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    SUMMER INTERNSHIP PROJECT

    REPORT ON MARKETING STRATEGY&

    PRICING ANALYSIS

    A PROJECT REPORT SUBMITTED IN

    PARTIAL FULFILLMENT OF THEREQUIREMENTS OF FOR

    THE AWARD OF DEGREE OF

    MASTER OF BUSINESS ADMINISTRATION

    G.L.A INSTITUTE OF BUSINESSMANAGEMENT

    CORPORATE GUIDE :FACULTY GUIDE

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    PREFACE

    It is well evident that work experience is an indispensable part of every professional

    course. In the same manner practical training in any organization is must for each and

    every individual, who is undergoing management course. Without the practical

    exposure one cannot consider himself as a qualified capable manager. Hence to fulfil

    this requirement eight weeks training was completed at ITI LIMITED, NAINI,

    ALLAHABAD. Entering in the organization is like stepping into altogether a new

    world. At first everything seems strange and unheard but as the time passes one

    understands the concept and working of the organization and thereby develop

    professional relationship.

    Initially it is felt as if classroom study was irrelevant and it is unless in any concern

    working. But gradually it is realized that all basic fundamental concepts studied are

    linked in one or other ways to the organization. But how and what can be done with

    fundamentals depends upon the intellectual and applicability of the individual

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    ACKNOWLEDGEMENTBob Briner says:

    Praise those who work for you, Do it publicly! It is impossible to say thanks too

    many times .

    Believe in these words and I like to express my feeling of gratitude for your supportthat helped me in completing my project and making me to learn many good andresponsible things of personal and social conduct and professional attitude during mysix weeks training on the topic of

    MARKET ANALYSIS & PRICING STRATEGIES IN ITI NAINI In fact, it

    was just impossible for me to complete my training, preparing my report without

    your help and guidance .It is too difficult for me to express my feelings in words for

    their exclusive guidance and support that is so invaluable for me to replace only with

    THANKS.

    First of all I would like to express my deep and heartily gratitude to Mr. M Shahid

    (Chief Manager), our training for giving priceless knowledge about the ITI Limited

    Naini and giving so much help in making the project complete. I am highly grateful

    for valuable advice in completing my project.

    I specially would like to thanks Mr. Santosh Kr. Srivastava (Marketing Officer)for his expensive lectures and to making us aware about Market Situation, PricingStrategies . His teaching style was very interesting and attractive and was full of theconcepts and thank to Mr. C.K.Gupta (Engineer Marketing) for his humble

    behaviour and good teaching.

    I would also like to extend my thanks to my faculty guide Ms SWETA

    AGRAWAL MAM and all faculty members of G.L.A Institute of BusinessManagement for their guidance & support.

    AZAD KUMAR YADAV

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    MBA 3 rd Semester

    STUDENTS DECLARATION

    I do hereby declare that the piece of dissertation report entitled MARKET

    ANALYSIS & PRICING STRATEGIES has been prepared by me under the

    avid guidance and supervision of MR. M. SHAHID, CHIEF MARKETING

    MANAGER, ITI LIMITED NAINI, ALLAHABAD, as a part fulfilment for the

    requirement of the degree in Master of Business Administration under M.

    TECHNICAL UNIVERSITY during the session 2010-12.

    To the best of my knowledge & belief, this is my own work and has not been

    submitted anywhere earlier for any other degree.

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    DATE: AZAD KUMAR YADAV

    Place:

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    Chapter Description Page No.

    PrefaceAcknowledgementStudent DeclarationTable of Contents

    1234

    Chapter I

    Introduction

    1.1 Introduction1.2 Need & Relevance of Study1.3 Review of Literature1.4 Objectives of Summer Internship

    5202122

    Chapter II

    Introduction toOrganization

    2.1 Brief Profile of Company2.1.3 Management chain2.1.4 Product of ITI & Technology

    242728

    Chapter III

    ITI Need marketingdepartment

    3.1.1 What is Marketing3.1.1.7 Marketing system3.2 Tender ,3.2.1 Types of tender 3.2.2 Tender from BSNL/MTNL3.2.3 TESC

    3237373840

    Chapter IV 4.1 Pricing strategies 55

    Chapter VResearch

    methodology

    5.1 Data Collection & Data Sources5.2 Sample Design & Sample Size5.3 Sample Selection

    616161

    Chapter VI

    Data Analysis&Interpretation

    Charts and Data Interpretation 62

    Chapter VIIConclusion &

    Recommendations

    7.1 Findings & Conclusion7.2 Recommendations7.3 Limitations

    757778

    8 Appendix

    9 Bibliography

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    Table of contents

    CHAPTER-I

    AN

    INTRODUCTION

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    I TI: AT A GLANCE

    Corporate head quarters ITI Bhavan, Doorvaninagar,Bangalore, 560016

    Manufacturing Units Bangalore Naini (near Allahabad, UP) Raibareily (UP) Mankapur (UP) Palakkad (Kerala) Srinagar(Jammu and Kashmir)

    Network System Unit Bangalore

    Regional offices New Delhi Bangalore Kolkata Mumbai Chennai Hyderabad Bhubaneswar Bhopal Ahmadabad

    Kochi Supported by 36 offices all over the

    country

    Manpower 13,000 approximately

    R & D base Bangalore Naini Mankapur

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    Quality system ISO 9000 compliant

    1.1: Introduction of ITI

    ITI Ltd is Indias largest and first public sector unit developed to manufacture

    telecommunication products with the latest technology. ITI was established on 25 th

    January 1950 in Bangalore. This is bedrock upon which India is launching its

    contribution to the worlds telecommunication revolution. ITI Ltd is the premier

    public sector undertaking of the country. It was the first public sector unit to be

    opened by government of India after independence in the year 1948-49. It was

    located in Bangalore. The activities of this public sector were manufacturing

    mechanical telephone instruments and exchanges. Due to advancements in

    technology in the field of electronics, ITI started its expansion program in the field of electronics in 1960s.

    ITI Limited (ITI) is a telecommunication service provider in India. It is

    principally engaged in development, production, and supply a comprehensive range

    of telecom products that include transmission, switching, access and subscriber

    premises equipments to its clients across the nation. In addition, it offers network

    management systems along with encryption and networking solutions to its

    customers for internet connectivity. The company along with BSNL has entered into

    a strategic alliance for constructing a V-SAT based network in Ku band for IP-based

    satellite broadband services. It holds six manufacturing facilities and three research

    and development centers located across the nation. ITI is headquartered at Bangalore,

    India.The company reported revenues of (Rupee) INR 17,853.20 million during the

    fiscal year ended March 2009, an increase of 54.91% over 2008. The operating loss

    of the company was INR 6,346.50 million during the fiscal year 2009, as compared to

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    an operating loss of INR 3,572.30 million during 2008. The net loss of the company

    was INR 6,355.20 million during the fiscal year 2009, as compared to a net loss of

    INR 3,583.80 million during 2008.

    Communication is our business was the motto adopted by ITI. With this motto in

    mind, ITI started its business in communication field. From a small beginning, it has

    grown in to a mammoth multiunit enterprise with manufacturing units at Doorvani

    Nagar and Electronic City in Bangalore (Karnataka), Mankapur, Naini and

    RaiBareily in Uttar Pradesh, Pallakkad in Kerala and Srinagar in Jammu and

    Kashmir. In addition to these manufacturing unit located at Bangalore for

    undertaking installation and maintenance of telecommunication equipments through

    the country which is now renamed as Network Communication Business Group. The

    company has a strong in house

    R&D infrastructure attached to the independent business groups. The main R&D

    divisions are located at Bangalore and Naini. Looking forward at the technology, the

    R&D is engaged in continuous development and absorption technology.

    The company lays a strong emphasis on quality which is taken as a corporatemanagement function under an independent Executive Director reporting to

    Chairman and Managing Director. A large number of companys products are

    covered under the Self Certification Scheme by the major consumer i.e.

    Department of Telecommunications (DoT).

    International quality management system: The Company has adopted ISO 9000,

    taking it as a Tool for organizational change and work design. Naini unit has taken

    ISO 9000 certification for design and production of telephones, digital multiplexingequipment and ISO 9000 certification for production of optical range of

    communication equipments.

    1.1.1: GOVERNMENTS INVOLVEMENT IN ITI

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    As ITI is a public sector undertaking therefore government influences the working of

    ITI. The marketing system prevailing in ITI-Naini is quite different from GeneralMarketing System prevalent in Private Business Units. The capital,

    1.1.2: NEED FOR THE ESTABLISHMENT OF ITI

    Government was enthused for the establishment of ITI because of the following

    reasons:-

    1. Social and economic development: - The first and the foremost reason for

    the establishment of ITI was social and economic development. Government

    aimed at the establishment of ITI in the backward areas of the country for their

    economic development. More and more employees got employment opportunities

    in this way.

    This upgraded their standard of living and provided them and their families with

    better living conditions, better educational facilities, better health facilities etc.

    This also led to establishment of economies of scale.

    2. Taxes: - The second motive of the government for the establishment of ITI-

    Naini was taxes. ITI being a public sector undertaking pays huge amount of taxes

    to the government.

    1.1.3: PRODUCTS MANUFCTURED BY ITI-NAI NI

    ITI primarily manufactures telecommunication equipments. They can be classifiedas:-

    Landline equipments Mobile

    Landline equipments can be further classified as under:-

    Switching equipments

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    Transmission equipments Instrument (telephone)

    ITI-Naini mainly deals with the manufacture of transmission equipments andinstrument.

    Table : 1.1 P RESENT FINANCIAL SCENARIO OF

    PERFORMANCE FROM 2002-2008 (IN RS. CRORES)

    Year 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10Sales(includingED)

    1795 1257 1389 1749 1818 1210

    Production 1689 1073 1362 1607 1797 1206Profit/loss aftertax

    375 706 310 429 405 358

    Growth inturnover

    - - 10.54% 25.94% 3.94%

    1.1.4 BAISE D ON A HOUSE JOURNAL

    OF ITI LIMITED

    ITI S TURNOVER REACHS HISTORIC HIGH

    ITI Ltd has recorded the highest turnover in its history by clocking Rs.4732.43crores for the is more than double its previous high of Rs.2317.63 crores recorded in2001-02 year ended march 31,2010. this is a quantum jump of 271% when compared tothe previous years turnover of Rs. 1741crores .in fact, the provisional turnover achievedthis year

    PROJECT UNDER IMPLEMENTATION (2010-11) Table : 1.2Total order for 2010-11 as on 01/04/10

    SR. NO

    PROJECTS/ PRODUCTS RS.CR(PROVL)

    1 GSM Infra-9ML SZ 699.95

    2 GSM Infra-9ML WZ 939.57

    3 G Pon & GE-Pon 130.19

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    4 IT Projects 2.13

    5 STMs DDF 39.01

    6 GSM-MTNL 59.23

    7 ASCON+DEFENCE 2.82

    8 ROs/cco/export 68.70

    9 SSTP 4.29

    10 Other misc. Product 10.66

    11 DWDM 44.16

    12 ADSL-CPE 75.88

    13 MLLN 1.17

    14 OCB-CSN MM/CORE&SPARES 0.14

    15 NSU-I&C 9.84

    16 Smart/sim card 6.50

    17 C-DOT &SPRES 0.8418 DATA CENTER 3.67

    19 RADIO Modem/SATCOM 10.11

    1.1.5 MISSION:

    To be the leader in the domestic market and an important global player in Voice, data

    and Image communications by providing total solutions to purchasers. To build on

    core competencies to enter new business areas.

    MANAGEMENT CHAIN : Figure:

    Ministry of Telecommunication

    Chairman and Managing Director

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    Board of Directors

    Executive Director (EDR)

    General Manger (Head of unit)

    Additional General Manager

    Deputy General Manager

    Chief Manger

    Manager

    Deputy Manger

    Assistant Manager

    Engineer

    Assistant Engineer

    Staff (Employees from category A to H)

    1.1.6 CHAIN OF NEW UNITS

    n addition to the present unit at Bangalore, manufacturing the telephone and

    transmission equipment, it has grown in to a multiunit enterprise with other

    manufacturing enterprise with other manufacturing units established Doorvani Nagar

    and Electronic City in Bangalore (Karnataka), Mankapur, Naini and RaeBareily in

    Uttar Pradesh, Pallakkad in Kerala and Srinagar in Jammu and Kashmir.

    I

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    The company now manufactures the entire range of telecommunication equipment

    right from telephone instruments to equipment for Satellite Earth Stations catering tothe DoT, MTNL, Defence services, railways and State electricity boards. It also tries

    to meet the requirements of the private purchaser for automatic exchanges.

    Besides this ITI also produces the road traffic signals of high reliability and variety of

    telemetry and tele- control equipments. The latest production of ITI is SDH and

    WILL. In future ITI is planning to switch over to ATM from SDH.

    Apart from supplying to the domestic market ITI has also taken up Turnkey projects

    abroad and has been exporting its products to as many as 20 other countries. The

    company has received fewer tenders due to global competition. On the basis of its

    quality and price, it is striding towards organizational excellence.

    ITI today is a market oriented company, growing in to a total solution provider. It isstriving towards achievement of excellence.

    1.1.7 PLANTS

    1. BANGALORE PLANT( Established in 1950)

    2. SRINAGAR PLANT( Established in 1970)

    3. NAINI PLANT( Established in 1971)

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    4. RAEBAREILY PLANT( Established in 1973)

    5. PALAKKAD PLANT( Established in 1975)6. MANKAPUR PLANT( Established in 1980)

    1.1.8 A WARDS

    Excellent performance PSE awards in the year 1997-98 given by INDIAN

    INSTITUTE OF INDUSTRIAL ENGINEERING.

    Best CHIEF EXECUTIVE GOLD AWARD by INTERNATIONAL GREEN L &

    SOCIETY on September 17, 1998.

    FACT MKK NAIR PRODUCTIVITY AWARD by KERALA STATE

    PRODUCTIVITY COUNCIL.

    INSPECTION SCHEME (AIS) of PALAKKAD plant has been certified under

    APPROVER SUPPLEMENTARY OCB 283 crore equipment to DOT, MTNL.

    INDUSTRIAL SAFETY AWARD by NATIONAL SAFETY COUNCIL.

    1.1.9 J OINT VENTURES

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    idening its area of operation, ITI teamed up with PACIFIC

    INTERNATIONAL COMPANY to manufacture micro earth stations. Theresult is ITI equatorial Satam ltd. (ISEL). Besides this earth station IESL also

    undertakes turnkey projects in various parts of the world. ITI Communication Pvt.

    Ltd. (ITIC) is a joint venture company set up in Singapore with the main objective of

    promoting exports of ITI to other countries.

    W

    Fibcom India Ltd, New Delhi, has also made joint venture with NKT, Denmark for

    SDH fibre optical product.

    The ITI has collaborated with a number of foreign- based companies having the latest

    technology. They are as follows:-

    Name of the company CountryM/s Siemens/Nee JapanM/s Ericson SwedenM/s AWA AustraliaM/s Nee JapanM/s Alcatel FranceM/s Comedge Singapore

    1.1.10 MAJOR LANDMARKS

    YEAR ACHIEVEMENTS1971-72 Start of production1973-74 Production of telephone developed in

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    house1980-81 Assoc ham awards for promotion of

    ancillary industries1981-82 Establishment of computer centre1986-87 Collaborations1986-88 Update telephone manufacturing

    technology and establishment of P.C.B.1989-90 Single and double sized P.C.B. and

    production of 140 mibt optical lineequipment and regenerator incollaboration with M/s Denmark.

    1991-92 Introduction of 565- mibt optical lineequipment and manufacturing of in-housedesign Telephone model ME-91 and TPS-90

    1994 Advancement of optical line instrument1995 Implementation of Q.D.C and ISO 9000.1996 Collaboration with M/s Fibcom India Ltd.

    and manufacture of Solar photovoltaicequipment.

    1997 Development of MARR and itsmanufacture along with 8 mbit and a40mbit optic mux equipment.

    1998 Production of DDF focus version.1999 Started in the worlds latest equipment i.e.

    Digital Loop Carrier (PDH) and production of 2/15 single channelequipment.

    2000 Development and production of DLC(SDH) and Access terminal along with the

    production of the central office terminalracks.

    1.1.11 RESEARCH A ND DEVELOPMENT

    An important fact that helped ITI survive adverse circumstances and aided in

    grooving is its research and development department. This department takes in

    account that all the ITI products are technologically well-advanced and of superior

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    quality. ITI has two R&D departments. One of them is situated in Naini (Allahabad)

    and the other is situated in electronic city (Bangalore).

    The laboratories conduct various tests to see that only quality products go out in the

    market. R&D is manned with highly qualified engineers. Highly advanced

    technology and equipments are also provided.

    These efforts have led to the successful commercialization of several products.

    IMPLEMENTATION OF GOVERNMENT POLICY OF

    ECONOMIC LIBERALIZATION AND ITS CONSEQUENCESThe monopoly of ITI was broken by Government of India in 1991 as by opening the

    door to the private sector and thus competition emerged.

    ITI has been selling its instruments since 1968 to the government sector. Previously

    the telecom sector was under total control of Government. With the commencement

    of open-door policy of government, the selling pattern changed. ITI therefore began

    to face stiff competition from other players. Some major problems faced by ITI are as

    follows:-

    Missing good professionals in marketing area Lack of availability of raw material on time Lack of autonomy to take decisions Need of more innovation and technology up gradation Need of more employee support Large quantity of waste product Lack of awareness in workers Fund crisis

    1.1.12 PURCHASER S

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    About 90% of ITI products are supplied to BHART SANCHAR NIGAM LIMITED

    (formally known as department of telecommunication (DOT)). The other significant purchasers of ITI are as follows:-

    Bharat Sanchar Nigam Limited

    Maha Nagar Telephone Nigam Limited

    Railways

    Defence

    Banks

    Corporate

    Factories/Offices

    Steel/Power/Oil sector

    General Public

    1.1.13 REASONS FOR THE PROBLEM

    Faulty government policy Lack of latest technology in communication Lack of latest technical knowledge among employees. Non availability of orders Fund crisis Excessive overhead expenditure Lack of publicity and advertisement Lack of sales promotion schemes Lack of up to-date features according to consumers demand

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    1.1.14 THE MAJOR COMPETITOR S OF ITI:-

    COMPETITORS FOR TELEPHONE INTRUMENTS:-

    BPL BEETEL TATA PANAPHONES ORPAT PUNWIRE BEL WETSON SHYAMWIRE

    COMPETITO RS FOR TRANSMISSION EQUIPMENTS

    HFCL DSC(at present TELLABS) NATALCO UTL BEL HTL FUJITSU ALCATEL

    COMPETITORS FOR EPABEX SYSTEM:- BPL TELECOM L & T LIMITED LG ELECTRONICS NORTHERN TELECOM TATA TELECOM SIEMENS INFORMATICS SYSTEM LIMITED SAMSUNG ELECTRONIC CORPORATION

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    1.1.15 GOVERNMENT ENDEAVOURS FO R UPLIFTMENT OF ITI:

    As already discussed, the monopoly of ITI was broken by Government of India in

    1991 as by opening the door to the private sector and thus competition emerged.

    ITI has been selling its instruments since 1968 to the government sector. Previously

    the telecom sector was under total control of government. With the commencement

    of open-door policy of government, the selling pattern changed. ITI therefore began

    to face stiff competition from other players. As a result, ITI started incurring huge

    loss.

    To solve the above problem and to alleviate the poor condition of ITI, government

    provided 30% reservation quota to ITI whenever any order was floated by

    BSNL/MTNL. Against 30% reservation quota orders 75% ordered value is given in

    advance for procurement of raw materials. According to this, ITI was to supply

    BSNL/MTNL at the lowest price which was opened at the bid.

    But ITI started to incur a loss because the price that used to open at the bid used to be

    very less than the cost that ITI used to incur for the production of the equipments.

    Therefore ITI was going in minus margin.

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    1.2 : Need & Relevance of studyAccording to Redman and Mary Research is the systematic effort to gain new

    knowledge. The main purpose of the study is to study the overall situation of the

    market for each product line and for each product within the product line with regards

    to the pricing strategies adopted by the ITI, Naini unit. The economic conditions and

    technologies keep on changing from time to time. These are very important for an

    organization to survive in the long run. They help to suggest sales goal, opportunities

    and strategies that will yield desired market penetration. These information are very

    important for new product selection and development.

    The project will help us to understand how and the areas where the ITI

    Company is influenced by its biggest competitors.

    It will also help us to understand the consumer behaviour and perception toward

    the ITI manufactured product & its competitors among the target segment.

    The project also deals and will able to know the possible areas where these are

    leading and where the improvement is required.

    This research will also help in getting information which will influence sales of

    the ITI product.

    This research will also serve as a reference material for other researchers who

    are going to conduct studies in fields related to the same as done by researcher.

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    1.3: REVIEW OF LITERATURE -:

    This research paper explores the manner in which state owned telecommunications

    equipment manufacturer Indian telephone industries was affected by the radically

    altered market conditions brought about by the opening of the economy and the loss

    of its monopoly status. ITIs experience show that the governments market oriented

    reform programme ended of creating anything but a level playing field for public

    enterprise. On the one hand by eliminating its monopoly privileges but not the

    constraints flowing from state ownership, and on the other hand, by imposing new

    market-related constraints, deregulation had an extremely destabilising effect on the

    operations of ITI.

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    1.3: Objectives of summer Internship

    A. To find out the demand of different product which manufactured by ITI, in

    the market

    B. To know satisfaction level of the customers with the products of ITI

    C. To find out the market share of ITI among different competitors

    D. To evaluate the competitiveness of the price of the products of ITI

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    CHA PTER-II

    Company profile

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    2.1 : Glimpse of NAINI Unit ITI NAINE units is the lead unit in North India, situated about ,16 km away from the

    holly city of Allahabad, which manufacturer the entire range of multiplexing

    equipment to meet the need of country in vital area of telecommunication .In view of

    priority of nation the organization had laid great emphasis on the development and

    manufacturing of product for rural telecommunication .It produces most modern

    optical terminal and line equipment and collaboration with TEJAS for SDH products

    such as STM-1,STM -16,&STM -64 In collaboration with ZTE CHINE, keeping pace

    with the advancement in the technology

    It has incorporated state of art technology in area of product design manufacturing

    and testing thus it has achieved self reliance in these areas. Beginning with moderate

    product of RS 1.66 cores during 1971-72 the unit has achieved a trail blazing worth

    RS 300cores 1992-93.It has got achieved annual growth rate of 70%during 1992

    ,which is a new land mark in the history of NAINI UNIT. It has got work force about

    2338 people.

    Sudden change in govt. telecommunication policy and entering of multinational

    affected the stead progress of the company .an unhealthy competition from the fly-by

    night private companies coupled with unrealistically cutthroat price quota of its

    production value while there is quantitative growth.

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    2.1.1 AI M OF ITI NAINI UNIT

    1. Regain status as largest indigenous manufacturer of Telecom equipment and

    consolidate share in new Technology.

    2. Sustain its status of top turn key in telecommunication.

    3. Respect External and Internal customers.

    4. No liquidate damages

    5. Reducing cycle time from dispatch to realization.

    6. Work lines a team.

    2.1.2 VISION OF THE ITI NAINI

    We will be perceived by our customers as the leading business partner for providing

    total network solutions.

    We will offer innovative solution using leading technologies in a cost competitivemanner to help customers achieve their business objective.

    We will pursue new opportunities arising from the convergence of information

    communication and entertain business.

    We will enhance shareholder value and will move up the value chain by expandingknowledge based and services based business while simultaneously leveraging our manufacturing business.

    In our manufacturing business will continuously drive down cost.

    We will leverage our telecom domain knowledge to build a telecom software business in India catering to global requirements.

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    We will apply R&D efforts in focused areas.

    We will form strategic alliances with the equipment /technologies suppliers andservices providers to access technologies and market and to help us provide totalsolution.

    2.1.3 : MANAGEMENT CHAIN OF ITI NAINI UNIT Figure 2.1

    General Manager (Head of unit)

    Additional General Manager

    Deputy General manager

    Chief Manager

    Manager

    Deputy Manager

    Asstt. Manager

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    Engineers/Officers

    Asstt. Engineers

    Staff category A to H

    2.1.4 PRODUCTS OF ITI NAINI ALLD

    STM-1CPE STM-16ADM STM-16MADM STM-1ADM

    STM-64(USA) DWDM (ZT) CHINA DDF EPBT (Telephone)

    Where-

    STM- Synchronous transport Module.

    ADM- Add Drop Module.

    CPE- Customer Promise equipment.

    DWDM- Dense wavelength Division Multiplexing.

    DDF- Digital Distribution Frame.

    EPBT- Electronic Push ButtonTelephone.

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    SDH- Synchronous DigitalHierarchy.

    OFC- Optical Fibre Cable.

    TECHNOLOGY

    The Technologies used for various products manufactured ITI NAINI unit are as

    following:

    1) DDG Own technology

    2) EPBT-Own technology

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

    Bangalore technology.

    4) STM-64 Xalted, USA technology

    5) DWDM-ZTE technology

    2.1.5 THE MAIN CUSTOMER OF ITI LTD NAINI

    ITI Naini has mainly the two types of customers-

    1. BSNL

    2. Non BSNL

    In the case of BSNL to providing the product to BSNL the company (ITI) has to fulfil

    the generic requirement. But in the case of non BSNL there is no need to fulfil the

    generic requirements.

    2.1.6 GENERIC REQUIREMENTS

    1. Productivity

    2. Size of the products.

    3. Structure of the products.

    4. Shape and design.

    According to Marketing Officer Sri S.K. Shrivastava

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    If the company is providing the products along with the generic

    requirements to the customers then the products are accepted

    otherwise rejected.

    2.1.7 PRODUCT DESCRIPTION

    Model NO.

    Registration NO.

    Date of manufacturing.

    Validity.

    Guaranty and warranty.

    Features of the Product.

    Others.

    2.1.8 COMPETITORS OF ITI NAINI ALLD

    Technofiber industries Bhopal

    Pentagon industries Bhopal

    Shakti Enterprises Bhopal

    SRV Telecom Bangalore

    Hindustan Telecom Allahabad

    Promod Telecom Luck now.

    DEC Kanpur

    BPL India Bangalore

    Prithvi (huawei technology)

    Puncom (huawei technology)

    Ordyne

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    Terracom (ordyne)

    Siemence ZTE (ZTE)

    HFCL (WRI)

    Eriksson

    2.1.9 : LAST FIVE YEARS PRODUCTION Table: 2.1

    years ITI NAINI UNIT

    2009-10 1829 287.24

    2008-09 1210 118.42

    2007-08 1818 92.24

    2006-07 1749 139.70

    2005-06 1389 73.16

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    ITI- NAINI PRODUCTION TARGET 2009-

    10 :- Table: EQUIPMENT REVENUE EARNED (cr)

    STM-1 ADM AND STM1 CPE 40.69

    STM-16 AND STM 16 MADM 74.34

    DDF 1.00

    DWDM 85.00

    New diversified products 50.00

    TOTAL REVENUE EARNED260.08

    (EXPECTED)

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    CHA PTER-III

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    3.1 MARKETING

    Marketing boasts a rich array of concepts and tools

    3.1.1 WHAT IS MARKETING?

    satisfaction at a profit .

    Two fold goal of marketing is to attract new purchasers by promising superior value

    and to keep current purchasers by delivering satisfaction.

    What does the term marketing means ? Many people think of marketing only as

    selling and advertising. It is no wonder, that every day we are bombarded with

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    television commercials, newspaper ads, direct mail campaigns, Marketing, more than

    any other business function, deals with purchasers. Understanding, creating,communicating and delivering purchaser value and satisfaction is the heart of many

    modern marketing thinking and practices. We may define marketing as, Marketing

    is the delivery of purchaser internet pitches and sales calls. However selling and

    advertising are only the tips of the marketing iceberg. Although they are important,

    they are only two of the many marketing functions and often not the most important

    ones.

    Today, marketing must be understood not in the old sense of making a sale- telling

    and selling , but in the new sense of satisfying purchaser needs. Selling occurs only

    after the product is produced. By contrast, marketing starts long before a company

    produces a product.

    3.1.1.1 Social Definition Of M arketing :-We define marketing as a social and managerial process whereby individuals and

    groups obtain what they need and want through creating and exchanging products

    and values with others.

    3.1.1.2 Managerial Definition:-Peter Drucker, an eminent management theorist puts it in this way- Marketing is the

    process of planning and executing the conception, pricing, promotion and distribution

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    of ideal goods and service to create exchanges that satisfy individual and

    organizational goals.Till 1993-94, ITI enjoyed being the only producer in the field of telecommunication

    in India.

    It had the power of monopoly, which was snatched away as the governments policy

    of liberalization was introduced. Previously ITI was producing the product and the

    market was buying it at the price which was being offered by ITI. With the entry of

    competitors, ITI felt the need of a Marketing department. Hence in 1994, in the

    month of April the Marketing department was established. Its main challenge is to

    bring back the lost glory of ITI.

    For this reason they need to keep up to date with the changing answer of the

    following five questions:-

    What business we are in?

    Who are our main purchasers?

    What are our purchasers wants and desires?

    How can we best distribute our products to them?

    How can we make communication with the more effectively?

    3.1.1.3 M I S S IONS AND OBJECTIVES:-

    The company entered the New Year with an objective of achieving new horizons inthe year 2010.

    The missions and objectives may be stated as under:- Creation of demand Creation of product image and personality Mass awareness about the product Provision of efficient after sales service

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    Periodic arrangement of marketing research Product modification and diversification as per purchasers specification Increase in sales Profits through purchaser satisfaction Generate demand for telecom products through innovation To become a strong service provider with major business thrust in telecom

    network operations and value added services. Strengthen the technology- scanning capabilities to benchmark their

    products/services against global standards, identify new products, enable

    better maker-buyer decisions and identify potential partners. Achieve global quality standards in all the products in the shortest time. Introduce effective planning and control system for achieving delivery

    schedules, streamlining production over the whole year and better inventory

    control. Create an environment that cares for the individuality and dignity of

    employees. Create a sense of achievement and involvement in the company.

    3.1.1.4 MARKETING PLAN:-

    The marketing plan operates at two levels. The strategic marketing plan lays out the

    broad marketing objectives and strategies based on an analysis of the current market

    situation and opportunities. The tactical marketing plan outlines specific marketing

    tactics including advertising, merchandising, pricing channels and services.

    3.1.1.5 MARKET-ORIENTED MARKETING

    STRATEGY:-

    Market-oriented marketing strategy is the managerial process of developing and

    maintaining a viable fit between the organization objectives, skills and resources and

    its changing market opportunity. The aim of strategic planning is to shape the

    companys business and product so that they yield target profits and growth.

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    It is the marketing strategy that decides the success at the business unit level which in

    turn decides the total corporations success. The linkage between marketing strategy

    and overall corporate success is indeed direct and vital. And in this linkage lies the

    significance of marketing strategy.

    To understand strategic planning, we need to reorganize that most of the large

    companies consist of four organizational levels. They are:-

    Corporate level Division level

    Business unit level

    Product level

    Corporate headquarter is responsible for designing a corporate strategic plan to guide

    the whole enterprise to make decisions about which businesses are to be started and

    which ones are to be eliminated .Each division establishes a plan covering allocation

    of funds to each business unit within that division. Each business unit develops a

    business unit strategic plan to carry that business unit into a profitable future. Finally,

    each product level within a business unit develops a marketing plan for achieving its

    objectives in its product market .

    3.1.1.6: MOTTO OF MARKETING DEPARTMENT:-

    Making Waves In Communication

    Establishment of ITIs Marketing Department:-The marketing system of ITI is in its infant stage. The requirement of this very

    section was realized when many rival companies entered in the same business area

    due to adoption of liberalization policy by Government of India. Therefore this

    department came into being in April, 1994. The other reason to establish marketing

    division was to get series of ISO certificates so that products can be sold in global

    market.

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    3.1.1.7 MARKETING SYSTEM

    There can be two types of marketing systems: -

    1. Open / Direct/Field marketing system : According to this marketing

    system there is a liberty for the suppliers to float the product anywhere in the

    market.

    2. Tender/ Quotation marketing system: - This is the marketing system

    that is prevalent in ITI, Naini. In this the purchaser float tenders to the

    suppliers and the lowest one(L1) is selected.

    3.2 WHAT IS A TENDER?A tender document or simply tender is a document of inquiry from purchaser

    specifying the exact nature of the requirement of materials against which

    offers/quotations are invited from the suppliers. Each tender document has a price

    which is in proportion with the tendered material.

    3.2.1: TYPES OF TENDERS

    There can be four types of tenders:-

    1. Single tender: - In this, the inquiry is floated to only one particular supplier. The

    price mentioned in the tender is cross checked against the previous orders. If the price

    is considered legitimate then the purchase order is placed.

    2. Limited tender: - Every company has a fixed number of approved suppliers. Inthis type, the tender is floated to only these limited numbers of suppliers.

    3. Open tender: - In the case of new technology or large orders this type of tender

    is floated. Information about the tender is floated on internet, magazines, newspapers

    etc. Urgent requirement can be fulfilled through 30% reservation quota order which

    can be placed upon ITI even before floating the tender.

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    The L1 opened price of tender is made effective for 30% reservation quota order after

    finalisation of L1 opened price.

    Limitation of an open tender: -

    i. It is time taking.

    ii. It is costly.

    Advantage of an open tender:-

    i. Very useful in case of new technology.

    ii. Offers a competitive price to the purchaser.

    In the case of BSNL, a time period of 5 weeks is given to the bidders for the

    submission of tenders. Regional offices are responsible for searching about the

    tender in case of ITI.

    4. Global tender : - This is similar to open tender, the only difference lies in the

    fact that global tender are floated all over the globe. This is mainly floated for

    imported, indigenous items.

    As 90-95% of ITIs products are purchased by BSNL/MTNL therefore the entire

    marketing process of ITI revolves around it

    3.2.2: TENDER FROM BSNL/MTNL:-

    A Tender from BSNL/MTNL contains 11 sections. These are:

    1. Notice Inviting Tender

    2. Instructions to Bidders

    3. General Conditions of the Contract

    4. Special Conditions of Contract

    5. Schedule of requirements

    6. Technical Specification

    7. Bid form and price schedules

    8. Performance Security Form

    9. Bid security Form

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    10. Letter of Authorisation for attending bid opening

    11. Annexure

    3.2.3 THELOCATION FOR COLLECTION OF TENDER

    DOCUMENT:

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

    1. Directly from the circle offices of BSNL/MTNL after the payment of the

    price of the tender document by the officers of concerned ROs.

    2. Download from the internet. In this case the payment of price done through

    demand draft which is submitted along with the filled tender document.

    3.2.4 DOCUMENTS STABLISHING BIDDERS

    ELIGIBILITY AND QUALIFICATIONThe bidder should furnish, as part of the bid documents establishing the bidders

    eligibility, the following documents or whichever is required as per terms and

    conditions of Bid Documents.

    i. Certificate of incorporation: The bidder participating should belong to a

    company and the company should be Indian. For this purpose, a certificate of

    incorporation issued by government of India is required. ITI was incorporated on

    25 th January 1950. It is the first PSU of free India.

    ii. Article or Memorandum of Association: It deals with the provisions of rules

    and regulations of the company.

    iii. Partnership deed or proprietorship deed as the case may be .iv. Registration certificate from State Director of Industries or from Secretariat

    for Industrial Approval (SIA) , Ministry of Industries, Government of India:

    This is issued by the Government of India proving the physical fitness of the

    company.

    v. TSEC issued by QA circle /Type Approval Certificate (TAC) issued by

    Telecom Engineering Centre or proof of having applied for TAC/TSEC

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    3.2.5 TECHNICAL SPECIFICATION EVALUATIONCERTIFICATE (TSEC)Every supplier needs to obtain a TSEC without which it is not eligible to participate

    in the tender for BSNL. The quality assurance wing of BSNL, which is located in

    Bangalore, provides every supplier a TSEC after it undergoes the following

    procedure.

    STEPS TO OBTAIN A TSEC: -

    1. A fixed amount of fees is paid to BSNL centre.

    2. A request is made to the QA wing of BSNL for TSEC.

    3. Inspectors from BSNL visit the supplier to test the product. In ITI, the test is

    conducted in the climatic chamber where a temperature ranging from -50C to

    150C can be provided. This to ensure that the equipment is viable to function

    anywhere in the country.

    4. Then the equipment is sent to BSNL centre for field trial. BSNL officers,

    engineers and technicians then undertake the field trial of the equipment. If

    any lacuna is found then suppliers engineers try to rectify it.

    5. After the successful field trial approval is made by QA wing.

    6. TSEC is provided to the supplier which makes it eligible for participation in

    tender.

    7. TSEC has its validity normally for a period of three years.

    3.2.6 T YPE APPROVAL CERTIFICATE (TAC)

    This is similar to TSEC, the only difference lies in the fact that TSEC is issued by the

    QA wing of BSNL situated in Bangalore whereas TAC is issued by Department of

    Telecommunication situated in New Delhi.

    TSEC contains the following: -

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    1. Product description

    2. Model number of the product

    3. Date of issue of TSEC

    4. Validity of TSEC(normally ranging for a period of 3 years)

    5. Specification that the TSEC is only valid for that particular supplier.

    i. Inspection Certificate issued by BSNL (QA) for execution of

    Educational/Commercial Order. (If applicable)

    ii. Bulk production certificate: This certificate is issued by BSNL certifying that

    the company is capable of bulk production.

    iii. Annual Report and /or a certificate from its bankers as an evidence that he

    has financial capability to perform the contract.

    iv. Quality Policy: The bidder shall furnish documentary evidence about the quality

    produced by the company necessary to perform the contract.

    3.2.7 ISO CERTIFICATE:ISO 9000 is a family of standards for quality management systems. ISO 9000 is

    maintained by ISO, the International Organization for Standardization and is

    administered by accreditation and certification bodies. The rules are updated, the time

    and changes in the requirements for quality, motivate change. Recently, on

    November 15, 2008, has made changes to the requirements of ISO 9001 .

    Some of the requirements in ISO 9001 (which is one of the standards in the ISO 9000

    family) include

    1. a set of procedures that cover all key processes in the business;

    2. monitoring processes to ensure they are effective;

    3. keeping adequate records;

    4. checking output for defects, with appropriate and corrective action where

    necessary;

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    5. regularly reviewing individual processes and the quality system itself for

    effectiveness; and

    6. facilitating continual improvement and a better after sale service

    A company or organization that has been independently audited and certified to be in

    conformance with ISO 9001 may publicly state that it is "ISO 9001 certified" or "ISO

    9001 registered". Certification to an ISO 9001 standard certifies that formalized

    business processes are being applied.

    i. Bid Security Exemption Letter: This is applicable for ITI only. ITI being a PSU

    is exempted from payment of bid security fee. Bid Security Exemption Letter is aletter issued by BSNL certifying the above.

    ii. Tax Clearance Certificate: This is documentary evidence certifying that the

    company has no tax burden on its part. This includes Sales Tax (or VAT)

    Clearance Certificate and Income Tax Clearance Certificate.

    3.2.8 CLARIFICATION OF BID DOCUMENTS

    To assist in the examination, evaluation and comparison of bids, the purchaser may,at its discretion ask the bidder for the clarification of its bid. The request for the

    clarification and the response should be in writing. However, no post bid

    clarification at the initiative of the bidder is entertained.

    A prospective bidder, requiring any clarification on the bid documents needs to

    notify the Purchaser in writing or by FAX at the Purchasers mailing address

    indicated in the invitation of Bid. The Purchaser responds in writing to any request

    for the clarification of the Bid Documents, which it receives not later than 10 days

    prior to the date of opening of the Tenders . Copies of the query (without

    identifying the source) and clarifications by the Purchaser are sent to all the

    prospective bidders who have received the bid documents.

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    Any clarification issued by BSNL in response to query rose by prospective bidders

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

    3.2.9 AMENDMENT OF BID DOCUMENTS

    At any time, prior to the date of submission of Bids, the Purchaser may, for any

    reason, whether at its own initiative or in response to a clarification requested by a

    prospective bidder, modify bid documents by amendments.

    The amendments are notified in writing or by FAX to all prospective bidders on the

    address intimated at the time of purchase of the bid document from the purchaser and

    these amendments will be binding on them.

    In order to afford prospective bidders a reasonable time to take the amendment into

    account in preparing their bids, the purchaser may, at its discretion, extend the

    deadline for the submission of bids suitably.

    3.2.10 BID PRICES

    The bidder has to mention two types of prices in the bid document. These are:-

    1. Composite Price: - The bidder has to give the total composite price inclusive

    of all Levies & Taxes i.e. Central Sales Tax/VAT & Excise Duty, packing,

    forwarding, freight and insurance. Octroi/Entry Tax are paid in actual extra as the

    case may be.

    2. Basic unit price : - The basic unit price is exclusive of all levies and taxes.

    That can be set as ex-factory price.

    Prices of incidental services also needs to be quoted. The offer should be firm in

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

    3.2.11 BID SECURITY

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    The bidder needs to furnish, as part of his bid, a bid security for a fixed amount.

    The bid security is required to protect the purchaser against the risk of biddersconduct.

    The bid security shall be in the form of a bank Guarantee issued by a scheduled bank

    in favour of the purchaser, valid for a period of 180 days from the date of tender

    opening .

    A bid not secured in accordance with above conditions can be rejected by the

    Purchaser being non-responsive at the bid opening stage and returned to the bidder

    unopened.

    The bid security of the unsuccessful bidder is discharged/returned as promptly as

    possible but not later than 30 days after the expiry of the period of the bid validity

    prescribed by the purchaser pursuant to clause 13.

    The successful bidders bid security are discharged upon the bidders acceptance of

    the advance purchase order satisfactorily and furnishing the performance security.

    The bid security may be forfeited:

    a) If the bidder withdraws his bid during the period of bid validity specified by

    the bidder in the Bid form or

    b) In the case of successful bidder , if the bidder fails :

    i. to sign the contract

    ii. to furnish performance security

    a) In both the above cases, i.e (a) & (b), the bidder will not be eligible to participate

    in the tender for same item for one year from the date of issue of APO. The

    bidder can not approach the court against the decision of BSNL in this regard.

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    b) The front bidder needs to submit an irrevocable undertaking duly signed by it

    and its technology/consortium partner stating that both of them i.e the front

    bidder and its technology/consortium partner will be liable for due performance

    of the contract jointly and severally failing which both of them will be liable to be

    barred from having any business dealing with BSNL for a period of 3 years.

    c) However, ITI is exempted to submit bid security and bid security exemption letter

    issued by BSNL corporate office has to be submitted along with the bid

    document.

    3.2.12 PERIOD OF VALIDITY OF BIDS

    A Bid is generally valid for 150 days to 180 days from the date of opening of bids

    prescribed by the purchaser. A bid valid for a shorter period can be rejected by

    the purchaser being non-responsive.

    In exceptional circumstances, the purchaser may request the consent of the bidder

    for an extension to the period of bid validity. The request and the response thereto is

    made in writing. The bid security is then also suitably extended. The bidder may

    refuse the request without forfeiting his bid security. A bidder accepting the request

    and granting extension is not be permitted to modify his bid.

    3.2.13 S ELLLING AND MARKING OF BID:

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

    original and four copies of Unpriced & Technical Bid dully marked ORIGINAL

    &COPY .The second cover should be contain priced financial original & four

    copies of priced financial bid & third cover should contain Bid security as

    mentioned in the Bid document. All the three covers should be sealed separately

    by the seal of the bidder.

    2. The envelope should be addressed to the purchasers at the address mentioned in

    the bid document.

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    3. The envelope should bear (the project name) the tender number and the words

    DO NOT OPEN BEFORE THE GIVEN TIME.4. The inner and outer envelops shall indicate the name & address of the bidders to

    enable the bid to the return unopened in case it is declared late or rejected.

    5. Tender may be send b registered post or delivered in person on above mentioned

    address.

    3.2.14 OPENING OF BIDS BY PURCHASER

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

    representatives who chose to attend at scheduled time of due date.

    2. A maximum of two representative of any bidder are authorized and permitted

    to attend the bid opening.

    3.2.15 PRLIMINARY EVALUATION

    1. Purchasers evaluates the bids to determine whether they are complete,

    whether any computational errors have been made , whether required sureties

    have been furnished , whether the documents have been properly signed and

    whether the bids are generally in order.

    2. If any discrepancies are encountered then those are rectified on the basis

    being mentioned in the bid documents. If the supplier does not accept the

    correction of the errors, his bid is rejected.

    3. The purchaser will determine the substantial responsiveness of each bid to the

    bid document. A substantially responsive bid is one which confirms to all the

    terms and conditions of the bid documents without material deviations.

    4. A Bid , determined as substantially non responsive will be rejected by the

    purchaser and shall not subsequent to the Bid opening be made responsive by

    the bidder by correction of the non- conformity.

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    3.2.16 EVALUATI AND COMPARISION OF SUBSTANTIALLY

    RESPONSIVE BIDS1. The purchaser evaluates in detail and compares the bids previously determined

    to be substantially responsive.

    2. The for detailed comparison of substantially responsive bids is mentioned in this

    clause

    3.2.17: PURCHASERRIGHT TO VARY QUNTITIES

    This clause specified that purchasers receive the right to increase or decrease the

    quantities of the goods and services up to a fixed quantity mentioned in the scheduled

    of requirement without any change in the unit price.

    PURCHASERS RIGHT TO ACCEPT ANY BID AND TO

    REJECT ANY OR ALL BIDS

    According to this clause , the purchaser reserve the right to accept or reject any bid

    and to annual the bidding process and reject all bids, at any time prior to awards of

    contract without assigning any whatsoever and without thereby incurring any liability

    to the affected bidder or bidders on the ground of the purchasers action.

    ISSUE OF ADVANCE PURCHASE ORDER

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    1. The issue of an advance order constitutes the intention of the purchaser to

    enter into contract with bidder.

    2. The bidder shall within 14 days of issue of the advance purchase order, give

    his acceptance along with performance security in conformity with section ix

    provided with the bid document .

    3.2.18 ANNULMENT OF AWARD

    If the successful bidder fails with the requirement of above then purchaser

    constitutes sufficient ground for the award and the forfeiture of the bid security, in the

    case the purchaser may make the award to and other bidder at the discount of the

    purchaser or call for new bids

    3.2.18.1 SECTION-1

    This section contains the special condition of the contracts that is needed to be singed

    between the bidder and supplier.

    3.2.18.2: SECTION -2

    This section contains GENERAL (COMMERCIAL) CONDITIONS OF

    CONTRACT

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

    3.2.18.2.1: PERFORMANCE SECURITY

    All suppliers need to furnish performance security to the purchaser for an amount

    equal to 5 % of the value of the purchase order within 14 days from the date of issue

    of advance purchase order by the purchaser.

    The proceed of the performance security are payable to the purchaser as

    compensation for any loss resulting from the suppliers failure to complete its

    obligations under the contracts.

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    The performance security bond should be in the form of the bank guarantee issued by

    a scheduled Bank in the form provided the bid document.

    The performance security bond is discharged by the purchaser after completion of the

    suppliers performance obligations including any warranty obligations under the

    contract.

    3.2.18.2.2 TRAINING :-

    The bidder needs to provide training for installation and maintenance staff of the

    purchaser free of cost where required. This clause contains the specifications related

    to the above.

    3.2.18.2.3: WARRATNY

    This clause contains the details about the warranty conditions that the purchaser

    expects from the supplier .

    3.2.18.2.4 : PAYMENT TERMS

    This clause contains the details regarding the payment terms. Normally

    payment of95 % of the price is made on the receipt of the goods by consignee for

    claiming this payment the following document are to be submitted to the paying

    authority.

    Invoice clearly indicating break up details of the composite price i.e. Basic,

    E.D, Sales Tax, any Duties and Taxes, Freight/Packaging charge, Service Tax

    etc. Delivery challan Supplier certificate for despatch

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    Excise gate pass/invoice or equivalent document Consignee receipt The sea freight receipt as per the rates approved by the ministry of the water

    and surface transport, if any Proof of payment of octroi/ entry tax if any.

    If the supplier fails to furnish necessary supporting documents i.e. excise/customs

    invoices etc. In the respect of duties/ Taxes which are cenvatable, the amount

    pertaining to such duties/Taxes is deducted from the payment due the payment to the

    firm

    3.2.18.2.5: LIQUIDATED DAMAGES

    This clause mentioned the penalties that are imposed on the supplier when the

    deliveries are made after expiry of the contracted delivery period. Without prior

    concurrence of the purchaser. Under such conditions the purchaser has right to

    recover liquidated damage under. However, when supply is made within 21 days of

    the contracted original period, the consignee may accept the stores and in such cases

    the provision of clause 16.2 will not be apply.

    If the supplier fails to deliver the store or any consideration thereof within the

    period prescribed and agreed for delivery without prejudice to other remedies

    available to purchaser is entitled to recover as agreed liquidated for breach of

    contract, a sum equivalent to 0.5% of the value of the delayed supply and /or

    undelivered material/ supply for each week of delay or part thereof for a period up to

    10 weeks and thereafter a the rate of 0.7% of the value of the delayed supply and

    undelivered material/supply for each week of delay or part thereof for another 10weeks of delay.

    DP extension beyond 20 weeks is not being generally allowed. The extension

    beyond 20 weeks may be decided in most exceptional circumstances on case to case

    basis, by the CGM concerned in case of tender floated by Circles and by the

    functional Director concerned in case tenders floated by Corporate office, stating

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    reasons and justification for grand of extension of the delivery period beyond 20

    weeks.

    3.2.18.3: SECTION -3

    This section is the TECHNICAL SPECIFICATION section that specifies from the

    supplier.

    3.2.18.4:SECTION -4

    This section contains the SPECIAL CONDITIONS OF THE CONTRACTS that is

    needed to be signed between the bidder and the supplier.

    3.2.18.5: SECTION -5

    This section contains the SCHEDULED OF REQUIREMENTS that is required by

    the supplier from the supplier .

    3.2.18.6: SECTION-6

    This section is the technical specification section that specifies from the supplier.

    3.2.18.7SECTION -7

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

    supplier.

    3.2.18.8: SECTION-8

    This section contains the BID SECURITY FORM.

    3.2.18.9: SECTION-9

    This section contains the PERFORMANCE SECURITY FORM.

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    3.2.18.10: SECTION-1 0

    This section contains the LETTER OF AUTHORISATION FOR ATTENDINBID OPENING which authorises the representatives of the suppliers to attend the

    bid opening for the tender mentioned above on behalf of requisite authority (Bidder)

    in the order of preference as mentioned.

    Maximum of two representatives are permitted to attend bid opening. In cases

    where it is restricted to one, first preference is allowed, alternate representative are

    permitted when regular representatives are not able to attend.

    Permission for entry to hall where bids are opened may be refused in case

    authorisation as prescribed above is not recorded.

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    TENDERING PROCESS FOR STABILIZED PRODUCTS

    Figure: 3.2

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    Receiving of Notice Inviting Tender (NIT) through:-

    Regional offices Internet Corporate office in Bangalore

    Request letter send along with TSEC and supplier recordto concerned Regional Office.

    On receipt of tender document, process starts.Management approval for participation is sought and

    finalisation of rate to be quoted in the subject tender is

    Management Assistance isrequired from

    Technical Costingde artment for

    Assistance is requiredfrom R & D forconfi uration of

    Bid

    Mostly tender bid isprepared by ROconcerned. Document with

    rates are forwarded to RO.

    Sometimestender bid isprepared by ITI

    and submitted bC

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    C

    Process of bid

    IndexPreparation of Power of

    Preparationof commercial

    Pricing and ceiling isdone. Original copy + 4

    Bid

    Bid opening.

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    Figure: 3.4,

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    FINISHEDPRODUCTS FROMITI LIMITED

    BHARATE SANCHARNIGAM LIMITED(THROUGH TENDERS,BIDS & DIRECT

    NON- BSNLPURCHASE

    THROUGHREGIONAL OFFICES

    DIRECTLY(THROUGH

    REGIONAL OFFICES)

    THROUGH DEALERS(MOSTLY FOR

    TELEPHONEEQUIPMENTS)

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    CHA PTER- IV

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    4.1 PRICING STRATEGIES

    One of the four major elements of the marketing mix is Price. Pricing is an important

    strategic issue because it is related to product positioning. Further more, pricing

    effects other marketing mix elements such as product features. Channel decision and

    promotion.

    While there is no single receipt to determine pricing the following is a general

    sequence of steps that might be followed for developing the pricing of a new product.

    Develop Marketing strategies-perform marketing analysis segmentation. Targeting

    and positioning.

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    1) Make marketing mix decision define the product. Distribution and

    promotional tactics.

    2) Estimate the demand curve-understand how quantity demanded varied with

    price.

    3) Calculate cost Include fixes and variable costs associated with the product.

    4) Set pricing objectives for example .profit maximization revenue

    maximization or price stabilization.

    5) Understand environmental factors- Evaluate likely competitors actions,

    understand legal constrains etc.

    4.1.1 P RICING OBJECTIVES

    1) Current Profit Maximization

    2) Current Revenue Maximization

    3) Maximize Quantity

    4) Maximize Profit Margin

    5) Quality Leadership

    6) Partial Cost Recovery

    7) Survival

    8) Status quo

    Figure: 4.1

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    PRICE

    Material cost Labour cost

    DirectMaterial

    IndirectMaterial

    IndirectLabour cost

    Direct Labourcost

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    I ndirect Material Cos t- The indirect material cost is known as the cost of thingsthat is used indirectly in the production. For example the cost of-

    -Nuts and bolts.

    -Solder wire price.

    -Welding electrode

    -Paint and Police

    -Chemicals for plating

    Labour Cost-The labour is mainly of two types-

    1. Direct Cost - This type of cost is related to manpower, printing andChemical treatment.

    2. Indirect Labour Cost - the cost of the Supervisors, feeders, helpers,testers, Inspection (physical fitness) is known as the indirect labour cost.

    OVERHEAD-The overhead is mainly related the cost of-

    Medical facility Transport facility Canteen facility Uniforms and shoes to the workers Salary of non productive employees

    Salary of officers and managementMaterial cost-

    Material cost +Lab cost + Packing cost+ Margin cost = Basic Cost

    Basic price +8.24% excise duty (ED)

    (Basic price +ED) 2%or 4 %CST/VAT

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    Overhea

    IndirectOverhea

    DirectOverhead

    Material cost - Material cost basically known as thepreliminary cost that is use in the raw material for example cost of

    metal sheet and cable etc.

    Direct Cost Direct cost means the cost of things that is used

    in production directly.

    For example -metal sheet and metal cable

    -Printed circuit

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    (Basic cost +ED+CST/VAT) 1.26 % FF

    (Basic cost +ED+CST/VAT+FF)= All inclusive cost

    Where-

    ED=Excise Duty

    CST=Central sales Tax

    VAT=Value Added Tax

    FF= Freight Forward

    Basic Price is also known as the Ex-Factory Cost or all exclusive cost.

    Present Tax Structure-

    ED..8.24%

    CST2%

    VAT.. 4%

    For Example

    There is a product which basic cost is 100 Rs.

    ED of 100 @ 8.24% =8.24

    Then the cost will be 100+8.24=108.24

    Now the VAT @ 4% OF 108.24=4.32

    The cost will be 108.24+4.32=112.56

    Now the freight forwarding (FF) @1.26% OF 112.56=1.41

    NOW the cost will be 112.56+1.41= 113.97

    Hence the all exclusive cost of the product is .Rs. 113.97

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    CHA PTER- V

    RESEARCH

    METHODOLO

    G Y

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    5.1 DATA COLLECTION

    SOURCES OF DATA: There were two sources of data used. The first one was

    primary source and the second was secondary source. The primary source consists

    of questionnaire and observation magazines.

    PRIMARY DATA is collected through questionnaire, search and research

    through place where today's computer has been mostly used.

    SECONDARY DATA is being search sites like magazines, newspapers,

    journals, websites and the data has been collected through other approaches.

    The design of questionnaire was follows:

    Type of questions: Subjective question were used. Phrasing of the question: The following points we re taken into

    consideration while phrasing of the questions :

    1. Difficult and vague words are avoided.

    2. Lengthy and unspecific questions were avoided.

    3. Two questions were not combined together . Order of the questions: General questions were included first followed

    by specific questions.

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    Number of questions: The questionnaire consisted of 11questions.

    5.3 . SAMPLE SELECTIONRandom sampling method was used and the sample size was 120.

    TARGET POPULATION : The selected population consisted of people related to

    the field.

    DESCRIPTION OF STUDY : The survey was conducted in Allahabad in the monthof June and July of 2010.

    CHA PTER- VI

    DATAANALYSIS&

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    INTERPRETATION

    Data red uction Graphical representation

    Q.1. Did you know name of two or more transmission equipment manufacturingcompanies?

    Table: 6.1

    No. Of respondents Percentage

    YES 80 66.66

    NO 40 33.33

    Figure: 6.1

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    6.1 INTERPRTATION : The survey showed that 67% respondent knowstransmission equipment manufacturing companies.

    Q 2 .Could you please tell which company comes first to your mind when weask about transmission equipment manufactures?

    Table: 6.2

    Company Name No. Of respondents Percentage

    ITI 18 15

    UTL 27 22.5

    PUNCOMM 15 12.5

    TECHNOFIBER 12 10

    PRITHVI 15 12.5

    PROMOD 12 10

    OTHERS 21 17.5

    Figure: 6.2

    : 6.2 ; INTERPRTATION :

    The survey showed that the main competitors of ITI NAINI are: UTL, PRITHVI,

    PUNCOMM, TECHNOFIBER, and PROMOD

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    The preference among the purchasers was UTL 22.5 %, ITI 15 %, PRITHVI 12.5%

    PUNCOMM 12.5 %, TECHNOFIBER 10 %, PROMOD 10.% and others 17.5 %.

    Q3 . Have you ever used products being manufactured By ITI?

    Table: 6.3

    No. Of respondents Percentage

    Yes 48 40

    No 72 60

    Figure: 6.3

    6.3 INTERPRETATION: After survey, it is found that, the productmanufactured by ITI that ever used by purchaser 40%.because of after liberalizationmore company start working in this field.

    Q4 .What is the products manufactured by ITI which are being used by you?

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    Table: 6.4

    Products No. Of respondents Percentage

    DWDM 39 32.5

    STM-16 33 27.5

    STM-1 24 20

    DDF 6 5

    OTHER 18 15

    Figure:6.4

    1.4 INTERPRETATION : After survey, it is found that, the product

    manufactured by ITI that were used by purchaser were 32.5 % DWDM,

    27.5 %STM-16, 20 %, STM-1, 5 % DDF and 15 % others

    .Q.5 Do you Satisfied with ITIs products quality?

    Table: 6.5

    No. Of Respondents Percentage

    Yes 102 85

    No 18 15

    Figure:6.5

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    6.5: INTERPRETATION : 85% of the customers that used ITI

    equipments were satisfied with its quality.

    Q.6 what are the probable reasons for not buying ITI products?

    Table: 6.6

    Reasons No. Of Respondents Percentage

    Higher price 78 65

    Delay in supply 24 20

    Defects 12 10Weak after sales service 6 5

    Figure:6.6

    6.6: INTERPRETATION: Those who did not use ITI equipment

    were 55 % due to delay in supply of the orders, 27.5 % due to presence of more

    defects than other companies and 17.5 % due to weak after the sales service.

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    Q7 While buying the telecom product did you consider any other product of anyother telecom company? Table :6.7

    No. Of Respondents Percentage

    YES 99 82.5

    NO 21 17.5

    Figure 6.7

    6.7 Interpretation: The survey showed that in market many company exist so

    respondent at the time of buying the telecom product easily consider any other

    product of any other telecom company.

    Q8 Do you like really think that there is different between quality andtechnology provided by ITI and that of other company?

    Table : 6.8

    No. Of Respondents Percentage

    YES 66 55

    NO 54 45

    Figure: 6.8

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    6.8 Interpretation : : After survey, it is found 55% respondent said thatthe quality & provide by ITI is different rather than other company. But technology

    of another company is advance.

    Q9 Do the ITI products need frequent after sales service?

    Table : 6.9

    No. Of Respondents Percentage

    YES 29 24

    NO 91 76

    Figure:6.9

    1.9 Interpretation : The survey showed that 76% respondent said thatthe ITI products not need frequent after sales service. It is show

    products quality.

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    Q. 10 Do you get the delivery of the products on time?

    Table : 6.10

    No. Of Respondents Percentage

    YES 40 33

    NO 80 67

    Figure:6.10

    1.9 Interpretation: 67% respondent said that they not get deliver

    on time but 33% respondent said that they get deliver ontime.

    Q. 11 what features/attributes are you looking for the transmission products whenyou purchase it? (Rate 1 to 8).

    Table: 6.11

    No. Of Respondents Percentage

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    PRICE 24 20

    OVERALL PRODUCT 21 17.7

    QUALITY 21 17.7

    COMPANY REPUTATION 18 14.7

    GUARANTEE PERIOD 14 11.8

    AFTER SALES SERVICE 11 8.9

    MAINTENANCE 8 5.9

    TIE UP 3 3.3

    Figure:6.11

    6.11: Interpretation : These features/ attributes that the customers look in the

    equipment were as follows:20 % low price,17.7 % good after sales service,17.7 %

    low maintenance cost,14.7 % good quality of the product,11.8 % technical

    collaboration,8.9 % company reputation,5.9 % overall product and 3% tie up.

    CHA PTER-V II

    CONLUSION&

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    R ECOMMENDATIONS

    7.1 FINDINGS

    1. The company that first comes to the mind of the people when asked about

    people, when talked about transmission equipment manufacturers is UTL.

    Therefore. UTL is the biggest competitor of ITI NAINI.

    2. The other two major competitors of ITI NAINI are ZTE and ALCATEL.

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

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    4. The major reason behind the above is the quality. Reliability and durability of

    the ITI products.

    5. The probable reasons why the purchasers do not prefer ITI product are due to

    higher price. Delay in supply of the orders. Presence more defects than the

    others companies and weak after sales service.

    6. Purchasers are satisfied with the quality of ITI products.

    7. The major attributes being sought by the purchasers while purchasing

    transmission

    CONCLUSION

    1. The biggest competitor of the ITI NAINI is UTL.

    2. For equipments supplied to BSNL, its share is 30 %.

    3. ITI depends highly on BSNL for orders.

    4. Most of ITIs collaborators have becomes its competitors.

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    5. As ITI is a public sector unit and largely depends upon BSNL for orders so it

    does not pay attention towards advertising and publicity.

    6. Approximately 80 % of its ultimate customers are satisfied from ITIs

    equipments.

    7. ITI S competitors have switched to better facilities.

    ITI lags behind in terms of innovation.

    7.2 RECOMMENDATIONS

    P RODUCT:

    New product those in demand in the market should be identified.

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    Durability of the product should be further enhanced. Some of the existing product

    should be further innovated.

    PRICE:

    ITI should try to reduced the price of its products for attracting new customers and to win

    competitors .this can be done by decreasing manufacturing expense. Also company can

    encourage discount and credit facility.

    PROMOTION:

    Perhaps it can be the key towards of the ITIS IN the present market. ITI should

    encourage and adopt new sales promotion strategies .these strategies can be fruitful in

    enhance the sales volume. Trade rebate. Discount guarantee etc. are tools of

    promotion ITI should go for appropriate advertisement and publicity channels and

    revive its old glory

    ITI should adopt customer oriented market strategies .it should tr to establish direct

    contact with the people to generate awareness about its products and to get an in

    depth information about their requirement.

    STRATEGIES FOR OTHER MODIFICATIONS:

    1. Research and development should be encouraged.

    2. Warranty should be replaced by replacement guarantee.

    3. Young marketing professional should be recruited so that high tech marketing

    environment is generated due to widening of marketing concepts and

    technical ideas.

    4. A more professional approach should be adopted to deal with the competitors.

    5. ITI is mainly depended on BSNL for its sales. It should try to explore new

    market for its products.

    STRATEGIES FOR DEVE LOPMENT WITHIN THE

    ORGANIZATION

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    1. There should be proper motivation to employees for better performance.

    2. Proper training should be induced for employees.

    3. A well organized management information system should be established to

    acquire a view of customers opinion.

    4. A marketing research team should be established.

    5. Essential measures should be taken to cut down the expenditure.

    7.3 LIMITATIONS

    Though utmost care was taking so that no aspect of the problem remains untouched

    but still there were certain constraints that should not be overlooked.

    There following were the main constraints in my project.

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

    openly.

    The secondary data was not very up to date.

    Some of the respondents were not available.

    Personal biases and perceptions of the respondent may have stopped him/her

    form giving the right information.

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

    Lack of time.

    Respondent biases for giving the right information.

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    BIBLIOGRAPHY

    Philip Kotler-Marketing management-Analysis, Planning and

    control, 13 th edition

    Dilel , Simken ,Pride , Ferrel-Concept and strategies, second

    European Edition.

    ITI Annual Report

    Bery G.C.-Marketing Research

    Business world

    Wikipedia

    http://www.itiltd-india.com /

    http://businessballs.com

    http://www.economicstimes.com

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    http://www.itiltd-india.com/http://businessballs.com/http://www.itiltd-india.com/http://businessballs.com/
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    APPENDIX

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    Q ESTIONNAIREI say thanks for agreeing to spare 5 minutes of your time for filling up this

    questionnaire.

    All details given by you will be kept strictly confidential.

    1. Did you know name of two or more transmission equipment manufacturing

    companies?

    i) Yes ii) No

    2 .Could you please tell which company comes first to your mind when we ask

    about transmission equipment manufactures?

    i) ITI. ii) UTL. iii) PRITHVI. iv) TECHNOFIBER. v) PUNCOMM. vi)

    PROMOD vii) OTHER.

    3. Have you never used products being manufactured By ITI?

    i. Yes ii) No

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

    used by you?

    i) DWDM

    ii) STM-16iii) STM-1

    iv) DDF

    5. Did you satisfy with its quality?

    i) Yes ii) No

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

    i) Delay

    ii) Defect

    iii) Higher price

    iv) Weak after sale service1. While buying the telecom product did you consider any other product of any

    other telecom company?

    i) Yes ii) No

    1. Do you like really think that there is different between quality and technology

    provided by ITI and that of other company?

    i) Yes ii) No

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

    i) Yes ii) No

    1. Do you get the delivery of the products on time?

    11. What features/attributes are you looking for the transmission products when you

    purchase it? (Rate 1 to 8).

    Price Overall product Quality Company reputation Guarantee period After sales services Maintenance cost

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    Tie up