Pursuing Digital Marketing and Sales Transformation in an Emerging Market: Lessons from India’s Tata Steel

 Vikalpa: The Journal for Decision Makers



Many articles on digital transformation report on the successes of born-digital pioneers (a.k.a. digital natives) in new, high-tech industries in developed countries These frequently cited initiatives have critical advantages from the start. Their founders and employees understand, possess, and are passionate about emerging technologies. They are not burdened by significant investments in legacy technologies and investors who seek returns on those assets. Instead, they are able to remain nimble. And because those companies operate in developed countries, they have access to bountiful funding and large markets.

All too often, research in those settings does not shed light on a more challenging question: How can older firms in traditional industries in emerging markets digitally transform long-standing marketing and sales practices to capitalize on changing market conditions? To succeed in new markets, companies must overcome resistance from senior managers who were successful in the traditional business world, marked by limited and dated technological systems and resources. Our case study examines how one company, Tata Steel in India, has successfully addressed these challenges.

Tata Steel, founded in 1907, is part of the Tata Group. Tata Steel’s total revenue from operations in India during the 2018–2019 fiscal year was about ₹836 billion (about $11.5 billion) and for Tata Group overall, about ₹7,927 billion (about $108 billion). In India, Tata Steel has 32,984 employees with a production capacity of 19.5 million metric tons per annum.

Tata Steel serves three principal market segments. By far, business-to-business companies (B2B) constitute the largest group of customers with about 60% of sales. The company’s B2B market includes key segments such as automobiles, appliances, construction, industrial products, metal components and power generation. The company also serves an emerging corporate account segment (B2ECA), which is about 20% of sales. These B2ECAs, alternatively known as small and medium-sized enterprises (SME’s), are the growth engine of India’s manufacturing sector. The final segment, focused on serving consumers (B2C), is a recent target of Tata Steel’s efforts (about 20% of sales). For this segment, Tata Steel sells rebars for home construction, galvanized sheet steel used to build homes in the rural sector, as well as the recently launched doors, home building products and furniture to do-it-yourself consumers.

The initiative for digital transformation at Tata Steel is spearheaded by its Marketing & Sales (M&S) function to integrate digital technology to solve problems and address customer needs. Tata Steel constituted a focused special task force under the Head of Digital Projects representing the Business Excellence & New Projects division and working with key business verticals: Automotive & Special Products, Branded Products & Retail, and Industrial Products, Projects & Exports. Each of these verticals is headed by a Chief of Marketing & Sales and is supported by a Business Excellence & New Projects team.

Any initiative that is launched in a large company loses novelty in six to twelve months. As competitors are prone to mimic the initiatives launched by the leader, these initiatives are treated as hygiene factors or, over time, become stale inside the organization. Hence the company felt the need to identify newer pain points and use advanced analytics to solve them. The way steel was bought in 2010 is very different from how steel will be bought in 2025. Consumer behaviour also undergoes change, and hence there is a need to find new ways of reaching customers and discovering new pain points. Providing digital as a solution is thus a moving target.

The article offers insights to companies in traditional industries and those in emerging markets on how to embrace digital transformation for enhanced business performance.


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