Dissertation- Performance of product portfolio offered by Milk Mantra with respect to its...

8/16/2019 Dissertation- Performance of product portfolio offered by Milk Mantra with respect to its competitors

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Dissertation

On

“Performance of product portfolio offered by Milk

Mantra with respect to its competitors”

( Report submitted for the partial fulfilment of the requirement for degree of Post Graduate

Diploma in Management from Regional College of Management affiliated to AICTE )

Submitted by:

Sayam oy

Regd No 1301247023

Internal guide

Prof. Dr . Aji tabh Das

Faculty of marketing Management

RCMA, Bhubaneswar

BHUBANESWAR, ODISHA

Chakadola Vihar, Chandrasekharpur, Bhubaneswar – 751023, Odisha

Tel: +91 674 2301595/ 2300455 / 466, Fax : +91 674 2300421, Email: [email protected]


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DECLARATION

I, Sayam Roy , pursuing PGDM (Post Graduate Diploma in Management) from Regional College of

Management Autonomous, Bhubaneswar, do hereby declare that this project on “Performance of product

portfolio offered by Milk Mantra with respect to its competitors” undertaken by me is a true work of

myself and is not submitted to any other university or published at any other time before for the purpose of

any degree or diploma.

Place:

Date:

Sayam Roy Regd. No. 1301247023


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ACKNOWLEDGEMENT

As a student of “Regional Col lege of M anagement Autonomous, Bhubaneswar ” I would like to extend my

sincere gratitude and thanks to Prof. Dr. Ajitabh Dash (RCMA) whose persistent supervision and

cooperation has been the source of inspiration for me during the internship.

It was because of his immense help and support that this project has been duly completed.

However, I accept the sole responsibility for any possible error and would be extremely grateful to the

readers of this dissertation if they bring such mistakes to my notice.


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CONTENTS

1) Chapter 1 : INTRODUCTION……………………………………………………………………..5 to 8

i) Introductionii) Background of the study

iii) Statement of the research problem

iv) Relevance of the study

v) Objective of the study

vi) Research hypothesis

vii) Limitation of the study

2) Chapter 2 : LITERATURE REVIEW……………………………………………………………9 to 15

i) Review of past literature

ii) Literature gap

iii) Contribution of the present study

3) CHAPTER 3 : CONCEPTUAL FRAMEWORK ………………………………………………16 to 21

i) Introduction

ii) Role of Marketing mix in Milk Products

iii) Product Polio As A Component Of Marketing Mix

iv) Profile of Milk Mantra

v) Profile of its Competitors

4) Chapter 4 : RESEARCH METHODOLOGY………………………………………………………...22

i) Introduction

ii) Method of investigation

iii) Sample for the study

iv) Sample selection

v) Period of the study

vi) Statistical tools and techniques used

5)

Chapter 7: DATA ANALYSIS AND INTERPRETATION…………………………...………23 to 26

6) Chapter 8 : FINDINGS AND CONCLUSION……………………………………….…………27 to 32

i) Findings of the study

ii) Suggestions

iii) Conclusion

iv) Managerial implication

7) BIBLIOGRAPHY……………………………………………………………………………………....32


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Chapter 1: INTRODUCTION

i) Introduction

Indian Dairy Industry

The Indian dairy industry has been through an evolution right from the British era till today. It has come

a long way over the years from a milk production volume of 55.7 million tons in 1991-92 to 127.3million tons in 2012. Steadily and firmly, it has cruised to become numerouno in the list of milk

producing countries and the smallholder milk producers have scripted this success story. Today, the

Indian Dairy industry stands at a mammoth size of US$ 70 billion. Given the highest mulch bovine

population of 115.487 million in the world, India exhibits tremendous potential to further strengthen its

position in the world dairy market. The operation flood program promoted and implemented by the

National Dairy Development Board (NDDB) has been instrumental in bringing about a white revolution

in India. Changing lifestyle, feeding habits and urban culture has somewhat effected the transition of the

Indian dairy Industry into a more of a demand driven, highly diversified and exciting business

proposition.The country accounts for more than 15 per cent of world’s total milk production and is also the world’s

largest consumer base of dairy products, consuming almost all of its own milk production. Dairying has

been regarded as one of the activities that could contribute to alleviating the poverty and unemployment

especially in the drought‐ prone and rain‐fed areas. In India, about three‐fourth of the population live in

rural areas and about 38 per cent of them are poor. Therefore among these people, as well as the large

vegetarian segment of the country’s population, dairy products provide a critical source of nutrition and

animal protein to millions of people in India.

Prior to year 2000, India was not noticed by most international dairy companies, as the country was

neither an active importer nor an exporter of dairy products.

Currently, the Indian dairy market is growing at an annual rate of 7 per cent. Despite the increase in

production, a demand supply gap has become imminent in the dairy industry due to the changing

consumption habits, dynamic demographic patterns, and the rapid urbanization of rural India. This

means that there is an urgent need for the growth rate of the dairy sector to match the rapidly growing

Indian economy.

The Structure of the Indian Dairy IndustryThe Indian dairy industry is mainly constituted of 22 state milk federations, 110,000 dairy cooperative

societies involving more than 12 million milk producers. There are also some major private players in

the field which further improved the dairy sector of the country namely; Amul, Britannia, Nestle, Mother

dairy and Nandini etc., to name a few. The home company "Amul" is ranked 18thin the world (IFCN,

2007), Fonterra of New Zealand being the no. one player in this field.

According to NDDB, the dairy cooperative network includes 177 milk unions operating in over 346

districts and covering 1, 33,349 village level societies is owned by around 13.9 million farmer members

of which 3.9 million were women. The Indian dairy industry contributes about 69 per cent to the entire

bulk of output from the livestock sector. The dairy sector has grown robustly in the past years and hasincreased the per capita availability to around 256 grams.


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Dairy cooperatives account for the major share of processed liquid milk marketed in the country. Milk is

processed and marketed by 170 milk producers' cooperative unions, which federate into 22state

cooperative milk marketing federations. The organized sector still remains a minor stakeholder and

handles about 20 per cent of the milk whereas the unorganized sector of the dudhiyas and mithaiwallas

still controls about 80 per cent of the industry. The structure of Indian dairy industry, as mentioned in

figure, further reveals that organized sector of Indian dairy industry comprise of private dairies, various

Milk Cooperatives Societies and Government dairies.

India has the credit of being the largest producer as well as the biggest consumer of milk in the world. It

also has the world’s largest dairy herd (comprised of cows and buffalos). In 2010-11, livestock generated

output worth INR 2,075 billion (at 2004-05 prices) which comprised 4% of the GDP and 26% of theagricultural GDP. India’s milk production accounts for 16% of total global output. The dairy industry is

expected to grow 4-5% per annum. In the past 20 years, milk production in India has doubled and has

reached the 116.2 million tons a year thus becoming India’s No.1 farm commodity. The current market

size of the dairy industry is INR 2.6 trillion and is estimated to grow up to INR 3.7 trillion by 2015.

As per the latest statistics of National Dairy Development Board (NDDB), the dairy cooperative network

in the country includes 177 milk unions covering 346 districts and over 1, 33,000 village-level societies

with a total membership of nearly 14 million farmers. All the statistics given above are indicators of a

flourishing dairy sector in India providing suitable opportunities to the industries engaged in the dairy

business.

The Orissa State Cooperative Milk Producers Federation Limited (OMFED) is a Dairy Cooperative

Society at the apex level. The main activities of OMFED are production, promotion, procurement,

marketing and processing of milk and its various products for the economic development of the

community of village farming in the state of Orissa. It is the leading organized milk producer of Odisha

and has come into existence to integrate the milk producers in rural areas with consumers in the urban

areas with an enterprising aptitude. OMFED is clearly the market leader till date in Odisha.

On the other hand the name Milk Mantra conveys a message that it is possible to establish a strong link

between the consumer and the producer, without compromising on quality, fair price for producers and

returns for investors. The company has successfully provided alternative products and, in the process,

demonstrated consumers will not hesitate to pay more for quality products. The company has madeinroads into the well-established supply chain through ethical milk sourcing.

Indian DairyIndustry

Organised

20%

Private Dairies

(532)

Cooperative

Societies (258)

Government

(46)

Unorganised

80%


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ii) Background of the study

Dairy farming in Odisha employed more than 60% of total work force in agriculture and allied

activity. The milk production status is increasing each year in Odisha. The milk production was

2.20 million ton in 2010-11 with per capita availability of milk 136 grams. There is total of 14.3

million milch cattle up to 2007. Majority of dairy farmers are small and marginal farmers.

OMFED is operating for more than three decades, new players have come. Among all the new

players in milk processing area, Milk Mantra is growing at a high pace.

The key players are:-

o AMUL: Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India.

The word amul (अम ू ल ) is derived from the Sanskrit word amulya (अम ू य ), meaning rare,

valuable .The co-operative was initially referred to as Anand Milk Federation Union Limited

hence the name AMUL. Formed in 1946, it is a brand managed by a cooperative body, the

Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly

owned by 3 million milk producers in Gujarat. Amul spurred India's White Revolution, which

made the country the world's largest producer of milk and milk products. In the process Amul became the largest food brand in India and has ventured into markets overseas. Dr Verghese

Kurien, founder-chairman of the GCMMF for more than 30 years (1973 – 2006), is credited

with the success of Amul. The Amul Model is a three-tier cooperative structure. This

structure consists of a dairy cooperative society at the village level affiliated to a milk union

at the district level which in turn is federated into a milk federation at the state level. Milk

collection is done at the village dairy society, milk procurement and processing at the District

Milk Union and milk products marketing at the state milk federation. The structure was

evolved at Amul in Gujarat and thereafter replicated all over the country under the Operation

Flood programme. It is known as the 'Amul Model' or 'Anand Pattern' of dairy cooperatives.

o MILK MANTRA: - Founded in late 2009 by Mr. Srikumar Misra (XIMB Graduate), India's

first VC funded agri-business startup. A dairy venture with a focus on functionally

differentiated products & leveraging brand capital for creating sustainable impact. The Milky

Moo brand is one of the fastest growing dairy foods/FMCG brands in this part of the world.

Milk Mantra is now procuring from area like Bhubaneswar, Cuttack and Puri.

o OMFED: - Started in 1980 OMFED as a brand name has become an integral part in its

existence. OMFED has seven dairy plants, these dairies are involved in processing of milk

products in various packing sizes for marketing it throughout the state of Orissa. OMFED has

seven dairy plants at Bhubaneswar, Rourkela, Sambalpur, Balasore, Dhenkanal, Keonjhar,

and Jeypore to process milk received from approximately 1-lakh farmers through 10 chilling

centers of District Milk Producers Union. Under the brand "OMFED" these dairies are

involved in processing of milk products in various packing sizes for marketing it throughout

the state of Orissa. OMFED as a brand name has become an integral part in its existence.

Thus its effectiveness as a co-operative organization in handling rural milk procurement,

processing and marketing has been proved beyond doubt in the state of Orissa.


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iii) Statement of the research problem

To analyze the performance of product portfolio offered by Milk Mantra with respect to its

competitor.

iv) Relevance of the study

To find out the acceptance level of Milk Mantra products among customers with respecte to its

competitors.

v) Objective of the study

To describe the product performance of Milk Mantra.

To analyze the perception of customers towards the products of Milk Mantra.

To develop a perceptual map for Milk Mantra products with respect to its major

competitors by taking into consideration eight attributes namely availability, nutritional

value, fat content, odor, taste, freshness, hygiene and price.

vi) Research hypothesis

Whether customers have a better perception towards the Milk Mantra products compared to itscompetitors?

vii) Limitation of the study

Survey area was confined to Bhubaneswar only.

Survey was totally confined to the customers who prefer only one brand each and doesn’t

include customers who consume products from more than one brand.

Time span was limited to 1 month.

Questions were mostly closed ended.


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Chapter 2: LITERATURE REVIEW

(i) Review of past literature

Literature Review 1:

Opportunities and Challenges in Indian Dairy Industry Supply Chain:

A Literature Review by Rajeev Kumar

Opportunities and challenges in Indian dairy industry

The entire dairy Industry in India has its base in the small holders and marginal farmers. These prime

stakeholders of the entire value chain of milk are deprived of minimum resources of land, labour, capital etc.

The other issues and challenges in Indian dairy industry at the grass root levels are given below:

I ssues and Challenges at the Small holder Level

Inadequate feeding of animals: More disease incidence: Small holders who are not members ofcooperative societies often get deprived of good animal health care facilities in terms of routinevaccination and prophylactic disease prevention measures. Financial constraints generally inhibit

these farmers’ access to the organized veterinary services and they still rely on the quacks andconventional treatment methods.

Low genetic potential of animals: The stock of animals even if crossbred has less percentage ofexotic genes, which lowers their milk production. There is indiscriminate artificial inseminationwithout proper record keeping which leads to repeated inbreeding and decreased production potentialof the animals.

Lack of chilling capacities: The farmers having high yielding varieties of the cattle and buffalohave a different issue all together. These farmers milk their animals 2-3 times in the day and everytime they have to carry this milk to the distant collection centres where there is a cooling facility orelse the milk goes waste if there is delay.

Exploitation of farmers: Those farmers who do not conform to any of the cooperative societies get

exploited at the hands of the contractors of the private dairies with regard to payment of exact duesas per the fat content of the milk.

High production costs: Compared to the amount of efforts and maintenance costs being involved inthe production of milk, the farmers do not get remunerative prices due to low market prices and lackof elasticity in the prices of milk.

Delayed payment of dues: The farmers are not only paid less according to the quality of milk butalso their payment is delayed from time to time. This comes in line with the sick and non-performingmilk cooperative unions, which pass on the perils of mismanagement and marketing losses to these

poor farmers.

I ssues and Chall enges at Coll ection Level

Milk base mainly consisting of small holders: The majority of dairy farmers being small andmarginal the average holdings of animal come to around 5 animals per farmer. This brings in thelogistical challenge of collecting milk from each farmer twice on a daily basis. The farmer usuallyloses much time waiting in the queue to deposit their milk at the collection centres thus resulting inloss of networking man-days.

Involvement of too many intermediaries: Keeping in view the large no of intermediaries involvedin the milk collection procedures the milk loses its quality in the process. This leads to increasedmicrobial contamination and fluctuation in the volume of the milk before reaching the collectioncentres and bulk coolers.

Gaps in information: In this era of information technology, the dairy sector is unorganized withrespect to the support information. There is no record of the milk, which is being collected fromdifferent milk producers at the collection centres. If anything goes wrong in terms of the discovery of


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zoonotic disease organisms at a later stage there is no scope of backtracking to the farmer. Thoughthere has been a success in this regard with the e-governance project being implemented in AMULwith the help of IIM Ahmadabad, it has not been replicated by all the cooperative societies in thesector.

Absence of a screening system: Milk before being pooled up at the collection centre from variousfarms and animals are not subjected to any screening for the zoonotic diseases and adulterants andcontaminants in many of the cooperative societies. This often results in spoilage of the entire batchof the pooled milk if one of the milk cans goes undetected. Linking back to source as such is not

possible in the absence of a database.

Lack of Infrastructure: When there is a thrust on increasing the milk production, then there should be ample amount of facilities to handle it. There is a dearth of required infrastructure of chilling plants and bulk coolers due to which so much of milk goes waste due to spoilage.

Manipulation of the quality of milk by the farmers: The farmers not being able to get fair andremunerative prices for the milk often tend to give adulterated milk at the collection centres. Theyoften add additives to forge the fat content of the milk and get better price for the lot. Addition ofvegetable fat, animal fat, starch, etc. has been quite frequent among the farmers to alter the fat andsolid content of the milk.

I ssues and Chall enges at the Processing L evel Seasonality of production and fluctuating supply: India being a tropical country renders a hot and

humid climate for the animals and thus fluctuations in the milk production. There is a flush season inthe cooler parts of the year whereas the production goes down in the warmer months. Thus, at times,the surplus of milk exceeds the processing capacity and milk goes waste whereas on the other handthe processing capacity goes underutilized in the lean period.

Absence quality standards: There is absence of stringent quality standards like HACCP, Codex etc.in most of the cooperative milk unions, which bars Indian dairy products for exports into the foreignmarket.

Adulteration and Food safety: The most important aspect of milk processing is its purity andwholesomeness. There has been an instance of cheap substitution of skimmed milk powder with

below standard substances, which is hazardous to health. Even though there are certain Food safetyActs but still every other day we get to know about various tankers of spurious milk beingapprehended.

Lack of trained and skilled workers: There is lack of trained and skilled workers who can handlethe milk processing operations hygienically and safely.

I ssues and challenges at the Storage and Logistics Level

Lack of cold storage facilities: Milk being a highly perishable product requires be processing orcooling as soon as possible after milking, to prevent spoilage and contamination. However to ensurethis there is a need of refrigerated milk silos for storage which are not present at the village levels.

Gap in the cold chain and transport facilities: There are long distances to be covered to reach bulkmilk coolers from the collection centre. There is a shortage of refrigerated vans and insulated tankersfor ferrying the chilled milk to the processing plants

I ssues and Chall enges at the Co-operati ve Level

Less number of member farmers: The cooperative model though successful has not been able toinclude all the farmers into the fold. There are still many potential farmers who use the informalchannel of milk sale and delivery.

Lower participation in the decision making process: There is huge government interference inmany of the co-operative federation activities, which leads to lesser say of the farmers in manycrucial issues.

Losses: Poor management of the some of the village cooperatives have led to huge losses in the tradedue to which farmers have lost faith in these entities.


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Low prices of milk: The co-operatives declare low prices for procuring milk from the farmers,which benchmarks the prices and forces other players to sell milk at the same prices.

Inefficient services: The cooperatives have also failed in many parts of the country in providing the basic inputs in terms of quality feed, exotic germplasm and veterinary services.

Insufficient Infrastructure: Some of the co-operatives are lacking the cooling and milk testingfacility at the village level collection centres.

I ssues and chall enges for Marketing

Majority of the Market is still unorganized: The milk market in India still faces the challenge ofgetting organized. The unorganized market makes it competes with the organized market in relationto prices.

Acceptability of the Consumer base: A large fraction of the consumer base in India is yet to acceptthe clean and supple milk from organized dairies due higher costs. The mind set of buying freshwhole milk from the milkman is still prevalent in the Indian consumers.

Less penetration to the rural Market: Most of the milk produced by the dairy co-operatives goesto the urban market. The rural consumers are still dependent on the informal and unorganized marketchannels. Lack of transparent milk pricing System: There is no specific minimum support price ofthe milk in the system, which makes it unremunerated for the farmers.

CONCLUSION

Highly competitive Indian dairy industry poses threat/challenges for the survival in the global dairy market.There is no doubt that there is tremendous scope for the growth of the dairy industry in the new millennium.The product mix of world dairy trade is likely to shift further towards cheese. This has been developed in theworld markets. As the market opens up, consumption trends associated with these markets will haveincreasing influence on the world trade. Whole milk powder is likely to continue to be a substantial

beneficiary and growth substantially in the Middle Eastern countries.The dairy industry in India has been on a steady path of progression since Indian independence. It has grownfrom producing 17 million tons of milk in 1951 to producing 127.3 million tons in 2012. Today, India is oneof the largest milk producing countries in the world. This solid progress is primarily attributable to structural

changes in the Indian dairy industry brought about by the advent of dairy cooperatives. The Indian dairyindustry reported a market size of USD 48.5 billion in FY2011.With a Compound Annual Growth Rate (CAGR) of 16 percent, it is anticipated to reach USD 118 billion in2017. On the back of a rise in disposable income, coupled with strong demand for dairy products, the Indiandairy industry is all set to experience high growth rates in the next five years. The consumption pattern ofdairy products in India is unique as compared to some of the western countries. Consumption is primarilyskewed towards traditional products; however, westernized products are gradually gaining momentum in theurban areas. Interestingly, buffalo milk accounts for the largest share of the total milk produced in thecountry. Since the pricing of milk is based on the fat content, buffalo milk offers higher profit margins ascompared to cow milk as it contains higher fat.The Indian dairy sector is characterized by high fragmentation. It is dominated by the unorganized sector

comprising of 70 million rural households. The per capita availability of milk in India stands at 289.4 grams

per day. Backed by strong domestic demand, the per capita availability of milk is anticipated to reach 336

grams per day in FY 2017. Currently, the Indian dairy market is growing at an annual rate of 7 per cent.

Despite the increase in production, a demand supply gap has become imminent in the dairy industry due to

the changing consumption habits, dynamic demographic patterns, and the rapid urbanization of rural India.

This means that there is an urgent need for the growth rate of the dairy sector to match the rapidly growing

Indian economy. Despite being the one of the largest milk producing countries in the world, India accounts

for a negligible share in the worldwide dairy trade. The ever-increasing rise in domestic demand for dairy

products and a large demand-supply gap could lead India to be a net importer of dairy products in the near

future.


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Literature Review 2:

The Economics of Milk Production in Orissa, India,with Particular Emphasis on Small-

scale Producers

by Amit Saha, Otto Garcia and Torsten Hemme

Results

Milk Production in India and Orissa

India is a world leader in milk production, contributing about 15 percent to total world output. In 2002, India

produced an estimated 84 million MT, second only to the EU. Milk yields in India, at 694 kg per cow per

year, however, are extremely low compared to other large milk producing countries such as the USA,

Germany or New Zealand. Average milk yields per animal in the US were 11 times higher than those of

India, while for New Zealand the figure is 5 times higher. Farm gate prices received in the US were twice as

high, while those received in Germany were 50 percent higher than those received by Indian farmers. Only

in New Zealand were farm gate prices found to be slightly lower.

Orissa does not contribute significantly to milk production in India. With only 1.7 percent of the dairy cow

population and 0.4 percent of the buffalo population in 2002, milk production in Orissa contributed only 1.1

percent to the milk produced in India. Most of the milk in Orissa is produced on farms with marginal to

small landholdings, less than 2 hectares, and with 3 or 4 animals. Even by Indian standards, milk yields in

Orissa are extremely low (1/4 of the Indian average). Farm gate prices of milk are only slightly lower than

the Indian average, but still a little higher than those received in New Zealand. The per capita milk

production in Orissa is very low at 26 kg per capita per year while the annual per capita production in India

is 82 kg.

Analysis of ‘Typical Farms’ in Ganjam and Gajapati Districts of Orissa

Based on the IFCN methodology, six farm types were identified as ‘typical’ and were subjected to detailed

analyses. Two small dairy farms, IN-2CO (2 local cows and less than a hectare land) and IN-2BO (2

buffaloes and 1-2 ha land), represent over 95 percent of the dairy farms in Orissa. The farms IN-6CO (6

crossbred cows in a peri-urban area) and IN-6BO (6 grade buffaloes, also in a peri-urban area) represent the

fast growing medium sized commercial farm types in Orissa. These farm types provide a picture of the

economies of scale and the effect of location peri-urban and urban areas. Farms IN-15CO (15 local cows)

and IN-9BO (9 local buffaloes) represent only 5 percent of the farms in rural areas but have distinctly

different production and management characteristics due to their large herd size and access to areas for

common grazing.

Dai ry production systems

Local, non-descript cows are the main type of dairy animals followed by buffaloes and crossbred cows. The

family is in charge of the management of the farm but they use the opportunity to hire very cheap labour.

Fallow and forest land can be used for grazing. Feed rations are based on agricultural by-products such as

rice bran, rice polish, broken rice, paddy straw and pulses meal. Commercial cattle feed is only used by the

medium sized commercial farms such as IN-6CO. Milking is done by hand. In terms of non fat corrected

milk (ECM), production per dairy animal ranges from 210 to 1,305 kg/year.


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Household comparison

Household incomes range from 420 US-$ to 1,570 US-$ per year. Income structure is quite diverse with

non-cash benefits being prominent in the small systems. For example, draught power, manure and fuel from

cow dung, and milk used in the household account for 16 percent of the household income in IN-2CO. Off

farm income is quite important for all the stall fed systems in Orissa and constitutes 5 to 45 percent of the

household income.

Whole farm comparison

The returns from farming range from 460 US-$ to 2,910 US-$ per year. The dairy contributes 25 to 85

percent to the whole farm returns. The returns from cash crops are also important, ranging from 15 to 70

percent, depending on farm type. Net cash farm income closely follows the level of farm returns with the

exception of the large commercial cow system (IN-15CO), where net farm income is relatively low, mainly

due to comparatively high cash costs and hired labour costs in dairy per 100 litres ECM. The highest net

cash farm income was obtained in the commercial buffalo based dairy farming system (IN-6BO), mainly

due to lower unit costs of milk production.

The net cash farm income ranges from 190 US-$ to 1,100 US-$ per year. The low net cash income of 190

US-$ per year (IN-2CO) is due to low milk yields, small size of land holding, and slightly lower milk prices

paid by the cooperative due to lower fat content and remote location.

Comparison of the dairy enterpr ise - Costs of mi lk production

The buffalo-based pastoral dairy farming system (IN-9BO) and the commercial stall-fed crossbred cow

based dairy farming system (IN-6CO) have the lowest cost of milk production per 100 litres of ECM at

around 12.3 to 12.9 US-$. The commercial buffalo-based dairy farming system with grade buffaloes, IN-

6BO, has slightly higher costs at 14.6 US-$ per 100 kg ECM, mainly because of slightly higher purchased

feed costs. These farm types have the potential to compete in the long run with imports of dairy products and

also to produce milk for export, provided international quality standards can be achieved and the dairy chain

being internationally competitive.

In the small farm systems, the buffalo-based rural farm (IN-2BO) produces milk at a significantly lower unit

cost (at 19.9 US-$ per 100 kg ECM) than the IN-2CO cattle based farm which could only produce at 31.4

US-$. This can be explained by higher milk yields and higher labour productivity in IN-2BO. It has to be

noted, however, that the main purpose of IN-2CO is to produce milk for home consumption (30 percent of

the production) by converting locally available feedstuff into milk, livestock, fuel and draught power for its

crop activities. Given that IN-15CO can produce milk at comparatively lower costs (15.3 US-$ per 100 kgECM), there is a potential to lower milk production costs, but this requires the realization of economies of

scale in similar cattle-based farms through expansion to larger herd sizes. Another alternative could be a

herd of a cow and a buffalo for uniform milk production in the year (see Annex A-6).

As in small dairy farms in most other countries, farm IN2-CO will tend to persist as long as alternative

employment opportunities (at 0.14 US-$/hour in this case) are not available. With the existing wage rate for

dairy labour at 0.11 US-$/hour, the chances of obtaining available alternative employment seems remote.

Comparison of dairy farms in Or issa and Haryana

A comparison of typical and leading-edge farms in Orissa with corresponding farms in Haryana reveals that

milk production in Orissa is relatively cost competitive. Although milk yields in Orissa are much lower than


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in Haryana, farmers in Orissa produce milk at competitive costs due to lower land costs and lower wage

rates. The availability of grazing land in Orissa and cheaper feed also contributes to lowering the costs of

milk production. Buffalo milk production was found to be more cost competitive in Orissa than in similar

farms in Haryana. However, farm gate milk prices are lower by around 5 percent in Orissa and farm incomes

are much lower in Orissa than in Haryana due to low milk yields and lower off-farm income.

Dairy chain in Or issa

Most of the milk marketing is done through the informal sector with milk being sold to the milkman or

locally. Farmers are encouraged to sell buffalo milk with higher fat content to co-operatives by milk pricing

based on fat content and assurance of seasonal fixed prices throughout the year.

Producer milk prices are 14 percent higher in the informal sector than in formal sector (milk union

cooperative). Consumer prices for fluid milk are also lower in the informal sector through the milkmen and

farmers selling directly in the rural market. Both the consumer and the producer markets are mostly captured

by the informal sector although the quality of milk handled through this channel is poor. Consumers have a

high price elasticity of demand for milk products. Without information on milk quality or means to check for

adulteration, consumers will continue to prefer the cheaper products and the informal sector will maintain itshold of the major share of milk markets in Orissa.

It is estimated that only about 5 percent of total marketable supply of milk is handled by the formal sector,

the cooperatives. Estimates show that the cooperative milk union selling toned milk with 3 percent fat

receives value-added and retail margins of 0.22 US-$ per kg of raw milk used and of 0.06 US-$ for other

raw materials used (Skimmed milk powder). In the informal sector, the local milkman selling raw milk in

the nearby town or city receives a processing and retailing margin of 0.13 US-$ per kg of milk handled

followed by the peri-urban farmer selling milk directly in the town, who

The Economics of Milk Production in Orissa, India, with Particular Emphasis on Small-scale Producers 4receives a margin of 0.12 US-$ per kg milk sold. The costs of value-added in the formal sector, however, are

significantly higher than in the informal sector.

Conclusions

The present study analyzed six typical dairy farming systems in Orissa. All the systems cover their cash

costs and contribute positively to farm income.

The most common dairy farming system, IN-2CO (2 local cows) produces very low cash farm income and

generates negative entrepreneurial profits. The persistence of this system is largely due to the low cash costs

of milk production. Moreover, given the scarcity of alternative employment opportunities for family labour,

the dairy activity produces a relatively good cash margin of around 10 US-$ per 100 kg ECM. There is

potential for improving farm income by improving milk yields and increasing herd size. The other small

dairy farming system, IN-2BO (2 buffaloes), has even lower costs of milk production than IN-2CO, mainly

due to its higher milk yields. Although the lowest net costs of milk production are incurred by the pastoral,

buffalo-based dairy farming systems (IN-6BO), this production system is not very prevalent in the region

given the scarcity of common grazing areas.

The share of off-farm income was the highest in the most prevalent small dairy farming system (IN- 2CO).

Family labour is a relatively important component of cost in small subsistence farm types like IN-2CO and

IN-2BO. In the commercial farm types such as IN-6CO and IN-6BO, purchased feed costs are

proportionately higher. Other returns from dairy such as cow dung for fuel and draught power are


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proportionately higher in the small farms. An important component of the dairy farming system that results

in significant differences in farm profits are the returns to labour. The returns to labour are very low for the

small farms but much above the existing wage level in case of the commercial farms (IN-6CO and IN-6BO).

In case of pastoral systems, IN-9BO had comparatively higher returns to labour than IN-15CO mainly due to

the higher milk yields of the buffalo-based system.

A comparative analysis of typical dairy farms in Orissa and Haryana revealed differences in cost and

productivity of dairy farming in the two states. A large potential to reduce milk production costs ofsmallholder dairy farming and increase family farm income through milk production exists in Orissa by

better breed, feed and herd management. Smallholders using buffalo for milk production in Orissa were

found to be more cost competitive than similar farms in Haryana. Hence suitable strategies to promote such

buffalo-based systems should have potential for improving the production and competitive position of

dairying in Orissa.

(ii) Literature gap

Does OMFED still enjoys the benefits of market leader that it used to 2-3 years back or is

it losing some grounds to its competitors like Milk Mantra, Amul, Kamdhenu.

If OMFED is still the market leader and it’s acceptability among the customers is highest

then how come Milk Mantra and or others are evolving and expanding at such a rapid

pace in Odisha and hence meticulously leveraging the power of branding and

merchandising and is using digital media extensively to promote their products.

(iii)Contribution of the present study

The study describes the current prevailing situation of dairy industry in Odisha.

It describes the product performance of key dairy players like OMFED, Amul, Milk

Mantra and thus helps to analyze the customer’s perception to contribute towardsdeveloping a perceptual map.

Hence it helps to determine the actual position of Milk Mantra with respect to its

competitors in the Odisha dairy industry.


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CHAPTER 3: CONCEPTUAL FRAMEWORK

(i) Introduction

A conceptual framework is an analytical tool with several variations and contexts. It is used to make

conceptual distinctions and organize ideas. Strong conceptual frameworks capture something real and do

this in a way that is easy to remember and apply.

Perceptual mapping is a diagrammatic technique used by asset marketers that attempts to visually

display the perceptions of customers or potential customers. Typically the position of a product, productline, brand, or company is displayed relative to their competition.

Perceptual maps can have any number of dimensions but the most common is two dimensions.

Perceptual maps need not come from a detailed study. There are also intuitive maps (also called

judgmental maps or consensus maps) that are created by marketers based on their understanding of their

industry. Management uses its best judgment. It is questionable how valuable this type of map is. Often

they just give the appearance of credibility to management’s preconceptions.

When detailed marketing research studies are done methodological problems can arise, but at least

the information is coming directly from the consumer. There is an assortment of statistical procedures

that can be used to convert the raw data collected in a survey into a perceptual map.(ii) Role of Marketing mix in Milk Products

The Marketing mix is a set of four decisions which needs to be taken before launching any new product.

These variables are also known as the 4 P’s of marketing. These four variables help the firm in making

strategic decisions necessary for the smooth running of any product /organization. These variables are

1. Product

2. Price

3. Place

4. Promotions

Marketing mix is mainly of two types.

Product marketing mix – Comprised of Product, price, place and promotions. This marketing mix

is mainly used in case of Tangible goods.

Service marketing mix – The service marketing mix has three further variables included which are

people, physical evidence and process.

The term marketing mix was first coined by Neil H Borden back in 1964 in his article “The concept of

marketing mix”. Several strategic analysts over the years believe that the marketing mix can make or break

the firm. Having the right marketing mix at the start of the marketing plan is absolutely essential. Over time

the concept of marketing mix has provided a steady platform for the launch of a new product or business.

As mentioned before, the marketing mix is characterized by four different but equally important variables.

These variables are never constant and may be changed over time. However, a change in one of the variables

may cause a change in all the other variables as well. The variables are as follows

Product – The first thing you need, if you want to start a business, is a product. Therefore Product is

also the first variable in the marketing mix. Product decisions are the first decisions you need to take

before making any marketing plan. A product can be divided into three parts. The core product, the

augmented product and the tertiary product. Before deciding on the product component there aresome questions which you need to ask yourself.

o What product are you selling?


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o What would be the quality of your product?

o Which features are different from the market?

o What is the USP of the product?

o Whether the product will be branded as sub brand or completely new?

o What are the secondary products which can be sold along with primary (Warranty, services)

Based on these questions, several product decisions have to be made. These product decisions

will in turn affect the other variables of the marketing mix. For example – You launch a car with

is to have the highest quality. Thus the pricing, promotions and placing would have to be altered

accordingly. Thus as long as you don’t know your product, you cannot decide any other variable

of the marketing mix. However, if the product features are not fitting in the marketing mix, you

can alter the product such that it finds a place for itself in the marketing mix.

Pricing – Pricing of a product depends on a lot of different variables and hence it is constantly

updated. Major consideration in pricing is the costing of the product, the advertising and

marketing expenses, any price fluctuations in the market, distribution costs etc. Many of these

factors can change separately. Thus the pricing has to be such that it can bear the brunt ofchanges for a certain period of time. However, if all these variables change, then the pricing of a

product has to be increased and decreased accordingly.

Along with the above factors, there are also other things which have to be taken in

consideration when deciding on a pricing strategy. Competition can be the best example.

Similarly, pricing also affects the targeting and positioning of a product. Pricing is used for

sales promotions in the form of trade discounts. Thus based on these factors there are several

pricing strategies, one of which is implemented for the marketing mix.

Place – Place refers to the distribution channel of a product. If a product is a consumer product,

it needs to be available as far and wide as possible. On the other hand, if the product is

a Premium consumer product , it will be available only in select stores. Similarly, if the product

is a business product, you need a team who interacts with businesses and makes the product

available to them. Thus the place where the product is distributed, depends on the product and

pricing decisions, as well as any STP decisions taken by a firm.

Distribution has a huge effect on the profitability of a product. Consider a FMCG company

which has national distribution for its product. An increase in petrol rates by Rs.10 will in fact

bring about drastic changes in the profitability of the company. Thus supply chain and logistics

decisions are considered as very important costing decisions of the firm. The firm needs to have

a full proof logistics and supply chain plan for its distribution.

Promotions – Promotions in the marketing mix includes the complete integrated

marketing communications which in turn includes ATL and BTL advertising as well as sales

promotions. Promotions are dependent a lot on the product and pricing decision. What is the

budget for marketing and advertising? What stage is the product in? If the product is completely

new in the market, it needs brand / product awareness promotions, whereas if the product is

already existing then it will need brand recall promotions.

Promotions also decide the segmentation targeting and positioning of the product. The right

kind of promotions affect all the other three variables – the product, price and place. If the

promotions are effective, you might have to increase distribution points, you might get to

increase the price because of the rising brand equity of the product, and the profitability might

support you in launching even more products. However, the budget required for extensive

promotions is also high. Promotions is considered as marketing expenses and the same needs to

be taken in consideration while deciding the costing of the product.

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All the four variables of marketing mix are inter related and affect each other. By increasing the

pricing of the product, demand of the product might lessen, and lesser distribution points might be

needed. On the other hand, the product USP can be such that maximum concentration is on creating

brand awareness, thereby increasing need of better pricing and more promotions. Finally, the overall

marketing mix can result in your customer base asking for some improvement in the product, and the

same can be launched as the upgraded product.

The role of marketing mix in Strategy – Marketing mix plays a crucial role while deciding

the strategy of an organization. It is the first step even when a marketing plan or a business plan is

being made. This is because marketing mix decision will also affect segmentation, targeting and

positioning decisions. Based on products, segmentation and targeting will be done. Based on the

price, positioning can be decided. And these decisions will likely affect the place and promotion

decisions. Thus, the marketing mix strategy goes hand in hand with segmentation targeting and

positioning.

To market the products every company needs to create a successful mix of right product at

right price at the right place through right promotion.

4P’s Requirement of Customer Thus providing

Product Fresh liquid milk Solu tion to CustomerPrice Affordable by common people Value to customer

Place Extensive availability as and when required Access to Customer

Promotion Proper info regarding the fat content, nutritional value I nformation to Customer

(iii)Product Portfolio As A Component Of Marketing Mix

Product is anything that can be offered to a market to satisfy a want or need.

Product Levels

Each level adds more value to the customers

Core Product: -This is the basic product and the focus is on the purpose for which the product

is intended. For example, a warm coat will protect you from the cold and the rain.

Generic Product: -This represents all the qualities of the product. For a warm coat this is about

fit, material, rain repellent ability, high-quality fasteners, etc.

Expected Product: -This is about all aspects the consumer expects to get when they purchase a

product. That coat should be really warm and protect from the weather and the wind and becomfortable when riding a bicycle.

CORE BENEFIT

BASIC

PRODUCT

EXPECTED

PRODUCT

AUGMENTED

PRODUCT

POTENTIAL

PRODUCT

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Augmented Product: -This refers to all additional factors which sets the product apart from

that of the competition. And this particularly involves brand identity and image. Is that warm

coat in style, its color trendy and made by a well-known fashion brand? But also factors like

service, warranty and good value for money play a major role in this.

Potential Product: -This is about augmentations and transformations that the product may

undergo in the future. For example, a warm coat that is made of a fabric that is as thin as paper

and therefore light as a feather that allows rain to automatically slide down.

PLC

Product Life Cycle is used to map the lifespan of the product, i.e. the stages through which a

product goes during its lifespan.

The four stages are: -

o INTRODUCTION:

Low and slow stage: The product sales are the lowest and move up very slowly at

snail's pace. Low levels of competition.

Highest Promotional Stage: During this period of introduction or the development,

promotional expenses bear the highest proportion of sales.

Highest Product prices: Lower input and sales absorbing fixed costs.

o GROWTH: Once the market has accepted the product, sales begin to rise. This is most crucial

stage and help the brand to establish in the market.

o MATURITY: Market becomes saturated because, the house hold demand is satisfied and

distribution channels are full.

o DECLINE: Sooner or later actual sales begin to fall under the impact of new product

competition and changing consumer tastes and preferences.

Features and strategies adopted at various stages of PLC.

INTRODUCTION GROWTH MATURITY DECLINE

SALES Low Sales Rapidly Rising Sales Peak Sales Declining Sales

COST High Cost/ Customer Avg Cost/ Customer Low Cost/ Customer Low Cost/ Customer

PROFIT Negative Risisng Profits High Profits Declining Profits

CUSTOMERS Innovators Early Adopters Early & Middle Majority Laggards

COMPETITION Few Growing Number Stable Number Declining Number

MARKETING

OBJECTIVE

Create Product

Awareness & TrialMaximise Market Share

Maximise Profit while

defending Market Share

Reduce Expenditure &

Milk the Brand

PRODUCT Offer a Basic ProductOffer Product Extension &

Service WarrantyDiversify Brands and Items

Phase Out Weak

Product

PRICE Charge Cost Plus Price to Penetrate MarketPrice to Match

Competition

Cut Price

DISTRIBUTIONBuild Selective

DistributionBuild Intensive Distribution

Build More Intensive

DistributionGo Selective

ADVERTISINGBuild Product Awareness

Amongst Early Adopters

Build Awareness and

Interest in the mass Market

Stress Brand Difference

and Benefits

Reduce to Level needed

to retain Loyality

SALES

PROMOTION

Use Heavy Sales

Promotion to entire trial.

Reduce to take advantage

of heavy customer demand.

Increase to encourage

Brand Switching

Reduce to minimal

Level

FEATURES

STRATEGIES


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(iv) Profile of Milk Mantra

(v) Profile of its Competitors

Milky Moo

Milk Curd Paneer Lassi Buttermilk

Omfed

Milk & MilkProducts

Ghee

Table butter

Paneer

Chennapod

Peda

Rabdi

Lassi

Cold Cofee

Curd

Milk

Ice Creams

HorticultureProducts

Orange sip

Pineapplesip

LemonGinger

Squash

Jam

Sauce

Pickle

KandhamalOrganicProducts

TurmericPowder

Mustardseed

Honey

Cattle feedproducts

Premiumgold

Deermash

Mineralmixture


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AMU L

BreadSpreads

BeverageRange

AmulPRO

Ice Cream

Paneer

Dahi

Ghee

Milk powder

Nutramul

MithaiRange

Chocolates

Fresh Cream

PouchButter Milk

Amul Cattle

Feed

AmulMilk


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Chapter 4: RESEARCH METHODOLOGY

(i) Introduction

The process used to collect information and data for the purpose of making decisions is called

research methodology. The methodology may include publication research, interviews, surveys

and other research techniques, and could include both present and historical information.

(ii)

Method of investigation

Collecting data and analyzing it through various statistical and marketing tools.

Primary Data: Primary data collected through questionnaire and interviewing the

customers.

Secondary Data: Collected from internet and from other research papers.

(iii)Sample for the study

Customers Sample Size :100

Successful Survey : 75

(iv) Sample selection

Only those samples which provided completed responses were selected. Total of 75 samples

were selected out of 100.

AMUL: - 25

OMFED: - 25

MILK MANTRA: - 25

(v) Period of the study

1 month

(vi) Statistical tools and techniques used

Many statistical tools like,

Descriptive Statistics

Bar Charts

Have been used in this research to derive the conclusion


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Chapter 5: DATA ANALYSIS AND INTERPRETATION

Do you like the taste

AMUL OMFED MILK MANTRA

Frequency Percent Frequency Percent Frequency Percent

Strongly Disagree 5 20.0 4 16.0 0 0Disagree 5 20.0 9 36.0 0 0

Neutral 9 36.0 7 28.0 5 20.0

Agree 5 20.0 5 20.0 15 60.0

Strongly Agree 1 4.0 0.0 0.0 5 20.0

Total 25 100.0 25 100.0 25 100.0

Do you feel that it has high nutritional value



Strongly Disagree 3 12.0 5 20.0 0 0Disagree 3 12.0 9 36.0 0 0Neutral 10 40.0 3 12.0 5 20.0

Agree 7 28.0 4 16.0 10 40.0

Strongly Agree 2 8.0 4.0 16.0 10 40.0

Total 25 100.0 25 100.0 25 100.0

0.0

10.0

20.030.0

40.0

50.0

60.0

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

AMUL Percent 20.0 20.0 36.0 20.0 4.0

OMFED Percent 16.0 36.0 28.0 20.0 0.0

MILK MANTRA Percent 0 0 20.0 60.0 20.0

P E R C E N T A G E O F R E

S P O N D E N T S

Do you like the taste?

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Strongly

Disagree

Disagree Neutral Agree Strongly Agree

AMUL Percent 12.0 12.0 40.0 28.0 8.0

OMFED Percent 20.0 36.0 12.0 16.0 16.0


P E R C E N T A G E O F R E S P O N D E N T S

Do you feel that it has high nutritional value


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Do you feel that the products have high freshness




Agree 6 24.0 4 16.0 15 60.0

Strongly Agree 5 20.0 2.0 8.0 0 0.0

Total 25 100.0 25 100.0 25 100.0

Do you feel the products are hygienic


Frequency Percent Frequency Percent Frequency PercentStrongly Disagree 3 12.0 3 12.0 0 0

Disagree 3 12.0 3 12.0 0 0Neutral 5 20.0 8 32.0 5 20.0

Agree 12 48.0 10 40.0 15 60.0

Strongly Agree 2 8.0 1.0 4.0 5 20.0

Total 25 100.0 25 100.0 25 100.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Strongly

Disagree

Disagree Neutral Agree Strongly

Agree

AMUL Percent 12.0 32.0 12.0 24.0 20.0

OMFED Percent 16.0 24.0 36.0 16.0 8.0


% O

F R E S P O N D E N T S

Do you feel that the products have high freshness

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Strongly

Disagree


Agree

AMUL Percent 12.0 12.0 20.0 48.0 8.0

OMFED Percent 12.0 12.0 32.0 40.0 4.0


% O


Do you feel the products are hygienic


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Does the product have low fat content



Strongly Disagree 2 8.0 7 28.0 0 0

Disagree 6 24.0 7 28.0 0 0

Neutral 10 40.0 7 28.0 20 80.0

Agree 4 16.0 2 8.0 5 20.0

Strongly Agree 3 12.0 2.0 8.0 0 0.0

Total 25 100.0 25 100.0 25 100.0

Do you feel the pricing of the product is perfect




Agree 3 12.0 7 28.0 7 28.0

Strongly Agree 0 0.0 4.0 16.0 0 0.0

Total 25 100.0 25 100.0 25 100.0

0.0

10.020.0

30.0

40.0

50.0

60.0

70.0

80.0

Strongly

Disagree


Agree

AMUL Percent 8.0 24.0 40.0 16.0 12.0

OMFED Percent 28.0 28.0 28.0 8.0 8.0


% O


Does the product have low fat content

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.040.0

Strongly

Disagree


Agree

AMUL Percent 16.0 40.0 32.0 12.0 0.0

OMFED Percent 20.0 16.0 20.0 28.0 16.0


% O


Do you feel the pricing of the product is perfect


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Products are available as and when required




Agree 0 0.0 2 8.0 3 12.0

Strongly Agree 0 0.0 5.0 20.0 0 0.0

Total 25 100.0 25 100.0 25 100.0

Do you like the odour




Agree 8 32.0 9 36.0 8 32.0

Strongly Agree 6 24.0 3.0 12.0 5 20.0

Total 25 100.0 25 100.0 25 100.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Strongly

Disagree


Agree

AMUL Percent 0.0 40.0 60.0 0.0 0.0

OMFED Percent 16.0 24.0 32.0 8.0 20.0


% O


Products are available as and when required

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.040.0

Strongly

Disagree


Agree

AMUL Percent 32.0 8.0 4.0 32.0 24.0

OMFED Percent 8.0 32.0 12.0 36.0 12.0


% O


Do you like the odour


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Chapter 6: FINDINGS AND CONCLUSION

(i) Findings of the study

1. Do you like the taste?

AMUL

Only 4% of respondents strongly like the taste. 40% don’t like the taste at all.

36% are not sure whether they like it or not.

OMFED

A major 52% don’t like the taste.

20% like the taste.

28% of respondents are not sure whether they like it or not.

Milk Mantra

80% of respondents do like the taste.

Rest 20% are not sure whether they like it or not.

Milk mantra is a clear winner in case of taste as there were no respondents in case of Milk mantra whodidn’t like the taste.

2. Do you feel it has high nutritional value?

AMUL

36% do agree that it has high nutritional value.

24% consider that it doesn’t have any nutritional value. 40% are not sure.

OMFED

56% disagree that it has high nutritional value.

12% are not sure.


Milk Mantra


Rest 20% are not sure.

Even here also Milk mantra is better accepted compared to other brands as more percentage ofrespondents in case of it agree to its high nutritional content.


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3. Do you feel that the products have high freshness?

AMUL

44% do agree that it has high freshness.

44% consider that it doesn’t have high freshness.

12% are not sure.

OMFED 40% disagree that it has high freshness.

36% are not sure.


Milk Mantra



Milk mantra products are considered to be fresher as compared to Amul and Omfed as majority ofrespondents (60%) consider it to be fresh.

4. Do you feel that the products are hygienic?

AMUL

56% do agree that it is hygienic.

24% consider that it doesn’t have high freshness.

20% are not sure.

OMFED

24% disagree that it has high freshness.

32% are not sure.


Milk Mantra



In case of freshness Milk Mantra leads followed by Amul and then Omfed.


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5. Does the product have low fat content?

AMUL

28% do agree that it is fat content is low.

32% consider that it has high fat content.

40% are not sure.

OMFED

56% consider that it has high fat content.

28% are not sure.

16% do agree that it is fat content is low.

Milk Mantra

20% do agree that fat content is low.


In this case the well accepted brands especially Omfed (in Odisha) and Amul have more acceptance as

compared to Milk Mantra. Majority of respondents are not sure about the fat content of Milk mantra products.

6. Do you feel the pricing of the product is perfect?

AMUL

12% do agree that the pricing is perfect.

56% consider that the pricing is not perfect and it is overpriced.

32% are not sure.

OMFED


20% are not sure.


Milk Mantra



28% are not sure.

Only Omfed comes out to be the brand which is considered perfectly priced by customers followed byMilk Mantra and then Amul.


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7. Products are available as and when required?

AMUL

Not even 1 customer agreed that the products are available readily.

40% consider that the products are not available as and when required.

60% are not sure.

OMFED 40% consider that the products are not available as and when required.

32% are not sure.

28% do agree that the products are available readily.

Milk Mantra

12% do agree that the products are available readily.

80% consider that the products are not available as and when required.

8% are not sure.

Milk mantra products are not at all readily available as and when required as perceived by the customers.

8. Do you like the odor?

AMUL

56% agreed that they like the odor.

40% consider that they don’t like the odor.

4% are not sure.

OMFED 40% consider that they don’t like the odor.

12% are not sure.


Milk Mantra


28% consider that they don’t like the odor.

20% are not sure.

In case of odor the most acceptable brand is Amul followed by Milk Mantra and then last is Omfed.


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Portfolio analysis of Milk Mantra using G. E. multi factor analysis.

As we can see that Milk Mantra is in a position where it has to invest to build.

(ii) Suggestions

Milk Mantra should properly inform customers regarding the fat content through variousadvertisements and promotions.

The pricing of the products must be reviewed by Milk mantra taking into consideration the priceset by its major rival Omfed. Proper pricing will make the products more acceptable tocustomers.

There is a huge gap in the proper distribution of milk mantra products. Hence the logistics systemmust be analyzed. Also Milk mantra must review and consider the distribution through districtmilk union concept which may help them to revamp the distribution system.

In case of odor it has better acceptance compared to omfed and hence must utilize this fact for business growth.

The major strengths of milk mantra lies in taste, high nutritional value, freshness and hygiene somilk mantra must maintain the same and moreover look for opportunities to improve these as andwhen required.

Milk Mantra


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(iii)Conclusion

Milk Mantra is in a position where the market attractiveness is high (being dairy industry) whereasthe business strength of Milk Mantra is medium.It must challenge the market leader OMFED for leadership. It must build selectively on its strengthsand thus reinforce in vulnerable areas so that it can evolve to become a much stronger business unitand hence become the market leader in dairy industry in Odisha.

(iv) Managerial implication

The product portfolio analysis suggests specific marketing strategies to achieve balanced mix of products that will produce maximum long run effects from scarce cash and managerial resources.In this case the portfolio analysis of Milk Mantra will help the organization to utilize on its strengthsand hence improve the other factors that are hindering their product acceptance in the Odisha market.


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CHAPTER 7: BIBLIOGRAPHY

Opportunities and challenges in indian dairy industry supply chain:

A literature review by rajeev kumar.

The economics of milk production in orissa, india,with particular emphasis on small-scale

producers by amit saha, otto garcia and torsten hemme.

Marketing Management (14th Edition) by Philip Kotler and Kevin Lane Keller.

Reference

1. en.wikipedia.org

2. www.google.co.in

3. http://www.segmentationstudyguide.com/

4.

http://www.strategicmanagementinsight.com/
http://www.google.co.in/http://www.google.co.in/http://www.segmentationstudyguide.com/http://www.segmentationstudyguide.com/http://www.strategicmanagementinsight.com/http://www.strategicmanagementinsight.com/http://www.strategicmanagementinsight.com/http://www.segmentationstudyguide.com/http://www.google.co.in/

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