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AN INTERNSHIP REPORT ON

AN INTERNSHIP REPORT ON DISTRIBUTION ROUTE EFFECTIVENESS PRITAM SONAWANE ROLL # 9810063 IN PARTIAL FULFILMENT OF

DISTRIBUTION ROUTE EFFECTIVENESS

PRITAM SONAWANE ROLL # 9810063

IN PARTIAL FULFILMENT OF THE MASTERS PROGRAM IN BUSINESS ADMINISTRATION

FULFILMENT OF THE MASTERS PROGRAM IN BUSINESS ADMINISTRATION DEPARTMENT OF MANAGEMENT STUDIES, INDIAN INSTITUTE OF

DEPARTMENT OF MANAGEMENT STUDIES, INDIAN INSTITUTE OF TECHNOLOGY, ROORKEE UTTARAKHAND. MAY – JULY 2010.

ACKNOWLEDGMENT

I consider it as a great privilege to place a record of my profound gratitude and indebtedness to my mentor Mr. Sunil More for his constant attention, invaluable guidance, and constructive criticism given to me, without which the project would have not seen the light of the day.

I am thankful to all respondents for giving me their valuable time and genuine information. My heartfelt gratitude also goes out to the staff and employees at Mother Dairy for having co- operated with me and guided me throughout the two months of my internship period.

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: WORLD’S 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

Product and Process Technology

36

Competition in Different Products

36

Advertisement and Promotion by Mother Dairy

37

Mother Dairy and Its Programme for Management of Change

38

ORGANIZATION STRUCTURE OF THE SALES DEPARTMENT

39

DISTRIBUTION NETWORK

40

Distribution Routes

40

Distribution Vehicles

41

Distribution System

41

Departments Involved In The Distribution Process

42

Project: Distribution Route Effectiveness Of Cold Chain Products (CCP) i.e. Curd

43

ABOUT THE PRODUCT

44

Mother Dairy’s Fresh Dairy Division

44

Product Profile

44

Pricing Of Various Packaged Dahi Available In The Market

47

What are Probiotics?

47

Why do we need Probiotics?

48

Where to get them from?

49

CURD MAKING PROCESS

50

OBJECTIVES OF THE PROJECT

51

RESEARCH METHODOLOGY

51

METHODOLOGY

52

DATA COLLECTION

52

Sources Of Data

52

METHODOLOGY ADOPTED FOR RESEARCH

53

Area Of Research

53

Types Of Outlet

54

SCOPE

54

LIMITATIONS

54

DATA PRESENTATION & ANALYSIS

55

MARKET CONSTRUCT – MARCH 2010

64

OBSERVATIONS & SUGGESTIONS

65

ADDED PROJECT: SALES PROMOTION

67

OBJECTIVE OF PROMOTION

67

PROMOTION TOOLS

67

Samples

67

Coupons

67

PROMOTION METHODOLOGY

67

SALES PROMOTION ACTIVITY SNAPS

68

CURD SAMPLING DATA

69

DATA ANALYSIS

70

SALES PROMOTION DATA INETRPRETATION

71

CONCLUSION

76

BIBLIOGRAPHY

77

ANNEXURE

78

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.

INTRODUCTION

FMCG SECTOR

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. India’s 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.

The FMCG sector consists of the following categories:

Personal Care- Oral care, Hair care, Wash (Soaps), Cosmetics and Toiletries, Deodorants and Perfumes, Paper products (Tissues, Diapers, Sanitary products) and Shoe care; the major players being; Hindustan Lever Limited, Godrej Soaps, Colgate, Marico, Dabur and Procter & Gamble. Household Care- Fabric wash (Laundry soaps and synthetic detergents), Household cleaners (Dish/Utensil/Floor/Toilet cleaners), Air fresheners, Insecticides and Mosquito repellents, Metal polish and Furniture polish; the major players being; Hindustan Lever Limited, Nirma and Ricket Colman. Branded and Packaged foods and beverages- Health beverages, Soft drinks, Staples/Cereals, Bakery products (Biscuits, Breads, Cakes), Snack foods, Chocolates, Ice- creams, Tea, Coffee, Processed fruits, Processed vegetables, Processed meat, Branded flour,

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-tooʺ 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.

the population is expected to maintain a robust growth rate. Spending Pattern An increase is spending

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 organised- retail 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 Profile and Mind Set of Consumer People are becoming conscious about health and hygienic. There is a change in the mind set of the Consumer and now looking at “Money for Value” rather than “Value for Money”. We have seen willingness in consumers to move to evolved products/ brands, because of

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 goodsʹ labels containing nutritional information compared to two years ago which was only 59 per cent.

ADVANTAGES TO THE SECTOR

Governmental Policy Indian Government has enacted policies aimed at attaining international competitiveness through lifting of the quantitative restrictions, reducing excise duties, automatic foreign in- vestment and food laws resulting in an environment that fosters growth. 100 per cent ex-port oriented units can be set up by government approval and use of foreign brand names is now freely permitted.

Central & State Initiatives Recently Government has announced a cut of 4 per cent in excise duty to fight with the slowdown of the Economy. This announcement has a positive impact on the industry. But the benefit from the 4 per cent reduction in excise duty is not likely to be uniform across FMCG categories or players. The changes in excise duty do not impact cigarettes (ITC, Godfrey Phillips), biscuits (Britannia Industries, ITC) or ready-to-eat foods, as these products are either subject to specific duty or are exempt from excise. Even players with manufacturing facilities located mainly in tax-free zones will also not see material excise duty savings. Only large FMCG-makers may be the key ones to bet and gain on excise cut.

Foreign Direct Investment (FDI) Automatic investment approval (including foreign technology agreements within specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food processing sector except malted food, alcoholic beverages and those reserved for small scale industries (SSI).

Expanding Daily

INDIAN DAIRY

India’s 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 world’s 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 India’s 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 shelf- life. 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.

Indian Dairy Products The term Indian Dairy Products refers to those milk products, which originated in undivided India.

Flow chart of conversion of milk into traditional Indian dairy products Milk Condensed Cultured Percipitation
Flow chart of conversion of milk into traditional Indian dairy products
Milk
Condensed
Cultured
Percipitation
Acid
Dahi
Misti Doi
Rabri
Kheer
Kkoa
Paneer
Shrikhand
Burfi
Sandesh
Ghee
Pedha
Chhana
Lassi
kalakand
Rasgoola
Kadbi
Gulabjamun
Pantoda
Rasmalai

SWOT ANALYSIS OF INDIAN DAIRY INDUSTRY

Strengths:

Demand profile: Absolutely optimistic. Margins: Quite reasonable, even on packed liquid milk. Flexibility of product mix: Tremendous. With balancing equipment, you can keep on adding to your product line. Availability of raw material: Abundant. Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization. Technical manpower: Professionally-trained, technical human resource pool, built over last 30 years.

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 can’t 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 consumer’s 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

terms of utilization of resources and presence in the market place.

A lateral view opens up opportunities in milk proteins through casein, caseinates and

other dietary proteins, further opening up export opportunities.

Yet another aspect can be the addition of infant foods, geriatric foods and nutritionals. Export potential: Efforts to exploit export potential are already on. Amul is exporting

to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT

treaty, opportunities will increase tremendously for the export of agri-products in

general and dairy products in particular.

Threats:

Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of place in the industry. Organized dissemination of information about the harm that they are doing to producers and consumers should see a steady decline in their importance.

The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far outweigh ‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental and weaknesses and threats are transitory. Any investment idea can do well only when you have three essential ingredients: entrepreneurship (the ability to take risks), innovative approach (in product lines and marketing) and values (of quality/ethics).

The Indian dairy industry, following its delicensing, has been attracting a large number of entrepreneurs. Their success in dairying depends on factors such as an efficient yet economical procurement network, hygienic and cost-effective processing facilities and innovativeness in the market place. All that needs to be done is: to innovate, convert products into commercially exploitable ideas. All the time keep reminding yourself:

Benjamin Franklin discovered electricity, but it was the man who invented the meter that really made the money!

INDIA: WORLD’S LARGEST MILK PRODUCER

India has become the world's No. 1 milk producing country, with output in 1999-2000 (marketing year ending March 2000) forecasted at 78 million tonnes. United States, where the milk production is anticipated to grow only marginally at 71 million tonnes,

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.

MARKETING TODAY & TOMORROW

The Indian Market - A Pyramid

India's dairy market is multi-layered. It's shaped like a pyramid with the base made up of a vast market for low-cost milk. The bulk of the demand for milk is among the poor in urban areas whose individual requirement is small, maybe a glassful for use as whitener

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.

Marketing Strategy for 21 st Century

Two key elements of marketing strategy for 21 st century are: Focus on strong brands and, product mix expansion to include UHT milk, cheese, ice creams and spreads. The changing marketing trends will see the shift from generic products to the packaged quasi, regular and premium brands. The national brands will gradually edge out the regional brands or reduce their presence. The brand image can do wonders to a product's marketing as is evident from the words of Perfume Princess Coco Chanel: In the factory, we pack perfume; in the market, we sell hope!

Emerging Dairy Markets

Food service institutional market: It is growing at double the rate of consumer market Defense market: An important growing market for quality products at reasonable prices Ingredients market: A boom is forecast in the market of dairy products used as raw material in pharmaceutical and allied industries Parlour market: The increasing away-from-home consumption trend opens new vistas for ready-to-serve dairy products which would ride piggyback on the fast food revolution sweeping the urban India.

India, with her sizable dairy industry growing rapidly and on the path of modernization, would have a place in the sun of prosperity for many decades to come. The one index to the statement is the fact that the projected total milk output over the next 15 years (1995- 2010) would exceed 1457.6 million tonnes which is twice the total production of the past 15 years!

NATIONAL DAIRY DEVELOPMENT BOARD (NDDB)

An Institution of National Importance

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.

Progressive evolution of the society is possible only when development is directed by those whom it seeks to benefit.

In particular, women and the less privileged must be involved in cooperative management and decision-making.

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

those that have earned customer confidence.

Some of the major Dairy Cooperative Federations include:

Andhra Pradesh Dairy Development Cooperative Federation Ltd (APDDCF)

Bihar State Cooperative Milk Producers' Federation Ltd (COMPFED)

Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF)

Haryana Dairy Development Cooperative Federation Ltd. (HDDCF)

Himachal Pradesh State Cooperative Milk Producers' Federation Ltd (HPSCMPF)

Karnataka Cooperative Milk Producers' Federation Ltd (KMF)

Kerala State Cooperative Milk Marketing Federation Ltd (KCMMF)

Madhya Pradesh State Cooperative Dairy Federation Ltd (MPCDF)

Maharashtra Rajya Sahakari Maryadit Dugdh Mahasangh (Mahasangh)

Orissa State Cooperative Milk Producers' Federation Ltd (OMFED)

Pradeshik Cooperative Dairy Federation Ltd (UP) (PCDF)

Punjab State Cooperative Milk Producers' Federation Ltd (MILKFED)

Rajasthan Cooperative Dairy Federation Ltd (RCDF)

Tamilnadu Cooperative Milk Producers' Federation Ltd (TCMPF)

West Bengal Cooperative Milk Producers' Federation Ltd. (WBCMPF)

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.

Operation Flood was implemented in three phases.

Phase I Phase I (1970-1980) was financed by the sale of skimmed milk powder and butter oil gifted by the European Union then EEC through the World Food Programme. NDDB planned the programme and negotiated the details of EEC assistance.

During its first phase, Operation Flood linked 18 of India's premier milk sheds with consumers in India's four major metropolitan cities: Delhi, Mumbai, Calcutta and Chennai.

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 self- sustaining 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

infrastructure required to procure and market increasing volumes of milk.

Veterinary first-aid health care services, feed and artificial insemination services for cooperative members
Veterinary
first-aid
health care services,
feed
and
artificial
insemination
services
for
cooperative
members were
extended,
along
with
intensified
member education.
Operation Flood's Phase III consolidated India's dairy cooperative movement, adding
30,000 new dairy cooperatives to the 42,000 existing societies organized during Phase
II. Milk sheds peaked to 173 in 1988-89 with the numbers of women members and
Woman’s Dairy Cooperative Societies increasing significantly.
Phase III gave increased emphasis to research and development in animal health and
animal nutrition. Innovations like vaccine for Theileriosis, bypass protein feed and urea-
molasses mineral blocks, all contributed to the enhanced productivity of milk animals.
From the outset, Operation Flood was conceived and implemented as much more than a
dairy programme. Rather, dairying was seen as an instrument of development,
generating employment and regular incomes for millions of rural people. "Operation
Flood can be viewed as a twenty year experiment confirming the Rural
Development Vision" (World Bank Report 1997c.)

About The Company

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 Dairy’s 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 state- of-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 company’s 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 Company’s 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-of- the-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 India’s finest food companies.

Objectives and Business Philosophy of Mother Dairy

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

Centralized quality control

Centralized purchases and

Pooling of milk efficiently

Mother Dairy had declared, as its business philosophy, the following:

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 Dairy’s 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.

Various Divisions Of Mother Dairy

NDDB Mother Dairy Amul (GCP) (IFP) Milk Division Spread & Beverages Fresh Dairy Grocery &
NDDB
Mother Dairy
Amul
(GCP)
(IFP)
Milk Division
Spread & Beverages
Fresh Dairy
Grocery & Cheese
products
Ice cream & Frozen
Products
-
Probiotic Curd
- Dhara
- Butter
- Chillz Ice cream
-
Curd
- UHT Milk
- Liquid Milk
- Cheese
- Peas
-
Lassi
- Ghee
- Fruit Drinks
- Frozen Vegetables
-
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:

products. Mother Dairy has a wide range of products out of which the following products are,
products. Mother Dairy has a wide range of products out of which the following products are,
 In Ghee Division
 In Ghee Division
 In Ghee Division
 In Ghee Division
 In Ghee Division
 In Ghee Division

In Ghee Division

 In Ghee Division

In Butter Division

 In Butter Division  In Ice Cream Division

In Ice Cream Division

 In Butter Division  In Ice Cream Division
 In Butter Division  In Ice Cream Division
 In Butter Division  In Ice Cream Division
 In Butter Division  In Ice Cream Division
 In Butter Division  In Ice Cream Division
 In Butter Division  In Ice Cream Division
 In Butter Division  In Ice Cream Division
 In Dahi Division

In Dahi Division

 In Dahi Division
 In Dahi Division
INTERNATIONAL BUSINESS Mother Dairy is a leading marketer of dairy products and fruit & vegetable

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 world- class 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

in products. This will, of course, be backed by relevant marketing and promotion campaigns. Mother Dairy is bringing in mass Indian flavours which are building up in terms of absolute percentage of contribution. Their attempt is to make the taste experience in ice creams as familiar as possible so as to increase consumption. Take the case of curd. It started off very slow but today, Mother Dairy claims it's growing at close to 60 per cent year-on-year in Delhi. Here again, the Indian flavour formula seems to have worked.

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.

Perspective Strategies applied by Mother Dairy

Mother Dairy maps the future of dairying in India, setting realistic goals for

Strengthening Cooperative Business,

Production Enhancement,

Assuring Quality and

Creating an Information and Development Research.

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.

Strategy for Strengthening Cooperative Business

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

Education of producer members, opinion leaders and trained professionals to be expanded and strengthened

Empower local leaders, strengthen societies and equip their staff and members with the skills and information they need

Persuade the State and Central Governments to remove the shackles on cooperative laws so dairy can compete on equal terms with other forms of enterprise.

Strategy for Production Enhancement

Improve the production potential of indigenous breeds of cattle such as Sahiwal, Gir, Rathi and Kankrej and breeds of buffalo such as Murrah, Mehsana and Jaffarbadi through appropriate selection programme

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

Increase production and availability of green and ensiled fodder

Encourage unions, NGOs and cooperatives to put common property area under improved pasture and fodder tree

Expand first-aid coverage through village level societies

Increase vaccination of animals against HS, BQ and FMD

Develop Mastitis and Brucellosis control strategies

Strategy for Assuring Quality

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

Facilitate improvement of hygiene, sanitation, food safety and operating efficiency in the dairy plants and sensitize dairy personnel to product quality aspects as per international standards.

Strategy for Creating an Information and Development Research

Link large cooperatives, Unions, Federations and NDDB in a national network that collects, adds value and disseminates information

Ensure availability of analytical information for Policy Planning and Decision Support.

Product and Process Technology

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.

Competition in Different Products

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 Amul’s monopoly over butter product. Same way, Nestle also play its game, by creating monopoly over its Maggie noodles. And so the company’s other products also gets penetrated in the market. But, Mother Dairy Mumbai Office doesn’t 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 and Its Programme for Management of Change

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 Dairy’s 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.

ORGANIZATION STRUCTURE OF THE SALES DEPARTMENT

Managing

 

Director

Chief Executive

Officer

National Sales

Manager

Regional Sales

Manager

Sales Manager

Area Sales

Manager

Senior

Executive

Junior

Executive

Pilot Sales Representative
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:

Distribution Plant Production Depot Retail Stock Retail Shelf Consumer Warehouse Warehouse
Distribution
Plant
Production
Depot
Retail Stock
Retail Shelf
Consumer
Warehouse
Warehouse

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:

Institution: The customers in this category collectively contribute a large chunk of the total sales of the Company. It basically consists of organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month. Examples: Clubs, Fine dine restaurants, Hotels, Corporate Houses, etc.

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-

availability of the product. Examples: Departmental stores, Super markets such as More, Spencer, Reliance Fresh, etc.

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.

Indirect distribution: In indirect distribution, an organization which is not part of the Company system has control on one or more of the distribution elements (Sales, delivery, merchandising and local account management).

Merchandising: Merchandising means communication with the consumer at the point of purchase to convey product benefit, value and Quality. Sales people and delivery personnel both have this responsibility. In certain locations special teams who go into business locations to specifically merchandise our products.

Departments Involved In The Distribution Process

The Distribution process mainly consists of three departments:

Distribution Department: It appoints distributors and establishes a distribution network, processes approved sale orders and prepares invoices, arranges logistics and ship products, co-ordinates with distributors for collections and monitors distribution stocks and their set-up.

Finance Department: It checks credit limits and approves sales orders in compliance with the credit policy followed by the firm, records collections from distributors, periodically reconciles outstanding balances from distributors, obtains balance confirmation from distributors and follows up outstanding balances.

Logistics or Warehousing Department: It dispatches goods as per approved by order, ensures that stocks are dispatched on a FIFO basis, ensures physical control over load out area and updates warehouse stock records in a timely manner.

Project: Distribution Route Effectiveness Of Cold Chain Products (CCP) i.e. Curd Division.

Of Cold Chain Products (CCP) i.e. Curd Division. The main objective of this study lies in

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.

ABOUT THE PRODUCT

Mother Dairy’s Fresh Dairy Division

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

Products under the Fresh Dairy division (Mumbai),

1)

B Activ Probiotic Dahi

of the Mumbai region. Product Profile Products under the Fresh Dairy division (Mumbai), 1) B Activ
of the Mumbai region. Product Profile Products under the Fresh Dairy division (Mumbai), 1) B Activ
Mother Dairy launched their Probiotic Dahi in Mumbai 2 years back. It says its B

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 Dairy’s 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 body’s essential fibre requirement.

Product pricing –

200 gms – Rs 16/-

400 gms – Rs 29/-

Availability – Department stores, Hypermarkets, Supermarkets, Retail Outlets, etc.

Life – 15 days

2)

Regular Dahi

Retail Outlets, etc. Life – 15 days 2) Regular Dahi Along with the new launched Probiotic

Along with the new launched Probiotic products Mother Dairy’s 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 cow’s 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 Dairy’s 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

dahi is maintained keeping its taste intact all year round.

Product Pricing –

90 gms – Rs 7/-

200 gms – Rs 15/-

400 gms – Rs 27/-

2 kgs - Rs 113/-

Availability – Department stores, Hypermarkets, Supermarkets, Retail outlets, etc.

Life – 15 days

Pricing Of Various Packaged Dahi Available In The Market

Brands

Mother Dairy

Amul

Nestle

Govardhan

Britannia

 

200

400

200

400

200

400

200

400

200

400

Quantity

gms

gms

gms

gms

gms

gms

gms

gms

gms

gms

Price

15

27

15

27

15

27

15

27

15

27

Therefore, the prices are not major issue as all the other competitors have same prices for their products.

What are Probiotics?

Probiotics are dietary supplements containing potentially beneficial bacteria or yeasts. According to the currently adopted definition by FAO/WHO, Probiotics are: ‘Live microorganisms which when administered in adequate amounts confer a health benefit on the host’.

Lactic acid bacteria (LAB) are the most common type of microbes used. LABs have been used in the food industry for many years, because they are able to convert sugars (including lactose) and other carbohydrates into lactic acid. This not only provides the characteristic sour taste of fermented dairy foods such as yogurt, but also by lowering the pH may create fewer opportunities for spoilage organism to grow, hence creating

possible health benefits on preventing gastrointestinal infections. Strains of the genera Lactobacillus and Bifid bacterium are the most widely used probiotic bacteria.

Probiotic bacterial cultures are intended to assist the body’s naturally occurring gut flora, ecology of microbes, to re-establish themselves. They are sometimes recommended by doctors and, more frequently, by nutritionists, after a course of antibiotics, or as part of the treatment for gut related candidiasis. Claims are made that probiotics strengthen the immune system to combat allergies, excessive alcohol intake, stress, exposure to toxic substances, and other diseases. In these cases, the bacteria that work well with our bodies (see symbiosis) may decrease in number, an event which allows harmful competitors to thrive, to the detriment of our health.

Maintenance of a healthy gut flora is, however, dependent on many factors, especially the quality of food intake. Including a significant proportion of probiotic foods in the diet has been demonstrated to support a healthy gut flora and may be another means of achieving the desirable health benefits promised by probiotics.

Probiotics, which means “for life”, have been used for centuries as natural components in health-promoting foods. The original observation of the positive role played by certain bacteria was first introduced by Russian scientist and Nobel laureate Eli Metchnikoff, who in the beginning of the 20 th century suggested that it would be possible to modify the gut flora and to replace harmful microbes by useful microbes.

The term “probiotics” was first introduced in 1953 by Kollath (see Haamilton-Miller et al 2003). Contrasting antibiotics, probiotics were defined as microbially derived factors that stimulate the growth of the microorganisms. In 1989 Roy Fuller suggested a definition of probiotics which has been widely used: “A live microbial feed supplement which beneficially affects the host animal by improving its intestinal microbial balance”.

In the 1960s the dairy industry began to promote fermented milk products containing Lactobacillus acidophilus. In subsequent decades other (Lactobacillus) species have been introduced including Lactobacillus rhamnosus, Lactobacillus caset, and Lactobacillus johnsonii, because they are intestinal species with beneficial properties.

Why do we need Probiotics?

If you are exposed to any of these risk factors, you are a candidate for probiotic

supplementation:

Lifestyle: Increased Stress, Rushed or irregular meals, excessive travel.

Diet: Unbalanced and poor diet and Increased Alcohol Consumption, high intake of food loaded with chemical additives (packaged and processed foods).

Excessive Medication: Increased use of medicines (contraceptives pills, antibiotics and steroids).

Environmental: Pollution, and increased use of pesticides.

Others: Poor gut (constipation and diarrhoea), Chemotherapy, Exposure to harmful radiations.

Where to get them from?

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.

CURD MAKING PROCESS

Sterilization Pasteurisation Inoculation and curdling Packing Heat Setting & Cooling
Sterilization
Pasteurisation
Inoculation and curdling
Packing
Heat Setting & Cooling

1)

Sterilization of milk

Milk is heated to 120°C for a few minutes or to just over 100°C 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.

OBJECTIVES OF THE PROJECT

The main objective of this project is “Mapping of the available marketing channels of Mother Dairy” in Mumbai region.

To find the comfort level of the dealers with the current distribution system.

To find the lacunas in the current distribution system.

To suggest remedial measures.

Study of curd market share by mapping in Mumbai.

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.

According to CLIFFORD WOODY, “Research is a careful inquiry or examination in setting the facts or principle, a diligent investigation to ascertain something.”

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.

METHODOLOGY ADOPTED FOR RESEARCH

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

• Andheri, Vile Parle, Santacruz

• Bandra, Khar

• Dadar, Prabhadevi, Worli

• Thane, Powai

Types Of Outlet

Grocery Store (Kirana)

Medical

Convenience Store

SCOPE

An Internship Program of 60 days in any organization provides information to all students like…

Current organisation work-culture.

Industry practical knowledge.

Gives Professional touch.

Better awareness about market competition.

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.

DATA PRESENTATION & ANALYSIS

1) Current Sales Rating Satisfactory Average Unsatisfactory 93 157 50 Sales Rating 17% 31% Satisfactory
1)
Current Sales Rating
Satisfactory
Average
Unsatisfactory
93
157
50
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.
52% of the retail outlets consider their sales to be average
31% of the retail outlets consider their sales to be satisfactory
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

Nestle

Govardhan

Britannia

Mahananda

73

106

53

27

41

Major Competitor 14% 24% 9% Amul Nestle 18% Govardhan Britannia 35% Mahananda
Major Competitor
14%
24%
9%
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

Probiotic

Flavoured

Curd

Curd

Curd

201

52

47

Type Of Curd 16% 17% Plain Curd Probiotic Curd 67% Flavoured Curd
Type Of Curd
16%
17%
Plain Curd
Probiotic Curd
67%
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. Nestle’s 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.

4)

Type Of Stock Keeping Unit (SKU)

200 gms

400 gms

2 kgs

116

169

15

Type Of SKU 5% 39% 200 gms 400 gms 56% 2 kgs
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.

5)

General Consumers Experience Towards Mother Dairy

Very Good

Good

Average

Bad

52

122

118

8

Consumers Experience 3% 17% Very Good 39% Good 41% Average Bad
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 competitor’s monopoly outlets.

6)

Schemes Offered By Companies

Amul (12 +1, 24+2)

Nestle

Govardhan

Britannia

Mother Dairy

(12+2,24+4)

(12+3, 24+6)

(12+1, 24+3)

(12+1,24+3)

21

81

104

43

49

Schemes Offered 7% 17% Amul 27% 14% Nestle Govardhan Britannia 35% Mother Dairy
Schemes Offered
7%
17%
Amul
27%
14%
Nestle
Govardhan
Britannia
35%
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.

Followed by Nestle with 27 %, Mother Dairy at 17%.

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.

7)

Service Level Of Companies

Amul

Nestle

Govardhan

Britannia

Mother Dairy

11

26

33

25

205

Service Level 4% 9% 11% Amul Nestle 8% Govardhan 68% Britannia Mother Dairy
Service Level
4%
9%
11%
Amul
Nestle
8%
Govardhan
68%
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 don’t 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 company’s 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.

8)

Frequency Of Service By Companies

Amul

Nestle

Govardhan

Britannia

Mother Dairy

11

26

33

25

205

Frequency Of Service 4% 9% 11% Amul Nestle 8% Govardhan 68% Britannia Mother Dairy
Frequency Of Service
4%
9%
11%
Amul
Nestle
8%
Govardhan
68%
Britannia
Mother Dairy

Mother Dairy comes out with a majority of the retailers 68%, feels that the alternate day’s 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 don’t 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,
Amul has a once in a week visit in this region, whereas Britannia, Nestle, Govardhan
has twice in a week visit.
9)
Number Of Freezers With Retailers
One
Two
Three
Four
28
132
118
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.

10) Freshness Of The Curd

Amul

Nestle

Govardhan

Britannia

Mother Dairy

11

26

33

25

205

Freshnness Of Curd 4% 9% 11% Amul Nestle 8% Govardhan 68% Britannia Mother Dairy
Freshnness Of Curd
4%
9%
11%
Amul
Nestle
8%
Govardhan
68%
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 don’t 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.

Hence, this parameter is also an important parameter to take into consideration.

MARKET CONSTRUCT – MARCH 2010

 

Mother

         

Brand

Dairy

Nestle

Amul

Chitale

Govardhan

Britannia

Daily Average (Sales in Tonnes)

4.19

6.24

11.43

0.8

1.1

1.27

Market Construct 4% 3% 5% 17% Mother Dairy Nestle 25% Amul 46% Chitale Govardhan Britannia
Market Construct
4%
3%
5%
17%
Mother Dairy
Nestle
25%
Amul
46%
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.

Rest covers with Govardhan & Chitale with 4% & 3% respectively.

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.

OBSERVATIONS & SUGGESTIONS

We can sum the observations in brief as follows:

Improve the market share by:

- providing more efficient & effective distribution

- catering to busy and untapped retailers at least 3 times a week

- widening the region (i.e. area of sales)

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 distributor’s 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.

There is a good potential scope of improvement by the distributor in the areas of uncovered outlets as well as those outlets which do not get the order as per requirement from the competitors.

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.

ADDED PROJECT: SALES PROMOTION

Sales promotion refers to the short-term incentives to encourage sales of a product or service. It consists of a diverse collection of incentive tools, mostly short-term, designed to stimulate quicker and greater purchase of products or services by consumers.

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 competitor’s 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.

SALES PROMOTION ACTIVITY SNAPS

SALES PROMOTION ACTIVITY SNAPS
SALES PROMOTION ACTIVITY SNAPS
SALES PROMOTION ACTIVITY SNAPS
SALES PROMOTION ACTIVITY SNAPS
SALES PROMOTION ACTIVITY SNAPS
SALES PROMOTION ACTIVITY SNAPS
SALES PROMOTION ACTIVITY SNAPS
SALES PROMOTION ACTIVITY SNAPS

CURD SAMPLING DATA

Sr.no

Area

OutletName

No. of Redemptioncoupon Distributed

CouponRedeemed

OpeningStock(400gm)

SaleInunits(400gm)

Remarks

1

 

PatelStore

58

12

22

12

 

2

Qualitymanglorestore

70

15

34

15

 

3

Malad

20thcentury

61

17

42

17

 

4

Astha

50

13

52

13

 

5

variety

20

3

43

3

 

6

 

Rex

54

15

51

15

 
           

Outlet openedat

7

Satguru

22

1

50

1

5.30pm

 

Borivali

         

Outlet openedat

8

A-1Superbazaar

24

3

16

3

5.00pm

9

Binit

25

9

50

9

 

10

Diamond

21

9

27

9

 

Total

   

405

97

387

97

 
 

Date-10July2010

1

 

PatelStore

61

12

23

12

 

2

Qualitymanglorestore

50

10

48

10

 

3

Malad

20thcentury

44

26

36

26

 

4

Astha

52

39

48

39

 

5

variety

12

2

22

2

 

6

 

Rex

79

32

40

32

 

7

Satguru

46

15

30

15

 

8

Borivali

A-1Superbazaar

47

10

24

10

 

9

Binit

43

6

38

6

 

10

Diamond

53

8

28

8

 

Total

   

487

160

337

160

 

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.

SALES PROMOTION DATA INETRPRETATION

1)

Average Household Curd Consumption

In Malad

One

Two

Three

unit/day

units/day

units/day

213

123

69

In Malad 17% One unit/day 53% 30% Two units/day Three units/day
In Malad
17%
One unit/day
53%
30%
Two units/day
Three units/day

In Borivali

One

Two

Three

unit/day

units/day

units/day

253

149

85

In Borivali 17% One unit/day 52% 31% Two units/day Three units/day
In Borivali
17%
One unit/day
52%
31%
Two units/day
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.

2)

Parameters Which Affects The Purchase

In Malad

     

Ease Of

 

Price

Taste

Quality

Availabity

Advertising/Promotion

47

151

135

49

23

In Malad 6% 12% 12% 37% 33% Price Taste Quality Ease Of Availabity Advertising/Promotion
In Malad
6%
12%
12%
37%
33%
Price
Taste
Quality
Ease Of Availabity
Advertising/Promotion

In Borivali

     

Ease Of

 

Price

Taste

Quality

Availabity

Advertising/Promotion

57

155

143

71

61

In Borivali 12% 12% 15% 32% 29% Price Taste Quality Ease Of Availabity Advertising/Promotion
In Borivali
12%
12%
15%
32%
29%
Price
Taste
Quality
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.

3)

Users Of Which Brand

In Malad

Mother

       

Dairy

Amul

Nestle

Britannia

Govardhan

78

120

97

71

39

In Malad 10% 19% 17% Mother Dairy Amul Nestle 30% 24% Britannia Govardhan
In Malad
10%
19%
17%
Mother Dairy
Amul
Nestle
30%
24%
Britannia
Govardhan

In Borivali

Mother

       

Dairy

Amul

Nestle

Britannia

Govardhan

95

163

125

61

43

In Borivali 9% 19% 13% Mother Dairy Amul Nestle 26% 33% Britannia Govardhan
In Borivali
9%
19%
13%
Mother Dairy
Amul
Nestle
26%
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

Kotler Philip & Keller Kelvin , Marketing Management

ANNEXURE RETAILER 1. Vendor Name:- 2. Location/Address:- 3. Avg. Daily Sales: Crates or Units 4.
ANNEXURE
RETAILER
1.
Vendor Name:-
2.
Location/Address:-
3.
Avg. Daily Sales:
Crates or Units
4.
How would you rate your present sales?
a)
Satisfactory:
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
400 gms
2 kgs
9. What according to you has been general consumers’ experience?
10. Any suggestions would you like to give to the company?
11. Schemes offered by the companies.
Amul –
Nestle –
Govardhan –
Britannia –
Mother Dairy -

12. Replacement policy offered by the companies. Amul –

Nestle –

Govardhan –

Britannia –

Mother Dairy –

13. Service level of the Distributor. (Very Good, Good, Average, Bad)

Amul –

Nestle –

Govardhan –

Britannia –

Mother Dairy –

14. Frequency of services of the Distributor.

Amul –

Nestle –

Govardhan –

Britannia –

Mother Dairy –

15. How many freezers do you have?

16. Freshness of the curd delivered by the distributor

Amul –

Nestle –

Govardhan –

Britannia –

Mother Dairy -

SALES PROMOTION FORMAT

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