EXECUTIVE SUMMARY

Distribution is all about getting your product/service to right people at the right time with special consideration for profit and effectiveness successful marketing does not end when a business has developed a product/service and has found its appreciate target audience with a view to selling it at the right price Small business need to acknowledge the different typesof distribution channels to utilize sales potential after reading the article you may learn that you could increase sales or profit by using a different distribution channel to the one that you currently use. Distribution channels are influenced largely by the type and size of the business and so some of the channels explained may not be feasible for your particular business consequently you may the note that these channels could be adopted in the future to accommodate for any change and to help your business grow. Milk is only natural product that is daily used by man at regular intervals for different purposes the national potential is ideal in quality and balanced to satisfy human amino acid requirements the content of vitamins and minerals are unique not only in proportion by in quality nutrients that are essential for mans growth and development. Milk is the only article of food that fairly represents a complete diet, and is the cheapest source of animal protein thus milk became the part of Indian food

MEANING / DEFINITION Marketing has been for a long time a neglected area in India, because of protective controls and prevalence of a sellers market in most products. However, the new trends as the government levels of fearing controls is bound to result in increasing competition and a change over in many more products to a buyers market. Marketing is the business function that identifies unfulfilled needs and wants defined and measures their magnitude, determines which target markets the organization can best serve, besides an appropriate products, services and programs to serve these markets and calls up on everyone in the organization to think and serve the customer from as a social point of view, marketing is the force, that harness a nations industrial capacities to meet the societys material wants. William David observed while great devices are invented in the laboratory, great products are invented in the marketing departments. A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want. Thus the size of the market depends up in the number of persons who exhibit the need have resources that interest others, and are willing to offer these resources in exchange for what they want. DEFINITION OF MARKETING Marketing is a social and managerial process by which individuals groups obtain what they need and they want through creating, offering and exchanging products of value with others. The marketing concept is a point of view on the business. It enunciates that any business is essentially a need satisfying process. It also enunciates that all the goals of the organization integrated management action and generation of consumer satisfaction. ----Caniff-----

The aim of marketing is to make selling superfluous. The aim is to know and understanding the customer as well as that the product or services fits.and sees itself. ----P.F Drucker---Marketing is the total system of business activities designed to plan, price, promote and distributing want- satisfying products to target markets to achieve organizational objectives. MARKETING MANAGEMENT Marketing management is the process of planning and executing the conception. Pricing, Promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. DISTRIBUTION A major focus of channels of distribution is delivery. It is only through distribution that public and private goods and services can be made available for use of consumption the distribution channel over comes the time place and possession gaps that separate goods services from those who need of want them.

NEED FOR THE STUDY

Model diary has a very important image of supplying good quality of milk at reasonable price to the consumer. It has a hugged turn over and profited and some other reasons gave birth too many private diaries as Model Diary occupies a very important place in our state. The purpose of production is served only if the consumer interests are attended to quality of the service rendered by Model Diary ensures the organization regarding customer satisfaction in their product the aim of this study is to provide an insight into the characteristics of the consumer markets indentify the possible source dissatisfactions work towards handing complaints from consumer which in turn help in enhancing customer satisfaction and prevent dissatisfaction . Keeping in the view the private diaries in Krishna district milk market a through a study of various factors include process quality availability packaging taste usage time and so on distribution is the process of moving products from the producer to the consumer which may involve several steps and the participations of multiple companies as noted distribution channels often require the assistance of the others in order for the marketer to reach its target market .Distribution channels are influenced largely by the type and size of the business and so some of the channels explained may not be feasible for your particular business consequently you may the note that these channels could be adopted in the future to accommodate for any change and to help your business grow .

SCOPE OF THE STUDY

Every manufacturer or marketer must aim at ultimate satisfaction of consumers in order to ensure future survival and profitability in this context, the factors influencing the purchase process such as quality price responsibility towards complaints should be studied in depth in order to gauge the extent which each of these factors affects a consumer is met is indicated by post-purchase behavior of the consumer the post-purchase stage determines whether the customer remains loyal or turns disloyal to brand or product purchased if his expectations of the product are in conformity with its performance, then there is ultimate satisfaction of customer and he remains loyal to the product. On the hand, if there are any discrepancies between the performance of the product and his expectations then there is bound to be in dissatisfaction and dissonance this dissatisfaction would lead to disastrous consequences to the marketer as he would not only lose out on the dissatisfied customer but would also have to face the worth of negative word of mouth publicity

OBJECTIVES OF THE STUDY

To study the customer satisfaction levels with respects to availability of model dairy products. To study the different type of distribution channels used by the company to meet the Expectations of customers and their needs To understand the criteria of selection of agents in model diary To measure the effectiveness of distribution channels of model diary achieving overall objectives. To evaluate the cost effectiveness of maintaining the distribution channel.

RESEARCH METHODOLOGY
Research methodology is a way of systematically solving the research

problem it may be understood as a science of studying how research is done scientifically the researchers study the various steps that are generally adopted in studying the research problem along with the logic behind it COLLECTION OF DATA Fact expressed in quantitative from can be termed as "data". Data may be classified either as "primary data" or "Secondary ". PRIMARY DATA The primary data is the data gathered by the researcher for the specific purpose of research situation at hand it is the first hand information that researchers gets from various sources like respondents, analogues case situation and research experiments or the primary data has been collected from the distribution by supplying them the questions from the customer. SECONDARY DATA Secondary data are already published data collected from some purpose other than one confronting the researcher at a given point of time the secondary data can be gathered from various sources like books journal, news papers reports of the company, websites etc.., SOURCE OF DATA After the objective has been stated clearly, the next task was to collect relevant data regarding the research study the data regarding the Indian and international diary scenario were collected from the internet and other relevant data were also collected from internet all through there were some data from newspaper and magazines but the major portion was given by the company i.e. the assistant manager of the respective departments. So the primary data involved data collected from milk booth and from few consumers.

DATA COLLECTION INSTRUMENT The basic instrument used in collecting the data in this survey is the questionnaire. Apart from that we had also gone through the record of the company the data collection from the above includes Data regarding model diary. Data regarding the highest selling product. Data regarding the contribution of each product towards sales. Data regarding total sales and market shares of model diary. Data regarding the distribution system of the MODEL DAIRY. Sample size: Population: finite (approx-15000) Sample size: 155 members AREAS OF THE STUDY DATA: The area of the study has been confined to certain areas of Vijayawada city only the areas of study include... Padamata Lanka Krishna Lanka Nidamanuru One Town. Bhavanipuram. Ibhrahimpatnam. Kondapali.

LIMITATIONS OF THE STUDY

In spite of honest and sincere efforts by the researcher there are bound to be certain discrepancies and inconsistencies again there were several Limitation both statistical and non statistical within which there research has been carried out. Some of the Limitation 1. The whole research study was carried out in Vijayawada only therefore the result may not be same in zonal basis. 2. It was very difficult to generalize the main finding as the sample size was very Small 3. Some of the finding has been taken in the research are based on the opinion, Attitudes, feelings and perceptions of few respondents, but the respondents were not willing to share their opinions and presumption, due to their busy schedule. 4. Time, and the study period is another major contrasting factor.

INDUSTRY SCENARIO
Dairying has been of life in India since the ancient times. The modern diary industry took roots in 1950 with the sale of bottled milk in Bombay from Array milk colony. The first large scale milk products factory was started in 1945 at Co-operative venture, with the assistance of UNICEF, for the production of milk powder, table butter and ghee. These products were making from the buffalo milk. India is the largest producer of milk in the world and dairy farming in the single largest contributor to Indias GDP a part from being the biggest source of employment. Dairy farming is a critical part of the Indian economy as its importance stems from three important stems from three important factors .First of all it provides income for small and marginalized farmers: second ,milk and its products are a critical part of our diet and third dairy farming complements other forms of agricultural activity. India has been largest milk producer in the world since 1988 and milk production has consistently improved over the past two decades. The production milk in 2010 was estimated to be 117 million tones and increased approximately 4% to a record 121.5 million tons in 2011. The worlds largest development program over undertaken, the operation flood undertook and gigantic task of upgrading and modernizing with production, procurement, processing and marketing with the assistance provided by the world bank and other external agencies, designed and implemented by the National Diary Development Board (NDDB) and the Indian Diary Corporation. The project was launched in July, 1970. Its basic concept compromises the establishment of cooperative structure OPERATION FLOOD 1 Operation flood also referred to as `white revolution is a gigantic project, propounded by the Government of India for developing dairy industry in the country. The Operation Flood-2 originally mean to be completed in 1975 actually took the period of about 9 years from 1970 to 79 for its completion at a total cost of about a
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Rs. 116 Cores. The operation flood-I was wholly finance any selling in India free gifts of 1, 26,000 Metric tons at skin milk powder and 42,000 Metric Tons of Buffer Oil donated out of the surplus of European economic community. ANANDPATTERN 1 Under the operation Flood -1 the program for increasing milk production was taken up in ice hinter lands of various breading tracks on Anand pattern and loudly proclaimed with a trample. The Co operative were started originally in 18 of Indian Milk shed districts and later on mine more milk shed areas were added to make a total of 27 in 10 states of the country viz., Maharashtra Tamilnadu, Andhra Pradesh, West Bengal, Bihar, Haryana, Punjab, Uttar Pradesh and Rajasthan. Those dairy Co operatives are based on the model known as Anand pattern of dairy Co operative. Under Anand Pattern concept rural Co operative infrastructure was to be built in the village, the milk products were to form their animals. In each participating village, the milk products were to form their own village diary Co operative. Thus Anand pattern diary co operative union organizes mobile veterinary and artificial insemination counters. In the sphere of Co operativisation the No. of Anand pattern organized societies under operation flood was 63121 on April 1st 1991 as age INST 60753 a year ago indicate one that years as many as 2368 new diary co operatives were found. OPERATION FLOOD 2 The operation flood-2 that started that in July 1978 is scheduled to be completed in 1985 at a cost Rs. 483 cores. A humble attempt has been made to present a general appraisal of the achievements made in same sufficient fields during Operation Flood-I. These achievements if at as all made particularly the Anand Pattern Dairy Co-operative unions are to serve now as bedrock of operation flood-2. These unions are to act as the starting nuclear for Co-operative charter federation, the main instrument for the gigantic project flood-2. The average nuclear charter federation world in 6 Districts Unions registered and unregistered. The Indian Dairy corporation, National Dairy Development Board being autonomy National Institutional probable are not required to indicate the basis on
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which state with allocations were made in Operation Flood-I up to end of the 1979, Gujarat State alone Government the lines shares of 1666.5 lakhs against 5 states Haryana, Bihar, Rajasthan and Andhra Pradesh put together the total disbursement in their case was 1732 lakhs only. This trend is going to be nationalized in Operation Flood-2. OPERATION FLOOD 3 The Indian Dairy Industry is growing rapidly and may become a strong competitor to World Dairy powder. The milk sector is the second largest contribution to the agricultural economy in terms of produce. The Phenomenal growth is a result of the National Dairy Development Board through Operation Flood Programme. Operation Flood-3 now in this closing position consolidated the procurement efforts to boost production. The projection for milk output for 2000 A.D., is nearly 90 million tone at a 5% growth rate. It is now 5 to 8 percent Dairy Factories established under Operation Flood, which covers 170 milk Co-operative societies. They have a milk drying component of about 697 Tones powder. In 1990-91 the Co-operatives collectively nearly 10 million Liters and per day. The operation flood being implemented by the National Dairy development Board aims to enhance the average milk procurement to 13.7 Million Kilograms per day by the year 1996 the concluding year of the operation flood 3 program. The peak procurement level curing the period is expected to means 18.3 Million Kilograms packed. The compulsive line figure for both during 1987 the base year of the Operation flood program to was respectively 8.5 and 11.2 mkg-pd efforts are also being made to increase capabilities of milk and production of milk powder. Under the operation flood improving Animal Health case and good breeding natural making available quality fodder under and incurring area and farm fertilization under Co-operatives and processing were added. Inventory and animals has broadly and Dairying from 1950 to 90 was 2.864 Cores achieve of all occasion to the Operation Flood. The rapid growth in milk production did away with import of milk powder except for a small quality (26.400 tones) during the drought years. marketed 8 million Liters of Liquid milk

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WORLD PRODUCTION The worlds milk produce comprises cows milk, buffalo milk and milk from sheep, goat and other animals. The worlds total milk production from all these sources in 2009 was 703.350 million tones which was a considerable jump from 697.573 million tons in 2008 As far as cows milk production is concerned use ranks first followed by India , china the Russian federation brazil and Germany respectively. The worlds cow milk output in 2009 was 85.86 million tones of which uses share was 85.86 million tones and Indias share was 45.14 million tones. On the other hand regarding the worlds buffalo milk output, India ranks first with a production of 59.87 million tons in 2009 followed by Pakistan, china, Egypt, and Iran respectively. The worlds total output of buffalo milk in 2009 was 89.86 million tones. CURRENT DAIRYING SCENE IN INDIA The dairy industry in India made rapid progress, particularly during the last two decades. Today, India occupies first position in milk production in the world, surpassing the US. The credit, no doubt, goes to operation Flood, which has played a key role in the development of Dairying. India is a milk consuming nation. This, couples with our large population ensured steady increase in demand for milk. The employment potential of Indian dairy sector is substantial. This sector provides additional income and generates job opportunities for 80 million farmer families. More than 70 per cent of marginal farmers and landless laborers maintain dairy animals to supplement their incomes. In India, there are 10.1 million farmers who are members of 77,000 village dairy Co-operative societies, each of which is affiliated to one of 170 district and regional Co-operative unions which in turn are part of a state Co-operative marketing federation. There are 22 of these federations, which offer dairy and other products in the market successfully while competing among themselves. At present, dairy farms are owned by individuals, investors and multinationals.

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The Co-operative sector has contributed significantly for the success of white revolution in India. There are Co-operative more than 97,000 milk Co-operative societies in 264 districts. This sector grows at the rate of 6.5 per cent annum. ADVANTAGES OF INDIAN DAIRY INDUSTRY In terms of total bovine population, India occupies the first position on the world, with 176.7 million cattle and buffaloes. (Worlds total bovine population is 1,420 million). A large bovine population, strong procurement infrastructure, presence of highly skilled manpower, cheaper labor, and a large number of processing and allied facilities are some of the advantages that the India dairy business has. PRODUCTION TRENDS Production of milk rose from 20.7 million tons in 2006-07 to 8.3 million tons in 2007-08. However, 45 per cent of the total milk is still handled by the traditional sector. In 2006, 77 million buffaloes produced about 50 percent of the total milk production in the country. In the same year, about 200 million cows produced about 45 per cent of the total milk production. (Nearly 156 million goats, sheep etc produce only about 5 per cent of the total milk output.) EXPORT POTENTIAL India is not fully utilizing its export potential in respect of dairy products. The cost of milk production in India is the lowest. And the dairy industry is not getting any subsidy. There is an urgent need to pay special attention to quality of India has to compete with other countries. At present, the country is exporting malted milk foods, ghee, butter and cheese to countries like Bangladesh, UAE, Nepal, Sri Lanka, Oman and Bahrain. Of course world milk prices are subject to dramatic fluctuations. Export earnings from the live stock sector and related products rose to Rs.19, 250 million in 2007-2008 from Rs. 7,920 million in 2006-07. DISAPPOINTING FACTS Milk availability in India is still low at 212 grams/day per person. Of course, the per capita availability of milk in the rural areas is barely 121 grams/day as compared to 400 grams/day in urban areas.

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Animal productivity remains low, as the national average is only 1.5 lit/day. Productivity of Indian cattle is 10 per cent of the productivity of cattle in Israel and 30 per cent of the level achieved by the developed countries. Unless milk productivity is raised, it is difficult to compete with Europe, America and Oceania. What is more, only 10 per cent of the milk produced is in the organized sector, leaving the remaining portion in the hands of milkmen thus providing chances for adulteration and exploitation. Also, our cattle and buffaloes are slow maturing, show irregular cycling behavior, produce fewer claves in their life-time, and suffer from physical and physiological anomalies in reproduction. There is a serious shortage of conventional feeds for feeding livestock. Both quantitatively and qualitatively, there exists a wide gap in demand and availability of fodder resources in India. During the last two decades, there has been no change in the cultivated area devoted to fodder. It still stands at 4.4 per cent of the total cropped area. It is estimated that 10 to 15 per cent increases can be recorded in the existing milk production through adequate feeding of bovine population. In order to solve feed shortage problem, we have to rely on cheap alternative feed to growing calves. STEPS TAKEN SO FAR The problem of low productivity of animals can be solved by ensuring availability of feed and fodder. Concrete efforts are needed to improve the productivity of fodder crops, develop grazing land, and promote agro-forestry systems like silvipasture and research on low-cost feed items. Extensive research has been carried out to find out the utility of items like apple ground nut hulls, milk cake,

neem cake, salad meal, soya pulp, rice bran and brewery waste. On June 9, 1992, the Govt., of India issued an order under section 3 of the essential commodities Act, 1955. According to this order, known as Milk and Milk Products Order (MMPO) 1992, milk does not have to mean just cow or buffalo milk, it could also be goat milk or even a mixture of the three. The various objectives of MMPO include:

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 Facilitating supply or availability of milk by balancing uneven supplies in different regions. Maintenance and increase of milk production and supplies and ensuring equitable distribution. Establishment of proper standards and norms for control in handling milk and milk products. Establishment, promotion or registration of any industry related to milk or milk products. Such other objectives incidental to the effective implementation of the MMPO. The milk unions are urging the government to either ban OGL imports of skimmed milk powder (SMP) or impose duty on the same. They argue that prices of imported powder should be at par with those of the domestic products. The price of skimmed milk powder is coming down under pressure from imports. It is said that levying of minimum import duty of 35 per cent of SMP would provide a level playing field to the producers. (India gets about 5,000 tons of imported milk powder annually). LATEST DEVELOPMENT IN THE DAIRY SECTOR Formation of new dairy Co-operatives in Operation flood areas to bring 3.5 million members under the Co-operative fold in addition to the 9 million members now being served by dairy Co-operatives. Providing vocational opportunities and fostering entrepreneurship among dairy-science student trainees to equip them with knowledge and experience so that they may take up dairying as a profession. TOP MOST PRIORITY In the livestock sector, productivity holds the key. The major thrust should be on genetic up gradation to improve productivity and production. Of course, priority should be given to infrastructure development, feed management and better health care services

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CURRENT SCENARIO Of the total milk output, the organized sector still handles an estimated output of 12% only despite vigorous dairy development activities. At present there are 25.2 dairy plants in the public and Co-operative sectors including pilot dairies with an average output of 12.2 million liters. The milk market covers 528 major towns, 4 metros and 149 class one and 375 smaller towns. About 300 million supply every day. The milk production enhancement units are being adequately strengthened. The Indian of Agriculture Research and the National Dairy Development Board are mounting massive efforts to integrate dairy science research, education, extension and development. Federation that was guided by National Co-operative Dairy Federation of India. The apex body of milk Co-operative societies. A national wide network system of Multi tier producers Co-operative which are domestic in structural and are professionally managed has been established. At present this program is providing a joint additional income of Rs. 1200 cores from milk. It is heartening to note that the Dairy equipment industry has grown to such an extent that most of Dairy Industry needs are met indigenously. TECHNOLOGY MISSION The operation flood program prepared the ground for launching another massive program at the national level called Technology Mission on Dairy Development (TMDD) on June 11, 1988. The main objective is to accelerate the pace of growth of dairy industry in India. To achieve this end, the operation flood programs such as the dairy research programs processing technology and product manufacturing etc. the mission operation areas has covered approximately 60% of the country by 1995. The mission will functions through the adoption of locating specific strategies such as peoples participation, demonstration of excellence, better land management cost effective handling and processing system and intensive marketing.

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DAIRY PROCESSION TECHNOLOGY Research studies in dairy technology in NDRI Karnal have led to the development of purely vegetarian processed cheese, a synthetic ghee flavor and Ghee making plant on the principle of Hydrodynamics and Heat transfer in horizontal thin scalped surface heat exchanges with a capacity to handle 500-600 kg an hour of creamy butter. A two-fold increase in shelf life in cheese was attained. The methods of manufacturing griehand cheese spreads of various flavors etc., have been successfully developed by NDDB. GROWTH IN CO-OPERATIVE In order to build a viable and self sustaining National Dairy Industry on Cooperative lined NDDB launched a project christened Operation Flood in 1970. Funds mobilized from sale of products based on foreign food with its development program It spurred Indian Dairy industry launch a White revolution. In sphere of Co-operatives the number of Anand pattern organized societies under operation flood were 63,121 till date and in next year, as many as produced and sold by these Co-operative fetched approximately up to 1000 cores per year. Beside the studies in milk the operation flood program has achieved success on other fronts also. Import of milk solids has been already ended and India recently exported 30,000 tons of milk powder. India is in the way of attaining total selfreliance and next self sufficiency in milk production. MAJOR DAIRY PRODUCTS AND BRANDS COMPANY Nestle BRANDS Milk Maid, Cerelac Lactogen, Milo & Everyday MAJOR PRODUCTS Sweet Condensed Milk

powder, Malted food, milk powder & dairy whitener, Ghee & Ice Cream.

Mild Foods Limited

Milk Food

Ghee & Ice Cream

Cadbury

Bourn Vita

Infant Milk Food, Malted Milk Food.

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NATIONAL DAIRY DEVELOPMENT BOARD (NDDB) At the time of Industrialization at cattle feed factory at Kajarie in October 1964 the late Sri LALBAHADUR SASTRY, the prime Minister of India paid unscheduled visits producers co operative societies and stated there overnight. He was impressed by the social economic changes brought milk co operatives in Krishna district and desired to have a national level organization to milk producers co operative societies replicateanansin other part of the country. Thus the National Dairy Development Board was sent up under the empowerment of Ministry of Agriculture and Irrigation. Govt. of India in September 1965 under the society Regulation act 1860 and the Bombay trusts act 1950. The president of India nominates the Board of Directors including Chairman, Secretary, and National Dairy Development Board in the chief of the organization. ANAND PATTERAN DAIRY DEVELOPMENT The information Anand pattern of milk co operative was launched with the organization of Krishna District Co operative Milk Producers Union Limited. In this pattern the function of dairy is milk procurement, processing and marketing are controlled by the milk products themselves.

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INSTALLAED PROCESSING CAPACITIES Name of the Dairy Visakha Dairy Rajahmundry Vijayawada Ongole Dairy Nellore Dairy Chittor MPF Nandhyal MPF Hyderabad Mother Dairy Hayatnagar Other Dairies Milk Processing 300 150 250 300 75 200 150 250 Butter Mfg 12 8 8 4 25 10 4 8 4 8 Ghee Mfg

S. No.

Powder Mfg

U. H. T.

1 2 3 4 5 6 7 8

13 22 30 14 10 12

50 30

200

10

249

DAIRY INDUSTRY IN ANDHRA PRADESH The program Dairy Industry was mooted with commendable help of the United National International Childrens Emergency Fund, Food and Agriculture Organization and Freedom from Hunger Company Campaign Organization of the U.K. these organization insisted a lot of the establishment of the dairy units at Hydria and Vijayawada in 1967 and 1969 respectively, which lead to pioneer dairy

development in Andhra Pradesh later to set cooling and chilling centers have been setup to feed these two gigantic units.

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The Government of Andhra Pradesh started dairy development corporation to interest of milk producers and ensuring adequate supply of fresh milk at reasonable price to the urban consumers as A. P. D. D. C., come in to the existence on 2nd April 1974. A. P. D. D. C., providing employment to nearly 20 employees and organism easy many as 87 dairy units including seven milk factories, 13 district dairies, 22 chilling centers, 18 cooling centre and 15 mini cooling centers. In addition to that the private units have been contributing their little mite in the development of dairy industry M/s. Hindustan milk foods that has started a malted milk product factory in Rajahmundry. Further to enhance working efficiency and to increase the turnover, the Government has constituted on autonomous dairy development. Corporation on the recommendation measure the dairy industry improving towards massive milk production and milk collections. DAIRY DEVELOPMENT In 1960 pilot milk supply scheme was started in the state for the dairy development, its initial capacity was 100 liters a day in the time of starting. Now its daily collection increased to 11 lakhs liters per day. It is also working as alien between milk producers of the towns by providing reasonable price to the producers to maintain stable market. A. P. DAIRY DEVELOPMENT CO OPERATIVE FEDERATION (A. P. D. D. C. F.) A. P. D. D. C. F. was formed in October, 1981 to implement Operation Flood 2 programs through active involvement of producers in organization milk production, procurements, processing and marketing on three tier, Co operative structure as per the National Government of India. The three tier system consists of primary dairy co operatives societies 13 village level, co operative unions at district level and federation at state level.

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OPERATION FLOOD In our state operation flood was divided in three types Anand Level. 1. Village Level D. C. S. 2. District Level 13 OPERATION FLOOD PROGRAMME Indian dairy Development Corporation own the responsibility of

implementation of operation flood programs, which provides money assistance, put 70% towards loans and 30% as subsidy. National Dairy Development Corporation selected district of the State for implementation of operation fold.

DISTRICT SELECTED UNDER OPERATIONS

District Krishna Srikakulam Vijayanagaram Vishakapatnam East Godavari West Godavari Chitoor Kurnool Cuddapah Nalgonda Rangareddy

Milk sheds / unions Krishna Vishaka Vishaka Vishaka Godavari Godavari Chitoor Kurnool Cuddapah Nalgonda Rangareddy

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APDCF RECENT TRENDS

Even though Andhra Pradesh is the second largest milk producing State in India, (after Uttar Pradesh) the dairy sector in the State still offers significant opportunities for entrepreneurs and farmers to set up units. While the State produced about 112.5 lakh tonnes (lt) of milk last year, with an annual growth rate of 6.5 per cent, the State Government, bankers and existing players in this sector feel that there is still a significant gap between supply and demand. While the State Government has unfurled a Rs 6,200-crore State Milk Mission up to 2015, banks, prominently NABARD, State Bank of Hyderabad and Andhra Bank, are gearing up to provide easier access to funding for prospective entrepreneurs. One area of concern, however, is the persistent lower levels of milk yield per animal, accentuated by factors such as fodder scarcity, inadequate veterinary support and lack of professional management. From a broader perspective, the State is endowed with rich livestock resources, having 255 lakh sheep valued at Rs 2,550 crore, 133 lakh buffaloes (Rs 13,300 crore) and 112 lakh cattle (Rs 11,200 crore). UNTAPPED POTENTIAL However there are still vast areas of untapped potential in the livestock sector, says Dr M.V. Reddy, Director of State Animal Husbandry Department. For instance, the productivity of a buffaloes is at 4 kg per animal, while the potential is 6 kg. In other words, while the current production is 76 lt, the potential is 150 lt. It has been projected that there are adequate entrepreneurship opportunities available in dairy-related areas such as male calf farming, milk chilling and processing, bio-gas plants, dairy products, fodder production, pharmaceuticals and consultancy. The State Government is promoting about 9,000 mini dairy units with

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five milch animals each in the current fiscal through 25 per cent subsidy on each animal. FINANCING Mr P. Mohanaiah, Nabard Chief General Manager, Hyderabad, said the bank had received about 17,000 claims from prospective dairy entrepreneurs so far this fiscal, out of which 14,000 have been cleared and Rs 14 crore worth subsidy already released. What makes banks more inclined towards financing of diary activity? The State has over 13 lakh self help groups that are linked through bank finance to the tune of Rs 13,719 crore. Most of the groups have been opting for dairying in their micro credit plan and an average more than 60 per cent of the financing is done for milch cattle rearing.

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SELECTING THE ANIMAL TO FARM WITH COWS V/S. BUFFALOES Cows Buffaloes

Good quality cows are available in the In India, we have good buffalo breeds market and it cost around Rs. 1200 to Rs. like Murrah and Mehsana, which are 1500 per liter of milk production per day. suitable for commercial dairy farm. (e.g. Cost of a cow producing 10 liter of Milk per day will be between Rs. 12,000 to Rs. 15,000). if proper care is given, cows breed Buffalo milk has more demand for regularly giving one calf every 13 14 making butter and butter oil (Ghee), as fat month interval. percentage in milk is higher then cow. Buffalo milk is also preferred for making tea, a welcoming drink in common Indian household. They are more docile and can be handled Buffaloes can be maintained on more easily. Good milk yielding cross breeds fibrous crop residues, hence scope for (Holsteing and Jersey crosses) has well reducing feed cost. adapted to Indian climate. The fat percentage of cows milk varies Buffaloes largely mature late and give from 3-5.5%and is lower then buiffaloes. birth to calves at 16 to 18 months interval. Male calves fetch little value. Buffaloes need cooling facility e.g. wallowing tank or showers / foggers with fan.

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WORLDS MILK OUTPUT BY ANIMAL Out of worlds combined milk output cows milk represented 84% in 2009 followed by 13%taken up by buffalo milk 2.2% by goat milk 1.3% by sheep and 0.2% by camel. In recent years cows milk production has been declined in many parts of the world like the European Union, USA, Australia, Japan, and china. On the other hand buffalo milk has kept increasing. Of the total buffalo milk output, more than 90% is produced by India and Pakistan. As far as milk from other animals is concerned according to fao data for 2010 goat milk was mainly produced in Asia, 21% in Africa and 15% in Europe. Regarding sheep milk production Asias share is 46% and Europe share is 34% while for camel milk Africas share is 89% of the world countries. The following tables will give the milk production by animal.

TOP 10 COW MILK PRODUCING COUNTRIES IN 2010

COUNTRY USA INDIA CHINA BRAZIL GERMANY FRANCE NEW ZEALAND UK POLAND PRODUCTION(TONNES)

8,58,59,400 4,51,40,000 3,55,09,831 2,91,12,000 2,79,38,000 2,33,41,000 1,54,00,000 1,32,36,500 1,24,47,200

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WORLD BUFFALO MILK PRODUCTION IN 2010

COUNTRY INDIA PAKISTAN CHINA IRAN PRODUCTION(TONNES) 59,874 22,279 3,000 240

MILK PRODUCTION IN INDIA Dairy farming alleviates poverty and un employment, especially in rural areas .According it has been growing over the years. The total volume of milk produced grew more than seven times from 17million tones in 1950-51 to 11603 million tons in 2010-11 . This tremendous rise in production is primarily the result of the dairy farming policy that was implemented in operation flood. The major milk producing states are Uttar Pradesh, Andhra Pradesh, Rajasthan, and Madhyapradesh.

WORLDS MILK PRODUCTION BY ANIMAL

ANIMAL Type of milk 2009 2010 GROWTH(20092010 COW MILK BUFFALO MILK GOAT MILK SHEEP MILK OTHER WORLD PRODUCTION 584.164 87.291 15.412 9.070 1.636 697.573 58.464 89.960 15.333 8.975 1.636 703.350 +0.6% +3.1% -0.5% -1.0% +0.0% +0.8%

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STATE WISE MIL PRODUCTION IN 2010-2011

STATES COW MILK UTTAR PRADESH ANDHRA PRADESH RAJASTHAN PUNJAB GUJARAT MAHARASTRA MADHYAPRADESH BIHAR HARYANA TAMILNADU TOTAL 2320 273 1912 1155 2548 2023 376 789 22467 5840 6323 5285 3355 3758 2807 5020 761 59201 1007 44 231 282 417 219 61 --3910 9548 9389 8844 7679 7167 6124 6006 5778 112540 3575 1029 BUFFALO MILK 13902 7601 GOAT MILK 1159 0.1 20203 10429 TOTAL

PER CAPITAL AVAILABILITY OF MILK Per capita availability of milk in India 2009-2010 was 263gm per day . This per capita availability as 130 gm per day during 1950-51. It has been increasing gradually over the past decades though it is still lower than the worlds average of 29.4 gm per day. In the marketing of milk and its products dairy cooperatives account for a major share of processed milk. Milk is processed and marketed by 177 milk producers cooperative milk marketing federations. In 2009-10 the average daily cooperative milk marketing output stood at 21.12 million liters with an annual growth of about 6.2% over the previous five years . This organized sector currently handles this volume in over 400 dairy plants. Mother dairy one of the world largest liquid milk plants is located in Delhi and handles over 800000 liters of milk every day.

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Over the years brands created by cooperations have become synonymous with quality and value AMUL, VIJAYA, VERKA, SARAS, NANDHINI, MILMA AND GOKUL are among those that have earned the customers trust across India. EXPORTS India exports skimmed milk powder whole milk powder, ghee, butter, cheese, condensed milk, milk food for babies, milk and cream in powder, butter milk, etc. These exports of dairy products are shown in below table for the year 2009-2010. PRODUCT QUANTITY(MILLION TONNES) SKIMMEDMILK POWDER OTHER GHEE BUTTER MILK&CREAM OF A FAT CONTENT BY WEIGHT 1% WHOLE MILK OTHER CHEESE OTHER MILK FOR BABIES OTHER BUTTER OIL 214.18 35945 679.10 450.89 172.88 107.106 78.729 47.590 3084.23 1275.52 5176.45 721.886 199.899 150.940 12173.50 1370.515 VALUE(MILLIONS)

IMPORTS Even though India ranks first in the world in the production of milk it imports some milk products like skimmed milk powder, milk and cream, buttermilk, whey, cheese and curd.

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A SUGGESTION TO HELP YOU IN DECIDING THE ANIMAL TO FARM WITH Middle class health conscious Indian families prefer low fat milk for consumption as liquid milk. We suggest you to go for a commercial farm of mixed type. (Cross breed, cows and buffaloes kept in separate rows under one shed). Conduct a thorough study of the immediate market where you are planning to market your milk you can mix milk from both type of animals and sold as per need of the market. Hotels and some general customers (can be around 30%) prefer pure buffalo milk. Hospitals, sanitariums prefer cows milk A GLANCE AT THE INFRASTRUCTURE AND MANPOWER

REQUIREMENTS The space required per animal should be 40sq.ft in shed and 80sq.ft open space. Besides, you will also need: 1. One room 10x 10 for keeping implements. 2. One room 10x 12 for milk storage 3. Office cum living room of suitable size. 4. Water tank capable of storing minimum 2000 liters 5. Bore well with capacity to fill water tank in 1 hr Total land requirement for a unit of 20 animals can be sited as 3000sq.ft. There should be space for expansion. Ideal space requirement for 100 animals is 13,000 to 15,000sq.ft (120x 125). For 20 animals initially, you can make contractual arrangements for getting an assured supply of 300kgs, of Lucerne and 400 kgs. Of maize fodders per day. However, in long run, as the strength of you farm will go up to 100 animals, it is advisable that you should go for a lease land of 15 to 20 acres with irrigation facility to cultivate green fodder for your animals. (one acre of green fodder cultivation for every five animals is required as a thumb rule.) The economics of whole dairy animal management depends upon its economic feeding. By making fodders like Lucerne or Berseem available for your animals you can reduce cost on feeding concentrate feed.

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The strength of laborers in your farm can vary with number of animals usually the thumb rule is one labor for every 10 animals on milk or 20 dry animals or 20 young stock. Why do Dairy Farming? Dairying is an important source of subsidiary income to small/marginal farmers and agricultural laborers. The manure from animals provides a good source of organic matter for improving soil fertility and crop yields. The gober gas from the dung is used as fuel for domestic purposes as also for running engines for drawing water from well. The surplus fodder and agricultural by products are gainfully utilized for feeding the animals. Almost all draught power for farm operations and transportation is supplied by bullocks. Since agriculture is mostly seasonal, there is a possibility of finding employment throughout the year for many persons through dairy farming. Thus, dairy also provides employment throughout the year. The main beneficiaries of dairy programmers are small/marginal farmers and landless laborers. A farmer can earn a gross surplus of about Rs. 12,000 per year from a unit consisting of 2 milking buffaloes. The capital investment required for purchase of 2 buffaloes is Rs. 18,223/-. Even after paying a sum of Rs.4294/- per annum towards repayment of the loan and interest the farmer can earn a net surplus of Rs. 6000 9000/- approximately per year. (For details see model scheme enclosed). Even more profits can be earned depending upon the breed of animal, managerial skills and marketing potential. According to World Bank estimates about 75 percent of Indias 940 million people are in 5.87 million villages, cultivating over 145 million hectares of cropland. Average farm size is about 1.66 hectares. Among 70 million rural households, 42 percent operate up to 2 hectares and 37 percent are landless households. These landless and small farmers have in their possessions 53 percent of the animals and produce 51 percent of the milk. Thus, small/marginal farmers and land less agricultural laborers play a very important role in milk production of the country. Dairy farming can also be taken up as a main occupation around big urban centers where the demand for milk is high.

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SCOPE FOR DAIRY FARMING AND ITS NATIONAL IMPORTANCE The total milk production in the country for the year 2001-02 was estimated at 84.6 million metric tons. At this production the per capita availability was to be 226 grams per day against the minimum requirement of 250 grams per day as recommended by ICMR. Thus, there is a tremendous scope/potential for increasing the milk production. The population of breeding cows and buffaloes in milk over 3 years of age was 62.6 million and 42.4 million, respectively (1992 census) Central and State governments are giving considerable financial assistance for creating infrastructure facilities for milk production. The ninth plan outlay on Animal Husbandry and Dairying was Rs. 2345 crores. FINANCIAL ASSISTANCE AVAILABLE FROM BANKS/ NABARD FOR DAIRY FARMING NABARD is an apex institution for all matters relating to policy, planning and operation in the field of agricultural credit. It promotes development through formulation and appraisal of projects through a well organized t\Technical Services Department at the Head Office and Technical Cells at each of the Regional offices. Loan from banks with refinance facility from NABARD is available for starting dairy farming. For obtaining bank loan, the farmers should apply to the nearest branch of a commercial or co-operative Bank in their area in the prescribed application for which is available in the branches of financing banks. The Technical Officer attached to or the Manager of the bank can help/give guidance to the farmers in preparing the project report to obtain bank loan. For dairy schemes with very large outlays, detailed reports will have to be prepared. The items of finance would include capital asset items such as purchase of milk animals, construction of sheds, purchase of equipments etc. the feeding cost during the initial period of one/two months is capitalized and given as term loan.

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Facilities such as cost of land development, fencing, and digging of well, commissioning of diesel engine/pump set, electricity connections, essential servants quarters, godown, transports vehicle, milk processing facilities etc. can be considered for loan. Cost of land is no considered for loan. However, if land is purchased for setting up a dairy farm, its cost can be treated as partys margin up to 10% of the total cost of project. SCHEME FORMULATION FOR BANK LOAN A Scheme can be prepared by a beneficiary after consulting local technical persons of State animal husbandry department, DRADA, SLPP etc., dairy cooperative society/union/federation/commercial dairy farmers. If possible, the beneficiaries should also visit progressive dairy farmers and

government/military/agricultural university dairy farm in the vicinity and discuss the profitability of dairy farming. A good practical training and experience in dairy farming will be highly desirable. The dairy co-operative societies established in the villages as result of efforts by the Dairy Development Department of State Government and National Dairy Development Board would provide all supporting facilities particularly marketing of fluid milk. Nearness of dairy farm to such a society, veterinary aid centre, artificial insemination centre should be ensured. There is a good demand for milk, if the dairy farm is located near urban centre. The scheme should include information on land, livestock markets, availability of water, feeds, fodders, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance available from State Government, dairy society/union/federation. The scheme should also include information on the number of and types of animals to purchased their breeds, production performance, cost and other relevant input and output costs with their description. Based on this, the total cost of the project, margin money to be provided by the beneficiary, requirement of bank loan, estimated annual expenditure, income, profit and loss statement, repayment period, etc. can be worked out and shown in the project report.

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A format developed for formulation of dairy development schemes is given as annexure I. Level of predevelopment return to resources Up to Rs.11,,000 Rs.11,001 Rs. 19,250 Above Rs. 19,251 Beneficiarys Contribution 5% 10% 15%

S.No (a) (b) (c)

Category of Farmer Small Farmers Medium Farmers Large Farmers

INTEREST RATE As per the RBI guidelines the present rate of interest to the ultimate beneficiary financed by various agencies are as under: No. (a) Loan Amount Up to CBs and RRBs and 12% SLDB/SCB As determined by SCB/SLDB subject to minimum 12% -do-

inclusive of Rs. 25000 (b) Over Rs. 25,000 13.5% and up to Rs. 2 Lakhs (c) Over Lakhs Rs.

2.0 As determined by -dothe banks

PRODUCTION PREFERENCE GROWTH The average birth wt.(Indian buffaloes) low 21 kg High 41 kg higher in male calves than in females. Average daily gain of 548 gm between 3 6 months 404 gm between births to 36 months. Body weight at first calving ranges from 367 kg (Dharwati) 531kg (Nili Ravi) Higher growth rate in reveries breeds than swamp.

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DIAL-A-MARKETTO INDIA Today, India is The Oyster of the global dairy industry. It offers opportunities galore to entrepreneurs worldwide, who wish to capitalize on one of the worlds largest and fastest growing markets for milk and milk products. A bagful of pearls awaits the international dairy processor in India. The Indian dairy industry is rapidly growing, trying to keep pace with the galloping progress around the world. As he expands his overseas operations to India many profitable options await him. He may transfer technology, sign joint ventures or use India as a sourcing center for regional exports. The liberalization of the Indian economy beckons to MNCs and foreign investors alike. ADVANTAGES Light in weight, easy to handle and no danger of breakage. Distribution costs lower (occupies less space, lower pay-load due to light weight, no collection of empties). Bottle washing costs eliminated (saving in equipment, detergents, steam, etc.). Tamper proof, Effective sales message can be printed. Less Noisy (during filling, sealing and transportation). No exposure to sunlight. Filling machinery compact and occupied much less space. No container deposit needed. DISADVANTAGES Costing higher per unit milk distributed. Product not visible. Difficult to remove cream. Inspection of milk (for sediment) not possible. Regular supply of special paper/film essential. Not so easy to open Some cases of leakage may occur.

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DAIRY PLANTS Indias modern milk supply goes back to December 15, 1950, when the Aarey Milk Plant in Bombay launched the supply of pasteurized and bottled milk on largescale for the first time in India. Subsequently, over the years, the share of the organized sector increased after the launching of Operation Flood in 1970. PROMOTION THE SALES These include (for both wholesale and retail sales) the following: a) Home delivery. b) Milk booths or distribution depots/bars. c) Stores. d) Soda fountains e) Coin vending machines f) Automatic dispensers g) Factories, hospitals, jails, restaurants, schools, etc. UTILIZATION OF RETURNED MILK Unsold milk presents a problem of economic disposal. Under tropical conditions, as in India, the returned milk should not be send again for sale as liquid milk since exposure to high temperatures during its inward and outward journeys subject it to quality deterioration and hence may cause consumer complaints. The unsold milk can be given for separation or utilized for preparation of dahi, etc. MILK PRODUCTION IN WORLD India is the largest animal milk producing country in the world followed by USA. It is estimated that the milk production would cross 50million tones by the end of 1995 and target to 250 million tons by 2020AD. 1950 - 17 million tones 1996 - 70.8 million tones 1997 74.3mT (Projected) 2020 -240mT
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Expected to reach 220 to 250mT 2020 India contributes to world milk production rise from 12 -15% & it will increase up to 30-35% (year 2020) What does the Indian dairy has to offer to foreign investor? India is a land of opportunity for investor looking for new and expanding markets. Dairy food processing holds immense potential for high returns. Growths prospective in the dairy food sector are termed healthy, According to various studies on the subject. place Key elements for marketing system Raw material (milk) availability An established infrastructure of technology Supporting man power DAIRY ORGANIZATION Dairy is an important source of subsidiary income to small/marginal farmers and agricultural labors. The manures from animals provide a good source of organic matter for improving soil fertility and crop yields. The goober gas from the dung is used as a fuel for domestic purposes as also for running engines for drawing water from well. The surplus fodder and agricultural by products are gainfully utilized for feeding the animals. Almost all draught power for farm operations and transportation is supplied by bullocks. Since agriculture is mostly seasonal, there is a possibility of finding the employment throughout the year for many persons through dairy farming. A farmer can earn a gross surplus of about Rs.12, 000 per year from a unit consisting of 2 milking buffaloes, the capital investment required for purchase two buffalo is Rs. 18,223. Even after paying a sum of Rs. 429 towards repayment of the loan and interest the farmer can earn a net surplus of Rs. 6,000 to 9,000 approximately per year. The basic infrastructural elements for a successful enterprise are in

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PACKAGE OF COMMON MANAGEMENT PRACTICES RECOMMENDED FOR DAIRY FARMER Some of the major norms and recommended practices are as follows. HOUSING a. Construct shed on dry, properly raised ground. b. Void water-logging, marshy and heavy rainfall areas. c. The walls of the shade should be 1.5 to 2mts high. d. The walls should be plastered to make them damp proof. e. The cattle shade should be well ventilated. f. The floor should be pucca/hard, even non-slippery impervious, well sloped (3m per meter) and properly drained to remain dry and clean. g. Provide 0.25 meter road, pucca drain at the rear of the standing space. h. Provide 5-10sq, meter loaf space for each animal. i. Provide proper shade and cool drinking water in summer. j. In winter keep animals indoor during night and rain. k. Provide individual bedding daily. l. Maintain sanitary condition around shed. m. Give adequate space for the animals. FEEDING OF MILCH ANIMALS a. Feed the animals with best feeds and fodders. b. Cut the fodder at the right stage of their growth. c. Chaff roughage before feeding d. Moisten the concentrate mixture before feeding. e. To estimate the daily feed requirement remembers that the animals consume about 2.5 to 3.0 per cent of their body weight on dry matter basis. MILKING IF ANIMALS a. Milk the animals two to three times a day. b. Wash the udder and teat with antiseptic lotions. Luke-warm water and dry before milking. c. Milk should be free from any contagious diseases and should wash his hands
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PROTECTION AGAINST DISEASES a) Be on the alert for signs of illness such as reduced feed intake, fever, abnormal discharge or unusual behavior. b) In case of outbreak of contagious disease, immediately segregate the sick, incontact and the healthy animals and take necessary disease control measures. BREEDING CARE a. Observe the animal closely and keep specific record of its coming in heat, duration of heat, insemination, conception and calving. b. Breed the animals in time. CARE OF CALVES a. Take care of new born calf. b. Treat/disinfect the navel cord with tincture of iodine soon as it is cut with a sharp knife. c. Keep the calf separately from birth till two months of age in a dry clean and well-ventilated place. Dehorn the calves around 4 to 5 days of age easy management when they grow.

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COMPANY PROFILE
WORK PROFILE We have established a dairy unit named MODELMILK DAIRY (P) limited.The promoters of the company are Sri Rao,Dr.N.Venkata Rao & B.Brahma D. Brahamanadam Naidu., at B.Nageswara village,

NIDUMANURU

Ramavarapadu Mandal, Vijayawada, Krishna District, Andhra Pradesh and commissioned for commercial production for marketing during September 1999 it handle 225000 liters of milk per day. The plant is located on Vijayawada Vishakhapatnam national Highway (NH.5), 5 kms from Vijayawada city towards Vishakhapatnam, in an area of 13.00 acre. The unit is registered under S.S.I. The milk in bulk is being purchased from other dairies processed, homogenized, packed and marketed mainly in Major cities in Andhra Pradesh. The milk is being also sold in Vijayawada, Guntur and Eluru town basing on consumers demand. By marketing the milk in various towns, assured market outlet is provided to large number of village milk producers for their surplus milk. The required machinery is installed in the dairy. Strict quality standards are applied before marketing the milk for which wellequipped laboratory is established. In order to deliver quality milk to the consumers insulated trucks are used to transport milk from the dairy to various destinations. MODEL MILKDAIRY PVT LTD is a dream come through to the dynamic young and entrepreneurs who have jointly efforted to convert their skills, knowledge and experience in the field of processing and producing milk and milk products. Realizing the milk production potentialities of the inversion track of the government of Andhra Pradesh and government of India, with self managed financial resources and establish the Modern dairy in the year 1995 at Narasaraopet and erected new plant at Nidammanuru the year 1995. Today, the dairy has passed to equate major dairies in the southern region which has not only captured the market by also has made Modern and accepted brand and preference of the consumers.

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Model Milk Dairy (P) Ltd (MMDPL) Handle 6.5 lakhs litersof milk per a day in all the packing stations and main dairy plant. Model Milk Dairy (P) Ltd having good infrastructure and well equipped with all latest machinery to process 6.5 lakhs liters of milk per a day which is the highest in the state of A.P. which has developed in a decade. MMDPL handles milk in the following locations: PLACING LOCATION GUDUR VELLALA CHERUVU BHIMADOLU PALAMANER HANDLING CAPACITY PER DAY 4.0 LAKH LITERS 1.0 LAKH LITERS 1.0 LAKH LITERS 1.5 LAKH LITERS

VISION To deliver best quality of milk and milk products at reasonable rates to maintain the leadership in the milk market.

MISSION To achieve market leadership in the area of milk products.

MAIN OBJECTIVES To provide assured year and market for the surplus milk procured in the rural areas supply wholesome milk and milk product to the urban consumer and to stimulate milk production and to develop the required infrastructure.

PROCUREMENT OF MILK MMDPL established 25 chilling centers in A.P and 8 chilling centers in Narasaraopet to procure both cow and buffalo milk good quality milk is being procured and chilling with in short time at chilling centers, to retain freshness of milk. The strength of the MMDPL is to procure 6.0 lakhs liters of milk directly from agents
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or farmers by having full equipped machinery and professionally trained staff. MMDPL have full control on its systems, so that pure quality of milk and milk products can be supplied to customers. PRODUCTION MMDPL has its main dairy plant at Nidumanuru with handling capacity of 4.0lakhs liters of milk per day. Market milk: - Main plant is processing 2.5 lakhs liters of milk per day in automatic sachet filling machines to supply and distribution of milk to Vijayawada, Eluru and Guntur etc... In insulated puffs.S There is continuous growth in sale of milk from 50000 liters to 250000 liter within a span of one-decade. MMDPL maintaining consistency in quality and is standards consumers have much confidence. MMDPL having its own supply chain management, which makes ease in timely distribution and assured supply, which gains customers satisfaction. At our calamander unit process and supply of 1.00 Lakh liters of milk and 20000 liters of Curd to Bangalore city. At our vellalacheruvu and Bhimadolu Packing stations processing and packing 2.0 Lakh liters of milk to Hyderabad, Warangal Vijayawada Eluru Guntur and Rajahmundry. PRODUCTS The main plant has capacities with modern equipment to manufacture milk products milk products like butter, ghee and milk powder. Butter is made from pure cow and buffalo fat under hygienically processed through continues butter making machine with a capacity of 8 tons per day. Ghee is made from pure cow and buffalo butter under supervision of 30 years experienced dairy technologists to retain granulation, color and aroma of ghee with a capacity of 8 tons per day. Ghee is packed in a wide range of 7ML to 15 KGS.
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 Milk powder is made from fresh cow and buffalo milk, plant is capable of making all type of milk powders with a capacity of 15 tones per day. By-products like sterilized flavored milk, Lassie, Khova, Milk cake, Mysore Palak Panner. PRODUCT LINE Milk UHT MILK GHEE Tetra S.F.M BUTTER MILK LASI CURD MISTHI DOI PANEER DOODH PEDA BURFI BASUNDHI KALAKAND T.M.DTM,FCM,STD(200ml,500ml,200ml). 1lt,500ml,200ml (DTM,TM,STM). 15kg.tin,200ml,500ml,1lt. Chocolate,badam,pine apple. 200ml. 200ml. 100grms,200grms,500grms. 100grms 200gr,500gr,1kg. 25gr,250gr. 250grms,500grms. 50ml. 1kg, 500grms.

MILK POWDER PLANT The main dairy has powder plant of 15 tons capacity per day. The plant has been designed to produce 15000 kgs of milk powder on a 20 hours per day. Evaporation is done in multiple effect falling film evaporators and powder is manufactured with high pressure nozzle spray dryer. The water evaporation capacity of the evaporator is 9400 kg per hour and spray dryer is designed to 758 kg per hour. Fluid bed dryer is also provided. The dairy is having the facility to convert surplus milk into milk powder around 150000 per day on average. As we are getting good quality milk from all chilling centers and best quality of milk powder is produced.

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MARKETING MMDPL is having good marketing facility of milk and milk products, marketing offices at Vijayawada, Chennai, Bangalore and Hyderabad is having good distribution system. All the marketing executives are professionally trained and having good skills and experience in marketing products. To maintain cold chain there are about 35 insulated puff vehicles to transport milk to various towns. There is tremendous increase in sales of milk and milk products due to best quality, there are about 3000 outlets in AP, TN and Karnataka. The dairy is catering need of 10 Lakh customers daily in southern region. QUALITY ASSURANCE MMDPL has well maintained laboratories in all their dairies. Technically qualified staff are looking after testing of milk and milk products. Quality assurance programs are implemented at every stage to ensure quality of milk and milk products. This dairy is an ISO 9001:2000 and an ISO 2000:2005 certified company. The dairy is following quality management system and food safety standards. MMDPL is having ISI License and AGMARK License and all other statutory standards as per requirements. There is continuous growth is procurement and sales. The capacities of the plants are also increased to handle the milk and to manufacture milk products. To meet the demand in market there is also plan to introduce products like cup curd, lassie in retail markets. QUALITY POLICY We are committed to achieve customer satisfaction throughhygienically processed and packed Milk and Milk Products. Westrive to continually improve the quality of our products andservices through up gradation of technologies and systems.Model's soul has always been imbibed with an unwrittenperpetual commitment to itself, to always produce and providequality products with continuous efforts to improve the processand environment.

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Adhering to its moral commitment and its continuous drive to achieve excellence in quality of Milk, Milk products & Systems, Model has always been laying emphasis on not only reviewing & re-defining quality standards, but also in implementing them successfully. All activities of Processing, Quality control, Purchase, Stores, Marketing and Training have been documented with detailed quality plans in each of the departments. Today Model feels that the ISO certificate is not only an epitome of achieved targets, but also a scale to identify & reckon, what is yet to be achieved on a continuous basis. Though, it is a beginning, Model has initiated the process of standardizing and adopting similar quality systems at most of its other plants. ACHIEVEMENT Today 6.5 lakh framers are supply milk through 8072 dairy collection centers. Covering about 12541 villages in the state. The milk procurement has grown to touch 360.8 million liter and sales of milk have touched 310.5 million liters during 2009-10. Andhra Pradesh has made rapid strides in the past 3 decades and has emerged as a major milk state. Dairying co-operative has become in instrument of change and growth in villages.

HR FUNCTIONS TECHNICAL INPUT ACTIVITIES Animal health care Artificial insemination Feed and fodder activities

TRAINING CENTRE This union has its own union training center funded by NDDB, to cater the need of the society personnel and framers various activities.

FINANCE FUNCTIONS FINANCE AND ACCOUNTS The financial operation of model dairy in Vijayawada has been increasing with a remarkable growth rate year by year from 1995-96 to 1999-2000 with all most double from rupees 25 to 50 lakhs. The purchase price of the milk also been year and

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this union is also in the habit of passing differential price since 1981 onwards up to reporting years.

COMPETITORS 1. MODEL MILK 2. JERSEY 3. SANGAM 4. VAISHNAVAI 5. MOTHER 6. THIRUMALA 7. JYOTHI 8. VISHAKA 9. MASQATI 10. MUKUNDA

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COMPANY PROFILE

MODEL MILK

NAME OF THE COMPANY

MODEL MILK PRODUCTS PVT.LTD. Nidamanuru, MODEL DAIRY MILK

Address of the Company

Vijayawada - 521104, Andhra Pradesh, India

Contact

Phone:91-866-2842777/2842396 Fax:91-866-2842111

Year of Establishment

1994

Type of Unit

Small Scale

Standard Certification

ISO 9001:2000

No of Staff

300

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ORGANIZATIONAL STRUCTURE

MANAGING DIRECTOR

FINANCE DEPARTMENT

SALES DEPARTMENT ASST. GENERAL MANAGER

PRODUCTION DEPARMENT

PERSONAL DEPARTMENT

SENIOR ACCOUNTS OFFICER JUNIOR ACCOUNTS OFFICER

SUPERVISOR PRODUCTION MANAGER SENIOR ASST.

DEPUTY GENERAL MANAGER

PLANT MANAGER JUNIOR ASST.

ACCOUNTS OFFICER

SALES MANAGER

MATERIAL MANAGER TYPISTS

TYPISTS

CLERICAL STAFF

QUALITY MANAGER

PROCESSING SUPERVISOR

CLERICAL STAFF

BOARD OF DIRECTORS Mr. .P. DHANU PRAKASH Mr. P. RATNAKAR Mr.VENKATESH Mr.RATNA KISHORE MANAGING DIRECTOR ASST.GENERAL MANAGER ASST. SALES MANAGER ASST.SALES MANAGER

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SWOT ASSESSMENT OF MODEL DAIRY STRENGTHS 1. Strategically located in the Model 2. Quick availability of raw material 3. Popular brand known from years 4. Milk and milk products are available at competitive prices 5. ability to maintain uniform quality 6. timely delivery 7. new technology implemented for production of milk 8. Model has very good infrastructure 9. Model attends to the complaints of consumers immediately 10. Model pays the highest price for the milk collected from farmers in India and loyalty among customers for the brand.

WEAKNESS

1. Freezing of marketable area. 2. Lack of flexibility in system. 3. Rivalry among sister unions 4. Government influence 5. Lack of personalize service to channel members 6. High overheads 7. Return are not expected

OPPORTUNITIES

1. Products at affordable prices 2. Your company has set high standards of quality and safety practices,which gives it an inherent advantage 3. There is also a constant and conscious effort to add further value to the consumer by offering new products and better quality of services in the distribution chain. 4. The improvement in the standard of living of consumers and the higher disposable income has increased the demand for high quality dairy products.
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THREATS

1. Milk being a perishable commodity demands an efficient cold chain management 2. Many new process are being developed to improve the quality of milk so processed and to extend its shelf life 3. Your company is in the forefront of such initiatives in establishing this infrastructure 4. The industry gas become highly competitive with diverse play.

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THEORETICAL FRAME WORK

INTRODUCTION Distribution decisions are critical in nature as they affect the affect the visibility of the firm and the product. These decisions affect the market share of the firm and hence great care has to be taken in selecting distribution alternatives The size and diversity of the Indian market. The heterogeneity is not just on account of culture and demographic profile of the population but also due to the infrastructure existing in the country. For example, the following fact sheet on the Indian market. Number of towns and cities: 3700 Number of metros: 4 Number of villages: 6, 30,000km Total length of road: 3,319,644km Total length of concrete road: 1,517,077km Rail network: 62,915km Total no of telecom connections: 18, 95 million Ratio of the number of retail outlets to the population 5.5outlets 1000persons. Number of accessible villages: 5, 00,000

This diversity in terms of accessibility of markets today posses a majority marketing challenge. Increasingly, marketers realize that if they were to make their brands available in the right size, at the right time, and at the right price, the Indian consumer can be motivated to buy and consume them Marketing management Marketing management is the process of planning and executing the conception. Pricing, promotion and distribution of ideas, good and services to create exchanges that satisfy individual and Organizational objectives. Industrial Marketing Industrial buyers constitute the largest market of all the purpose volumes of transactions involved in industrial buying significantly exceeds that of the ultimate consumer market.

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ROLE OF MIDDLEMEN OR INTERMEDIARIES

Besides making the product available to the customer, middlemen perform several other roles and functions Information Middlemen have a role in providing information about the market to the manufacture .Developments like changes in customer demography, psychographic, media habits, entry of a new competitor and changes in customer preferences. Since middlemen are present in the market place and close to the customer, they can provide this information at no addition cost. Price Stability Maintaining price stability in the market is another function a middlemen performs. The middleman absorbs an increase in the price of the product and continues to charge the customer the same old price. The middleman also maintains price stability by keeping his overheads low. Promotion Promoting the products in their territory is another function that middlemen perform. Many of them design their own sales incentives programmer amied at building customer traffic at their outlets. Financing Middlemen finance manufactures operations by providing the necessary working capital in the form of Advance payments of goods and services. Because it has to be made even the products are bought, consumed and paid for by the ultimate consumer. Titles Most middlemen take the title of goods, services, and trade in their own name. This helps in diffusing the risks between the manufacturer and middlemen. This also enables middlemen to be in physical possessions of the goods, which in return enables them to meet customer demand at the very moment it arises.

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Marketing Flows in Marketing Channels for a Typical Consumer Company

Physical flow:

Suppliers of Inputs

Transporter and

Manufacturer

Warehouses

Transporters and C&F agents or company warehouses

Customers

Retailers

Transporters

Whole saler

Title flow: Input Suppliers Payment flow: Suppliers Bank Manufacturer Wholesaler/ Dealer Retailers Cust omer s Manufacturer Wholesalers or Dealers Retailers Customers

Information flow: Suppliers of Inputs Transporter and Warehouse s and Banks Manufactur ers Transporter and Warehouse s and Banks Wholesaler/ Dealer Transporter and Warehouses and Banks

Customers

Retailers

Promotion flow:

Suppliers of Inputs

Advertising and agency

Manufactur ers

Advertising and agency

Trade

Custom ers

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THE NEW ROLE OF INTERMEDIARIES The role of intermediaries is fast undergoing a change. Impact by Internet and mobile communication technologies, intermediaries find that their conventional role of selling the goods in their possession and competing on the basis of price does not hold good anymore .Today , since the customer can access any intermediary anywhere in the world. Hence the middlemen have to have access to the basis full range of products and service required by the customer.

CHANGING ROLE OF MIDDLEMEN

Conventional Role

Contemporary Role Link benefits to produce a superior

Transact discrete product or service

customer experience in new market space Access and get to customer the full range

Sell what they have, or what is in stock

of products and service they need for this experience

Cut costs to compete on price of products and services Focus on discrete core items Gear offerings to average customer

Get rid of non-value addition activies, waste, duplication. Concentrate on value-added services Personalize offering to suit unique individual needs

TYPES AND NATURE OF MIDDLEMEN There are three types of middlemen that facilitate the flow of goods and service from manufacturer to the customer

Merchant Middlemen These are the intermediaries who take title to the goods and service and sell them. We know them as dealers, wholesalers, and retailers. These middlemen get margins and bonuses as compensation. They share the risk with manufacturers when they take title and physical possession of the goods.

54

Agents:

they help in identifying potential customers and even in negotiations. They

do not share risk with manufacturers as they do not take the title of goods and services. Agents earn a commission and reimburse for all expenses by the manufacturer. Facilitators: these are independent business units that facilitate the flow of goods and services from the producer to the customer without taking a title to them or negotiation for them on behalf of the producer.

CHANNEL LEVELS One of the important decisions that firms have to often is regarding the number of channel levels required to serve a given market. Channel level represents channel members who have a specific role to play. From as low as zero ,or in other words, directly from the manufacture to the customer, one can have a high as 4 to 5 levels involved in distribution . Typically, zero level existing in most industrial product marketing, particularly in capital equipment. When the number of customers is high and they are concentrated in specific geographical areas without any uniform pattern in their order lot size, that is some buy in small volumes and other in bulk, the firm adopts one channel level of distribution. Here the firm sells its goods to a whole seller or larger dealer or transfers them to an agent. Many a time, as in the case of consumer products, customers are spread all over the country and the market is large. To reach out to such a vast market, a firm has to necessary increase the length of the channel and one finds two, three, four levels of distribution. The Indian market has undergone a significant change with the emergence of middle-class consumers all over the country. Even in rural markets there has been an increase in income levels and the demand for branded and package goods is on the increase, awareness also increase. Traditionally, most firms transported their goods from the factory to state capital, which had earlier been the major markets. Wholesalers would buy their requirements from this point and then redistribute the goods to different towns. Normally the wholesaler would have his sales force or direct contact with the some major retailers and would sell through them This often left gaps in the market as, many a time, the wholesaler would sell to the retailers, not necessary because of market demand but because the retailer was financially sound and could
55

pay the whole seller immediately. This obviously implies increase in width of the channel same level to serve the market. CONSUMER MARKETING CHANNEL 0-Level Manufacturer 1-Level Manufacturer 2-Level Manufacturer 3-Level Manufacturer Wholesaler

Wholesaler

Jobber

Retailer

Retailer

Retailer

Consumer Consumer Consumer Consumer

A zero level channel contains one selling intermediary, such as a retailer. A two level channel contains two intermediaries. In consumer markets, these are typically a wholesaler and a retailer. A three level channel contains three intermediaries. Om the meat packing industry, as many as six levels. From the producer point of view, obtaining information about end users and exercising control become more difficult as the number of channel levels increases.

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INDUSTRIAL MARKETING CHANNELS

0-Level Manufacturer

1-Level Manufacturer

2-Level Manufacturer

3-Level Manufacturer

Manufacturers representative

Manufacturers sales branch

Industrial distributors

Industrial customer

Industrial customer

Industrial customer

Industrial customer

Channels commonly used in industrial marketing. An industrial goods manufacturer can use its sales force to sell directly to industrial customers, or it can sell to industrial distributors, who sell to the industrial customer, or it can sell through manufacturers representatives or its own sales branches directly to industrial customers, or indirectly to industrial customers through industrial distributors. Zero, one, and two level marketing channels are quite common. FACTORS DETERMINING THE LENGTH OF THE CHANNEL From the above discussion, it may be concluded that following will determine the length of the channels of distribution. (a) Size of the Market: The larger the market size , the economical it is to indirectly serve the market and hence the longer the channel. Conversely the smaller the market, smaller the channel. (b) Order Lot Size: If the average order lot size is small, it is better to have a longer channel than when the average order is in bulk or if a container load is bought.

57

(c) Service Requirements : If the product and market requires a high level of service and it is a major factor in buying decision, it is advisable that the keeps a shorter channel like zero or one level only (d) Product Variety: If customers shop for an assortment of the products it is advisable that the firm ensures the availability of its product range at all outlets selling complementary and substitute products.

FACTORS INFLUENCING DISTRIBUTION DECISIONS Distribution patterns, channel objectives, and constraints are influenced by a host of variables .these are. Market Characteristics Market characteristics play an influence role on distribution decisions. For example, if customer wants a high level of service, manufacturers will have to ensure that its channel members are able to provide it .the latter alternative may be costly but it may ensure a high level of customer confidence. Company Characteristics The next variable is company characteristics and objectives. The channel design is influenced by the companys long-term objectives, financial resources, manufacturing capacity, marketing mix, and even its corporate philosophy. Product Characteristics Here the key issues for analysis are product value, perceived risk, nature of the product. Product value and product risk is high. Middleman Characteristics This refers to middlemens aptitude for service, promotion, handling ,

storage, contract, and credit. Channel design reflects the strength and weakness of different intermediaries. Intensity of Competition: The nature and intensity of competition in the industry will determine the distribution pattern by a firm. Some industries have multiple brand outlets. Environmental characteristics like government policy, statutory provisions ,state of the economy, technology, infrastructure development also affects.

58

IDENTIFYING MAJOR DISTRIBUTON ALTERNATIVES We have mentioned the three distribution alternatives in the preceding sections, namely intensive, selective, and exclusive. Intensive: This alternative involves all the possible outlets that can be used to

distribute the product. Which is mainly use for soft drink firms? They have multiple outlets to ensure this easy possible availability to the customer. Selective Distribution: This alternative helps focus the selling efforts of manufacturing firms on a few outlets rather than dissipating it over countless marginal ones. Selective distribution can help the manufacturer gain optimum market coverage and more control. Exclusive Distribution: When the firm distributes its brand through just one or two more outlets in the market who exclusively deal in it and not all competing brands.this is a common form of distribution in product and brands that seek a high prestigious image. The firm also hopes to get the benefit of aggressive selling by such outlets.

TERMS AND RESPONSIBILITY OF INTERMEDIARIES The commercial policy of a manufacturer often lays down the terms and conditions and responsibility for the intermediaries. (a) Price Policy: These sets out the price at the middlemen will get the product from the manufacturers and the discount schedule. It also mention the price at which middlemen may sell the product. (b) Payment Terms: The manufacturing firms stipulates the modes and terms of payment. Others may accept a letter of credit as a mode of payment. (c) Returns Policy: this indicates the warranty that the manufacturer extends to the intermediary. Some firms offer spot replacement for any of its products returned by the customer. Other take time to settle these claims. (d) Mutual Service and Responsibilities: These should be spelt out clearly, particularly in the case of franchised and exclusive agency channels. (e) Territorial Rights: The manufacturer should spell out the territorial jurisdiction of each of the distributors to avoid any territory jumping. This will also helps in the distributors evaluation.

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CRITERIA FOR EVALUATING CHANNEL ALTERNATIVES

The channel alternatives have to be evaluated from the point of view of the cost of distribution, the degree of control of manufacturer gets over the market through an alternative. Evolution of Channels The distribution strategy of any manufacturing firm should respond to market change. As markets evolve, products nature, and competition intensifies, the distribution plan of the has to be modified. One cannot assume that a distribution plan, once evolved, will continue to delivery results for the entire period of the products life. This is because of changing behavior and characteristics of customer who adopt the product at different time intervals. While in the introduction and early growth phase customers are willing to pay any price and go the place to buy it, at the latter stage of growth and early maturity, customers demand convenience buy it. But as products enter the latter part of maturity, customers became price and convenience sensitive. Hence the planning the distribution strategy a firm should consider value addition by the channel and market growth rate.

Growth Dedicated Stores: Computer Stores Shoppers Stop Introductory Rate Specialist Channels like boutiques in fashion/ designer wear High

Mature Department Stores like Akbarallys

High

Market Decline Discount Stores Low cost alternatives like Discount Sales Low Low Growth

Value added by channel members

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VERTICAL MARKETING SYSTEM

Often one finds that the manufacturers, wholesalers, retailers are locked in an unproductive conflict. These is because each of them conventionally acts as independent business units pursuing a profit goal even though, at a time , it may work against the others. the vertical marketing systems achieves economies of scale through their size, bargaining power, and eliminating of duplicates services. TYPES OF VERTICAL MARKETING SYSTEMS

(i)Corporate Vertical Marketing Systems: In this successive stages from production to distribution are under single ownership of any of the channel members. Vertical integration is achieved through forward or backward integration. (ii)Administered VMS: Unlike the corporate VMS administered VMS seeks to control successive stage from production to distribution not through ownership but through the size and power of one of the channel member like brand leaders. (iii)Contractual VMS: This consists of independent firms at different levels of production and distribution integrating their programs on a contractual basis to obtained larger economies of scale and sales impact than they could achieve alone. Some are voluntary chains.

HORIZONTAL MARKETING SYSTEMS Another contemporary marketing system that challenges the conventional one is this. It reflects the readiness of two or more non-related companies to put together resources to exploit an emerging market opportunity. Multichannel Marketing System Lately, firms have been realizing that one single system or channel system is not always able to deliver the desired results. For one, Indian market has grown dramatically over the last one decade with the emergency of the middle class, working couples, and single child families. This growth is not just restricted to metros but has spread across the country to every towns and rural areas. In this multiple channels are using.

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MANAGING THE CHANNEL

Just as no single distribution plan can remain static in the midst of market changes, channel members expectation also change. At one stage , channel members used to take pride in mentioned their relationship with well-know nations and multinations firms like Godrej, Hindustan Liver and so on. Manufacturing companies today demand much greater selling efforts from their middlemen. The former also want to be provide timely market information, more warehouse space, competitive advantage. Pressure on margins is an inevitable element in an intra channel competition. CHANNEL CONFLICT To manage channel conflicts the marketer must understand (a)The type. (b)The nature or cause (c)Magnitude of the conflict. TYPES OF CONFLICT In any channel arrangement there can three types of conflict. (i)The Vertical-level Conflict: Vertical level conflict occurs when the channel members at one levels is in conflict with another member at the next higher or lower level. (ii)Horizontal-level Conflict: Conflict at the same level between channels members is called horizontal-level conflict .Hence, inter stockiest conflict or conflict at the retail level among retailers on issue like pricing and territory jumping. (iii)Multichannel-level Conflict: Sometimes the middlemen come in conflict with the manufacturer, using both direct and indirect means of distribution. Such a conflict is called multichannel-level conflict. NATURE OR CAUSE OF CONFLICT Channel conflict occurs largely due to financial and non-financial reasons. (i)Goal Incompatibility: A Major factor causing conflict between manufacturers and wholesalers is the perceived goal incompatibility between them. (ii)Role Ambiguity: Many a time conflicts occur because of role ambiguity. This is a common cause of conflict in multichannel conflict. (iii)Difference in Perception of the Market: In this and economy may also create a conflict between the manufacturer and middlemen.

62

MAGNITUDE OF THE CONFLICT This refers to the seriousness of conflicts. At times the conflict may not be of a magnitude the magnitude demanding the manufacturers attention. MANAGING THE CONFLICT To minimize the conflict, the manufacturer may take the following steps: (a)Communication: An effective way to minimize channel conflicts is to have regular communication between manufacturers and the channel members. (b)Dealer Council: this resolves conflict is through formation of dealer councils. Such resolves horizontal-level and vertical conflicts. (c)Super ordinate Goals: this gives of maximum customer satisfaction. If the channel members can be motivated to perceive customer satisfaction as the ultimate goal of all members in the channel and leads to gain profits. (d)Arbitration and Mediation: this gives resolved through arbitration and mediation. Generally in intramiddlemen conflicts horizontally or vertically. MOTIVATIG CHANNEL MEMBERS Another major challenge to marketer today is to keep channel member motivated so that they give their best performance. Financial rewards like including higher margins, extended credit time, bonuses, and reimbursement of expenses. While nonfinancial rewards include contests, public recognition, paid holidays and training. Through these activates we can motivate the channel members. PLINNING A MARKET DRIVEN DISTRIBUTION SYSTEM In any market situation, if the distribution system of a firm is not customer focused or market driven, it risks losing its market share. Louis Western and Frederic D.Sturidvant suggested in eight step process. 1. Knowwhat Customers Want: in this service can categorized in five groups. (a) Lot size (b) Market decentralization. (c)Waiting time. (d)Product variety. (e)Service backup. 2. Decide on the Outlet: the marketer can develop clusters or segment that value different service in particular way and whose prioritization of service is similar.

63

3. Determine the costs:

Once the alternative has been selected, the market should

now detriment the costs will be. This help of either in house corporate executives or outside the professions. They also determine link suppliers. 4. Bind the Ideal: ideal alternative should tested agnist (a) Efficiency in costs, revenue, profits. (b) Effectiveness, especially in market share. (c) Adaptability or ability of capital invested to accept new products. 5. Compare the Alternatives: one must compare these alternatives with the existing one on parameters like function performed by various channel participants. Costs and discounts. 6. Review Assumption in the Light of Research 7. Comfort the Gap between the Ideal and the Actual Distribution System 8. Implementing Change in the System, if Required. CHANNELS OF DISTRIBUTION WITH REFERENCE TO MODEL DAIRY

CHANNELS OF DISTRIBUTION
MILK Door delivery Door delivery

Manufacturer Manufacturer

Retailer/agent Retailer/agent

Customer Customer

A set of the interdependent organizations involved in the process of market a product or services available for use of consumption by the consumer or business user.

According to bucking, a distribution channel consists or the set of the people and firms involved in the transfer of the title to a product moved from producer to ultimate consumer or business user.

64

FUNCTIONS OF DISTRIBUTION CHANNEL:

A distribution channel moves goods from producer to consumer. It overcomes the major time, place and procession gaps that separate goods and services from those who use them. Members of marketing channel perform many key functions such as gathering information, developing promotion, increasing contact, matching the buyers needs negotiation, physical distribution, financing and risk taking of the channel work.

MILK PRODUCTS:
Manufact urer Stockiest Retailer Consumer

NUMBER OF CHANNEL LEVELS

The number of channel levels can channelize marketing channel. Each layer of marketing intermediaries performs some work in bringing the product and ownership closure to the final buyer is a channel level. Each middleman that perform some work they are part of every channel. Direct market channel: A marketing channel alternatives and decided on the best channel design, it must implement and manage the chosen channel. The channel manager calls for selecting and motivating individual channel member and evaluating their performance overtime. The various alternative which a company has in distribution channel, can be understood from the below tables.

65

CUSTOIMER MARKETING CHANNEL:

SOME OF THE IMPORTANCE OF THE CHANNELS OF DISTRIBUTION: 1. Channel provide distribution efficiency to manufacture. 2. Channel supply products in required assortments. 3. Channel provider salesmanship. 4. Channel help merchandise the product. 5. Channel help implement the prise merchandise. 6. Channel look after physical distribution and financing function. 7. Channel of distribution of intermediaries, channel design, location, of outlets, channel remuneration and dealers principal relation 8. Physical distribution transportation warehousing, inventor level, order Processing, etc.

CHANNEL 1

Plant

Commission

Delivery Boys

Consumer

In this channel the milk distribution to the consumer through the commission agents. These commission agents are playing vital role in the sales of Model dairy. This channel is the most important channel maximum of sales is being achieved
66

through this channel. This is the easiest channel through which consumer can acquire the milk. This commission agent in turn appoints delivery boys for supply to consumer. This is the easiest channel where goods will be delivered directly to the consumer through dairy vans in time. I.e. both morning and evening. This facility makes commission agents comfortable and motivated. Even cash is collected at the points of booths.

CHANNEL 2
Model Dairy

Retailer

Customer

This channel includes retailer where the other products like butter milk, Doodah peda, Lassi, Flavored milk, Ghee, etc..... which are being manufactured by the Model dairy are being sold. A retailer is a person who sells ultimate customers. In case of Model dairy at some of the areas from where every customer can buy dairy pros. The organization itself established retail shop and employed its own people. It has also given this retailer shop even to the outsiders. In these retail outlets customers can get milk products other than milk like ghee, flavored milk, doodh peda, etc.,

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CHANNEL 3

Model Dairy

Customer

In fact this cannot be considered as a channel because there are no intermediaries between the organizations. Hence the customers are in direct contact with the dairy. They give order for the special occasion to dairy; these orders will be met on time by Model dairy personnel. The customer can book directly to the organization or they can even book through booth agents. The hotels, restaurant and other sweet merchants use even this channel. There will be direct contact between the customer and Model dairy. The transaction purchasing will be only through marketing department. This channel can also be considered as the zero level channels where the manufacturer is directly selling to the consumer. This is also kind of direct marketingchannel to the products like milk etc., This type of channel is very useful where the consumer can directly be in contact with the producer.

CHANNEL 4
Model Dairy

Stockiest

Retailer

Consumer

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Model dairy has recently gone for this channel of distribution. This channel consists of stockiest who are equivalent to the dealer. Designing of the channel is not a day to day task in the channel management. It is the administration of the dealer network that constitutes an everyday task in channel management. These stockiest were invited by the organization through the news paper ads.

LOCAL MILK MARKETING

Vijayawada city having of about 8 lakh including the nearby sub urban. To cater the needs of the consumer in Vijayawada city and also in the important towns of Kondapalli, Gannavaram, Ibrahimpatnam, Mangalagiri, Guntur and Machilipatnam milk is being supplied in sachets as indicated here under.

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1 Is your opinion about the present distribution channel of model dairy? TABLE: 1 Present Distribution Channel Excellent Good Satisfactory No. Of Agents 18 118 19 % of Agents 11.5 76 12.5

FIGURE:1
140 120 100 80 60 40 20 0 Excellent Good Satisfactory 18 11.5 19 12.5 76 No. Of Agents % of Agents 118

Interpretation From the above 76% of retailers are saying that the distribution channel of model dairy is good. 12.5% of retailers are saying that the distribution channel of model dairy is satisfactory and 11.5% of retailers are saying that the distribution channel of model dairy is excellent. Majority of retailers are saying that the distribution channel of model dairy is good. Because model dairy provide different channels of distribution, so many retailers show interest towards model dairy produce

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2 Monthly incomes of a dealer and distributor through model dairy products? TABLE: 2 Monthly Income Up to 5000 6000 8000 10000 No.Of Agents 103 24 19 9 % of Agents 66.5 15.5 12.5 5.5

FIGURE:2
12000 10000 10000 8000 8000 6000 6000 4000 2000 0 0 1 2 3 4 66.5 15.5 12.5 5.5 Monthly Income No.Of Agents % of Agents

Interpretation From the above table, it is being observed that the majority of respondents 66.5% under monthly income up to Rs.5000, 15.5% respondents income between the monthly income of Rs.6000. 12.5% respondents income between the monthly income of Rs.8000 and then only 5.5% respondents monthly income above Rs.10000.

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3. How is the quality of model dairy milk products? TABLE: 3 Quality Good Satisfactory Poor No.of Agents 107 44 4 % of Agents 69 28.5 2.5

FIGURE:3
120 100 80 60 44 40 20 4 0 Good Satisfactory Poor 2.5 28.5

107

69 No.of Agents % of Agents

Interpretation From the above table, 69% of retailers saying that model dairy milk and milk products are in good quality, and 28.5% of retailers says that model dairy milk is satisfactory, and 2.5% of retailers say it is poor in quality of milk and milk products. Majority of retailers saying that model dairy milk and milk products quality is good, so model dairy produce good quality of milk and milk products.

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4. Are you satisfied with the commission offered by model dairy to sell their products? TABLE:4 Commission Yes No No. Of Agents 98 57 % of Agents 63.5 36.5

FIGURE:4
120 100 80 60 40 20 0 No. Of Agents % of Agents 57 63.5 Yes 36.5 No 98

Interpretation From the above table, it is observed that 63.5% of the retailers are satisfied with commission offered by model dairy. And also 36.5% agents do not satisfied with the commission offered by model dairy. The majority of retailers (63.5%) are satisfied with commission.

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5.Why people prefer model dairy milk ? TABLE:5 People Prefer 24hrs availability Competitive Price Prompt and easy delivery Attractive Packing No.Of Agents 5 38 122 0 % of Agents 3 24.5 72.5 0

FIGURE:5
140 122 120 100 80 60 40 20 0 24hrs availability Competitive Prompt and Price easy delivery Attractive Packing 5 3 38 24.5 0 0 72.5 No.Of Agents % of Agents

Interpretation From the above table , it is evident that 72% of customer prefer dairy milk because pompt and easy delivery , 24.5% of customer prefer model dairy milk because of the competitive price, 3% of customers prefer 24hours availability .

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6.How do you place an order for the stock? TABLE:6 Order for Stock Over Through Phone Send a Phone Through Sales Vechicles Representative Of Model Collects the indent No.Of Customers 52 0 0 103 % of Customers 33.5 0 0 66.5

FIGURE:6

120 100 80 60 40 20 0 52 33.5

103 66.5

No.Of Customers 0 0 0 0 % of Customers

Interpretation From the above table, 66.5% of retailers said that representative of model dairy collects the indent, and 33.5% over through phone , most of the people directly representative of model dairy collects the indent.

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7.How fast do you get the stock? TABLE:7 Get the Stock Same Day Immediately receipt of the day After 1 day After 2 days No.Of Customers 151 4 0 0 % of Customers 97.5 2.5 0 0

FIGURE:7

160 140 120 100 80 60 40 20 0

151

97.5 Get the Stock No.Of Customers % of Customers

4 2.5 1 2

0 0 3

0 0 4 5

Interpretation From the above table evident that 97.5% of retailers said that they get stock on same day, while 2.5% of retailers said that immediate receipt of the day .with the help of my observation I found that the retailers are more interested to sell Model dairy products because of the fast delivery offered by the model dairy.

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8. Which product has a minimum sale? TABLE:8 Maximum Sale Milk Butter Milk Curd Lassi Other products No.of Customers 103 2 33 1 16 % of Customers 66.5 1 21 0.5 11

FIGURE:8
120 103 100 80 60 40 20 2 1 0 Milk Butter Milk Curd Lassi Other products 1 0.5 33 21 16 11

66.5 No.of Customers % of Customers

Interpretation From the sales analysis of model dairy products shows that 66.5% of customers buying UHT MILK, 21% buy curd and 11% buy other products , buttermilk 1% and finally lassie 0.5%. with the help of sales data we can evaluate the model dairy milk customers are than the other milk related products. In those milk related by products also curd is in the next position of sales.

77

9.please specify the price of the milk that consumers can attract? TABLE:9 Price per Litre Rs. 28 Rs. 26 Rs. 30 Rs. 38 No.of Customers 3 2 30 120 % of Customers 2 1 19 78

FIGURE:9
140 120 120 100 80 60 40 20 3 0 Rs. 28 Rs. 26 Rs. 30 Rs. 38 2 2 1 30 19 78 No.of Customers % of Customers

Interpretation I was found that 78% of the people were buying the milk per liter for the cost of Rs.38, 19% of people were buying the milk for the cost per liter for Rs.30. and other of the people were buying the milk cost per liter for Rs 28 and only 1% of the people were buying the milk per litre for Rs26 . so majority of the people were buying the milk for Rs38. (with my observed the people are purchasing full cream milk & next prefer for the people is economy price milk.)

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10.Are you selling other milk and milk products? TABLE:10 Selling Other Milk Products Yes No No.Of Agents 38 117 % of Agents 24.5 75.5

FIGURE:10

140 120 100 80 60 40 20 0 No.Of Agents % of Agents 38 24.5 75.5 Yes No 117

Interpretation From the above table I observed that the maximum % i.e.., 75.5% of the agents are not selling other milk and milk products and 24.5% of the agents are selling other milk and also the Model dairy milk& milk products .Even though the

competition is high in the market then also the agents are prefer to sell Model dairy milk and milk products.

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11.Have you face any problem with products if model dairy? TABLE:11 Face any problem No.of Agents % of Agents

Yes No

17 138

11 89

FIGURE:11
160 140 120 100 80 60 40 20 0 No.of Agents % of Agents 17 11 89 Yes No 138

Interpretation I was observed that 11% of the agents facing the problem , and 89% of the agents did not face any problem(with Model diary products) . Because the model dairy provide all specialties for the dealer and distributors.

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12. What is your opinion about the price of model milk and milk products ? TABLE:12 Price High Reasonable Low No.Of Agents 20 133 2 % of Agents 13 86 1

FIGURE:12

140 120 100 80

133

86 No.Of Agents

60 40 20 20 0 High Reasonable Low 13 2 1

% of Agents

Interpretation I was observed that 86% of the people were saying reasonable price. 13% of the people were saying that milk and milk products are very high. 1% of the people were saying that milk and milk products are low.

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13. How long have you been using these model milk and milk products ? TABLE:13 Years 10 5 3 2 No.Of Agents 44 54 19 39 % of Agents 28.5 35 12.5 24

FIGURE:13
60 50 40 30 20 10 10 0 1 2 3 4 5 3 28.5 24 19 12.5 2

54 44 39 35 Years No.Of Agents % of Agents

Interpretation With the help of my study I found that 35% of the people were using model dairy products since five years, 28% of the people were saying that using ten years, 24% are using two years, and 12.5% are using from three years. The people are very loyal to the Model dairy products.

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14. Which factor do you consider to selling model milk and milk products? TABLE:14 Factors Quality Service Commission No Leakage and Spoilage No.Of Agents 90 18 45 2 % of Agents 58 11.5 29 1.5

FIGURE:14

100 90 80 70 60 50 40 30 20 10 0

90

58 45 29 18 11.5 2 1.5 Quality Service Commission No Leakage and Spoilage No.Of Agents % of Agents

Interpretation I was observed that 58% of the people were saying based on the quality, 29% of the people were saying that commission, 11% are saying based on service, and 1.5% are saying that there is no leakage and spoilage. so the people are very happy about the quality parameters maintained by the Model dairy.

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15. Are you satisfied with the service offered by the model dairy? TABLE:15 Service Offered Yes No No.Of Agents 133 22 % of Agents 86 14

FIGURE:15
140 120 100 86 80 Yes 60 40 22 20 0 No.Of Agents % of Agents 14 No 133

Interpretation I was observed that 86% of the people were saying that they are satisfied and remaining 14% of the people were saying that they are not satisfied. In that also the people who are satisfied because of the quality maintenance, delivery system(proper distribution channel),services and all are available at reasonable price.

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FINDINGS

Majority of Retailers are saying that the distribution channel of Model Dairy is good Observed that the majority of respondents 66% under monthly income up to 5000. The 69% of distributers saying that Model Dairy milk & milk products is good quality. The majority of retailers are satisfied with commission. Agents are evident that 72% of customers prefer Dairy Milk because prompt & easy delivery. Evident that 97% of retailers said that they get stock on same day. I was observed that 35% of the agents using these Model Milk & Milk products from past 5years. Factors that consider to selling Model Milk & Milk products by agents as based on quality.

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SUGGESTIONS
Maintain good relationship with loyal customers for business extension of Model Dairy. Concentrate on By-Products to get the effective market share in giving the competition with other Dairy Milk companies. Provide sophisticated commission to agents. Solve the complaints of dealers with in the short span of time. Use the effective Advertisement about the Model Milk & Milk products.

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CONCLUSION
Model Dairy has a competitive advantage when it comes to its distribution and logistics procedure because the company has been able to mobilize every resource it has to efficiently distribution its products. Model Dairy clearly understand its competitive advantage in being so big whose operations is of large scale and has used it to gain favorable edge in the competitive . Model Dairy have embarked on a multi varied marketing campaign that extends and distribution channel. The successful ongoing marketing it in corporate media advertisement, community partnership , innovative packing design and interactive digital engagement through the internet and new media channels. From the entire project work the Model Dairy company good brand image in the Vijayawada city. The Model Dairy distribution channel minting good channels starters avoiding shortly of products all forms of retailers and these company

operating own outlets to grab more market share.

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BIBILOGRAPHY

S.NO

TITLE OF THE BOOK

AUTHOR PUBLISHER EDITION

Himalaya publications Prentice hall of India Mc.Graw-Hill 12th Edition. 5th Edition 3rd Edition

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Marketing P.Kotler & management K.Keller Marketing channels Louis w.stern

Marketing Rajan Management Saxena

NEWS PAPERS The Hindu Business Line MAGAZINES Business Line Business World Frontline WEBSITES www.nabard.org www.nddb.org www.modeldairyfarm.com www.ffymag.com

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pQUESTIONARY TO THE BOOTH AGENTS

NAME PLACE BOOTH NUMBER QUESTIOS 1) Is your opinion about the present distribution channel of Model Dairy ( ) a. Excellent. b. Good. c.Satisfctory. 2) Monthly Income of a dealer and distributer through Model Dairy products ( ) a. Rs.5000/b. Rs.6000/c. Rs.8000/d.Rs.10000/ 3) How is the quality of Model Dairy products ( ) a. Good. b. Satisfactory. c. Poor. 4) Are you satisfied with the commission offered by Model Dairy to sell their products ( ). a. Yes. b. No. 5) Why people prefer Model Dairy milk. ( ). a. 24 hrs Availability. b. Competitive price. c. Prompt easy delivery. d. Attractive packing. : : :

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6) How do you place an order for the stock ( ). a. Over through phone. b. Send a person. c. Through sales vehicle. d. Representative of Model collects the indent. 7) How fast do you get the stock? ( ). a. Same day. b.Immeditaly receipt of the day. c. After one day. d. After two days. 8) Which product has a maximum sale ( ). a. Milk. b. Butter milk. c. Curd. d. Lassie. e. Other products. 9) Please the specify the price of the milk that consumer an attract ( ). a. Rs.28/b. Rs.26/c. Rs.30/d.Rs.38/10) Are you selling others milk and milk products ( ). a. Yes. b. No. 11) Have you faced any problems with products of Model Dairy( ) a. Yes. b. No.
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12) What is your opinion about the price of Model milk and milk products? ( ). a. High. b. Reasonable. c. Low. 13) How long has you been using these Model milk and milk products ( ). a.10 years. b. 5 years. c. 3 years. d. 2 years. 14) Which factor do you consider to selling Model milk and milk products.( ). a. Quality. b. Service. c. Commission. d. No leakage and spoilage. 15) Are you satisfied with the service offered by Model Dairy ( ). a. Yes b. No

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