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Introduction
The Term Industrial Tour refers to a report on some industry visiting them physically, observing their process of production/ operation, and gathering relevant data from the management personnel, analyzing & evaluating the findings & drawing comments on the performance of the sample enterprises. As a part of 4th year BBA Program, we have visited Baizid Steel Industries Ltd. (BSIL) & reported on the performance of the company. Performance means accomplishment of an expected course of action. Management makes efforts to steer the organization towards destination. Evaluation is the process of identifying the financial strengths and weakness of the company. Performance Measurement of a company has been the subject matter of decision to planners , administrators, managers, Economist and academicians since long. There is a need for comprehensive consideration company so that their performance can be objectively evaluated. We have emphasized the promotional and Marketing activities of this company.
COMPANY PROFILE
Baizid Steel Industries Ltd (BSIL) a unit of well known ABC Group of Industries, having 22 years experience exclusively in steel making, is fully automatic steel re-rolling mill in the country. Baizid Steel Industries Limited (BSIL) is one of the biggest steel manufacturing companies in the private sector in Bangladesh. It is a renowned private limited company. It established in 1986. It was incorporated under the company act. It is a concern of ABC group. The company is the brainchild of the prominent entrepreneur named Abu Bakar Chowdhury. Thinking about the increasing demand of steel in the country this prominent entrepreneur decided to set up this factory. The factory of this company is located at Nasirabad beside Baizid Bostami road in Chittagong. Now the total production capacity of the company is 15 ton per hour. The company is using latest and sophisticated technology to manufacture product. Baizid Steel Industries Limited (BSIL) has a modern chemical analysis and physical testing lab to ensure the quality of the product. Baizid Steel Industries Limited (BSIL) is led by a group of dedicated professionals in each department and each department is led by a highly qualified managing director who is leading the company to meet the challenge of future marketing. The company has several departments like production department, sales department, marketing department, purchase department and human resource department. At present total number of officials of Baizid Steel Industries Limited (BSIL) is about 150 and the number of worker is about 300. The number of workers work in the factory is of two types permanent workers and temporary workers. The number of temporary workers varies according to the volume of production. During peak season more number of workers is engaged in factory. And in the off peak season like rainy season the number of worker is curtailed.
A visit to the mill is sure to impress any visitor by the huge range of activities going on there and the enormous facilities the mill possesses.
Manager Production
Manager Sales
Manager Marketing
Senior Executive HR
Foreman Production
Executive Marketing
Executive Administration
Executive HR
In charge Store
In charge Lab
Assistant Store
Assistant Lab
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MARKETING MIX
Baizid Steel Industries Limited (BSIL) is active in marketing management. The marketing department analyses, makes planning, implements and controls the programs designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objective of Baizid Steel Industries Limited (BSIL). It always analyzes marketing opportunities and threats to market and develops marketing strategies at different level of marketing department and different stages of product life cycle. Then the marketing department of the company plans different marketing mix program like: Product Mix Price Mix Place Mix Promotion Mix
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PRODUCT
Steel is an industrial product. Baizid Steel Industries Limited (BSIL) has been producing different type of products made of steel over last 22 years. Following table shows different feature of the products of Baizid Steel Industries Limited (BSIL): Product features in numeric figures Nominal Bar nominal dia mm 8 10 12 16 20 22 25 28 32 weight Kg/m 0.395 0.616 0.888 1.579 2.466 2.985 3.854 4.836 6.313 Cross-sectional area mm 50.3 78.5 113.1 201.1 314.2 380.3 490.9 616.0 804.2 Approximate lengths (Per metric ton) meter 2532 1621 1126 633 405 335 259 207 158 feet 8307 5318 3694 2077 1330 1100 850 680 518
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The products of Baizid Steel Industries Limited (BSIL) are shown in the following figure:
Deformed Bar
Round Bar
Prime Quality
Commercial Quality
1. Round Bar: As the name is implies the shape of the product is round which is 8 mm to 32 mm in size. It is equivalent to ASTM A 615 2. D-Formed Bar :It is more popular at present as it some special qualities. It is of two types given below: Prime Quality D-Formed Bar: It is a product of 60 grade. It is generally used in multistoried infrastructure. Its length is 12 meter. Commercial Quality D-Formed Bar: It is a product 40 grade. Its length is 15 meter. It is used in all types of constructions.
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1. Durability: The rod made by Baizid Steel Industries Limited (BSIL) has high durability. The durability of the companys product is higher than those of the other competitors. Generally the contraction made by Baizid Steel Industries Limited (BSIL) to survive for at least twenty years. Besides the construction can sustain any earthquake for a high risk. 2. Weight: Baizid Steel Industries Limited (BSIL) Limited is committed to ensure accurate weight. To measure the product the company uses computerized weight bride, which results in accurate weight. If any customer or dealer logs any complaint about the weight of product, the marketing department enquires it. But it is matter of pleasure that the measurement in weighting is so accurate that hardly any objection regarding weight of the product has arisen. 3. Quality: In today's highly technological world, there cannot be any compromise on quality. At BSIL, this realization has led to ensuring that every product measures up to the highest International Standards. This is the main reason why most of the quality conscious buyers and in particular most foreign construction firms working in Bangladesh buy steel from BSIL. Strict adherence to buyers' specifications in terms of steel grade, profile and close tolerances on unit mass have enabled BSIL to supply steel to a number of national projects. BSIL makes different & distinctive from others is that the mill can only use M.S. Billets of regular shape and proper size that means it is a hundred percent billet based mill and the product is quality product. For ensuring high quality of the product the management of Baizid Steel Industries Limited (BSIL) has taken following steps: Baizid Steel Industries Limited (BSIL) asks every customer to see the BSIL G 60 logo on the product and be sure about quality of product. The organization ensures the quality by continuous checking process in every stage of the production by sampling.
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Baizid Steel Industries Limited (BSIL) has a modern chemical analysis and physical testing lab to ensure the quality of the product. BSIL is committed to the customers to take back its product if any authorized standard lab can prove that its product quality is below the standard. The products of BSIL are approved by BSTI, which issued certificate in the year of 1985. The products of BSIL are tested by BUET (Bangladesh University of Engineering and Technology) The products of BSIL are certified by ISO 9001: 2000 The products are produced by automated machine that ensures high quality. Raw materials with high quality are collected. BSIL recruit and appoint highly skilled plant engineer, specialist Chemist & skilled and experienced worker to maintain quality. BSIL always strictly follows BSTI requirements and manages its manufacture, inspection and test and servicing in conformance with ISO-9001 all the time.
4. Product Life Cycle: Baizid Steel Industries Limited (BSIL) already crossed their introduction stage and its position in the product life cycle is growth stage to maturity stage. By spending huge amount of money on the product improvement, promotion and distribution the company have already captured their dominant position. 5. Brand Name: A brand name is a term, name, design or symbol or combination of them intended to identify the goods and services of one seller or a group of sellers and to differentiate them from those of the competitors. A brand is a seller promise to deliver consistency a specific set of features, benefits and services to buyers. The brand name means a warranty of quality. A brand can deliver up to four levels at meaning that is attributes, benefits, values and personality. So a brand name is the view of the product, quality and faults. Baizid Steel Industries Limited (BSIL) has now only one brand named BSIL. The
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company requests every customer to see the BSIL G 60 logo on the product and be sure about its product. In respect of the time the brand had been very popular in market. 6. Packaging: Some marketers hold the view that packaging is fifth P along with price, product, promotion and place. Packaging is the activities of designing and producing the container of wrapper for a product. But as an industrial product the product of BSIL is not packed.
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PRICE
The amount of the money charged for a product or a service or the sum of the values that consumer exchange for the benefits of having or using the product or service is called price in marketing. Price is the only element in the marketing mix that produces revenue. The company should be very careful of this important mix. Because a little bit change in price can make huge change in market sale. So Pricing is the most flexible and the sensitive element in the marketing mix. But at the same time, pricing and price competition is the number one problem facing many marketing executives. Much company cannot handle pricing well. Product Wise Pricing of BSIL: The product wise pricing of the company is given below: 1. Prime Quality Product2. Commercial Quality Productin the market and factors. TK. 47,500 per ton. TK.46, 500 per ton.
The prices fluctuate according to competitors price, cost of raw materials, demand
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Baizid Steel Industries Limited (BSIL) considers the best time comes for price setting. Basically they focus on the demand of the market and competition. That means the company is highly affected by the external factors. The company always meets the market demand and it wants to get the market leadership. There is no doubt that the company must consider the reseller through whom it earns the profits. From the group discussion with toplevel managers we have come to know that reseller contribution is much more than others factors on the profit. The company always considers the internal factors, which are fully controllable by the top level of management.
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Baizid Steel Industries Limited (BSIL) follows different pricing approaches and strategies given below: 1. Cost-Based Pricing: The simplest pricing method is cost plus pricing adding a standard markup to the cost of the product. Construction companies, for example, submit job bids by estimating the total project cost and adding a standard markup for profit. The method is popular because First, the company is more certain about costs and demand. By adding the price to cost, it simplifies pricing. Second, as all firms in the industry generally use this pricing method, prices tend to be similar and price competition is thus minimized. Third, the company management feels that cost-plus pricing is fairer to both buyers and them for calculation. Baizid Steel Industries Limited (BSIL) followed the cost based pricing at the initial stage of the production but after few years it was withdrawn. It is notable that the cost based pricing is popular for the new companies which has just entered or are thinking to enter into the market. The new company generally cannot follow any other pricing method.
2. Competition-Based Pricing: Consumer will base their judgment of a product value on the prices that competitors charge for similar products. Here we discuss two forms of competitions based pricing:
Going-rate Pricing: in going rate pricing, the firm bases its price largely on
competitors price, with less attention paid to its own costs or to demand. The firm might charge the same, more or less than its major competitors. Going rate pricing is very popular. When demand elasticity is hard to measure, firm feels that the going rate price represents the collective wisdom of the industry concerning the price that will yield a fair return. They also feel that holding to the going price will prevent harmful price.
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Seal-bid Pricing: competition based pricing is also used when firms bid for jobs.
Using such pricing, a firm bases its price on how it thinks competitors will price rather than on its own costs or on the demand. The firm wants to win a contract require pricing lower than other firms. Yet the firm cannot set its price below a certain level. It cannot price below cost without harming its position. In contrast the higher company sets its price above its cost, the lower its chance of getting the contract. Mainly Baizid Steel Industries Limited (BSIL) follows such pricing, as it is the best system to survive in market. The company all the time has a watchful eye on the current market price and change its product price making consistence the price of the main competitors. Even a slightest change in the price of the competitors product make the management of Baizid Steel Industries Limited (BSIL) concerned to take new competitive pricing decision. 3. Geographical Pricing: A company must also decide the price of its products considering the customers located different parts of a country or world. It may be of different types like FOB-origin pricing, uniform-delivered pricing, zone pricing, basing point pricing, freight absorption pricing. Baizid Steel Industries Limited (BSIL) sometimes uses this strategy to attract the customers of all places. It uses it locally. The company set ups two or more zones to set up such pricing strategy. 4. Promotional Pricing: With promotional pricing companies will temporarily price their products below cost. Promotional pricing takes several forms. Generally manufactures will sometimes offer cash rebates to the customers who buy the product from the dealers within a specified time. With promotional pricing Baizid Steel Industries Limited (BSIL) temporarily prices their products below cost. Promotional pricing takes several forms. Generally BSIL offers discount and commission. 5. Segmented Pricing:
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Selling a product or service at two or more prices, where the difference in prices is not based on difference in costs. Baizid Steel Industries Limited (BSIL) sells the product or service at two or more prices. Some times they sells the cement with a smallest profit to a group of new customer only for entering the market. Besides at rainy season Baizid Steel Industries Limited (BSIL) is very careful in reduction of pricing. 6. Discount & Allowance Pricing: Baizid Steel Industries Limited (BSIL) extends cash discount pricing especially to those customer who regular pay price within credit period. Besides quantity reduction pricing is also applied for the customer who buy large volumes. Baizid Steel Industries Limited (BSIL) has a target and if any reseller purchases huge quantity of product at a time and full fill the target; he is rewarded with quantity discount.
PLACE
Place means distribution of product. Product is distributed through distribution channel. Distribution channel is a set of independent organizations involved in the process of making product or service available for use or consumption by the consumer or business
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user. Several types of flows connect all of the institution in the channel. Business markets commonly include multilevel distribution channel. The channel of distribution may be of following types: 1. Manufacturer 2. Manufacturer 3. Manufacturer Customer Reseller (Agent/Dealer) Reseller (Agent/Dealer) Customer Retailer Customer
Here first channel of distribution is called zero level channel. Second and last one is called one level channel and two level respectively. In general industrial product doesnt not so long distribution channel as it is in case of consumer products. Baizid Steel Industries Limited (BSIL) considers the following factors to give any body agency and to involve anybody as a channel member: Financial condition of the willing dealer Marketing capability Previous background the dealer Marketing experience Honesty Place of shop Goodwill of the channel member.
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product on the basis of market demand. Most often the customers of their products purchase from the factory directly. Channels of distribution used by BSIL are discussed in the below-----1. BSIL 2. BSIL 3. BSIL Customer Retailer Agent Customer Retailer Customer
1. Zero level distribution Channel: BSIL sell its products directly to the customers. Any customers with any requirement can order the company for direct sale to them. Any customer can call the sales department to loge their requirement without going through any middlemen. The corporate customers like Equity Property, Ideal Development, TK Group, Well Group, Diamond holdings do not go through any channel. The company sell products to them directly which result in cost effectiveness. This type of distribution channel is responsible for a big volume of sales. 2. One level distribution channel: BSIL uses this channel to reach product to the customers having small amount of demand. The channel member may be either a retailer or an agent. 3. Two level distribution channel: BSIL uses this channel to expand market all over the country. It has appointed agents in the different region of the country who transport goods from the factory to their respective sales office and sell them to the retailer and ultimately the retailers sell goods to the consumers.
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Following discussion reveals the important aspects of the channel of distribution used by BSIL: 1. Distribution channel of the company is most sound and strongest in the city of Chittagong. 2. BSIL mostly sells its cement directly to the customers. The system is working quite efficiently and smoothly. 3. The corporate customers of the company are Equity Property, Ideal Development, TK Group, Well Group, and Diamond holdings etc, which perform direct sale from the company. 4. The company has not any private carrier of its. It depends on the private transport company for carrying goods. The company transport goods to the customer at the their request if necessary. It provides free transport service to the valuable customers. 5. The company has agent in the city of Shylet, Chittagong, Dhaka and Coxbazar. 6. The company uses selective distribution channel of distribution. 7. Agents dont require depositing any amount of money for getting agency. 8. The company hasnt experienced still any channel conflict. 9. The company receives order by mail, email, and telephone and through salespeople. 10. The company uses computerized order processing system, which speeds up the order-shipping-billing cycle.
WAREHOUSING OF BSIL
The warehouse of Baizid Steel Industries Limited (BSIL) is situated inside the factory. It is notable that there is no warehouse outside Chittagong. The warehousing place is very safety and the internal environment of the warehousing place is suitable for keeping
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the products in good condition. In the wet weather no problem is created for storing rod. Generally no product is stored for long time as the management of Baizid Steel Industries Limited (BSIL) is always makes wise decision regarding production considering demand because it may reduce the standard of rod. Maximum three weeks any product is stored in the warehouse. Wet season is the peak season of warehousing as demand falls a bit in this season. The management for warehousing is standard. The security system of the warehousing house is appreciable too.
PROMOTION
Promotion is one of the four major marketing mixes. In modern marketing system it is very important for developing good product, pricing it actively and making it accessible to target customers. The main promotional tools are advertising, sales promotion, public relation and personal selling. The main promotional objectives of BSIL are given below:
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To create high demand. To face competition. To survive in the competitive market To introduce about the product of the company. To build-up god will. To get world wide market To increase profit.
For this purpose the company prefer newspaper, magazine, sponsorship, signboard, festoon and sticker. At the time of selection of these media they consider goodwill and selling quantity. At time of selection of these media they consider the user, organizational good will, selling quantity. But the most effective promotional activities of BSIL is to motivate the sales force and resellers: To assure accurate measure To prescribe about ISO certificate. To remind about the product quality
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1. Advertising: In case of advertising the company the company mainly considers the cost. Besides the company budgets an amount of money for annual advertising annually. The company uses the following media for advertisement: Print media like publication Local and national newspaper TV channel Notice Sign board Bill board Project display board
2. Sales promotion: It is short-term incentives to encourage the sale of a product. The company uses following sales promotion tools: Sample of products Discount Credit sales Allowance Commission to agent Gift for valuable customer Corporate client conference.
3. Personal selling: The sales force of Baizid Steel Industries Limited (BSIL) personally visit the retailers, customers, corporate customers to give idea about its product and try to promote the sales.
SWOT OF BSIL
STREGHTHS: 1. Quality of the products of BSIL 2. Best technical and managerial support
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3. Direct distribution to the end users 4. Long time experience in MS product 5. Goodwill WEAKNESS: 1. Labor unrest 2. Depending on outside transport 3. Lack of skilled human resources in every level of production and management. 4. Always cannot ensure every size of product OPPORTUNITIES: 1. New Machine will be installed within few years to double the production volume, which results in increase in sales volume. 2. Support of engineers and developers. 3. Increasing demand of the rod gradually. THREATS: 1. Demand may decrease in future 2. Support from financial institutions may decline if loan cannot be repaid in due time. 3. Support Government may decreases. 4. Fluctuation in foreign currency may leave affect on increasing price, which may results in losing profit. 5. New competitors in steel industry may be a great threat to the company. 6. New environmental protection act may affect the production system as well as production volume.
PROBLEMS OF BSIL
Our group has been able to find out the following problems hampering the performance of BSIL: 1. BSIL does not use any scientific method to assess the demand of its product in the market. It produces as much as it can and due to high demand luckily all the
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products are sold. But it may face problem when its production capacity will increase because of installing new machine in future. 2. In BSIL there is no use of special statistical and mathematical techniques to take any marketing decision. The relevant department and the other department are not familiar with such practice. 3. BSIL does not have own track to carry the finished good to the agent, retailer and consumer. 4. The standard of the production system used by the company at present is not so modern. 5. The companys products have high demand but it cannot increase the production volume because of limitation of production system. 6. The company is not so careful of maintaining labor friendly environment to in the factory. 7. The company put more importance on the local market of Chittagong which is not a good strategy because in future the local demand of Chittagong market on reduce and the company may face decease in sales volume. 8. The number of corporate customers who are responsible for big volume of sales is not satisfactory. 9. Warehousing system is not so developed. 10. The job of skilled workers in the factory is not permanent. It puts more importance on temporary worker to minimize cost. But because of temporary job the turnover of skilled worker is very high in the factory as a result of which sometimes the company faces the problem of lack of skilled workers. 11. Promotional planning is not so effective. 12. Bureaucracy in the different levels of management exists and so sometimes quick decision-making process is disturbed. 13. The main competitors of BSIL like BSRM, KSRM, Basundara Still Mill have started exporting products at a higher price than local market price and making handsome profit but still Baizid Steel Industries Ltd (BSIL) is not thinking of exporting products abroad. 14. Proper documentation of each and every information is not maintained.
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15. The organization gives less emphasis on advertisement of its product, which leaves a negative affect on the promotion of products. 16. The officials of sales department are not trained up regularly to expand market share. 17. The company does not perform societal marketing to build up its image. 18. The company does not use environment friendly production system and it is polluting surrounding environment of its factory area. 19. The company has short-term production plan. It has not any long-term production plan for five years or more as a competent firm has. 20. In the off peak season the company cannot make proper balance between demand and supply and so the stock of product is much during the off peak period which indicates unsatisfactory performance in the inventory management of Baizid Steel Industries Ltd (BSIL). 21. The lifetime of the company is about 22 years but still the company has not been able to build its image, as some new competitors have been able within short period of time.
RECOMMENDATION
Following recommendations can be made for the betterment of the performance of the company: 1. BSIL should use scientific method to assess the demand of its product in the market.
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2. The standard of the production system used by the company at present should be further improved. 3. BSIL should focuses on the diversification of its products to meet the new and potential demand of the customers. 4. The company should increase the production volume by installing new machine as it has been informed that the product of company has high demand in the market. 5. The company should maintain labor friendly environment to motivate the workers in the factory. 6. The company should think about the expansion of the market all over the country as in future the local demand of Chittagong market on which it put more importance, may reduce. 7. The number of corporate customers who are responsible for big volume of sales should be increased. 8. Warehousing system should be improved so that the quality of the product isnt deteriorated if the product is stored for a long time. 9. The job of skilled workers in the factory should be made permanent otherwise the problem of lack of skilled workers that the company sometimes faces will not be removed. 10. Promotional planning should be effective. 11. Bureaucracy in the different levels of management should be minimized and decision-making process should be faster. 12. The company should think of exporting product at a higher price than local market price. 13. Delivery schedule should be planned and adhered to that order. Communication between factory and head office should be improved so that the committed delivery schedule is realistic with production capacity. 14. Proper documentation of each and every information should be maintained. 15. The organization should give more emphasis on advertisement of its product. 16. Sales department should be more effective to expand market share.
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17. The company should use environment friendly production system otherwise in future the company may face problem created by environmental protection act and the environmentally conscious pressure group. 18. In the off peak season the company should make proper balance between demand and supply so that the stock of product is not much. 19. The company should frequently update the marketing strategy 20. The company should carefully observe the strategy used by its main competitors like BSRM, KSRM, Basundara Still Mill. 21. The company should perform societal marketing to build up its image. 22. It should make long term plan.
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Manufacturing firm. 5) The year of establishment: 1986 6) Year of commencement of production: 1986
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19) What type of technology do you use? Automatic foreign technology 20) Do you have any production plan? Yes but short term. 21) What is the production plan of 2005 and how much you achieved? Yes.
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Other Questions
46) What is the sale Volume of the products? 1800 tons per month 47) What is the revenue per year? Not answered. 48) What is the peak period for your products? Dry season 49) What is the target sale in the next 3 years? Not answered. 50) Does your factory cause any environmental pollution toward locality? Yes. But the company is trying to control pollution.
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CONCLUSION
It is found from the study that the performance of Baizid Steel Industries Limited (BSIL) is satisfactory but not outstanding. Still the company is improving but very slowly. Its lifetime is about 22 years, which is a long period of time but still is the company is not performing so well as its competitors like BSRM, KSRM are doing. It is notable that the future of our local steel manufacturers is very bright. So if the company can implement the recommendation, it will be able to capture a good market in future. Finally we, the members of GROUP- pray to Almighty for continuous improvement and prosperity of Baizid steel industries Limited.
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REFERENCE BOOKS
PRINCIPLES OF MARKETING By-Philip Kotler & Garry Armstrong MARKETING MANAGEMENT By-Philip Kotlet FUNDAMENTAL OF MARKETING By-William. J. Stanton BASIC MARKETING By-F.J. McCarthy MARKETING: STRATEGIC FOUNDATION By-J. S. O. Panwar MARKETING By-S.N. Rajan Nair