ACKNOWLEDGEMENTS

I am very thankful to my host organization “The Panchmahal District Cooperative

Milk Producers’ Union Limited” for giving me the opportunity to work and study
there as part of our Organization Traineeship Segment (OTS) of PRM course. I am
grateful to Dr R. S. Patel, Managing Director, “The Panchmahal District Cooperative
Milk Producers’ Union Limited” for providing me with the opportunity to understand
the market and functioning of the dairy. I owe special words of thanks to my
Reporting Officer, Mr. R. J. Mehta, Assistant manager (Marketing) for helping me
during the progress of the work and providing me valuable insights.

I am also very thankful to the Marketing Supervisor, Mr. Chiragbhai V. Patel; Senior
Assistant Marketing Mr. Kesharisinh R. Jadav and other staff of the sales offices who
helped me during the market survey and sales and distribution channel study. And I
extend my heartiest thanks to all the personnel of Panchmahal Dairy who cooperated
with me during the study of the organization.

Finally, I thank my faculty guide, Prof S. N. Biswas for offering helpful suggestions
and comments. Prof S. N. Biswas has guided me in this project through his invaluable
constructive suggestions without which I could not have been through this project.

Amarkant Sinha (25054)

EXECUTIVE SUMMARY

i
1. Students Name: Amarkant Sinha (25054)
2. Organization: The Panchmahal District Cooperative Milk Producers’
Union Ltd. Panchmahal Dairy, Godhra, District –
Panchmahal (Gujarat).
3. Reporting Officer: Mr. R. J. Mehta (Assistant Manager, Marketing)
4. Faculty Guide: Prof. S. N. Biswas
5. Project Title: “Measures of improving liquid milk market in
the Panchmahal and Dahod districts”
Objectives: 1) To understand the liquid milk and milk product market in the
Panchmahal and Dahod districts
2) To assess the consumer preference.
3) To develop and suggest strategies for growth in sale of liquid milk in
the existing market and to develop strategy to enter newer market.
Scope: The study was carried out in the local sales area of Panchmahal Dairy
covering the towns of Dahod, Halol and Godhra.
Methodology: Discussions with sales offices’ staff, In-depth interviews of
Distributors, Questionnaire for a) Agents b) Household Consumers, Trip on dairy’s
Vehicle
Sources of data: Primary Sources: Agents of Panchmahal Dairy, Consumers of Milk
and Staff of Panchmahal Dairy. Secondary Sources: Annual Report of Panchmahal
Dairy, Sales Office records and other records and reports from the Dairy
Major Findings: 1) Panchmahal dairy has the market share of 59% 2) About 77.4
percent of milk is consumed for drinking and for tea& coffee preparation in the
households on regular basis.3) About 64% of consumers prefer buffalo milk and 27%
of the consumers prefer cow milk.4) Panchamrut has a very good brand image among
the consumers 4) Door delivery of milk is an important criteria in determining the
source of milk 5) 36% of the consumers are unsatisfied with the pack size offered by
the dairy 6) Most of the retailers are highly satisfied with staff behaviour but
dissatisfied with the incentives and commission 7) 83%of the retailers surveyed don’t
have any cooling facility 8) About 73% of the retailers sell milk in open and don’t
have any shop 9) there had been stagnancy in number of agents of the dairy over last
six years.10) 69% 0f the agents offer home delivery of milk to the consumers.11) the
dairy does not offer any training programme for the agents.12) Retailers perceive
leakages in Panchamrut pouches is more in comparison to “Amul” brand of packed
milk manufactured by the dairy.13) The milk is not available through out the day.

ii
Conclusions: 1) There is very less emphasis on promotional activities by the dairy 2)
The Panchmahal dairy will have to face tough competition from “Sanchi” brand of
milk in future 3) There is ample scope for the dairy to increase market share 4) The
marketing department is under staffed and they are always busy with the routine work
Recommendations: 1) Emphasize on door delivery to increase sales 2) Set up new
milk booths to make milk available round the clock at MRP 3) Increase the number of
agents and encourage them to have fair competition among them 4) Increase the staffs
in the marketing department 5) Reduction in leakage in Panchamrut brand of milk and
improvement in packaging is an immediate need to increase retailer satisfaction 6)
Introduce schemes for retailers to boost the sales 7) Introduce various new sales
promotion schemes for consumers to increase the market penetration of the
Panchmahal dairy milk 8) Constitute a consumer / agent grievance redressal and
interaction system for addressing various complaint on urgent basis 9) Reduce the
minimum security deposit scheme for appointing new agents 10) More interaction
among agents and consumers with dairy officials is required.

TABLE OF CONTENT

iii
1.0 INTRODUCTION ........................................................................................1
1.1 The Indian Market - A Pyramid.......................................................................................................2

1.2 Growing Volumes...............................................................................................................................2

1.3 Potential for further growth..............................................................................................................2

2.0 MILK PROCUREMENT...............................................................................3

3.0 MARKETING DEPARTMENT.....................................................................4

3.1 Existing Physical Distribution System.............................................................................................7

4.0 RESEARCH DESIGN..................................................................................8

4.1 Decision Problem ...............................................................................................................................8

4.2 Research Problem..............................................................................................................................8

4.3 Objectives............................................................................................................................................8

4.4 Scope ...................................................................................................................................................9

4.5 Working Definitions.........................................................................................................................10

4.5.1 Consumers..................................................................................................................................10

4.5.2 Customers......................................................................................................................................10
4.5.3 Consumption pattern..................................................................................................................10
4.5.4 Retailers/agents:.........................................................................................................................10
4.5.5 Strategies....................................................................................................................................10
4.5.6. Market structure........................................................................................................................10
4.5.7 Institutional Buyers....................................................................................................................10
4.5.8 Access.........................................................................................................................................10
4.5.9 Availability.................................................................................................................................11

4.6 Sources of Data.................................................................................................................................11

4.6.1 Primary Sources: .......................................................................................................................11

4.7 Data Requirement ...........................................................................................................................11

4.7.1 Data from Consumers- ..............................................................................................................11
4.7.2 Data from Retailer ...................................................................................................................12

5.0 METHODOLOGY......................................................................................12

6.0 LIMITATION...............................................................................................13

7.0 FINDINGS FROM THE STUDY.................................................................14

7.1 Findings of the agents' survey.........................................................................................................14
7.1.1 Type of shop of the agents: .......................................................................................................14
7.1.2 Suitability of time.......................................................................................................................15
7.1.4 Satisfaction with Commission ...................................................................................................17
7.1.5 Home deliveries offered: ...........................................................................................................18
7.1.7 Extent of satisfaction with the payment system ........................................................................iv 20
 7.1.8 Training programme ..................................................................................................................20

7.2 Findings of the household surveys..................................................................................................21

7.2.1 Market share of Panchmahal dairy:............................................................................................21

7.2.2.Usage pattern of milk...................................................................................................................22

7.2.3 Constituents of the milk.............................................................................................................23
7.2.4 Time of milk purchase:...............................................................................................................24
7.2.5 Availability of pasteurized milk ................................................................................................24
7.2.7 Factors associated with selection of source of milk...................................................................26
7.2.7.1Old relation with the seller..................................................................................................26
7.2.7.2Time of delivery of milk .....................................................................................................27
7.2.7.3 Door delivery of the milk...................................................................................................27
7.2.7.4 Role of credit facility in determination of source of milk..................................................28
7.2.7.5 Perception regarding the freshness of Panchmahal dairy milk..........................................30
7.2.7.8 Perception regarding the tastiness of Panchmahal dairy milk............................................32
7.2.7.9 Perception regarding the drinking of Panchmahal milk.....................................................33
7.2.7.10 Perception regarding tea or coffee making from Panchmahal dairy milk........................33
7.2.7.11 Perception regarding the price of Panchmahal dairy milk..............................................34
7.2.7.12 Perception regarding smell of Panchmahal dairy milk ...................................................35
7.2.7.14 Perception regarding the consumer orientation programme of dairy...............................37

7.2 Route Details.....................................................................................................................................42

7.4 SWOT Analysis for liquid milk of the Panchmahal dairy............................................................43

7.4.1 Strengths ...................................................................................................................................43
7.4.2 Weakness ...................................................................................................................................44
7.4.3 Opportunity..............................................................................................................................44
7.4.4 Threat........................................................................................................................................44

8.0 SUGGESTIONS AND RECOMMENDATIONS.........................................45

8.1 Strategies for Market Development:..............................................................................................45
8.1.1 Tapping the Commercial institution segment ............................................................................45
8.1.1.1Steps to be taken for institutions needing more than 20 LPD: ...........................................45
8.1.1.2 Steps to be taken for institutions needing less than 20 LPD ............................................46
8.1.2 Discovering And Entering New Geographical Markets.............................................................46
8.1.3. Educate the Consumer...............................................................................................................47
8.1.4 Contact the Consumers..............................................................................................................47
8.1.5 “Catch them young”...................................................................................................................48
8.1.6 Market Penetration Strategies / Competitive strategies.............................................................49
8.1.7 Sales Promotion Program ..........................................................................................................49
8.1.8 Availability “ the key concern’...................................................................................................50
8.1.9 Shops: The future of distribution ..............................................................................................50

8.2 Unsold package policy:....................................................................................................................50

8.3 Leakage policy: ................................................................................................................................51

8.4 Constitute a consumer / agent grievance redressal and interaction system:..............................52

8.5 Motivate agents................................................................................................................................52

8.6 Crate deposit.....................................................................................................................................53

8.7 The Crates: Source of identity........................................................................................................53

8.8 Including Agents into the change process .....................................................................................54

v
8.9 The New Positioning of Marketing.................................................................................................55

8.10 Trained Staff...................................................................................................................................56

9.0 REVIEW AND EVALUATION OF STRATEGIES......................................56

9.1 Integrated Evaluation......................................................................................................................57

10.0. CONCLUSION........................................................................................57

REFERENCES................................................................................................58

APPENDIX 1: QUESTIONNAIRE FOR AGENTS SURVEY...........................59

..........................................................................................................63

APPENDIX 2: QUESTIONNAIRE FOR CONSUMER SURVEY....................63

vi
 LIST OF TABLES

Table 1 - Type of milk sold by the dairy and its composition 3

Table 2 - Type of milk sold with its size and year of inception 6
Table 3 - Sales pattern of milk during past years 7
Table 4 - Sampling pattern of consumers in different town 13
Table 5 - Charging extra for home delivery 18
Table 6 - Extent of satisfaction with the quality of packing Amul milk 19
Table 7- Extent of satisfaction with the packing of Panchamrut milk 20
Table 8- Attributes of Panchmahal dairy and it’s rating by consumers 26

LIST OF FIGURES
vii
Figure 1 - Number of societies pouring milk with amount of milk per day 4

Figure 2 - Milk sales pattern of Panchmahal dairy 5

Figure 3 – Places of storage of milk by agents 14

Figure 4 – Type of shops owned by agents 15

Figure 5 – Suitability of time by agents 15

Figure 6 – Number of agents associated with Panchmahal dairy 16

Figure 7 – number of years of association of agents with Panchmahal dairy 17
Figure 8 – Extent of satisfaction in agents with incentives offered 17
Figure 9 – Home delivery offered by the agents 18
Figure 10 - charging extra for home delivery 19
Figure 11 - Extent of satisfaction with the payment system 20
Figure 12 – Agents attending training programme conducted by the dairy 21
Figure 13 – Source of milk purchased by the consumers 22
Figure 14 – Usages pattern of milk 23
Figure 15 – Consumers knowing the constituents of milk 24
Figure16 -Time of purchase of milk by consumers 24
Figure 17- Availability of pasteurized milk in town 25
Figure 18 – ever used Panchmahal dairy milk 25
Figure 19 – importance of old relationship with determination of sources of milk 27
Figure 20 – Importance of time of delivery of milk in determination of source of milk 28
Figure 21 – Importance of door delivery of milk in determination of source of milk 29
Figure 22 – Importance of credit facility in determination of source of milk 30
Figure 23– Views about the freshness of Panchmahal dairy milk 31
Figure 24– Satisfaction of pack sizes of Panchmahal dairy milk 32
Figure 25 – perception of people regarding Panchmahal dairy milk as healthy 33
Figure 26 –Perception of people regarding Panchmahal dairy milk is tasty 33
Figure 27 – Perception of people regarding drinking of Panchmahal dairy milk 34
Figure 28 – Perception regarding tea or coffee making from Panchmahal dairy milk 35
Figure 29 – Perception of people regarding pricing of Panchmahal dairy milk 35
Figure 30 – Perception of people regarding smell of Panchmahal dairy milk 36
Figure 31 – Perception of people regarding packing of Panchmahal dairy milk 37
Figure 32 – Perception regarding the consumer orientation programme of dairy 38
Figure 33 – Preference regarding the type of milk 38

viii
ix
1.0 INTRODUCTION

Dairying has been proved to be most important source of livelihood in the villages
where the agriculture is mostly dependent upon the seasonal rainfall. Dairying had
been accepted by the villagers as one of the most important source of livelihood.
Indian dairy industry has grown at tremendous pace after operation flood under the
able leadership of "Father of white revolution - Dr. V. Kurien". 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 and after that
the journey went on to take our country to first position in the world in milk
production surpassing United States of America. Indian Dairying is emerging as a
sunrise industry; it represents one of the world largest and fastest growing markets for
milk and milk products due to increasing disposable incomes among the 250 million –
strong middle class. The country emerged as world number one milk producer with its
output of 92 million tones. According to the prescribed standards of “World Health
Organization (WHO) each person should consume at least 220 ml per day. Now in our
country per capita availability of milk is around 230 ml per day. In India the milk is
mostly consumed for drinking purposes as opposite to the trends in western countries
where milk is mainly consumed in the form of milk products.
70% of India’s one billion plus population lives in 627000 villages in rural areas. 90%
of the rural population is concentrated in villages with a population of less than 2000,
with agriculture being the main business. As per the National Council for Applied
Economic Research (NCAER) study, there are as many ‘middle income and above’
household in the rural areas as there are in urban areas. According to NCAER
projections, the number of middle and high-income household in rural India is
expected to grow from 80 million to 111 million by 2007. In urban India it is expected
to grow from 46 million to 59 million.
Thus the absolute size of rural India is expected to be double that of urban India, but
despite the high rural share in these categories, the rural penetration rates of packed
milk and milk products are low, thus offering tremendous potential for growth. This
simply shows the great potentiality of rural India as a market for product of all
categories and it becomes clear that rural India has to be the hot target in future for
companies, co-operatives as it presents a plethora of opportunities, all waiting to be
harnessed.
1
1.1 The Indian Market - A Pyramid

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 litres per day. In the major cities lies an immense growth potential for the
modern sector. Presently, its milk distribution network, dispensing hygienically
packed wholesome, quality pasteurized milk, serves barely 778 out of 3,700 cities and
towns. 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.

1.2 Growing Volumes

The effective milk market is largely confined to urban areas, which is inhabited by
over 25 per cent of the country's population. An estimated 50 per cent of the total milk
produced is consumed here. 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 of Doodhiyas cater to this market. The consumer access has become
easier with the information revolution. One can get liquid milk through out the day
from different milk booths in the cities, which is run by cooperative's dairy agents.

1.3 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. The small sachet of 250ml
2
should be made available at the right place and at the right time. The consumers today
do not want to walk for long distance for getting milk from the vendors so the milk
should be made available at the place near by his house.
Out of the total procurement of 17602 TKGPD in India, 4716 TKGPD are procured in
Gujarat. The numbers of members in the cooperative societies in Gujarat are
10851000 and out of that 2232000 are women members. Panchmahal Dairy has the
1375 registered cooperative societies and 264 are non-registered cooperative society
.Out of these forty-two of them are women societies. The procurement of milk in the
Panchmahal dairy has increased over the years. It has increased to highest 321000
liters per day in the flush season in the year 2004-05. The growth of milk procurement
is attributed to the increase in the cooperative societies and increase in the number of
artificial insemination in the villages. The milk is sold in the local sales areas such as
Godhra, Dahod, Luna Wada and Halol. Apart from the local sales, milk is sold to
GCMMF in the packing center at Dewas in Madhya Pradesh and Mother Dairy,
Ahemdabad besides other dairies. The following are the main types of milk is
manufactured and sold by the Panchmahal dairy in the Panchmahal
Table 1- Type of milk sold by the dairy and its composition
Name of variant Fat content SNF content
Amul Gold (FCM) Min 6% Min 9.1%
Amul Shakti (Standardized) Min 4.5% Min 8.5%
Panchamrut (Toned) Min 3% Min 9%
Double toned milk "Health" (DTM) Min 1.5% Min 9%

2.0 MILK PROCUREMENT

The union has covered 80% villages in the Panchmahal and Dahod districts. At
present union manages around 1639 societies out of which 1375 are registered
societies and 264 are non-registered societies. Out of these only 1380 cooperative
society are pouring milk. Of total there are 42 are women societies, which are
functioning very well. During 2004-045, the milk union registered an average
increase of 8% in milk collection with average collection of 2,58,000 litres of milk
everyday. The dairy is also implementing a programme to increase the milk
processing capacity from the existing 2-lakh litres per day to 4 lakhs liters per day.
The average procurement from different cooperative societies is shown in the graph
below. 0nly 33% of the active cooperative societies supplied over 200kg of milk. 3
 Figure 1 - Number of societies pouring milk with amount of milk per day

51 112
<100 lt
103
100-200 lt
201-300 lt
301-400 lt
184
826 401-500 lt
51 >500 lt

3.0 MARKETING DEPARTMENT

<100 lt

Panchmahal dairy at present has four main types of milk i.e. Pasteurized standardized
100-200 lt

201-300 lt

301-400 lt

milk (Amul Shakti), Pasteurized homogenized toned milk (Panchamrut), Whole milk
401-500 lt

>500 lt

(Amul Gold), Double toned milk DTM ("Health") besides “Buttermilk”. The
Panchmahal dairy itself markets these five products. The area covered by Panchmahal
dairy is Dahod and Panchmahal district. For selling its milk in this region, dairy has
established sales offices or cash centers in different areas. Every sales office has
appointed agents who timely supply the milk and the milk products to the consumers.
The sales offices are situated at:
1. Dahod
2. Godhra
3. Halol
4. Luna Wada
The following are the sales pattern of liquid milk (in liters) in the Panchmahal dairy

4
 Figure 2 - Milk sales pattern of Panchmahal dairy in liters

36000
66000
local sales
mother dairy, gandhinagar
federation

96000

Panchmahal Dairy has captured 55% of the total market and vendors cover the rest
45%. The function of supervisor of each cash center is to collect the order and money
in advance from agents and these orders are sent to the dairy. The dairy staffs appoint
the agents centrally after considering the various factors such as potential of the area,
distance of other Panchmahal agents, potential of the agent and population of the area.
The new agent is not given any formal training. The new agent has to deposit money
to the dairy as security money. The dairy does not provide any training to the agent to
do the business.
To make aware the consumers about dairy and its activity the dairy conducts
Consumer Orientation Program. By conducting this type of program the dairy is able
to make the consumers aware of the types of milk that the dairy is producing and its
use as per the requirement of the consumers. The dairy also conducts student
awareness campaign. But this is done on very limited scale. Last year few
programmes were conducted on “World Milk Day” in which various students were
invited to the dairy and they were taught about the cooperative principles and were
made aware of the various products dairy is manufacturing. The students gave very
good feedback of such programmes and various new the dairy should carry out such
programmes on consumer education from time to time. After such interactive
programmes, dairy also gets consumers’ suggestions and complaints about their
products. So, it is useful for dairy to improve the quality of the product.

5
To capture more market and to increase its market share Panchmahal dairy has
introduced milk in 200ml pouches so that the need of the lower income category is
satisfied. But in my study I found that very less number of people are aware of such
pack size offered by the dairy and its reach is very limited. The hierarchy of the
marketing department is as follows.
Assistant manager (marketing)

Assistant office (marketing)

Assistant (marketing)

Senior clerk

The dairy has timely introduced different types of milk and by-products like Butter
Milk to meet the different ever-changing preferences and tastes of the consumers.
Table 2 - Type of milk sold with its size and year of inception

Sr. no. Milk Type Pack Size Launch

Month/year
1 Toned Milk 500 ml 1979-80
2 Whole Milk 500 ml 25-06-
1993
3 Standardized Milk 500 ml 25-08-
1999
4 Double Toned Milk 500 ml/200ml 8-01-
2001
5 Butter milk 500 ml 1-04-
1999

Besides liquid milk the dairy also manufactures Ghee, Table Butter, Flavored
milk (brand name “Amul Kool”), Skim Milk powder, under brand name Amul.
Ghee is also packed in brand name Panchamrut. As per the rolling plan of
GCMMF, the dairy manufactures and supplies milk and milk products to them
round the year. Time to time GCMMF conducts market research and suggests
new products for the union, which the unions take over.
6
 In tune to the changing world market scenario and changing trade policies
Panchmahal Dairy has obtained ISO- 9000: 2000 and HACCP certification,
Export certification, etc .to satisfy customers needs and expectations. The
following is the pattern of liquid milk sold by the dairy in Dahod and Panchmahal
districts, which has been observed over the years.

SALES PATTERN OF MILK DURING PAST YEARS

Table 3 - Sales pattern of milk during past years
Year Avg.Milk Sales Lpd.
1979-80 3571
1980-81 8265
1981-82 9145
1982-83 10685
1983-84 12660
1984-85 15838
1985-86 19265
1986-87 24697
1987-88 26055
1988-89 33301
1989-90 27513
1990-91 26339
1991-92 34780
1992-93 35451
1993-94 40339
1994-95 43981
1995-96 54802
1996-97 59474
1997-98 62764
1998-99 68110
1999-2000 67272
2000-01 66893
2001-02 64137
2002-03 59916
2004-05 65601

3.1 Existing Physical Distribution System

7
The following is the existing distribution channel followed by the dairy in distribution
of liquid milk market in the Dahod and Panchmahal districts.

Panchmahal dairy

Sales-Offices/Cash Centers

Agents

Consumers

4.0 RESEARCH DESIGN

4.1 Decision Problem

On the basis of brief discussion with assistant marketing manager regarding the
marketing effort undertaken by the union and the present market scenario of milk in
Dahod and Panchmahal districts, the problem was defined as
Increasing the sales of liquid milk from existing 65,000 LPD to 80,000 LPD in the
Panchmahal and Dahod district by April 2006.

4.2 Research Problem

To explore the new vistas for growth in sale of liquid milk in the Panchmahal and
Dahod districts

4.3 Objectives
The objectives of the study were as follows:
1) To understand the liquid milk and milk product market in the Panchmahal and
Dahod districts 8
2) To assess the consumer preference.
3) To develop and suggest strategies for growth in sale of liquid milk in the existing
market and to develop strategy to enter newer market

4.4 Scope
1. The study will be confined to the limits of Dahod and the Panchmahal
districts.
2. Market Structure includes following
- Trade Structure
- Competition (Different players in the market)
- Pricing
- Market size and growth of packed milk,
- Their strategies (Price Based, Differentiation or focused),
- Different partners in the channel,
- Commission structure of different players,
- Their dominance in different areas, and
- The different consumer segments in the market.
3. Consumer preference and perception in terms of
- Price
- Delivery system
- Time and Frequency of usage
- Usage
- Packaging
- Freshness, Hygiene, Quality (fat content, smell)
- Availability (round the clock)
- Taste
- Pack Size
4. Competitor: Local milk vendor (Doodhiya), Sanchi brand from Madhya
Pradesh in Dahod town only and farmers having cow and producing milk for
own consumption purpose and selling to near by households.

9
4.5 Working Definitions

4.5.1 Consumers

People who consume the Panchmahal dairy milk in the households for the purposes of
drinking, tea and coffee making, curd making etc are covered in this category. The
customers are also considered as the consumers. These include the people who use
milk for end use i.e. Children, housewives and males.

4.5.2 Customers
People who make the decision regarding milk consumed in the household. Generally
this is the lady of the house or the male member who makes all the purchase
decisions.

4.5.3 Consumption pattern

It included the frequency and quantity of purchase, point of purchase and desired end
benefits as perceived by the consumers.

4.5.4 Retailers/agents:
The agents include the shopkeepers who have been authorized by the dairy to sell
Panchmahal dairy milk and appear in the agents’ list of dairy.

4.5.5 Strategies
The strategy includes the step taken by the Union to boost the sales. These are mainly
concerned with distribution networks, margin, trade schemes, packaging, and pricing
and promotional scheme of the dairy.

4.5.6. Market structure

It includes market size, brand available in the market, pricing and commission
structure distribution channel and demand pattern.

4.5.7 Institutional Buyers

These generally are the consumers who buy milk for purposes other than their own
consumption. Like tea stall, sweet makers.

4.5.8 Access
It refers to the nearness of source like retail point or door delivery. The place has to
be easily reachable for the willing buyers.

10
4.5.9 Availability
It refers to availability of milk as and when required at any time of the day. This refers
to the time utility.

4.6 Sources of Data

4.6.1 Primary Sources:

1) Agents of Panchmahal Dairy
2) Consumers of Panchmahal dairy
3) Staff of Panchmahal Dairy
4.6.2 Secondary Sources:

1) Annual Report of Panchmahal dairy

2) Sales Office records
3) IRMA Library
4) Other records and reports from the Dairy

4.7 Data Requirement

The following data were gathered

4.7.1 Data from Consumers-

• Consumer’s priority in terms of Quality, Price, Availability of the milk.
• Perception regarding packed milk
• Market share of dairy milk with respect to other sources
• Selection of milk source and its relationship with various factors
• Quantity of milk consumed and expenditure on food items
• Consumer’s preference –Loose milk Vs Packed milk
• Consumer perception and preference –Panchmahal dairy milk Vs Competitor
and Panchamrut Vs Loose milk
• Buying Behavior and pattern (Morning/evening / both times)
• Existing and preferred Payment system (One time payment-Advance/Credit or
Daily basis)
• Existing and preferred delivery system (door to door, nearby retailer)
• Pack size and Variant purchase and preferred
11
 • Product Quality and views of consumers about different attributes of milk
preferred
• Milk Usage pattern (Tea & Coffee making, Curd making, Drinking, sweets
making)
• Effect of Seasonality in their buying behaviour
• Effect of number of members on milk purchased by the household
• Effect of income spent on food items on amount of milk purchased
• Various attributes associated with the dairy milk and its importance in milk
purchase decision made by the customer
• Attendance regarding various consumer orientation programme carried out by
the dairy

4.7.2 Data from Retailer

• Consumer profile
• Years of association with the dairy
• Daily turnover brand and variant wise
• Brands stocked
• Satisfaction with margin structure of the brands and variant stocked
• His perception regarding services (POP, and other facility which increase his
sales) offered by the officials and distributor of brands he stocks.
• Order placement and product replacement mechanism
• Payment mechanism, credit allowed
• Any other incentive provided to him by the concern organization
• Complaint redressal mechanism if it exists
• Perception regarding advertisements done by the dairy
• Perception regarding other factors which affect the consumer purchasing
decision of milk
5.0 METHODOLOGY

Data from consumers, retailers was gathered through pre-tested questionnaires. The
samples for agents survey were selected randomly on the basis of list provided by the
12
dairy. There are 235 agents at present associated with the Panchmahal dairy. I decided
to take the interview of 30 agents out of which 13 agents were selected from Dahod
district and 17 agents were selected from the Panchmahal district. The numbers of
agents were taken so on the basis of ratio of agents in two districts.
The sampling for the consumer survey was designed on the basis of sales pattern
according to the instructions of the reporting officer. The towns selected by me were
Dahod, Halol and Godhra. The samples were taken randomly. Firstly wards were
selected randomly and then various households were selected randomly on the basis
of list of households were obtained from the municipality. There is no any uniform
pattern of income in the different wards and populations of different wards vary
greatly. So I took population as one of important criteria for selection of number of
households from different wards.
Table 4 - Sampling pattern of consumers in different towns
Town Number of
households
Godhra 149
Halol 30
Dahod 84

6.0 LIMITATION
The study has following limitations
a) Non-response error due to lack of interest of the respondent
b) Response error due to factors like social desirability and because of the
length of the questionnaire.
c) Time constraint and torrential rain for fifteen days and heavy flood in
the area decreased number of samples.
d) The Geographical spread of the sales territory can neutralize the
representative sample’s claim. The covering of two districts by one
person was very difficult due to extreme weather conditions and lack
of proper transportation facility.
e) The native language of people in the district is "Gujrati" and it was
very difficult to communicate the meaning of different questions. The
people were not able to understand "Hindi" and "English" which are
known to me. 13
7.0 FINDINGS FROM THE STUDY
7.1 Findings of the agents' survey

7.1.1 Type of shop of the agents:

Most of the agents sell their milk in open on the roadside and they do the business for
two hours in the morning and one hour in the evening. They have their fixed place
where they get milk at the predefined place. They also do not have any signboard to
display. The people recognize them according to the crates and their association with
them for years. The most of the agents also lack cooling facility to store milk pouches.
They try to dispose off all the pouches as soon as possible because they do not have
sufficient cooling facility. Only 16.7% of the agents have cooling facility for storing
milk.
Figure 3 – Places of storage of milk by agents

PLACE OF STORAGE OF MILK

10% 7%

OPEN
DEEP FREEZER
REFRIGERATOR

83%

The following figure shows that only 24% of the agents have a definite structure for
selling milk. On enquiry they told that they do not want to incur extra cost on building
a shop for selling milk because milk business is done at most for three in a day.
Figure 4 – Type of shops owned by agents

14
 80
70
60
50
40 73.3
Series1
30
20
10 20
3.3 3.3
0
OPEN GROCERY PCO HOME
SHOP

7.1.2 Suitability of time

According to studies conducted by me, it was found out that more than 90% of agents
told that the time of getting milk from the dairy was suitable to them. But
approximately 10% of the agents revealed that they want the time of getting milk in
winters should be delayed by at least delayed by one hour because the consumers
come late in the winter month and they have to un-necessarily wait for them.
Figure 5 – Suitability of time by agents

100.0%

80.0%
Percent

60.0%

40.0%

20.0%

0.0%
yes no

is time is suitable for the agent to sell the milk

The time of delivery to the agents is scheduled keeping in mind the cost factor so that
the agents and the consumers get milk in time. So for that the vehicles carrying milk
leaves the dairy in Godhra at about 2 o’clock in the night so that the delivery to the
agents is over by 6 a.m. But during this process the agent who gets the milk first has
to get up early and if there is any problem with the vehicle or any delay in the arrival
of the vehicle from the plant, the last agent gets the milk a bit late. But that is very
rare. This problem is more prominent in Dahod district where the tanker has to cross
two railway crossings on its way to Dahod. Sometimes if the agent is late due to any
15
reason then the distributing staff will leave the assigned crates of milk open on the
ground and would proceed for other agent.
The agents also complained that the dairy leaves the crate with them for only two
hours and they take all the crates back while returning. In this way they face lots of
difficulty while doing the home delivery. Last year the dairy provided with the
carrying bags for carrying the pouches of milk for home delivery. But the bags did not
last long and they had to shift to old methods of carrying milk pouches to the
consumers.
7.1.3 Years of association of agents of dairy

At present there are 235 agents associated with Panchmahal dairy. The number of
agents associated with the dairy remained almost constant in past six years. Many
no .of ag ents associ ated with panchmahal dairy

agents left the business when they got jobs in the government and many agents left
250
238
236
234
229
238
236
235
220
219
200 199

the business because of natural calamity. More than fifteen percent of agents had been
176
166
150 146
140
141140
139
122
116
113
105 Series1
100 95

50

associated with the dairy for more than twenty years. 0

1983- 1987- 1991- 1995- 1999- 2003-

84 88 92 96 2000 2004

Figure 6 – Number of agents associated with Panchmahal dairy

250 238238236235
229234236
219220
200 199
176
166
150 140141139140146
116 122
105 113
100 95 Ser ies1

50

0
1983- 1986- 1989- 1992- 1995- 1998- 2001- 2004-
84 87 90 93 96 1999 2002 2005

The study revealed that average association of the agents with the dairy is of 9.13
years. The standard deviation of the years of the association with the dairy is of 6.952
years.

16
 Figure 7 – number of years of association of agents with Panchmahal dairy

Frequency

0
Mean = 9.13
0 5 10 15 20 25 Std. Dev. = 6.95
N = 30
years of association with dairy

7.1.4 Satisfaction with Commission

There has been hike in the prices of all the commodities even in milk but there has not
been increase in the commission for the agents. The agents also shown dissatisfaction
over the incentives offered by the dairy. The incentive offered to them had not
changed for more than four years. Few of the agents wanted that instead of flat
commission of Rs.0.40 per liter they should give the commission on the basis of
amount of money of which milk was sold. They wanted higher commission for Amul
brands of milk because they have to invest higher amount of money. The other
competitors such as “Sanchi dairy” pay high commission i.e. almost double than what
Panchmahal Dairy pays to the agents. But this high commission by the competitors
may be for entering into the market but Panchmahal dairy is paying a reasonable
amount.
Figure 8 – Extent of satisfaction in agents with incentives offered

HIGHLY SATISFIED

3%
33% SATISFIED
30%

UNDECIDED
34%
SLIGHTLY
DISSATISFIED

17
7.1.5 Home deliveries offered:
More than seventy percent of agents offer home delivery of milk to customers. Many
of the agents agreed that they charge rupees ten to fifteen per month depending upon
the situation for home delivery. But many of the agents are not able to charge any
money for home delivery because of intense competition among the agents. In this
way consumers are indirectly benefited out of this. The dairy has also provided them
with the carry bags for home delivery but some of agents could not get the carry bag.
They carry milk in the crates as well as the carry bags. All the agents use bicycle for
home delivery. Some of the agents were of the view that instead of the taking all the
crates at the same time, the dairy should take the crates in other shift. Most of them
are of view that crates are better than carry bags for carrying milk for home delivery.
Figure 9 – Home delivery offered by the agents

HOME DELIVERY OFFERED

70
60
50
40 69

30
31
20
10
0
yes no

Table 5 - Charging extra for home delivery

Frequency Percent Valid Percent Cumulative Percent

Valid 1(yes) 10 33.3 45.5 45.5
2(no) 12 40.0 54.5 100.0
Total 22 73.3 100.0
Missing System 8 26.7
Total 30 100.0

18
 45.5% of the agents agreed that they charge extra money for home delivery. They
also demanded that the dairy should make the extra charge provision for home
delivery and extra charge should be printed on the polythene packs.

Figure 10- agents charging for home delivery

AGENTS CHARGING EXTRA FOR HOME DELIVERY

46%
YES
BO
54%

AGENTS CHARGING
AGENTS
EXTRA CHARGING
FOR HOMEEXTRA
DELIVERY
FOR HOME DELIVERY

YES YES

BO BO

7.1.6 Satisfaction with quality of packing

At present, the dairy sells two brands of milk Amul and Panchamrut. But surprisingly
the agents had different levels of satisfaction with the both types of milk. The
numbers of leakages were far more in case of Panchamrut brand than Amul brand of
milk. The following frequency table clearly indicates the contrasting view about the
both types of milk packages.

Table 6 - Extent of satisfaction with the quality of packing Amul milk

Cumulative
Frequency Percent Valid Percent Percent
Valid Highly satisfied 8 26.7 26.7 26.7
Satisfied 19 63.3 63.3 90.0
Undecided 2 6.7 6.7 96.7
Slightly dissatisfied 1 3.3 3.3 100.0
Total 30 100.0 100.0

Table 7- Extent of satisfaction with the packing of Panchamrut milk

19
 Cumulative
Frequency Percent Valid Percent Percent
Z Highly satisfied 1 3.3 3.3 3.3
Satisfied 5 16.7 16.7 20.0
Undecided 9 30.0 30.0 50.0
Slightly dissatisfied 15 50.0 50.0 100.0
Total 30 100.0 100.0

7.1.7 Extent of satisfaction with the payment system

At present the agents have to pay the bills of the milk same day. The agents keep the
commission with them and they pay rest amount of money at the cash centers, which
are situated in the respective towns. The cash centers are local contact point for agents
and they normally use it as the liaison point between them and the dairy. They also
lodge complaints if any with the supervisor present at the cash centers. About ten
percent of the agents are slightly dissatisfied with payment system. They are of belief
that they are not able to save any big amount of money as they get money daily.
Instead they want that they should be paid monthly commission, which will enable
them to get good sum of money at a time. Earlier the dairy had the system of monthly
payment of commission but due to pressures from the agents that system was revoked.
Figure 11 - Extent of satisfaction with the payment system

10% 13%

Highly satisfied
Satisfied
Undecided
33% Slightly dissatisfied
44%

7.1.8 Training programme

Out of thirty agents surveyed, only one agent was given some training for conducting
business. The agents are not given any training even before induction as the agents
20
for selling products of dairy. Most of the agents were of view that the dairy should
conduct some training programme for agents, which would enable them better dealing
with customers and better handling of the milk products and pouches. This training
programme will also develop a sense of belongingness among the agents for the dairy.

Figure 12 – Agents attending training programme conducted by the dairy

TRAINING PROGRAMME ATTENDED BY THE AGENTS

3%

YES
NO

97%

7.2 Findings of the household surveys

7.2.1 Market share of Panchmahal dairy:

According to study conducted, it was found out that Panchmahal dairy is having the
market share of 59.0% and doodhiyas are having the market share of 33.7%. Many
people rear their own milch animal to get milk. Many new individuals who never had
any exposure to cattle rearing have been taking dairying as profession and they
mainly target the neighbours and their relatives as their first customers. This trend was
mostly observed in Dahod town.

Figure 13 – Source of milk purchased by the consumers

21
 60

50

40

59
30
Series1

20 33.7

10
5.4 1.8
0
Panchamrut Doodhiya milk Private dairy Any other
dairy milk farm

It was also found out that about 35.5% of household purchase 500ml of milk per day
and 41%of the households purchase one litter of milk per day. There is correlation of
0.285 between amount of milk purchased and number of family members. So it can be
concluded that amount of milk consumed in the family does not depend much on
number of family members in the households. But there is correlation of 0.792
between the quantity of milk consumed and number of members of the family whose
age is less than fifteen years. So the dairy should focus on the population group of that
segment to increase the milk sale.

7.2.2.Usage pattern of milk

About 77.4 percent of milk is consumed for drinking and for tea& coffee
preparation in the households on regular basis. But only 3 percent of people purchase
milk for only tea & coffee making purpose. But this trend changes during the season
and festivals. The milk is more used for making curd during the summers but very
rarely used for curd making during the winters.

Figure 14 – Usages pattern of milk

22
 usesof_milk

80

60
Percent

40

20

0
tea &coffee drinking sweet tea &coffee tea &coffee tea &coffee other tea &coffee all of the tea &coffee
and drinking and curd and sweet and above and drinking
making drinking&oth and sweets
er

usesof_milk

7.2.3 Constituents of the milk

Only about 20.9% of respondents were aware of the constituents of milk. Most of the
respondents who gave affirmative answer about having knowledge about the
constituents of milk were having very vague idea about its constituents. They were
not able to give the full details about the names of the constituents. Only four of the
total respondents were able to clearly tell about the constituents of the milk.

Figure 15 – Consumers knowing the constituents of milk

23
 21%

YES
NO

79%

7.2.4 Time of milk purchase:

About 83.1 % of the respondents revealed that they purchase the milk in the morning.
In most of the cases the doodhiya supply the milk in the morning. 7.8% of
respondents purchase the milk in evening and 9% of respondents purchase the milk in
both morning and evening.
Figure - 16 Time of purchase of milk by consumers

90

80

70

60

50
83.1 Ser ies1

40

30

20

10 9
7.8
0
MORNING EVENING MORNING &EVENING

7.2.5 Availability of pasteurized milk

About 36.9 % of the respondents were aware of the fact that pasteurized milk was
available in the town.40.3% of the respondents were not having any idea about the
availability of pasteurized milk in the town. But 22.8% of the respondents denied 24
the
fact of availability of pasteurized milk in the town. The pie- diagrams below clearly
state the above-mentioned fact. Many of the respondents who had been consuming the
dairy milk over the years were also unaware of the availability of pasteurized milk.
Figure 17- Availability of pasteurized milk in town

40% 37%
YES
NO
DON'T KNOW

23%

About 91.3% of the respondents said that they had heard of Panchamrut brand of
milk. Rest of the respondents who told that they never heard of Panchamrut brand of
milk were mostly uneducated and they were not using milk from any source and they
had the income below Rs 3000 per month. About 70.3% of total respondents told that
they had used Panchamrut brand of milk and rest of the respondents (about 29.7%)
told that they had never used the Panchamrut brand of milk.
Figure 18 – ever used Panchmahal dairy milk

30%
YES
NO

70%

7.2.6 Attributes associated with Panchmahal dairy milk

For the purpose of ascertaining satisfaction level of consumers with the quality of
Panchmahal dairy milk, the respondents were asked to rate various attributes of milk
on Panchmahal dairy milk a five-point scale. The following table shows the
25
percentage of the consumers who had rated the various attributes of Panchmahal dairy
milk according to five point Lickert scale.

Table 8- Attributes of Panchmahal dairy and it’s rating by consumers

Strongly Agree Indifferent Disagree Strongly

Attributes agree (4) (3) (2) disagree
(5) (1)
Good for 3.7 69.6 24.6 2.1
children
Creamy 3.7 25.7 52.4 18.3
Has vitamin 0.5 17.8 41.9 39.3 0.5
Clean 4.2 42.9 42.4 39.3 0.5
Nutritious 4.7 47.1 35.6 12.6
Unadulterated 2.1 23.6 55 18.8 0.5
Good for 4.7 45 38.7 11.5
women
Germ free 4.7 35.6 49.7 9.9
Tasty 1 18.3 49.2 31.4
Pack size 64.1 35.9

7.2.7 Factors associated with selection of source of milk

7.2.7.1Old relation with the seller

Various factors related to the selection of source of milk were studied and importance
of each factor in determination of source was studied. Here again five point Lickert
scale was followed to study this attribute of consumer behaviour. The study revealed
various factors that are mentioned below. 34.9% of respondents considered old
relationship with the seller plays moderate role in determination of source of milk.
32.8% of respondents felt that it plays low role, 30.3%of them felt that it played high
role in determination of source of milk. About 2.1% of the respondents felt that it
plays very high role in determination of source of the milk.
26
Figure 19 – importance of old relationship with determination of sources of milk

IMPORTANCE OF OLD RELATIONSHIP WITH DETERMINATION

OF SOURCES OF MILK

35
30
25
20 34.9
30.3 32.8 Series1
15
10
5
2
0
VERY HIGH HIGH MODERATE LOW

7.2.7.2Time of delivery of milk

51.3% of the respondents believe that it plays moderate role in determining the source
of the milk.42.1% of the respondents believe that it plays high role in determining the
source. 5.1% of the respondents believe that it plays low role where as 1.5% of the
respondents believe that it plays very high role in determining the source of the milk.
Figure 20 – Importance of time of delivery of milk in determination of source of
milk

60

50

40

30 51.3
Series1

42.1
20

10
1.5 5.1
0
VERY HIGH HIGH MODERATE LOW

7.2.7.3 Door delivery of the milk

27
41.5% of the respondents believe that door delivery of the milk plays moderate role in
determining the source of the milk where as 30.3% of them believe that it plays high
role in determining the source of the milk. 23.6% of them believe that door delivery
of the milk plays low role in determining the source of the milk and 4.1% of the
respondents feels that home delivery of the milk plays very high role in determining
the source of the milk used 30% of the people were agree to pay extra charge for
home delivery where as 70% of the people were against this idea.

About 5.1 % Of the respondents feel that convenience in getting milk plays very high
role in criteria of selection of milk sources.42.1% of them feel that it plays high role.
Whereas 35.4% of them feel that it plays moderate role. 16.4% and 1% of the people
feel that it plays low and very low respectively in determination of selection of milk
sources.

Figure 21 – Importance of door delivery of milk in determination of source of

milk

door_delivery

50

40

30
Percent

20

10

0
very high high moderate low very low

door_delivery

7.2.7.4 Role of credit facility in determination of source of milk

28
Credit facility is mostly offered by the doodhiya in towns to push their milk. This also
helps in building of rapport between the seller and buyer. The dairy does not provide
any credit facility to the retailer so in turn the agents also don’t provide any credit
facility to the customers in most of cases. About 42.6% of people feel that it plays low
role in determination of source of milk, 36.9% of the people feel that it plays
moderate role in determination of source. 13.8 % of people feel that it plays high role
where as 6.7 % of the people feel that it plays very low role in determination of the
milk sources.
There is correlation of 0.301 between the credit facility and monthly
expenditure on food items. This shows that the credit facility may play important role
in determination of source of milk for those families who spend less on food items.

Figure 22 – Importance of credit facility in determination of source of milk

credit_facility

50

40

30
Percent

20

10

0
high moderate low very low

credit_facility

29
7.2.7.5 Perception regarding the freshness of Panchmahal dairy milk

The Panchmahal dairy milk is having very good image in the mind of consumers. 3%
of the people believe that Panchmahal dairy milk is very good in freshness where as
58% of the people believe that it is good in terms of freshness quality. 37% of people
perceive it as neutral in terms of freshness quality. Only 2% of the people perceive it
as bad in terms of freshness quality of the milk.
On enquiry people who told that Panchmahal milk is bad on terms of freshness told
that the milk is stored in the dairy and it is distributed to the consumers, whereas they
get the doodhiya milk which is milked in front of their eyes so they consider doodhiya
milk much better than Panchmahal dairy milk in terms of freshness.

Figure 23– Views about the freshness of Panchmahal dairy milk

2% 3%

37%
very good
good
neutral
bad

58%

7.2.7.6 Satisfaction with pack sizes of Panchmahal dairy milk pouches:

Approximately 64% of the people were satisfied with the milk packs' size they are
getting. Rest of 36% of people were unsatisfied with the milk packet's size they were
30
getting. The people had contradictory views about the Panchmahal dairy pack sizes.
The people from lower income strata felt that present pack size of 500 ml is too costly
for them to purchase whereas people from higher income group and who used to
consume more than 1000 ml of milk per day were of view that it would be better if
they get one liter pack size of milk with some cheaper prices. But the numbers of
people demanding such type of milk packs are very less in comparison to people who
want smaller pack size of the milk

Figure 24– Satisfaction of pack sizes of Panchmahal dairy milk

7.2.7.7 Perception regarding the healthiness of Panchmahal dairy milk

The people have high respect for Panchmahal dairy milk as I found through the
consumer surveys. 7% of the people consider it as very good in terms of healthiness
of the milk. 54% of the people believe that it is good in terms of healthiness. 38% of
31
the people had perception that it is neutral in terms of healthiness and 1% of the
people had the perception that it was bad in terms of healthiness character of the milk

Figure 25 – perception of people regarding Panchmahal dairy milk as healthy

1% 7%
38% very good
good
neutral
bad
54%

7.2.7.8 Perception regarding the tastiness of Panchmahal dairy milk

Most of the people (approximately 75.6%) have neutral opinion about the taste of the
Panchmahal dairy milk. 15.6% of people believe that taste of Panchmahal dairy milk
is good and 1.1% of people have the view that taste of the Panchmahal dairy milk is
very good. but 7.8% of the people feel that the taste of Panchmahal dairy milk is bad.
Most of the consumers who had the view that the taste is bad are the consumers of
doodhiya milk. They had the view that the taste of the milk is like the powdery milk.
Figure 26 –Perception of people regarding Panchmahal dairy milk is tasty

32
 people believing that panchmahal dairy milk is
tasty

8% 1% 16%
very good
good
neutral
bad
75%

7.2.7.9 Perception regarding the drinking of Panchmahal milk

Approximately 6% of the people feel that Panchmahal dairy milk is very good in
drinking and 52% of people feel that it is good for drinking. 31% of them feel that is
neither good nor bad in the drinking attribute where as 11% of the people feel that it is
bad in drinking

Figure 27 – Perception of people regarding drinking of Panchmahal dairy milk

PERCEPTION REGARDING THE DRINKING

OF PANCHMAHAL MILK

60 52
50
40 31
30 Series1

20 11
10 6

0
VERY GOOD GOOD NEUTRAL BAD

7.2.7.10 Perception regarding tea or coffee making from Panchmahal dairy milk

33
4% of the people feel that Panchmahal dairy milk is very good in making tea or coffee
making. Where as 46% of people feel that it is good for making tea or coffee making.
38% of the people have neutral feeling regarding the tea and coffee making attribute
of the Panchmahal dairy milk. But 10% of the people feel that Panchmahal dairy milk
is bad in the attribute of tea or coffee making.

Figure 28 – Perception regarding tea or coffee making from Panchmahal dairy

milk

PERCEPTION REGARDING TEA OR COFFEE MAKING

50

40

30
48 Series1

20 38

10 10
4
0
VERY GOOD GOOD NEUTRAL BAD

7.2.7.11 Perception regarding the price of Panchmahal dairy milk

The price of doodhiya milk ranges from Rs. 12 to Rs. 19 depending upon the
situation. They also have variable rate depending upon the availability of the milk.
They charge higher price from the irregular customers. The dairy has the policy of
having uniform price through out the year.
Only 7.8% of the consumers feel that the dairy is having good price for Panchmahal
dairy milk.61.1% of the people feel that they are charged reasonable for the milk they
are getting abut 31.1% of the people feel that they are charged higher for the quality
of milk they are getting from the dairy.
Figure 29 – Perception of people regarding pricing of Panchmahal dairy milk

34
 PERCEPTION REGARDING PRICING OF
PANCHMAHAL MILK

7.80%
31.10%
good
neutral
bad

61.10%

7.2.7.12 Perception regarding smell of Panchmahal dairy milk

People have wide view regarding the smell of the milk of Panchmahal dairy. Some of
the people who claimed that the smell of the Panchmahal dairy milk is bad said that it
smells like milk powder. Only 16.7% of people were of the view that it smells good.
67.2% of the people told that it has neither good smell nor bad smells. But alarmingly
15.6% of people were of the view that it smells bad. These people were of the opinion
that the bad smell of the milk makes it difficult to drink.

Table 9- Smell of Panchmahal dairy milk

Cumulative
Frequency Percent Valid Percent Percent
Valid Very good 1 .4 .6 .6
Good 30 11.4 16.7 17.2
Neutral 121 46.0 67.2 84.4
Bad 28 10.6 15.6 100.0

Figure 30 – Perception of people regarding smell of Panchmahal dairy milk

35
 perception regarding smell of milk of panchmahal dairy

16% 1% 17%

very good
good
neutral
bad

66%

7.2.7.13Perception regarding the packaging of milk of Panchmahal dairy

The perception about the packaging the milk of Panchmahal dairy milk varies a lot.
4.4% people believe that the packaging is very good. 53.3% of the people believe that
the packaging is good and 33.9 % of the people regard that packaging is of neutral
standard. But 8.3% of the people believe that the packaging of Panchmahal dairy milk
is bad.

Figure 31 – Perception of people regarding packing of Panchmahal dairy milk

36
 PERCEPTION REGARDING THE PACKAGING OF PANCHMAHAL DAIRY
MILK

60

50

40

30 53.3 Series1

20 33.9
10
4.4 8.3
0
very good good neutral bad

7.2.7.14 Perception regarding the consumer orientation programme of dairy

More than 70% of people feel that consumer orientation programme is an effective
way of creating awareness among the public about the products of the dairy. They also
believe that it will able to tackle the mis-conception regarding the milk and milk
products of the dairy. They also believe that once people will attend the consumer
orientation programme then they will be able to come across the benefits of the dairy
products. But 29.8% of the people believe that only running consumer orientation
programme is not an effective method of creating awareness among consumers. They
believe that more steps should be taken to increase the awareness among the
consumers such as advertisement through television, poster and newspaper

37
Figure 32 – Perception regarding the consumer orientation programme of dairy

30%

YES
NO

70%

7.2.8 Preference regarding the type of milk

The people have more preference about the buffalo milk. Around 64% of people
prefer buffalo milk where as only 2% of the people prefer only cow milk.27% of
people prefer both types of the milk and 7% of the people are ignorant about the types
of milk they are getting.
Figure 33 – Preference regarding the type of milk

PREFERENCE REGARDING THE TYPE OF MILK

7% 2%
COW
27%
BUFFALO
BOTH
IGNORANT
64%

town name population yearly milk sold by dairy

dahod 147184 7571720
godhra 169373 5830989.5
halol 70000 2189073
38
 total 386557 15591782.5
daily milk consumed = 42717litre/
per capita milk
consumption= 0.1105 litre

Factor Analysis

The correlations between all the variables are not significantly low so factor analysis
can be performed. This communalities table shows that the underlying relationships
between the variables and whichever factor they are supporting. To test this, the
Barlett test of sphericity is used. The approximate chi-square value has come up to
338.911. This value is very high compared to the chi value at degrees of freedom 6
and significance of 95 %. So the Kaiser-Meyer-Olkin measure of sampling adequacy
is done and its value has come to be 0.532 and since it is greater than 0.5 the factor
analysis can be done.

Communalities indicate the amount of variance in each variable that is accounted for.
Initial communalities are estimates of the variance in each variable accounted for by
all components or factors. For principal components extraction, this is always equal to
1.0 for correlation analyses. Extraction communalities are estimates of the variance in
each variable accounted for by the components. The communalities in this table are
all high, which indicates that the extracted components represent the variables well.

Then the factors are rotated and the initial eigen values are calculated. The eigen
values are arranged in decreasing order in the table from factors 1 to 4. The Total
column gives the eigen value, or amount of variance in the original variables
accounted for by each factor. Factor 1 accounts for 52.691percent of the total
variance, factor 2 to 31.202 % of the total variance. These two factors account for
83.8926percent of the total variance. The % of Variance column gives the ratio,
expressed as a percentage, of the variance accounted for by each component to the
total variance in all of the variables. The Cumulative % column gives the percentage
of variance accounted for by the first n components. For example, the cumulative

39
percentage for the second component is the sum of the percentage of variance for the
first and second components.

We have selected the factors whose variance is greater than 1 and these accounts for 2
factors. The same can be done using the scree plot or priori determination or
percentage of variance also. The scree plot helps you to determine the optimal number
of components. The eigen value of each component in the initial solution is plotted.
Generally, the factors on the steep slope are extracted. The factors on the shallow
slope contribute little to the solution.

The extracted sum of square loadings table shows the extracted components. They
explain nearly 83% of the variability in the original four variables, and it helps to
considerably reduce the complexity of the data set by using these factors, with only
17% loss of information. The rotation maintains the cumulative percentage of
variation explained by the extracted components, but that variation is now spread
more evenly over the components. The large changes in the individual totals suggest
that the rotated component matrix will be easier to interpret than the unrotated matrix.

The rotated component matrix helps you to determine what the factors represent. The
second factor is most highly correlated with sex of respondents and is a better
representative, however, because it is less correlated with the other two factors.
Similarly the core variables for other factors are also identified.

For each case and each factor, the factor score is computed by multiplying the case's
original variable values by the component's score coefficients. The resulting three
component score variables are representative of, and can be used in place of, the four
original variables with only a 3% loss of information.

Cluster Analysis
K-means cluster analysis is a tool designed to assign cases to a fixed number of
groups (clusters) whose characteristics are not yet known but are based on a set of
specified variables. The K-Means Cluster Analysis procedure begins with the
construction of initial cluster centres. The first step in this procedure is to select k

40
well-spaced observations for the cluster centres. After obtaining initial cluster centres,
the procedure:

• Assigns cases to clusters based on distance from the cluster centres.

• Updates the locations of cluster centres based on the mean values of cases in
each cluster.
These steps are repeated until any reassignment of cases would make the clusters
more internally variable or externally similar. Cluster analysis helps to group based on
different objects. In this method the score of the objects on several dimensions are
taken. First maximization of the score is attempted and then minimization of the
number of objects is attempted. Then the degree of similarity or dissimilarity is
studied.

We have assumed that there are two clusters. It is because in this case the number of
market segments in terms of type of computers is two – branded computers and
assembled computers.

The initial clusters use two randomly selected cases. The classifications of cluster
centres are interim centres used for the assignment of cases. The classification criteria
are updated till the stopping criteria are reached. The values of variables in the initial
clusters are the means for each variable in each cluster. The values given in the
iteration table are the distances between each cluster centre. The cluster centre
changes with each iteration. The cluster membership displays the distance between
each case and the classification centre.
In this case the entire iterations have settled in the third step.

Here the cases have been systematically assigned to clusters to maximize the
differences they should not be interpreted as testing the null hypothesis of the
difference among clusters. The F tests should be used only for descriptive purposes
because the clusters have been chosen to maximize the differences among cases in
different clusters. The observed significance levels are not corrected for this and thus
cannot be interpreted as tests of the hypothesis that the cluster means are equal.

41
The values in the final cluster represent the squared Euclidean distances between final
cluster centres. The greater distances between clusters represent the greater
dissimilarities. Here the respondents in both the clusters are similar. The larger F-
values give the greater separation boundary between clusters. In this case it is the
occupation of the respondents. The Analysis of variance gives the result of variable
which contributes most to the cluster solution. Respondents in cluster two seem to be
more affected by the variables in purchasing a specific type of computer.

The final cluster centres represent the mean for the variables in each final cluster. The
distance between the final cluster centres indicate that the pairs have been well
separated. Convergence has been achieved due to no or small change in cluster
centers. The maximum absolute coordinate change for any center is .040. The current
iteration is 10. The minimum distance between initial centers is 9.434.

7.2 Route Details

To understand and to know the actual process of distribution of milk I studied the
route of all the agents of Panchmahal dairy. I took the help of the supervisors and also
went on trips with the distribution vehicle. After this study I could come out with the
route map of different distribution channel. These route maps show the path of the
vehicle during the distribution. These maps are not according to the scale but give an
idea about the distribution network. I also collected the data of sales, time of delivery
and the distance covered by different distributors.
The dairy has four main routes of transportation of milk to consumers in different
towns such as Godhra, Dahod, Halol and Luna Wada.

 The vehicle for the Dahod town has to leave around 12 A.M. from the dairy so
that they are able to cater the consumers in time. There are two railway
crossings on its way to Dahod and most of the time these remain closed due to
passage of goods train in night. There are four different routes in Dahod town
covering different localities. One of the vehicles also leaves for Garbara for
supplying milk there.

42
  The vehicle for Halol leaves around 1 A.M. there are two routes for Halol
town. One vehicle leaves directly for Halol town and other vehicle cover
Baijalpur, Kalol and then finally leaves for Halol.
 The vehicle for Luna Wada leaves the dairy at 2 A.M. and it also covers the
Shehra town.
 Four vehicles that leave the dairy at around 4 A.M cover Godhra town. There
are four different routes for Godhra town. The agents wait at the predefined
place and they get the delivery. The time is so less that they are barely able to
count the pouches and the agents are not able to check any leakages if any
present in the pouches.

7.4 SWOT Analysis for liquid milk of the Panchmahal dairy

A SWOT analysis is carried out for liquid milk marketed by the Panchmahal dairy in
the Dahod and Godhra districts.

7.4.1 Strengths
• Credibility attached to the brand name AMUL and Panchamrut i.e. high
awareness and good perception in the minds of consumer about AMUL and
Panchamrut as a brand. The people also have sense of pride when they
purchase milk from the dairy.
• Agent System: There is no any mediator between the agent and the dairy and
thus the agents are able to get better incentives and they feel that dairy directly
deals with them
• The Panchmahal dairy has been in the district for thirty-two years. The dairy
was founded against all odds and perception of people at that time. Even
UNICEF declared that there was no any scope of milk procurement from the
area.
• Lack of any strong competitor in the area. The doodhiya are main competitors
of the dairy in milk selling and they are highly divided lot. No any organized
dairy is present in the dairy having any definite brand of milk.

43
7.4.2 Weakness
• The packaging qualities of milk pouches are not up to mark in case of
Panchamrut milk pouches. There had been the complaints of leakage in the
milk pouches.
• Low awareness about the pouch of 200 ml, which was recently launched by
the dairy. The dairy agents do not aggressively pursue these pouches.
• There had high turnover among the agents due to many reasons such as getting
jobs, lesser commission paid by the agent and luring of agents by the "Sanchi
dairy"
• Low penetration in terms of retailer coverage. There had been almost
stagnancy in the number of agents associated with the dairy for seven years.

7.4.3 Opportunity
• More than 40% of the market is with small players and loose milk suppliers
such as doodhiya. So there is a scope to increase the liquid milk market in the
Dahod and Panchmahal districts.
• Expanding Godhra and Halol towns (Both geographically and population
wise). Halol is fast emerging as industrial hub. Various new industries are
setting up there so the demand of liquid milk will automatically increase in the
town.

7.4.4 Threat
• Goodwill of the existing competitors such as doodhiya who had been in the
business from generations together. The doodhiyas have developed favorable
relationship with the consumers.
• The doodhiyas offer credit facility to customers, which are not given by the
Panchmahal dairy. In this way doodhiya are also able to manipulate with the
quality of the milk.
• Competitors such as doodhiya have loyal consumer base.
• The doodhiyas determine the price of the milk according to availability of
milk. They charge variable rates for the milk in different seasons. Where as
the dairy has the policy of charging uniform price for the milk through out the
year.

44
8.0 SUGGESTIONS AND RECOMMENDATIONS
8.1 Strategies for Market Development:
The need for market development ensures that both the consumer and the producer
benefit from the exchange. A market can grow in three ways:
a. By discovering new markets like geographical and consumer
b. By increasing the milk usage quantity
c. By bringing the new consumers

8.1.1 Tapping the Commercial institution segment

This strategy fits into the first category of market growth. The Union on it own has
not tapped the commercial institutions segment. Courtesy some of the agents, the
Panchmahal dairy brand is accepted in the hotels and restaurants. The institutional
segment can be broken into two categories
a. Those buying more than 20LPD
b. Those buying less than 20 LPD

8.1.1.1Steps to be taken for institutions needing more than 20 LPD:

A. Prepare a list of all the hotels, restaurants, sweet shops, ice cream parlours and
bakeries in each of the Godhra and Dahod. This list can be generated from the
database of the survey conducted and also from the city hotel association.
B. A meeting should be conducted in each city inviting all the institutions. The top
officials of the Union should conduct the meeting. The benefits of using
Panchmahal dairy milk should be told to the institutions.
C. Bring about the experiences of presently Panchmahal dairy milk using institutions.
D. Try to know their preferences for small sachets or 5-liter sachets or bulk tin packs.
E. Try to know whether they will prefer delivery from the dairy or through agents
only.
F. Try to know their preferences for terms of payment
G. Invite and give them a trial offer for say 10 days of door delivery at any time and a
credit of one day.

45
H. For promotion, boards saying “ We use Panchamrut milk. Pure milk” should be
given.
I. Position the product as fresh; smell free and tasty on the advertisements and
presentations.
J. Senior official in the marketing section should contact each of the institution. This
person should be given some power to negotiate the terms of payment for the
institution.
K. The official should then visit that institution at least once a week, to maintain a
good contact.

8.1.1.2 Steps to be taken for institutions needing less than 20 LPD

A. Get list of such institutions, which are already purchasing packed milk from the
agents.
B. Make such list for each agent and keep it as reference.
C. The agents should be given incentive to cover as many such institutions as
possible.
D. Incentive can be given in terms of number of new institutions covered in a month
or in terms of increased LPD of milk supplied to institutions.
E. This will be a two-way benefit for the agent. First from the increased commission
he/she gets due to increased sales and secondly from the incentive.
F. For every 10 LPD sales increase for one month over the present level Rs. 200 per
month for two months should be given.
G. The Marketing supervisors responsible should be given the job of visiting these
institutions and knowing their problems, if any.

8.1.2 Discovering And Entering New Geographical Markets

The other strategy of discovering new geographical areas can be used in this case.
There are many areas where no milk is being supplied by the Union. A proper control
over these markets will benefit the Union in long run. A special team should be
created for identifying retail points in these areas. Incentives should be given to the
salesmen/ team members for identification of retail points and successfully
46
maintaining them. Such incentive should not be in monetary terms but in forms of
items and mentions on the notice boards.

Steps to be taken:
A. Target setting for the salesmen/ Marketing supervisors is to be done.
B. Identification of points
C. Route setting by the Marketing In Charges’

8.1.3. Educate the Consumer

As it came out, the preference for milk drinking is very low in this area. Targeting
this use will increase the consumption of milk and hence the market. The potential
targets in this category can be the middle and high-income group households. These
groups are educated and can understand what is best for them. These can be further
divided into users of packed milk and users of loose milk. Following things should be
done to educated the consumer:

8.1.4 Contact the Consumers

Regular consumer contact meets should be held, especially with the women. Here a
comparison of Panchamrut milk with other doodhiya milk should be demonstrated.
Along with this benefits of drinking milk for the children and adults can be told.
Focus on ‘Drinking milk’ should be there in the meets. Project the milk as safe and
hygienic drink for children

Steps to be taken:
A. A Child Specialist in the city should be contacted to talk over the meeting.
B. Use of Overhead Projector Presentation creates a good impression in the minds of
consumer. So OHP should be carried out for every presentation. Standard Slides
can be prepared both in English as well as Gujrati. A well-trained team should be
used for consumer education purposes.
C. Names and addresses of the consumers should be taken on standard formats with
information on type of product using, quantity, price etc. This information should
then be fed into computer to have a database of consumers.

47
D. At such meetings a lucky draw can be arranged. Coupons can be prepared and
given to the participant when he/she fills up a form. At the end of session lucky
draw of the coupons should be taken and the winners should be given a free
supply of 500ml pouch of milk of his desire for 7 days. The Gulab Jamun mix
pack, which is manufactured by the dairy, can be given to the winners of lucky
coupons.
E. The number of winners can be decided after keeping in mind the amount of milk
kept for sales promotion activity.
F. This will ensure that consumers use of the milk and he/she does not throw it. This
will help in some adjustment to the new taste.
G. After 7 days a small talk with such consumers should be taken up, as to for what
purpose the milk was put into, and they can be invited on next consumer meet to
share their experiences.
For each city/ town a minimum of two consumers meets to be held every
month starting from April when the milk of doodhiya decreases in the market.
This should continue all through the year.

8.1.5 “Catch them young”

The coming generation will be the major consumer of packed milk. So it is essential
that they be nurtured right from the beginning.

Steps to be taken:
A. All the big schools in the cities should be contacted.
B. Toppers (first two or three rankers) from class 1 onwards to class 8 in each school
should be supplied 500ml milk daily for two –four months in the school itself.
These toppers will be known as PANCHAMRUT SCHOLARS.
C. A special function should be organized at the school or dairy premises. OR at any
place of all the schools. A special guest can be in form of the MP, DC, MLA,
KMF Senior Official; Registrar of Co-operative should precise over the function.
D. This will bring a feeling of pride and achievement with the Panchamrut brand and
will also make the children accustomed to taste of Panchamrut milk. This will
48
 ensure that consumer makes use of the milk and he/she does not throw it. This will
help in some adjustment to the new taste.
E. Proper feedback should be taken at regular intervals as to usage purpose of milk
and perception of the quality. The names and addresses can be fed into the
database.
F. Also competitions like drawing competition for kids, quiz competition on milk
and packed milk, cooperatives should be held. Results should be announced on the
spot and prizes also given in form of caps, coupons of dairy for free milk supply
for seven days.
G. Free Label stickers should be distributed in schools during the presentations.
H. The dairy visits should be taken at regular intervals for such schools. The benefits
of clean milk production should be told to the visitors through a talk or projector
or through films.

8.1.6 Market Penetration Strategies / Competitive strategies

The growing competition in the market requires that Panchmahal dairy should think
over its competitive strengths and weaknesses. Although it enjoys a good brand name
and image in the minds of consumers, it may not be long when it is lost to the
competition owning to its policies and relations with agents and consumers.
Following strategies will be helpful in this regard.

8.1.7 Sales Promotion Program

All the activities of sales promotion should be carried out .The milk should be
projected as SAFE and HYGIENIC
Campaigns should focus on these two aspects.
The high-income groups should be targeted for increasing milk consumption for
drinking.
Focus on the drinking aspect of milk should be given in every promotional
activity.

49
8.1.8 Availability “ the key concern’
As it has come from the survey that availability of milk after morning vending hours
is very less, so this problem should be tackled. There is no use of advertising if the
product is not available in the market or available after lot of problems. Also the
number of houses served by a single agent should be brought down to say 500 per
agent by the year 2007.

8.1.9 Shops: The future of distribution

Selling of milk through the parlors will not solve the problem of availability because
such parlors will cater to only nearby areas and are also not considered convenient. So
confectionery shops and grocery stores having refrigeration facility should be
targeted. For example, in Godhra around 60 cold drink shops are there which have
refrigerators. Many of the grocery or confectionery shops also have refrigerators. So
such shops can be potential agents in future if they are motivated properly. It will cost
nothing to the dairy and it will also remove the dependence on agents.

Steps to be taken:
A. Data on the number of shops having refrigeration facility to be collected.
B. Target for very field employee to be set.
C. POP materials to be supplied to the shops.

8.2 Unsold package policy:

Currently the Union is not taking back the unsold packs. This is having
implications on its sales in following terms:
Agents (more than 80 %) give indent which is less than the demand, as they are
afraid to take risk (one unsold 1 liter Amul gold pack of milk is equal to 45 liters
of Amul gold milk sold)
This results in consumer shifting to other brand that is available nearby.
The agent's sales gets over by 8.00 AM in some points. This trend over long
terms means that point gets image of non availability after 8.00 AM
The desired retailer push is not taking place.
The agents who have refrigeration facility charge 50p to Re 1 per liter for such
pack after 10 AM. 50
 The agents who do not have refrigeration facility have to shell out money out of
their pocket to keep the packs in others fridge. Added to this chances are milk
will be curdled until morning.

Steps to be taken:
A. The truck on its return journey can take the unsold milk back. This milk can be
kept in the cash centers and cash centers can serve as a point of selling milk
through daytime without incurring any extra cost.
B. But this milk should not be more than 3 % of the indent quantity. This will ensure
that the agent does not give any undue amount in indent but at same time is
motivated enough to increase the indent.
C. The agent will not have to worry about the keeping of that unsold milk.
D. The consumers will not have to pay higher amount.
E. A column in the indent sheet with the salesmen can be inserted with this regard.

8.3 Leakage policy:

The Union does not have any leakage policy. That means 1 liter of leakage is
equivalent to income from sale of 45 liters of milk of Amul gold milk. The leaky
packs are either sold at lower rates or consumed in house as curd. Where these
leakages do comes from:
At the dairy during packing due to improper sealing
At time of loading,
During the transportation, this depends a lot on the condition of vehicle in use
At the time of unloading the handling of crates by loaders is very rough
Added to this is the condition of crates that is pathetic.
Earlier the dairy used to pack ten liters of milk pouches in a crate but now it
packs twelve liters of milk in a single crate. This leads to more cuts from the top
end of the milk pouches. So it will be better if dairy reverts back to previous
policy of packing of twenty packs in crates.

Steps to be taken:
A. A daily record of leakage is to be maintained by inquiring the agent
B. Addition of one column in the indent sheet of salesmen for leakage of the day.
51
C. Daily record of leaky packets sorted before the vehicle leaves dairy to be
maintained.
D. Replacement to be given in some mutually agreeable manner.

8.4 Constitute a consumer / agent grievance redressal and interaction

system:

The more we become responsive to our consumers and agents the better we will be
in long run. This should be the motto of complaint redressal and interaction system.
The words interaction has been introduce to have a two-way growth.

Steps to be taken:
A. A special telephone line should be dedicated for this purpose.
B. One person having good conversation skills in Gujrati and English should be the
sole player in this system.
C. His / her job should be to look into the complaints, record them, get connected to
the concerned authority, help the grievance get solve quickly as possible and keep
track of the grievance handling.
D. For every complaint a number should be given to the complainer. This will act as
future source of reference.
E. Not only this he/she would have to handle all the queries that come to dairy or
through telephone, post.
F. The name, address and telephone number should be published in the newspapers,
leaflets, cable TV ads and other media used.
G. Also this should be informed that for every complaint take the number of
complaint as reference from the operator.
H. The senior official of the Union such as Manager should check the register daily.

8.5 Motivate agents

A major concern that the agents feel that union is giving them less commission. The
commission for the agents had not changed since 1-12-2000. So there is a need to
look into the matter. Any activity on this front should be based on the unsold package
policy, credit policy. In order to have short term increase in sales incentive scheme for
52
agents should be launched especially in the flush season. These can work on any gift
item such as gulab jamun mix, which is manufactured by the dairy.

Steps to be taken:
A. A proper incentive scheme to be worked out.
B. Decision regarding monetary rewards or/ and gifts to be taken.
C. Agents to be informed of the scheme at a meeting.

8.6 Crate deposit

This is an important factor for the agents not increasing sales. A deposit of Rs.15,
000/- is taken per outlet. This is very big amount for the people who want to be agent
of the dairy. So instead of flat rate of Rs. 15000 the dairy should fix the rates on the
basis of number of liters the agents are selling. This will enable them to have more
number of agents in the market it will also help in better and healthy competition
among the agents and the agents will tap various untapped areas. The dairy can follow
following method for appointing new agents
To tackle this Union should do either of two

1. Fix a slab system for the deposit.

For sales less than equal to 300 LPD amount Rs 6000/-
For every 100 Liters extra additional amount of Rs2000/-
Also when the deposit matures interest should be given to agents at nominal rates.

Steps to be taken:
A. Decision to be taken about the final choice.
B. Agents to be informed about the decision

8.7 The Crates: Source of identity

Two things need to be mentioned about the crate
1. The crates should prominently display Panchmahal Dairy name on two lengthy
sides in "Gujrati" and "English". The dairy should not accept the crates of other
dairies. The agents are in habit of exchanging better crates of the dairy with poor

53
 crates of other dairies such as "Sanchi". They also use the crates for other
household purposes so this practice will have to be discouraged among the agents.
2. The situation of crates is very bad especially cream crates mainly due to their
rough handling by the loaders. These should be replaced. And the loaders told to
handle crates properly.

Steps to be taken:
A. The damaged crates to be segregated.
B. Stickers to be pasted or printing to be done
C. Instruction to be given to handlers of crates

8.8 Including Agents into the change process

The agents are the ambassadors for Union. They provide a very good interface
between Union and customers. Thus union should develop a relationship with agents
that will be conducive of growth for all parties. This concept of ‘Relationship
Marketing’ is catching up fast. Union should also make use of this .A special meet for
the agents should be organized every six months to make them aware of the
operations of dairy. At this meet awards should be given like
 Largest Selling Agent for each area
 Agent showing highest growth in absolute terms
 Agents covering maximum number of institutions
 Agents with highest door delivery
 Oldest agents in the city
Any new agent recruited should be first shown the dairy and its operations.
In addition to this a monthly meeting should be held at each city. The targets should
be given, performance should be reviewed, and complaints and suggestions should be
taken at the meeting.

Some suggestions for revitalization of marketing department marketing

department
The marketing department should be separated from the accounts department
and the assistant marketing manager should be given free hand in deciding the
marketing policies. 54
 The marketing department should be given equal importance like that given to
procurement and plant operations. At present the marketing department is highly
under staffed and they are not able to visit the towns because of their pre-
occupied routine works.
The extra staff can come as deputation from the other departments, the qualified
person can also be sourced from the organization if one is there, otherwise the
recruitment from outside should take place.

8.9 The New Positioning of Marketing

Union and its employees should know the significance of Marketing in an
organization. Coordinated efforts by the departments and employees will benefit both
the parties. The interaction between various departments should be a regular and
routine process. Fortnightly meeting of the heads of various departments should be
held. A possible way of encouraging the Marketing focus can be through short tern
deputation to the Marketing section. The details are given below

Steps to be taken:

• Temporary teams should be formed consisting of four employees from across

the various sections.
• These teams should be assigned or placed in a town for 20 days to one month.
• These teams should go to the market daily and try to know how market
works.
• Also it is suggested that a small target of increasing 2-4 liter of household
demand should be given to each member to have a better experience on
convincing the consumer.
• The teams can also make small presentations at the various institutes.
• Hold Demonstrations at various points.
• Carry out door-to-door visits at selected consumer areas.
• The same team should be placed in different cities to study and experience the
competition well.
55
 • If the teams work out well some of the members can be deputed to the
Marketing section.

8.10 Trained Staff

The lack of adequate trained staff in both field and office is a set back for the Union.
Thus training should be given in the following fields and levels:

1. Motivational and Leadership Training: To be given to the Heads of each

department and the Marketing In Charges’.

2. Sales and Distribution Management Training: For Marketing Manager and

Marketing In Charges’. The personnel in the marketing departments should be
sent for various advanced courses in various institutes such as IRMA, NDDB.

9.0 REVIEW AND EVALUATION OF STRATEGIES

The review and evaluation mechanism should be devised for the strategies
implemented. This review should take place at regular intervals (to be decided in a
meeting).
Targets set in terms of
Total sales
Sales per city
Sales per agent
Sales per field staff
Number of consumer meets, contact programmes
Number of outlets per year etc
Should serve as basis for the performance evaluation
The following important steps should be taken
• A meeting of Agents should be held city wise in a month under the presence
of Marketing supervisor.
• Once in every Six Months combined meeting of the agents should be held at
Dairy.
• Performance chart of each agent for that period should be displayed at
meeting.

56
 • Any marked changes in the situation should be discussed jointly and
accordingly targets should be adjusted.

9.1 Integrated Evaluation

The integrated evaluation means judging the performance not in isolation but
conjunction with performance of other departments of Union. The inter-linkages are
very strong in the activities of union. A poor performance at procurement level can
increase the processing cost by large amount making the marketing’s responsibility
high. Similarly a negative performance of the plants operations can lead to poor milk
and milk products going in the market. Thus again the marketing will suffer.
However, if marketing fails the losses incurred will be tremendous. Thus the
minimum that can be done at this level is that setting of targets and evaluation in
coordinated way. No body should perceive his/ her job as better than other
department’s. The only way can be each department doing their job with full
dedication and interest.
Monthly twice a joint meeting should be held of all the heads of sections.

10.0. CONCLUSION

The role of strategies becomes important when the context of operations undergoes a
major change. Although, the co-operative milk unions face many problems like lack
of target market, lack of professional management, lack of capital raising ability, the
producer orientation of organization still the fact that management realized
importance of a planned effort for marketing is commendable on its part. The working
in such planned way will definitely find the Unions faring well in tough market
environment. However, this focus should not get reduced in coming years.

57
REFERENCES

1. Bhargav, Neeti and Manjula Rajoli: Strategic Marketing Plan for Belgaum Milk
Union Ltd.: MTS Report No. 1232, PRM-96-98; IRMA
2. Green, Paul E., Donald S.Tull and Gerald Albaum: Research for Marketing
Decisions, 5th Edition, Prentice Hall of India, 1999 New Delhi.
3. Johnson, Gerry and Kevan Scholes: Exploring Corporate Strategy: Text and Cases,
4th Edition; Prentice Hall of India, 1999 New Delhi.
4. Wind, Yoram & Thomas S. Robertson: Marketing Strategy: New Directions for
Theory and Research, Journal of Marketing; Vol.47, 1983. Pg.12-25

58
APPENDIX 1: QUESTIONNAIRE FOR AGENTS SURVEY

Dear respondent,

I am a student of Institute of Rural Management, Anand carrying out a study on milk

market of Panchmahal and Dahod districts, as a part of my project. I need certain
information to assist me in completion of my project, which I will get by
administering this questionnaire. I expect your cooperation in this regard, the
information divulge by you will be kept confidential and will be used for academic
purpose only.
1. Personal Details

a) Name of the retailer:

_____________________________________________________________________

b)Address:

_____________________________________________________________________

c) Telephone number:

d) Number of years associated with Panchmahal Dairy

2. Type of shop

Hotel Grocery shop Bakery PCO

Home Mobile stall Other______________

3. Location of shop

Highway City main road Street

Other___________

4. Brands handled:

5. Daily quantity handled___________(in liters)

Health: _________ Panchamrut: _________ Amul shakti: _________

Amul gold: ________Butter Milk: ___________

59
6. What is the distance of other nearest Agent/Retailer?

a) Agent of Panchmahal dairy: ________

b) Agent of Other milk: i) Brands handled: ___________________________

ii) Distance_______

c) What do you feel about the distance of other agent of Panchmahal dairy?

_________________________________________________________________

____

7. When do you sell milk?

Morning Evening

Both morning and evening All day

8. How many times do you get milk delivery from dairy? ________

10. Is this time suitable to you? Yes No

11. If Not then what time is suitable for you?

_________________________________________

12. How do you store milk after getting the delivery from the distributor?

Open Deep Freezer Refrigerator

Ice Box Visi-cooler Other _______

13. How do you think you can improve milk storage at your shop?

_____________________________________________________________________

14. Do you want to sell milk for the whole day if dairy makes it available?

Yes No

15. How dairy can help you for improving storage?

______________________________________________________________

16. How many consumers return without milk daily? ________

17. What is the approximate average number of leakage pouches per day? ____

60
18. Main reason for leakage is

Pin Hole leakage Side packing opens

Middle (vertical) packing opens

19. What is the frequency of spoilage? ________________

20. Do you feel that spoilage occur too frequently and is a big problem?

Yes No

21. To whom you report to immediately when spoilage occurs? ______________

22. In how much time you get response to that? _________________________

23. How do you measure the response of sales staff when you complain of spoilage?

Satisfactory Neutral Unsatisfactory

24. What can be done to reduce spoilage?

Change in delivery time Cooling Equipment Training

25. a) Home Delivery offered: Yes No

b) How much (liters/day) ___________

26. Do you charge the consumer for the home delivery facility?

Yes No Comments, if any ____________________________

27. How do you carry milk for home delivery? ____________________________

28. How do you think the home delivery system can be improved?

33. Have you attended any training/Orientation programme conducted by dairy?

Yes No

a) If yes, how do you find it? Very useful OK Not

useful

61
 b) What do you feel after attending the program? (Any changes in feelings for

complaints regarding commission, leakages etc)

_____________________________________________________________________

b) If No, would you like to attend the orientation programme?

Yes No

34. Should dairy conduct such programmes? Yes No

35. Satisfaction level

FACTORS Highly Satisfied Undecided Slightly Dissatisfied

Satisfied Dissatisfied
Availability
Quality of packaging
Consumer satisfaction
Advertising
Incentives offered
Dairy employees’
assistance
Distributor’s employee
assistance
Approachability of

staff
Complaint redressal
Payment System
Dairy employee’s
behaviour
Commission

36. Do you consider yourself as a member of Panchmahal family?

Yes No
Why?
________________________________________________________________
37. Do you think that a uniform for all retailers will help to improve image of

Panchmahal dairy and increase your association with the dairy?

Yes No

38. Any suggestion do you want to give penetration of Panchmahal dairy milk into the
market
62
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________

THANK YOU VERY MUCH

APPENDIX 2: QUESTIONNAIRE FOR CONSUMER SURVEY

Dear respondent,
I am a student of Institute of Rural Management, Anand carrying out a study on milk
market of Panchmahal and Dahod districts, as a part of my project. I need certain
information to assist me in completion of my project, which I will get by
administering this questionnaire. I expect your cooperation in this regard, the
information divulge by you will be kept confidential and will be used for academic
purpose only.
1. Do you buy milk? Yes No
63
2.From where do you buy milk? 1. Panchmahal dairy booth 2. Doodhiya
milk
3. Private dairy farm please tell the brand 1_______________
2_______________
4. Any other (please specify)__________________________________
3. How do you buy milk?
1. Delivered at the door by the doodhiya
2. Delivered at the door by dairy agent
3. Domestic help
4. Family members (please specify)
______________________________________
5. Any other (please
specify)_____________________________________________

4. What are the different uses of the milk you buy by you?

1. Tea 2. Drinking 3. Curd 4. Sweet

5. Any other purpose (please specify)______________________________________

5. How much milk do you normally use daily?_____________________________

6. When in the day do you buy / get milk?
1. Morning 2. Evening 3. Both 4. Afternoon

7. How do you pay for the milk?

In advance At the time of purchase Credit payment

8. Do you know about different constituents of milk? Yes No

9. If yes, please tell the names of different constituents of milk_______________

10. Do you know about different proportion of constituents of milk used by you?

Yes No

11. If yes, tell name of different proportion of constituents of milk used by you.
_____________________________________________________________________
_____________________________________________________________________

12. Can you tell what pasteurization is?

___________________________________________________________________
_____________________________________________________________________

13. Is pasteurized milk is available in the town? Yes No

14.Have you ever heard of Panchamrut milk? Yes No

15. Have you ever used Panchamrut milk? Yes No

64
16. Qualities associated with the Panchamrut milk

Factors Strongly Agree Indifferent Disagree Strongly

agree disagree
Good for children
Creamy
Has vitamins
Clean
Nutritious
Unadulterated
Good for pregnant
ladies
Germ free
Tasty

17. Importance of following in selection of regular source for buying milk?

Factor Very high High Moderate Low Very low

Relations/ old association
Time of delivery
24 hour availability
Convenience
Door delivery
Looks of shop
Credit facility
ISO Certification

18. Do you think that it is reasonable to charge little extra for door delivery?
1. Yes 2 No if yes, how much?_____________

19 Have you changed the source/ kind of milk you buy in the past?
1. Yes 2 No

20. What were the reasons for change in source/ kind of milk? Please specify.
_____________________________________________________________________
_____________________________________________________________________

21. Here are the few factors that play a role in our buying decision. Please rank the
factors according to their importance (1 for the best 75-100%, 2 for 50-75%, 3 for 25-
50% and 4 for 0-25%)

Factor Panchmahal Doodhiya Private dairy Other

dairy milk milk farm milk sources
Freshness of
milk
Cream/fat
content
Cleanliness
65
Sweetness

Odour/smell
Consistent
quality
Packaging of
milk
Fitness for
making curd
Rapport with
seller

22. What is the price you pay for per liter of milk you
purchase_____________________

23. Are you ready to pay a higher price for more hygienic milk with higher fat
content?
1.Yes 2. No

B. PROBLEM IDENTIFICATION AND ATTRIBUTES

24 Are you satisfied with your present milk?
1. High 2 Moderate 3. No
25. Which milk do you prefer?
1. Cow 2. Buffalo 3 Both 4 Ignorant

26. Reasons for using said milk

1. Healthy 2. Whiteness 3 Fat content 4. Taste
Any other
reason__________________________________________________________
27. Are you satisfied with present pack size of Panchmahal milk? 1. Yes 2 No

28. If no, what are the reasons for the dissatisfaction?

_____________________________________________________________________
_____________________________________________________________________
__________________
29. What do you think about Panchamrut milk?

Factor Very good Good Neutral Bad Very bad

Freshness
Healthy
Taste
For making
tea or coffee
For drinking
Price
Smell/ odour
Packaging
Pack sizes
Leakages
66
30. Have you attended consumer orientation programme run by Panchmahal dairy?
1. Yes 2. No

31. Do you think it is an effective method to increase awareness?

1. Yes 2. No

32. What improvements can be done to increase consumer awareness?

_____________________________________________________________________
_____________________________________________________________________
____________________________________________________________________

33. Who takes decision of buying milk in the family?

1. Self 2. Husband 3. Parents 4. Neighbour 5.
Others_______________

34. While taking the decision of buying the milk advice is taken from whom?
1. Husband 2. Parents 3. In laws 4. Children 5.
Others_________________

C. PROFILE OF THE RESPONDENTS

35.Name_____________________________________________________________

36. Age_________________ years

37 Sex: 1. Male 2.Female

38. Ward number _____________

39. Address
_____________________________________________________________________
_____________________________________________________________________
40. Respondent’ status 1. Housewife 2. Working women 3 Male
member

41 Education level of the respondent 1. Illiterate

2. Can read and write 3. Up to class tenth 4. Class twelfth 5. Graduation

D. PROFILE OF THE HOUSEHOLD

42. Age group of household members

Age group Number of members

Infants (<3 years)
Children (3-15 years)
Young adults (15-35 years)
Adults (35-55 years)
Old (55 years and above)
Total number of members
67
 43. Occupation of the head of the household
1. Services 2. Business 3. Self-employed
4. Any other (please specify) ________________________________

44. Average monthly expenditure of the household on food items

1. Less than Rs 500 2. Rs. 500- Rs.999 3 Rs.1000- Rs.1999
4. Rs.2000-Rs. 4999 5. Rs. 5000- Rs.9999 6 more than Rs 10,000

45. Average monthly income of the household

1. Less than Rs.3000
2. Rs. 3000 – Rs 4499
3. Rs.5000 – Rs. 9999
4. Rs 10000- Rs 14999
5. Rs 15000 – Rs 19999
6. Rs 20000 and above

THANK YOU VERY MUCH

68