contractors to retail users from the private sector organisation to the public sector undertakings. These consumers can be classified into 3 major groups:
1) Government
2) Retailer (B TO C)
3) Private sector consumers (B TO B)
To cater to the needs of all its consumers, the company does both (B to B selling) and retail outlets (B to C selling). Bulk orders come under direct selling and small order from retail outlets.
Tata steel has selected 28 distributors in different location across India. Every distributor is given 2 days training session, after which they become confident about the product and learn how to differentiate its product from its competitor product. Aggressive distribution strategy needs to be adopted for covering large rural area. Distributors keep active sales force to cover all the retailers in their geographical area. Their sales force visits different rural and urban areas to attract retailers so that they can maximise their sales. Also, the sales force comes up...

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