National Aluminium Company Limited
A Project Report On Customer Satisfaction Strategy and Evaluation
By
Manoja Kumar Mishra
Under the guidance of
Shri J.P. Dash Chief Manager, Marketing National Aluminium Company Ltd
Asia-Pacific Institute of Management Studies
July, 2009
Certificate from Summer Project Guides This is to certify that Mr. Pinak Mohanty, a student of the Post-Graduate Diploma in Management, has worked under our guidance and supervision. This Summer Project Report has the requisite standard and to the best of our knowledge no part of it has been reproduced from any other summer project, monograph, report or book.
Shri J. P. Dash, Chief Manager, Marketing National Aluminium Company Ltd. Bhubaneswar Date: July 08, 2009
2
Abstract National Aluminium Company Ltd truly a national venture to take the country forward in the world Aluminium market, was incorporated on Jan 7 ,1981.NALCO is today a major player in the Alumunium Industry in our country.In a major leap forward, NALCO has not only contributed to India’s need for self sufficiency in Aluminium ,but has also given the technological edge in making this strategic metal at the best of world standards ,there by increasing exports and earning valuable foreign exchange by competing in the global market. Thus NALCO heralded a new era of Aluminium making in the country as well as in the world acquiring the 5th position. Today, NALCO has emerged as the largest integrated bauxite-alumina-Alumunium complex in Asia ,enabling India to witness a quantum jump in Alumina and Aluminium production. But the very success of any enterprise depends largely on its ability to satisfy and retain its customers. Successful enterprises know very well what the key drivers of customer satisfaction are and the areas that will have the greatest impact in improving the customers overall perception of the product or service. NALCO has its Corporate Office at Bhubaneswar and has four regional offices at Delhi, Mumbai, Kolkata and Chennai. This study has been conducted on the Customer Satisfaction evaluation of those customers of NALCO who deal directly with the Corporate Marketing Department i.e. those customers who buy through the corporate office in Bhubaneswar. This study also gives an idea of the customer satisfaction strategy followed by NALCO and how it carries out its own in-house customer satisfaction surveys. This project aims at finding answers to four major questions: Whether the customers are satisfied with NALCO
Which parameter in the product and services offered by NALCO is perceived by the customers to be most important
Whether customers are satisfied with the resolution of complaints as done by NALCO
What are the views of the customers regarding the method of customer satisfaction surveys conducted by NALCO
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Acknowledgement I wish to express my sincere gratitude to Mr. J.P.Dash, Chief Marketing Manager, NALCO for giving me this opportunity to have an enriching learning experience in this company and also for his keen interest, guidance, continuous encouragement, support and help throughout the period of the project. His expertise has been extremely rewarding and has provided an opportunity for me to become accustomed to the corporate world and take my knowledge beyond the boundaries of the classroom. I also wish to extend my gratitude to Ms.Sumita Sahai and Mr.Gautam Mohapatra from the Marketing Department of NALCO and to Mr.T.S.Rao from the Dispatch Section of Smelter Plant, Angul for their never ending support during the course of the project. Their guidance has been extremely valuable, both in terms of knowledge and experience. My special thanks to the staff of NALCO for their cooperation, support and camaraderie shown towards a trainee.
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Table of Contents Page 5 6 7 8
List of Figures List of Tables List of Appendices List of Abbreviations I
Introduction
9
1.1
10 10 16 19
1.2 2
3
Industry Profile 1.1.1 Global Scenario 1.1.2 Indian Scenario Company Profile
Research Problem
24
2.1 2.2 2.3 2.4
24 25 26 27
Need For the Study Objectives of the Project Research Methodology Limitations
Customer Satisfaction
28
3.1 3.2 3.3 3.4 3.5
28 29 29 30 30
An Introduction Major Customers of NALCO Customer Satisfaction Strategy Overview Tools For Tracking Customer Satisfaction Strategy Customer Complaints 3.5.1
3.6 3.7 3.8
Measuring Satisfaction Strategy How NALCO gives importance to Customer Satisfaction Customer Satisfaction Index 3.8.1 3.8.2 3.8.3 3.8.4 3.8.5 3.8.6
3.9
Customer Complaint Resolution in Domestic Market
Initial Calculation of weightage Determination of CSI Review of CSI CSI Improvement Study of CSI for half year ending June 2008 Study of CSI for half year ending December 2008
Customer Satisfaction Survey 3.9.1 3.9.2
31 32 33 34 34 34 35 35 36 37 38
Analysis of the Survey Findings from the Survey
39 50
4
Suggestions
51
5
Conclusion
52
6
References
53 5
7
Appendices
54
List of Figures Figure No.
Description
Page
1
Break-up of Aluminium Consumption – Geographically
12
2
Growth in world’s Aluminium demand
13
3
Global Metal Balance for Aluminium
14
4
Aluminium Inventory and Price Trend
15
5
Industry-wise consumption of Aluminium in the world
15
6
Industry-wise consumption of Aluminium in India
19
7
Production and consumption scenario in Indian Aluminium Industry
20
8
Various Products of NALCO
25
9
Trend Graph of Customers with CSI less than the benchmark
37
10
CSI for half year ending June ’08
38
11
CSI for half year ending December ’08
39
6
List of Tables Table No.
Description
Page
1
Per Capita consumption of Aluminium in different countries
16
2
Leading Aluminium producing companies
17
3
Aluminium metal balance for India
20
4
Integrated complex of NALCO
21
5
NALCO– The year at a glance
24
6
Various products of NALCO
25
7
Region-wise average CSI for half year ending June ’08
38
8
Product-wise average CSI for half year ending June ’08
38
9
Region-wise average CSI for half year ending December ’08
39
10
Product-wise average CSI for half year ending December ’08
39
11
Customer’s feedback table
41
7
List of Appendices Appendix No.
Description
Page
1
Location of Alumina Plants in India
56
2
Location of Aluminium Plants in India
57
3
Half-yearly customer feedback report of NALCO
58
4
Customer Satisfaction survey questionnaire
60
8
Abbreviations
BALCO
Bharat Aluminium Company Limited
CSI
Customer Satisfaction Index
HINDALCO
Hindustan Aluminium Company Limited
LME
London Metal Exchange
MALCO
Madras Aluminium Company Limited
MW
Mega Watt
MT
Metric Tonne
NALCO
National Aluminium Company Limited
NYMEX
New York Metal Exchange
TPY
Tonnes per Year
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1. Introduction Aluminium was not "discovered" until 1808 (about 200 years ago) although early civilizations used aluminium-bearing clays to make pottery and aluminium salts were used in making dyes and medicines. In 1854 people learnt how to produce aluminium commercially. Today, one can not live without it! Aluminium is a metallic element with the symbol Al. Aluminium - in its metallic form - does not exist naturally. It is found only in combination with other minerals in the form of silicate and oxide compounds which make up about 8 per cent of the earth's crust. The primary ore mineral of aluminium is bauxite. Bauxite contains all kinds of impurities - primarily metals such as iron - but consists of 45 percent to 60 percent aluminium oxide, or alumina. Aluminium can be very strong, light (less than one third the specific gravity of steel, copper or brass), ductile, and malleable. It is an excellent conductor of heat and electricity. Polished aluminium has the highest reflectivity of any material - even mirror glass. It can be cast, rolled or extruded into an infinite variety of shapes. It has unique barrier properties as a packaging material, it resists corrosion and it can be recycled again and again and again, with no loss of quality or properties. Mixed with small, often minute, quantities of other materials such as iron, silicon, zinc, copper, magnesium, tin, titamium, lithium, chromium, tungsten, manganese, nickel, zirconium and boron, it is possible to produce an array of alloys with very different physical properties. A total of about 29 million tons of aluminium is needed to meet worldwide demand each year. About 22 million tons of the total is new aluminium and 7 million tons is aluminium scrap that is recycled for reuse. The recycled material is equal to about 25% of the total amount of aluminium used worldwide.
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1.1. Industry Profile First the global scenario in the Aluminium market is covered followed by the Indian scenario.
1.1.1. Global Scenario • •
•
Aluminium ore, most commonly bauxite, is plentiful and occurs mainly in tropical and sub-tropical areas - Africa, West Indies, South America, South Asia and Australia. There are also some deposits in Europe The leading producing countries include the United States, Russia, Canada, the European Union, China, Australia, Brazil, Norway, South Africa, Venezuela, the Gulf States (Bahrain and United Arab Emirates), India and New Zealand. Together they represent more than 90 percent of the world primary aluminium production. The largest aluminium markets are North America, Europe and East Asia.
Source : Reliance Money Research
Fig 1 : Break-up of Aluminium Consumption – Geographically
• •
• •
The overall Aluminium demand is expected to rise by just 2.6% for CY09E as against 3.9% growth for CY08E and 7.4% growth for CY07. Global demand growth for aluminium has reduced sharply from its peak of 7.4% y- o-y in CY07 to 3.9% y-o-y in CY08E and is expected to reach a new low 2.6% y-o-y in CY09E. China, which accounts for 33% of global aluminium trade, is witnessing fall in demand from 39% y-o-y growth in CY07 to 9% y-o-y growth in CY08E. While, the aluminium demand from rest of world has also shown miniscule improvement over the pervious year. But, China still has drag effect on the rest of the world because it was China that had driven about 80% of the incremental demand in CY07. Global demand for rolled extruded products is projected to reach nearly 31.8 million tons by 2012, registering a CAGR of 8.5% for the period 2008-2012. The worldwide market for flat surfaced extruded products is estimated to cross 8.7 million tons in 2008-09.
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Fig 2 : Growth in world’s Aluminium demand
•
• •
Power shortage and transportation are the key bottlenecks that are currently undermining the profitability of the global aluminium industry. In addition, increasing prices of raw material and energy are pressurizing margins and are creating problems in production, cost reduction , and operation of the aluminium. The aftermath of global slowdown has led to built up of inventory position to upwards of 2 mn tonne in CY08; this in turn resulted in drastic fall in price of aluminium to $ 1500/tonne in Dec 08. A similar surplus of 4.6 mn tonne is expected in CY09. In order to rationalize the current scenario of increase in inventory position and fall in price of aluminium have resulted in massive production-cuts and delay in capex plans by many companies across the world. The total global aluminium production- cuts, which amount to 6.82 mn tpa, in which China accounts for 4.05 mn tpa of aluminium production-cuts and balance by rest of the world has been undertaken. It is anticipated that such action of production-cuts and capex plans delays across the world will help in filling the gap between demand and supply situation. Thus, this may enable the world aluminium price to reach at its rationale level.
12
Fig 3 : Global Metal Balance for Aluminium
• • • •
Prices have fallen from $3305 per ton in July 2008 to $ 1254 per ton in March 2009. The price of Alumina has drastically fallen from all time high of $ 435/tonne in July ’08 to as low as $ 225/tonne in Dec '08. The current Aluminium prices are below the cost of production of almost 70% of the producers in the world. LME and NYMEX are the important international markets that provide direction to the aluminium prices.
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Fig 4 : Aluminium Inventory and Price Trend
• •
Construction, Transport and Packaging industry accounts for about 65% of industry wise consumption of Aluminium while Europe, N. America and China contribute 71% of the annual consumption. Automobile and construction industries along with packaging industry are experiencing recession due to the global economy slowdown. So, slump in these industries have directly impacted the demand of aluminium sector at large. Further, to worsen the situation there has been a significant decline in prices of aluminium.
Fig 5 : Industry-wise consumption of Aluminium in the world 14
• The per capita consumption in different countries is as follows
Country Switzerland Japan Germany USA Sweden Italy Australia France UK Venezuela Malaysia Thailand India
Consumption in kg 32.5 30.9 30.1 26.9 25.3 20.9 17.9 17.7 11.1 8.2 2.4 0.9 0.7
Table 1 : Per capita consumption of Aluminium in different countries
Some of the leading Aluminium producing companies in the world are : 15
National Aluminum Company Limited(INDIA)
Adal Group, Inc. (US)
Dynafond (FRANCE)
Alcan Inc (CANADA)
FENIS ALUMINYUM (TURKEY)
Alco Hellas SA (GREECE)
Global Alumina Products Corporation (CANADA)
Ocean Grand Holdings Limited (HONGKONG)
Alcoa Inc. (UNITED STATES)
Grupa Kety SA (POLAND)
P.A. Resources Bhd MALAYSIA)
Aleris International, Inc. (UNITED STATES)
Henan Zhongfu Industry Co., Ltd. (CHINA)
PMB Technology Berhad (MALAYSIA)
Aloymil-Milonas Aluminium Industry SA (GREECE)
Hindalco Industries Limited (INDIA)
PT Alakasa Industrindo Terbuka (INDONESIA)
Aluar Aluminio Argentino SA (ARGENTINA)
Indian Aluminium Company, Limited (INDIA)
PT Alumindo Light Metal Industry Terbuka (INDONESIA)
Aluminium Company of Malaysia Berhad (MALAYSIA)
International Aluminum Corporation (UNITED STATES)
Sam-A Aluminium Company Limited (KOREA (SOUTH))
Aluminium of Greece SA (GREECE)
Jaan Cherng Technological Company Ltd. (TAIWAN)
Sanmenxia Tianyuan Aluminum Company Limited (HONG KONG)
Aluminiumwerk Unna AG (GERMANY)
Jiaozuo Wanfangluminum (CHINA)
Ningbo Fubang Jingye Group Co., Ltd. (CHINA)
Shandong Aluminium Industry Company Ltd (CHINA)
Aluminum Corporation of China Limited (CHINA)
Kaiser Aluminum Corporation (UNITED STATES)
Shandong Nanshan Industrial Company Limited (CHINA)
Capral Aluminium Limited (AUSTRALIA)
Klil Industries Ltd (ISRAEL)
Shanxi Guanlu Co Ltd (CHINA)
Catcher Technology Company (TAIWAN) Century Aluminium Company (UNITED STATES) Chin Foh Berhad (MALAYSIA)
LB Aluminium Berhad (MALAYSIA) Lanzhou Aluminium Co., Ltd (CHINA)
Madras Aluminium Company Ltd (INDIA)
Top High Image Corp. (TAIWAN) United Alloy-Tech Company Ltd (TAIWAN) Xinjiang Joinworld Co., Ltd. (CHINA)
Choi Aluminum Company Limited (KOREA (SOUTH))
Maxxam Inc. (UNITED STATES)
Xxentria Technology Materials Co Ltd (TAIWAN)
Comat Industrial Ltd (SINGAPORE)
Midas Holding Limited (SINGAPORE)
Ye Chiu Metal Smelting Berhad (MALAYSIA)
16
Cymat Corporation (CANADA)
Namsun Aluminum Co., Ltd (KOREA (SOUTH))
Yunnan Aluminium Co., Ltd. (CHINA)
Table 2 : Leading Aluminium Producing Companies
1.1.2. Indian Scenario •
India’s share of global aluminium production is hovering around 3 per cent. The Indian aluminium industry is highly concentrated with only five primary plants in the country from three business houses. o The Aditya Birla Group: Hindustan Aluminium company Limited (Hindalco), Indian Aluminium Company Limited (Indal) o Sterlite Industries: Bharat Aluminium Company Limited (Balco), Madras Aluminium Company Limited (Malco) o Public Sector Undertakings: National Aluminium Company Limited (Nalco).
• • •
India is the fifth largest producer of aluminium in the world. The major alumina and aluminium plants are shown in Appendix 1 and Appendix 2 respectively. Indian aluminium producers are amongst the lowest cost producers of the metal in the world, which is a significant advantage, especially during times of cyclical downturns. Abundant bauxite reserves and access to low cost labour have given the domestic aluminium manufacturers an edge over their international peers. It is estimated at about 3037 million tonnes for all categories of bauxite (proved, probable and possible). With the present level of consumption of aluminium, the identified reserves would have an estimated life of over 350 years. India's reserves are estimated to be 7.5 per cent of the total deposits and installed capacity is about 3 per cent of the world. In terms of demand and supply, the situation is not only self-sufficient, but it also has export potential on a competitive basis. India's annual export of aluminium is about 82,000 tonnes. As a result of the process of liberalization of trade in aluminium, India has emerged as a net exporter of aluminium, on competitive terms. Although, domestic aluminium production exceeds the domestic demand, India imports on an average 15-20 per cent of the total supply of aluminium. Imports are necessary, due to the shortage of domestically produced ingots. India’s imports of aluminium and products primarily comprise of unwrought items like ingots, billets, scrap, bars and rods. The consumption of aluminium in India of 0.7 kg per person is very low in keeping with the countries low GDP. However the low per capita consumption of aluminium in India is in fact an opportunity for growth in aluminium consumption against the back drop of fast growing economic conditions in India. The consumption pattern of aluminium in India is different from the global consumption pattern. The electrical sector is the largest end user of aluminium in India accounting for 36 % of the total aluminium demand. The transport sector contributes to another 22 % of the total demand. The Transportation sector is a major driver of aluminium consumption in the future.
•
• • •
•
• •
17
Fig 6 : Industry-wise consumption of Aluminium in India
•
•
• •
Indian Aluminium players have not remained untouched by the current global scenario that prevails in the aluminium sector Madras Aluminium Company Ltd, which belongs to Madras Aluminium Company Ltd, which belongs to Vedanta Group, has temporarily shut down its 40,000 tonne of aluminium production. MALCO's marginal cost to produce a tonne of aluminium is $1600/tonne, which is above the current LME price at which aluminium is trading, making it difficult for Malco to continue production. The core players such as Hindalco and Nalco are producing at an average marginal cost of $1450/tonne and $1500/tonne respectively. Both these companies are just able to keep their neck above the water and do not anticipate any production-cuts in near future as long as LME Aluminium is above $1500/tonne. Also, these companies are going ahead with their capex plans for FY09E due to expectations of sustained domestic demand. As per the current capex plans, the Aluminium production capacity of India will double to 2.7 mn tone per annum by FY12E and 3.2 mn tonne by FY13E. Indian aluminium players- Hindalco, Nalco & Sterlite have exhibited 98% as ratio of sales to production for total Indian aluminium industry in H1 FY09E thus reflecting the strong domestic demand. Total Indian industry's production has increased by 8%, while sales volume has registered a jump of 12% as compared to pervious year of the same half year. Indian aluminium industry is highly consolidated and it is a price taker- not a price marker. Indian Aluminium Industry is priced at LME plus a small premium. Most of players in this industry have an average cost of production of approximately $1500/tone.
18
Fig 7 : Production and consumption scenario in Indian Aluminium Industry
Table 3 : Aluminium Metal Balance for India
1.2. Company Profile : NALCO 19
After discovery of 1000 million tones of Bauxite reserves in the Eastern Ghats, the Government of India on March 28, 1978, authorized Aluminium Pachiney of France to prepare a feasibility report on the industrial exploration of Bauxite for the establishment of an integrated Aluminium complex. The result of this study led to the Koraput District in Orissa. NALCO was incorporated in 1981 as a public sector unit. The newly founded NALCO signed an agreement of collaboration with Aluminium Pechiney, the world leader in this field for incorporation of technical know-how to set up Asia’s largest integrated Aluminium Complex. NALCO is considered to be a turning point in the 50 years’ old history of Indian Aluminium Industry. In a major leap forward, NALCO has not only addressed itself to the country’s need for self sufficiency in aluminium, but has also given the country the technology edge in making this strategic metal on the best of the world standards. NALCO was set up as an independent, fully owned Central Government undertaking on 7th January 1981 to exploit a part of the large deposits of bauxite discovered in the East Coast. It started its commercial production in the year 1987-88. With its consistent track record in capacity utilization, Technology absorption, Quality assurance, export performance, servicing of loans, internal resource generation and posting of profits, NALCO is an example of India’s industrial capacity. Today as an ISO-9000 company, NALCO has emerged as the largest integrated Bauxite-Alumina-Aluminium Complex in the Asia enabling India to witness a quantum jump in alumina and aluminium production. NALCO for the first time created exportable surplus in alumina and helped India to focus on its massive bauxite resources in the east coast estimated at 1600 million tones. The integrated complex has 5 segments i.e. bauxite mines, alumina refinery, alumina plant, captive power plant, port facility. Today NALCO is one of the Navaratna Company of India. The integrated complex as a whole:
Production unit Bauxite Mines Alumina Refinery Aluminium plant Captive Power Plant Port Facility
Original Capacity 24,00,000 TPY 8,00,000 TPY 2,30,000 TPY 720 MW 3,75,000 TPY Alumina Export & 1,46,000 TPY Caustic Soda import
Expanded Capacity 48,00,000 TPY 15,75,000 TPY 3,45,500 TPY 960 MW 9,12,000 TPY Alumina Export & 1,46,000 TPY Caustic Soda import
Table 4 : Integrated complex of Nalco
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Under Expansion 63,00,000 TPY 21,00,000 TPY 4,60,000 TPY 1200 MW
Company Vision To be a reputed global Company in the Metals and Energy sectors
Company Mission To achieve growth in business with a global competitive edge providing satisfaction to the customer, employees, shareholders and the community at large
Corporate Goals •
To ensure a healthy return on investment by maximizing operational efficiency, capacity utilization and productivity;
•
To continually improve and redesign systems, processes and practices in order to ensure error prevention and response time;
•
To adopt internal customer focus as a means to external customer satisfaction;
•
To treat human resource as a key to quality excellence and ensure development, involvement and satisfaction in employees;
•
To ensure high quality of inputs through proactive interaction with suppliers;
•
To meet obligations towards the society as a responsible corporate citizen;
•
To provide value for money to all stake holders;
•
To follow ethical business philosophy at all times.
Corporate Objectives •
To maximize capacity utilization.
•
To optimize operational efficiency and productivity.
•
To maintain highest international standard of excellence in product quality, cost efficiency and customer service.
•
To provide steady growth in business by technology up-gradation, expansion and diversification.
•
To have global presence and earn foreign exchange.
•
To maintain leadership in domestic market.
•
To maximize return of investment. 21
•
To develop a strong R & D base and increase business development activities.
•
To promote result oriented organizational ethos and work culture that empower employees and helps realization of individual and organizational goals.
•
To maximize international customer satisfaction.
•
To faster high standards of health, safety and environment friendly products.
•
To participate in peripheral development of the area.
The various units that have been set up since 1985 include:-
Bauxite mine: On Panch Patamali hills of Koraput District in Orissa, fully mechanized open cast mine of 24, 00,000 TPY capacities is in operation since 1985, serving feed stock to alumina refinery located on the foothills. The capacity has been expanded to the 48, 00,000 TPY.
Alumina refinery: It is in operation since 1986, the 8, 00,000 TPY alumina refinery is located in the picturesque valley of Damanjodi. The capacity has been expanded to 15,75,000 TPY which was dedicated to the nation by the Hon’ble minister of Coal and Mines, Sri Ram Vilas Paswan on 18.04.2002 it was two parallel streams of 4,00,000 TPY capacity each being designed to: •
Provide 4, 00,000 tons of alumina to the company’s smelter at Angul.
•
Export the balance 4, 00,000 tons to overseas markets through Visakhapatnam Port. The technological features of alumina refinery are: o Low temperature atmospheric pressure digestion process. o Energy efficient fluidized bed calciness of 2x14, 000 Tpd.
Aluminium Smelter: A 3,45,000 TPY capacity aluminium smelter is located at angul in Orissa. Based on energy efficient state of art technology and smelting pollution control, the smelter is in operation since 1987. The capacity was expanded to 3, 45,000 TPY and was completed by the end of 2003.
Captive Power Plant:
22
Close to the aluminium smelter, a captive power plant of 960 MW. Capacity has been established to feed this smelter. The capacity is being expanded to 1200 MW. The salient features are: • • • •
Microprocessor based burner management system for optimum thermal efficiency. Computer controlled data acquisition system for on line monitoring. Automatic turbine runs up system. Specially designed barrel type high pressure turbine Waste disposal of ash
Port Facility: On the inner harbor of Visakhapatnam port on the Bay of Bengal, NALCO has mechanized storage and ship handling for export of alumina in bulk. The salient features are: • • •
Mechanized silo storage facility of 2x25, 000 tons capacity Mechanized mobile ship leader of 2200 TPY capacity. Capacity to handle maximum ship size 35, 000 Dwt.
The other two ports are Kolkata and Paradeep.
Stockyards: Customers of NALCO can buy Aluminium directly from the smelter plant or from the nine stockyards that are there across the country. The nine stockyards are in Baddi, Bhiwandi, Bangalore, Chennai, Faridabad, Jaipur, Kolkata, Silvassa and Vizag. It is to be noted that the prices of Aluminium bought from the smelter are different from those when bought from the stockyards.
Expanding capacity: Nalco had embarked on massive expansion plan taking the capacity of Alumina refinery to 2.1 mn tonne (an increment of 0.525 mn tonne) and Aluminium Smelting of 0.46 mn tonne (an increase of 0.12 mn tonne) in its 2nd phase of expansion which is expected to be completed in Dec.’08 at an expenditure of Rs 40 bn. With enhanced capacity Nalco would be in position to cash on the rising domestic demand. The company is moving forward with other domestic expansions viz. third phase at an expense of Rs 60 bn taking the refinery capacity to 3 mn tone and smelting capacity to 0.58 mn tonne by Dec. 2011, 1.4 mn tonne refinery complex at Vizag at capex of Rs 70 bn, 0.5 mn tonne smelting capacity at Jharsuguda at expense of Rs 85 bn along with 1260 MW power plant. Nalco has also undertaken 2 overseas projects viz. 0.5 mn tpa Smelter with 1250 MW power plant at Indonesia at the cost of Rs 140 bn and 0.33 mn tpa Smelter in Iran at expense of Rs 80 bn.
The year at a glance: Units
2007-08
2006-07
in ‘000 MT in ‘000 MT in ‘000 MT Million Unit
4,685 1,575 360 5,609
4,623 1,475 359 5,968
PHYSICAL Bauxite Mining Alumina Hydrate Production Aluminium Production Power Generation FINANCIAL 23
Export Turnover Gross Sales Profit Before Tax Profit After Tax Earnings per Share Book Value per share Dividend
Rs. In Crore Rs. In Crore Rs. In Crore Rs. In Crore In Rs In Rs In %
2,134 5,474 2,467 1,632 25 137.73 60
Table 5 : NALCO – The year at a glance
The various products of NALCO are : Aluminium
Ingots
Sows
Billets
Wire Rods
Cast Strips
Calcined Alumina
Alumina Hydrate
Special Products
Special Hydrate / Alumina
Rolled Product
Aluminium Rolled Products
Alumina & Hydrate
Zeolite A
Table 6 : Various products of NALCO 24
2,585 6,515 3,620 2,381 37 119.43 75
Fig 8 : Various Products of NALCO (a) Ingots (b) Sows (c) Billets (d) Wire-rods (e) Cast Strips
2.1. Need For The Study In the ever-competitive market it becomes necessary for each producer to understand what the customer wants. Also an in-depth knowledge of the satisfaction levels and brand loyalty helps them to better position their product in the minds of the consumer. The knowledge of the satisfaction levels of its own products helps the producer to be in tune with the needs and demands of the consumers and an idea about the satisfaction levels of its competitors makes the producer aware of opportunities lying ahead. Satisfaction is further directly related to Loyalty. The more the satisfaction the more the loyalty, the more the sales and the more the profits. Also there were certain feedback sought by the company regarding the in-house customer satisfaction strategy adopted by them Thus we conducted a Market Research to reveal the insights buyers of NALCO and their satisfaction levels to different parameters.
25
2.2. Objectives of The Project To initially make a brief study of the Aluminium industry both in the global scenario and in the Indian scenario To make brief study of the company i.e. NALCO To find out the importance of solving the customer’s complaints To make study on the customer’s complaint resolution method carried out by NALCO To study the customer satisfaction strategy as carried in-house by NALCO and to study about the Customer Satisfaction Index To analyze the CSI for half years ending June ’08 and December ‘08 To find the customers who buy through the Corporate Marketing Department of NALCO
26
To evaluate Satisfaction levels of customers on the following grounds o
Overall Customer Satisfaction
o
Complaint Resolution
o
Customer Satisfaction Surveys conducted by NALCO
o
Most important parameter in the products and services offered by NALCO
To offer suggestions, if any for improvement of Customer Satisfaction
2.3. Research Methodology Marketing research is the systematic and objective identification, collection, analysis, discrimination, and use of information for the purpose of improving decision making related to the identification and solution of problem with respect to marketing. The following are the steps adopted: The general methodology adopted for the project was a survey based approach where an attempt was made to gather relevant information and feedback from the customers. The objectives of the study were formulated. They have been outlined in the previous page. The next step was to select the sample. Convenient sampling method was employed. Those customers were selected who buy through the Corporate Marketing Department in Bhubaneswar. 27
The customers were mainly from the state of Orissa but there were also few others who were from neighbouring states. Primary data was collected through questionnaires, telephonic interviews and personal interviews. Those customers who were located in Bhubaneswar and the neighbouring city of Cuttack were interviewed personally. The remaining customers were either interviewed over telephone or questionnaires were sent to them by email. Secondary data was collected from official manuals, journals, metal bulletin and company website. The data collected were presented in the form of bar graph, pie chart, line graphs and other graphs. They were processed and analyzed and the results were interpreted. The findings were reported and suggestions were given to the organization.
2.4. Limitations The present study is subjected to following limitations : The sample was restricted to 14 respondents (customers), which may restrict the scope of study The scope of study is restricted only to the customers who buy through the Corporate Marketing Department. Therefore this will not be representative of the whole set of customers Due to their busy schedule some customers did not give response to all the questions in the questionnaire and some did not respond at all Due to the time constraints all the customers were not covered. 28
3.1. Customer Satisfaction: An Introduction The very success of any enterprise depends largely on its ability to satisfy and retain their customers. Any business without a focus on customer satisfaction is at the mercy of the market. Without loyal customers eventually a competitor will take away your customers and your customer retention rate will decrease. A successful enterprise knows very well what the key drivers of satisfaction are, the areas that will have the greatest impact in improving customer’s overall perception of our service. Best practice companies also monitor customer feedbacks over time and communicate a strong message about their commitment to serve their customer. As per the marketing concept, a firm can realize all its business goals by generating customer satisfaction. The idea may sound somewhat utopian. In reality, it is an eminently workable proposition. 29
The satisfaction is a function of perceived performance and expectations. If the performance falls short of expectations , the customer is dissatisfied. If the performance matches the expectations , the customer is satisfied. If the performance exceeds the expectations, the customer is highly delighted. Many companies aim for high customer satisfaction, because the customers who are just satisfied find it better to switch to other companies when a better offer comes along. Those who are highly satisfied are much less ready to switch. High satisfaction or delight creates an emotional bonding with the brand. The result is high customer loyalty. Xerox’s senior management believes that a very satisfied or delighted customer is worth ten times as much to the company as a satisfied customer. A very satisfied customer is likely to stay with Xerox many more years and buy more than a satisfied customer will.
Benefits of Measuring Customer Satisfaction • • • • • • • •
Learning strategies for improving services Learning customer expectations Identifying common reasons for customer dissatisfaction Improving customer retention Making customers feel valued Uncovering missed opportunities to demonstrate your capacity to solve problems and win back customer’s confidence Improved competitive position Helping to decide where best to spend improvement dollars to make sure you spend it where it matters the most.
3.2. Major Customers of NALCO NALCO plays a vital role in the Indian Aluminium industry. The Aluminium producing capacity of the country has witnessed a quantum jump after the entry of NALCO. Through its quality products it gets about 800 direct reputed customers and some of them are cited below: • • • • • • • • •
JINDAL ALUMINIUM LTD NATIONAL SMALL INDUSTRIES CORPORATION HINDUSTAN SEALS LTD BAJAJ AUTO LTD GOETZE INDIA LTD TATA MOTORS LTD GANGA JAMUNA LTD HIREN ALUMINIUM LTD STERLITE INDUSTRIES LTD 30
• • • • • • • • •
METAL POWER COMPANY LTD SUNDARAM CLAYTON LTD INDIA PISTONS LTD ORDNANCE FACTORY AMBAJHARI HINDUSTAN AERONAUTICS LTD BHILAI STEEL PLANT ROURKELA STEEL PLANT VISAKHAPATNAM STEEL PLANT BOKARO STEEL PLANT
3.3. Customer Satisfaction Strategy Overview When we talk about customer service or satisfaction, we talk about creativity. It allows us to handle or diffuse problems at hand or later on in the process of conducting everyday business. We talk about how or rather what the organization has to do to gain not only the sale but also the loyalty of the customer. He wants to know the pay of the transaction both in the short and long term. We want to know what the customer wants; we want to know if our customers are satisfied. Satisfaction of course means that what we delivered to the customer met his / her approval. We want to know if the customer is delighted and is willing to come back.
Measuring customer satisfaction is a sound business strategy because: • • • • • •
It is expensive to win new customers and customer retention is critical for business success. It is less expensive to sell additional products and services to existing, satisfied customers. Problems encountered by customers negatively impact their loyalty; if we disappoint them they may start looking for alternatives. The customer contact centre has significant impact on customer loyalty, and in many businesses the call centre has more contact with the customer than any other part of the business. Most customers will not take the initiative to complain; they will not tell you, they will tell their friends and co-workers how good or bad you were. “Word of Mouth” is the best and the least expensive way of advertising and customers are much more likely to tell others about negative experiences than positive experiences.
3.4. Tools For Tracking Customer Satisfaction Strategy Customer satisfaction surveys: Studies show that although customers are dissatisfied with one out of every four purchases, less than five percent will complain. Most customers will buy less or switch suppliers. Responsive companies measure customer satisfaction directly by including periodic surveys. While collecting customer satisfaction data, it is also useful to ask additional question to measure repurchase intention and to measure the likelihood or willingness to recommend the company and brand to others.
Complaint & Suggestion System:
31
A customer-centered organization makes it easy for customers to register suggestions and complaints. Some customer-centered companies establish hotlines with toll free numbers. Companies are also using websites and e-mails for quick two-way communication
Ghost Shopping: Companies can have people to pose as potential buyers to report on strong and weak points experienced in buying the company’s and competitor’s products. These mystery shoppers can even test how the the company’s sales personnel handle various situations.
3.5. Customer Complaints When you receive a customer complaint, you know exactly where you stand with the customer. This is especially true if the organization broadly interprets “customer complaints” as any negative feedback that the organization receives. Whether the complaint is justified or not is irrelevant; perception becomes the customer’s reality.But trouble starts when organizations rely on customer complaints as their jointly gauge of customer perceptions. The weakness inherent in relying solely on complaints is twofold. First, many dissatisfied customers simply do not bother to complain. They have decided that it is not worth the time and effort for them to communicate the problem. In fact, they might just decide that it is not worth the risk of placing another order. The organization might lose a customer and not even understand what went wrong. And it is much more expensive to regain a customer that to retain one. Second, complaints, by definition provide only negative feedback. An organization cannot understand the full range of customer perceptions based on negative feedback alone. A system for gathering customer perceptions should present a balanced picture of where the organization stands, which does not happen when customer complaints are isolated from other aspects of customer relations. That being said, customer complaints can be an effective part of an overall system for gathering data on customer perceptions. The trick is to pair this method with at least one other, the combination of which will give an organization a more accurate view of its status in customers’ minds. Two specific types of complaints can be especially useful in maintaining an organization’s success repeat complaints (eg. Complaints about the same product, for the same reason or from the same customer) and complaints that pose significant risk to the organization. Analysis of complaint data can identify these phenomena, and management can then take appropriate action on the underlying issues. In these cases, the complaint system becomes a critical survival barometer for the organization. When complaints are not promptly resolved, frustrated customers seek redress in different agencies or at different parts or levels of the same agency, resulting in duplicate effort and compounding costs. There are costs associated with a poor complaint system and there are benefits associated with a good one. Studies have shown that handling customer complaints well can be a critical part of a turnaround strategy. If a complaint is handled well, it sustains and strengthens customer loyalty and the company’s image as a leader. It also tells the customer that the company cares and can improve because of their contact. In government agencies, it promotes public confidence in government services. Customer complaints strategies also represent valuable information about recurrent problems. They can point the way to understanding the root causes of customer problems and help an organization target core processes that need improvement. If acted upon to improve core processes, customer complaints can be a source of information that can reduce costs as other measures of contractor performance. 32
3.5.1 Customer Complaints Resolution in Domestic Market NALCO has a laid down system of quick redressal of customers complaints and to initiate action to prevent recurrence of similar complains arising out of sales of Ingot, Sow, Billet, Wire Rod, Cast Strip and Rolled Products in Domestic and International markets. The responsibility for corrective and preventive actions lies with the respective DGMs of Corporate Marketing Department for Domestic and Export sales. For Domestic Marketing section, respective executives who are in charges of different categories of products are earmarked for collection of data or information, coordination with the different agencies, analysis of the information as well as initiating proposal for corrective actions. On receipt of complaints from customers arising out of sales of NALCO’s finished products, such as ingots, sows, wire-rods etc. , the complaint is entered in a complaint register and given a control number. Customer is given an interim given on receipt of the complaint with assuarance of quick redressal. The complaints received are sorted into different categories and are then referred to different to different departments for their comments like, complaints relating to invoices/ payments are referred to MarketingFinance for their comments, complaints relating to late delivery to smelter port, stockyard and Marketing Department, relating to quality to to documentation or information exchanges of correspondence to Smelter and Marketing Department and relating to shipment to shipment( physical) to port and smelter. On getting clarification from the respective departments, the concerned executive initiates proposal for evaluation of the complaint, stating the comments and information received from various departments. Suitable corrective as well as preventive actions are taken after proper investigation and interaction with the customer involved. These corrective as well as preventive actions involved from the proposals, which are taken accordingly, are communicated to the concerned agencies for compliance. Records of these actions are maintained in the respective party files at the Corporate Marketing department. Records maintained in the Domestic section of Corporate Marketing Dept. and Complaint registers, Complaint files of four categories and Complaint Review files of Domestic sales. In case of Domestic metal sales, complaints sorted into respective complaints categories (four numbers) i.e. relating to late delivery, quality, quantity and documentation information exchange / correspondence and the corrective actions taken there on are also kept in category wise complaints files. DGM ( Domestic Marketing), in addition to his routine involvement in resolution of customer complaints , also reviews all outstanding customer complaints in a monthly basis for suitable and effective managerial control. The Domestic Marketing section carries out statistical analysis of the complaints with respect to different causes and percentage compliance against number of complaints raised, suitable data completion is also being conducted to have a more in-depth analysis of customer complaints to eliminate the root causes in future.
3.6. Measuring Satisfaction Strategy The customer-centered firms seek to create high customer satisfaction, which is not its main goal. If the company increases customer satisfaction by lowering its price or increasing its services, the result may be lower profits. The company might be able to increase its profitability by means other than increased satisfaction (eg. By improving manufacturing processes or investing more in R & D). Also the company has many stakeholders, including employees, dealers, suppliers and stock holders. Spending more to increase customer satisfaction of other partners. Ultimately the company must operate on philosophy that is trying to deliver a high level of customer satisfaction subject to delivering acceptable levels of satisfaction to the other stakeholders, given its total resources. When customers rate their satisfaction with an element of the company’s performance say, delivery the company needs to recognize that customers vary in how they define good delivery. It could mean early delivery, on time delivery, order completeness and so on. Yet if the company had to spell out every 33
element in detail, customers would face a huge amount of questionnaire. The company must also realize that two customers can report being “highly satisfied” for different reasons. One may be easily satisfied most of the time and other might be hard to please but was pleased on this occasion. Now it can be measured through CSI ( Customer Satisfaction Index ). Improving Customer Satisfaction. Once a Customer Satisfaction Measurement program is in place Customer Satisfaction research is not an end unto itself. The purpose in measuring Customer Satisfaction is to se where a company stands in this regard in the eyes of its customer, thereby enabling improvements in products and services which will lead to higher satisfaction levels. The research is just one component in the quest to improve Customer Satisfaction. There are many others including: • Top Management commitment • Linking of Customer Satisfaction scores with employee and management monetary incentives • Recognition of employees who contribute to Customer Satisfaction • Identification, measurement and tracking of operational variables which drive satisfaction scores • Customer-based improvement goals • Plans for improving operational variables • Incorporation of Customer Satisfaction skills into employee training programs • Measurement of and plans for improvement of Customer Satisfaction • Changes in corporate hiring practices • Top Management, through its actions, must show that Customer Satisfaction is important to it. This can be done in several ways. • Acknowledging areas where the company needs to improve • Allocating appropriate resources to the improvement of Customer Satisfaction • Involvement of management and employees in the development of plans for customer satisfaction improvement • Linking management bonuses to satisfaction scores • Clear and frequent communication of what is being done to improve Customer Satisfaction
3.7. How NALCO Gives Importance To Customer Satisfaction • • • • • • • • • •
Critical areas required for a company to work towards Customer Satisfaction: Vision and Mission statements Top-down commitment Ongoing feedback Training and skill developments of staffs Improving processes Service standards Teamwork between departments A clear strategy towards achieving Customer Satisfaction Roles understanding by managers and staffs 34
Service is everyone’s business; hence not only they’re who work directly with the customers, but also everyone else within the company need to be trained on customer service. In case of NALCO, these factors are well satisfied In its Mission statement, NALCO has clearly specified that its mission is to achieve growth in business with global competitive edge providing satisfaction to customers, employees, shareholders and community at large. Hence the importance of Customer Satisfaction is clearly understood. In one of NALCO’s objectives, it has clearly been mentioned , “ To maintain highest international standards of excellence in product quality, cost, efficiency and Customer Satisfaction” In its Quality policy, NALCO has given importance to Quality, which it aims will form the core of their business philosophy : “Meeting the needs and wants of Customers”.
3.8. Customer Satisfaction Index Customer Satisfaction Indicator (CSI) is an indicator of customer satisfaction on different aspects of products and services offered by NALCO. This feedback helps NALCO to take various corrective measures to enhance customer satisfaction level in order to retain snd expand NALCO’s customer base. CSI of each customer in each product category is arrived at by the following method:
3.8.1. Initial Calculation Of Weightage: Regional Offices and Corporate Marketing Department calculate the average weightage of each value category / factor based on feedback received from their respective segment of customers. The final average weightage for each value category factor, product segment-wise is calculated by corporate marketing department taking into consideration the weightage of each value category / factor calculated by the zonal offices and corporate marketing department.. The final average weghtage is of different 35
value categories / factor for various product segments are calculated through feedback from the customers.
3.8.2. Determination Of CSI: Feedback from customers is obtained on regular basis twice a year i.e. June / July and December / January for the half year ending June and December. The feedback form can be seen in Appendix 3. Computation, analysis and review of CSI, rating obtained in respect of value categories / factors are carried out by respective Regional Offices / Corporate Marketing. Based on the finalized weight structure so arrived for each value category / factor product wise and quality rating obtained from the customers for each product, the CSI is computed for each customer in respect of each product. CSI of each customer in each product category is arrived at as mentioned below: Weightage (%) value categories / factors i.e. chemical composition, physical parameters etc based on perceived importance of the factor by the customer. The weightage is applicable to total of all factors under the same category, where more than one factor is indicated. Ratings are given by the customers in respect of various value categories / factors. The ratings are in the scales of 1 to 10. CSI = ∑ (w * r) / ∑ (w*10) Where, w = weighage of value categories / factors r = rating of value categories / factors Thus , CSI is expressed as fraction.
3.8.3. Review of CSI: Respective in charge marketing of regions reviews the CSI and quality rating obtained from the customer. If the index is found to be low , specific interaction is made with the concerned customer. The concerned agencies and the plant personnel then take it up so that suitable corrective action is taken to improve the same. The respective in charge marketing of regions give periodic feedback to the corporate Marketing regarding the CSI, rating of the value categories / factors, corrective actiona taken and the effect of the same. Corporate Marketing reviews the process on quarterly basis and provide feedback to ED (Marketing ). ED ( Marketing ), thereafter, reviews the entire process on quarterly basis and takes suitable corrective action for improving the effectiveness of the same . Trend analysis, Histograms and other statistical analysis tools are used for analysis and review, as necessary , from time to time. 36
3.8.4. CSI Improvement Whenever percentage response is lower than 60 %, it may be taken up with customers’ so as to achieve the above level. Thereafter, Head of Marketing / In charge Marketing review the CSI and ratings obtained from the customers. If the CSI is less than 0.84, the reasons for assigning low ratings may be ascertained by regional offices and corporate marketing from the customers through direct interaction with them and communicated to the corporate marketing so that the same could be taken up with the concerned agencies for corrective action to improve the same. Feedback from customers is obtained on regular basis twice a year ending June and December. Based on the overall average weightage for each category / factor and rating assigning by the customer to NALCO for each value category / factor, the customer-wise, product-wise is calculated by each region and corporate marketing. It is to be noted that the cut off CSI was 0.62 till December 2006 when it was increased to 0.75. It was later increased to 0.86 from June 2008. The fraction is decided based on the minimum CSI achieved in the previous year. The trend graph showing the number of customers having CSI less than 0.6 and 0.7 from December 2006 and less than 0.85 from June 2008 is shown below.
Fig 9 : Trend Graph of Customers having CSI < 0.62 & < 0.75 from Dec ’06 & < 0.86 from June ‘08
3.8.5. Study Of CSI For Half Year Ending June 2008 • •
The number of responses received was 149. The below graph shows that there were 5 customers having a CSI of less than 0.8, 56 CSI between 0.8 and 0.9 and 88 having CSI of above 0.9
37
Fig 10 : CSI for half year ending June ‘08
•
The region-wise average CSI for half year ending June 2008 is shown below. Region Wise East South West North Corporate Marketing Total Average
Region Average 0.911 0.851 0.932 0.943 0.891 0.906
Table 7 : Region-wise average CSI for half year ending June 2008
•
The product-wise average CSI for half year ending June 2008 is shown below. Product Wise Billet Ingot Sows Wire Rod Total Average
Product Average 0.864 0.921 0.912 0.925 0.906
Table 8 : Product-wise average CSI for half year ending June 2008
3.8.6. Study Of CSI For Half Year Ending December 2008 • •
The number of responses received was 135. The below graph shows that there were 46 customers having a CSI of between 0.8 and 0.9 and 89 having CSI of above 0.9 38
. Fig 11 : CSI for half year ending Dec ‘08
•
The region-wise average CSI for half year ending December 2008 is shown below. Region Wise East South West North Corporate Marketing Total Average
Region Average 0.922 0.923 0.902 0.948 0.961 0.931
Table 9 : Region-wise average CSI for half year ending December 2008
•
The product-wise average CSI for half year ending June 2008 is shown below. Product Wise Billet Ingot Sows Wire Rod Total Average
Product Average 0.924 0.929 0.951 0.921 0.931
Table 10 : Product-wise average CSI for half year ending December 2008
•
The CSI in the western region has gone down slightly.
•
Out of the customers who have CSI less than the benchmark, most have given no non-credit sales as one of the reasons of dissatisfaction
3.9. Customer Satisfaction Survey Conducted For Customers Coming Directly Under Coprporate Marketing
39
The CSI method of estimating customer satisfaction is an in house survey conducted by NALCO. The survey which was conducted as part of the summer internship is an independent one and it includes only customers which come directly under the Corporate Marketing head. The customers surveyed were mainly from Orissa with exception of few who were from other states. The questionnaire is attached as Appendix 4. Some of the customers surveyed were : • • • • • • • • • • • • • • • •
OEL Extrusions Ltd Gulf Oil Corporation Ltd Jaidurga Metals Pvt Ltd Alco Industries Pvt Ltd S.K. Aluminium Industries Pvt Ltd Bhusan Power & Steels Shree Bajrangbali Metal Inds Rourkela Steel Plant Maa Budhi Metal Ind Ganapati Aluminium Industries OSIC B.P. Entreprises OCL India Ltd Binayak Aluminium Ltd Bhilai Steel Plant Bokaro Steel Plant
The analysis is mainly classified into four categories. • Overall Satisfaction Level of Customers • Importance of the various parameters as perceived by customers • Satisfaction related to the Complaint Resolution • Customers views regarding current method of customers satisfaction surveys conducted by NALCO
3.9.1. Analysis of The Survey Customers Feedback Table 40
No. of Customers to whom feedback forms sent No. of responses received Response in %
15 10 66.67 %
Table 11 : Customers Feedback Table
A. Customers were asked questions which helped us find out whether they were satisfied with NALCO. Below are the graphical representations of some of the responses received. How satisfied are you with NALCO? Response Highly Satisfied Slightly Satisfied Neither Satisfied nor Dissatisfied Slightly Dissatisfied Highly Dissatisfied Total
Frequency 10 0 0 0 0 10
Percentage 100 0 0 0 0 100
100 80 60 40 20 0 Highly Satisfied.
Slightly Satisfied.
Neither Satisfied nor Dissatisfied
Slightly Dissatisfied
Highly Dissatisfied.
How likely is it that you will do business with NALCO again in the future? Response
Frequency 41
Percentage
Highly Likely. Slightly Likely Neutral Slightly Unlikely Highly Unlikely. Total
10 0 0 0 0 10
100 0 0 0 0 100
1 00 80
How likely is it that you would
60 40 20 0 Highly Likely. Slightly Likely
Neutral
Slightly Unlikely
Highly Unlikely.
recommend NALCO to others? Response Highly Likely. Slightly Likely Neutral Slightly Unlikely Highly Unlikely. Total
Frequency 10 0 0 0 0 10
Percentage 100 0 0 0 0 100
100 80 60 40 20 0 Highly Likely. Slightly Likely
Neutral
Slightly Unlikely
Highly Unlikely.
How satisfied are you that the people at NALCO showed interest in you as an individual / treated you as a valued customer? Response Highly Satisfied
Frequency 8 42
Percentage 80
Slightly Satisfied Neither Satisfied nor Dissatisfied Slightly Dissatisfied Highly Dissatisfied Total
1 1 0 0 10
10 10 0 0 100
100 80 60 40 20 0 Highly Satisfied.
Slightly Satisfied.
Neither Satisfied nor Dissatisfied
Slightly Dissatisfied
Highly Dissatisfied.
Compared to other companies, the prices of NALCO are? Response Higher About the same Lower Do not know Total
Frequency 0 1 9 0 10
Percentage 0 10 90 0 100
100 90 80 70 60 50 40 30 20 10 0 Higher
About the same
Lower
Do not know
How satisfied are you with the clarity of information or advice provided by NALCO? Response Highly Satisfied Slightly Satisfied
Frequency 3 7 43
Percentage 30 70
Neither Satisfied nor Dissatisfied Slightly Dissatisfied Highly Dissatisfied Total
0 0 0 10
0 0 0 100
100 90 80 70 60 50 40 30 20 10 0 Highly Satisfied.
Slightly Satisfied.
Neither Satisfied nor Dissatisfied
Slightly Dissatisfied
Highly Dissatisfied.
How satisfied are you with the time taken by NALCO to respond to queries? Response Highly Satisfied Slightly Satisfied Neither Satisfied nor Dissatisfied Slightly Dissatisfied Highly Dissatisfied Total
Frequency 5 5 0 0 0 10
Percentage 50 50 0 0 0 100
100 75 50 25 0 Highly Satisfied.
Slightly Satisfied.
Neither Satisfied nor Dissatisfied
Slightly Dissatisfied
Highly Dissatisfied.
How would you rate your overall relationship with NALCO, considering all your experiences with them so far? Response Excellent Very Good
Frequency 4 6 44
Percentage 40 60
Good Average Poor Total
0 0 0 10
0 0 0 100
100 80 60 40 20 0 Excellent
VeryGood
Good
Average
Poor
B. The second part of the analysis is finding out the most important parameter as perceived by the customers.In order to find out which is most important to them, customers were asked to rate different parameters according to their perceived importance. The parameters are Quality of the product, Timeliness of delivery, Customer Service, Price and Merchandising options. These parameters were to be ranked from 1 to 5. For any parameter which was ranked 1st, it was assigned 5 points. Similarly parameters ranked 2nd were given 4 points and so on. The findings were as follows: 45
Price Total Points
44
Quality of Product 39
Customer Service 20
Timeliness of delivery 42
Merchandising Options 24
Merchandisingoptions Timeliness of delivery Customer Service Quality Price 0
10
20
30
40
50
From the above, it is found out that customers give the most importance to the price of Alminium, closely followed by the timeliness of delivery.
C. There are times when certain issues arise during or after a deal like issues regarding payment, issues related to delivery , issues related to the return of goods purchased (which is very rare ) etc. The feedback of the customers was sought regarding their past experiences in such situations. The third part of the analysis was regarding the satisfaction of the customers as far as complaint resolution is concerned. Ease of contacting NALCO to complain 46
Response Excellent Very Good Good Average Poor Total
Frequency 3 7 0 0 0 10
Percentage 30 70 0 0 0 100
100 90 80 70 60 50 40 30 20 10 0 Excellent
VeryGood
Good
Average
Poor
Attention given to the complaint Response Excellent Very Good Good Average Poor Total
Frequency 2 8 0 0 0 10
Percentage 20 80 0 0 0 100
100 90 80 70 60 50 40 30 20 10 0 Excellent
VeryGood
Good
47
Average
Poor
Speed with which NALCO dealt with the issue Response Excellent Very Good Good Average Poor Total
Frequency 1 7 2 0 0 10
Percentage 10 70 20 0 0 100
100 90 80 70 60 50 40 30 20 10 0 Excellent
VeryGood
Good
Average
Poor
The final resolution/outcome Response Excellent Very Good Good Average Poor1 00 Total 90
Frequency 1 7 2 0 0 10
Percentage 10 70 20 0 0 100
80 70 60 50 40 30 20
48
10 0 Excellent
VeryGood
Good
Average
Poor
D. As we have already mentioned, NALCO undertakes it own Customer Satisfaction Survey. A part of the survey was regarding the Customer Satisfaction Survey that is conducted by NALCO. The third part of the analysis is to find out whether the customers where satisfied with the in-house Customer Satisfaction Survey that NALCO conducts. The findings were as follows: Whether Satisfied with the way NALCO conducts its Customer Satisfaction Survey Response Yes No Total
Frequency 10 0 10
Percentage 100 0 100
100
75
50
25
0 Yes
No
How often should NALCO conduct its Customer Satisfaction Survey Response Annually Semi-Annually Quarterly Monthly Total
Frequency 6 4 0 0 10
49
Percentage 60 40 0 0 100
Whether more parameters be included in the Customer Satisfaction Surveys conducted by NALCO Response Yes No Total
Frequency 1 9 10
Percentage 10 90 100
100 90 80 70 60 50 40 30 20 10 0 Yes
No
50
3.9.2. Findings From The Survey •
Customers are satisfied with the way NALCO conducts its own Customers Satisfaction Surveys. They are also mostly satisfied with the parameters based on which the surveys are conducted. But 60 % of the customers wish that the surveys should be conducted annually while 40 % prefer the way it is conducted semi-annually.
•
When it comes resolution of complaints, 10 % felt that it was excellent while 70 % found it to be very good and 20 % found it to be good. This shows that customers are satisfied with it but they are not extremely satisfied.
•
There are scopes of improvement in this area mainly in the speed with which the complaint is resolved. Most customers are not highly satisfied with the overall way the complaints are dealt with. 70 % of the customers have not given the best ratings to the ease of contacting NALCO to register a complaint.
•
It is also found that price of the product and the timeliness of delivery are the two most important parameters as perceived by the customers closely followed by the quality of the product. The reason why quality comes next to the other two is probably because the customers are assured of good quality products from NALCO.
•
Most customers also feel that the price quoted by NALCO is lower than what is offered by other producers which means they are satisfied with the price quoted by NALCO
•
In general, the customers are highly satisfied with NALCO, they would like to do business with NALCO in the future and they would also recommend NALCO to others.
•
But when asked about the overall relationship with NALCO, there is a reduction in the percentage of highly satisfied people. 40 % find it excellent while a majority 60 % find it very good.
•
This reduction in percentage could be because there are certain areas where there is room for improvement like customer service, clarity of information provided by NALCO and the time it takes to respond to queries apart from the customer complaint resolution issues mention earlier.
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4. Suggestions From the previous observation it can be stated that NALCO is able to maintain the overall satisfaction of its customers but in addition to that: •
NALCO needs to develop its customer relationship management (CRM). Though the customers are satisfied, there is scope for improvement in the relationship part.
•
Customers are not highly satisfied when it comes to contacting NALCO to register a complaint. An online customer complaint section can be included in the official website of NALCO and a dedicated operator for quick resolution of complaints.
•
NALCO can have better evaluation of the customer satisfactions by using the database of complaints so that organization could better align its products and services to meet customer expectations.
•
The knowledge base mentioned above could be integrated with all other functions and process of the company with the help of a strong IT framework. This could help in taking care of customer needs and expectations at all functional levels.
•
NALCO should respond to customer complaints quickly which will improve customer loyalty. A speedy response can add 25% to customer loyalty.
•
Customers expect improvement in the clarity of information issued by NALCO. The information could be related to pricing, MOU policies other terms and conditions.
•
Selling on credit is not a policy of NALCO. If any buyer wants to buy products from NALCO, then the payment is to be made in advance or through Letter of Credit including all taxes, which is difficult for some buyers. So NALCO should allow some customers having good track record to take in credit term.
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•
Though most customers (60%) feel that the CSI surveys conducted by NALCO should be conducted annually, I would strongly recommend NALCO to continue with semi-annual method. This is so because with the ever changing external business environment, the needs and expectations of customers also keep changing. It is but necessary to keep track of these changes.
5. Conclusion As National Aluminium Company Ltd. always tries to continuously improve upon their responsiveness in all spheres of interaction, this project was a sincere effort to help NALCO in maintaining healthy relationship with their customers. I hope that the data which were collected for NALCO and the suggestions and recommendations given will help them in inventing new areas & restructuring old areas in way of customer satisfaction management.
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6. References •
NALCO Metallic Bulletin
•
27th Annual Report 2007-08 of NALCO
•
Marketing Manual, NALCO
•
NALCO at a glance
•
Official Website of NALCO : www.nalcoindia.com
•
Other websites o www.metalworld.co.in o www.indiainfoline.com o www.wikipedia.org
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7. Appendices
55
Appendix 1
56
Appendix 3 National Aluminium Company Ltd. Corporate Marketing Department Half-Yearly Customer Feedback Report For Period Ending :June / December , 200___ CUSTOMER’S NAME: ……………………………………………………………… (A) GENERAL PRODUCT CATEGORY:
INGOT
SOW BILLET WIRE CAST ROLLED ROD STRIP PRODUCT
Please furnish the feedback separately for each category. (B) FEEDBACK REPORT Note: 1. Rating : In 10 points scale, please tick in the appropriate box as per your ratings where 1 = unsatisfactory and 10 = excellent. 2. Please go through the rating for your best supplier for same product, if other than NALCO. VALUE CATEGORIES 1. Chemical Composition : NALCO 1 2 3
4
5
6
7
8
9
10
3
4
5
6
7
8
9
10
2. Physical Parameters: NALCO 1 2 3
4
5
6
7
8
9
10
4
5
6
7
8
9
10
3. Packaging including identification & tagging NALCO 1 2 3 4 5 6
7
8
9
10
Best Supplier 1 2
Best Supplier 1 2
Best Supplier 1 2
3
3
4. Delivery time from DI date NALCO 1 2 3
4
5
6
7
8
9
10
4
5
6
7
8
9
10
Best Supplier 57
1
2
3
4
5
6
7
8
9
10
5. Payment terms NALCO 1 2
3
4
5
6
7
8
9
10
3
4
5
6
7
8
9
10
6. Documentation Factor a) Completeness NALCO 1 2 3
4
5
6
7
8
9
10
3
4
5
6
7
8
9
10
Factor b) Timely Dispatch NALCO 1 2 3
4
5
6
7
8
9
10
4
5
6
7
8
9
10
4
5
6
7
8
9
10
4
5
6
7
8
9
10
8
9
10
8
9
10
Factor c) Timely and correct refund of credit balance / discounts NALCO 1 2 3 4 5 6 7 8
9
10
9
10
Best Supplier 1 2
Best Supplier 1 2
Best Supplier 1 2
3
7. Responsiveness Factor a) Response to queries NALCO 1 2 3 Best Supplier 1 2
3
Factor b) Timely and complete redressal of complaint, if any NALCO 1 2 3 4 5 6 7 Best Supplier 1 2
Best Supplier 1 2
3
3
4
4
5
5
6
7
6
7
8
Signature: Official Seal:
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Appendix 4 QUESTIONNAIRE Dear Respondent, We are students pursuing our MBA in the field of Marketing. Currently we are doing our Summer Internship in National Aluminium Company Ltd. The Objective of the study is to determine the Customer Satisfaction levels of the clients and customers of NALCO with respect to various parameters. This is purely an academic exercise and is meant to upgrade the knowledge in the field of Marketing. The information obtained through this study will be kept strictly confidential. The research and summary report will be prepared using aggregate data, but all individual responses will be kept confidential. We request you to be a part of this study and help us collect and document the necessary information as per the enclosed questionnaire. We thank you for your time, effort and support. For any clarification, please feel free to contact us at the email address or cell numbers given below. We will be thankful if you will send us feedback. Thank you. Pinak Mohanty, KJ Somaiya Institute of Management Studies and Research, Mumbai
Email :
[email protected] Mobile: +91-9769435406
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Name of the Organization : Name of Respondent
:
Designation
:
Email Address
:
Telephone
:
Date
:
1. How satisfied are you with NALCO? a. Highly Satisfied. b. Slightly Satisfied. c. Neither Satisfied nor Dissatisfied d. Slightly Dissatisfied e. Highly Dissatisfied.
2. How likely is it that you will do business with NALCO again in the future? a. Highly Likely. b. Slightly Likely c. Neutral d. Slightly Unlikely e. Highly Unlikely.
3. How likely is it that you would recommend NALCO to others? a. Highly Likely. b. Slightly Likely c. Neutral d. Slightly Unlikely e. Highly Unlikely.
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4. How satisfied are you that the people at NALCO showed interest in you as an individual / treated you as a valued customer? a. Highly Satisfied. b. Slightly Satisfied. c. Neither Satisfied nor Dissatisfied d. Slightly Dissatisfied e. Highly Dissatisfied.
5. Please rate the IMPORTANCE of each of the following services provided by NALCO. a. Timeliness of Delivery
1
2
3
4
5
b. Quality of Product
1
2
3
4
5
c. Customer Service
1
2
3
4
5
d. Merchandise Options
1
2
3
4
5
e. Any Other Services
1
2
3
4
5
1. Extremely Important 2. Important. 3. Indifferent 4. Little importance. 5. Not at all important
6. Compared to other companies, the prices of NALCO are a. Higher. b. About the same. c. Lower. d. Do not know.
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7. In any past event of something going wrong, and we sincerely hope that it never happens, how would you rate the following : . Ease of contacting NALCO to complain
1
2
3
4
5
b. The attention given to your complaint
1
2
3
4
5
c. Speed with which NALCO dealt with it
1
2
3
4
5
d. The final resolution/outcome
1
2
3
4
5
1. Excellent 2. Very Good 3. Good 4. Average 5. Poor
8. How satisfied are you with the clarity of information or advice provided by NALCO? a. Highly Satisfied. b. Slightly Satisfied. c. Neither Satisfied nor Dissatisfied d. Slightly Dissatisfied e. Highly Dissatisfied.
9. How satisfied are you with the time taken by NALCO to respond to queries? a. Highly Satisfied. b. Slightly Satisfied. c. Neither Satisfied nor Dissatisfied d. Slightly Dissatisfied e. Highly Dissatisfied.
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10. How would you rate your overall relationship with NALCO, considering all your experiences with them so far? a. Excellent b. Very Good c. Good d. Poor
11. Are you satisfied with the overall way the Customer Satisfaction Survey is conducted by NALCO? a. Yes b. No. If “No” then what changes should be made? [Please write your response here]
12. How often should the Customer Satisfaction Surveys be conducted by NALCO? a. Annually b. Semi Annually c. Quarterly d. Monthly
13. Should more parameters be included in the Customer Satisfaction surveys conducted by NALCO? a. Yes b. No
14. If “Yes”, then what new parameters should be included? [Please write your response here]
15. Do you have any comments or suggestion that could help NALCO improve its product or service? [Please write your response here]
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