An Exploratory Study on Competitive Milk Brands With Reference to Thiruvananthapuram Dairy

INTRODUCTION

This project is being carried out as a part of the academic curriculum, Master of

Business Administration, under Mahatma Gandhi University. This work is submitted in

partial fulfillment of the requirements for the award of the degree of Master of Business

Administration. As per the curriculum the final project work should be a specialization in

any one of the areas viz Marketing Management and Human Resource Management. A

report based on the project done is to be submitted and this is treated as a course carrying

300 marks. The organization selected by me is MILMA, THIRUVANANTHAPURAM

DAIRY. The period of study is for 45 days, from May 15th to June 30th.

Survival of the fittest’ as in the case of war had ever been the trend that ruled the

markets. To be the fittest in the Market, being the aim of each and every company,

competition becomes inevitable and unavoidable part of every business. Privatizations

and Globalization being the slogan of the day, companies cannot survive by simply doing

a good job. They must do an excellent job if they are to succeed in the increasingly

competitive global market place. With the recent liberalization of economy and the

globalization of markets, the business atmosphere in India has gone through a sea change.

Restapism and beurocracy which has been the ban of our country, has now vanished from

the scene.

RELEVANCE OF PRESENT RESEARCH

Though Milma have been in the milk market for a quite long time, it does not

know is detail about the other milk brands in Thiruvananthapuram dairy. This marketing

research tries to highlights the threats and the position of the other milk brands. Though

the Milma is in a strong position compared to the other milk brands it is useful to Milma,

to know about details of the other milk brands for improving its provision. The stringent

competition in the milk market urged the organization for an independent view of the

market and compels them to find out why people prefer other brands, and how can they

be made loyal customers of Milma.

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OBJECTIVES OF STUDY

To identify the competitors of Milma in Thiruvananthapuram Dairy.

To determine the factors which affect the competitiveness in the dairy industry.

To analyze the influence of Sales Promotion on sales of milk.

To ascertain the influence of Commission on sales of milk.

RESEARCH METHODOLOGY

Research is defined as human activity based on intellectual application in the

investigation of matter. The primary aim for applied research is discovering, interpreting,

and the development of methods and systems for the advancement of human knowledge

on a wide variety of scientific matters of our world and the universe. Scientific research

relies on the application of the scientific method, a harnessing of curiosity. This research

provides scientific information and theories for the explanation of the nature and the

properties of the world around us.

METHODS OF DATA COLLECTION

PRIMARY DATA

Primary data was collected through personnel interview and seeks answer to a set

of preconceived questions in a structural way. (Primary data are the actual information,

which are received by researcher for study from the actual field of research). The data

collected through interview and observation called primary data because the researcher

attains them from the field of research directly and for the first time. For this research the

researcher uses the following methods:-

Personal Interview

Schedule

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SECONDARY DATA

Secondary data are the information, which are attained indirectly. The researcher

does not attain them himself or directly. Secondary data are generally attained from

published and unpublished materials. They can gathered from public documents such as

diaries, letters or they can gathered from public documents such as books, manuscripts,

records and census reports. Secondary data were collected also from the other sources

like company journals, company web site, company brouchers and internet.

SAMPLE UNIT

The sample unit consists of milk dealers of Thiruvananthapuram Dairy

(Attingal to Parasala).

SAMPLE SIZE

A sample size of 100 milk dealers of Thiruvananthapuram Dairy.

SAMPLING METHOD

The sampling method adopted was Simple random sampling.

RESEARCH TOOL

Pie Diagram and Bar Charts

Simple Percentage Analysis

Chi Square Test

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SIMPLE PERCENTAGE ANALYSIS

Percentage refers to a special kind of ratio. Percentages are used in making

comparison between two or more variables to find the efficacy of each variable.

Percentages are used to describe relationships among them replacing the common base

say (100) so that comparisons can be made easy and meaning full.

PERCENTAGE = NO. OF RESPONDENTS × 100 TOTAL NO OF RESPONDENTS

CHI- SQUARE ANALYSIS

Chi-square test was first used by Karl Pierson in the year 1990; the quantity x2

describes the magnitude of discrepancy between theory and observation. It is defined as,

CHI – SQUARE TEST (X2) = (O – E) 2 / E

DEGREES OF FREEDOM = V = (R – 1) (C -1)

Were,

‘O’ = Observed Frequency

‘E’ = Expected Frequency

‘R’ = Number of Rows

‘C’ = Number of Columns

LIMITATION OF STUDY

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Since the research study has to be completed within a specified period, a small

segment of the dealers has been taken.

The data were collected from respondents directly. The respondents have

answered the questions based on their state of perception at that point of time.

This could have led to slight variations in the data.

Hesitations from the part of respondents to give information.

CONCEPTS USED

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COMMISSION

The payment of commission as remuneration for services rendered or products

sold is a common way to reward sales people. Payments often will be calculated on the

basis of a percentage of the goods sold. This is a way for firms to solve the principal-

agent problem, by attempting to realign employee’s interests with those of the firm.

Commission rates are generally based upon the achievement of specific targets which

have been agreed between management and the salesperson in question. Offering

monetary compensation in the form of commission alone, or commission in addition to

salary rather than simply a fixed salary, is intended to create a strong incentive for

employees to invest maximum effort into their work. Common industries where

commission is used include car sales, property sales, insurance broking and many other

sales jobs. A side effect of commissions is that in some cases, they can result to sales

people resorting to dishonest and fraudulent business practices in order to increase their

sales.

SALES PROMOTION

Sales promotion aims directly at inducing purchaser to buy a product. It involves

demonstrations, contest, price off, coupons, free samples, special packaging and money

refund offer. Sales promotion activities are designed to encourage resellers and sales

people to sell the product. Sales promotion is a non recurrent in nature and is for a short

period.

OBJECTIVES OF SALES PROMOTION

6

http://en.wikipedia.org/wiki/Sales

http://en.wikipedia.org/wiki/Insurance_broker

http://en.wikipedia.org/wiki/Real_estate_broker

http://en.wikipedia.org/wiki/Car_dealership

http://en.wikipedia.org/wiki/Principal-agent_problem

http://en.wikipedia.org/wiki/Principal-agent_problem

http://en.wikipedia.org/wiki/Percentage

http://en.wikipedia.org/wiki/Sales

http://en.wikipedia.org/wiki/Remuneration

The fundamental objectives are Informing, Persuading and Reminding.

INFORMING

Informing is to educate the consumers about the product. They must have some

knowledge about the product offered by the producer. They should, therefore be informed

of the product. Free cases may be distributed to leading retailers who may be a source of

advertisement for other prospective consumers.

PERSUADING

Sales persons persuade consumers to buy products. They develop or reinforce a

favorable set of attitudes and influence their buying behavior. They supply comparative

information on various products so that consumers may be willing to purchase the

products promoted by them.

REMINDING

Reminding leads the firm to reinforce the previously satisfactory behavior of the

consumers. For this purpose, it provides suitable knowledge for recollection. Reminding

the consumers of their past satisfaction will persuade them to stay with the products and

prevent them from shifting to competitors.

DAIRY INDUSTRY

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The dairy industry is recognized as one of the largest and most important of food

industries. The dairy industry exists for one purpose – to provide, at a reasonable cost,

milk and milk products that satisfy the consumer’s needs and fulfills his nutritional

requirements. The industry means different things to the different participant- the

producers, the dairy handlers and consumers.

The word “Dairy” was derived from the Middle English word, “deirie” meaning

day or maid servant worked. Dairy now connotes a wide range of activities starting with

the production of milk in the farm to the point it reaches the consumer in the form of

liquid together by a diverse field of disciplines such as dairy science, animal husbandry,

crop husbandry, and dairy engineering. Management science is applicable in each of

these disciplines and integrates them, to achieve the objective of providing milk to the

consumer by making an optimum use of Earth’s renewable resources for production of

milk.

The importance of dairying stems from the role of milk in human nutrition. Food

serves two major functions in human nutrition, to provide energy and to furnish the

elements essential for growth and replacement of body tissues. All the three main forms

of food-carbo-hydrates, fats and proteins provide the energy, but only proteins can supply

nitrogen and amino-acids essential for growth and replacement of tissues. In planning for

human nutrition, there are two possible stages the first has a limited objective of holding

back hunger while the second is achieved by providing a balanced diet which includes a

certain quantity of animal protein to include the essential amino-acids in the diet. The

developed countries have achieved the second stage. The developed countries need to

plan their agriculture for providing adequate balanced nutrition from the available

resources with in the country. The relevance of the dairy industry, at this stage of

planning for food, is in promoting supply of balanced diet to the population.

In terms of biological value human nutrition egg protein is the most important,

followed by the protein from milk. Egg or milk protein can furnish all the amino-acids

essential for normal growth and healthy life processes, provided that they are consumed

in adequate amounts. Fish, meat and poultry products are also high in the scale of

biological value. Vegetable protein from wheat, maize, rice, beans and nuts are of low

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biological value, particularly when it represents the only source of protein. The essential

amino-acids are not provided in sufficient quantities. In many of the developing

countries, more so in India, milk may form the only source of animal protein. “One quart

(approximately on litre) of milk furnishes approximately all the fat, calcium, phosphorus

and riboflavin; half the protein; one third of the vitamin A, acetic acid and thiamin; one

fourth the calories and with the expectation of iron, copper, magnesium and manganese,

all the minerals needed daily considerable amounts of nicotinic and choline are also

provided”. Milk is the secretion of mammary glands, produced primarily for feeding the

young. All mammals produce milk. However, milk is obtained for commercial

consumption purposes from domestic animals, particularly the cow. The milk of

different species essentially contains the same constituents. The composition may,

however vary from species to species in minor proposition. The variation in milk

composition is likely to occur within the species due to a number of factors like breed,

age, stage of lactation, individual variation, seasonal variation, variation from lactation to

lactation, interval between milking, first and last milk, fitness of the animal and feed

provided to the animal. Milk and cream are the main products of dairying. The other

products are derived from these principle products.

The industry faced with some general characteristics peculiar to dairying. The

production of milk is seasonal mainly because of the nature and purpose of milk

production. Milk is produced for the young calf and is, therefore, depended on the

calving season. However, the demand for milk and milk products remain the same

throughout the year. Milk is bulky and highly perishable. The milk handlers, therefore,

have to process the milk and store it under refrigeration or reduce the bulk by drying

before storage.

Agriculture and allied industries account for nearly half the gross national income

of India, one fourth of which is from dairy. The national economy of certain European

countries like Denmark and Sweden are depended almost entirely on animal husbandry of

which dairying is a major industry. In the US, dairy industry alone contributes to one fifth

of the total agricultural income. Moreover, the consumer spends a fifth of his food

expenses on milk and milk and milk products. Apart from the contribution, dairing needs

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to the economy and nutritional status of any country, the industry provides employments

to thousands of people. In the US, over a quarter million people were employed by the

diary industry in 2000. In the tropics, where dairying is less developed, millions earn

there income either partly or wholly from the dairy industry.

DAIRY INDUSTRY IN INDIA

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In India, dairying has been practiced as a rural cottage industry since the remote

past. Semi-commercial dairying started with the establishment of military dairy farms

and co-operative milk unions throughout the country towards the end of the nineteenth

century.

During the earlier years, each household in those countries maintained its ‘family

cow’ or secured milk from its neighbour who supplied those living close by. As the

urban population increased, fewer households could keep a cow for private use. The

high cost of milk production, problems of sanitation etc., restricted the practice; and

gradually the family cow in the city was eliminated and city cattle were all sent back to

the rural areas.

Gradually farmers within easy driving distance began delivering milk over regular

routes in the cities. This was the beginning of the fluid milk-sheds which surround the

large cities of today. Prior to the 1850s most milk was necessarily produced within a

short distance of the place of consumption because of lack of suitable means of

transportation and refrigeration.

The Indian Dairy Industry has made rapid progress since Independence. A large

number of modern milk plants and product factories have since been established. These

organized dairies have been successfully engaged in the routine commercial production

of pasteurized bottled milk and various Western and Indian dairy products. With

modern knowledge of the protection of milk during transportation, it became possible to

locate dairies where land was less expensive and crops could be grown more

economically. In India, the market milk technology may be considered to have

commenced in 1950, with the functioning of the Central Dairy of Aarey Milk Colony,

and milk product technology in 1956 with the establishment of AMUL Dairy, Anand.

The industry is still in its infancy and barely 10% of our total milk production under

goes organized handling.

HISTORY OF INDIAN MARKET MILK INDUSTRY

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Beginning in organized milk handling was made in India with the establishment

of Military Dairy Farms.

Handling of milk in Co-operative Milk Unions established all over the country on a

small scale in the early stages.

Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945

Pasteurization and bottling of milk on a large scale for organized distribution was

started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961),

Madras (1963).

Establishment of Milk Plants under the Five-Year Plans for Dairy Development all

over India. These were taken up with the dual object of increasing the national level

of milk consumption and ensuing better returns to the primary milk producer. Their

main aim was to produce more, better and cheaper milk.

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DAIRY INDUSTRY IN KERALA

Milk is an unavoidable element in the life of Keralites. In olden days, Kerala was

far ahead in production of milk. But due to several reasons the production of milk is

defined. Milk producers in Kerala are in the grip of a major crisis following the flow of

large quantity of milk from outside the State at lower prices. According to a survey, the

state produces 20.61 lakhs tons of milk per annum. The production, according to market

sources, is insufficient to meet the demand of the state’s population. As a result, Kerala

has become a major market for milk produced in neighboring States. Supplies from

Tamil Nadu meet around 60% of the daily demand milk.

Rapid increase in milk processing and marketing companies has resulted in tough

competition leading to cut in prices. Thus, availability of milk at low prices from other

States has created a crisis for the milk producers in the State farmers said. A dairy expert

told Business Line that the only solution to the crisis was production of “good and pure

milk” by which the Kerala milk producers could compete and recapture the market Dairy

Development Board was created in 1962. The livestock Development and Milk

Marketing Board for milk procurement and marketing was set up, followed by the Kerala

Co-operative Milk Marketing Federation. But all these have failed to save the dairy

sector and the farmers.

One of the major problems being encountered is the non-availability of modern

facilities to process and stock the entire milk produced during the peak season (in the

rainy months). As a result, during these months, not only are restriction imposed on the

quantity procured but there is a cut in the prices by the co-operatives. The State has over

2,972 milk marketing their functioning unfavourable to the development of the sector.

When the societies run by NGOs procure milk at Rs.1o per litre from the farmers by

providing subsidy for cattle feeds, in Kerala they were being discouraged with taxes.

Kerala requires 68.5 lakh tons of cattle fodder, of which they only 40 tons are available

within the State. Non-availability of land and improved variety of fodder grass has

become major impediments.

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COMPANY PROFILE

"Milma" is the popular name given to Kerala Co-operative Milk Marketing

Federation (KCMMF). Milma started its operation in 1980 with its head office at

Thiruvananthapuram. It was started under the Indo-Swiss project. The project was

launched in 1963 on the basis of a bilateral agreement executed between the Swiss

Confederation and the Government of India. The project has made great strides in the

improvement of livestock farming in the state. One of them is the development of Swiss

Brown, a cross breed suited for the state's conditions. The project is now managed by

the Kerala Livestock Development and Milk Marketing Board. It main motive was to

implement the Operation Flood programme started by the National Dairy Development

Board (NDDB) in Kerala.

The project impact was so widespread that close to about 83 % of the adult cattle

of the state got converted to the new breed – Sunandini-, the milk production increased

by over ten times and the per capita availability of milk increased by over 7 times with

over a million families dependant on milk production. The project has succeeded in

integrating better technology and management to the traditional small holder production

system. It also demonstrated how the high productive, semi stall fed cows led to a

spontaneous decline in the total bovine population of the state from 34.6 lakh in 1977 to

21.86 lakh in 2003 when the total bovine population of India went through an upsurge.

This contributed immensely to environmental sustainability. By demonstrating a growth

model for productivity enhancement, the project not only impacted the million small

livestock holders in Kerala, but also millions outside the state.

The project demonstrated revolutionary institutional changes beginning with the

Indo Swiss project of Kerala, an autonomous institution under the govt. of Kerala to the

Livestock Development and Milk Marketing Board and then to the present autonomous

company - the Kerala Livestock Development Board, with the formidable dairy

cooperative system under the Kerala Cooperative Milk Marketing Federation

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http://en.wikipedia.org/wiki/National_Dairy_Development_Board

http://en.wikipedia.org/wiki/National_Dairy_Development_Board

http://en.wikipedia.org/wiki/Operation_Flood

http://en.wikipedia.org/wiki/Thiruvananthapuram

(MILMA), under the able guidance of its first managing director S. Nagarajan IAS,

spun off as successful an independent entity.

The name milma represents:-

2,702 primary milk co-operative societies.

7.78 lakhs farmer members.

Three Regional Co-operative Milk Producers' Union.

Eleven Dairies capable of handling 9.90 lakhs litres of milk per day.

Thirteen Milk Chilling Centers.

Two Cattle Feed Plants with cumulative capacity of 600MT per day.

One Milk Powder Plant of 10MT per day capacity.

A well established Training Centre.

5,200 retail outlets.

Over 32,000 people working either directly or indirectly for the functioning of

milma.

Apart from these we serve millions of consumers day-in and day-out.

MISSION

“Farmer’s prosperity through consumer satisfaction”

OBJECTIVES

To channelize marketable surplus milk from the rural areas to urban deficit areas

to maximize the returns to the producer and provide quality milk and milk

products to the consumers.

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To carryout activities for promoting Production, Procurement, Processing and

Marketing of milk and milk products for economic development of the farming

community.

To build up a viable dairy industry in the State.

To provide constant market and stable price to the dairy farmers for their produce.

NETWORK

The Motto of Co-operation of "of the people, by the people and for the people"

is the foundation of the "three tier system" followed by the organization. At the village

level we have the Village Milk Co-operative Societies which have the local milk

producers as its members. These Village Co-operatives unite at the Regional level and

form Regional Co-operative Milk Producers' Unions. These Unions are federated at the

State level to form State Federation namely Kerala Co-operative Milk Marketing

Federation (KCMMF).

ASSOCIATES

Milma is in constant touch with other organizations in this sector. It is only

through this active exchange that milma grew from a small dairy co-operative to the

position it holds in Kerala today.

The Company’s Chief Associates are:-

NATIONAL DAIRY DEVELOPMENT BOARD (NDDB):

NDDB, under Dr.V.Kurien’s guidance set up KCMMF in 1980. Ever

since then, there has been a very close co-operation between NDDB and the

Federation. NDDB are the originators of the Operation Flood Programme and

have been our funding agent for the Operation Flood Projects in Kerala.

AMUL:

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The Dairy Co-operatives of Gujarat have been the inspiration for the

development of such a vast network of dairy co-operatives in Kerala. Among the

co-operatives in Gujarat, the Kaira District Co-operative Milk Producers Union

(AMUL) is the fist in this sector. Our Co-operatives are called “Anand Pattern

Co-operative Societies” following the illustrious lineage of “AMUL”.

GOVERNMENT OF KERALA:

The phenomenal success of the Dairy Co-operatives in Kerala could not

have been achieved, without the foundation of animal husbandry activities, led by

the Animal Husbandry Department, Dairy Development Department and Kerala

Livestock Development Board, of the Government of Kerala.

KERALA COOPERATIVE MILK MARKETING FEDERATION FOLLOWS

A THREE TIER SYSTEM

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KERALA CO-OPERATIVE MILK MAREKTING FEDERATION

THIRUVANANTHAPURAM REGIONAL CO-PERATIVE

MILK PRODUCER’S UNION

ERNAKULAM REGIONAL CO-OPERATIVE MILK PRODUCER’S UNION

MALAPURAM REGIONAL CO-OPERATIVE MILK PRODUCER’S UNION

THIRUVANANTHAPURAM REGIONAL CO-OPERATIVE MILK PRODUCER’S UNION,

KOLLAM, PATHANAMTHITTA,

ALAPPUZHA

ERNAKULAM, KOTTAYAM,

THRISSUR, IDUKKI

POVAKOD, KOZHIKODE,

KANNUR, WAYANAD

MILK PROCESSING

The milk which is being collected from the primary societies is tested before the

milk is sent to the chilling centre or to the dairy.

The tests are:

1. Organoleptic tests

2. Fat%

3. SNF%

At the chilling centre that is in the dairy the sample of individual co-operative

society is tested for the following tests: -

1. Organoleptic

2. Temperature

3. Cloton Boiling

4. Acidity% (as lactic acid)

5. Fat%

6. SNF%

It is essential to check acidity and temperature of pooled milk before dispatching

to the dairy plant.

At milk plant the sample of each society is testes for following tests.

1. Organoleptic tests

2. Temperature At raw milk reception dock

1. Fat%

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SOCIETIES (APCOS)

FARMERS

2. SNF% In Laboratory

3. Acidity%

4. COB

The Toned Milk having 3.00% fat and 8.50% SNF, sugar and cardamom/Cocoa

powder/Coffee powder as flavoring agents. After dong all the tests which s essential, the

milk is pasteurized. After pasteurizing the milk is packed and stored in freezers.

According to the demand from the market, it is distributed.

FIG – 2.1

FLOW DIAGRAM OF MILK PROCESSING

RAW MATERIAL

DUMP TANK

CLARIFICATION

COOLING AND STORING

PREHEATING

STANDARDIZATION

LIQUID MILK (OPTIONAL)

CREAM BUTTER

HOMOGENIZATION

GHEE

PASTEURIZATION

PACKING

COLD STORAGE

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DISTRIBUTION

WHOLE MILK

STANDARD MILK

TONED MILK

DOUBLE TONED MILK

PRODUCT PROFILE

Milma has a range of products. A marketing chain consisting of nearly 4000 retail

outlets, across the state ensures availability of milma's products to consumers. Milma

with its motto your health is our concern has become synonymous with assured quality

of milk and milk products. Milma's spectrums of products adhere to the PFA rules and

are released for distribution only after stringent quality checks.

Some of the main products that Milma has are:-

1. PASTEURASIZED MILK:

Milma market liquid milk in pasteurized form. The pasteurized milk contains

vitamin A. This pasteurized milk contains vitamin A. This enriched milk comes in three

varieties.

Fat free milk

Toned milk which contains 3% fat and 8.5% of SNF

Standardized milk which contains .5% fat 9% SNF

Conveniently packed in 500 ml and 1 litre sachets, the fat content range of Milma’s Milk

has made it the popular health drink of young and old alike.

2. ICE-CREAM

Milma ice-cream is available in a range of lip smacking flavours: vanilla,

chocolate, mango, strawberry and fruit & nut. In addition, our Ernakulam Union also

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produces and distributes delicious "kulfi" and cream rolls. The only ice-cream in Kerala

market which is manufactured in a dairy and hence most fresh ice cream.

3. SAMBHARAM

Sambharam (butter milk) a favorite beverage of Kerala. Milma Sambharam, the

only product of its kind in the market, is very popular throughout the State. It comes in

convenient 200ml throw away sachets.

4. CURD

It is a fermented product prepared from pasteurized skim milk using Curd Culture

from National Dairy Research Institute (NDRI). It is delicious, tasty, free from

cholesterol and available in 500ml and bulk.

5. LASSI

It is a sweetened and flavored product prepared from curd. It is available in 200ml

pack and is a very good health drink for all age group.

6. GHEE

Ghee is a key ingredient in most Indian delicacies. Milma produces good quality,

pure ghee from butter or cream at all dairies. The ghee is available in convenient packs of

100gm to 15Kg.

7. BUTTER

Milma Butter prepared from the cream of milk contains 81% fat and less than

15.6% water. This is available in convenient 100gm, 200gm and 500gm family packs.

Available in salted and unsalted varieties.

8. TETRAPACK FLAVOURED MILK

Milma offers a range of flavoured health drinks in hygienic tetrapacks.

Cardamom milk has already captured the market and are available at all milma outlets.

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9. REFRESH

In addition to milk drinks, milma also has a mango drink in the market. Refresh,

milma's mango drink is a favourite in the fruit drink sector.

10. PEDA

An indigenous milk product manufactured by evaporating water content from

wholesome cow's milk and sweetened with cane sugar. It is a nutritious and delicious

sweet bite for children. It is available in 25gm and 250gm cartons.

11. CREAM ROLL

Mixture of tasty ice-cream and tooty fruity encircled with oven fresh spong cake.

It is a delicious snack rich in milma cream.

12. MILMA SIP

Made from pasteurized skim milk, sweetened and flavoured. Available in 25ml

polyethylene tube in flavours like vanila, pineapple, strawberry, mango, and rose etc...

And served in chilled condition. It is a safe and nutritious substitute to all other sip-ups.

13. CATTLE FEED

Balanced cattle feed is the major input provided to the dairy farmers of the State

from the Federation. There is a high level of acceptability for this product in the market.

Milma is now producing 600MT cattle feed a day. It produces both mash and pellet form

of cattle feed. In addition to augment the balanced feed and to support vitamin level in

milk animal, milma has come out with milma mineral mixture - "milma min". The cattle

feed is distributed to farmers at reasonable rate through Apcos, Dealers and Government.

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DEPARTMENTS

KCMMF HEAD OFFICE

Provides Staff Management functions to support its Units & Regional Milk

Unions. KCMMF Head Office has well established Marketing, Purchase, Quality

Control, Finance, Project, Systems and HRD departments.

MARKETING

Brand Management

Lean Flush Management

Bulk trading of surplus products

Institutional supply contracts

Co-ordinate promotional activities

Packaging & Product Development

Procurement & Consumer Pricing

PURCHASE

Centralized purchase of Dairy consumables

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Purchase of Raw Materials for Cattle Feed Plants

Purchase functions of KCMMF Head Office

QUALITY CONTROL

Render technical & legal assistance to primary dairy co-operatives and Regional

Milk Unions

Liaison and maintain quality of milk and milk products as per the standards

Liaison with statutory authorities for bringing in suitable amendments in statutes

Attend to consumer complaints on quality problems

FINANCE

Financial management of KCMMF and its units

Liaison with financial institutions for availing loan for creation of infrastructure.

Liaison with Government for availing Government financial assistance

Long term repayment and scheduling of loans

Capital Management Schemes for primary co-operative societies

Recommend remuneration of APCOS employees

PROJECTS

Planning and execution of projects for creating infrastructure for Regional Milk

Unions and KCMMF

Providing consultancy for execution of projects

Liaisoning with statutory authorities like Factories and Boilers, Electrical

Inspectorate, Dept.of Explosives etc for obtaining approval and implementation of

projects

Liaisoning with Government for land allocation, water, power and other amenities

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Estate management and assistance in maintenance of Plant & Machinery of

KCMMF Units

COMPUTER

Maintenance of Systems at KCMMF, Units and Regional Milk Unions

Development of software’s to support various functions.

Purchase of Hardware & Software

Support Management Information System

Networking

Conducts Training programs for development of computer skills

HUMAN RESOURCE DEVELOPMENT

Milma family has 2098 skilled, efficient and qualified personnel and has an

excellent labour relationship

Takes active role in framing personnel policies and service rules

Finalize long term wage settlement, bonus etc.

Placement and career development activities

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COMPANY MILESTONES OF THE YEAR 2007-08

Federation and all the three Regional Milk Unions joined hands with NDDB to be a

part of the national stream to promote co-operative brand. In the wake of competition

from private sector, KCMMF and the Regional Milk Unions readily accepted the well

planned Marketing Strategy of NDDB and the mnemonic symbol of NDDB was

introduced in the milk pouches in the State. Kerala is the first federation to adopt the

mnemonic symbol throughout the State.

The year 2007 was a landmark year for milk production in the country, which reached

a new high. At over 100 million tonnes, milk output has breached the magical three-

digit level, making India the world’s second largest producer, after the European

Union (154 million tonnes) and accounting for nearly 15 per cent of the world

production of 675 million tonnes. The milk prices in India have been rising primarily

because economic growth and demographic pressure have pushed demand higher.

Prices also edged up because of the countries entry into the international market for

skimmed milk powder. High milk powder prices led the government to even place an

26

embargo on its export. Being milk deficit State, the year 2007-08 was a turbulent year

to Kerala and our dependency on other States have increased. With the active co-

ordination and involvement of our Regional Milk Unions we could get through the

problems faced by our organization in this front and we could meet the demand for

milk from our esteemed consumers.

27 years ago, we responded to the challenges that threatened dairying in our State by

implementing the Operation Flood program with the active support and assistance of

the National Dairy Development Board. NDDB guided in taking up us the challenges

with a program that contributed significantly to creating the self-reliant, vibrant dairy

industry that now greatly benefits millions of rural households across the country.

Though, milk price was increased twice during the financial year and we passed on

nearly 70% of the increased consumer rupee to the farmer s, still our members are

struggling to continue in the profession due to spiraling cost of production. We would

believe that what the milk producer seeks to achieve by engaging his time and energy

in milk production is a remunerative price and a stable round the year market. If these

two needs are fulfilled, then the milk producer would continue in dairying and

perhaps, even expand even expand his business, of course within the boundaries of

other constrains.

Increasing the selling price of milk and passing on maximum benefit to the farmers is

not the only solution and in long run we have to look for other ways. The choice of

cost plus approach for milk pricing would breed inefficiencies since it would ignore

the demand factor. Similarly this would be an open invitation for large-scale import

of milk from the less priced neighboring states through other channels and ultimately

work to the determent of the milk producers of our State. So also, we have to

appreciate that soaring prices in a shorter period could adversely affect domestic

consumption as many of the households are in the low-income category.

Healthy growth in milk production can be achieved only through active intervention

in reducing the cost of production at farmer level and sustained investments in animal

feeding, breeding and health care.

27

A heavy surge in raw material prices for manufacturing of cattle feed has placed us in

a crisis situation as cattle feed plants are running heavy losses. Though we tried to

keep the cattle feed prices at reasonable levels, the spiraling cost of raw material

forced us to increase the selling price of cattle feed which in turn resulted in increased

cost of production to our farmer members. The situation with regard to the

availability of raw material needed for cattle feed manufacturing was not at all rosy.

The oil cakes are costly and in short supply. Maize is being diverted for the

production of ethanol as bio-fuel due to its better conversion efficiency in the fuel.

Molasses become a scarce material and availability and its price become serious

concern to us. The prices of rice bran have gone up mainly due to ban on export of

rice. Since the ingredient cost is going up regularly, the cost of the compounded feed

is also going up, beyond the reach of a small producer. As the cost of milk production

increases, the margin of profit for the producer decreases. This is quite discouraging

trend, especially for the milk producers who are sometime even forced to quit

dairying as a profession. We feel that it is high time we looked forward for alternative

nutritional technologies, which would help our members to get the nutritional

requirement for their animals. So also efforts to be made by through Government

intervention to cushion the dairy producers against inflation by extending subsidy to

the farmers for purchase of cattle feed at reasonable prices.

HIGHLIGHTS OF THE YEAR 2007-08

Highest ever turnover achieved. The turnover of Rs.835.12 crores.

With the active co-ordination and involvement of our Regional Milk Unions we could

get through the problems faced by our organization in this front and we could meet

the demand for milk from our esteemed consumers.

Moreover, the farmer gets 75% of the consumer price back in his hands, unlike

vegetables and fruits for which the farmer gets only 15% of the value paid by the

28

consumer. The ensuring of remunerative prices to milk producers and the

organization of an efficient supply chain management system impacted on the milk

production of the State. It is our proud to be Milma acclaimed as the No: 1 brand in

the State for the 2nd consecutive year in the survey conducted by Dhanam Magazine

which shows the popularity and consumer belongingness of this household brand.

TABLE NO – 2.1

MILK PROCUREMENT AND SALES (LTRS IN LAKHS)

YEAR PROCUREMENT SALES2000 2249.33 2308.692001 2487.11 2412.832002 2418.25 2558.592003 2179.73 2698.802004 2319.70 2841.212005 2630.14 3069.512006 2921.14 3340.052007 2722.90 3497.432008 2694.00 3475.00

(Ten lakhs = 1 million)

COMPANY FUTURE AIMS

The dairy industry in the country is exposed to various challenges. The management

of lean-flush periods has always been a matter of major concern to Milma and it still

continues to be a key problem to be addressed on top priority. We have to re-dedicate

ourselves to uphold our oft-repeated slogan "Farmers' Prosperity through Consumer

Satisfaction". To keep farmer and consumer contended and happy in chorus is a

difficult task. We have to formulate strategies and plans to accomplish the aforesaid

task. Though a quarter century has elapsed since the drawn of Operation Flood

programme we are yet to achieve self-sufficiency in milk production. At the same

time we can be proud of our achievements in the area of infrastructure development,

milk consumption enhancement and economic and social development of rural dairy

farmers. A joint concerted effort of Milma and other Government agencies in Dairy

Development and Animal Husbandry will go a long way in fulfilling our dreams. We

29

have to strive to wipe off the accumulated losses and to improve the performance

both on the physical and financial fronts. Your trust, your confidence and your

encouragement will further energize and motivate us in this pursuit.

Food crisis is a major threat now faced by the world and being the 2nd largest

populated country we are forced to bear the brunt more than others. Our Government

is giving priority to ensure food security to the citizens. To ensure food security we

have to enhance domestic production of agricultural commodities including dairy

products. This can only be achieved through ensuring remunerative prices to their

produce and encouraging them to produce more milk and other agriculture products.

We have to strengthen the hands of our farmers by enhancing their capability to

produce more and thereby ensure the prosperity of our nation.

MARKETING ACTIVITES OF COMPETITORS

KSHEERA MILK

Ksheera milk is a product of Maranallor Ksheera Vyavasaya Sahakarana Sangam

Ltd. It comes under the Dairy Development Department. The plant of Ksheera is located

in Kuvalassery in Thiruvananthapuram District. They processes and markets milk in

their own plant. They markets milk in all areas of Thiruvananthapuram District. They

procure the milk from the local milk farmers and milk societies.

TYPES OF MILK

1. Toned Milk

2. Double Toned Milk

30

TYPES OF PACKET

1. 500 ml

THE COMPOSITION OF FAT & SNF

1. Toned Milk - 3.0% 8.5%

2. Double Toned Milk - 1.5% 9.0%

MAXIMUM RETAIL PRICE (MRP)

Rs.10.00/-

COMMISSION STRUCTUR

40 Ps per Packet

No. OF VEHICLES

28 number of Vehicles.

SUPPLY OF MILK

They supply milk during Morning and Evening Session.

QUANTITY OF MILK SUPPLY

10,000 lit/day

SYSTEM OF COLLECTION OF MONEY

The Ksheera collects money in advance. That is one day before issuing the milk

they have to pay the money.

CRITERIA FOR AGENCY

The agent has to pay Rs.1000/- in advance for getting Ksheera milk agency. The

presence of refrigerator is needed. They should have interest in selling milk.

31

No. OF DEALERS

They have 800 dealers in Thiruvananthapuram.

SALES PROMOTION

For the sales promotion they are using boards, banners and even newspapers for

advertisement.

OTHER PRODUCTS

1. Ksheera Sambharam.

2. Ksheera Curd.

3. Ksheera Ghee.

AMBADI MILK

The company has a processing plant in Vellanad, Thiruvananthapuram District.

They collect milk from local farmers and they have a procurement plant in Thenkashi,

Tamil Nadu and they collect milk from their also. They pack and market milk in

Thiruvananthapuram Dairy itself. In Thiruvananthapuram they have 11 main routes. And

they use private vehicles for the supply of milk on a contract basis.

TYPES OF MILK

1. Toned Milk

2. Double Toned Milk (is called KANNAN)

TYPES OF PACKET

1. 500 ml

32


1. Toned Milk - 3.0% 8.5%



Rs.10.00/-

COMMISSION STRUCTUR

75 Ps per Packet

No. OF VEHICLES


SUPPLY OF MILK



1300 lit/day


They follow the ready cash payment basis. They have credit facility only for the

institutions.

CRITERIA FOR AGENCY

The agency is given to the people who are interested and experienced in selling

milk.

No. OF DEALERS


33

SALES PROMOTION

For sales promotion they are using boards, banners and even newspapers for

advertisement.

MAIN CLIENTS

1. Big Bazaar.

2. Reliance.

3. Gokulam Hospital.

OTHER PRODUCTS

1. Ambadi Sambharam.

2. Ambadi Curd.

3. Ambadi Ghee.

A ONE MILK

The company processes and packs milk in its plant Patharam, Kollam District.

They collect milk from the farmers and also from outside the district. The company

mainly focuses on the interior places of Thiruvananthapuram District, where there is no

reach for Milma. That means direct reach to the customer.

TYPES OF MILK

1. Toned Milk


TYPES OF PACKETS

1. 250ml

34

2. 500ml

THE COMPSITION OF FAT & SNF

1. Toned Milk - 3% 8.5%



250ml - Rs.5.00/-

500ml - Rs.10.00/-

COMMISSION STRUTURE

250ml - 25Ps per Packet

500ml - 50Ps per Packet

NO. OF VEHICLES

10 number of vehicles

SUPPLY OF MILK

They supply milk during Morning and Evening. In the morning their 95% of

supplies are done.


1,200 lit/day


They follow ready cash payment basis.

CRITERIA FOE AGENCY

35


the milk.

NO. OF DEALERS


SALES PROMOTION

For the sales promotion they are using boards, banners for their advertisement.

OTHER PROUCTS

1. A One Sambharam.

2. A One Curd.

ROYAL MILK

The company processes and markets milk in its plant near to Eramalloor,

Alappuzha District. In Thiruvananthapuram District they have no plant, they have only

the distribution. They procure milk from local milk farmers as well as other states.

TYPES OF MILK

1. Toned Milk


TYPES OF PACKET

1. 500 ml

36


1. Toned Milk - 1.5% 8.5%



Rs.10.00/-

COMMISSION STRUCTUR

75 Ps per Packet

No. OF VEHICLES


SUPPLY OF MILK



1000 lit/day


They follow ready cash payment basis.

CRITERIA FOR AGENCY


the milk.

No. OF DEALERS


SALES PROMOTION

37

For the sales promotion they are using boards, banners and even newspapers for

advertisement.

OTHER PRODUCTS

1. Royal Sambharam

2. Royal Kattimoru

3. Royal Ghee

HERITAGE MILK

The company has production plant in Dindigul, Tamil Nadu. In

Thiruvananthapuram District they have only milk distribution. They procure milk from

Andhra Pradesh and Karnataka. In Thiruvananthapuram District they mainly focus on

Thiruvananthapuram City. And also they focus the Bakery, Tea shop etc.

TYPES OF MILK

1. Toned Milk


38

TYPES OF PACKET

1. 500 ml

THE COMPOSTIOTN OF FAT &SNF

1. Toned Milk - 3.0% 8.5%



1. Rs.10.50/-

COMMISSION STRUCTURE

Rs.1/- per Packet

NO. OF VEHICLES

4 Numbers of Vehicles

SUPPLY OF MILK

They supply milk during Morning and Evening sessions.


1000 lit/day


They follow ready cash payment basis

CRITERIA FOR AGENCY


the milk.

No. OF DEALERS


39

SALES PROMOTION

For the sales promotion they are using boards, banners.

OTHER PRODUCTS

1. Heritage Curd

2. Heritage Ghee

MILMA BID TO COUNTER COMPETITION

The Kerala Cooperative Milk Marketing Federation (Milma) here is gearing up to

face the competition put up by private dairies by introducing new products and

improving its marketing activities. The cooperative is now going about strengthening its

monopoly in the liquid milk market by launching milk in varying constitutions and also

flavoured milk. Milk in 200 ml packs to cater to the low-income group, long-life curd,

ice cream mixes are also in the offing. In Thiruvananthapuram city, Milma's sale is

around 1.1 lakh litres daily, its market share being more than 65 per cent, while the

40

private dairies sell around an estimated 30,000 litres. In the district alone, there are

several brands of milk available, such as A1, Royal, Ambadi, Shakthi, Soorya, Kairali,

Penta, Heritage and Ksheera.

Dairying is an important source of subsidiary income to small and marginal

farmers and agricultural labourers of Kerala. Being a balanced food, it is an essential

part of the diet of the children and invalids. The changing food habits of the people have

increased the demand for milk and milk products. As per the recommendations, the per

capita consumption of milk will be 240 gm/day, which means that the 333 lakh people

of Kerala need 79.92 lakh litres of milk per day. It is estimated that the State’s

production of milk during 2007 is only 58 lakh litres per day. The demand production

gap is nearly 22 lakh litres, which is being met by milk-import from neighbouring

States by Milma as well as by private traders. Out of 58 lakh litres of milk produced

within the State, the organized sector handles only 18 percent. The rest is marketed

either directly by the producer or vendor in the unorganized sector. The major factor

affecting enhanced milk production in the State is the high cost of production compared

to that of the neighbouring States. It is difficult to establish equilibrium between the

procurement and selling prices without hurting both rural producers and urban

consumers. The high cost of production calls for a higher price for the product, but

enhancing the selling price will affect the common man’s budget. Further it will result

in the flooding of cheaper milk from neighbouring States that creates problem for our

producers .Milma was formed with a view to over come the issues pertaining to milk

production in the State. Now the Government has taken earnest steps to reorganize

Milma to achieve the goals. The main function of Milma is procuring milk from the

Primary Cooperative Societies and its distribution. It is only a marketing process.

Unfortunately, Milma has no role in production sector. Gradually Milma became a

trader. The availability of milk at cheaper rates from Karnataka and Tamil Nadu

federations prompted Milma to collect it, as it was profitable than local procurement.

Now the decrease in production and conversion of bulk quantity to milk powder has led

to a shortage of milk and price hike in the State. This has put Kerala Cooperative Milk

41

Marketing Federation in a critical state that made it to incur heavy loss on account of

bringing milk from distant places.

(A MARKET STUDY CONDUCTED BY IIM, KOZHIKODE)

TABLE NO – 4.1

TABLE SHOWING THE BRANDS THAT DEALERS DEAL

BRANDS NO.OF DEALERS PERCENTAGE

MILMA 100 100

KSHEERA 30 30

42

AMBADI 26 26

A ONE 18 18

ROYAL 14 14

HERITAGE 12 12

INTERPRETATION:

The above table reveals that all the dealers are dealing the Milma milk. Along

with the Milma milk they are dealing the other brands milk also.

In the other milk brands 30% of dealers are dealing the Ksheera milk, 26% of

dealers are Ambadi milk, 18% of dealers are A one milk, 14% of dealers are Royal milk

and the last 12% of dealers are dealing the Heritage milk.

FIG – 4.1

THE BRANDS THAT DEALERS DEAL

43

TABLE NO – 4.2

TABLE SHOWING THE SALES OF MILK BRAND IN A DAY

SALES PER DAY NO. OF DEALERS PERCENTAGE

BELOW 150 12 12

150-200 26 26

200-250 20 20

250-300 18 18

300-350 14 14

ABOVE 400 10 10

INTERPRETATION:

44

The above table reveals the dealers sales per day. In the table 12% dealers sales

below 150 packet, 26% dealers are selling between 150 – 200 packets, 20% dealers are

selling 200 – 250 packets, 18% dealers are selling 250 - 300 packets, 14% dealers are

selling the 300 – 350 packets and only 10% dealers are selling the above 400 packet per

day.

FIG – 4.2

THE SALES OF MILK BRAND IN A DAY

TABLE NO – 4.3

TABLE SHOWING THE REASON FOR BRAND PREFERENCE

45

VARIABLES RANK 1 RANK 2 RANK 3 RANK 4 RANK 5 RANK 6 TOTAL

PRICE 5 9 15 11 20 40 100

QUALITY 24 21 21 9 9 16 100

BRAND IMAGE 2 2 8 33 37 18 100

ADVERTISING 26 28 32 11 1 2 100

AVAILABILITY 43 36 13 6 2 0 100

PACKAGING 0 4 11 30 31 24 100

TABLE NO – 4.3.1

TABLE SHOWING THE RANKIG OF ATTRIBUTES

VARIABLES RANK 1 PERCENTAGE

PRICE 5 5

QUALITY 24 24

BRAND IMAGE 2 2

ADVERTISING 26 26

AVAILABILITY 43 43

PACKAGING 0 0

INTERPRETATION:

The above table reveals that the dealers given importance to the attributes in order

of availability, advertising and quality while the brand preference.

In the ranking the 43% dealers are rank the availability, 26% dealers are rank the

advertising and 24% dealers are the rank the quality.

FIG – 4.3

46

THE RANKIG OF ATTRIBUTES

TABLE NO – 4.4

TABLE SHOWING THE MOST SELLING MILK BARND

BRANDS NO. OF DEALERS PERCENTAGE

MILMA 26 26

KSHEERA 23 23

AMBADI 16 16

A ONE 14 14

ROYAL 12 12

HERITAGE 9 9

INTERPRETATION:

47

The above table reveals the most selling milk brand. In this table Milma is the

most selling milk brand, 26% dealers are selling this milk. After Milma, Ksheera in the

second selling milk brand, 23% dealers are selling this milk. Then after comes the other

milk brand.

FIG – 4.4

THE MOST SELLING MILK BRAND

TABLE NO – 4.5

48

TABLE SHOWING THE FACTORS THAT INFLUENCE THE CUSTOMER

FACTORS NO. OF DEALERS PERCETAGE

PRICE 8 8

QUALITY 28 28

AVAILABILITY 32 32

BRAND IMAGE 6 6

ADVERTISING 20 20

PACKAGING 6 6

INTERPRETATION:

The above table reveals the factors that influence customer to purchase the

particular milk brand.

In 32% of dealers saying that the availability of milk brand is the most important

factor that influences the customer. Then 28% of dealers say that the quality of the milk

brand is also another factor for the purchase of the milk brand. The 20% dealers say the

advertising is the other factor for the purchase of the milk brand

FIG – 4.5

49

THE FACTORS THAT INFLUENCE THE CUSTOMER

TABLE NO – 4.6

TABLE SHOWING THE MOVEMENT RATE OF MILMA MILK

RESPONSE MOVEMENT RATE PERCENTAGE

GOOD 29 29

AVERAGE 42 42

POOR 29 29

INTERPRETATION:

50

The above table reveals the movement rate of Milma milk. In this table 42% of

dealer’s response that the Milma milk movement is average. 29% of dealers response

that good, 29% of dealers repose that poor.

FIG – 4.6

MOVEMENT RATE OF MILMA MILK

TABLE NO - 4.7

51

TABLE SHOWING THE BRAND WHICH GIVES HIGH COMMISSION


MILMA 10 10

KSHEERA 20 20

AMBADI 25 25

A ONE 15 15

ROYAL 18 18

HERITAGE 12 12

INTERPRETATION:

The above table reveals the brand which gives the high commission. In this table

25% of dealer’s opinion that Ambadi milk gives the high commission. 20% of dealer’s

opinion that the Ksheera mik is second in high commission gives milk brand. 18% of

dealer’s opinion Royal milk is third place in high commission milk.

The commission of Milma milk is very low compare to any other milk brands.

FIG – 4.7

52

THE BRAND WHICH GIVES HIGH COMMISSION

TABLE NO - 4.8

TABLE SHOWING THE SATISFACTION LEVEL OF COMMISSION

GIVEN BY MILMA

RESPONSE NO. OF DEALERS PERCENTAGE

YES 60 60

NO 40 40

INTERPRETATION:

53

The above table reveals the satisfaction level of commission given by Milma.

From the 100 dealers 60% of dealers are satisfied by the commission given by Milma.

And 40% dealers are not satisfied with the commission given by Milma.

FIG – 4.8

SATISFACTION LEVEL OF COMMISSION GIVEN BY MILMA

TABLE NO - 4.9

54

TABLE SHOWING THE RECOMMENDATION OF DEALERS


MILMA 15 15

KSHEERA 22 22

AMBADI 20 20

A ONE 18 18

ROYAL 14 14

HERITAGE 11 11

INTERPRETATION:

The above table reveals the dealers recommendation of milk brand to the

customer. 22% dealers are recommended the Ksheera milk, 20% of dealers are

recommended the Ambadi milk and 18% dealers are recommended A one milk.

FIG – 4.9

55

THE RECOMMENDATION OF DEALERS

TABLE NO – 4.10

TABLE SHOWING THE SATISFACTION LEVEL OF SALES PROMOTION

GIVEN BY MILMA


YES 58 58

NO 42 42

INTERPRETATION:

56

The above table reveals the satisfaction level of sales promotion given by Milma.

From the 100 dealers 58% of dealers are satisfied by the sales promotion given by Milma.

And 42% dealers are not satisfied with the sales promotion given by Milma.

FIG – 4.10

SATISFACTION LEVEL OF SALES PROMOTION GIVEN BY MILMA

TABLE NO - 4. 11

57

TABLE SHOWING THE BRAND WHICH GIVES HIGH SALES PROMOTION


MILMA 18 18

KSHEERA 25 25

AMBADI 20 20

A ONE 15 15

ROYAL 12 12

HERITAGE 10 10

INTERPRETATION:

The above table reveals the milk brands which gives the high sales promotion.

On this table 25% of dealer’s opinion that the Ksheera milk is providing the high sales

promotion. Then 20% of dealer’s opinion that Ambadi milk is providing the sales

promotion. Only 18% dealer’s are opinion that Milma milk providing the sales promotion

FIG – 4.11

58

THE BRAND WHICH GIVES HIGH SALES PROMOTION

TABLE NO – 4.12

TABLE SHOWING THAT MILMA IS THE TOP MOST MILK BRAND

IN THE DAIRY PRODUCT


AGREE 68 68

DISAGREE 32 32

INTERPRETATION:

59

The above table reveals that Milma is the top most milk brand in the dairy

product. 68% dealers are agreeing with the opinion because of the brand image of the

company. Just 32% of dealers are not agreeing with the opinion because they saying that

other dairy products also available in the market.

FIG – 4.12

MILMA IS THE TOP MOST MILK BRAND IN THE DAIRY PRODUCT

60

TABLE NO - 4. 13

TABLE SHOWING THE SALES PROMOTIONAL SUPPORT EXPECTED

FROM THE MILK BRANDS


PRICE OFFS 13 13

CREDIT FACILITY 53 53

DISPLAY ALLOWANCE 27 27

FREE GOODS 7 7

INTERPRETATION:

The above table reveals the dealers expectation of sales promotional support from

the milk brand. In the 100 dealers 53% of dealers are normally expected the credit

facility from the part of milk brands. 27% of dealers are expected the display allowance.

13% of dealers are expecting price offs and rests of 7% dealers are expecting free goods.

61

FIG – 4.13

THE SALES PROMOTIONAL SUPPORT EXPECTED

FROM THE MILK BRANDS

TABLE NO – 4.14

TABLE SHOWING THE SATISFACTION LEVEL OF TIMELY MILK

SUPPLY OF MILMA


YES 22 22

NO 78 78

INTERPRETATION:

62

The above table reveals the timely milk supply of Milma. In 100 dealers 78% of

dealers are not satisfied the timely supply of Milma milk. 22% of dealers are satisfied the

timely supply of Milma milk.

FIG – 4.14

THE SATISFACTION LEVEL OF TIMELY MILK

SUPPLY OF MILMA

TABLE NO – 4.15

TABLE SHOWING THE SUGGESTIONS TO IMPROVE THE SALES OF

63

MILMA MILK


SUGGESTIONS 32 32

NO SUGGESTIONS 68 68

INTERPRETATION:

The above table reveals the suggestions from the dealers for the improvement of

sales of Milma milk. From the 100 dealers 68% dealers have no suggestion and 32% of

dealers have suggestion.

FIG – 4.15

SUGGESTIONS TO IMPROVE THE SALES OF MILMA MILK

CHI-SQUARE TEST

64

Chi-square test is applied to test the goodness of fit, to verify the distribution of

observed data with assumed theoretical distribution. Therefore it is a measure to study the

divergence of actual and expected frequencies; Karl Pearson’s has developed a method to

test the difference between the theoretical (hypothesis) and the observed value.

TEST OF GOODNESS OF FIT

If we have a set of frequencies of a distribution obtained by an experiment and if

we are interested in knowing whether these frequencies are consistent with those which

may be obtained based on some theory (or hypothesis), then we can use X2 test of

goodness of fit for this purpose.

STEPS FOR THE X 2 TEST OF GOODNESS OF FIT

1. H0: There is goodness of fir between observed and expected frequencies.

2. Compute the test statistic, X2 = ∑(0 – E)2/ E where ‘O’ stands for observed

frequencies and ‘E’ stands for expected frequencies are to be computed.

3. Degree of freedom = n-r-1 where ‘r’ is the number of independent constraints to be

satisfied by the frequencies. For frequencies distribution, r is the numbers of

parameters computed from the data.

4. Obtain the table value of X2 for the degree of freedom and for the desired level of

significance.

5. If the calculated value of X2 is less than the table value we conclude that there is

goodness of fit.

Chi – square test (X2) = (O – E) 2 / E

65

Degrees Of Freedom = V = (R – 1) (C -1)

Were,

‘O’ = Observed Frequency

‘E’ = Expected Frequency

‘R’ = Number of Rows

‘C’ = Number of Columns

For the chi-square test the table value has taken @ .05% level of significance.

HYPOTHESIS

HO: There is no significant relationship between Sales Promotion and Sales of milk.

H1: There is a significant relationship between Sales Promoting and Sales of milk.

TABLE NO – 4.16

CHI – SQUARE TEST IS CONDUCTED TO ANALYZE THE RELATIONSHIP BETWEEN SALES PROMOTION AND SALES OF MILK

CROSS TABLE

SALES PROMOTION OF

MILMA

SALES OF MILMA MILKTOTAL

GOOD AVERAGE POOR

YES 19 29 10 58

NO 10 13 19 42

TOTAL 29 42 29 100

O E (O – E) (O – E)2 (O – E)2 / E

19 16.82 2.18 4.7524 0.2825

66

29 24.36 4.64 21.5296 0.8838

10 16.82 -6.82 46.5124 2.7653

10 12.18 -2.18 4.7524 0.3902

13 17.64 -4.64 21.5296 1.2205

19 12.18 6.82 46.5124 3.8188

TOTAL 9.3611

X2 = ∑ (O – E) 2 / E = 9.3611

Degree of freedom = r – 1 × c – 1

= 3 – 1 × 2 – 1

= 2 × 1

= 2

Level of Significance = .05

Calculated Value = 9.3611

Table Value = 5.9915

INTERPRETATION:

The calculated value is more than the table value. So, the Null hypothesis is

rejected. Hence, there is a significant relationship between Sales Promotion and Sale of

milk.

HYPOTHESIS

HO: There is no significant relationship between Commission and Sales of milk.

67

H1: There is a significant relationship between Commission and Sale of milk.

TABLE NO – 4.17

CHI – SQUARE TEST IS CONDUCTED TO ANALYZE THE RELATIONSHIP BETWEEN COMMISSION AND SALES OF MILK

CROSS TABLE

COMMISSION OF MILMASALES OF MILMA MILK

TOTALGOOD AVERAGE POOR

YES 19 30 11 60

NO 10 13 17 40

TOTAL 29 43 28 100

O E (O – E) (O – E)2 (O – E)2 / E

19 17.4 1.6 2.56 0.1471

30 25.8 4.2 17.64 0.6837

11 16.8 -5.8 33.64 2.0024

10 11.6 -1.6 2.56 0.2207

13 17.2 -4.2 17.64 1.0256

17 11.2 5.8 33.64 3.0036

TOTAL 7.0831

X2 = ∑ (O – E) 2 / E = 7.0831

Degree of freedom = r – 1 × c – 1

= 3 – 1 × 2 – 1

68

= 2 × 1

= 2

Level of Significance = .05

Calculated Value = 7.0831

Table Value = 5.9915

INTERPRETATION:

The calculated value is more than the table value. So, the Null hypothesis is

rejected. Hence, there is a significant relationship between Commission and Sale of milk.

FINDINGS

The sales promotional activities to the dealers are not effective.

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Though the brands awareness is 100%, the sale of the Milma milk is very poor in

some regions.

The availability is the main factor that influences the dealers and customers to prefer

a particular milk brand.

The dealers are not satisfied with the replacement of damaged milk.

The commission structure to the dealers is very low compared to the all other brands.

The dealers are not satisfied with the quality of the Milma milk.

The dealers are not satisfied the timely supply of Milma milk.

The dealers expect the sales promotion support like credit facility, display allowance

but they are not getting it.

The dealers facing the shortage of Milma milk.

SUGGESTIONS

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The commission to the dealers is less compared to the all other brands in

Thiruvananthapuram Dairy. So Milma has to increase the commission for getting

more sales.

The Milma milk brand has to give attention for the timely supply of milk.

The availability of Milma milk in the rural area is very less. So the Milma has to

concentrate in the rural area too.

Milma should offer incentive schemes to dealers for motivating sale of Milma milk.

There is a growth potential in the market regions like Kattakada, Vembayam and

Neyyatinkara, so Milma should also concentrate on these regions.

To ensure the prompt replacement of damaged milk.

To give the credit facility to the regular dealers of Milma milk.

Ensure the good quality milk to the dealers.

CONCLUSION

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Milma, “The goodness Kerala wakes up to” has good image in the minds of

people. Milma is the first and inimitable organization which created a revolution in

Procurement, Processing, Marketing and Distribution of pure milk in the state. “Your

health our concern” has now becomes a synonym for assured quality. The name Milma

is now familiar with each and every house in Kerala.

Though Milma have been in the milk market for a quite long time, it does not

know is detail about the other milk brands in Thiruvananthapuram Dairy. This marketing

research tries to highlights the threats and the position of the other milk brands. Though

the Milma is in a strong position compared to the other milk brands it is useful to Milma,

to know about details of the other milk brands for improving its provision. The stringent

competition in the milk market urged the organization for an independent view of the

market and compels them to find out why people prefer other brands, and how can they

be made loyal customers of Milma.

Even though much efforts have been taken to ensure the credibility of this report

it may be worth while to say that the more areas of this topic could be used for further

research studies.

BIBLIOGRAPHY

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PHILIP KOTLER : “MARKETING MANAGEMENT”

PRENTICE HALL OF INDIA (P) LTD,

NEW DELHI.

WILLIAM G. ZIKMUND : “BUSINESS RESEARCH METHODS”

AKASH PUBLISHING HOUSE,

NEW DELHI.

S.C.GUPTA

V.K.KAPOOR : “FUNDAMENTALS OF APPLIED

STATISTICS”

SULTAN CHAND & SONS,

NEW DELHI.

INTERNET SOURCE : www.indiandairy.com

www.milma.com

www.google.com

www.wikipedia.com

SCHEDULE

Dealer’s Name:…………………………...

Location:………………………………….

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http://www.google.com/

http://www.milma.com/

http://www.indiandairy.com/

1. What are the brands that you deal with?

a) Milma b) Ksheera c) Ambadi

d) A One e) Royal f) Heritage

2. Sales of milk brand in a day?

a) Below 150 b) 150 - 200 c) 200 - 250

d) 250 - 300 e) 300 - 350 f) Above 400

3. Rank the milk brands on the following attributes?

Brand Name Price Quality Brand Image Advertising Availability PackagingMilmaKsheeraAmbadiA OneRoyalHeritage

4. According to you which are the most selling milk brand?



5. The most important attribute that influence the customer?

a) Price b) Quality c) Availability

d) Brand Image e) Advertising f) Packaging

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6. Identify the Unique Selling Proposition (USP) on each milk brands?

a) Milma ………… b) Ksheera ……………… c) Ambadi ……….……….

d) A One ………… e) Royal …………………… f) Heritage ……………….

7. How do you rate the sales movement of Milma milk?

a) Good b) Average d) Poor

If less than average specify the reason............................................................

8. Which milk brand gives the high Commission?



9. Are you satisfied with the Commission provided by Milma?

Yes No

If no specify the reasons………………………………………………………………………………

10. Which milk brand do you recommend to the customer?



11. Are you satisfied with the Sales promotion activities given by Milma?

Yes No

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If no specify the reason......................................................................................

12. Which milk brand gives the high sales promotion?



13. Milma is the most top milk brand in the dairy product? Do you agree?

Agree Disagree

If disagree specify the reason………………………………………………………………………

14. What kind of Sales promotional supports do you normally expect from the milk brands?

a) Price offs b) Credit facility

c) Display allowance d) Free goods

15. Are you satisfied with the timely milk supply of Milma?

Yes No

16. Any other suggestions to improve the sales of Milma milk?………………………………………………………………………………………………………………………..

THANK YOU

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An Exploratory Study on Competitive Milk Brands With Reference to Thiruvananthapuram Dairy

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