CHAPTER I: COMPANY’S

PROFILE

2
1.1 OVERVIEW

Corporate head quarters ITI Bhavan,

Doorvaninagar,Bangalore
560016

Manufacturing Units • Bangalore

• Naini (near Allahabad, UP)
• Raebareily (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

3
Quality system ISO 9000 compliant

1.2 ITI – A GLIMPSE

I TI Ltd is India’s largest and first public sector unit developed to

manufacture telecommunication products with the latest technology.
ITI was established on 25th January 1950 in Bangalore. This is bedrock
upon which India is launching its contribution to the world’s
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.

“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 RaeBareily 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 corporate

management function under an independent Executive Director reporting to

4
Chairman and Managing Director. A large number of company’s 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 multiplexing equipment and ISO 9000 certification
for production of optical range of communication equipments.

1.3 GOVERNMENT’S INVOLVEMENT IN ITI

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 General Marketing System prevalent in Private Business
Units. The capital,

1.4 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,

5
 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.

1.5 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.

1.6 PRESENT FINANCIAL SCENARIO OF ITI

PERFORMANCE FROM 2002-2008 (IN RS. CRORES)

Year 2002- 2003- 2004- 2005- 2006- 2007-

6
 03 04 05 06 07 08
Sales(includ 1795 1257 1389 1749 1818 1210
ing ED)
Production 1689 1073 1362 1607 1797 1206
Profit/loss 375 706 310 429 405 358
after tax
Growth in - - 10.54% 25.94% 3.94%
turnover

7
1.7 MANAGEMENT CHAIN:

Ministry of Telecommunication

Chairman and Managing Director

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)

1.8 BOARD OF DIRECTORS

8
Sri S.K. Chatterjee
Sri Tejbir Singh
Sri K K Khurana
Sri B P Gupta
Sri Ravi Agarwal
Lt. Gen. S P Shreekumar
Sri A K Srivastava
Sri C K Koshy
Sri K T Mayuranathan
9
Chairman and Managing Director
Director(Marketing)
Director(Human Resource)
Director(Finance)
Director(Production)
Director
Director
Special Director
Company Secretary
1.9 CHAIN OF NEW UNITS

I 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.

The company now manufactures the entire range of telecommunication

equipment right from telephone instruments to equipment for Satellite Earth
Stations catering to the 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 is striving towards achievement of excellence.

10
1.10 SPECIAL ACHIEVEMENTS

D uring the year under review, the company has produced 3.06
million lines of switching equipments that included 200 kl of new
CDoT MAX- XL Exchange. Bulk production of SMPS to tune of Rs. 28.70
crore and bulk production of Digital Microwave (SDH) equipments were
its major achievements. Optical fibre systems (SDH), being newly
inducted in the Indian network were supplied for the first time. The
company is placed first for supply of 1.69 million lines of new
technology exchanges and for supply of 770 numbers of 2/140 Mbs
Optimax along with regenerators.

11
1.11 PLANTS

1. BANGALORE PLANT( Established in 1950)

2. SRINAGAR PLANT( Established in 1970)

3. NAINI PLANT( Established in 1971)

4. RAEBAREILY PLANT( Established in 1973)

5. PALAKKAD PLANT( Established in 1975)

6. MANKAPUR PLANT( Established in 1980)

12
1.12 AWARDS

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.

13
1.13 JOINT VENTURES:-

W idening its area of operation, ITI teamed up with PACIFIC

INTERNATIONAL COMPANY to manufacture micro earth stations.
The result 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.

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 Country

company
M/s Siemens/Nee Japan
M/s Ericson Sweden
M/s AWA Australia
M/s Nee Japan
M/s Alcatel France
M/s Comedge Singapore

14
1.14 MAJOR LANDMARKS

YEAR ACHIEVEMENTS
1971-72 Start of production
1973-74 Production of telephone developed
in house
1980-81 Assoc ham awards for promotion of
ancillary industries
1981-82 Establishment of computer centre
1986-87 Collaborations
1986-88 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 line
equipment and regenerator in
collaboration with M/s Denmark.
1991-92 Introduction of 565- mibt optical line
equipment and manufacturing of in-
house design Telephone model ME-
91 and TPS-90
1994 Advancement of optical line
instrument
1995 Implementation of Q.D.C and ISO
9000.
1996 Collaboration with M/s Fibcom India
Ltd. and manufacture of Solar
photovoltaic equipment.
1997 Development of MARR and its
manufacture along with 8 mbit and
a40 mbit optic mux equipment.
1998 Production of DDF focus version.
1999 Started in the world’s latest

15
 equipment i.e. Digital Loop Carrier
(PDH) and production
of 2/15 single channel equipment.

2000 Development and production of

DLC (SDH) and Access terminal
along with the production of the
central office terminal racks.

16
1.15 RESEARCH AND 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 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.

17
1.16 PRODUCTS MANUFCTURED BY ITI-NAINI

ITI primarily manufactures telecommunication equipments. They can

be classified as:-

• Landline equipments

• Mobile

Landline equipments can be further classified as under:-

• Switching equipments

• Transmission equipments

• Instrument (telephone)

ITI-Naini mainly deals with the manufacture of transmission equipments

and instrument.

The equipments produced by ITI-Naini are as follows:

1. STM

They can be of following types:

i) STM-1 CPE

ii) STM-1 ADM

iii) STM-4

18
 iv) STM-16 ADM

v) STM-MADM

vi) STM-64

2. DDF

3. DWDM

4. EPBT

1.17 TECHNOLOGY

The technologies used for various products manufactured by ITI-Naini

are as follows:

1. DDF- Own technology

2. EPBT- Own technology

3. STM-1 CPE, STM-1, STM-4,STM-16 ADM and MADM – Tejas,

Bangalore technology

4. STM-64 – Exaltec, USA technology

5. DWDM- ZTEE technology

19
1.18 COMPETITORS

PRODUCT COMPETITORS
DDF Technofiber Industries, Bhopal
Penatagon Industries, Bhopal
Shakti Enterprises, Bhopal
SRV Telecom, Bangalore
Hindustan Enterprises, Allahabad
Dee Controls, Kanpur
EPBT Pramod Telecom, Lucknow
SRV Telecom, Bangalore
BPL India, Bangalore
Bharati Telecom
STM- I ADM, CPE Prithvi (Huawei technology)
Puncom (Huawei technology)
STM-4 ADM
Ordyne (Ordyne technology)
STM-16 ADM Siemens (Siemens technology)

20
STM-16 MADM
ZTEE(ZTEE technology)
HFCL(WRI technology)
ICOMM (UTSAR technology)
STM-64 Puncom (Huawei technology)
Ericsson (Ericsson technology)
ICOMM (UTSTAR technology)
Siemens (Siemens technology)
DWDM UTL(Adwas technology)
Prithvi (Huawei technology)
Terracom (Multiplex technology)
NSM (NSM technology)
Siemend (Siemens technology)

1.19 PRODUCTION OF ITI-NAINI 2008-09

ITI-Naini produced following products during the financial year 2008-

09:-

EQUIPMENT REVENUE EARNED(in crores)

STM -1 ADM and STM- 1 CPE 36.07
STM-16 ADM and STM-16 MADM 103.90
STM-64 ADM 5.58
DDF 4.21
DWDM 136.21
Spare sales and repair 1.11
Telephone(ETBT) 0.16
Total revenue earned 287.24

1.20 ITI-NAINI PRODUCTION TARGET 2009-10

EQUIPMENT REVENUE EXPECTED(in crores)

STM -1 ADM and STM- 1 CPE 40.69
STM-16 ADM and STM-16 MADM 74.34
DDF 1.00
DWDM 85.00
New diversified products 50.00
Total revenue expected to earn 260.08

21
1.21 PURCHASERS:-

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:-

• Videsh Sanchar Nigam Limited

• Maha Nagar Telephone Nigam Limited

• Railways

• Defence

• Banks

• Corporate

• Factories/Offices

• Steel/Power/Oil sector

• General Public

22
CHAPTER II: MARKETING
STRETEGY OF ITI, NAINI
23
MARKETING

24
 “Marketing boasts a rich array of concepts and tools”

2.1 WHAT IS MARKETING?

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 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 television commercials, newspaper ads,
direct mail campaigns, 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.

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2.2 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.

2.3 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.

2.3.1 TYPES OF TENDERS

There can be four types of tenders:-

26
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. In this type, the tender is floated to only these
limited numbers of suppliers.

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.

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.

27
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.

3. 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 ITI’s products are purchased by BSNL/MTNL therefore the

entire marketing process of ITI revolves around it.

2.3.2 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. Bid Security Form

9. Performance Security Form

10. Letter of Authorisation for Attending Bid Opening

11. Annexure A-D

2.3.2.1 SECTION I: NOTICE INVITING TENDER

28
This section contains the following information

1. Tendered item and quantity

2. Specifications

3. Estimated amount

4. Tender fee

5. Last date of submission of bid

6. Date and time of bid opening

7. Eligibility

2.3.2.2 SECTION II: INSTRUCTIONS TO BIDDERS

The important information mentioned in this section are:

2.3.2.2.1 DEFINITIONS:

“The Purchaser” means the Bharat Sanchar Nigam Ltd. (BSNL), New
Delhi

“The Bidder” means the individual or firm who participates in this

tender and

submits its bid.

“The Supplier” means the individual or firm supplying the goods under
the

contract.

“The Goods” means all the equipment, machinery, and/or other

materials which the Supplier is required to supply to the Purchaser
under the contract.

29
“The Advance Purchaser Order” means the intention of Purchaser
to place the Purchase Order on the bidder.

“The Purchase Order” means the order placed by the Purchaser on

the Supplier signed by the Purchaser including all attachments and
appendices thereto and all documents incorporated by reference
therein. The purchase order shall be deemed as “Contract”
appearing in the document.

“The Contract Price” means the price payable to the Supplier under
the purchase order for the full and proper performance of its
contractual obligations.

“Validation” is a process of testing the equipment as per the Generic

Requirements in the specifications for use in BSNL network.
BSNL has laid certain norms according to which it purchases
products. It has laid down specifications for every equipment according
to which the equipment is manufactured. All these norms are
mentioned in the GENERIC REQUIREMENT (GR) of that equipment.
Every aspect of every component (for example size, weight, component
specifications, drawings etc.) of equipment is being mentioned in the
GR of that equipment and no amendment can be done.

The supplier has to manufacture every equipment in accordance with

the norms laid down in the GR of that equipment.

Validation is carried out in simulated field environment and includes

stability, reliability and environmental tests.

Cost of Tender Document: Each Tender Document has a fixed cost

which is mentioned in the tender document.

The location for collection of Tender Document:

In case of ITI, the tender document may be collected from:-

30
 1. Directly from the circle offices of BSNL/MTNL after the payment of
the price of the tender document by the officers of concerned
RO’s.

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.

2.3.2.2.2 ELIGIBLE BIDDERS

1. The eligible bidders should be Indian companies registered to

manufacture the tendered item(s) or Indian companies registered to
manufacture the equipment, duly authorized by the manufacturer of
tendered item to submit the bid on their behalf and having
Memorandum of Understanding (MOU) with the manufacturer for
maintenance support of the equipment during the life span of the
product, having clearance from Reserve Bank of India wherever
applicable.

Memorandum of Understanding (MoU) is a contract signed

between the bidder and the TOT partner (the partner of the bidder
which provides technology to the bidder for the manufacture of
equipment) for maintenance support of the equipment.

2. The bidder should have obtained valid Technical Specification

Evaluation Certificate from the QA wing of BSNL or Type Approval
Certificate from Department of Telecom (Telecom Engineering Centre)
for the tendered item in which the bidder is participating against
General Requirements and Technical Specifications given in the bid
document and should have successfully executed Educational
/Commercial orders issued by DOT/BSNL for the same item.

31
2.3.2.2.2.1 TECHNICAL SPECIFICATION EVALUATION
CERTIFICATE (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.

2.3.2.2.2.2 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 -50°C to 150°C 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 supplier’s 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.

2.3.2.2.2.3 TYPE APPROVAL CERTIFICATE (TAC) is similar to TSEC,

the only difference lies in the fact that TSEC is issued by the QA wing of

32
BSNL situated in Bangalore whereas TAC is issued by Department of
Telecommunication situated in New Delhi.

2.3.2.2.2.4 TSEC contains the following: -

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.

Or

3. The bidder should have obtained valid Type Approval Certificate

from Department of Telecom (Telecom Engineering Centre) or TSEC
from the QA wing of BSNL for the each of the tendered item GR and
Technical Specifications given in the bid document and bidder or his
collaborator should have successfully executed
Educational/Commercial orders for 25% of the quantity of the tendered
items to any purchaser in the world /government or semi government
bodies in India.
Or

4. The bidder should have registered their product for TSEC in QA

wing of BSNL along with required fee, samples of the products
etc., and enclosing copy of Form QF-103 with registration number
with the bid at least one day before the date of tender opening
for the tendered item in which bidder is participating and bidder
or his collaborator should have successfully executed
Educational/Commercial orders for 25% of the quantity of the

33
 tendered items to any purchaser in the world /government or
semi government bodies in India.

5. The bidder shall collaborate with only that manufacturer who has
collaboration with not more than 2 parties including the bidder in India.

The proof of all the above eligibility criteriae should be

attached with the tender document.

2.3.2.2.3 DOCUMENTS ESTABLISHING BIDDER’S ELIGIBILITY

AND QUALIFICATION

The bidder should furnish, as part of the bid documents establishing

the bidder’s 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 25th 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

34
vi. Inspection Certificate issued by BSNL (QA) for execution of
Educational/Commercial Order. (If applicable)
vii. Bulk production certificate: This certificate is issued by BSNL
certifying that the company is capable of bulk production.
viii. Annual Report and /or a certificate from its bankers as an
evidence that he has financial capability to perform the contract.
ix. Quality Policy: The bidder shall furnish documentary evidence about
the quality produced by the company necessary to perform the
contract.
x. 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;
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 does not guarantee any quality of end products and

35
 services; rather, it certifies that formalized business processes are
being applied.

xi. 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 a letter issued by BSNL certifying the
above.
xii. 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.
xiii. Memorandum of Association (MoU): It is an undertaking duly
signed by front bidder and its technology/consortium partner stating
that both of them shall be liable for due performance of the contract
jointly and severally.

2.3.2.2.4 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
Purchaser’s 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

36
identifying the source) and clarifications by the Purchaser are sent to
all the prospective bidders who have received the bid documents.

Any clarification issued by BSNL in response to query raised by

prospective bidders forms an integral part of bid documents and it may
amount to an amendment of relevant clauses of the bid documents.

2.3.2.2.5 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.

2.3.2.2.5 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.

37
 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 need to be quoted. The offer should

be firm in Indian Rupees. No Foreign exchange is made available by
the purchaser.

2.3.2.2.6 BID SECURITY

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
bidder’s conduct.

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.

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.

2.3.2.2.7 PERIOD OF VALIDITY OF BIDS

38
Bid remains 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.

2.3.2.2.8 SEALING AND MARKING OF BIDS:

1. The bid should be submitted in three covers. The first cover

should contain the original and four copies of Unpriced Technical &
Commercial Bid duly marked ‘ORIGINAL’ & ‘COPY’. The second cover
should contain Priced Financial original and four copies of Priced
Financial Bid and third cover should contain Bid Security as
mentioned in the Bid Document. All the three covers should be
sealed separately by the personal seal of the bidder.

2. The envelopes should be addressed to the purchaser at the

address mentioned in the bid document.

3. The envelope should bear (the project name), the tender number
and the words ‘DO NOT OPEN BEFORE’(due date & time).

4. The inner and outer envelopes shall indicate the name and
address of the bidders to enable the bid to be return unopened in
case it is declared ‘late’ or rejected.

5. Tender may be sent by registered post or delivered in person on

above mentioned address.

6. Venue of Tender Opening is also mentioned.

39
2.3.2.2.9 OPENING OF BIDS BY PURCHASER

1. The purchaser opens bids in the presence of bidders or their

authorized representatives who chose to attend, at scheduled time on
due date.
2. A maximum of two representatives of any bidder are authorized
and permitted to attend the bid opening.

2.3.2.2.10 PRELIMINARY EVALUATION

1. Purchaser 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 document. 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.

2.3.2.2.11 EVALUATION AND COMPARISON OF SUBSTANTIALLY

RESPONSIVE BIDS

40
 1. The Purchaser evaluates in detail and compares the bids
previously determined to be substantially responsive.

2. The basis for detailed comparison of substantially responsive

bids is mentioned in this clause.

2.3.2.2.12 PLACEMENT OF ORDER

The Purchaser considers placement of orders for commercial supplies

only on those eligible bidders whose offers have been found
technically, commercially and financially acceptable and whose goods
have been type approved/validated by the purchaser. The Purchaser
reserves the right to counter offer price(s) against price(s) quoted by
any bidder.

2.3.2.2.13 PURCHASER’S RIGHT TO VARY QUANTITIES

This clause specifies that purchaser reserves the right to increase or

decrease the quantity of goods and services up to a fixed quantity
mentioned in the schedule of requirement without any change in the
unit price.

2.3.2.2.14 PURCHASER’S RIGHT TO ACCEPT ANY BID AND TO

REJECT ANY OR ALL BIDS

According to this clause, the Purchaser reserves the right to accept or

reject any bid, and to annul the bidding process and reject all bids, at
any time prior to award of contract without assigning any reason
whatsoever and without thereby incurring any liability to the affected
bidder or bidders on the grounds of purchaser’s action.

2.3.2.2.15 ISSUE OF ADVANCE PURCHASE ORDER

1. The issue of an Advance Purchase Order constitutes the intention of the

Purchaser to enter into contract with the bidder.

41
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.

2.3.2.2.16 SIGNING OF CONTRACT

1. The issue of Purchase order constitute the award of contract on the

bidder.
2. Upon the successful bidder furnishing performance security the
Purchaser discharge the bid security.

2.3.2.2.17 ANNULMENT OF AWARD

If the successful bidder fails to comply with the requirement of

above then purchaser constitutes sufficient ground for the annulment
of the award and the forfeiture of the bid security. In this case the
Purchaser may make the award to any other bidder at the discretion of
the purchaser or call for new bids.

2.3.3 SECTION II

This section contains GENERAL (COMMERCIAL) CONDITIONS OF

CONTRACT

Some of the important clauses mentioned in this section are:-

2.3.3.1 PERFORMANCE SECURITY

All suppliers need to furnish performance security to the purchaser for

an amount equal to 5% of the value of purchase order within 14 days
from the date of issue of Advance Purchase Order by the Purchaser.

42
 The proceeds of the performance security are payable to the Purchaser
as compensation for any loss resulting from the supplier’s failure to
complete its obligations under the contract.

The performance security Bond should be in the form of Bank

Guarantee issued by a scheduled Bank and in the form provided the
Bid Document.

The performance security Bond is discharged by the Purchaser after

completion of the supplier’s performance obligations including any
warranty obligations under the contract.

2.3.3.2 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

2.3.3.3 WARRANTY

This clause contains the details about the warranty conditions that the
purchaser expects from the supplier.

2.3.3.4 PAYMENT TERMS

This clause contains the details regarding the payment terms. Normally
payment of 95% of the price is made on receipt of goods by consignee.
For claiming this payment the following documents are to be submitted
to the paying authority.

(i) Invoice clearly indicating break up details of composite price i.e.

Basic, E.D., Sales Tax, any other Duties and Taxes, Freight
/Packing Charges, Service Tax etc.
(ii) Delivery Challan
(iii) Supplier certificate for dispatch
(iv) Excise gate pass / invoice or equivalent document
(v) Inspection certificate of QA

(vi) Consignee receipt

(vii) The sea freight receipt as per the rates approved by the Ministry
of Water and Surface Transport, if any

43
(viii) Proof of payment of octroi/entry tax etc., if any.

“If the supplier fails to furnish necessary supporting documents i.e.

excise/customs invoices etc. in respect of the Duties/Taxes which are
cenvatable, the amount pertaining to such Duties/Taxes is deducted
from the payment due to the firm.”

The balance 5% payment is released within 6 months from the date of

supply of the equipment in case there are no damage/shortages. In
those cases where such shortages/damages are intimated to the
supplier in writing, the balance payment is released only after the
cases are settled in accordance with the provision of the P.O.

2.3.3.5 LIQUIDATED DAMAGES

This clause mentions 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 delivery period, the consignee may accept the stores and in
such cases the provision of clause 16.2 will not apply.

If the supplier fails to deliver the store or any consignment thereof

within the period prescribed and agreed for delivery, the purchaser,
without prejudice to other remedies available to the purchaser is
entitled to recover, as agreed liquidated damages 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 (TEN) weeks, and thereafter at the rate of
0.7% of the value of the delayed supply and/ or undelivered material/
supply for each week of delay or part thereof for another TEN weeks of
delay.

44
 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
tenders floated by Circles and by the Functional Director concerned in
case tenders floated by Corporate Office, stating reasons and
justifications for grant of extension of delivery period beyond 20 weeks.

The total value of the liquidated damages as per above sub-clauses

shall be limited to a maximum of 12% (Twelve percent) i.e. LD shall be
levied upto 20 weeks.

2.3.4 SECTION IV

This section contains the SPECIAL CONDITIONS OF CONTRACT that

is needed to be signed between the bidder and the supplier.

2.3.5 SECTION V

This section contains the SCHEDULE OF REQUIREMENT that is

required by the supplier from the supplier.

2.3.6 SECTION VI

This section is the TECHNICAL SPECIFICATION section that specifies

the GR number according to which the purchaser wishes to avail goods
or services from the supplier

2.3.7 SECTION VII

This section contains the BID FORM AND THE PRICE SCHEDULE for
the supplier.

2.3.8 SECTION VIII

This section contains the BID SECURITY FORM.

45
2.3.9 SECTION IX

This section contains the PERFORMANCE SECURITY FORM.

2.3.10 SECTION X

This section contains the LETTER OF AUTHORISATION FOR ATTENDING

BID 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 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 the hall where bids are opened, may be
refused in case authorization as prescribed above is not recovered

2.3.11 Along with these sections there are certain annexure are
included in the bid document. These are:

2.3.11.1 Annexure A: Compliance (clause by clause)

This annexure specifies clause by clause compliance to the bid

document on the part of the bidder.

2.3.11.2 Annexure B: No Deviation Certificate

This annexure certifies that there is no deviation from the bid

document.

2.3.11.3 Annexure C: No Relation Certificate

The bidder should give a certificate that none of his/her near

relative is working in the units where he is going to apply for the
tender. In case of proprietorship firm certificate will be given by the
proprietor. For partnership firm certificate will be given by all the
partners and in case of limited company by all the Directors of the
company excluding Government of India/Financial institution nominees
and independent non-Official part time Directors appointed by Govt. of

46
India or the Governor of the state and full time Directors of PSUs both
state and central. Due to any breach of these conditions by the
company or firm or any other person the tender will be cancelled and
Bid Security will be forfeited at any stage whenever it is noticed and
BSNL will not pay any damage to the company or firm or the
concerned person.

The company or firm or the person will also be debarred for further
participation in the concerned unit.

The near relatives for this purpose are defined as:-

(a) Members of a Hindu undivided family.

(b) They are husband and wife.

(c) The one is related to the other in the manner as father, mother,
son(s) & Son’s wife (daughter in law), Daughter(s) and daughter’s
husband (son in law), brother(s) and brother’s wife, sister(s) and
sister’s husband (brother in law).

2.3.11.4 Annexure D: Checklist

This annexure contains a checklist of all the documents that are to be

enclosed with the bid.

47
2.4 TENDER MARKETING SYSTEM:-

This is the marketing system that is prevalent in ITI.

STAGES IN A TENDER MARKETING SYSTEM PREVALENT IN ITI,

NAINI

The whole marketing system in ITI, Naini is divided in to four broad

categories. They are: -

1. Tendering process

2. Post bid process

3. After sales service

1.4.1 TENDERING PROCESS

The tendering process can be described with the help of following

flowchart: -

48
 Receiving of Notice Inviting Tender(NIT) through:-

• Regional offices

• Internet

• Corporate office in Bangalore

Request letter send along with TSEC and supplier record to

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
done.

Assistance is required Management Assistance is required from

from R & D for approval of Technical Costing
configuration of prices. department for material
tendered item. costing.

Bid
Preparation
49
Mostly tender bid is Sometimes tender bid is
prepared by RO concerned. prepared by ITI and
Document with rates are submitted by ITI or sent to
forwarded to RO. Bid is RO for submission.
submitted by RO.

Process of bid
preparation.

Preparation of Index Preparation of

Power of preparation. commercial
Attorney. compliance and price

Pricing and ceiling is done.

Original copy + 4 copies
are prepared.

Bid submission.

50
 Bid opening.

1.4.2POST BIDDING PROCESS

The post bidding process can be described with the following

flowchart:-

Evaluation of technical
bid

Evaluation of financial
bid

L1 (lowest one) bidder sorted

out

Price Negotiation Committee (PNC)

meeting between supplier and purchaser
51
 Counter offer of discounted price by the purchaser to
the supplier (depends on the discretion of supplier to
accept or regret it)

FIRM PRICE is
fixed

Placement of order by the

purchaser

Issue of Letter of Intent (LOI) or Advance Purchase Order by the

purchaser

Acceptance letter send by supplier within 14

days

Placement of Purchase Order (PO) by the

purchaser
52
 PO received by the supplier (ITI in
this case)

PO verified by the supplier against the bid

document

PO sent to the Production Planning

department

Purchase requisition (PR) raised by the Production

Planning department for raw materials

PR sent to the Purchase

department

Purchase department obtains the required raw materials

by TOT partner or by the approved vendors

53
 Raw materials received by Inward Goods (IG)
department

Raw materials inspected by Inspection Goods (IGI)

department

Production Planning department and store

informed

Requisition made by store for manufacturing

and send to Production Planning department
for approval

Requisition made by store for manufacturing

and send to Production Planning department
for approval

Issue of raw material by the store to

the shop

Manufacturing Process in the

shop

Manufactured items send to

store
54

Manufactured items prepared by shop and

other items taken by the Assembly
 Assembled product send to
store

Products send for final

assembly

Products send for final

testing

Despatch of finished
product

Shipping of finished
product

Finished product received by the

purchaser

Payment made according to the conditions

mentioned in the bid document after proper
55
inspection by the purchaser
 1.4.3AFTER SALES SERVICE
ITI also provides efficient after sales service as and when required by
the purchaser.

56
 CHAPTER III: PRICING
STRETEGY OF ITI, NAINI

57
PRICING STRATEGY OF ITI-NAINI
The pricing strategy of ITI-Naini can be discussed as below-

First of all, ITI-Naini takes in consideration the price opened in the

tenders earlier for the same product to avoid very high or very low
prices.

The price is mainly composed of:

1. Material cost

2. Labour charge

3. Overhead

3.1.1 MATERIAL COST:

This is the main component of price. It is concerned with the price of

raw materials. The cost of raw materials keeps on fluctuating from time
to time so latest and updated material cost should be taken in
consideration.

Material cost can be of two types:

1. Direct material cost

2. Indirect material cost

3.1.2 Direct material cost is the cost of raw materials that are used in the
manufacturing process. For example: metal sheets, printed circuits and other
components like resistor, integrated circuits etc.

3.1.3 Indirect material cost includes the cost of those materials that are
indirectly used n the manufacturing process. For example: nuts and bolts

58
solder wire, welding electrodes, paint, polish and chemicals for plating and
ionodizing.

3.2 LABOUR CHARGE

This includes the following

1. Direct labour charge

2. Indirect labour charge

3.2.1 Direct labour charge is the cost involved with the labour directly
involved in the manufacturing process.

3.2.2 Indirect labour charge is the cost involved with

i. Supervisors

ii. Feeders

iii. Helpers

iv. Testers etc.

3.3 OVERHEADS

These are the surplus expenses which include welfare expenses. These
include expenses on:

1. Medical facility

2. Transport facility

3. Canteen

4. Uniform and shoes being provided to the employees

5. Salary of non productive employees

6. Salary of officers and management.

Before liberalisation overheads formed an essential part of the price. But now
due to increased competition, overheads are not included in the price.

3.4 DEPARTMENTS RESPONSIBLE FOR SETTING THE PRICE

59
 1. MATERIAL COSTING DEPARTMENT: Material costing department is a
part of finance department in ITI and is responsible for setting up of
material cost. As the price of raw materials keeps on fluctuating
therefore they are responsible for being updated with the latest price.

2. INDUSTRIAL ENGINEERING DEPARTMENT: This department is

responsible for setting up the labour charge.

The following steps are undertaken to fix the price:

1. Add material cost, labour charges and packing charges to obtain

the cost price ( overheads ignored due to competition)

2. Add margin percentage to the cost price to obtain the basic

price.

3. Add ED to basic price. At present, ED=8% of basic price. Then

add CESS which at present is 3% of ED. In case of service (for
example software) add service tax in the place of ED. At present
ST=10% of basic price. After adding CESS, service tax=10.3%.

4. Add CST or VAT (in case of same state) to above. At present,

CST=2% of basic price+ED and VAT=4%of basic price+ED.

In case of service no CST is applicable.

60
5. Add the cost of freight, forwarding and insurance
(which is expressed in terms of a percentage of basic
price + ED+CST/VAT) to the above.

6. The firm price is obtained.

61
 CHAPTER IV: MARKETING

RESEARCH REPORT

RESEARCH METHODOLOGY

62
Research can be defined as “a scientific and systematic
search for pertinent information in any branch of knowledge’. It is the
pursuit of truth with the help of study, observation, comparison and
experiment. Research is ,thus, an original contribution to the
existing stock of knowledge making for its advancement.

4.1 FORMULATING THE RESEARCH PROBLEM

At the very beginning the researcher, singles out the problem, he /

she wants to study in specific terms.

ITI being in this business for so long understands the ups and downs of
this business very well. Hence when the problem aroused due to
liberalization and also due to entrance of competition and ITI started
losing its market share and incurring losses, it changed its pricing
strategy and new policies were introduced. But still it continued to be in
losses even though its profits were increasing. Hence it was necessary
to find out what the actual reason was for the losses incurred. For this
reason this research was carried out to find out:

• Whether the people were satisfied with the product or not?

• Whether the price was competitive or not?

• Whether there was a demand of the product in the market?

• Why there was a loss being incurred every year even when the
company sales were increasing?

The apparent problem for losses being incurred was that the prices
were not competitive enough hence the company was going into
losses. Even when the pricing strategy was changed it was going into
loss. It was also necessary to find whether there was acceptance for

63
the product in the market. It was also necessary to find out whether
repeat purchase was there or not. It was also necessary to find out the
strength of competitors and how was it affecting ITI.

With addition to the above problems, it was found out that there are
certain problems inside the company which lead to the drop in
productivity. To check out these problems there was another
questionnaire prepared for the employees within the organization.

4.2 OBJECTIVE OF RESEARCH:

The research objective was to find out for the above problem. ITI being
a pioneer in the telecom business and therefore would like to hold its
position. It therefore wanted to get an in depth view of the above
stated problem.

4.3 RESEARCH APPROACHES

There are two basic approaches to research, quantitative approach
and the qualitative approach. The former involves the
generation of data in quantitative form, which can be subjected to
rigorous quantitative analysis in a formal and rigid manner. This
approach is further sub-divided into inferential approach is to form
a database form which to infer characteristics or relationship of
a population. This usually means survey research where asample of
population is studied to determine it’s characteristics and it is then
inferred that the population has the same characteristics.

Qualitative approach to research is concerned with subjective

assessment of attitudes, opinions and behaviour. Research in such a
situation is a function of researcher’s insight and impressions.
Such an approach to research generates results either in non-

64
quantitative form or in the form, which are no subjected to rigorous
quantitative analysis.

This research follows both the inferential quantitative and qualitative

approach. The questionnaires circulated to collect the relevant
information have been analyzed ion the basis of rating given to each
question and then, aggregate of the rating of all the questions of a
group has been taken to find out the percentage of each response to
that group.

4.4 RESEARCH PROCESS FOLLOWED:

Research process consists of a series of actions or steps

necessary to effectively carryout research and the desired sequencing
of these steps. The various steps involved in a research process are
not mutually exclusive, not are they separate or distinct. However, the
following order concerning various steps provides a useful procedural
guideline regarding the research process and has been used to carry
out this research:

4.5 PREPAIRING THE RESEARCH DESIGN:

The function of research design is to provide for the collecting of the

relevant information and data with minimal expenditure of effort, time
and money. But the way of achieving all this depends mainly on the
purpose of the research. Here, the purpose of the study is both
exploration and description.

4.6 INFORMATION

65
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 questionnaires and observations. The
secondary source consists of internet and magazines.

The design of questionnaire was as follows:

• Types of questions: Subjective questions were used for

questionnaire and questionnaire consisted of dichotomous questions
.

• Phrasing of the questions: The following points were taken into

consideration while phrasing of the questions:

1. Difficult and vague words were 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.

• Number of questions: Both the questionnaires consisted of 12

questions.

TARGET POPULATION: The selected population consisted of people

related to the field.

DESCRIPTIONS OF STUDY: The survey was conducted in Allahabad

during June, 2009.

TIME AVAILABLE: The time available for research 15 days and

for the completion of this research, the time limit was 25 days.

4.7 DETERMINATION OF SAMPLING DESIGN AND

SAMPLE SIZE:

A sample design is a definite plan for obtaining a sample from the

given population. It is determined before the data is collected.

66
Steps in sampling design:

Population: All items under consideration in the field of enquiry.

Sample: The respondents that have been selected for the

purpose of the study.

Sampling unit: The individual unit of the selected sample

Sample frame: This contains the list of all the items of the
universe.

Size of the sample: This refers to the number of items selected

from the universe to constitute the sample. For the purpose of this
study, a sample size of 40 was taken.

Sampling design:

Sample random sampling: Random sampling method was used.

This design involves the use of lottery system or the random tables for
the selection of the sample. Random sampling ensures the law of
statistical regulatory i.e., the sample has the same composition and
characteristics as a the universe.

4.8 FINDINGS:
The survey from the customers showed that the main competitors of
ITI-Naini are:

• UTL

• Prithvi

• Puncomm

• Technofiber

67
 • ZETEE

• Pramod

The preference among the purchasers was UTL 22.5 %, ITI 15%,
Prithvi 12.5%, Puncomm 12.5%, Technofiber 10 %, ZETEE 10% ,
Pramod 10% and Others 17.5 %.

The products manufactured by ITI that were used by purchasers

were 32.5% DWDM, 27.5 % STM-16, 20 % STM-1, 5% DDF AND 15%
others.

The reasons that customers preferred ITI products were 85.7% due
to quality of products, 14.3% due to company’s reputation and 10.9%
due to technical collaborations.

85.7% of the customers that used ITI equipments were satisfied with
its quality.

Only 29.8% of total customers were satisfied with technology

provided by the ITI products.

Those who did not use ITI equipments were 35.2% due to high price,
18.8% due to supply of orders, 17.5% due to presence of more defects
than other companies and 17.5% due to weak after sales service.

The features/ attributes that the customers look in the equipments

were as follows:

• 20% Low Price

• 17.7% Good After Sales Service

• 17.7% Low Maintenance Cost

• 14.7% Good Quality of Product

• 11.8 % Technical Collaboration

68
• 8.9% Company Reputation

• 5.9% Overall Product

4.8.1 GRAPH SHOWING CUSTOMER’S PREFERENCE FOR

DIFFERENT COMPANIES MANUFACTURING
TRANSMISSION EQUIPMENTS

69
 CUSTOMERSPREFERENCE

9
8
7
6
5
4
3
2
m
sg
fu
on
taP
e
rc

1
0

Company

70
4.8.2 GRAPH SHOWING PREFERENCE OF CUSTOMERS
FOR DIFFERENT ITI EQUIMENTS

CUSTOMERSPREFERENCE

35

30

25

20

15
m

10
sg
fu
on
taP
e
rc

DWDM
STM-16
STM-1
DDF
Others

Products

71
4.8.3 GRAPH SHOWING WHY CUSTOMERS PREFER ITI
PRODUCTS

90

80

70

60

50

40

30
m
sg
fu
on
taP
e
rc

20

10

QUALITY
COMPANY'S
REPUTATION TECHNICAL
COLLABERATION

Reason

72
4.8.4 GRAPH SHOWING WHETHER THE CUSTOMERS
ARE SATISFIED WITH THE QUALITY OF ITI PRODUCTS

90
80
70
60
50
40
30
g m
P

20
fu
son
tae
rc

10
0

YES
NO

Response

73
4.8.5 GRAPH SHOWING WHETHER THE CUSTOMERS
ARE SATISFIED WITH THE TECHNOLOGY OF ITI
PRODUCTS

80
70
60
50
40
30
20
tm
rPu
sg
n
o
e
a
fc

10
0

YES
NO

Response

74
 4.8.6 GRAPH SHOWING REASONS GIVEN BY
CUSTOMERS FOR NOT PURCHASING ITI PRODUCTS

REASONSFORNOTPURCHASINGITI PRODUCTS

60

50

40

30

20
m
sg
fu
on
taP
e
rc

10

Delayof supply of orders

Presence of more defects
After sales service

Reasons

75
4.8.7 GRAPH SHOWING FEATURES CUSTOMERS LOOK
IN EQUIPMENTS

20
18
16
14
12
10
8
6
mg
fu
on
taP
e

4
s rc

2
0

Reasons

76
The survey among the employees gave the following results:

1. 55.5 % employees think ITI is missing good professionals in

marketing area.

2. 45.5 % employees think there is lack of availability of raw material

on time.

3. 85% employees there is need of more innovation and technology up

gradation.

4. 66.6% employees think that the publicity and advertisements and

sales promotion schemes of ITI,Naini are inadequate.

5. 72.3% employees think there is a low market potential for ITI

products.

6. 85% employees think there is a lack of latest technical knowledge

among them.

7. 43.2% employees think there is need of more employee support.

8. 56.3 % think there is lack of latest technology in communication.

77
9. 78.2% think there is no availability of orders in ITI.

10. 85 % think there is a fund crisis in ITI.

11. 85 % think there is excessive overhead expenditure in ITI.

78
4.8.8 GRAPH SHOWING REASONS FOR LOW
PROFITABILITY WITHIN THE ORGANISATION

90
80
70
60
50
40
30
m N
o
.fe
ly
s

20
10
0

Reasons

79
4.9 INTERPRETATIONS:

1. The company that first comes to the mind of 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 ZETEE and Alcatel.

3. The products manufactured by ITI that are preferred the most are
DWDM.

4. The major reason behind the above is the quality, reliability and
durability of ITI products.

5. The probable reasons why the purchasers do not prefer ITI products
are due to high price, delay in supply of orders, presence of more
defects than other 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 equipments are low price and good after
sales service.

8. ITI is missing good professionals in marketing area.

9. There is low market potential for ITI products.

10. There is lack of availability of raw material on time.

11. There is lack of autonomy to take decisions.

12. There is need of more innovation and technology up gradation.

13. There is need of more employee support.

14. There is large quantity of waste product.

80
15. There is a lack of awareness in workers

16. There is a crisis for fund in the organisation.

17. There is lack of latest technology in communication

18. There is lack of latest technical knowledge among employees.

19. There is non availability of orders.

20. There is excessive overhead expenditure.

21. There is lack of publicity and advertisement.

22. There is lack of sales promotion schemes.

23. There is lack of up to-date features according to consumer’s

demand.

4.10 RECOMMENDATIONS

Product: New products those in demand in the market should be

identified. Durability of products should be further enhanced. Some of
the existing products should be further innovated through exploitation
of new technologies and technical collaberations.

Price: ITI should try to reduce the price of its products for attracting
new customers and to win competitor’s customers. This can be done by
decreasing manufacturing expenses. Also, company can encourage
discount and credit facility.

Promotion: Perhaps, it can be the key towards ITI’s success in the

present market. ITI should encourage and adopt new sales promotion
strategies. These strategies can be fruitful in enhancing the sales
volume. Trade rebate, discount guarantee etc. are tools of

81
promotion.ITI should go for appropriate advertisement and publicity
channels and revive its old glory.

ITI should adopt customer oriented market strategies. It should try to

establish direct contact with people to generate awareness about its
products and to get an in depth information about their requirements.

Strategies for other modifications:

1. Research and development should be encouraged.

2. Warranty should be replaced by replacement guarantee.

3. Young marketing professionals 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 dependant on BSNL for its sales. It should try to

explore new markets for its products.

Strategies for development within the organisation:

1. There should be proper motivation to employees for better

performance

82
2. Proper training should be induced for employees.

3. Employees should be given autonomy to take decisions.

4. Relations with the vendors and suppliers should be

strengthened.

5. A well organized management information system should be

established to acquire a view of customer’s opinion.

6. A marketing research team should be established.

7. Essential measures should be taken to cut down the

expenditure.

8. More adequate marketing professionals should be employed.

9. More emphasis should be given on publicity, advertising and

sales promotion.

10. Management should pay more attention for the up

gradation of technology to meet the global standard.

11. Adequate measures should be taken to meet the fund crisis

in the organisation.

83
4.11 CONCLUSION:

1. The biggest competitor of ITI, Naini is UTL.

2. For equipments supplied to BSNL, ITI’s share is 30%

3. ITI depends highly on BSNL for orders.

4. Most of ITI’s collaborators have become its competitors.

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

ITI’s equipments.

7. ITI’s competitors have switched to better facilities.

8. ITI lags behind in terms of innovation.

9. Employees in ITI lack technical expertise.

10. There is lack of funds in ITI.

84
4.12 LIMITATIONS

Though utmost care was take so that no aspects of the problem remain
untouched but stii there were certain constraints that should not be
overlooked.

The following were the main constraints in my project.

The topic was very delicate hence people were afraid to give their
views openly.

The secondary was not very up to date.

Some of the respondents were not available.

Personal biases and perceptions of respondent may have stopped

him/her from giving the right information.

The respondent may have not understood the actual implication of the
subject.

85
 4.13 SWOT ANALYSIS

STRENGTHS

• Government of India undertaking.

• High quality.

• Market leader in DWDM products.

• 30 % reservation quota from government.

WEEKNESSES
86
• High price, delay in supply of orders, presence of more
defects than other companies and weak after sales service.

• Lack of good professionals in marketing area.

• Lack of availability of raw material on time.

• There is need of more innovation and technology up

gradation.

• There is need of more employee support.

• There is large quantity of waste product.

• There is a lack of awareness in workers.

• There is a crisis for fund in the organisation.

• There is lack of latest technology in communication

• There is lack of latest technical knowledge among

employees.

• There is non availability of orders.

• There is excessive overhead expenditure.

• There is lack of publicity and advertisement.

• There is lack of sales promotion schemes.

• There is lack of up to-date features according to

consumer’s demand.

87
OPPORTUNITIES

• Capturing new technologies.

• Improving the value chain.

THREATS

• Competitors

• New uncaptured technologies

88
 CHAPTER V :
APPENDIX

89
5.1 QUESTIONNAIRE 1 (FOR CUSTOMERS)

I 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. Could you please tell which company comes first to your mind
when we ask about Transmission Equipment Manufacturers?

2. Could you please name two or more companies manufacturing

telecom equipments?

3. Have you ever used products being manufactured by ITI?

(Yes/No)

4. If yes, then what are the products manufactured by ITI which are
being used by you?

90
5. What are the reasons for choosing this product?

6. If no, what are the probable reasons for not buying ITI product?

7. While buying the telecom product did you consider any other
product of any other telecom company?

8. Do you really think that there is difference between quality

provided by ITI and that of other company? (Yes/No)

9. Do you really think that there is difference between technology

provided by ITI and that of other company? (Yes/No)

10. Do the ITI products need frequent after sales service?

(Yes/No)

11. Do you get the delivery of products on time? (Yes/No)

91
12. What features/attributes are you looking for in the
transmission products when you purchase it? (Rate 1 to 8)

• Price

• Overall product

• Quality

• Company reputation

• Guarantee period

• After sales service

• Maintenance cost

• Tie up

92
5.2 QUESTIONNAIRE 2 (FOR EMPLOYEES WITHIN TNE
COMPANY)

12. Do you think ITI is missing good professionals in marketing area?

Yes No

13. Do you think there is lack of availability of raw material on time?

Yes No

14. Do you think there is need of more innovation and technology up

gradation?

Yes No

15. What are your views about the publicity and advertisements

schemes of ITI,Naini?

Adequate Inadequate

16. What are your views about the sales promotion strategies of

ITI,Naini?

Adequate Inadequate

17. Do you think there is a low market potential for ITI products?

93
 Yes No

18. Do you think there is a lack of latest technical knowledge among

employees?

Yes No

19. Do you think there is need of more employee support ?

Yes No

20. Do you think there is lack of latest technology in

communication?

Yes No

21. Do you think there is non availability of orders in ITI?

Yes No

22. Do you think there is a fund crisis in ITI?

Yes No

23. Do you think there is excessive overhead expenditure in ITI?

Yes No

94
95
REFERENCES

REFERENCES

96
• Kotler Philip- Marketing Management-Analysis, Planning And
Control, Tenth Edition, 2000 Prentice Hall India

• Dilel, Simken,Pride, Ferrel – Concepts and Strategies, second

European Edition.

• ITI Annual Report

• Beri G.C.- Marketing Research

• Business World

• Wikipedia

• http://www.itiltd-india.com/

• http://www.msn.com/

• http://www.google.com/

• http://www.bawwrchi.com/

• http://www.businessballs.com

• http://search.ebscohost.com/

• http://www.economictimes.com/

97