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PRITAM SONAWANE
ROLL # 9810063
ACKNOWLEDGMENT
In the end I would like to thank my Institute, Department of Management Studies, IIT
Roorkee for having given me this opportunity to put to practice, the theoretical knowledge
that I imparted from the program.
Pritam Sonawane
Mr Sunil More
Contents
EXECUTIVE SUMMARY ....................................................................................................................... 6
FMCG SECTOR ................................................................................................................................... 7
INTRODUCTION ............................................................................................................................. 7
SWOT ANALYSIS ............................................................................................................................ 8
GROWTH PROSPECT ...................................................................................................................... 9
ADVANTAGES TO THE SECTOR ..................................................................................................... 10
INDIAN DAIRY .................................................................................................................................. 11
MILK PRODUCTION ...................................................................................................................... 11
Flow chart of conversion of milk into traditional Indian dairy products .................................... 13
SWOT ANALYSIS OF INDIAN DAIRY INDUSTRY .............................................................................. 13
INDIA: WORLDS LARGEST MILK PRODUCER ................................................................................. 15
Milk: India's Number One Farm Commodity ................................................................................ 16
MARKETING TODAY & TOMORROW ............................................................................................ 16
NATIONAL DAIRY DEVELOPMENT BOARD (NDDB) ............................................................................ 19
An Institution of National Importance ...................................................................................... 19
Philosophy ............................................................................................................................... 19
Constitution ............................................................................................................................. 20
Dairy Cooperatives .................................................................................................................. 20
OPERATION FLOOD ...................................................................................................................... 21
MOTHER DAIRY ............................................................................................................................... 24
About The Company ................................................................................................................ 24
Objectives and Business Philosophy of Mother Dairy ............................................................... 26
Various Divisions Of Mother Dairy ........................................................................................... 27
INTERNATIONAL BUSINESS .......................................................................................................... 31
STRATEGIES IMPLEMENTED ......................................................................................................... 32
Focused Approach ................................................................................................................... 32
Product Differentiation ............................................................................................................ 32
Smart Marketing ...................................................................................................................... 33
Perspective Strategies applied by Mother Dairy ....................................................................... 34
Strategy for Strengthening Cooperative Business ..................................................................... 34
Strategy for Production Enhancement ..................................................................................... 35
Strategy for Assuring Quality ................................................................................................... 35
Strategy for Creating an Information and Development Research ............................................ 35
EXECUTIVE SUMMARY
The main objective of this study lies in understanding the organization, studying,
understanding the marketing channels of the company and to correct its distribution activities
as well.
Deep learning regarding channel efficiency and understanding the market structure,
identifying potential outlets and practical survey was also undertaken.
This project is regarding the distribution route effectiveness, to study the impact of it on sales
and how the company understands the market using different strategies. The project was
undertaken for a period of sixty days and was carried out within the limits of Mumbai.
During the entire course of the project, many outlets were surveyed for analysis regarding
distribution effectiveness & channel mapping.
In the first part of the project, a survey of selected outlets was conducted by taking interview
of outlet owners or managers. Based on the information gathered through the outlet managers
or owners service and distribution improvement, competitive position in the different areas
and scope for the market expansion is studied.
FMCG SECTOR
INTRODUCTION
Products which have a quick turnover, and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). FMCG products are those that get replaced within a year.
Examples of FMCG generally include a wide range of frequently purchased consumer
products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and
detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products,
and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged
food products, soft drinks, tissue paper, and chocolate bars.
Indias FMCG sector is the fourth largest sector in the economy and creates employment for
more than three million people in downstream activities. Its principal constituents are
Household Care, Personal Care and Food & Beverages. The total FMCG market is in excess
of Rs. 85,000 Crores. It is currently growing at double digit growth rate and is expected to
maintain a high growth rate. FMCG Industry is characterized by a well established
distribution network, low penetration levels, low operating cost, lower per capita
consumption and intense competition between the organized and unorganized segments.
Bottled water, Branded rice, Branded sugar, Juices; the major players being; Hindustan Lever
Limited, Nestle, Coca-Cola, Cadbury, Pepsi and Dabur.
Spirits and Tobacco- the major players being; ITC, Godfrey, Philips and UB
SWOT ANALYSIS
Strengths:
Low operational costs
Presence of established distribution networks in both urban and rural areas
Presence of well-known brands in FMCG sector.
Weaknesses:
Lower scope of investing in technology and achieving economies of scale, especially in
small sectors
Low exports levels
"Me-too products, which illegally mimic the labels of the established brands. These
products narrow the scope of FMCG products in rural and semi-urban market.
Opportunities:
Untapped rural market
Rising income levels, i.e. increase in purchasing power of consumers
Large domestic market- a population of over one billion.
Export potential
High consumer goods spending.
Threats:
Removal of import restrictions resulting in replacing of domestic brands
Slowdown in rural demand
Tax and regulatory structure.
GROWTH PROSPECT
Large Market
India has a population of more than 1.150 Billions which is just behind China. According to
the estimates, by 2030 India population will be around 1.450 Billion and will surpass China
to become the World largest in terms of population. FMCG Industry which is directly related
to the population is expected to maintain a robust growth rate.
Spending Pattern
An increase is spending pattern has been witnessed in Indian FMCG market. There is an
upward trend in urban as well as rural market and also an increase in spending in organisedretail sector. An increase in disposable income, of household mainly because of in-crease in
nuclear family where both the husband and wife are earning, has leads to growth rate in
FMCG goods.
changing lifestyles, rising disposable income etc. Consumers are switching from economy to
premium product even we have witnessed a sharp increase in the sales of packaged water and
water purifier. Findings according to a recent survey by A. C. Nielsen shows about 71 per
cent of Indian take notice of packaged goods labels containing nutritional information
compared to two years ago which was only 59 per cent.
INDIAN DAIRY
Expanding Daily
Indias modern dairy sector has expanded rapidly. From an insignificant 200,000 litres per
day (lpd) of milk being processed in 1951, the organized sector is presently handling some 20
million lpd in over 400 dairy plants. Already, one of the worlds largest liquid milk plants is
located in Delhi, handling over 800,000 litres of milk per day (Mother Dairy, Delhi). India's
first automated dairy (capacity: 1 million lpd) -- Mother Dairy, Gandhinagar -- has been
established at Gandhinagar near Ahmedabad, Gujarat, in Western India. It is owned by
Indias biggest dairy cooperative group, Gujarat Cooperative Milk Marketing Federation
(GCMMF) in Anand, with an annual turnover in excess of Rs 23 billion (US $500 million).
Amul-III with its satellite dairies, with total installed capacity of 1.5 million lpd has also been
commissioned. India's first vertical dairy (capacity: 400,000 lpd), owned by the Pradeshik
Cooperative Dairy Federation(PCDF) has been commissioned at Noida, outside Delhi.
MILK PRODUCTION
The Upside
Increasing awareness: As India enters an era of economic reforms, agriculture, particularly
the livestock sector, is positioned to be a major growth area. The fact that dairying could play
a more constructive role in promoting rural welfare and reducing poverty is increasingly
being recognized. For example, milk production alone involves more than 70 million
producers, each raising one or two cows/buffaloes. Cow dung is an important input as organic
fertilizer for crop production and is also widely used as fuel in rural areas. Cattle also serve as
an insurance cover for the poor households, being sold during times of distress.
Supply matches demand: Efforts to increase milk production by dairy farmers are strongly
influenced by the degree to which demand signals are transmitted through the marketing
system. Cooperatives have played an important role in transmitting the message of urban
market demand to them. Since the demand in the urban scenario is rapidly increasing so is the
supply generated by the farmers.
Surplus capacity: Further, the new dairy plant capacity approved under the Milk & Milk
Products Order (MMPO) has exceeded 100 million lpd. The new capacity would surpass the
projected rural marketable surplus of milk by about 40 per cent by 2005 AD.
The Downside
Technological gaps: Several areas of the dairy industry can be strengthened by the induction
of state-of-the-art technologies from overseas. Those who bring in new technologies or sign
joint ventures with foreign companies stand to benefit the most. To make the best out of the
present situation, the following areas require immediate remedial action on the part of dairy
entrepreneurs:
Raw milk handling needs to be upgraded in terms of physico-chemical and microbiological
attributes of the milk collected. The use of clarification and bactofugation in raw milk
processing can help improve quality of the milk products.
Better operational efficiencies are needed to improve yields, reduce waste, minimize
fat/protein losses during processing, control production costs, save energy and extend shelflife. The adoption of Good Manufacturing Practices (GMP) and HACCP would help
manufacture milk products conforming to international standards and thus make their exports
competitive.
Latest packaging technology can help retain nutritive value of packaged products and extend
their shelf-life. For proper storage and transportation, cold chain needs to be strengthened.
Good scope exists for value-added products like desserts, puddings, custards, sauces, mousse,
stirred yogurt, nectars and sherbets.
Milk
Condensed
Acid
Cultured
Dahi
Misti Doi
Rabri
Kheer
Percipitation
Kkoa
Paneer
Shrikhand
Burfi
Sandesh
Ghee
Pedha
Chhana
Lassi
kalakand
Rasgoola
Kadbi
Gulabjamun
Pantoda
Rasmalai
Weaknesses:
Perishability: Pasteurization has overcome this weakness partially. UHT gives milk long
life. Surely, many new processes will follow to improve milk quality and extend its shelf
life.
Lack of control over yield: Theoretically, there is little control over milk yield. However,
increased awareness of developments like embryo transplant, artificial insemination and
properly managed animal husbandry practices, coupled with higher income to rural milk
producers should automatically lead to improvement in milk yields.
Logistics of procurement: Woes of bad roads and inadequate transportation facility make
milk procurement problematic. But with the overall economic improvement in India, these
problems would also get solved.
Problematic distribution: Yes, all is not well with distribution. But then if ice creams can
be sold virtually at every nook and corner, why cant we sell other dairy products too?
Moreover, it is only a matter of time before we see the emergence of a cold chain linking
the producer to the refrigerator at the consumers home!
Competition: With so many newcomers entering this industry, competition is becoming
tougher day by day. But then competition has to be faced as a ground reality. The market is
large enough for many to carve out their niche.
Opportunities:
"Failure is never final, and success never ending. Dr Kurien bears out this statement
perfectly. He entered the industry when there were only threats. He met failure head-on,
and now he clearly is an example of never ending success! If dairy entrepreneurs are
looking for opportunities in India, the following areas must be tapped:
Value addition: There is a phenomenal scope for innovations in product development,
packaging and presentation. Given below are potential areas of value addition:
Steps should be taken to introduce value-added products like shrikhand, ice creams,
paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater presence and
flexibility in the market place along with opportunities in the field of brand building.
Addition of cultured products like yoghurt and cheese lend further strength - both in
occupied the top slot till 1997. In the year 1997, India's milk production was on par with
the U.S. at 71 million tonnes. The world milk production in 1998 at 557 million tonnes
would continue the steady progress in recent years (see Table 1). Furthermore, the annual
rate of growth in milk production in India is between 5-6 per cent, against the worlds at 1
per cent. The steep rise in the growth pattern has been attributed to a sustained expansion
in domestic demand, although per capita consumption is modest - at 70 kg of milk
equivalent.
Annual Milk Production has trebled
India's annual milk production has more than trebled in the last 30 years, rising from 21
million tonnes in 1968 to an anticipated 80 million tonnes in 2001. This rapid growth and
modernization is largely credited to the contribution of dairy cooperatives, under the
Operation Flood (OF) Project, assisted by many multi-lateral agencies, including the
European Union, the World Bank, FAO and WFP (World Food Program). In the Indian
context of poverty and malnutrition, milk has a special role to play for its many
nutritional advantages as well as providing supplementary income to some 70 million
farmers in over 500,000 remote villages.
Milk: India's Number One Farm Commodity
Milk is India's number one farm commodity in terms of its contribution to the national
economy. In 1994-95, the value of its output based on producer price was Rs. 500,051
millions, exceeding that from paddy (rice). Notwithstanding its top place and the many
benefits it bestows on the lower rungs of the rural society, dairying has not received due
attention from planners, economists, social scientists and others. For example, the
investment in dairying made under the five-year plans is not commensurate with its
output. Consequently, its potential has not been adequately tapped.
for their tea and coffee. Nevertheless, it adds up to a sizable volume - millions of litres
per day. In the major cities lies an immense growth potential for the modern sector.
Presently, barely 778 out of 3,700 cities and towns are served by its milk distribution
network, dispensing hygienically packed wholesome, quality pasteurized milk.
According to one estimate, the packed milk segment would double in the next five years,
giving both strength and volume to the modern sector. The narrow tip at the top is a
small but affluent market for western type milk products.
Growing Volumes
The effective milk market is largely confined to urban areas, inhabited by over 25 per
cent of the country's population. An estimated 50 per cent of the total milk produced is
consumed here. By the end of the twentieth century, the urban population is expected to
increase by more than 100 million to touch 364 million in 2000 a growth of about 40 per
cent. The expected rise in urban population would be a boon to Indian dairying.
Presently, the organized sector both cooperative and private and the traditional sector
cater to this market.
The consumer access has become easier with the information revolution. The number of
households with TV has increased from 23 million in 1989 to 45 million in 1995. About
34 per cent of these households in urban India have access to satellite television channel.
Potential for further growth
Of the three A's of marketing - availability, acceptability and affordability, Indian
dairying is already endowed with the first two. People in India love to drink milk. Hence
no efforts are needed to make it acceptable. Its availability is not a limitation either,
because of the ample scope for increasing milk production, given the prevailing low
yields from dairy cattle. It leaves the third vital marketing factor affordability. How to
make milk affordable for the large majority with limited purchasing power? That is
essence of the challenge. One practical way is to pack milk in small quantities of 250 ml
or less in polythene sachets. Already, the glass bottle for retailing milk has given way to
single-use sachets which are more economical. Another viable alternative is to sell small
quantities of milk powder in mini-sachets, adequate for two cups of tea or coffee.
Due to very wide dispersal of producing and consuming units of milk, the unorganized
sector continues to dominate the milk marketing in India. However, the market structure
for milk is constantly changing. The organized sector now handles above 20% of the
milk output in the country. The cooperative sector accounts for nearly 50% of this. There
are over 1.10 lakh milk producers cooperatives federated into district milk unions and
State Dairy Federations, which have organic links with the Mother Dairy at the national
level. It is heartening to note that the milk producers in the Anand Model of milk
production get net of intermediation, about 60% of the final price. In other basic foods,
the returns are as low as 30% of the final price. NDDB supports the development of dairy
cooperatives by providing them financial assistance and technical expertise. Over the
years, brands in milk products created by cooperatives have become synonymous with
quality and value. Brands like Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras
(Rajasthan). Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur) are among
those that have earned customer confidence.The Dairy Cooperative Network i) includes
170 milk unions ii) operates in over 338 districts iii) covers nearly 1,08574 village level
societies iv) is owned by nearly 12 million farmer members.
In sum, NDDB is a unique example of an organisational innovation with a focus on
human resource and co-operative development in India. By placing technology and
professional management in the hands of the village societies it has helped to raise the
standard of living of millions of poor people. These processes prove that true
development is the development of the people and this could be achieved through putting
the instruments of development in the hands of the people.
Philosophy
Cooperation is the preferred form of enterprise, giving people control over the
resources they create through democratic self-governance.
Self-reliance is attained when people work together, have a financial stake, and
both enjoy the autonomy and accept the account ability for building and
managing their own institutions.
Technological innovation and the constant search for better ways to achieve our
objectives is the best way to retain our leading position in a dynamic market.
While our methods change to reflect changing conditions, our purpose and values
must remain constant.
Constitution
The National Dairy Development Board has been constituted as a body corporate and
declared an institution of national importance by an Act of India's Parliament.
The National Dairy Development Board -- initially registered as a society under the
Societies Act 1860 -- was merged with the erstwhile Indian Dairy Corporation, a
company formed and registered under the Companies Act 1956, by an Act of India's
Parliament - the NDDB Act 1987 (37 of 1987), with effect from 12 October, 1987. The
new body corporate was declared an institution of national importance by the Act.
The general superintendence, direction, control and management of NDDB's affairs and
business vests with the Board of Directors.
Dairy Cooperatives
Dairy Cooperatives account for the major share of processed liquid milk marketed in the
country. Milk is processed and marketed by 170 Milk Producers' Cooperative Unions,
which federate into 15 State Cooperative Milk Marketing Federations.
The Dairy Board's programmes and activities seek to strengthen the functioning of Dairy
Cooperatives, as producer-owned and controlled organisations. NDDB supports the
development of dairy cooperatives by providing them financial assistance and technical
expertise, ensuring a better future for India's farmers.
Over the years, brands created by cooperatives have become synonymous with quality
and value. Brands like Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras
(Rajasthan). Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur) are among
National Dairy Development Board (NDDB) is the central cooperative board of the
country and was created to promote, finance and support producer-owned and controlled
organizations mentioned above. Two main players Amul of GCMMF and Mother
Dairy of NDDB is the leading brand in India. Our main focus is to analyze the strategic
move of NDDB for mother Dairy from top to bottom. Thus we are going to concentrate
on the progress of Mother Diary and NDDB for their future strategies.
OPERATION FLOOD
A recent World Bank audit shows that of the Rs 200 crores it invested in Operation
Flood II, the net return into the rural economy has been a whopping Rs 24,000 crores per
year over a period of ten years, or a total of Rs 240,000 crores in all. No other major
development program has matched this input-output ratio.
Operation Flood, launched in 1970, has been instrumental in helping the farmers mould
their own development. Thus helping reach milk to consumers in 700 towns and cities
through a National Milk Grid. It also helped eradicate the need for middlemen thereby
reducing the seasonal price variations. As a result of the cooperative structure the whole
exercise of production and distribution of milk and milk products has become
economically viable for farmers to undertake on their own. In this manner the farmer
himself can enjoy the fruits of his own labor, instead of surrendering a majority of the
profit to corrupt middlemen.
Phase
Operation Flood's Phase II (1981-85) increased the milk sheds from 18 to 136;
II
290 urban markets expanded the outlets for milk. By the end of 1985, a selfsustaining system of 43,000 village cooperatives covering 4.25 million milk
producers had become a reality. Domestic milk powder production increased
from 22,000 tons in the pre-project year to 140,000 tons by 1989, all of the
increase coming from dairies set up under Operation Flood. In this way EEC
gifts and World Bank loan helped to promote self-reliance. Direct marketing
of milk by producers' cooperatives increased by several million litres a day.
Phase
Phase III (1985-1996) enabled dairy cooperatives to expand and strengthen the
III
MOTHER DAIRY
Mother Dairy Delhi was set up in 1974 under the Operation Flood Programme. It is
now a wholly owned company of the National Dairy Development Board (NDDB).
Mother Dairy markets & sells dairy products under the Mother Dairy brand (like Liquid
Milk, Dahi, Ice creams, Cheese and Butter), Dhara range of edible oils and the Safal
range of fresh fruits & vegetables, frozen vegetables and fruit juices at a national level
through its sales and distribution networks for marketing food items.
Mother Dairy sources significant part of its requirement of liquid milk from dairy
cooperatives. Similarly, Mother Dairy sources fruits and vegetables from farmers /
growers associations. Mother Dairy also contributes to the cause of oilseeds grower
cooperatives that manufacture/ pack the Dhara range of edible oils by undertaking to
nationally market all Dhara products. It is Mother Dairys constant endeavor to
(a) Ensure that milk producers and farmers regularly and continually receive market
prices by offering quality milk, milk products and other food products to consumers at
competitive prices and;
(b) Uphold institutional structures that empower milk producers and farmers through
processes that are equitable.
At Mother Dairy, processing of milk is controlled by process automation whereby stateof-the-art microprocessor technology is adopted to integrate and completely automate all
functions of the milk processing areas to ensure high product quality/ reliability and
safety. Mother Dairy is an IS/ ISO-9002, IS-15000 HACCP and IS-14001 EMS certified
organization. Moreover, its Quality Assurance Laboratory is certified by National
Accreditation Board for Testing and Calibration Laboratory (NABL)-Department of
Science and Technology, Government of India.
Mother Dairy markets approximately 2.8 million liters of milk daily in the markets of
Delhi, Mumbai, Saurashtra and Hyderabad. Mother Dairy Milk has a market share of
66% in the branded sector in Delhi where it sells 2.3 million liters of milk daily and
undertakes its marketing operations through around 14,000 retail outlets and 845
exclusive outlets of Mother Dairy.
The companys derives significant competitive advantage from its unique distribution
network of bulk vending booths, retail outlets and mobile units. Mother Dairy ice creams
launched in the year 1995 have shown continuous growth over the years and today boasts
of approximately 62% market share in Delhi and NCR. Mother Dairy also manufactures
and markets a wide range of dairy products that include Butter, Dahi, Ghee, Cheese,
UHT Milk, Lassi & Flavoured Milk and most of these products are available across the
country.
The company markets an array of fresh and frozen fruit and vegetable products under the
brand name SAFAL through a chain of 400+ own Fruit and Vegetable shops and more
than 20,000 retail outlets in various parts of the country. Fresh produce from the
producers is handled at the Companys modern distribution facility in Delhi with an
annual capacity of 200,000 MT. An IQF facility with capacity of around 75 MT per day
is also operational in Delhi. A state-of-the-art fruit processing plant of fruit handling
capacity of 120 MT per day, a 100 percent EOU, setup in 1996 at Mumbai supplies
quality products in the international market. With increasing demand another state-ofthe-art fruit processing plant has been set up at Bangalore with fruit handling capacity of
around 250 MT per day.
Mother Dairy has also been marketing the Dhara range of edible oils for the last few
years. Today it is a leading brand of edible oils and is available across the country in over
2,00,000 outlets. The brand is currently available in the following variants: Refined
Vegetable Oil, Refined Soybean Oil, Refined Sunflower Oil, Refined Rice Bran Oil,
Kachi Ghani Mustard Oil and Filtered Groundnut Oil. Mother Dairy has also launched
extra virgin Olive Oil under the Daroliva brand.
Mother Dairy has over the last 3 decades, harnessed the power of farmer cooperatives to
deliver a range of delicious products and bring a smile on your face. In times to come,
Mother Dairy shall strive to remain one of Indias finest food companies.
The main stakeholder of Mother Dairy was the farmer member for whose welfare it
existed.
Unlike other organizations, their objective is not to maximize the profit. They are more
interested in giving the best price for the farmers for their milk than in making a large
profit. Thus they look at the price given to their suppliers as not a cost but as an
objective.
Mother Dairy had, as its main objective, carrying out activities for the economic
development of agriculturists by efficiently organizing marketing of milk and dairy
produce, agricultural produce in raw and/or processed form and other allied produce.
This was to be done through:
Common branding
Centralized marketing
Ensure that milk producers and farmers regularly and continually receive market
prices by offering quality milk, milk products and other food products to
consumers at competitive prices and;
Uphold institutional structures that empower milk producers and farmers through
processes that are equitable.
The biggest strength of Mother Dairy was the trust it had created in the minds of its
consumers regarding the quality of its products. NDDB, and its brand Mother Dairy,
stood for guaranteed purity of whatever products it had produced. Adulteration was
simply not done in any of its products. In India, where such trust was hard to come by,
this could provide a central anchor for Mother Dairys future business plans. For more
than 40 years' Mother Dairy helping to create a national network has been adapted and
extended to other commodities and areas. Their constant effort to learn and to enrich
experience is central to their approach and capacities. In times to come, Mother Dairy
shall strive to become a leading player in the food industry in India.
NDDB
Mother Dairy
Amul
(GCP)
Grocery & Cheese
products
(IFP)
Milk Division
- Dhara
- UHT Milk
- Liquid Milk
- Ghee
- Butter
- Cheese
- Peas
- Fruit Drinks
- Frozen Vegetables
Fresh Dairy
- Probiotic Curd
- Curd
- Lassi
- Mishti Doi
The Company is always looking to innovate and come up with, either complete new
products or new ways to pack the existing products. Mother Dairy has a wide range of
products out of which the following products are,
In Milk Division:
In Ghee Division
In Butter Division
In Dahi Division
INTERNATIONAL BUSINESS
Mother Dairy is a leading marketer of dairy products and fruit & vegetable products in
the Indian sub-continent. Its unwavering commitment to quality, state-of-the-art
technology, and the use of superior ingredients enable it to offer a wide range of worldclass products.
In addition to its market leadership in India, Mother Dairy is also active in the global
arena, exporting its range of dairy products to various international markets. In recent
years, the brand's fruit pulp, pastes, purees and concentrates have evoked tremendous
demand across the globe. To cater to this demand, Mother Dairy has set up a 100 per cent
Export Oriented Unit with a capacity for processing over 15000 metric tonnes of fresh
produce annually. Moreover, a new state-of-the-art plant with an installed capacity for
processing 10 metric tonnes of fruit per hour is being set up at Bangalore. The units are
ISO 9001-2000 and HACCP certified, and the products are Kosher certified.
As another step towards providing quicker and better service to its international
customers, Mother Dairy has established a marketing office in Rotterdam. With a view to
ensuring world-class quality on a consistent basis, Mother Dairy focuses on delivering
value at every stage - right from the farm to the plant. Best ingredients. Streamlined
processes. Reliable customer service. These are the aspects that make Mother Dairy an
outstanding brand.
STRATEGIES IMPLEMENTED
Focused Approach
Mother Dairy wants to get into bigger markets and have bigger shares in those markets.
The cooperative is also expanding its product portfolio further to match rival offerings
particularly those of Amul. For the first 22 years of its existence, liquid milk was the
only dairy product that Mother Dairy offered.
It was in 1996 that it came up with ice-creams. But the real spurt came about seven years
ago, when it introduced curd, flavoured milk, and lassi and mishti doi. It introduced
butter a four-and-a half year ago; ghee and UTH milk four years ago; and cheese, about
three-and-a half year ago. And under its frozen foods and vegetables brand Safal, besides
the introduction of corn and mixed vegetables.
Product Differentiation
While Mother Dairy still may not have a product portfolio as large as Amul, which is
also expanding across the country in a big way and is a much bigger player, it's doing its
bit. Mother Dairy says the idea is not just to enter new markets, but to do well in those
markets - which mean bigger market shares in the different product categories in
whichever market it is present.
The drivers will be value created through quality of the offerings as well as innovations
Smart Marketing
On the marketing front, Mother Dairy says it's trying to take its product campaigns and
communications to a higher platform. For instance, in the case of milk, the campaigns do
not talk about the obvious benefits - milk is good for health, it has calcium and so on but rather it targets children and are created around ideas such as "The country needs
you, grow faster".
As far as products such as butter, cheese and ice creams go, the campaigns have been
created around "taste". For butter again, the focus is on children. Here, Mother Dairy has
dared to go different. Since 60 per cent butter is consumed by kids, the company wants
them to sit up and take notice of its butter. Makkhan Singh, a sturdy jovial cow (a
cartoon character) has been made its brand ambassador.
While Mother Dairy has been carrying out school programmes - games and activities
involving Makkhan Singh in Delhi. It also runs a gaming website on the character to
attract children.
It's cheese for children again. A couple of years ago, Mother Dairy carried out a retail
activity: "Cheese khao superhero ban jao", where kids buying cheese at a retail outlet
were invited for a photo op - dressed as superheros - through Polaroid cameras; and the
framed photograph was presented to them. The activity was carried out in about 150
outlets in Delhi and Mumbai, with about 20,000-25,000 snaps being taken. Cheese was
also something that helped the company bond better with its retailers. In November 2005,
retailers in Delhi displayed banners proclaiming, "Cheese ke saath bees ki cheez," a
proposal that said if a consumer buys Mother Dairy cheese, the retailer can offer him
anything worth Rs 20 from the shop - which worked better than offering something free
with the product, which the consumer didn't even needs.
The exercise resulted in better ties with retailers. A positive response made Mother Dairy
to repeat it in Kolkata as well. Clearly, Mother Dairy has aggressive plans. But, strong
regional brands and other co-operatives will continue to give it tough competition.
Mother Dairy maps the future of dairying in India, setting realistic goals for
Production Enhancement,
The plan was realised with the successful completion of the Operation Flood Programme
and has been developed by the State Milk Marketing Federations and the Milk Producers'
Cooperative Unions in consultation with the Dairy Board. The goals and strategies to
meet them have been drawn by its actual implementers - Federation and Unions and
supported by NDDB.
Recruit, train and motivate increasing numbers of women to work for Mother
Dairy to achieve significant improvements in dairy husbandry, as they primarily
shoulder animal husbandry related responsibilities in rural India
Consolidation and growth in milk and milk product marketing, promoting better
equity for regional cooperative brands and developing qualified and skilled
manpower
Empower local leaders, strengthen societies and equip their staff and members
with the skills and information they need
Cross non-descript cattle with Holestein Friesian in areas with adequate feed and
fodder and with Jersey in resource-poor areas
Increase the production and use of high quality feed appropriate to local
conditions
Encourage unions, NGOs and cooperatives to put common property area under
improved pasture and fodder tree
Identify and address quality related problems at every stage from the producer at
the village cooperative, to the dairy plant and the process of final delivery to the
consumer
As a part of its effort to add value to the business, Mother Dairy identifies, develops,
tests and transfers product and process technologies.
Regional preferences are an important basis, for developing products and their
manufacturing processes. In addition equipment has been designed and commercialised
for manufacturing indigenous milk products like shrikhand, paneer, khoa, lassi, gulab
jamun, mishti doi and curd as well as popular western products like ice-creams and
cheeses.
In developing process, product and equipment technology, emphasis is placed on
maintaining high quality standards. To check milk quality, test kits have been developed.
NDDB also provides services for analysis of dairy product samples.
The nature of competition varied among the different products. In the case of liquid milk,
competition was from private dairies and contractors. There was also competition from
newly emerging private dairies that had started supplying milk to the consumer. They
were generally not very particular about the brand of liquid milk, so that the sales
depended to a large extent on dealer push. However, there was scope to establish
differentiation through appraising the customers of the quality not only of the initial milk
itself, but also the quality of the supply chain, which ensured the stability of milk.
For butter and cheese, new entrants were making their mark. Britannia, a firm engaged in
manufacture and sale of biscuits, had entered into foods business, and more particularly
in milk and milk related products such as butter. Britannia had introduced new forms of
cheese, and supported its products with extensive advertising campaigns. It was believed
that advertisements played a powerful role in the demand for particular brands of butter
and cheese.
The ice creams market was an emerging market in India, witnessing the entry of
numerous players. The national scene was dominated by Hindustan Lever with its
Kwality and Walls brands, accounting for about 45 percent of the market. GCMMF was
the other national player, with about 30 percent of the market. There were, in addition,
very powerful regional players such as Vadilal Ice Creams in the Western India who
commanded substantial (in excess of 30 percent) of the regional market shares. Ice
creams were largely promoted through local promotions, hoardings (billboards) and
advertisements.
There is a certain kind of monopoly created by the companies in the market. Such as,
Amul creates monopoly over its butter in the market. The retailers are sometimes forced
to keep the other products of the company, if it needs butter. So other product also gets
penetrated in the market because of Amuls monopoly over butter product.
Same way, Nestle also play its game, by creating monopoly over its Maggie noodles. And
so the companys other products also gets penetrated in the market. But, Mother Dairy
Mumbai Office doesnt have any such kind of products on which the company can create
monopoly upon.
It could be expected that these companies would also expand their operations in the
coming years.
Advertisement and Promotion by Mother Dairy
On the marketing front, Mother Dairy says it's trying to take its product campaigns and
communications to a higher platform. For instance, in the case of milk, the campaigns do
not talk about the obvious benefits - milk is good for health, it has calcium and so on but rather it targets children and are created around ideas such as "The country needs
you, grow faster".
As far as products such as butter, cheese and ice creams go, the campaigns have been
created around "taste". For butter again, the focus is on children. "Amul butter may be
selling the most, but the advertising and promotions are almost always targeted at
adults," points out an analyst citing Amul's popular Utterly-Butterly campaigns.
Here, Mother Dairy has dared to go different. Since 60 per cent butter is consumed by
kids, the company wants them to sit up and take notice of its butter. Makkhan Singh, a
sturdy jovial cow (a cartoon character) has been made its brand ambassador.
While Mother Dairy has been carrying out school programmes - games and activities
involving Makkhan Singh in Delhi, it has plans to take such activities to Mumbai and
Kolkata as well. It also runs a gaming website on the character to attract children. Equity
and empathy are being built for the brand, the values for which it stands, and the various
other Mother Dairy products, which draw their core values from Mother Dairy milk.
It's cheese for children again. A couple of months ago, Mother Dairy carried out a retail
activity: "Cheese khao superhero ban jao", where kids buying cheese at a retail outlet
were invited for a photo op - dressed as superheros - through Polaroid cameras; and the
framed photograph was presented to them. The activity was carried out in about 150
outlets in Delhi and Mumbai, with about 20,000-25,000 snaps being taken.
It claims that the exercise resulted in better ties with retailers. A positive response made
Mother Dairy to repeat it in Kolkota as well. Clearly, Mother Dairy has aggressive plans.
But, strong regional brands and other co-operatives will continue to give it tough
competition. It will not be a cakewalk anymore.
In Mumbai, Mother Dairy carried out a marketing operation few months back, named as,
Operation Jawalamukhi. Under this operation, sales executives of each division of the
company used to go together to unleash the opportunities. Suppose if an outlet only keeps
Mother Dairy Milk, then this team used to try to convince the retailer to penetrate the
other products of the company also, such as, Curd, Ice cream. Hence, this activity was
carried for two weeks, which brought out many great opportunities in the market.
Moreover, Mother Dairy Mumbai office carried out a new scheme in the market few
months back which was of coupon distribution. The company used to distribute the
scratch coupons to the retailers, which would have a discount of Rs. 10, 25, 50, 100, 200,
300, 500, 1000, 2000 off on it. That means, the retailer used to get the free material
worth of that coupon amount. Hence, this has helped a lot in building strong
relationships with the retailers.
Mother Dairy looked at all its operations, strengths and weaknesses as well as
opportunities available, and came to the conclusion that it had to become more customer
centred (rather than merely being farmer or supplier centred). This required paying close
attention to the customer needs and quality. Mother Dairy realized that it was not enough
that Mother Dairy itself was wedded to these ideas; the entire supply chain had to
conform. Hence it launched a Total Quality Management or TQM to ensure the high
quality of the products from the starting point (the village farmer who supplied milk)
right through the value chain until it reached the consumer. This meant the need for the
involvement of farmers, transporters, factory personnel, wholesalers and retailers, each
of whom had a role to play.
What began as a TQM movement gradually became a movement for management of
change in the entire value chain. Mother Dairys Management of Change (MOC)
initiative was launched in six areas: cleanliness of the dairy co-operative societies,
planning and budgeting of the dairy cooperative society, artificial insemination service,
and quality testing and milk measurement by the dairy co-operatives, animal feeding and
management practices and self leadership development.
Chief Executive
Officer
National Sales
Manager
Regional Sales
Manager
Sales Manager
Area Sales
Manager
Senior
Executive
Junior
Executive
Pilot Sales
Representative
DISTRIBUTION NETWORK
Mother Dairy has a wide and well managed network of salesmen appointed for taking up
the responsibility of distribution of products to diverse parts of the City. The distribution
channels are constructed in such a way that the demand of customers is fulfilled at the
right place and the right time when it is needed by them.
A typical distribution chain at Mother Dairy would be:
Production
Plant
Warehouse
Distribution
Depot
Warehouse
Retail Stock
Retail Shelf
Consumer
The customers of the Company are divided into different categories and different routes,
and every salesman is assigned to one particular route, which is to be followed by him on
a daily basis. A detailed and well organized distribution system contributes to the
efficiency of the salesmen. It also leads to low costs, higher sales and higher efficiency
thereby leading to higher profits to the firm.
Distribution Routes
The various routes formulated by Mother Dairy for distribution of products are as
follows:
Modern Retail Format (MRF): This route consists of outlets of Mother Dairy
products, wherein a considerable amount of stock is kept in order to use for future
consumption. The stock does not exhaust within a day or two, instead as and
when required stocks are stacked up by them so as to avoid shortage or non-
General Retail: Under this route, all the outlets that come in a particular area or
an area along with its neighbouring areas are catered to. The consumption period
is not taken into consideration in this particular route.
Examples: All retail outlets.
Distribution Vehicles
The company has six highly insulated vehicles for the product delivery purpose, each
having a capacity of 125 crates. The routes of these vehicles are as follows,
1) First Vehicle Pune
2) Second Vehicle Vashi (Thane to Dombivali, Vashi to Panvel)
3) Third Vehicle Vikhroli to Borivali (E)
4) Fourth Vehicle Jogeshwari (W) to Borivali (W)
5) Fifth Vehicle South Mumbai (Kurla to Churchgate)
6) Sixth Vehicle - For tuning and alteration purpose.
Distribution System
Direct distribution: In direct distribution, the company has direct control over
the activities of sales, delivery, and merchandising and local account management
at the store level.
The main objective of this study lies in understanding the organization, studying,
understanding the marketing channels of the company and to correct its distribution
activities as well.
Deep learning regarding channel efficiency and understanding the market structure,
identifying potential outlets and practical survey was also undertaken.
This project is regarding the distribution route effectiveness, to study the impact of it on
sales and how the company understands the market using different strategies. The project
was undertaken for a period of sixty days and was carried out within the limits of
Mumbai.
During the entire course of the project, many outlets were surveyed for analysis
regarding distribution effectiveness & channel mapping.
In the first part of the project, a survey of selected outlets was conducted by taking
interview of outlet owners or managers. Based on the information gathered through the
outlet managers or owners service and distribution improvement, competitive position in
the different areas and scope for the market expansion is studied.
As a part of my project I have been assigned to the Fresh Dairy division of Mother Dairy.
Fresh dairy handles products which require a temperature control of 0-4 degrees.
Currently the Fresh Dairy division in Mumbai and Pune region have two products in that
product line, while 2-3 products are waiting to be launched. The current product range
includes the Probiotic Dahi, and Regular Dahi. The Probiotic ranges of products are sold
under the brand name of B Active.
The Fresh Dairy division has been making a business of around 4.19 tonnes daily
average and is growing steadily with its packaged dahi brining in the chunk of the
revenue. Mother Dairy started its operations in Mumbai 3 years ago. Since then it has
managed to make a steady progress in the Fresh Dairy products in spite of having 15 year
old competitors like Amul, Chitale, Aarey, Nestle etc.
The sales are depended mostly through the retail route which consists of department
stores, hypermarkets, malls or the local grocery stores. A good distribution network is set
in place with 20 distributors all over Mumbai and Thane region. Expansion plans are in
the pipe line considering the huge potential of the Mumbai region.
Product Profile
Mother Dairy launched their Probiotic Dahi in Mumbai 2 years back. It says its B
Activ plus curd is an innovative and extremely healthy offering containing proboitic
strains and dietary fibre. The company said the curd offers nutritional benefits and
helps in keeping the digestive system balanced. Thus ensuring good health for the
entire family.
In addition to the probiotic strains, dietary fibre has been incorporated in the curd
resulting in improved gastrointestinal health, glucose tolerance and better insulin
response helping in wait management. Suitable for the Indian palate, lactic cultures
have been used in the curd ensuing desired texture, consistency and taste that the
consumer generally wants in his / her curd. With the growing health consciousness
among consumers, the consumption of the new fibre which probiotic dahi provides
consumers with the added benefits of improved nutrient absorption and a well
balanced digestive system besides the goodness of dahi, says Paul Thachil, Mother
Dairys Chief Executive Officer (Dairy & Foods), Mother Dairy Fruit & Vegetable
(P) Ltd said. Based on the insight drawn from an extensive consumer research, we
found an inherent need of providing essential ingredients like fibre through the
consumers daily diet. Based on this insight the R & D team came out with this unique
and innovative product which can meet 10% of bodys essential fibre requirement.
Product pricing
Along with the new launched Probiotic products Mother Dairys Fresh Dairy
Division is growing stronger day by day in the western region with its trump card
Dahi.
Curd or Dahi is a dairy product obtained by curdling (coagulating) milk with
rennet or an edible acidic substance such as lemon juice or vinegar and then
draining off the liquid portion (called whey). Milk that has been left to sour ( raw
milk alone or pasteurized milk with added lactic acid bacteria) will also naturally
produce curds, and sour milk cheese is produced this way. The increased acidity
causes the milk proteins (casein) to tangle into solid masses, or curds. The rest,
which contains only whey proteins, is the whey. In cows milk, 80% of the
proteins are caseins. Curd products vary by region and include cottage cheese,
quark (both curdled by bacteria and sometimes also rennet) and paneer (curdled
with lemon juice). The word can also refer to a non dairy substance of similar
appearance or consistency, though in these cases a modifier or the word curdled
is generally used (e.g. bean curd, lemon curd or curdled eggs).
Mother Dairys Dahi goes through a highly scientific process which involves
standardized milk keeping the calorific and nutritional value of the product high.
As a result of the standardization procedures the quality and the freshness of the
Product Pricing
90 gms Rs 7/-
2 kgs - Rs 113/-
Brands
Quantity
Price
Mother Dairy
200
400
gms
gms
15
27
Amul
200
400
gms
gms
15
27
Nestle
200
400
gms
gms
15
27
Govardhan
200
400
gms
gms
15
27
Britannia
200
400
gms
gms
15
27
Therefore, the prices are not major issue as all the other competitors have same
prices for their products.
If you are exposed to any of these risk factors, you are a candidate for probiotic
supplementation:
Diet: Unbalanced and poor diet and Increased Alcohol Consumption, high intake
of food loaded with chemical additives (packaged and processed foods).
Fermented dairy products: Yogurt, Buttermilk (Chaach), Lassi and Kefir (Thin
drinkable Yogurt), but not in most commercially available ones as the cultures are
not live.
Dietary Supplements Probitic drinks, powders, Capsules, etc. are very useful as
they are highly concentrated sources of good bacteria as compared to the natural
ones. A 65 ml of a probiotic drink provides bacteria, which equals to nearly 60 tubs
(200 ml) of commercial yogurt.
Helpful foods To ensure good gut flora, it is important to take plenty of probiotic
food, which supports the growth of probotic flora. These Foods include Whole
grains, Oats, Wheat Bran, Barley, Isabgol,(Psyllium), Soyabeans and Soy based
products, Flaxseeds, Sunflower seeds, Fenugreek seeds (Methre), Garlic, Onions,
Leek (like spring onions), Carrots, Citrus fruits.
Packing
1) Sterilization of milk
Milk is heated to 120C for a few minutes or to just over 100C for 20 to 30 minutes and
this process kills all pathogenic and most other microorganisms and spores and the milk
will keep for 1 to 2 years. The milk is off white in colour and has a characteristic
caramel, boiled milk taste which is not to everyone likes.
2) Pasteurisation
Milk is often pasteurized to destroy pathogenic microorganisms and to eliminate spoilage
and defects induced by bacteria.
3) Inoculation and curdling
Milk for curd making must be of the highest quality. Because the natural microflora
present in milk frequently include undesirable types called psychrophiles, good farm
sanitation and pasteurization or partial heat treatment are important to the curd-making
process. This is done in Inoculation and curdling.
4) Packing
The curd is then packed into its respective packages of 90 gms, 200 gms, 400 gms, 2 kgs.
5) Heat Setting & Cooling
After the packaging, curd is kept in a room for 3 hrs for the purpose of heat setting,
which is important to the curd-making process. In addition, the curd must be free of
substances that may inhibit the growth of acid-forming bacteria (e.g., antibiotics and
sanitizing agents).
And after heating, the packed products are cooled in another store room for 4-5 hours.
This process makes the curd more thick, which can last for more number of days in the
same condition.
To find the comfort level of the dealers with the current distribution system.
RESEARCH METHODOLOGY
The term Research is composed of two words Re and Search. Re means again & again,
Search means search about new facts. Thus the term Research can be defined as a careful
investigation or enquiry specially to search new facts in any branch of knowledge. The
term Research refers to the systematic method consisting of enunciating the problems,
formulating the hypothesis, collecting the fact or data, analyzing the facts and reaching
certain conclusion either in the form of solution toward the concerned problem or in
certain generalization for some theoretical formulation.
METHODOLOGY
Methodology is the systematic and objective identification, collection analysis,
dissemination, and use of information for the purpose of improving decision making
related to the identification and solution of problem.
During the course of conducting the study the information were gathered mainly through
the primary sources. Conducting field survey by talking to the individual and the
methodology used in the survey was personal observation and interview with the
consumer and retailers with the help of questionnaire.
DATA COLLECTION
The task of data collection begins after a research problem has been defined and research
design has been chalked out. While deciding about the method of data collection to be
used for the study, the research should keep in mind two types of data viz. Primary and
Secondary.
Sources Of Data
a) Primary Data.
b) Secondary Data.
Primary Data
The Primary Data are those, which are collected afresh and for the first time and thus
happen to be original in character.
The observation method is the most commonly used method especially in studies relating
to behavioural sciences. Questionnaire method is also very widely used in order to give a
structure to the entire study.
Secondary Data
The secondary Data are those which have been already collected by someone else and
which have already been passed through statistical process.
The Secondary Data regarding the project was given by the company which was a list of
the outlets that were to be visited.
For this project, the method available was to get enough information through
personal interaction with the outlet owners with the aid of a questionnaire. The
collection of primary data requires considerable time. In this research the Primary
data were obtained by actual working in the market and interacting with the outlet
owners or managers who are involved in the process.
The secondary data was a list of the outlets that were to be surveyed and was
given by the company.
Area Of Research
Mumbai
From Virar till Worli & Thane till Powai.
Vasai Road, Nallasopara, Virar
Mira Road, Bhayandar
Borivali, Dahisar
Kandivali, Charkop
Malad, Goregaon, Jogeshwari
Medical
Convenience Store
SCOPE
An Internship Program of 60 days in any organization provides information to all
students like
Get chance to face different types of customers and tackle with different situation.
LIMITATIONS
Time provide by institute i.e. 60 days is not sufficient to get practical knowledge.
Seasonality was the biggest threat because the duration of the project was in the
summer. This is peak selling time for the company on the other hand in the rainy
season the picture is different. That affects the sample size and also the sale.
Finding and analysis was for the specific area (Routes) only.
During the project we have to trust the dealers and their perception actual
situation may vary.
Sales Rating
17%
31%
Satisfactory
Average
Unsatisfactory
52%
There were total 300 outlets surveyed for checking the service provided by the
distributor in the Mumbai region.
17% of the retail outlets consider their sales to be unsatisfactory due to competition
from other brands in the market. More number of companies are entering into this
business, as the entry barriers are very low.
2) Major Competitor
Amul
73
Nestle
106
Govardhan
53
Britannia Mahananda
27
41
Major Competitor
14%
9%
24%
Amul
Nestle
18%
Govardhan
Britannia
35%
Mahananda
35% retailers think that Nestle is major competitor for Mother Dairy.
Nestle comes out to be a major competitor for the company with 35% share, followed
by Amul, Govardhan, Mahananda, Britannia.
Nestle brings out more innovative schemes, and also gives retailers scrumptious
scheme of 12+2, 24+4.
Though Nestle pays twice in a week visit in the market, it still stands out to be a major
competitor for Mother Dairy.
Amul again, because of its huge consumer base posses a likely competitor to the
company just next to Nestle.
3) Type Of Curd
Plain
Curd
201
Probiotic
Curd
52
Flavoured
Curd
47
Type Of Curd
16%
17%
Plain Curd
67%
Probiotic Curd
Flavoured Curd
Plain curd is heavily consumed in Mumbai, but there are strategies which are going
on for promoting more Probiotic curd in this region.
There are many class areas in Mumbai, which are having high potentials for the sale
Probiotics. Nestles Nesvista has created a good awareness in some areas, but still a
large market has been left out.
More advertising & promotions must be carried out in such class areas of Mumbai for
boosting up the Probiotic sale.
67% retailers voted for plain curd in this region, but there is also a great preference
for Govardhan flavoured curd in some areas.
So Mother Dairy must also think about initiating a new flavoured curd in the market.
200 gms
116
400 gms
169
2 kgs
15
Type Of SKU
5%
39%
200 gms
400 gms
56%
2 kgs
This region has a maximum consumption of 400 gms sku, so the company delivers
more number of crates of 400 gms in this region.
56% retailers favours for 400 gms sku, as there is more demand for the same in this
region and the company has executed it amazingly.
Mostly the central part of the Mumbai has more sales of 200 gms sku. Moreover,
areas which are close to Mumbai such as Nallasopara, Virar but come under Thane
district shows more consumption of 200 gms, as the purchasing power of those people
are less as compared with the Mumbaities.
Very Good
52
Good
122
Average
118
Bad
8
Consumers Experience
3%
17%
Very Good
39%
Good
41%
Average
Bad
41% of the retailers articulate that, there is a good response towards the product, the
product is enormous and the experience of the consumers is fine. Hence, the retailers
are also satisfied with the distribution route which makes available the products at
right time.
Since three years, Mother Dairy has strived very hard in capturing the market, as
Amul had a monopoly since many years in this western region. But now, Mother
Dairy has somewhat succeeded in breaking this monopoly by capturing third place in
the market share just next to Nestle.
3% retailers which favours for bad are the competitors monopoly outlets.
Amul
(12 +1, 24+2)
21
Nestle
(12+2,24+4)
81
Govardhan
(12+3, 24+6)
104
Britannia
(12+1, 24+3)
43
Mother Dairy
(12+1,24+3)
49
Schemes Offered
7%
17%
27%
14%
Amul
Nestle
Govardhan
35%
Britannia
Mother Dairy
The schemes offered has an immense impact directly on the sales of the product,
Govardhan is offering a fine scheme in the market with 35% retailers feel so.
Govardhan has penetrated in the market because of this scheme. Retailers in some
areas are readily keeping their products, as the scheme is more scrumptious.
Hence, Mother dairy must also play with new schemes in the market for increased
sale which will also satisfy the distributor.
26
33
25
Mother Dairy
205
Service Level
4%
9%
11%
Amul
8%
68%
Nestle
Govardhan
Britannia
Mother Dairy
68% retailers has favoured for Mother Dairy as having a stupendous service levels.
The retailers which keep Mother Dairy Dahi, only those have contributed in getting
this information. The remaining 32% retailers dont keep Mother Dairy products and
hence has contributed for other companies, as other companies are providing fine
schemes and also some companies such as Amul & Nestle creates monopoly in the
market with the help of their products.
The companys distributor has been totally committed when it comes to delivery of
the products in this region.
Amul has a once in a week visit in this region, whereas Britannia, Nestle, Govardhan
has twice in a week visit.
26
33
Mother Dairy
25
205
Frequency Of Service
4%
9%
11%
Amul
8%
68%
Nestle
Govardhan
Britannia
Mother Dairy
Mother Dairy comes out with a majority of the retailers 68%, feels that the alternate
days service has been more advantageous for the company in capturing the market.
The retailers which keep Mother Dairy Dahi, only those have contributed in getting
this information. The remaining 32% retailers dont keep Mother Dairy products and
hence has contributed for other companies, as other companies are providing fine
schemes and also some companies such as Amul & Nestle creates monopoly in the
market with the help of their products.
In some high potential areas of this region, the company pays visit on daily basis,
hence the retailers has been entirely satisfied with the company. This has made
Mother Dairy the only company in Mumbai which is providing such service.
Mother Dairy distributor penetrates in the market early in the morning and before all
other competitors, so that the company can cover the market completely sooner than
its competitor.
This has helped the company in increasing its sales exceptionally in this province.
Amul has a once in a week visit in this region, whereas Britannia, Nestle, Govardhan
has twice in a week visit.
One
28
Two
132
Three
118
Four
22
Number Of Freezers
7%
9%
One
40%
Two
44%
Three
Four
44% retailers own two freezers in their outlets and 40% retailers own three freezers in
their outlets.
The number of freezers and their capacity makes possible for the retailers to stack
more number of product pieces in their shelf. Hence, this is also an essential
parameter which Mother Dairy must take into account & bring out new schemes for
freezers.
26
33
25
Mother Dairy
205
Freshnness Of Curd
4%
9%
11%
Amul
8%
68%
Nestle
Govardhan
Britannia
Mother Dairy
68% retailers favour Mother Dairy for the freshness of the product. The retailers
which keep Mother Dairy Dahi, only those have contributed in getting this
information. The remaining 32% retailers dont keep Mother Dairy products and
hence has contributed for other companies, as other companies are providing fine
schemes and also some companies such as Amul & Nestle creates monopoly in the
market with the help of their products.
Hence, the Mother Dairy retailers are more satisfied with the same date products.
Further, some retailers keep other companies products also, because there is a demand
for it. As Amul is an old company & has wider consumer base, people demands its
products, and therefore the retailers has to store their products also.
The Mother dairy distributor skilfully provides the retail outlets with the same date
products, which has made the company the only one in Mumbai, which supplies
products of same date.
As curd is a perishable product having a self life of 15 days. Hence, retailers desires
for the products which is manufactured and delivered in less time.
Mother Dairy brilliantly embarks upon this by providing products on same date as of
packed date, as the company has its manufacturing unit at Thane which makes this
possible.
Amul has its manufacturing plant in Gujarat which takes almost 2-3 days for products
to come in the market. Nestle has its plant in Baramati, which also takes 2 days for its
products to come in market.
Brand
Daily Average (Sales in
Tonnes)
Mother
Dairy
Nestle
4.19
6.24
0.8
1.1
1.27
Market Construct
3%
4%
5%
17%
Mother Dairy
Nestle
25%
46%
Amul
Chitale
Govardhan
Britannia
Amul has great market share with 46% in the month of march 2010, followed by
Nestle 25% at the second position, followed by Mother Dairy 17% at the third
position.
Since three years, Mother Dairy has strived very hard in capturing the market, as
Amul had a monopoly since many years in this western region. But now, Mother
Dairy has somewhat succeeded in breaking this monopoly by capturing third place in
the market share.
Company should adhere to and implement the customers suggestions and complaints
about products, service policies, price changes, advertising, etc.
Increase in the number of sales vehicles. By increasing the distributors vehicle in the
area, it will capture more number of outlets, the coverage of the outlets per day will be
increased which will ultimately increase the sale of the product.
Schemes must be revised for the Mother Dairy monopoly outlets; so that these outlets
would get more benefit and the sale might increase from these outlets (Monopoly
outlets are those outlets which keep only Mother Dairy Curd).
Company must try to create more awareness regarding the Probiotic among the
retailers as well as among the consumers.
Wakefulness towards Probiotics will be more beneficial for the company. Company
must try to increase its Probiotic curd sale in this province. Promotions and
advertising of the probiotics must be done heavily in this region. The company does
not spend more on these activities.
Provide better schemes & services in order to gain market share. All the companies
are trying to capture this high profit Mumbai region by drawing out more competitive
schemes, so Mother Dairy must also carry out some alterations in their schemes in
order to gain great yield from this region.
Majority of the retail outlets receive sufficient display facility & merchandise for the
promotion purpose.
The storage capacity of the outlets must be increased in order to increase the sale, as
the outlets can stack more pieces in it. So, the company must come up with some
innovative schemes for freezers.
The company provides 100% replacement scheme to the retailers which has
encouraged them in carrying out more business. Replacement is provided on the
expired or damaged products. The company allows 1 % damage pieces policy as a
norm.
OBJECTIVE OF PROMOTION
The specific objectives set for sales promotions will vary with the type of the target market.
For consumer promotions, objectives include encouraging purchasing of larger sized units,
building trial among non-users and attracting switchers away from the competitors brands.
PROMOTION TOOLS
Samples
These are offers of a trial amount of a product. It consists of inviting prospective purchasers
to try the product without cost or at a lower cost in the hope that they will buy the product.
Samples were given free.
Coupons
Coupons are certificates that give buyers a saving when they purchase a specified product.
These were given to the prospective purchasers who had come to try the product. A discount
of Rs 2/- was given on purchase of 400 gms of Probiotic or Regular Dahi. Coupons were
redeemed the other day.
PROMOTION METHODOLOGY
Point of purchase (PoP) includes displays and demonstrations that take place at the point of
purchase or sale. The days selected were Friday & Saturday, as these were the high Retail
counter traffic days. A large chunk of consumers comes to the retail outlets on these
weekends. And the timings were of the evenings. And the areas selected were Borivali
(West) & Malad (West) with 5 outlets in each region.
Satguru
22
24
25
21
405
Coupon Redeemed Opening Stock (400 gm) Sale In units (400 gm)
12
22
12
15
34
15
17
42
17
13
52
13
3
43
3
15
51
15
1
50
16
50
27
387
3
9
9
97
23
48
36
48
22
40
30
24
38
28
337
12
10
26
39
2
32
15
10
6
8
160
Borivali
8
9
10
Total
1
Patel Store
2
Quality manglore store
3 Malad 20th century
4
Astha
5
variety
6
Rex
7
Satguru
8 Borivali A-1 Super bazaar
9
Binit
10
Diamond
Total
61
50
44
52
12
79
46
47
43
53
487
3
9
9
97
Date-10 July 2010
12
10
26
39
2
32
15
10
6
8
160
Remarks
Outlet opened at
5.30 pm
Outlet opened at
5.00 pm
DATA ANALYSIS
On the first day in Malad, a total of 259 coupons were distributed in the market out of
which only 60 discount coupons were redeemed back the next day.
As it was raining heavily during the promotion time, the sale of the products was
hampered in a huge way. Consumers were not able to come to the retail outlets for the
activity.
In Borivali, a total of 146 coupons were distributed in the market out of which only37
coupons were redeemed back the next day.
The reason was same for this area also. Consumers had a harsh time to come to the
outlets because of which sale was affected in a great manner.
Consumers were given free samples of regular curd of 90 gms. Earlier this activity
was started by giving a scoop of Dahi to the consumers, but as the result was blink,
company had to give free samples, as one was ready to take the scoop of dahi.
The next day, in Malad, a total of 219 discount coupons were distributed in the market
out of which only 89 coupons were redeemed.
The reason was that, people were not given enough time to come back to the retail
outlets after 2-3 days for redemption. The coupons distributed on Saturday were
meant to be redeemed on the same day that too during the time of promotion. Hence,
the sale was hampered in this area.
The next day, in Borivali, a total of 268 discount coupons were distributed in the
market out of which only 71 coupons were redeemed.
The reason was same for this area also. Consumers were not having enough time to
redeem the coupons on the same outlet.
Therefore, the company must have given 2-3 days time for the consumers to come
back for the redemption.
Moreover, the time when the promotion was started was too late, as the monsoon had
already arrived in the city. The sale of curd is usually low during this season. Hence,
there are chances of not getting proper inferences, as most people avoid consuming
curd during this period.
Two
units/day
123
Three
units/day
69
In Malad
17%
53%
30%
One unit/day
Two units/day
Three units/day
In Borivali
One
unit/day
253
Two
units/day
149
Three
units/day
85
In Borivali
17%
One unit/day
52%
Two units/day
31%
Three units/day
In Malad, 53% of the households consume one unit per day, whereas in Borivali, 52%
households consume one unit per day.
Hence, this leads us to the consumption pattern of the households in that locality.
Price
47
Taste
151
Ease Of
Availabity
49
Quality
135
Advertising/Promotion
23
In Malad
12%
6%
12%
Price
Taste
33%
37%
Quality
Ease Of Availabity
Advertising/Promotion
In Borivali
Price
57
Taste
155
Ease Of
Availabity
71
Quality
143
Advertising/Promotion
61
In Borivali
12%
12%
Price
15%
32%
Taste
Quality
29%
Ease Of Availabity
Advertising/Promotion
Taste and Quality comes out to be a major parameter for Curd in both the regions. In
Malad, Taste constitutes around 37% followed closely with Quality, which constitutes
33%.
In Borivali, Taste constitutes for 32% & Quality at 29%, which clearly indicates that,
the households in this province has likelihood for these two parameters.
Hence, Mother Dairy must give more weight age to these parameters, as there has
been a quality problem in the products during the last month in many regions of
Mumbai.
In Malad
10%
19%
17%
Mother Dairy
Amul
30%
24%
Nestle
Britannia
Govardhan
In Borivali
Mother
Dairy
95
In Borivali
9%
13%
19%
Mother Dairy
Amul
26%
Nestle
33%
Britannia
Govardhan
It can be clearly seen that, Amul is still having a huge consumer base in both the
regions viz, in Malad & Borivali.
Amul is the having a high share of users with 30% in Malad & 33% in Borivali. This
is then followed by Nestle and then at third position is Mother Dairy with 19%
consumer share in each of the areas.
Mother Dairy must try to come up with more product line in the Mumbai region, so as
to break this consumer base as Amul & Nestle are having more variety of products.
Moreover, Amul is in this western region since many years, whereas, Mother Dairy
has just completed three years in this region. Both the companies have their own
strong hold regions such as, Amul in Western region & Mother Dairy in Northern
Region.
Hence, Mother Dairy must come up with more innovative products in their product
catalogue for this region.
CONCLUSION
The Sampling and Sales Promotion activities were a good first step into the area of Marketing
and Sales. It helped in developing a considerable amount of convincing skills, because, it
took a lot to convince the consumers & retailers for the information. A good understanding of
the market was accomplished with the group consisted of a variety of consumers and
retailers. This even helped in the polishing of communication skills, a must-have to survive
and make it big in the present world. It even gave a good understanding of behaviour of
consumers and retailers when placed in different situations. It helped in developing the kind
of relations one needs to uphold in the corporate world and it helped in building up the right
attitude.
As all the points in the above mentioned paragraph, are the must-have skills for anyone in the
field of Marketing and Sales, the training period was a good experience and a good stepping
stone into the real business world.
BIBLIOGRAPHY
www.nddb.org
www.motherdairy.com
www.fnbnews.com
www.indiadairy.com
www.google.com
Opportunities and Challenges in the Indian Dairy Industry Dr. K. G. Karmakar and
Dr. G. D. Banerjee
ANNEXURE
RETAILER
b) Average: ______
c) Unsatisfactory: ______
5. If the answer to the above is other than 4a then please choose the reasons from
below:
a) Competition from other brands
b) Competition from local dairy owners
c) Others ___________________________________________________________
6. Whom do you consider your major competitor?
___________________________________________________________________
7. Which type of curd sells the most?
Plain curd ___ Probiotic curd ___ Flavoured curd___
8. Package of what size moves faster?
200s _____
2 kgs _____
1) Name: _____________________________________________________
2) Address & Phone no: ___________________________________________
3) Average household consumption of curd/day: ______units
4) Users of which brand
Brand ______________________________
5) Rank the top 3 most important parameters which affect your purchase.
Price
Taste
Quality
Ease of Availability
Advertising/promotion