Tata Steel´s rise from a steel manufacturer to a global branding leader mirror a journey of relentless innovation and strategic adaptation.
Company Background
Tata Steel is one of the most successful companies in India. In 2001 and 2005 it was ranked the world´s best steel company based on many criteria- from cash operating costs to stock market performance. The company was established in 1907 and began its production in 1911. Within 47 years the company increased its production capacity from 0,1 million to 2 million tons of mild steel.
In 1983 Tata Steel bought the Indian Tube Co. Ltd.- a manufacturer of seamless and welded tubes.
In the early 80s, Tata Steel started its five-stage modernization program for its steel plants- thanks to which, in 2001 the company became the world´s lowest-cost producer of steel with operating costs of hot metal (liquid stage) being 75 US dollars per ton. In the same year, the company started another stage of the modernization program, which focused on attracting, developing, and retaining human resources– creating a new organizational structure that aimed to introduce performance management systems and create growth, flexible decision-making processes, and accountability. To reduce breakdown time, readjustments, accidents, errors, and product rejections, the company introduced the Total Productive Maintenance program.
In August 2001, with a change of managing director, the new program- Vision 2007 was established. It aimed to make the Economic Value Added and Tata Steel´s image positive. The company achieved its goal already in the first year of inception!
New Strategy
The 1990s can be characterized as a difficult time for the Indian steel industry. Tata Steel, to become more independent from the external environment, developed a new strategy of branding its products and moving to high-value-added products. The company realized that it is crucial to focus strongly on customers, to become successful in the industry. In the late 1990s, the company introduced several marketing programs with taglines such as “customer first- her haal mein” (customer comes first in any case) or “customer first- her haal mein, her saal” (customer comes first in every case, every year). The change of approach from producer logic to customer logic made Tata Steel successful.
Branded products
Another step was to focus on the shift into the domain of high-value-added products. In 2000, Tata Steel launched its first branded product- Tata Shaktee– the brand for galvanized corrugated sheets. Only 6 months later, the company introduced a second brand- Tata Tiscon for rods used in the construction industry. In 2003 the company launched several product brands- Tata Steelium, Tata Pipes, Tata Bearings, Tata Agrico, and Tata Wiron. With this approach, the company wanted to beat the industry trend and move away from selling commodities into marketing brands. Tata Steel realized that branding the commodity steel would provide a unique selling proposition– that would help stabilize the flow of revenues and make premium pricing possible.
Even though Tata was already associated with a great range of products, it decided to create sub-brands with separate identities, supported by the corporate brand as a co-driver and not the main focus. At one point Tata, with its products and services- from automobiles to software- was one of the biggest industrial houses in India.
In the beginning, the biggest struggle of Tata Steel was its inexperienced marketing team. To educate them, the company organized seminars and workshops and formed separate teams- one for “long” and another for “flat” products- to separate different approaches.
Print ads, outdoor advertising, and TV commercials were the communication tools that the company used. Tata Steel was also instrumental in controlling AIDS in the state of Jharkhand, by their AIDS awareness initiatives. This put the company ahead in terms of Corporate Social Responsibility practices.
Value Management
Tata Steel not only implemented workshops for the marketing team but also for salespeople- Retail Value Management. Moreover, it put importance on target group check and distribution revamp- adopting both sales strategies for B2B and B2C.
From the beginning, Tata Steel´s branding initiative showed impressive outcomes. Report from 2003-2004 showed that the sale of branded products increased by 84 %.
There is no reason not to conclude that Tata Steel has achieved tremendous success through its extraordinary actions. With the introduction of different strategies and programs, the company was able to reach its peak in the industry.
Source: Kotler, P., & Pfoertsch, W. (2006). B2B Brand Management. Springer Berlin Heidelberg.