A REPORT ON SALES AND DISTRIBUTION

Submitted to Placement Department

Submitted by Group No.6 PGDM 1st Section B

Group members-Nitin Kumar (group leader) Neha agrawal Neha Singh Nidhi Saxena Nidhi Jain Nishant Kr.Pathak

Introduction-- Mother Dairy - Delhi was set up in

1974 under the Operation Flood Programme. It is now a subsidiary company of National Dairy Development Board (NDDB). Mother Dairy markets dairy products like Liquid Milk, Ice Creams, Flavoured Milk, Dahi, Lassi, Mishti Doi, Ghee, Butter, Cheese, Dairy Whitener, UHT Milk, Dhara range of edible oils and the Safal range of fresh fruits & vegetables, frozen vegetables and fruit juices at a national level, through it's sales and distribution networks, for marketing food items. Wider spread However, as far as other dairy products are concerned, Mother Dairy plans to expand across the board. "Other than milk, for most state federations, dairy products are still a small part of their operations. So we are taking our products to regions across India, where we see enough market potential," says Thachil. In ice creams, it was only two years ago that Mother Dairy entered its first market outside Delhi - UP and Punjab. Today, it's extended its operation to Haryana, Jaipur, Mumbai and Kolkata as well. Next year, it plans to go south to Hyderabad and Bangalore. In the case of butter and cheese, it's present across north India, Mumbai and Kolkata, and has plans to enter Bangalore by year-end. In UTH milk, it has entered Mumbai and the milk-short areas of West Bengal and north-east. For ghee, although the current focus is the northern region, it has plans for a nationwide presence. As far as Mother Dairy's non-dairy products are concerned, edible-oil brand Dhara has already has nationwide presence.

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". "We are saying we want children to achieve their ambitions faster. That the product is pure or healthy is a given for us," says Thachil. 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. 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. 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. Thachil 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.

Distribution & Sales

IN MILK PRODUCTS-DMS has a network of over 1298 outlet including All Day Milk Stalls (ADMS) for sale of milk and milk products. a) Concessionaires on DMS outlets b) Loose Milk Outlets c) All Day Milk Stalls(ADMS) d) All Day Milk Stalls in Govt. building 1298 167 270 15

Milk booths are allotted to ex-servicemen, retired Govt./semi-Govt. servants, physically handicapped and un-employed persons. Sales performance of DMS during the last 5 years (FIGURES IN LAKH LITRES/AVE. PER DAY) YEAR 2000-01 2001-02 2002-03 2003-04 2004-05 DMS 2.15 2.06 1.95 2.26 2.70 MOTHER DAIRY 0.26* 0.62* TOTAL 2.15 2.06 1.95 2.52 3.32

* In order to utilize the excess milk plant capacity and to make the organization financially viable, custom packing of milk for Mother Dairy (Delhi) was commenced w.e.f.3.12.2003. Current Selling Price S.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 Item Toned Milk TM Double Toned Milk DTM Full Cream Milk FCM Loose Milk Ghee 1 Ltr Butter Salt 500 Gm Butter Plain 500 Gm Paneer 200 Gm Paneer 1 Kg Dahi 200 Gm Yoghurt 100 Gm Flavoured Milk 200 Ml Chhach 20 Ml Price Rs 17 Per Litre Rs 15 Per Litre Rs 21 Per Litre Rs 16 Per Litre Rs 155.00 Per Litre Rs 72.00 Per 500 Gm Rs 75.00 Per 500 Gm Rs 19.00 Per 200 Gm Rs 90.00 Per 1000 Gm Rs 8.00 Per 200 Gm Rs 6.00 Per 100 Gm Rs 8.00 Per 200 Ml Rs 6.00 Per 20 Ml

Distribution system (Facts from visit) DCSM (Driver Cum Sales Man) - Drivers are trained to sell the products at the booths. This saves the time and expense on the workforce. Control room - Mother dairy ensures milk availability across all the retail outlets through a control room set up at the dairy premises. The control room is very vital for efficient distribution of milk to all the retail outlets. It organizes distribution routes so that shops do not run out of milk. Wireless with every truck Each milk tanker is fitted with a wireless set. As soon as the person in the control room learns that a shop is running out of milk, he contacts the tanker nearest to the shop on wireless which, than delivers the milk to the shop. Indenting system Through this system the booth in charge predict the demand so as to ensure the availability of products on time and to meet the occasional demands efficiently.

IN ICE CREAM SEGMENT Mother dairy entered into this segment in 1994. Ice creams are not only for the summer. Indians crave for them throughout the year, and biggies like Amul and Mother Dairy have realised it. Therefore, the companies have decided that the marketing season will be a round-the-year affair. Ice cream consumption in India is much lower than in other countries. The domestic per capita consumption is 500 ml per year against 4 litres in Singapore and 25 litres in the US. There is a scope for the market to grow almost seven-fold to reach the global average, ice cream marketers feel. Paul Thachil, CEO of Mother Dairy India, said, Ice cream is more of an impulse buy, so we focus on the impulse market. We are strengthening this segment by introducing new tastes. Visibility is also important to push sales. Mother Dairy is planning to open 10,000 selling points, including both carts and parlours. Mother Dairy is also taking advantage of the retail boom. It in talks with Food Bazaar, Reliance Retail and other chains to set up parlours within their stores. Amul is planning to make itself available in 50,000 more retail outlets. While Kwality Walls is present in 20 cities, Mother Dairy is present in 50 cities and is targeting 50 more, Amul is already present in 10,000 cities.

Sales figures 62% of the market has been captured in Delhi.

Mother Dairy claims that its sales drop by only 10 to 20 per cent during the winters. Its products sell well during September to November, which is the festive season. Sales also vary according to the climactic conditions in the different parts of the country. People in the hilly areas may not be too keen on ice creams during the winter, but the residents of Mumbai and Calcutta do not mind having them in the cold weather. However, the take-home variety sells more than the impulse variety. Mother Dairy is expecting a 40 per cent rise in sales. As part of their growth strategies, company is planning to focus on eastern India, which they feel has a tremendous potential. Mother Dairy has recently opened a factory in Dhulagarh, near Howrah.