Zoning sale areas is the new strategy for Tata Steel amid Covid-19

Tata Steel’s sales strategy was put to test by the lockdown and subsequent reluctance of customers to move out fearing infection. This pushed the firm to reorient its marketing blueprint. 
 

“We divided the country not just into districts, but also into zones, and deployed the limited amount of sales force we had,” Peeyush Gupta, vice-president (marketing and sales) of Tata Steel, told Business Standard. The Centre had divided the country into red, orange, and green zones during the lockdown.
 

On March 24, Prime Minister Narendra Modi announced the lockdown that underwent phased relaxation till May-end, after which unlocking started even as some states continued to impose restrictions on movement.
 

“Many of our sales efforts during the initial period of lockdown in April, May, and June were linked to zones the government used to come out with, asking companies to perform. We would then ask dealers of the respective zones to function accordingly, supplying them with material,” said Gupta.
 

The company used analytics and data support from its market learning. This helped understanding market even better, said Gupta. “One of the biggest changes we had to face was that we had to become faceless, yet do the transaction in a very engaging manner. All functions, logistics, supply chain, production and commercial areas, including accounts, were all faceless.”
 

The move, which virtually brought trade to a standstill, impacted revenue streams of companies across sectors because they had to deal with labour shortage and a broken supply chain.
 

Tata Steel has over 125 points from where the company carries out its transactions, across the country. The company had to enable all its 27 stockyards, besides 125 distribution points, as customers were unable to visit.

 

Tata Steel India reported net sales of Rs 9,145 crore in the June quarter, down 58 per cent from the same period last year.
 

The company, like other players such as Sajjan Jindal-led JSW Steel, MA/NS (formerly Essar Steel) and Jindal Steel & Power, initially increased its focus on exports, taking it as high as 80 per cent before moving back to domestic sales from June.

Besides reaching out to customers in a faceless manner, Tata Steel helped customers get permission from local authorities, which placed the firm in an advantageous position with the first right of refusal.
 

Though Tata Steel managed to sail through the tough business scenario, the company witnessed a jolt on product development front, thus highlighting limitations of faceless interactions.
 

“The faceless approach allowed us to address immediate problems of customers, but on the product development front we were not able to make much headway. Changes in production plans and development plans were conversations not happening at all. They are beginning to happen only now,” said Gupta. 
 

While the firm was clear on going digital in many ways, it had not expected the initiative to speed up in the manner that it has since the last few months.
 

“We were all clear that digital spend is going to grow in any case, but what the lockdown did was it hastened it up. We never thought we could do digital spend in rural products. Now, digital absorption is very high even in rural areas because they have access to gadgets, and tele-density is very high in India,” said Gupta.
 

The firm expects digital spend to rise significantly in the coming years. According to Gupta, the biggest advantage of digital spend is the reach. "I am able to reach a larger proportion of my target segment including creating my presence with the various stakeholders, whether it is influencers or the channel or the consumers in myriad ways. The biggest differences between a paper print spend versus a digital spend is you spend money for the creation of the art work, and also on the transmission. In digital, I do not spend anything on the transmission," said Gupta.