“A COMPARITIVE STUDY OF DISTRIBUTION AND SALES PROMOTION MILK PRODUCT IN MARKET” SUMMITTED TOWARDS THE PARTIAL FULFILLMENT OF MASTER OF BUSINESS ADMINISTRATION (SUBMITTED TO UPTU, NOIDA) A RESEARCH REPORT 2013-2015
SUBMITTED TO:
SUBMITTED BY:
Mr. AMIT AGARWAL
RAVI
KUmar (Faculty of Management)
MBA VI th Sem. Roll no. 1360970039
JP SCHOOL OF BUSINESS MEERUT 1
(AFFILIATED TO UPTU NOIDA)
2
CONTENTS 1. Student declaration 2. Acknowledgement
2
3. Preface
3
4. Introduction
6
5. Company profile 10 6. Distribution process 35 7. Objective 44 8. Research methodology 47 9. Swot analysis 54 Data analysis 59
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10. Recommandation & suggestions 66 11. Limitations 70 12. Conclusions 72 13. Questionnaires 74 14. Bibliography 79 DECLARATION
I, RAVI KUMAR hereby declare that I have carried out the Research Project on the topic “A COMPARITIVE STUDY OF DISTRIBUTION AND SALES PROMOTION OF MILK PRODUCT IN MARKET.” I further declare that the research project work is my original work and no part of this report has been published or submitted to anybody or university for award of any other degree / diploma.
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Date: 28-05-2015 Place: Meerut
RAVI KUMAR Roll No. – 1360970039 MBA IVth Sem.
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ACKNOWLEDGEMENT It is my pleasant duty to offer my service acknowledgement to those honorable personalities of the department who have been a constant source of help and encouragement in carrying out this project. First of all I wish to express my indebtness to Mr. I.V. Thaplia, Manager Marketing, Parag Dairy for her valuable suggestions and guidance throughout the project. I wish to express my indebtness to Mr. IMRAN KHAN (H.O.D., JP SCHOOL OF BUSINESS) for his valuable suggestions and guidance throughout the project.
This research would not have been completed without friendly efforts of the all the concerned authorities. Also this project enables me to have the know-how of the effectiveness & working of the team spirit. Its web like structure helps me to have added potential in myself to adjust easily to the tense & result oriented environment of the organization.
RAVI KUMAR
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PREFACE As a student of M.B.A. (Master of Business Administration), one of the most reputed professional courses, I consider as my privilege to thank all the persons involved in the working of this project and their supervision and guidance I have been able to complete this research.
The attractive feature of the M.B.A. course is that along with theory we also get to have the exposure of the practical environment. This is through the summer training that we have to undergo after the completion of first year. The entire journey from the very idea of this project report to reality would not have been possible without guidance and support of many people.
The Research Report is based on Systematic and Scientific search for pertinent information on Specific Topic.
The study was confined geographically to Meerut & Noida. The data source was collected from the regular visits of Shopkeepers.
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The special task is also assigned to me to analyze the market opportunities in different regions of Meerut. It constitutes the Meerut regions and under that different counters have been visited. A set of questionnaire was prepared & scrutinized before going for market analysis.
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AN INTODUCTION -TO FMCG INDUSTRY The FMCG sector is a cornerstone of the Indian economy. This sector can drive growth, enhance quality of life, create jobs, and support penetration of technology. A vibrant FMCG sector can boost agricultural product and export. It contributed to the exchequer significantly, disperse technology across the value chain and usher in the product innovation. This innovation can improve Indian Health standards. Fast Moving Consumer Good (FMCG) industry has a long history. However, the Indian FMCG began to take shape only during the last fifty-odd years Today, the Indian FMCG industry continues to suffer from a definitional dilemma. In fact, the industry is yet to crystallize in terms of definition and market, size, among others. The definitional confusion that has marked the Indian FMCG industry is getting confounded. Some others call it the CPG industry and some even call it the PMCG industry. The Indian FMCG industry has suffered because of the confusion.
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It is an industry which touches every aspect of human life from looks to hygiene to palate. Perhaps defining as industry whose scope is so vast is not so easy. The government is at crossroads not knowing how and where to slot the Indian FMCG industry and unsurprisingly, the manner in which it has treated an industry which holds tremendous promise as producer of goods that pervade everyday life has been only callous. The facts that the FMCG industry is a noteworthy employer and a major tax payer are being ignored. The only thing that is cheering the industry are the reforms of the nineties. Post reforms, the industries is excited about a burgeoning rural population whose income are rising and which is a willing to spend on goods designed to improve lifestyle. What is needed now is a change in the mindset of the mandarins, FMCG industry -friendly legislation are the needs of the hour. It does not matter whether changes are being brought about by dawning market realities or the ongoing economic reforms. One thing is certain here: The Indian FMCG industry has a promising future to look forward to.
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In terms of growth potential, the Indian market is a great horse to bet on. With a little help and understanding from the government, the Indian FMCG can realize its true potential. So far, it has been a checked graph for the MNC’s operating in the Indian FMCG industry. Domestic companies are only beginning to make their presence felt in the industry. It has taken tremendous consumer insight and market savings for the FMCG players to reach where they are today. But, the journey has only begun.
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COMPANY PROFILE INTRODUCTION Meerut Pradeshik co- operative dairy federation came into being on 23rd march 1938 via registration number 257. the capital invested was only Rs.100 and 220 litres of liquid milk. Today 2 lakh litres of milk is handled in the co-operative production unit and its annual turnover has touched the Rs. 50 crore mark.
IN BRIEF Established
:
1938
Registration
:
23 march 1938
First dairy inspector
:
Mr. N. K. Bhargava
Board of director
:
Mrs. Kamini Chauhan
Initial Capital Investment
:
Rs. 100
Present Capital
:
State Government 9% Co-operative 10%
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Location
:
Shastri Nagar
Area of Distribution
:
Shastri Nagar Tej garhi Presently : the entire district – Meerut. (U.P.)
In spite of several setbacks and hurdles, the co-operative has steadily progressed from strength. Operation flood II, which was implemented in Uttar Pradesh, is the year 1983-84 provided the much –needed impetus to the co-operative. For the past few years Meerut Pradeshik co - operative dairy federation has maintained its lead in among the states cooperatives in areas as diverse as distributions, handling , revenue.
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HISTORY OF PRADESHIK CO-OPERATIVE DAIRY FEDERATION
The history of co-operative dairy industry in U.P. dates back to 1917, when “Katra Co-operative Milk Society” Allahabad was established. “ LMPU ” was established in 1938 as the first step towards organized dairy development programme all over India . At the time of independence four milk supply schemes were operating in Meerut, Allhabad, Varanasi and Kanpur cities. The Agra co-operative dairy came into existence in the second five year plan while dairies at Bareilly, Gorakhpur and Mathura were adopted later on.
The apex institution of dairy co-operative was registered under the name of “PCDF” (Pradeshik co-operative dairy federation) in the year 1962 during the fourth five year plan Aligarh and Meerut were also proposed to be included in the 17
scheme. The govt. of U.P. also entrusted PCDF with the responsibility of implementing the operation flood I was to establish co-operative structure in some of the best milk shee’s located in ten states in U.P. being of them.
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OPERATION FLOOD I, II AND III WERE STARTED IN U.P. WITH THE FOLLOWING OBJECTIVE :-
Removing the middlemen between the producers and consumers by the procurement of the milk directly by the producer directly through village co-operative society . To increase the production of milk from milking animals by providing inputs to the producers. To arrange the supply of liquid milk in the major cities of U.P. for carrying out the whole programme successfully and for proper planning, implementation, follow-up, maintenance etc. an effective organization structure has been charted out .
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MARKETING DIVISION The marketing division of P.C.D.F. has been divided into two parts : – 1-
Liquid milk marketing.
2-
Milk product marketing.
The division is important because the marketing strategies of both are entirely different; both sub divisions are discussed brief.
LIQUID MILK MARKETING At present the liquid milk having brand name as “PARAG” is being marketed through local units / milk in major cities of U.P. & Meerut under direction of P.C.D.F. Ltd. – MEERUT, KNP, DLH, VRN, MRT, are the main central points for maximum milk demand.
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MILK PRODUCT MARKETING The product marketing division is handling the marketing the Product of Butter, Ghee, Mattha, Milk Cake, Ice-cream, Dahi etc. The above products reach the ultimate consumer through one of the following distribution channels. a)
Stockists Sale.
b)
Concessionaries Sale.
c)
Clearing & Forwarding Agents.
Stockist sale is three – stockiest > Retailer > Consumer each of the intermediaries operates on the bass of margin base of the % of investment. In concessionaries sale only one intermediary is involved viz . Manufacturer > Stockiest > Retailer > Consumers Through this channel the product of highly perishable nature find their way out.
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Except U.P. & Meerut in other states PARAG products are distributed through “Clearing overheads by eliminating the necessity for P.C.D.F. owned warehouses and offices in three states” .
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OBJECTIVES PCDF’S front-end objective was to see that there was enough milk for everyone in town. Marketing is simply the PCDF’S tool to achieve their ultimate objective and delivering the pure parag milk to every home.
PURPOSE PCDF’S aims to build a system to ensure that individual farmer got a fair price for the milk he sold.
MISSION PCDF’S mission is to become the strongest marketing organization by 2005.PCDF’S came into existence in 23rd march 1938,with the simple intension of ensuring a fair return to the producers. Which was implemented in UP is the year 1983-1984 provided the much needed impetus to co-operation. The mission was to develop a product mix that would not only
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promote sustained growth but also help member union to develop adequate.
Production and processing facilities. It also aimed to offer quality products at fair price, and to do so by achieving economies of scale and costs. And this mission gave birth to brands like parag and Amul.
Vision To increase it’s number of Parag milk customers and its turnover to 50 crores by 2005 by product diversification.
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BRIEF ON MEERUT MILKSHED BACK GROUND Meerut milkshed is situated in the hinterland of Delhi the Nations capital. Since centuries it has formed the part of the traditional supply line of agriculture products from the villages to the big cities specially Delhi. Rich in its milk potential the milkshed has, in the course of the last few decades been thoroughly exploited by small traders and power full contractors and well organized private diaries. Thus, while large profits were being retained by such intermediaries the rural milk producers found their position deteriorating day by day.
In 1950 a co-operative milk supply union was organized in Meerut which started collecting milk from villages and supplied it to Delhi and local markets. This milk union continued to function for about a decade. In the mean time Delhi Milk Scheme was established by Govt. of India in 1959-60 to ensure quality milk at right price to the local population. The scheme 25
started operating through 11 chilling centers in Western Uttar Pradesh (U.P.) in the periphery of Delhi. These chilling centers were
mainly
located
in
the
then
district
of
Meerut.
Bulandshahar which comprised Ghaziabad district, Meerut district and Bulandshahar distrist as of now. The milk was collected through contractors and 10 Milk Union were also formed almost at the same time, around each chilling center. These continued functioning in a rather lopsided manner till 1997.
Gradually, all the milk unions almost became defunct and were supplying very little milk during the years 1970-77 obviously contractors had monopoly and collected major share of milk which was wither supplied to Delhi Milk Scheme or to the local population of the Metropolis.
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OPERATION FLOOD-I This programme was launched in U.P. by National Dairy Development Board (N.D.D.B). In 1972 and the implementing agency in the state was Pradeshik Cooperative Dairy Federation Ltd. (P.C.D.F. Ltd.) The basic ides was to replicate Anand Pattern three tier cooperative systems in U. P. In August- September 1972 organisation of societies was taken up in Baraut, Binauli, and Chaprauli blocks of Meerut, which started functioning from April 1978 with a team of 27 employees drawn from Meerut Milkshed. Under the guidance of the spear head team, 198 Milk Procurement Co-operative Societies were organized by 1981, when the Operation Flood-I programme ended. Feeder balancing Dairy (F.B.D.) Meerut was set up under Operation Flood-I programme with the specific purpose of supplying milk to Delhi diaries and conversion of surplus milk into various dairy products. This dairy is situates near village Gangol about 15 km. from Meerut city. The dairy was 27
commissioned in April 1978 and processed the liquid milk procured
form
the
then
milkshed
comprising
Meerut,
Ghaziabad, and the purpose of establishing Feeder Balancing Dairy, Meerut was to provide remunerative market for milk produced in the milkshed comprising districts of Meerut, Balandshahar
and
Muzaffarnagar
as
envisaged
under
Operation Flood-I programme. Thus F.B.D. Meerut was obliged to receive entire surplus milk from the rural areas, through a net work of milk co-operative societies and to supply milk to Delhi Diaries viz; Mother Dairy and Delhi milk scheme.
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OPERATION FLOOD – II: The operation flood – II was launched in U.P. from November 1982. By the end of operation flood-II programme the number of milk procurement cooperative societies had reached 612.
F.B.D. Meerut had initial capacity of handing 1.0 lac liters of milk per day. Due to increase in the number of village dairy cooperative societies (V.D.C.S.) there was an increase in procurement of the milk from union and the flow of milk from neighboring milk union increased, the capacity of F.B.D. was increased to handle 3.5 liters of milk every day in 1990. in the year 1992-93 F.B.D. Meerut has handled the milk received from more than 15 milk unions. The progress of the dairy plant of last six years in given in annexure – 1 (Table -1).
Bulandshahar districts the purpose of establishing Feeder Balancing Dairy, Meerut was to provide remunerative market for milk produced in the milkshed comprising districts of 29
Meerut, Balandshahar and Muzaffarnagar as envisaged under Operation Flood-I programme. Thus F.B.D. Meerut was obliged to receive entire surplus milk from the rural areas, through a net work of milk co-operative societies and to supply milk to Delhi Diaries viz; Mother Dairy and
AREA OF OPERATION Earlier the area covered under Meerut Milkshed was Meerut, Ghaziabad and Bulandshahar districts. Now all the three districts have their own independent milk unions. The present area of operation of Meerut milkshed is Meerut district only, where the milk procurement, milk processing and milk marketing operations are carried out by Gangol Sahkari Dugdh Utpadak Sangh Ltd, Meerut.
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PROFILE OF MEERUT CITY Meerut is situated in the most fertile belt of land and hence it is an ideal place for agriculture and animal husbandry. Sugarcane is the main crop and this is one of the major producers of sugar in the country. Because of this people here are habitual of eating sweets. The district has an agro based economy and the population even in the urban areas is will informed about agriculture and dairying. Dairying as an economic activity has roots in both rural as well as urban areas. Milk product in the district finds a ready market because of various products in the district finds Delhi milk scheme population of Meerut city as per census (1991), average growth rate of population over last ten years and estimated population in the year 1993 is given in the following paragraph. Total population of the city (2001)
8,46,954
Average population growth rate (over ten years)
5.78%
Total estimated population (2003)
9,47,745
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PRESENT PRODUCT MIX: Though the product mix of the milk union varies from season to season and depends on the quantity of the milk received however the exhaustive list of product mix of the milk union is as follows. NAME OF THE PRODUCT 1. GHEE
PACKING SIZE In 500 gm, 1 kg & 15 kg tin pack
2. W.M.P.
In 1 kg pack & 25 kg pack
3. S.M.P.
In 20 gm, 100 gm, & 500 gm pack
4. TABLE BUTTER 5. WHITE BUTTER 6. LIQUID MILK 7. PASTEURISED LIQUID
In 20 kg pack Skimmed milk & whole milk in tankers to mother Dairy and Delhi scheme under national grid. Full cream milk (6.0% fat & 9.0% SNF)
8. PANEER 9. MILK CAKE 10.FLAVOURED MILK
Standardized milk (4.5%fat & 8.5% SNF) Toned milk (3.5% fat & 8.5% SNF) In 100 gm & 500 gm pack In 100 gm & 500 gm pack
MARKET SCENARIO 32
INTRODUCTION Meerut is one of the bet milk pockets of the country. Being close to Delhi, milk and milk products trade is well developed and organized in this area. Because of liberalization in the licensing policy for dairy industry a number of diaries are coming up in this pocket. Such a scenario is going to pose a serious challenge to Meerut dairy plant.
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DEPRESSED
MARKET
FOR
TRADITIONAL
MILK
PRODUCTS: Presently there is a slump in the market traditional milk products like ghee and milk powder. The factors responsible for this are increased milk production and competition in the market. Also due to deliquescing many new milk plants are coming in that area which will certainly increase the competition in the market .Manufacturing of these
traditional
milk products results in blockade of large capital as the market conditional milk products results in blockade of large capital as the market conditions are not favourable for quick disposable of these product. Hence if these traditional milk products re manufactured then the stock will remain in the godowns of milk union for a long time. This leads to revenue loss and results in less liquidity of milk union .apart from this due to increased competition the market there is very less margin on these products. Therefore to cope with this situation it has become very essential to pay attention for the manufacturing of value added milk products like paneer, milk cake, flavoured milk etc. and introduce them in the local market.. for this purpose it is essential to know the market potential of these products in MEERUT city. 34
KEY PLAYERS Key players in this industry are Amul, Parag, Paras, Gopalji. But Amul dominates this industry. The reason for its success is that it is the market leader of packaged milk and its quality and advertisement also play major role in its success. As a pioneer in the packaged milk industry, Amul secured first-mover advantage in the market. It has sustained this advantage through outstanding product quality and a well-oiled distribution network. This has helped Amul to ensure that its brand
has
the
highest
top-of-mind
awareness
among
consumers. During the 1990s, when the growth potential in the packaged milk market attracted new players, including a couple of large industries, some observers thought Amul would take a hit. It hasn’t the brand has actually grown in value and volume. However, growing awareness of health and hygiene issues and increasing prosperity have boosted the demand for branded pasteurized milk. In this scenario, Amul is the best35
placed brand. And it retains more than 80% share of the branded milk in Meerut market despite the entry of new players. Amul
always
rides
an
emotional
wave
with
its
advertisement campaigns. It also attempts to elevate the brand to the status of a health icon- “Piyo Pure” Also the reason for its success is its quality. Still consumers feel that Amul is better than any other milk in the market. It has captured the maximum share of this industry.
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AVAILABILITY & VISIBILITY OF KEY PLAYERS
Most of the milks are available at every shop. Amul is present nearly on every shop as it is the necessity of the retailers to keep it so as to retain the customers. Other branded milks are also present in every shop but they are uneven in availability. In this tough competition in the milk industry availability is one of the factors for success. When Britannia was launched, its advertising campaign was very attractive therefore it created a huge demand in the market, but proper supply or adequate supply was not there in the market, and quality and taste was as good as Amul, and hence its sales got down. The customer are not as much brand loyal in this industry, they comes to the retailer shop and ask for Amul milk but if it is not available then it is not that they come out of the shop and search for Amul, in spite of this they take any other milk which
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is advised by the retailer or supplied by the supplier (suppliers are those who gives the home delivery of milk) because milk is not luxury but it is the necessity. So keeping this point in view, Parag must be made available at every shop. Although Parag milk is available on most of the shops but there are some shops, which are left uncovered by the sales agents, so the company needs to focus on covering those uncovered shops in Meerut city.
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DISTRIBUTION PROCESS Product flow
Factory
C&F Agent
Distributor
Retailers Consumers
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DISTRIBUTION PROCESS There is a distributor for every milk in the sub city, his job is to ensure the distribution of milk to each and every area and outlet in the sub city. This distributor works as a representative of the company for the retailers. Further this distributor ensures the supply of milk to the customers with the help of retailers. Sometime distributor delivers the product directly to the customer. So there are two main players in the distribution process: 1. Distributor 2. Retailers The company delivers the product to the distributor with the help of C&F agent, and the distributor further distributes the product to the customers with the help of retailers. For this distribution distributor forms a team of sales agents. These sales agents go to every market in the sub city and check for the demand and supply of milk for the retailers. These sales agents work as a link between the retailers and the distributor. Supervisors are appointed to check the working of these sales agents. The supervisor is responsible for the working of his sales agents.
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EXISTIG MARKETING SYSTEM OF D.U.S.S. LTD. MARKETING CHANNELS The milk and milk products manufactured by D.U.S.S. Ltd. Are marketed mainly in two different ways. (a)
THROUGH
REGIONAL
MARKETING
OFFICES
(R.M.O.) The State Federation has opened R.M.O. in different cities of the state as well as in other states. This R.M.Os are directly controlled by the State Federation and are headed by a Manager Gr-11 or Manager Grlll. Products like Table Butter, Ghee, and Milk Powder are marketed through these R.M.Os. (B) DIRECT MARKETING BY THE MILK UNION The marketing department of the milk union is headed by a Manager Marketing Gr.-III and supported by two field supervisors. Manager Marketing has to monitor the sales of liquid and milk products in the city, being sold through 300 42
retailers. These retailers are situated in different parts of the city in commercial semi-commercial and residential areas.
PRODUCT DELIEVERY SYSTEM Products are being delivered on the basis of demand of retailers which is collected in advance. All retailers gave their demand for milk and milk products to the transporter during the previous trip. This demanded quantity is delivered at the retailers shop in the subsequent trip. Any special demand can be given directly to the plant and delivery of the same can be made at the nearest retail outlet or the party can collect it directly from the plant. All the sales are done on cash basis. Cash is collected by the transpoht after delivering the products which is then deposited with & cashier of the milk union.
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DISTRIBUTION ASPECTS All the products are distributed through retailers. In earlier years some stockiest were also appointed but at present they are not working. Presently there are about 300 retailers on the rolls of the dairy. These retailers are not distributed evenly in the city. There are pockets of concentration of retailers while there are some areas where retailers are not at all operating. Majority of retailers re along the main roads or in the main markets. Their presence in the interior part of the city is negligible. Also the conditions and the width of roads is a factor responsible for not serving the entire city effectively. All the products are delivered through hired vehicles. The contracts for transporting milk and milk products are made for a year. Contractors are also responsible for collecting the cash and the demand from each retailer.
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A vehicle on an average covers a distance (to and fro) of approximately 100 kms and reaches about 40 retailers. The total time involved in the distribution is about 3 hours. In lean season when the average handling drops substantially, the Meerut dairy plant stops manufacturing milk products. The production operations then get limited to selling milk in tankers to Mother Dairy Delhi, Delhi Milk Scheme and to major cities of the state. Any short fall in the supply of liquid milk is accommodated by reconstituting the conserved milk product commodities in to liquid milk to maintain the regular supply. All the products manufactured by the dairy Plant as mentioned in the above table are sold under a common brand name of “PARAG”.
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TRADE SCHEMES The company gives schemes to the distributor when the quantity is large. The sole purpose of scheme is to encourage the purchase. These schemes may be in the form of discount or in the form of gifts. Other types of schemes are launched for the retailers to encourage the purchase of milk. These schemes may be issued by the company or by the distributor also. Retailers normally prefer the reduction in the net rate of the milk as a scheme. They like scheme on which milk is free on the purchase of milk rather than anything else is free on the purchase of milk. This creates problem for the retailers, e.g. suppose on the purchase of one crate of milk company was giving two pouch of curd free. Now this will create inventory problem for the retailers. First he has to store curds in the store. Secondly sometime retailer demands the free gift by purchasing only half crate of milk and says that he will purchase the rest half crate next day and then the scheme will be satisfied. The biggest problem in such type of schemes is that customer demands for the reduction in the net rate rather than anything else. So the retailers always prefer the reduction in 46
the net price rather than the scheme or they prefer the scheme in which milk is free on milk. So that the net effect of the scheme is the reduction in price.
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MARKETING RESEARCH The American marketing association defines marketing research as follows: “Marketing Research is the functional links to the customers, consumers
&
public
to
marketing
through
information.
Information used to identify and define marketing opportunities and problems; generate, define and evaluate marketing actions;
monitor
marketing
performance
and
improve
understanding of marketing process.” Marketing Research specifies the information requires addressing these issues, designing the method for collecting information, managing and implementing the data collecting process, analyzing the result and communicating the findings and their implementations.
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OBJECTIVE OF RESEARCH 1. To study the availability of the brand in dealers in the market. 2. To study the tastiest brand in the market of milk. 3. To study the distribution channel of the parag Milk. 4. To study the promotion backup of brand. 5. To study the satisfactions level of brand. 6. To take suggestion from dealers which help in increasing sale value.
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RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. It may be understood as a science of studies
how
research
is
done
scientifically.
Research
methodology has many dimensions. The purpose of methodology is to describe the process involved in the research work. This includes the overall research design, the data collection process, the sampling process, the field survey, and analysis procedure.
52
RESEARCH DESIGN Research Design consists of three parts: 1. Exploratory Research 2. Descriptive Research 3. Causal Research An exploratory research focuses on the discovery of idea and is generally based on secondary data. It is preliminary investigation that does not have a rigid design. This is because a researcher engaged in an exploratory study that may have to change his focus as a result of new ideas and relationship among the variables. A descriptive study is undertaken when the researcher wants to know the characteristics of certain group such as age, sex, educational level, income, and occupation etc. A casual research is undertaken when the researcher is interested in knowing the cause and effect relationship between two or more variables. Such studies are based on reasoning along well-tested lines.
53
DATA SOURCE Data is generally of two types: 1. Primary data 2. Secondary data Primary Data are those data specially collected for problem in hand. In this study data were collected from primary sources in personal interview of retailers and interaction with consumers by survey method. These methods of data collection are quite popular. These are the major methods of data collection in the research study. Secondary Data are those data, which are collected for some purpose other than helping and solving the problem in hand. Sources of secondary data are: Old reports Company records Magazines Company web site (http://www.Parag.com)
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Sample Procedure: How should the respondents be chosen? To get the most feasible and accurate result, simple random probability sampling method was adopted for direct interview of retailers and cluster sampling was used to communicate the consumers from different apartments of different sectors for the survey. In simple random probability sampling, probability of being chosen as a sample unit for each unit in the population is equal. Each sample unit from the population is chosen randomly. Probability of being chosen as a sample unit depends upon the population size and no. of sample units to be chosen. While in cluster (area) sampling the population is divided into mutually exclusive groups (such as city blocks, sectors etc.), and the researcher draws a sample of the groups using random sampling. Sometimes researcher again draws sample units of respondents from the selected groups, it is known as two step area sampling.
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Sample Size: Distributors
1
Retailers
25
Consumers
1244
Field Work: During the survey sample packs of Parag milk and curd have been distributed among the selected consumers, and their feedbacks have been taken regarding those samples.
56
57
RESEARCH APPROACH Primary data can be collected in various ways: through observation, focused group, surveys, behavioral data, and experiments. During this research data have been collected using survey method. Survey method is best suited for descriptive research. Companies undertake surveys to learn about
people’s
knowledge,
beliefs,
preferences,
and
satisfaction, and to measure these magnitudes in the general population.
Research Instrument: Questionnaire is most common research instrument in collecting
primary
data
during
marketing
research.
A
questionnaire consists of a set of questions presented to respondents. Because of its flexibility, the questionnaire is by far the most common instrument used to collect primary data.
58
59
SWOT ANALYSIS
STRENGTHS: Parag is the oldest Milk Marketing Federation in India. It has a large network of villages from where it collects milk. Parag is a reputed and well known company in India, its products are easily recognized by the customers. Parag has evolved from a single product company to Multi-product Corporation. Its products range is spread over a wide spectrum, from milk and curd to ice cream and chocolate. Customers will at least think of using the product once and check its quality, as it is the product of Parag. Parag has the oldest ad campaign in the country.
60
WEAKNESSES: Parag perceived old traditions. It is good in quality but not better than Amul. Advertisement is not frequent. Amul has the advantage of being the market leader of packaged milk in the market. Price is competitive as compared to other brands in the market, but margin to the distributor is less than that of other brands. Parag milk has been launched just one and half year back in Meerut, so awareness among the people is low about the Parag milk. It lacks in aggressive marketing approach, which is helping competitors.
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OPPORTUNITIES: There is a huge opportunity in milk market. Amul is available since last so many years in the market, and it has dominated this industry, so people need change. If Parag provide a better taste and quality then it can swap most of the customers of Amul with least effort. Customers always believe that there is a chance of improvement. Milk is basic necessity for daily use; everyone needs it daily for one or other reason. Average consumption of milk is 1-2 liter in each house. In Meerut about 72% of total milk market is packaged milk market and rest is of loose milk. So there remains a big area to be covered.
62
THREATS: There is a very tough competition with other brands. Better image of competitor in particular segment. Amul is dominating milk in the market, quality wise and price wise. Market is too price sensitive. People are using Amul and other brands since so many years, so it is difficult for them to suddenly change the brand and taste that has already been developed. So it is really difficult to convince them.
63
Total Milk Consumption (per day) 64
Total milk consumption Amul Parag Other packaged milk Loose milk
28200 Ltrs. 18000 Ltrs. 2400 Ltrs. 1800 Ltrs. 6000 Ltrs.
Amul has dominated milk industry in Meerut. Around 65% of total milk market in Meerut has been captured by Parag. Other brands include Amul, Mother diary etc.
Total Packaged Milk 65
Total consumption Parag & Amul Others
22200 Ltrs. 20400 Ltrs. 1800 Ltrs.
Only 8% of total packaged milk market is of local brands.
Packaged Milk Market in Terms of Volume 66
(Before Promotion) Total milk consumption Amul Parag Others
22200 Ltrs. 18000 Ltrs. 2400 Ltrs. 1800 Ltrs.
Packaged Milk Market in Terms of Money (Before promotion) 67
Total milk consumption Parag Amul Others
Rs. 357420 Rs. 39168 Rs. 289800 Rs. 28452
Parag had around 11% market share in Dwarka.
Packaged Milk Market in Terms of Volume (After Promotion) 68
Total milk consumption Amul Parag Others
22272 Ltrs. 14664 Ltrs. 5832 Ltrs. 1776 Ltrs.
After promotion, sale of Parag in Meerut has been increased by 143% (i.e. from 2400 Ltrs. to 5832 Ltrs. Per day). Most of the customers, who have switched to Parag, were the customers of Amul.
Improvement Possible with the Distributor (Preference) 69
1.
Credit Period
2.
Replacement
3.
Collection of Payment
4.
Others
Customer Purchase Milk Because of
Price
30%
Quality
50%
Packing
2%
Scheme
15%
Others
3%
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RECOMMENDATIONS AND SUGGESTIONS This industry is most competitive industry. There are large numbers of competitors in this field. In such condition a small loop may create a big problem. The condition is made more though by Amul, which is dominating in this industry, so only a detained study and full fledged effort can help in good sales to capture the market. Three things are necessary to improve the sales in the sub city: 1. Advertisement 2. Quality of milk 3. Margin provided to the retailer and distributor Advertisement is the most important step to improve sales. People are not loyal to any brand; they purchase milk, which had an image in their minds. Before leaving their home they already know for which milk they will ask the shopkeeper. And this image comes from advertisement. In city distributing small pamphlets along with newspaper or fixing posters or hoardings can do advertisement. Of course quality of milk is another issue, which can improve sales. In long run if we want to succeed then we have to create a value for our milk in the mind of the customers and that can be done by quality. The first priority must be to ensure that the milk lack in taste by Amul as it is the main competitor. 72
These two above mentioned factors are tough to implement. The easiest step to improve the sales in the market is the margin provided to the retailers. The reason for this is simple Amul is best milk in the market and retailers do not want to sale it. They are forced to sale it because customer demand for it. The reason why retailers do not prefer to sale Amul is its margin. Retailers always try to sale milk other than Amul because they provide good margin to them. The milks, which are best in margin, are Paras and Gopalji. Therefore retailers always try to sale Paras and Gopalji instead of Amul and Parag. Now if Parag can provide good margin to the retailers then they will try to sale Parag instead of Amul. And once the milk becomes established then the rates can be increased and the margin to the retailers can be decreased. The most important competitive advantage in this market is distribution. The ability to get their product to as many outlets as possible and to ensure its availability on a continuous basis is the biggest challenge for producer. This is so because milk is a basic necessity (not a luxury) with little relationship to personal income that is the milk consumption per person is not likely to vary significantly by income level.
Critical success factors: More frequency of visit of sales personnel 73
More timely delivery of stocks Better replacements More credit period Relaxation in collection of payment Initiative on display by distributor More schemes provided to the smaller outlets Aggressive sales promotion schemes are needed due to stiff competition More emphasis should be given on services
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LIMITATIONS Marketing research suffers from several limitations. A large number of problems which are caused by financial constraints, insufficient sample size, and lack of personal contact etc. marketing research only helps managers in decision making process. It provides data and information to the managers but it can not be a substitute for marketing.
Limitations of Survey: In this industry, it is very difficult to find the exact figures as the consumption is very low. There is not a particular trend followed in this industry to promote sales. Actions are taken according to the situations and the situation changes very fast in this industry. Sales price vary from retailer to retailer, as the cost price is different for different retailers due to schemes given. The number of shops is very large in number and it is very difficult to cover all of them.
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CONCLUSION Milk industry is very competitive industry and dominance of Amul makes it tougher for other brands to establish in this field. So in order to compete in this market everything should be perfect with main focus on distribution. The distribution must be proper and retailers must be the main center of focus. They are the people who can make difference. Parag advertisement is coming on TV and FM Radio in Meerut also. So there is a possibility that sales will increase as more and more people come to know about Parag milk. Advertisement can bring the customers to the shops but after that the retailer is the key person. If he wants he can sell any milk. Therefore it should be the combined effort of company and retailers to improve the sales. Also people always prefer change so if we provide them better substitute of Amul they will welcome this change.
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RETAILER SURVEY FORM Name of the shop Address Tel.No.
___________________________ ___________________________ ___________________________
Q1) What are the milks you usually keep in your shop? a) Amul b) Parag c) Paras d) Gopalji e) Others _______________ Q2) Rate these milks in terms of volume of sales from 1 to 3. a) Amul b) Parag c) Paras d) Gopalji e) Others Q3) Does packing play any role in promoting sales? a) Yes b) No Q4) How you sold the milk? a) At M.R.P. b) Less than M.R.P. c) More than M.R.P. Q5)How you get the delivery from the distributor? a) Through rickshaw b) Through tampo c) Through mini truck 80
d) Others _______________ Q6) How would you compare the services of Parag and Amul on the following? (Rank 1 to 5) Parag Amul a) Frequency of visit of sales ____ ____ personnel b) Timely delivery ____ ____ c) Display support ____ ____ d) Any other ____ ____ Q7) Is there any improvement possible with distributor on the following parameter? (Please tick ) Yes No a) Credit period ____ ____ b) Collection of payment ____ ____ c) Replacement ____ ____ d) Any other ____ ____ Q8) Customer purchase milk because of: a) Price b) Quality c) Packing d) Scheme e) Others ______________
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CONSUMER SURVEY FORM Name of consumer ___________________________ Address ___________________________ Tel.No. ___________________________ Q1) Which brand of milk do you consume? a) Amul b) Parag c) Paras d) Gopalji e) Other _____________ Q2) Which variant of milk do you use? a) Full Cream b) Standardized c) Tonned d) Double Tonned Q3) How much milk you purchase daily? a) Full Cream _____ Ltrs. b) Standardized _____ Ltrs. c) Tonned _____ Ltrs. d) Double Tonned_____ Ltrs. Q4) How do you get milk? a) From retailers b) From supplier c) From other ______________ 82
Q5) How much do you pay to the retailer/supplier for the milk? a) FCM Rs._____ b) STD Rs._____ c) Tonned Rs._____ d) DTM Rs._____ Q6) If you are getting home delivery, is supplier charging extra cost for the delivery? a) Yes b) No
Rs._____ per (Liter/Day)
(For those who are not currently using Parag) Q7) Have you ever used Parag milk? a) Yes b) No Q8) If no, then do you want to taste it at least once? a) Yes b) No Q9) If you find it better than your current brand, then will you continue using it? a) Yes b) No
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BIBLIOGRAPHY BOOK REFERRED: Marketing Research : Measurement and Method, Donald S. Tull and Del I.Hawkin,Prentice Hall India,Sixth Edition,Nov,2001 Beri,G.C., Market research, New Meerut, Tata McGraw Hill publishing co. LTD, 1980 IInd edition. Boyd,W.Harper, Ralph Westfall Stanley f. stasch, Marketing Research text and cases, All India Traveller book seller, Meerut, seventh edition. Philip Kotlar , Marketing Management, New Meerut , Pearson education (Singapore) pte LTD) eleventh edition Kothari, C.R., Research methodology, New Meerut, Vikas publication house, eleventh edition. WEB SITE: www.icicibank.com www.statebankofindia.com www.google.com www.webindia123.com www.indiainfoline.com
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