CHAPTER-I

INDUSTRY PROFILE

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 INDUSTRY PROFILE

The production of milk on dairy farms and the processing of milk and milk
products at dairy plants make up the dairy industry. Along with producing many kinds of
milk, the industry makes butter, cheese, yogurt, and ice cream. Dairying produces food
products that form a regular part of many people's diets, and in many parts of the world it
is a big business and major employer.

A dairy is a facility for the extraction and processing of animal milk mostly from
goats or cows, but also from buffalo, sheep, horses or camels for human consumption.
Typically it is a farm or section of a farm that is concerned with the production of milk,
butter and cheese.

Terminology differs slightly between countries. In particular, in the U.S. a dairy

can also be a facility that processes, distributes and sells dairy products, or a room,
building or establishment where milk is kept and butter or cheese is made. In New
Zealand English a dairy means a corner convenience store
.
As an attributive, the word dairy refers to milk-based products, derivatives and
processes, and the animals and workers involved in their production. A dairy farm
produces milk and a dairy factory processes it into a variety of dairy products. These
establishments constitute the dairy industry, a component of the food industry

Milk producing animals have been domesticated for thousands of years. Initially
they were part of the subsistence farming that nomads engaged in. As the community
moved about the country so did their animals accompany them. Protecting and feeding
the animals were a big part of the symbiotic relationship between the animal and the
herder

In the more recent past, people in agricultural societies owned dairy animals that
they milked for domestic and local consumption, a typical example of a cottage industry.

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The animals might serve multiple purposes. In this case the animals were normally
milked by hand and the herd size was quite small so that all of the animals could be
milked in less than an hour about 10 per milker. These tasks were performed by a
dairyman.

With industrialization and urbanization the supply of milk became a commercial

industry with specialised breeds of cow being developed for dairy, as distinct from beef
or draught animals. Initially more people were employed as milkers but it soon turned to
mechanisation with machines designed to do the milking.

Historically, the milking and the processing took place close together in space and
time on a dairy farm. People milked the animals by hand; on farms where only small
numbers are kept hand-milking may still be practiced.

At the processing plant, the milk is pumped into temporary holding tanks. It is
then weighed, and samples are sent to the laboratory where tests are made for odor and
flavor, bacteria, sediment, and milk protein and fat content.

Milk of inferior quality may be rejected. Only the highest-quality raw milk,
usually designated “Grade A,” is used for fresh fluid milk. Dairy plants control the fat
content of their products with separators, which extract the desired percentage of
butterfat, or cream, from the milk. The milk remaining after the cream has been removed
is known as skim. The dairy may sell it for cattle feed, convert it into powdered skim
milk, or package it for sale for human use as liquid skim milk.

Almost all milk and most milk products sold today are pasteurized, or processed
with heat to kill harmful bacteria. The process is named for the French scientist Louis
Pasteur, who first developed it to prevent spoilage of other food products. Cream used in
making butter is pasteurized before churning. Ice cream is always pasteurized.

In the homogenized the milk is forced under high pressure through many tiny
holes. This breaks up the fat globules into minute particles. They do not rise to the top as
cream, making the shaking of milk, as was once common, unnecessary. Homogenized
milk also yields an improved body and texture in many dairy products.

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 Fluid milk may be packaged in plastic containers, glass bottles, or in cardboard
cartons that are coated with paraffin wax to make them leakproof. Filled containers then
go to a refrigerated room to remain until the delivery trucks pick them up.

Humans have been drinking animals' milk since ancient times. Sanskrit records
mentioned milk 6,000 years ago. The Bible describes the promised land as “a land
flowing with milk and honey.” Some 2,300 years ago, the Greek physician Hippocrates
recommended milk as a medicine. Christopher Columbus brought cattle to the New
World on his second voyage. Cows were brought from Europe.

Indian dairy Industry:

The dairy industry in India engages in the production and processing of milk and
cream. It is also involved in the manufacture of other dairy products like cheese, curd, and
many more. The dairy industry specializes in the procurement, production, processing,
storage and distribution of dairy products.

India stands the first place in its share of dairy production in the international
scenario. It contributes about Rs 1,15,970 in the national economy. This ever-expanding
industry provides gainful employment to a vast majority of the rural households. It
employs about 8.47 million people on yearly basis out of which 71% are women.

Today, India is 'The Oyster' of the global dairy industry. It offers opportunities
galore to entrepreneurs worldwide, who wish to capitalize on one of the world's largest
and fastest growing markets for milk and milk products. The Indian dairy industry is
rapidly growing, trying to keep pace with the galloping progress around the world. As he
expands his overseas operations to India many profitable options await him. He may
transfer technology, sign joint ventures or use India as a sourcing center for regional
exports. The liberalization of the Indian economy beckons to MNC's and foreign
investors alike.

India’s dairy sector is expected to triple its production in the next 10 years in view
of expanding potential for export to Europe and the West. Moreover with WTO
regulations expected to come into force in coming years all the developed countries
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which are among big exporters today would have to withdraw the support and subsidy to
their domestic milk products sector.

India today is the lowest cost producer of per liter of milk in the world, at 27
cents, compared with the U.S' 63 cents, and Japan’s $2.8 dollars. Also to take advantage
of this lowest cost of milk production and increasing production in the country
multinational companies are planning to expand their activities here. Some of these milk
producers have already obtained quality standard certificates from the authorities. This
will help them in marketing their products in foreign countries in processed form.

The urban market for milk products is expected to grow at an accelerated pace of
around 33% per annum to around Rs.43, 500 crores by year 2005. This growth is going to
come from the greater emphasis on the processed foods sector and also by increase in the
conversion of milk into milk products. By 2005, the value of Indian dairy produce is
expected to be Rs 10,00,000 million. Presently the market is valued at around
Rs7,00,000mn.

Background:

India with 134mn cows and 125mn buffaloes has the largest population of cattle
in the world. Total cattle population in the country as on October'00 stood at 313mn.
More than fifty percent of the buffaloes and twenty percent of the cattle in the world are
found in India and most of these are milch cows and milch buffaloes.

Indian dairy sector contributes the large share in agricultural gross domestic
products. Presently there are around 70,000 village dairy cooperatives across the country.
The co-operative societies are federated into 170 district milk producers unions, which is
turn has 22-state cooperative dairy federation. Milk production gives employment to more
than 72mn dairy farmers. In terms of total production, India is the leading producer of
milk in the world followed by USA. The milk production in 1999-00 is estimated at 78mn
MT as compared to 74.5mn MT in the previous year. This production is expected to
increase to 81mn MT by 2000-01. Of this total produce of 78mn cows' milk constitute
36mn MT while rest is from other cattle.

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 While world milk production declined by 2 per cent in the last three years. Indian
production has increased by 4 per cent. The milk production in India accounts for more
than 13% of the total world output and 57% of total Asia's production. The top five milk
producing nations in the world are India ,USA, Russia, Germany and France.

Although milk production has grown at a fast pace during the last three decades
milk yield per animal is very low. The main reasons for the low yield are:

• Lack of use of scientific practices in milching.

• Inadequate availability of fodder in all seasons.
• Unavailability of veterinary health services.

Production of milk in India:

Year Production in million MT

1988-89 48.4
1989-90 51.4
1990-91 53.7
1991-92 56.3
1992-93 58.6
1993-94 61.2
1994-95 63.5
1995-96 65
1996-97 68.5
1997-98 70.8
1998-99 74.7
1999-00 78.1
2000-01 81.0

World's major milk producers: (Million MTs)

Country 1997-98 1998-99 ( Approx.)

India 71 74.5
USA 71 71
Russia 34 33

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 Germany 27 27
France 24 24
Pakistan 21 22
Brazil 21 27
UK 14 14
Ukraine 15 14
Poland 12 12
New Zealand 11 12
Netherlands 11 11
Italy 10 10
Australia 9 10

Operation Flood:

The transition of the Indian milk industry from a situation of net import to that of
surplus has been led by the efforts of National Dairy Development Board's Operation
Flood programmers under the aegis of the former Chairman of the board Dr. Kurien.

Launched in 1970, Operation Flood has led to the modernization of India's dairy
sector and created a strong network for procurement processing and distribution of milk
by the co-operative sector. Per capita availability of milk has increased from 132 gm per
day in 1950 to over 220 gm per day in 1998.

The main thrust of Operation Flood was to organize dairy cooperatives in the
milk shed areas of the village, and to link them to the four Metro cities, which are the
main markets for milk. The efforts undertaken by NDDB have not only led to enhanced
production, improvement in methods of processing and development of a strong
marketing network, but have also led to the emergence of dairying as an important source
of employment and income generation in the rural areas.

It has also led to an improvement in yields, longer lactation periods, shorter

calving intervals, etc through the use of modern breeding techniques. Establishment of
milk collection centers and chilling centers has enhanced life of raw milk and enabled
minimization of wastage due to spoilage of milk.

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 Operation Flood has been one of the world's largest dairy development
programmers and looking at the success achieved in India by adopting the co-operative
route, a few other countries have also replicated the model of India's White Revolution.
Per Capita availability of milk

Year gm/day
1950 132
1960 127
1968 113
1973 111
1980* 128
1990 178
1992 192
1996 198
1997 200
1998 202
1999 203
2000 212
2001E 225
2002P 250

Fresh Milk:

Over 50% of the milk produced in India is buffalo milk, and 45% is cow milk.
The buffalo milk contribution to total milk produce is expected to be 54% in 2000.
Buffalo milk has 3.6% protein, 7.4% fat, 5.5% milk sugar, 0.8% ash and 82.7% water
whereas cow milk has 3.5% protein, 3.7% fat, 4.9% milk sugar, 0.7% ash and 87% water.
While presently the price of Buffalo milk is ruling at $261-313 per MT that of cow is
ruling at $170-267 per MT. Fresh pasteurized milk is available in packaged form.
However, a large part of milk consumed in India is not pasteurized, and is sold in loose
form by vendors. Sterilized milk is scarcely available in India.

Packaged milk can be divided according to fat content as follows:

Whole (full cream) milk - 6% fat

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Standardized (toned) milk - 4.5% fat

Doubled toned (low fat) milk - 3% fat

Another category of milk, which has a small market, is flavoured milk.

The Indian Market:

Milk has been an integral part of Indian food for centuries. The per capita
availability of milk in India has grown from 172 gm per person per day in 1972 to 182gm
in 1992 and 203 gm in 1998-99.This is expected to increase to 212gms for 1999-00.
However a large part of the population cannot afford milk. At this per capita consumption
it is below the world average of 285 gm and even less than 220 gm recommended by the
Nutritional Advisory Committee of the Indian Council of Medical Research.

There are regional disparities in production and consumption also. The per capita
availability in the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm
per person per day. This disparity is due to concentration of milk production in some
pockets and high cost of transportation. Also the output of milk in cereal growing areas is
much higher than elsewhere which can be attributed to abundant availability of fodder,
crop residues, etc which have a high food value for milch animals.

In India about 46 per cent of the total milk produced is consumed in liquid form
and 47 per cent is converted into traditional products like cottage butter, ghee, paneer,
khoya, curd, malai, etc. Only 7 per cent of the milk goes into the production of western
products like milk powders, processed butter and processed cheese. The remaining 54% is
utilized for conversion to milk products. Among the milk products manufactured by the
organized sector some of the prominent ones are ghee, butter, cheese, ice creams, milk
powders, malted milk food, condensed milk infants foods etc. Of these ghee alone
accounts for 85%.

It is estimated that around 20% of the total milk produced in the country is
consumed at producer-household level and remaining is marketed through various

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cooperatives, private dairies and vendors. Also of the total produce more than 50% is
procured by cooperatives and other private dairies.

While for cooperatives of the total milk procured 60% is consumed in fluid form
and rest is used for manufacturing processed value added dairy products; for private
dairies only 45% is marketed in fluid form and rest is processed into value added dairy
products like ghee, makhan etc.

Still, several consumers in urban areas prefer to buy loose milk from vendors due
to the strong perception that loose milk is fresh. Also, the current level of processing and
packaging capacity limits the availability of packaged milk. The preferred dairy animal in
India is buffalo unlike the majority of the world market, which is dominated by cow milk.
As high as 98% of milk is produced in rural India, which caters to 72% of the total
population, whereas the urban sector with 28% population consumes 56% of total milk
produced. Even in urban India, as high as 83% of the consumed milk comes from the
unorganized traditional sector.

Presently only 12% of the milk market is represented by packaged and branded
pasteurized milk, valued at about Rs. 8,000 crores. Quality of milk sold by unorganized
sector however is inconsistent and so is the price across the season in local areas. Also
these vendors add water and caustic soda, which makes the milk unhygienic.

India's dairy market is multi-layered. It's shaped like a pyramid with the base
made up of a vast market for low-cost milk. The bulk of the demand for milk is among
the poor in urban areas whose individual requirement is small, maybe a glassful for use as
whitener for their tea and coffee. Nevertheless, it adds up to a sizable volume - millions of
liters per day. In the major cities lies an immense growth potential for the modern sector.
Presently, barely 778 out of 3,700 cities and towns are served by its milk distribution
network, dispensing hygienically packed wholesome, quality pasteurized milk.

According to one estimate, the packed milk segment would double in the next five
years, giving both strength and volume to the modern sector. The narrow tip at the top is a
small but affluent market for western type milk products.
Growing Volumes

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 The effective milk market is largely confined to urban areas, inhabited by over 25
per cent of the country's population. An estimated 50 per cent of the total milk produced
is consumed here. By the end of the twentieth century, the urban population is expected to
increase by more than 100 million to touch 364 million in 2000 a growth of about 40 per
cent. The expected rise in urban population would be a boon to Indian dairying. Presently,
the organized sector both cooperative and private and the traditional sector cater to this
market.

The consumer access has become easier with the information revolution. The
number of households with TV has increased from 23 million in 1989 to 45 million in
1995. About 34 per cent of these households in urban India have access to satellite
television channel.

Potential for further growth

Of the three A's of marketing - availability, acceptability and affordability, Indian

dairying is already endowed with the first two. People in India love to drink milk. Hence
no efforts are needed to make it acceptable. Its availability is not a limitation either,
because of the ample scope for increasing milk production, given the prevailing low
yields from dairy cattle. It leaves the third vital marketing factor affordability. How to
make milk affordable for the large majority with limited purchasing power? That is
essence of the challenge. One practical way is to pack milk in small quantities of 250 ml
or less in polythene sachets. Already, the glass bottle for retailing milk has given way to
single-use sachets which are more economical. Another viable alternative is to sell small
quantities of milk powder in mini-sachets, adequate for two cups of tea or coffee.

Marketing Strategy for 2000 AD

Two key elements of marketing strategy for 2000 AD are: Focus on strong brands
and, product mix expansion to include UHT milk, cheese, ice creams and spreads. The
changing marketing trends will see the shift from generic products to the packaged quasi,
regular and premium brands. The national brands will gradually edge out the regional
brands or reduce their presence. The brand image can do wonders to a product's
marketing as is evident from the words of Perfume Princess Coco Channel.

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 • Penetration of milk products

Western table spreads such as butter, margarine and jams are not very popular in
India. All India penetration of butter/ margarine is only 4%. This is also largely
represented by urban areas, where penetration is higher at 9%. In rural areas, butter/
margarine have penetrated in 2.1% of households only. The use of these products in the
large metros is higher, with penetration at 15%.

Penetration of cheese is almost nil in rural areas and negligible in the urban areas.
Per capita consumption even among the cheese-consuming households is a poor 2.4kg pa
as compared to over 20kg in USA. The lower penetration is due to peculiar food habits,
relatively expensive products and also non-availability in many parts of the country.
Butter, margarine and cheese products are mainly manufactured by organized sector.

Similarly, penetration of ghee is highest in medium sized towns at 37.2%

compared to 31.7% in all urban areas and 21.3% in all rural areas. The all India
penetration of ghee is 24.1%. In relative terms, penetration of ghee is significantly higher
in North and West, which are milk surplus regions. North accounts for 57% of ghee
consumption and West for 23%, South & East together account for the balance 20%. A
large part of ghee is made at home and by small/ cottage industry from milk. The relative
share of branded products in this category is very low at around 1-2%.

Milk powder and condensed milk have not been able to garner any significant
consumer acceptance in India as indicated by a very low 4.7% penetration. The
penetration is higher at 8.1% in urban areas and lower at 3.5% in rural areas. Within
urban areas, it is relatively higher in medium sized towns at 8.5% compared to 7.7% in a
large metro.

Market Size and Growth

Market size for milk is estimated to be 36mn MT valued at Rs470bn. The market
is currently growing at round 4% pa in volume terms. The milk surplus states in India are
Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh,
Karnataka and Tamil Nadu. The manufacturing of milk products is concentrated in these

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milk surplus States. The top 6 states viz. Uttar Pradesh, Punjab, Madhya Pradesh,
Rajasthan, Tamil Nadu and Gujarat together account for 58% of national production.

Milk production grew by a mere 1% pa between 1947 and 1970. Since the early
70's, under Operation Flood, production growth increased significantly averaging over
5% pa.

About 75% of milk is consumed at the household level which is not a part of
commercial dairy industry. Loose milk has a larger market in India as it is perceived to be
fresh by most consumers. In reality however, it poses a higher risk of adulteration and
contamination.

Major Players

The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-
operative Milk Marketing Federation (GCMMF) is the largest player. All other local
dairy cooperatives have their local brands for e.g. Gokul, Warana in Maharashtra, Saras
in Rajasthan, Verka in Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, etc.

Other private players include J K Dairy, Heritage Foods, Indiana Dairy, Dairy
Specialties, etc. Amrut Industries, once a leading player in the sector has turned bankrupt
and is facing liquidation.

Packaging Technology

Milk was initially sold door-to-door by the local milkman. When the dairy co-
operatives initially started marketing branded milk, it was sold in glass bottles sealed with
foil. Over the years, several developments in packaging media have taken place. In the
early 80's, plastic pouches replaced the bottles. Plastic pouches made transportation and
storage very convenient, besides reducing costs. Milk packed in plastic pouches/bottles
have a shelf life of just 1-2 days, that too only if refrigerated.

In 1996, Tetra Packs were introduced in India. Tetra Packs are aseptic laminate
packs made of aluminum, paper, board and plastic. Milk stored in tetra packs and treated
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under Ultra High Temperature (UHT) technique can be stored for four months without
refrigeration. Most of the dairy co-operatives in Andhra Pradesh, Tamil Nadu, Punjab and
Rajasthan sell milk in tetra packs. However tetra packed milk is costlier by Rs5-7
compared to plastic pouches. In 1999-00 Nestle launched its UHT milk. Amul too re-
launched its Amul Taaza brand of UHT milk. The UHT milk market is expected to grow
at a rate of more than 10-12% in coming years.

Export Potential
India has the potential to become one of the leading players in milk and milk
product exports. Locational advantage : India is located amidst major milk deficit
countries in Asia and Africa. Major importers of milk and milk products are Bangladesh,
China, Hong Kong, Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and
other gulf countries, all located close to India.

Low Cost Of Production : Milk production is scale insensitive and labour

intensive. Due to low labour cost, cost of production of milk is significantly lower in
India.

• What does the Indian Dairy Industry has to Offer to Foreign Investors?

India is a land of opportunity for investors looking for new and expanding
markets. Dairy food processing holds immense potential for high returns. Growth
prospects in the dairy food sector are termed healthy, according to various studies on the
subject.

1. The basic infrastructural elements for a successful enterprise are in place.

2. Key elements of free market system
3. Raw material (milk) availability
4. An established infrastructure of technology
5. Supporting manpower

Indian (traditional) Milk Products

There are a large variety of traditional Indian milk products such as

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Makkhan - unsalted butter.

Ghee - butter oil prepared by heat clarification, for longer shelf life.

Kheer - a sweet mix of boiled milk, sugar and rice.

Basundi - milk and sugar boiled down till it thickens.

Rabri - sweetened cream.

Dahi - a type of curd.

Lassi - curd mixed with water and sugar/ salt.

Channa/Paneer - milk mixed with lactic acid to coagulate.

Khoa - evaporated milk, used as a base to produce sweet meats.

• Major players in Indian market

The major players are Amul, Britannia, and Dabon International dominating the
market. Other major brands were Vijaya, Verka and Nandini (all brands of various
regional dairy cooperatives) and Vadilal. The heavy advertising and promotions being
undertaken by these new entrants is expected to lead to strong 20% growth in the
segment. Amul has also become more aggressive with launch of new variants such as
Mozzarella cheese (used in Pizza), cheese powder, etc.

The entry of new players and increased marketing activity is expected to expand
the market. All the major players are expanding their capacities.
Capacity expansion in Cheese

Company Brands State Capacity

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 Dynamix Group Manufactures for Maharashtra 35 tons per
Britannia day
GCMMF Amul Gujarat 20 tons per
day
APDDCF Vijaya Andhra Pradesh 10 tons per
day
• Major dairy products manufacturers

Company Brands Major Products

Nestle India Milkmaid,Cerelac, Lactogen, Sweetened condensed milk, malted
Limited Milo, Everyday foods, milk powder and Dairy whitener
Milkfood Milkfood Ghee, ice cream, and other milk
Limited products
SmithKline Horlicks, Maltova, Viva Malted Milkfood, ghee, butter,
Beecham powdered milk, milk fluid and other
Limited milk based baby foods.
Indodan Indana Condensed milk, skimmed milk powder,
Industries whole milk powder, dairy milk whitener,
Limited chilled and processed milk
Gujarat Co- Amul Butter, cheese and other milk products
operative milk
Marketing
Federation
Limited
H.J. Heinz Farex, Complan, Glactose, Infant Milkfood, malted Milkfood

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Limited Bonniemix, Vitamilk

Britannia Milkman Flavoured milk, cheese, Milk Powder,

Ghee
Cadbury Bournvita Malted food

Future Prospects

India is the world's highest milk producer and all set to become the world's largest
food factory. In celebration, Indian Dairy sector is now ready to invite NRIs and Foreign
investors to find this country a place for the mammoth investment projects. Be it
investors, researchers, entrepreneurs, or the merely curious – Indian Dairy sector has
something for everyone.

Milk production is relatively efficient way of converting vegetable material into

animal food. Dairy cows buffaloes goats and sheep can eat fodder and crop by products
which are not eaten by humans. Yet the loss of nutrients energy and equipment required
in milk handling inevitably make milk comparatively expensive food. Also if dairying is
to play its part in rural development policies , the price to milk producers has to be
remunerative. In a situation of increased international prices, low availabilities of food aid
and foreign exchange constraints, large scale subsidization of milk conception will be
difficult in the majority of developing countries.

Hence in the foreseeable future, in most of developing countries milk and milk
products will not play the same roll in nutrition as in the affluent societies of developed
countries. Effective demand will come mainly from middle and high income consumers
in urban areas.

There are ways to mitigate the effects of unequal distribution of incomes. In Cuba
where the Government attaches high priority to milk in its food and nutrition policy, all
pre-school children receive a daily ration of almost a litre of milk fat the reduced price.
Cheap milk and milk products are made available to certain other vulnerable groups, by
milk products outside the rationing system are sold price which is well above the cost

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level. Until recently, most fresh milk in the big cities of China was a reserved for infants
and hospitals, but with the increase in supply, rationing has been relaxed.

In other countries dairy industries have attempted to reach lower income

consumers by variation of compositional quality or packaging and distribution methods or
blending milk in vegetable ingredients in formula foods for vulnerable groups. For
instance, pricing of products rich in butter fat or in more luxury packaging above cost
level so as to enable sales of high protein milk products at a some what a reduced price
has been widely practiced in developing countries. This policies need to be brought in
Indian Dairy scenario.

COMPANY PROFILE

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 HERITAGE FOODS INDIA LTD
The Heritage Group, founded in 1992 by Sri Nara Chandra Babu Naidu, is one of the fastest
growing Private Sector Enterprises in India, with three-business divisions viz., Dairy, Retail and Agri
under its flagship Company Heritage Foods (India) Limited. Heritage recognized one of India’s
largest and most successful dairy for the last 16 years. Based in Hyderabad with and existing brand
presence in Andhra Pradesh, Tamilnadu, Karnataka, Kerala and Maharastra. Heritage is known for its
high quality standards and premium range of mil and milk products and following high quality
standards. Heritage is having 12 Packing stations, 74 chilling centers/bulk coolers with operationally
safe process equipments. Heritage brand is seen in 8.0 lakh households today.

With an objective of "Bringing prosperity into the rural families through co-
operative efforts", he along with a few like-minded, friends and associates promoted "Heritage
Foods" in the year 1992 taking opportunity from the Industrial Policy, 1991 of Government of
India and he has been successful in his endeavourer. At present, Heritage has market presence
in the states of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Maharastra. More than
three thousand villages and three lakh farmers are being benefited in these states. On the other
side, Heritage is serving millions of customers needs, employing more than 5000 employees
and generating indirect employment opportunities to more than 10000 people. Beginning with a
humble annual turnover of Rs.4.38 crores in 1993-94, the sales. Turn over has reached close to
Rs.350 crores during the financial year 2006-2007

Mission & Vision

Mission
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Bringing prosperity into rural families of India through co-operative efforts and providing
customers with hygienic, affordable and convenient supply of " Fresh and Healthy " food
products.

Vision

To be a progressive billion-dollar organization with a pan India footprint by 2012.

To achieve this by delighting customers with "Fresh and Healthy" food products, those are a
benchmark for quality in the industry.

We are committed to enhanced prosperity and the empowerment of the farming community
through our unique "Relationship Farming" Model.

To be a preferred employer by nurturing entrepreneurship, managing career aspirations and

providing innovative avenues for enhanced employee prosperity

BOARD OF DIRECTORS:

Sri D. Seetharamiah is the chairman of this company. Smt N. Buvaneswari is the

vice-chairman& managing director. Another persons namely Dr. V Nagaraja Naidu, Sri
N.P Ramakrishna, Dr. N.R Sivaswamy, Dr. A. Apparao are directors of this company. Sri
Nara lokesh is a Executive director of this company

LOGO:

SUBSIDIARIES:

 Heritage Finalease Limited

 Heritage International Limited

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  Heritage Agro Marine Private Limited

HERITAGE SOLOGAN:

When you are healthy, we are healthy

When you are happy, we are happy

We live for your “HEALTH &HAPPINESS”

“Don’t ask for milk

Demand Heritage”

ANNUAL TURNOVER:

The company beginning with a humble annual turnover of Rs.4.38 Crores in the year
of 1993-94. The sales turnover reaches close to Rs.558 crores during the financial year
2007-2008. The target of Heritage Foods India ltd aiming for Rs.700 crores during the
year 200-09.

MARKET SHARE:

HFIL went to a public issue to raise resources which was over

subscribed 54 times and its shares are listed under”B1” category on BSE & NSE .the face
value of share is Rs.10.

Ex:
Time 06 Feb (15:10:32)
Prev Close 60
Mkt Cap (Rs Cr) 71.30
Last traded 62.00

QUALITYPOLICY:

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  “We are committed to achieve customer satisfaction through hygienically
processed and packed mil and milk products we strive to continually
improve the quality of products and services through up gradation of
technology and system”

FOOD SAFETY POLICY:

 We are committed to procure, process & supply safe & whole some milk & milk
products to our valued customers through

 Implementation of food safety Management system in raw material selection

 Continual up gradation of technology, system & services

 Ensuring bests Hygiene & sanitation practices by complying with statutory &
regulatory requirements

 Providing resources to achieve measurable objectives through continual

improvement

ISO-22000-2005:

 Heritage is the fastest growing company in dairy industry with turnover of 700
crores from milk & milk products 200 crores from allied business with highest
return on Investment

 It is a preferred brand delighting the customers with safe & wholesome milk &
milk products of high quality &service at competitive price

 It excels in benchmark business practices in Indian dairy industry

 Heritage is a team of highly motivated committed, professionals. Who act as like

entrepreneurs practicing innovation, integrity & honesty.

BENEFITS OF ISO 22000-2005:

 To make products more acceptable internationally, as there is a nearly unanimous

worldwide acceptance of the ISO-22000 series the food safety management
system standards

 To reduce risk of product & service liability claims

 To enable the company to export to worldwide where ISO22000 certification is

expected.
22
  To enhance the communication between organization both up stream & down
stream in the food chain Identify that all relevant food safety hazards are
identified & ad equably controlled at each step with in food chain, delivering safe
product

PRODUCT PROFILE

Heritage milk a naturally nutritive rich fresh- wholesome food par excellence with
self-contained productive food characteristic. Hygienically procured, pasteurized and poly
packaged under PFA standards. Heritage milk is a complete food for any age, be it
children. Teenagers, adults, expecting mothers as older citizen’s rich with just about all-
essential nutrients.

Heritage milk is full of strength building proteins, energy giving

carbohydrates & fats, bone & teeth building calcium & phosphorus and the essential life
giving vitamins

Milk Products Of Heritage Dairy:

Milk: Toned Milk, Double Toned Milk, Whole Milk, Cow Milk, Full cream milk

UHT Milk In Tetra packs:

Toned milk, Double Toned Milk, STD Milk, Slim Milk, Fresh cream.

BY PRODUCTS:

Butter Milk Skim Milk Powder

Flavoured Milk (Vanilla, Curd (cup & pouch)

Pineapple, Elaichi,
Badam, Pista, Chocolate, Ice-Creams
Strawberry)
Breads
Doodh peda

Lassi (fruit & sweet) Biscuits

Cooking Butter
Honey
Panner

Buffalo Ghee Cow Ghee

Cookies

23
Marketing of Milk and Milk products:

One of the most crucial links in the marketing of milk and some of milk products
is that, it is highly perishable commodity. It cannot be stored in its original state for more
than four hours and therefore billing and packing is required for increasing its keeping
quality.

Further it is chemical saving fat and also essential proteins, minerals, vitamins and water
as its main ingredients. Therefore it can be suitable concerted into butter, ghee, milk
powder and reconverted into milk powder and reconverted into milk, when required thus
these things will, be kept in mind, while planning effective.

Information Technology:

Heritage Company using like “SAP”, “ERP” latest packages, connecting easily to
all IT departments in each plant. Therefore the main advantage of these packages is we
have easily access the data from different plants and easily to enter the data and modified
the data.

Heritage Network:

TotalCenters-62

Chilling centers-50 Packing Stations-11

Major chilling ceters-22 Andhra Pradesh -8

Mini chilling centers-12 Karnataka -1

Ice Plants -5 Maharastra -1

Tamilnadu -2
Bulk cooling Units -11

Total farmers 8 lakhs

24
 Daily Collection of Milk 8 Lakhs liters

Milk Collections Centers 8784

Total Employees (Directly & 5000

Indirectly)

FUTURE ENHANCEMENT

• To enhance supplies to meet the growing demand.

• To enhance productivity of the cattle and the capacity of farmers.

• To establish and integrate and cold chain, packaging and transportation

• Facilities of more milk in unadulterated form village collection sites to the length
and breadth of the company.

• To take advantage of the international market under the regime of reduced

subsidies is multi-faceted and necessary

• This is the exciting challenge, which Heritage grids itself to take in its purest to
add value to its existence

• To cover Uncovered markets and to grab more sales

• Exploring Possibilities to export the products to most of them foreign countries

MARKETING DEPARTMENT:

 To ensure 100% delivery of milk packets to Agents before 5.00AM Daily

 To increase sales turnover by10%

 To maintain customer satisfaction index not less than 80%.

The marketing department covers all the activities related to supply of milk & milk
products in the states of AP, Karnataka, and Tamilnadu & Kerala. It operates through its
sales office (11), Distributing agents is 2582.

Presently company supplies 6lacks liters of milk per day on average. There are 6 varieties
of milk & 14 milk products and 3 Variants of UHT milk

On the whole company and sales offices together focus on identifying customer needs
through regular feedback surveys and making supplies according to their needs.

25
Marketing departments works with a comprehensive objective of supplying safe healthy
product to customer forever.

Sales offices involve in day-to-day operations of supplying milk & milk products and
reports to the corporate office regularly on the need of customer feedback and their needs
at corporate office strategies are formulated and sent to sales offices for their execution.

“Be a Partner in our Growth”

HERITAGE PARLOUR:

• Join Franchisee Chain Expansion of Heritage and create profitable Franchisee

partnership with Heritage parlours.

• Excellent Business Model for New Entrepreneurs/ Business owners

• No Franchisee fee during 2008-09

• Willingness to invest Rs.1.0-1.5 Lakhs

• Earn Rs.10000/- to Rs.20000/- Per Month

Retail division

Rural Retail

Heritage Foods India ltd started the Rural Retail business with the objective of reaching
FMCG products to villages with population of less than 5000

• Strengths

• Efficiencies of centralized procurement

• Large network of milk collection agents, at most interior villages, who are franchisees of
the “Heritage Store"

• Large network of farmers who supply milk to Heritage two times a day

• Rural customers have the option of purchasing FMCG and other products against their
milk account, thus easing rural liquidity

Opportunity

Large Untapped rural market.

26
The Vendor led distribution network does not cover most of the villages.

High dependence on the wholesale market at the closest town for all the FMCG needs.

Format

Brand “Heritage Store“.

Avg. floor area of 100 sq-ft.

Franchise arrangement with the milk collection agents.

As on date Heritage operates over 1800 stores across Andhra Pradesh.

Agri Division

Value proposition for farmers

Annual Crop calendar that would ensure much higher annual income per unit area.
Technical guidance- Agri advisory services, regular training of farmers, credit linkage and input
supply.
Package of improved farm practices for better productivity & quality.
Assured Market at doorstep.
Assured timely payments.
Transparency in operations.

Vegetables and seasonal fruits are produced through contract farmers and reach pack houses via
collection centers strategically located in identified villages for washing, sorting, grading and
packing and dispatch to the retail stores through DCs

CHAPTER-II
27
 OBJECTIVES AND METHODOLOGY

NEED FOR THE STUDY:

Most organizations struggle to operate manage and improve their efficiency in

order to satisfy the customer and at the same time to deliver quality products.
Organizations to concentrate on variety of needs and wants of the customer where one is
able use or enjoy the product. Hence it has become a dire need rather than mere academic
interest in order to study the satisfaction levels of customers using heritage milk.
Therefore this study has been undertaken to assess the perception level of customers of
heritage milk.

IMPROTANCE OF THE STUDY:

Marketing touches all of us everyday of our lives. We wake up to an alaram.Then we

brush our teeth with “Colgate” shave with “Gillette” Use other Toiletries and appliances,
which are being used for our daily activities. Computer, which is used for printing. All are
produced, and marketed by manufacturers around the world

28
 In addition to range of items normally considered as goods and services, what is being
marketed may be ideas, such as reducing air pollution or contributing to the united way
people ,such as industrial plant sites or a place to go for variation.

Marketing is the business function that identifies needs and wants defined and
measures their magnitude, determines which target markets the organization can best
serve, besides as appropriate products service and programs to serve these markets and
calls up on every one in the organization to “think and serve the customer” from as a
social point of views, marketing is the force that harnesses a nations industrial capacities
to meet the society’s material wants. William Davidow observed. “While great devices
are invented in the laboratory, great products are invented in the marketing departments.

How ever, the new trends as the government levels of rearing controls is bound to result
in increasing competition and a change over in many more products to a buyer’s market.
Ordinarily marketing is considered as an activity or function performed by business firms.
However, marketing also can be carried out by other organization or even by individuals.
Whenever we try to persuade somebody to do something, you are performing marketing.

OBJECTIVES OF THE STUDY

 To study the customer perception levels of Heritage milk
 To study the socio-economic back ground of customers.
 To know the rate of consumption per day.
 To learn about the type of milk and usage rate of Heritage milk by consumers.
 To study about the customer opinion regarding price, quality, availability of
Heritage milk
 To identify the dissatisfaction levels, that might be their in customer satisfaction.
 To know the positive factor of Heritage milk.
 To know the awareness of Heritage parlours.
.

Methodology:
29
Data Sources:
The study is descriptive in nature; two types of data are collected for the study.

1. Primary data.
2. Secondary data.

a) Sources of primary data:

It is the data which is collected for the first time for the study. Primary data is also
called as original data. In this study primary data is collected from Heritage
consumers with the help of Questionnaire consists of 13 closed ended questions.
Some of the information were verified and supplemented through personal
observations.

The study is carried out during the period Jan, Feb-2009 a sample of 142 consumers
was chosen to collect the data for the study. Out of the primary data total population
of150

b) Sources of secondary data:

The secondary data was collected from the magazines, journals, and Internet etc.,
published by the organization.

LIMITATION OF THE STUDY:

• The study was confined only to the Hyderabad city.

• Primary data is surely depends on the opinion of the respondents.

• The response of the customer depends on the various factors like experience,
motivational factors like experience, motivational factors, personal feeling etc.

• The present study is confined to sample of customers using heritage milk.

30
31
 CHAPTER-III

THEORITICAL FRAME WORK

Customer satisfaction, a business term, is a measure of how products and

services supplied by a company meet or surpass customer expectation. It is seen as a key
performance indicator within business and is part of the four perspectives of a Scorecard.
In a competitive marketplace where businesses compete for customers, customer
satisfaction is seen as a key differentiator and increasingly has become a key element of
business strategy.

There is a substantial body of empirical literature that establishes the benefits of customer
satisfaction for firms. Organizations are increasingly interested in retaining existing
customers while targeting non-customers; measuring customer satisfaction provides an
indication of how successful the organization is at providing products and/or services to
the marketplace.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation
of the state of satisfaction will vary from person to person and product/service to
product/service. The state of satisfaction depends on a number of both psychological and
physical variables which correlate with satisfaction behaviors such as return and
recommend rate. The level of satisfaction can also vary depending on other options the
customer may have and other products against which the customer can compare the
organization's products.

32
Because satisfaction is basically a psychological state, care should be taken in the effort
of quantitative measurement, although a large quantity of research in this area has
recently been developed. Work done by Berry (Bart Allen) and Brodeur between 1990
and 1998 defined ten 'Quality Values' which influence satisfaction behavior, further
expanded by Berry in 2002 and known as the ten domains of satisfaction. These ten
domains of satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access,
Environment, Inter-departmental Teamwork, Front line Service Behaviors, Commitment
to the Customer and Innovation. These factors are emphasized for continuous
improvement and organizational change measurement and are most often utilized to
develop the architecture for satisfaction measurement as an integrated model. Work done
by Parasuraman, Zenithal and Berry (Leonard L) [3]between 1985 and 1988 provides the
basis for the measurement of customer satisfaction with a service by using the gap
between the customer's expectation of performance and their perceived experience of
performance. This provides the measurer with a satisfaction "gap" which is objective and
quantitative in nature. Work done by Cronin and Taylor propose the
"confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman,
Zeithaml and Berry as two different measures (perception and expectation of
performance) into a single measurement of performance according to expectation.
According to Garbrand, customer satisfaction equals perception of performance divided
by expectation of performance.

The usual measures of customer satisfaction involve a survey with a set

of statements using a Likert Technique or scale. The customer is asked to
evaluate each statement and in term of their perception and
expectation of performance of the organization being measured.

Customersatisfaction.com is your single, best resource for improving your customer

service, sales, and telemarketing and negotiation capabilities

We offer special seminars, conference and convention programs, customer service

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webinars, audio & video learning products, original articles, books, and e-letters. We also
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By teaming with us, you’ll be able to access uniquely effective protocols for improving
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Our methods have been recognized as the "Best" of the "Best Practices in Customer
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we also give customers new forums, including blogs, where they can Rant & Rave,
praising excellent service providers while alerting us to those who fail to meet
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creating a significant feedback loop between businesses and those who are served by
them.

33
 It's a well known fact that no business can exist without customers. In the
business of Website design, it's important to work closely with your customers to make
sure the site or system you create for them is as close to their requirements as you can
manage. Because it's critical that you form a close working relationship with your client,
customer service is of vital importance. What follows are a selection of tips that will
make your clients feel valued, wanted and loved.

1. Encourage Face-to-Face Dealings

This is the most daunting and downright scary part of interacting with a customer. If
you're not used to this sort of thing it can be a pretty nerve-wracking experience. Rest
assured, though, it does get easier over time. It's important to meet your customers face to
face at least once or even twice during the course of a project.

My experience has shown that a client finds it easier to relate to and work with someone
they've actually met in person, rather than a voice on the phone or someone typing into an
email or messenger program. When you do meet them, be calm, confident and above all,
take time to ask them what they need. I believe that if a potential client spends over half
the meeting doing the talking, you're well on your way to a sale.

2. Respond to Messages Promptly & Keep Your Clients Informed

This goes without saying really. We all know how annoying it is to wait days for a
response to an email or phone call. It might not always be practical to deal with all
customers' queries within the space of a few hours, but at least email or call them back
and let them know you've received their message and you'll contact them about it as soon
as possible. Even if you're not able to solve a problem right away, let the customer know
you're working on it.

A good example of this is my Web host. They've had some trouble with server hardware
which has caused a fair bit of downtime lately. At every step along the way I was emailed
and told exactly what was going on, why things were going wrong, and how long it
would be before they were working again. They also apologized repeatedly, which was
nice. Now if they server had just gone down with no explanation I think I'd have been
pretty annoyed and may have moved my business elsewhere. But because they took time
to keep me informed, it didn't seem so bad, and I at least knew they were doing something
about the problems. That to me is a prime example of customer service.

3. Be Friendly and Approachable

A fellow Site Pointer once told me that you can hear a smile through the phone. This is
very true. It's very important to be friendly, courteous and to make your clients feel like
you're their friend and you're there to help them out. There will be times when you want
to beat your clients over the head repeatedly with a blunt object - it happens to all of us.
It's vital that you keep a clear head, respond to your clients' wishes as best you can, and at
all times remain polite and courteous.

4. Have a Clearly-Defined Customer Service Policy

This may not be too important when you're just starting out, but a clearly defined
customer service policy is going to save you a lot of time and effort in the long run. If a
customer has a problem, what should they do? If the first option doesn't work, then what?
34
Should they contact different people for billing and technical enquiries? If they're not
satisfied with any aspect of your customer service, who should they tell?

There's nothing more annoying for a client than being passed from person to person, or
not knowing who to turn to. Making sure they know exactly what to do at each stage of
their enquiry should be of utmost importance. So make sure your customer service policy
is present on your site -- and anywhere else it may be useful.

5. Attention to Detail (also known as 'The Little Niceties')

Have you ever received a Happy Birthday email or card from a company you were a
client of? Have you ever had a personalized sign-up confirmation email for a service that
you could tell was typed from scratch? These little niceties can be time consuming and
aren't always cost effective, but remember to do them.

Even if it's as small as sending a Happy Holidays email to all your customers, it's
something. It shows you care; it shows there are real people on the other end of that
screen or telephone; and most importantly, it makes the customer feel welcomed, wanted
and valued.

6. Anticipate Your Client's Needs & Go Out Of Your Way to Help Them Out

Sometimes this is easier said than done! However, achieving this supreme level of
understanding with your clients will do wonders for your working relationship.

Take this as an example: you're working on the front-end for your client's exciting new
ecommerce Endeavour. You have all the images, originals and files backed up on your
desktop computer and the site is going really well. During a meeting with your client
he/she happens to mention a hard-copy brochure their internal marketing people are
developing. As if by magic, a couple of weeks later a CD-ROM arrives on their doorstep
complete with high resolution versions of all the images you've used on the site. A note
accompanies it which reads:

"Hi, you mentioned a hard-copy brochure you were working on and I wanted to provide
you with large-scale copies of the graphics I've used on the site. Hopefully you'll be able
to make use of some in your brochure."

Your client is heartily impressed, and remarks to his colleagues and friends how very
helpful and considerate his Web designers are. Meanwhile, in your office, you lay back in
your chair drinking your 7th cup of coffee that morning, safe in the knowledge this happy
customer will send several referrals your way.

7. Hon our Your Promises

It's possible this is the most important point in this article. The simple message: when you
promise something, deliver. The most common example here is project delivery dates.

Clients don't like to be disappointed. Sometimes, something may not get done, or you
might miss a deadline through no fault of your own. Projects can be late, technology can
fail and sub-contractors don't always deliver on time. In this case a quick apology and
assurance it'll be ready ASAP wouldn't go amiss.

35
 Perception is the process through which a person forms an opinion about the
various stimuli he receives from his sensory organs. In marketing, perception is
concerned with understanding how the consumer views a product or service. The five
senses of a person help him in this process. The marketer uses various props to stimulate
the consumer, that is, through the use of colors, sound, touch, taste, or smell, to observe
the product.

The marketer must distinguish his message from the competitor’s message. This is when
Just Noticeable difference (JND) comes to their aid. JND is the minimum difference that
the consumer can detect between two stimuli he receives. It helps the consumer to
distinguish changes in prices among purchase alternatives. Marketers thus use stimuli to
grab customers’ attention and most often these efforts are clearly visible and known to the
customer.

Consumer behavior is the study of when, why, how, where and what people do
or do not buy products. It blends elements from psychology, sociology, social
psychology, anthropology and economics. It attempts to understand the buyer decision
making process, both individually and in groups. It studies characteristics of individual
consumers such as demographics and behavioral variables in an attempt to understand
people's wants. It also tries to assess influences on the consumer from groups such as
family, friends, reference groups, and society in general.

Belch and Belch define consumer behavior as 'the process and activities people engage in
when searching for, selecting, purchasing, using, evaluating, and disposing of products
and services so as to satisfy their needs and desires'.

Information search

Once the consumer has recognized a problem, they search for information on products
and services that can solve that problem. Belch and Belch (2007) explain that consumers
undertake both an internal (memory) and an external search.

Sources of information include:

• Personal sources
• Commercial sources
• Public sources
• Personal experience

The relevant internal psychological process that is associated with information search
is perception. Perception is defined as 'the process by which an individual receives,
selects, organizes, and interprets information to create a meaningful picture of the world'

The selective perception process

• Selective exposure consumers select which promotional messages they will

expose themselves to.

36
 • Selective attention consumers select which promotional messages they will
pay attention to
• Selective comprehension consumer interpret messages in line with their
beliefs, attitudes, motives and experiences
• Selective retention consumers remember messages that are more meaningful
or important to them
• The implications of this process help develop an effective promotional
strategy, and select which sources of information are more effective for the
brand.

Information evaluation

At this time the consumer compares the brands and products that are in their evoked set.
How can the marketing organization increase the likelihood that their brand is part of the
consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the
functional and psychological benefits that they offer. The marketing organization needs to
understand what benefits consumers are seeking and therefore which attributes are most
important in terms of making a decision.

Purchase decision

Once the alternatives have been evaluated, the consumer is ready to make a purchase
decision. Sometimes purchase intention does not result in an actual purchase. The
marketing organization must facilitate the consumer to act on their purchase intention.
The provision of credit or payment terms may encourage purchase, or a sales promotion
such as the opportunity to receive a premium or enter a competition may provide an
incentive to buy now. The relevant internal psychological process that is associated with
purchase decision is integration.

Post purchase evaluation

The EKB model was further developed by Rice (1993) which suggested there should be a
feedback loop, Foxall (2005) further suggests the importance of the post purchase
evaluation and that the post purchase evaluation is key due to its influences on future
purchase patterns.

Internal influences

Consumer behavior is influenced by: demographics, psychographics (lifestyle),

personality, motivation, knowledge, attitudes, beliefs, and feelings

External influences

Consumer behavior is influenced by: culture, locality, royalty, ethnicity, family, social
class, reference groups, lifestyle, and market mix factors.

37
38
 CHAPTER-IV

DATA ANALYSIS

Relational table- I: Age and variants of milk:

Age

15-30 30-50 Above 50 Total

Variants of milk
Toned milk 57 18 4 79

Whole milk 4 27 21 52
Double toned milk 6 3 2 11
Total 67 48 27 142

39
INTERPRETATION:

The above table it is very clear that out of 142 respondents 55.63% of the total
respondents are using toned milk of which about 47.18.% these are in age group of 15 to
30.where as 36.61.% of respondents are using whole milk which about 19.01%these are
in age group 30 to 50. Why because in the age group 15-30 like young age as well as
growing stage of people. So youngsters are wants most energy food. So Toned milk has
high Fat and NSF so it occupies the first place compared to the other variants of milks.

Here least respondents namely 7.746% of the total respondents of the of

Double toned milk which about 0.014% these are in age group of above 50.Why because
in this age the people need not want high calories milk. Because of diabetes, bold
pressures patients are very high. So they want to low calories of milk that is whole milk.

Relational Table- II: Family size and Consumption rate:

Family size Below 4 4 to 6 Above 6 Total

Consumption rate
0.5liters 17 6 2 25
1-1.5 liters 6 43 21 70
2 and above 3 10 34 47
Total 26 59 57 142

INTERPRETATION:

The above table it is clear that out of 142 total respondents 18.30% are 4 or less
than 4 members. It means small family size. So the consumption rate of milk is 11.97% is
very low. Because the usage rate of milk is limited. Where as family size 4 to 6 the
40
consumption 1-1.5 liters of milk. I.e. rate is 49.29% is very high. Because of increasing
the family size consumption rate also increases.

Here the family size above 6 the usage rate of milk is 40.14% is very high because
they purchase more milk for their daily usage rate.

AWARENESS ABOUT HERITAGE MILK:

Table: 1 showing sources of knowledge about Heritage milk

Source No of Respondents Percentage (%)
Advertisements 22 16
Friends 10 7
Retailers 39 27
Point of purchase 71 50
Total 142 100

Fig: 1 showing sources of knowledge about Heritage milk

41
 60
50

No of respondence(%)
50
40
27
30
20 16
7
10
0
Advertisements Friends Retailers Point of
Purchase
Source

Source: Primary data

INTERPRETATION:

The above table shows that 50% of the respondents know about the Heritage
milk through point of purchase display, containing wall paintings, display of the milk
packets in front of the shop and display of milk credits by the company. 27% through
retailers 16% of the respondents know about the company through advertisements, 7%
through friends.

TIME BEING USED HERITAGE MILK:

Table: 2 showing time being used Heritage milk

Time period No. Of respondents Percentage (%)

Days 33 23
Months 38 27
Years 71 50
Total 142 100

42
 Fig: 2 showing time being used Heritage milk

80

No.of respondents(%)
50
70
60
50
27
40 23
30
20
10
0
Days Months Years
Time period

Source: Primary data

INTERPRETATION:

From the above table show that 50%respondents are regular customer of
Heritage milk from the past so many years, where as 27%respondents are using
few months. And 23% respondents are started using heritage milk in past days.

CONSUMPTION PER DAY:

Table: 3 showing customers consumption per day

Liters No. Of respondents Percentage (%)

0.5liters 24 17
1liters 67 48
1.5 liters 30 21
2 and more above 21 14
Total 142 100

43
 Fig: 3 showing customers consumption per day

80
No.of respondents(%) 70 48

60
50
40
21
30 17
14
20
10
0
0.5liters 1liters 1.5 liters 2 and more
above
Liters

Source: Primary data

INTERPRETATION:

From the above table show that 48%are consuming one- liter, 21% are consuming
one half-liter 17% of the respondents are consuming half-liter milk per day, and only 14%
are consuming 2 or more than two liters. Because the consumption is depending upon the
family size

VARIANTS OF MILK USED BY CUSTOMER:

Table: 4 showing variants of milk consumed by the consumers

Type of milk No. Of respondents Percentage (%)

Toned milk 101 71
Whole milk 20 14
Double toned milk 17 12
Cow milk 4 3
Total 142 100

44
 Attributes No. Of respondents Percentage (%)
Price 5 3
Quality 110 78
Brand name 27 19
Total 142 100

Fig: 4 showing variants of milk consumed by the consumers

120
71
100
No.of respondents(%)

80
60
40
14 12
20
3
0
Toned milk Whole milk Double Cow milk
toned milk
Milk
Source: Primary data

INTERPRETATION:

From the above table shows that 71%of the respondents are preferred toned milk
14% of the respondents are using whole milk 12% are using Double toned milk, only 3%
of respondents prefers Cow milk. According to the customers tastes and preference they
are chosen different variants of milk. Another reason is that these variants of milk are
packed with different Fat, NSF percentages.
Thus, Customers prefer Toned milk mostly for their consumption.

CONSIDARABLE FEATURES OF CONSUMERS:

Table: 5 showing considerable features of consumers

45
 Fig: 5 showing considerable features of consumers

120
78
100
No.of respondents(%)

80

60

40
19
20
3
0
Price Quallity Brand
name
Attributes

Source: Primary data

INTERPRETATION:

Form the table it is clear that most of the consumers are looking for quality.
78% of the consumer’s preferred quality, 19% respondents considered Brand image, only
3% of respondents considered about prices of milk. Quality refers to the taste, freshness,
packing.

INFLUENCE OF PRICE:

Table: 6 showing customer opinions on prices of milk

46
 Opinion No. Of respondents Percentage (%)
Low 0 0
Medium 83 59
High 59 41
Total 142 100

Fig: 6 showing customer opinions on prices of milk

90
59
80
NO.of respondents(%)

70
41
60
50
40
30
20
10
0
0
Low Medium High
Scale

Source: Primary data

INTERPRETATION:

From the 142 respondents 59% of respondent’s opinion is that the price of
the Heritage milk is medium. None of the consumers are of the opinion that the price of
milk is low, 41% of the respondents are saying that the prices of Heritage milk are very
high. Because as the company is paying maximum support price to the farmers and
increase of the transportation cost. So prices of heritage milk are competitive.

47
QUALITY OF MILK:

Table: 7 showing customer opinions on quality of Heritage milk

Quality No. Of respondents Percentage (%)

Excellent 84 60
Good 41 29
Average 17 11
Poor 0 0
Total 142 100

Fig: 7 showing customer opinions on quality of Heritage milk

90
60
80

70
No.of respondents(%)

60

50
29
40

30

20 11

10
0
0
Excellent Good Average Poor
Quality

Source: Primary data

INTERPRETATION:

48
 From the above table shows that 60% of consumers opined that the quality of
Heritage milk is Excellent, 29% respondents that it is good, 11% are average, none of
them say poor.

Hence, it can be concluded that most of the customers feel Excellent with the quality of
Heritage milk.

CONSUMERS OPINION ON FRESH MILK:

Table: 8 showing consumers opinion on fresh milk

Response No. Of respondents Percentage (%)
Strongly agree 29 20
Agree 103 73
Disagree 10 7
Strongly disagree 0 0
Total 142 100

Fig: 8 showing customers opinion on fresh milk

No.of respondents(%)

120
73
100
80
60
40 20
20 7
0
0
Strongly Agree disagree Strongly
agree disagree
Freshness of milk

Source: Primary data

INTERPRETATION:

The table shows that the 93% customers agreed that fresh milk is available in the
market it means Heritage foods supply everyday fresh milk with labels display of date,
month, year. Only 7% of the customers are not satisfied with freshness of milk

49
 Therefore it can be seen from the table that most of the customers feel that Heritage
milk is available freshly

AVAILABILITY OF HERITAGE MILK IN THE MARKET:

Table: 9 showing availability of Heritage milk in the market

Response No. Of respondents Percentage (%)

Strongly agree 10 7
Agree 121 85
Disagree 8 5
Strongly disagree 3 2
Total 142 100

Fig: 9 showing availability of Heritage milk in the market

140
85
120
No.of respondents(%)

100
80

60
40

20 7 5 2
0
Strongly Agree disagree Strongly
agree disagree
Opinion of consumers

50
 Source: Primary data

INTERPRETATION:

The above table show that 85% of respondents are agree with the statement that
Heritage milk is easily available in the market,7% strongly agree, 5% respondents
disagree agree, Only 2% respondents are strongly disagreeing with the statements.
Because of company followed good supply chain process and timings followed exactly.
Where as cooperation between top management to lower level management is good.

CUSTOMER OPINION ABOUT CHANNEL OF DISTRIBUTION:

Table: 10 showing customer opinions about channel of Distribution

Channel No. Of respondents Percentage (%)

Door delivery 81 57
Purchase from Retail shop 21 15
Purchase form Agents 34 23
Purchase from Company outlets 6 5
Total 142 100

Fig: 10 showing customer opinions about channel of Distribution

90
57
80
No.of respondents(%)

70
60
50
40 23
30 15
20
10 5
0
Door delivery Purchase from Purchase form Purchase from
Retail shop Agents Company
outlets
Channel

Source: Primary data

51
INTERPRETATION:

From the above table shows that 57% of the customer preferred the door delivery
channel as the best option. Where as 15% opined purchasing from agents, 23% are
purchasing in at retail shops, 5% of respondents purchase from company outlets. Because
of company have more milk outlets through entire city.

Thus, it can be conclude by saying that customers feel door delivery channel as the best
option in purchasing milk

ATTRIBUTES OF HERITAGE MILK:

Table: 11 Showing Attributes of Heritage milk

Factor No. Of respondents Percentage (%)

Flavour 12 8
Freshness 44 31
Taste 57 41
Brand image 29 20
Total 142 100

Fig: 11 Showing Attributes of Heritage milk

60
41

50
31
No.of respondents(%)

40

20
30

20
8
10

0
Flavour Freshness Taste Brand image
Factors

52
 Source: Primary data

INTERPRETATION:

From the above table it is clear that out of 142 respondents 41% respondents are
saying that taste is the plus point of Heritage milk, 31% are saying that Freshness is
positive factor of Heritage milk, 20% of respond to Brand image of Heritage milk. 8% of
respondents to Falvour in milk. Because in customer point of view company have good
brand image. Where as milk taste is excellent .because the company take more quality
measures like ISO- 9001, 22,000.These are the standards tells the real quality of milk.

CUSTOMERS INTERST IN DAIRY PRODUCT:

Table: 12 showing Customers interest in Dairy products

Products No. Of respondents Percentage (%)
Ice-creams 15 11
Flavoured milk 27 19
Doodhpeda 21 15
Butter milk 11 8
Curd 12 8
Panner 11 8
All the above 45 31
Total 142 100

Fig: 12 indicate the customer interest in Dairy products

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 No.of respondents(% )

Ice-creams

Ice-creams
Flavoured milk
11
All the above
Doodh peeda
31 Flavoured milk
19 Butter milk

Curd

Panner
Doodh peeda Panner
8
Curd Butter milk 15
8 All the above
8

INTERPRETATION:

From the above table shows that 31% of customers preferred and interest to use
in all dairy products, 19% preferred Flavour milk, 15% prefers Doodh peda, 11%
respondents preferred to buy Ice creams 8% responds to Buttermilk, curd, Panner
respectively. Because the dairy products are very fresh and healthy. And most of the
customers are likely to buy curd and butter milk for their daily needs. Panner is a
vegetable items mostly used in cooking purpose. Ice-creams are attracting the children’s.
Where as Flavoured milk is a milk which indicates different flavours like sweet, Badam,
pista, strawberry etc.

AWARE OF HERITAGE PARLOURS:

Table: 13 showing customers aware of Heritage Parlours

Response No. Of respondents Percentage (%)

Aware 90 64
Not aware 52 36
Total 142 100

Fig: 13 showing customers aware of Heritage Parlours

54
 60
64

No of respondence(%)
50

40 36

30

20

10

0
Aware Not aware
Response

Source: primary data

INTERPRETATION:

Form the above table shows that most of the customers (64%) are aware of
Heritage parlours, introduced by Heritage Company. Only 36% of customers not aware of
Heritage parlours. Because company has less advertisements in the market. They have
chosen only print media i.e. is only pamphlets for advertising to promote their products in
to the market segments. Because the amount invest on Heritage parlour is very less.

55
 CHAPTER-V

FINDININGS AND SUGGESTIONS

Summary of Findings, Conclusions& Suggestion:

FINDINGS:

 Most of the respondents have come to know about heritage milk through point of
Purchase through displaying credits in roadside.

 Majority of the respondents are regular consumers of Heritage milk for more than
a year, remaining customers are using Heritage milk since 6months.

 Majority of the customers are consuming more than liter per milk daily.

 Majority of the customers preferred toned milk for their daily needs.

 Majority of the customers are choosing Heritage milk because of quality.

56
  Majority of the customers fell ok with the price of milk available in the market but
some of respondents say that the prices of Heritage milk high.

 Most of the customers satisfied the quality of Heritage milk, remaining of

customers given a rating as good.

 Majority of the customers are agreeing that the availability of milk is on demand
of the product.

 Most of the customers preferred door delivery distribution channel as the best
channel.

 Most of customers experienced that taste is one of the major positive factors in
Heritage milk

 Almost every customer preferred each and every type of new products produced
by the company.

 Most of the customers are Aware of Heritage Parlours

PERSONAL OBSERVATIONS IN SURVEY:

1. According to my observation dealers play a vital role in the consumer

decision-making process and in changing the customer perception to wards a
particular brand of milk.

2. Some of the consumers think that the price of milk is high. So in future
company might think on price reduction.

57
 3. As, survey reveals that some of the consumers say that we re using Heritage
milk for past so many years, but recently heavy smell is happening in the milk.
And another cause is Leakage problem.

4. Company might be thinking about packing as well as quality of milk.

SUGGESTIONS

 Heritage milk and milk products need to expansion of the market in different
segments

 Increase the Advertisements and publicity through Media &News papers

regarding Heritage milk& milk parlours is to be done in all effective manners, in
ordered to increase the sales

58
  Distribution channel must be recognized at frequent intervals, so as to reach the
product to the customers effectively.

 Concentration had to be laid on the dealers because they have a great capacity to
change the customer’s decision.

 Company should encourage the dealers (or) Agents in the form of extra benefits; it
may increase the sales of our milk &milk products.

 Company should supply complaint box in every milk booth in order to know
public opinion & also their suggestions.

 Continuous improvement of quality of product and stylish colorful packing design

these measures in order to attract new customers

 Company should conduct a market survey at least once in 3months in order to

know the opinion of customers.

 Avoid the problems that smell in milk. These are discouraging the customer
loyalty.

CONCLUSION

From the above findings it is clear and can be concluded saying Heritage milk is the
customer’s best preference for consumption & the first choice for consumption.

Heritage has brand image “Don’t ask the milk Demand Heritage”, “Health& Happiness”
these captions are very popular in the market .so this image as well as maintain quality of
59
packing, standard price of the milk durability of milk availability of the milk these are
strictly followed by the company.

As said customer is a King in the marketing .HFIL treats customers as god by

considering the preference of the customer& there by satisfying the customers on all
aspects.

60
 APPENDIX

GUDLAVALLERU ENGINEERING COLLEGE, GUDLAVALLERU

SESHADRIRAO KNOWLEDGE VILLAGE
(PG DEPARTMENT OF BUSINESS ADMINISTRATION)
“Consumers perception towards Milk and Milk Products”
Of
Heritage Foods India Limited

Name: Family Size:

Age: Income Level:

1. How did you know about Heritage milk?

a) Advertisement b) Friends c) Agents d) Point of Purchase
61
2. Since how many days/ months/years are you using Heritage Milk _
_________?

3. How many liters of Milk do you consume Per Day?

a) 0.5 Liter b) 1 Liter c) 1.5Liter d) 2and more

4. Which type of milk are you using?

a) Toned Milk b) Whole Milk c) Double Tonned Milk d) Cow
Milk

5. Rank the features of Heritage Milk:

1 2 3
Price
Quality
Brand Name

6. What do you feel about the prices of Heritage Milk?

a) Low B) Medium c) High

7. How do you rate the quality of Heritage Milk?

a) Excellent b) Good c) average d) Poor

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8. Does Heritage Milk is easily available in the Market?
a) Strongly agree b) agree c) disagree d) Strongly Disagree

9. Does Heritage sell Fresh Milk?

a) Strongly agree b) agree c) disagree d) Strongly Disagree

10.How are you getting the Milk?

a) Door delivery b) Purchase at retail shop c) Purchase from agents
d) Purchase from company outlets

11.According to you what is the positive factor of Heritage Milk?

a) Flavour b) Freshness c) Taste d) Brand Image

12.What is your most favorite Product in Heritage Dairy Products?

a) Ice-cream b) Panner c) Lassie d) Flavoured Milk
e) Curd f) Doodhpeda g) Butter Milk h) All the above

13. Are you aware of Heritage Parlours?

a) Yes b) No

14. What suggestion would like to give about Heritage

Milk______________________________________________________
________________________________________________________

Thank You ( )

Signature

63
 BIBILOGRAPHY

REFERENCE:
64
 • Basic Information - Questionnaires filled by the customers.
(9-02-09 to -20-02-09)

• Websites - www.heritagefoods.co.in
(10-02-09, 12-02-09, 14-02-09)
www.wikipedia.com
(10-02-09, 12-02-09, 14-02-09)
www.google.com
(10-02-09, 12-02-09, 14-02-09)
www.answers.com
(10-02-09, 12-02-09, 14-02-09)

TITTLE OF THE BOOKS: Marketing Management - (Philip Kotler)

Consumer Behavior - (Leon G.schifman& Kaunk)

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