Preference Repaired)

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CHAPTER – 1

SECTION-A

INTRODUCTION TO THE TOPIC

Dairy market has a great potential in a comparison with other markets of food product

due to the popularization of this category of products in the recent years. The changes

are very dynamic and are mainly affected by the degree with which market offer

matches changing preferences of buyers which on the other hand are altering together

with a change in lifestyle of consumers that manifests it through:

• increasing attention to the health and nutritional values of food products,

• reduce of time spending on household activities, including preparing meals,

• expectation of the convenience of food products,

• expectation of the availability of food products.

• expectation of the facility of preparation,

The consequence of these changes is that consumers choose convenient food and food

such as “light” or “diet”. Both of these groups include dairy products, especially

modern, because modern products on dairy market have a great potential and there

exists a low market saturation of this category of products.

The highest milk producer in the entire globe – India boasts of that status. India is

otherwise known as the ‘Oyster’ of the global dairy industry, with opportunities

galore to the entrepreneurs globally. Anyone might want to capitalize on the largest

and fastest growing milk and mil products' market. The dairy industry in India has

been witnessing rapid growth. The liberalized economy provides more opportunities

for MNCs and foreign investors to release the full potential of this industry.

Potential for investment in the dairy industry

Some areas of Indian dairy industry can be toned up by the evocation of differentiated

technologies and equipment from overseas. These include:

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1. Raw milk handling: The raw milk handling needs to be elevated in terms of

physicochemical and microbiological properties of the milk in a combined

manner. The use of clarification and bactofugation in raw milk processing can

aid better the quality of the milk products.

2. Milk processing: Better operational ratios are required to amend the yields and

abridge wastage, lessen fat/protein losses during processing, control

production costs, save energy and broaden shelf life. The adoption of GMP

(Good Manufacturing Practices) and HACCP (Hazard Analysis Critical

Control Points) would help produce milk products adapting to the international

standards.

3. Packaging: Another area that can be improved is the range of packing

machines for the manufacture of butter, cheese and alike. Better packaging can

assist in retaining the nutritive value of products packed and thus broaden the

shelf life. A cold chain distribution system is required for proper storage and

transfer of dairy products.

4. Value-added products: There's vast scope for value-added products like

desserts, puddings, custards, sauces, mousse, stirred yoghurt, nectars and

sherbets to capture the dairy market in India.

The Indian dairy industry has aimed at better mananamegemt of the national resources

to enhance milk production and upgrade milk processing involving new innovative

technologies. Multinational dairy giants can also make their foray in the Indian dairy

market in this challenging scenario and create a win-win situation for both.

India's Milk Product Mix

Fluid Milk 46.0%

Ghee 27.5%

Butter 6.5%

Curd 7.0%

Khoa (Partially Dehydrated Condensed Milk) 6.5%

Milk Powders, including IMF 3.5%

Paneer & Chhana (Cottage Cheese) 2.0%

Others, including Cream, Ice Cream 1.0%

Overview of the Indian Dairy Sector

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• The country is the largest milk producer all over the world, around 100

million MT

• Value of output amounted to ` 1179 billion (in 2004-05) (Approximately

equals combined output of paddy and wheat!!)

• 1/5thof the world bovine population

• Milch animals (45% indigenous cattle, 55 % buffaloes, and 10% cross bred

cows)

• Immensely low productivity, around 1000 kg/year (world average 2038

kg/year)

• Large no. of unproductive animals, low genetic potency, poor nutrition and

lack of services are the main factors for the low productivity

• There are different regions – developed, average, below average (eastern

states of Orissa, Bihar and NE region) in the dairy industry.

The market size of the dairy industry was $45 billion in 2006-07 and it is estimated to

grow to $83 billion by 2015. The processed dairy category accounts for 73 per cent in

value terms and 35 per cent in volume terms. The processed market is $32.9 billion in

value terms. The organised sector contributes 24 per cent or $7.9 billion to the

processed category. Sweets, homemade ghee and yogurt contribute significantly to the

organised segment.

1.1 CONSUMER PREFERENCES

Consumer preference may be defined as “The power or ability to choose one thing

over another with the anticipation that the choice will result in greater satisfaction,

greater capability or improved performance.” The underlying foundation of demand,

therefore, is a model of how consumers behave. The individual consumer has a set of

preferences and values whose determinations are outside the realm of economics.

They are no doubt dependent upon culture, education, and individual tastes, among a

plethora of other factors. The measure of these values in this model for a particular

good is in terms of the real opportunity cost to the consumer who purchases and

consumes the good. If an individual purchases a particular good, then the opportunity

cost of that purchase is the forgone goods the consumer could have bought instead.

1.2 THE THEORY OF THE CONSUMER

A consumer is someone who buys or uses things (goods) or services.

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• GOODS are things we use like food.

• SERVICES are things that other people do for us. Service may be defined as”

an activity or benefit that one party offers to another”. It is essentially tangible

and does not result in ownership of anything. Its production may or may not be tied to physical products.

The "consumer" is the one who consumes the goods and services produced. Mahatma

Gandhi said a customer is the most important visitor in our premises. He is not

dependent on us, we are on him. He is not an interruption to our work, he is the

purpose of it.

Typically when business people talk of consumers they are talking about person asconsumer , an aggregated commodity item with little individuality other than that

expressed in the buy/not-buy decision. However there is a trend in marketing to

individualize the concept. Instead of generating broad demographic

profiles and psycho-graphic profilesof market segments, marketers have started to

engage in personalized marketing, permission marketing, and mass customization.

Consumer make decisions by allocating their scarce income across all possible goods

in order to obtain the greatest satisfaction. Formally, we say that consumers maximize

their utility subject to budget constraint. Utility is defined as the satisfaction that a

consumer derives from the consumption of a good. As noted above, utility’s

determinants are decided by a host of noneconomic factors. Consumer value is

measured in terms of the relative utilities between goods. These reflect the

consumer’s preferences.

1.3 THE THEORY OF CONSUMER PREFERENCES

Consumer preferences are defined as the subjective (individual) tastes, as measured

by utility, of various bundles of goods. They permit the consumer to rank these

bundles of goods according to the levels of utility they give the consumer. Note that

preferences are independent of income and prices. Ability to purchase goods does not

determine a consumer’s likes or dislikes. One can have a preference for Porsches over

Fords but only have the financial means to drive a Ford.

1.4 IMPORTANCE OF CONSUMER PREFERENCE

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

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

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

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

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


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

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

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

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

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

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

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

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

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



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

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

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

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

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



Consumer preference for a product can make or break a company. If consumers

generally like a product, it can stay around for years and sell millions of copies.

However, if consumers do not like the product, it could disappear very quickly if the

company cannot figure out how to fix the problem.

Many consumers choose to buy white cars instead of red or blue no matter what brand

the car is, where it was built or how many cup holders it has. This is a consumer

preference. Why is white the most popular car colour? Some people say it is because

it signifies purity or even technology. The colour of a car has nothing to do with how

the car functions, so logic would say that all colours would sell the same amount or

car manufacturers would only produce one colour. However, this is not the case.

Those manufacturers produce many colours, including twice as many in white, or

whichever colour is trendy or popular at the time.

1.5 DIFFERENCE OF OPINION

Sometimes, consumer preferences may lead to negative results. Shampoo companies

found that their customers associate suds with cleanliness, leading them to add

sudsing agents to their products even though the amount of suds has nothing to do

with how well the shampoos clean hair. The first company to add more suds to their

formula was able to use it as a marketing and promotional advantage. Other

companies followed suit, leading to a sudsiness competition.

Unfortunately, the more sudsy the lather, the worse the shampoo will clean. This is

true for two reasons. According to the Fox Avenue Salon website, "First, the

extremely sudsy shampoo takes much longer to rinse out of your hair, resulting in

excessive use of water. Secondly, with so many suds the hair doesn't seem to get as

clean." So, instead of manufacturers educating customers on how shampoo works,they add chemicals to adjust their products to the consumer preference.

1.6 HOW COMPANIES FIND CONSUMER PREFERENCES

Companies routinely test the market to find out what customers like and dislike about

their products and competitors' products. This is usually done by an internal

marketing department or outsourced to a market research firm. Phone interviews,

paper surveys, electronic surveys, focus groups and consumer samplings are common

methods for gathering information.

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http://www.ehow.com/cars/








Market Research Example

Here is a popular example of market research: A customer has finished shopping and

paying for merchandise at a local grocery store. Before handing the receipt to her, the

cashier points to and explains that she has been invited to participate in a short survey

about her visit. If she chooses to participate, she will receive $5 off her next visit and

a chance to win a large monetary grand prize.

1.7 HOW COMPANIES USE THIS INFORMATION

After gathering information, the next step for the company is to determine what it

means. Analysis of the information may lead the company to change the formula,

packaging, colour, size or some other feature of the product. In the case of the suds in

the shampoo, the manufacturers may find that customers are continuing to prefer and

associate the foamy lather with high quality cleanliness, leading them to keep the

same formula or decide to add even more of the sudsing agent.

1.8 THE NEED TO UNDERSTAND CUSTOMER PREFERENCE

Have you ever wondered why your company often loses relatively satisfied

customers? Why is it that customers will often indicate they are satisfied with how

they have been treated but then leave for a competitor at the first opportunity? Why is

customer defection often unrelated to price? The answers to these and other related

questions are found in coming to an understanding of customer preference.

The idea that customers prefer one product or one service over another is not new.

The ability to identify and measure the elements of such preference decisions with

any accuracy and reliability has only recently become available.

Research into this area of consumer behavior has brought understanding to some of

the major issues with standard customer satisfaction research. Most importantly, we

have come to realize that high customer satisfaction does not assure continued

customer preference. Satisfaction research over the past fifteen years demonstrates

that high satisfaction scores, while a measure of corporate performance on a set of

important criteria, do not adequately explain the composition of preference formation

and therefore often serve as insufficient predictors of sustained preference or what is

normally referred to as customer loyalty.

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Loyalty as a concept has also shown itself to be difficult to define. Like beauty,

loyalty is truly in the eye of the beholder. We understand there are different types and

degrees of loyalty and some of these are not appropriate in describing the relationship

between a consumer and a company. However, preference has demonstrated the

ability to be effectively measured and to provide meaningful insight into the choices

consumers make when selecting one provider over another and when determining to

continue a relationship over time.

An Example

Let’s consider an individual considering the purchase of a new automobile. This is,

for most people, a highly considered purchase. The potential automobile customer

may have a preference profile like the one below with a number of emotive and

functional components that must be met for preference to form.

Meaning of Brand

1.9 BRAND

A brand is a name, term, sign, symbol or a combination of them intended to identify

the goods and services of one seller or group of sellers and to differentiate them from

those of competition. For example, Coke, Nestle and Microsoft are well renowned

brands. Brands cannot be expected to last forever. Brands today play a number of

important roles that improve consumers' lives and enhance the financial value of the

firms. A brand can take many forms, including a name, sign, symbol, colour

combination or slogan. The word brand began simply as a way to tell one person's

cattle from another by means of a hot iron stamp.

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Some people distinguish the psychological aspect, brand associations like thoughts,

feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become

linked to the brand, of a brand from the experiential aspect. The experiential aspect

consists of the sum of all points of contact with the brand and is known as the brand

experience. The psychological aspect, sometimes referred to as the brand image, is a

symbolic construct created within the minds of people, consisting of all the

information and expectations associated with a product, service or the company

providing them.

Brand is the personality that identifies a product, service or company (name, term,

sign, symbol, or design, or combination of them) and how it relates to key

constituencies: customers, staff, partners, investors etc. Some people distinguish the

psychological aspect, brand associations like thoughts, feelings, perceptions, images,

experiences, beliefs, attitudes, and so on that become linked to the brand, of a brand

from the experiential aspect.

The experiential aspect consists of the sum of all points of contact with the brand and

is known as the brand experience. The psychological aspect, sometimes referred to as

the brand image, is a symbolic construct created within the minds of people,

consisting of all the information and expectations associated with a product, service or

the company(ies) providing them.

People engaged in branding seek to develop or align the expectations behind the

brand experience, creating the impression that a brand associated with a product or

service has certain qualities or characteristics that make it special or unique. A brand

is therefore one of the most valuable elements in an advertising theme, as it

demonstrates what the brand owner is able to offer in the marketplace. The art of creating and maintaining a brand is called brand management. Orientation of the

whole organization towards its brand is called brand orientation.

Careful brand management seeks to make the product or services relevant to the target

audience. Brands should be seen as more than the difference between the actual cost

of a product and its selling price - they represent the sum of all valuable qualities of a

product to the consumer.

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

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

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

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

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


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

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

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

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





A brand which is widely known in the marketplace acquires brand recognition. When

brand recognition builds up to a point where a brand enjoys a critical mass of positive

sentiment in the marketplace, it is said to have achieved brand franchise. One goal in

brand recognition is the identification of a brand without the name of the company

present. For example, Disney has been successful at branding with their particular

script font (originally created for Walt Disney's "signature" logo), which it used in the

logo for go.com.

1.10 BRAND POSITIONING

Effective Brand Positioning is contingent upon identifying and communicating a

brand's uniqueness, differentiation and verifiable value. It is important to note that

"me too" brand positioning contradicts the notion of differentiation and should be

avoided at all costs. This type of copycat brand positioning only works if the business

offers its solutions at a significant discount over the other competitor(s).

Generally, the brand positioning process involves:

1. Identifying the business's direct competition (could include tertiary players

that offer your product/service amongst a larger portfolio of solutions)

2. Understanding how each competitor is positioning their business today (e.g.

claiming to be the fastest, cheapest, largest, the #1 provider, etc.)

3. Documenting the provider's own positioning as it exists today (may not exist if

startup business)

4. Comparing the company's positioning to its competitors' to identify viable

areas for differentiation

5. Developing a distinctive, differentiating and value-based brand positioning

statement, key messages and customer value propositions.

1.10.1 BRAND POSITIONING STRATEGIES

• Overall strategies

Since its introduction, Titan has been positioned as a premium brand,

providing high quality products. With its numerous sub-brands catering to different

segments, the challenge that Titan faces is to create a strong brand image. It follows

different positioning strategies; these strategies can also be analyzed as given below:

• Attribute Positioning:

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When the company launched its products, it was the first to bring quartz

watches to the Indian market. The company successfully leveraged this to penetrate

the market and gain a market share. Raga, Classique and Regalia come under this

strategy. Classique has been positioned as elegant corporate wear that leaves a quiet,

but definite impression and fusion of function and sophistication. Power dressing now

has a new weapon! As Magic in gold and bicolor look, the 'Regalia' range represents

the essence of dress-wear. Raga has been differentiated and positioned as exclusive

watches for women. The Raga and Silver Raga collection is elegant, delicate and

feminine with each piece being truly unique.

• User Positioning:

Titan caters to several user groups- children (the Dash), sportspersons and

adventurers (PSI4000 and Fastrack range). The Fastrack range is seen as being

contemporary, sturdy and reliable. The advertising, packaging and merchandising of

this range is young, vibrant and ‘cool’ (the ad line says “Cool watches by Titan”)

• Benefit Positioning:

The Fastrack Digital range offers the customer a functional watch that is also

attractive. The digital watch has a “techno-geek” image, but Titan seeks to

differentiate its offering on the basis of superior style and attractiveness.

• Competitor Positioning:

With the entry of several foreign watchmakers into the market, Titan had to

counter the threat. Most of the entrants are catering to the upper end of the market-

Omega, Tissot, Cartier etc. Titan already had the Tanishq brand in this segment.

However, it has tried to reposition this brand by increasing the price range to

encourage more customers.

• Quality or Price Positioning:

In the overseas market, especially in Europe where it is competing with Swiss

and Japanese watches, it is positioning itself as ‘value- for- money’: reasonably priced

(less than Swiss watches and higher than Japanese), attractively styled and of good

quality. In Indian market, Sonata is a perfect example of Price positioning, titan came

up with this segment when it was facing heavy competition from lower end segment.

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1.11 CONSUMER AND BRANDING

Consumers may look on branding as an important value added aspect of products or

services, as it often serves to denote a certain attractive quality or characteristic (see

also brand promise). From the perspective of brand owners, branded products or

services also command higher prices. Where two products resemble each other, but

one of the products has no associated branding (such as a generic, store-branded

product), people may often select the more expensive branded product on the basis of

the quality of the brand or the reputation of the brand owner.

People begin to develop preferences at a very early age. Within any product category,

most consumers have a group of brands that comprise their preference set. These are the

four or five up market brands the consumer will consider when making a purchase.

When building preference, the goal is to first get on the consumer’s preference sets, and

then to move up the set’s hierarchy to become the brand consumers prefer the most –

their upmarket brand. Gaining and maintaining consumer preference is a battle that is

never really won.

In every product category, consumers have more choices, more information and higher

expectations than ever before. To move consumers from trial to preference, brands need

to deliver on their value proposition, as well as dislodge someone else from the

consumer's existing preference set.

Preference is a scale, and brands move up, down and even off that scale with and

without a vigilant brand management strategy. Pricing, promotional deals and product

availability all have tremendous impact on the position of our brand in the consumer’s

preference set. If all things are equal, the best defence is to make us more relevant to

consumers than the competition. The brands potential can only be fulfilled bycontinually reinforcing its perceived quality, upmarket identity and relevance to the

consumer. The same branding activities that drive awareness also drive preference.

And, while awareness alone will not sustain preference, it will improve the brand’s

potential for building and maintaining preference.

1.12 FACTORS AFFECTING THE CONSUMER PREFERENCES

A consumer's decision to buy a product is the result of interplay of many factors. The

process of choosing is a complex phenomenon. Selection of a product or service goes

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through a set of stages, especially for the selection of durable products. The customer

has to spend much time to think, evaluate and choose the desired brand based on

his/her requirements. After the opening up of the economy during the 1990s, with

proliferation of products and services from global players, the consumers found it

very hard to choose the right product or services. (Dharmaraj and Sudhahar, 2010)

A number of factors involve consumer choices. In some cases, consumers will be

more motivated . For example, one may be more careful choosing a gift for an in-law

than when buying the same thing for one self. Some consumers are also more

motivated to comparison shop for the best prices, while others are more convenience

oriented. Personality impacts decisions. Some like variety more than others, and

some are more receptive to stimulation and excitement in trying new stores.

Perception influences decisions. Some people, for example, can taste the difference

between generic and name brand foods while many cannot. Selective perception

occurs when a person is paying attention only to information of interest. For example,

when looking for a new car, the consumer may pay more attention to car ads than

when this is not in the horizon. Some consumers are put off by perceived risk . Thus,

many marketers offer a money back guarantee. Consumers will tend to change their

behavior through learning—e.g., they will avoid restaurants they have found to becrowded and will settle on brands that best meet their tastes. Consumers differ in the

values they hold (e.g., some people are more committed to recycling than others who

will not want to go through the hassle).

1.12.1 Customer involvement

Consumer involvement will tend to vary dramatically depending on the type of

product. In general, consumer involvement will be higher for products that are very

expensive (e.g., a home, a car) or are highly significant in the consumer’s life in some

other way (e.g., a word processing program or acne medication).

It is important to consider the consumer’s motivation for buying products. To achieve

this goal, we can use the Means-End chain, wherein we consider a logical progression

of consequences of product use that eventually lead to desired end benefit. Thus, for

example, a consumer may see that a car has a large engine, leading to fast

acceleration, leading to a feeling of performance, leading to a feeling of power, which

ultimately improves the consumer’s self-esteem. A handgun may aim bullets with

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precision, which enables the user to kill an intruder, which means that the intruder

will not be able to harm the consumer’s family, which achieves the desired end-state

of security. In advertising, it is important to portray the desired end-states. Focusing

on the large motor will do less good than portraying a successful person driving the

car.

1.12.2 Attributes

In a very frequent buying situation, consumers have to choose among products with

very similar intrinsic attributes. Under these conditions they must rely mainly on

extrinsic product attributes. Findings indicate: 1) a very strong preference for one of

the brands prior the test but the subjects were unable to distinguish their preferred

brand from the others in the blind taste test; 2) that subjects are not aware about the

factors directing their choice of a product; 3) that differences in subjects' preferences

due to brand name are much higher than those they indicate due to beers tastes. There

is a strong effect of brand name on consumers' buying intentions. (Urdan et al ).

The effects of market entry-information and exposure-order on brand preference

depend on attribute-type and the time between attribute encoding and preference

construction. Market entry-information has no effect on preference and where the

second-encountered brand is preferred to the first. (Niedrich et al ).

1.12.3 Consumer Perception

There are many things that influence the behaviour of the consumer. These influences

can be religion, ethnic group, social class, age, gender, values, etc. But what is even

more important than the different stimuli itself is how consumers perceive, process,

interpret and store the stimuli. This work will describe what perception is, how

consumers perceive and how this scheme can be used by marketers. What is perception? In general, perception is gathering information through our senses, which

are seeing, hearing, touching, tasting, smelling and sensing. Through these senses we

can perceive things, events or relations. But as there are so many different stimuli

only a small portion of them are noticed and an even smaller amount can really reach

our attention. And that’s were it is necessary to talk about the difference between

Sensation and perception. Although the distinction between sensation and perception

is not that easy as it was believed in former times, a rough distinction can be made.

Sensation is the immediate response of our sensory receptors to such basic stimuli as

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light, colour, etc. Perception is the process by which these stimuli are selected,

organized and interpreted. When talking about perception we always have to keep in

mind that we perceive the world not as it is, but as we think it is. That means that

there are innumerable perceived worlds out there. This statement is based on the fact

that every human being relates the observed world to its past experiences, its values,

etc. Perception is more than just gathering information about a certain event at a

certain time. It involves, recognizing stimuli, processing and storing them. The major

challenge for the marketer is to identify the target customer and to find out, how this

customer perceives the world. That will help to adjust all marketing activities to the

target customer.

a) Consumer Perception Theory

Consumer perception theory is any attempt to understand how a consumer's

perception of a product or service influences their behavior. Those who study

consumer perception try to understand why consumers make the decisions they do,

and how to influence these decisions. Usually, consumer perception theory is used by

marketers when designing a campaign for a product or brand. However, some people

study consumer perception in order to understand psychology in a much more general

sense.

b) Perception

In general psychological terms, perception is our ability to make some kind of sense

of reality from the external sensory stimuli to which we are exposed. Several factors

can influence our perception, causing it to change in certain ways. For example,

repeated exposure to one kind of stimuli can either make us oversensitive or

desensitized to it. Additionally, the amount of attention we focus on something can

cause a change in our perception of it.

c) Branding

A brand, or a brand name, is the attempt to impose some kind of identifying feature

on a product or service so that it is easily recognized by the general public. A brand is

oftentimes associated with an image, a set of expectations or recognizable logo. The

goal of a brand is to set a product or service apart from others of its kind, and

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influence the consumers to choose the product over similar products simply because

of its associations.

d) Positioning, Repositioning or Depositioning

Positioning is the process whereby marketers attempt to build a brand. Marketers

actively try to create an image which is both recognizable and appeals to a certain

group of people or target market. Repositioning is the process of altering this image,

usually in order to influence a larger target market and thereby influence the behavior

of a greater number of consumers. Depositioning is the practice of trying to devalue

alternative, competing brands in the perceptions of a shared target market.

e) Value and Quality

Value refers to the perceptions a consumer has of a product's benefits when weighed

against its cost. Value can be measured both qualitatively--the emotional or

psychological pleasure a consumer derives from a product or service--and

quantitatively, in terms of the actual financial gain it wins them. Quality can be

related to value, and may be taken into account when measuring the value of a

product or service. More formally, it refers to the way in which a product or service

relates to its competitors, or else conforms to a set of measurable standards.

f) Buyer's remorse

Buyer's remorse is a strong feeling of regret which occurs after a purchase has been

made. It is a specific case of cognitive dissonance, or the psychological state of worry

or unease which comes about when attempting to come to terms with conflicting

ideas, perceptions or motives. Buyer's remorse usually occurs after a consumer has

made a purchase he or she has come to regret. Generally, it involves the realization

that the opportunity of purchasing one product or service over another in some way

outweighs the value of the purchase. In this regard, it occurs when a consumer's

perception of a purchase changes after he or she has already invested in it.

1.12.4 Status

Status have additive effects on brand preference such that perceptions of first-in-

market and first-experienced brands are more favorable, suggesting that both

explanations are operative. The effects of pioneer status on brand preference aremediated by attitude toward the brand and company credibility, while the effects of

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experience order on brand preference are mediated by attitude toward the brand and

attribute recall. The effect of pioneer status on brand preference is the result of both

brand -level and company-level associations. (Niedrich et al ).

1.12.5 Brand Preference and Age Groups

Young consumers, for instance their approaches to product categorization; their

decision-making strategies; and their role in family decision making, considerable

work remains to be done to understand how young consumers develop brand loyalty,

brand preference and reliance. The findings indicate that product/brand imagery is

clearly established among young consumers, particularly for branded fashion

sportswear; and the results suggest that research design must take account of both age

and gender differences when choosing methods for eliciting data from young

consumers. ( Bruce and Hill, 1998)

The level of influence varies according to age, predisposition and cultural values.

While older customers place more emphasis on perceived brand quality, high on the

cultural value of individualism, commitment to brand is found to be a strong

contributor to brand preference. Similarly in the groups with a high power distance,

brand preference is more influenced by brand initiatives. While brand initiatives make

modest improvements to brand preference overall, more substantial impacts occur

under situational conditions. (Chomvilailuk and Butcher, 2010)

1.12.6 Values, Attitudes and Perception

The role of customer value has been largely recognized over time by the firms as an

instrument towards stimulating market share and profit optimization. The customer

values for innovative products and unfamiliar brands of firm in competitive markets

are determined largely by habits, reinforcement effects, and situational influences thanstrongly-held attitudes. (Rajgopal, 2006)

Consumers recognize brands by building favorable attitude towards them and through

the purchase decision process. Brand preference is understood as a measure of brand

loyalty in which a consumer exercises his decision to choose a particular brand in

presence of competing brands. Brand attributes including emotions, attitudes,

personality, image, reputation and trust influence consumer perceptions and temporal

16

http://www.emeraldinsight.com/search.htm?ct=all&st1=Margaret+K.+Hogg+Margaret+Bruce&fd1=aut

http://www.emeraldinsight.com/search.htm?ct=all&st1=Alexander+J.+Hill&fd1=aut

http://www.emeraldinsight.com/search.htm?ct=all&st1=Margaret+K.+Hogg+Margaret+Bruce&fd1=aut

http://www.emeraldinsight.com/search.htm?ct=all&st1=Alexander+J.+Hill&fd1=aut



association with brands. The study reveals that higher brand relevance and trust build

strong the association of consumers with brand in long-run. (Rajgopal, 2004)

The credibility of a brand as a signal is defined as the believability of the product

position information contained in a brand, which depends on consumer perceptions of

the willingness and ability of firms to deliver what they have promised. This term is

called moderation phenomenon "preference discrimination," which we conceptualize

as the decision makers' capacity to effectively discriminate between products' utilities

in choice situations. There is a strong evidence for brand credibility effects and

differential mechanisms through which brand credibility's impact materializes on

brand choice conditional on choice set, choice set formation and preference

discrimination. (Erdem et al, 2006)

1.12.7 Information search and decision making.

Consumers engage in both internal and external information search. Internal search

involves the consumer identifying alternatives from his or her memory. For certain

low involvement products, it is very important that marketing programs achieve “top

of mind” awareness. For example, few people will search the Yellow Pages for fast

food restaurants; thus, the consumer must be able to retrieve one’s restaurant from

memory before it will be considered. For high involvement products, consumers are

more likely to use an external search. Before buying a car, for example, the consumer

may ask friends’ opinions, read reviews in Consumer Reports, consult several web

sites, and visit several dealerships. Thus, firms that make products that are selected

predominantly through external search must invest in having information available to

the consumer in need—e.g., through brochures, web sites, or news coverage.

1.12.8 Segmentation and Brand PreferenceA multi-segmenting methodology is proposed for comparing the segmenting

capabilities of segmentation variables and providing complete market segmentation

information. Demographic and psychographic variables based on the differentiation of

consumer brand preference were used to elicit the characteristics of market segments.

The multi-combination variables of demographic segmentation exhibited market-

segmenting capabilities equivalent to those of psychographic segmentation. (Feng

Lin, 2004)

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1.12.9 Behaviour of Consumer

Consumer choice behavior has some important prevailing conditions that must be

taken into account while studying choice. In the light of the classical problem solving

buying behavior, consumers engage in information search before making the actual

choice. Consumer decision making process is usually guided by already formed

preferences for a particular alternative. This means that consumers are likely to make

the choice between alternatives based on limited information search activity (Beatty

and Smith, 1987; Moorthy et al , 1997).

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SECTION-B

VERKA MILK PLANT PROFILE

1.13 HISTORY

Milking has its advent

in the very evolution

of placental

mammals. While the

exact time of its

appearance is not

known, the immediate

ancestors of modern

mammals were much

like monotremes

including the

platypus. Such

animals today produce

a milk-like substance

from glands on the surface of their skin, but without the nipple, for their offspring to

drink after hatching from their eggs. Likewise, marsupials, the closest cousin to

placental mammals, produce a milk-like substance from a teat-like organ in their

pouches. The earliest immediate ancestor of placental mammals known seems to be

eomaia, a small creature superficially resembling rodents that is thought to have lived

125 million years ago, during the Cretaceous era. It almost certainly produced what

would be considered milk, in the same way as modern placental mammals.

Animal milk is first known to have been used as human food at the beginning of animal domestication. Cow milk was first used as human food in the Middle East

Goats and sheep are ruminants: mammals adapted to survive on a diet of dry grass, a

food source otherwise useless to humans, and one that is easily stockpiled. The

animals’ dairying proved to be a more efficient way of turning uncultivated grasslands

into sustenance: the food value of an animal killed for meat can be matched by

perhaps one year's worth of milk from the same animal, which will keep producing

milk — in convenient daily portions — for years.

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Around 7000 BC, cattle were being herded in parts of Turkey. There is evidence from

DNA extraction of skeletons from the Neolithic period that people in northern Europe

were missing the necessary genes to process lactase. Scientists claim it is more likely

that the genetic mutation allowing the digestion of milk arose at some point after dairy

farming began. The use of cheese and butter spread in Europe, parts of Asia and parts

of Africa.

Milk was first delivered in bottles on January 11, 1878. The day is now remembered

as Milk Day and is celebrated annually. The town of Harvard, Illinois also celebrates

milk in the summer with a festival known as Milk Days. Theirs is a different tradition

meant to celebrate dairy farmers in the "Milk Capital of the World."

1.14 BEHIND VERKA

Far away from the din and maddening pace of the city, there rests, near Amritsar

sleepy village called Verka. Peaceful in its seclusion, life crawls on its own pace.

The cool breeze, rustle of the banyan leaves, the chirruping of the birds, the quite

flow of the shimmering water besides those soft folds of lush green, nestling a

healthy cattle grazing away to glory. Today, Verka has out-stripped its own

boundaries to reach our homes. Verka was there long before it came to MILKFED.

But then, it was the difference between being there and making it big. When we at

MILKFED took it on, we believed that it had potential to do a lot more. And it did.

With little more of a consumer oriented approach, Verka became a brand to reckon

with. With its growing outlets and thus easier availability, it reached far and wide

across the state and beyond. To people today, Verka is part of their daily lives.

1.15 INTRODUCTION: THE VERKA MILK PLANT LDH.

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Verka milk plant, Ludhiana is known Ludhiana distt- co-operative milk produce

union. It is situated on Ferozepur road. It is fully equipped with modern fluid milk

plants facilities.

VMP, Ludhiana is a prestigious milk plant of Punjab State famous all over the

country and abroad for the supply of quality milk products. It has got first position in

Northern Zone. It's functioning stone was laid by Sh. Prakash Singh Badal, the Chief

Minister of the Punjab on June 22 1970. This plant was inaugurated by our referred

Prime Minister Smt. Indira Gandhi.

Milk plant is a co-operative society and farmers (producers) share all its profit and

losses. Govt. does not provide any financial assistance to milk plant Ludhiana. But

Govt. Supervisor and control is there. Law and policy maker is Punjab Govt. here

there is no dishonesty in the milk plant. It is very neat and clean organization. The

handling capacity of the milk plant per day is 4 Lac Litre.

In the year 1983, PDDC merged into milkfed and control of milk plant transferred to

milkfed in year 1983. But the efforts of the Directors and milk producer's control of

milk plant transferred to milk union, (union of milk producers).

Milk plant Ludhiana produces variety of milk products like Milk cake, cheese, Butter,

Ghee skimmed milk powder and standardized milk'. Milk plant sells better quality of

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pasteurized milk to people. Ghee manufactured by this plant is not only sold in

country but also supplied to foreign countries like Nepal, Dubai.

The new achievements of this milk plant is to achieve the International quality

certificate ISO 9002. To get this ISO -9002 certification the following clauses are

requires.

1. Management Responsibility

2. Quality Systems

3. Contract Review

4. Documents and data control

5. Purchasing

6. Purchase- Supplier product

7. Product - Identification and tractability

8. Process Control

9. Inspecting and testing

10. Inspection, Measuring and test equipment

11. Inspection and test status.

12. Control of non conforming products

13. Corrective action

14. Holding, Storage, packaging and delivery

15. Quality Records

16. International Quality Audits

17. Training

18. Statistical Techniques

19. Design and control

20. Servicing

Profits of milk plant are distributed to workers and milk produces as increase in rate

of fat and SNF and to workers as bonus. In the year 2001-2002 the milk plant

achieved the Gross profit (Without Interest & Dep. ) for Rs. 5,7200000 and net profit

for Rs. 3,3100000.

In milk plant Ludhiana is controlled by Govt. The Govt. does not give any assistance

to the milk plant but milk plant can receive loans etc with the guarantee of Govt.

policymaker is the Govt. but milk produces spend money.

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Machinery of best technology has been installed in the milk plant. The machinery is

available for the productions of following milk products.

1. Pasteurized fluid milk

2. Sterilized flavoured milk

3. Milk-cake

4. Paneer

5. Lassi

6. Ice Cream

7. Butter

8. Ghee

9. Skimmed milk

powder

10. Whole milk powder

11. Baby food

But according to the demands from the open market the following milk products are

produced:-

1. Pasteurized/ Sterlised milk

2. Milk cake3. Paneer

4. Butter

5. Ghee

6. Skimmed milk powder

Lured by high profits some new

concerns in private sector also try to

set up their own plants. So, the presentmargin of the milk plant has become

less and future is looking hard. The milk plant is still standing ahead and not loosing

courage. Normally middlemen and traders dominate the market. The milk plant

steadily marched toward fix goal of becoming a strong and viable milk plant and now

is at No. 1 in Northern Zone.

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All its officer as well as workers are assets to milk plant Ludhiana who are

performing their duties delight and with full zeal and energy. Also the building of

milk plant. Ludhiana is nicely planned and maintained. There is great system of work.

1.16 PROFILE

Full Name The Ludhiana Distt, Co- Operative Milk Produces Union Ltd. Ldh.

Registered Office Milk plant, Ferozepur Road, Ludhiana-141004

Head Office Punjab State Co- operative milk producers federation Ltd. S.C.O.

153- 155 sector 34-A, Chandigarh.

Date of

Registration

1972 with PDDC

Date of Inauguration

31st

Oct. 1974

Commencement

of production

Feb 1979.

Constitution Co- Operative

Bankers Punjab State Central Co-operative Bank.

Product Brand Verka

No. of Milk

Agencies

332

No. of Societies 751 No. of employees

• Permanent

• temporary

823

491

332

Milk Chilling

Centres

6

Milk Handling

Capacity

4,00,000L/ Per day

Products

Marketed by

The Punjab State Co-operative Milk Producers Federation Ltd.

Chandigarh.

General Manager Mr. Harinder Singh Grewal

Deputy Manager Mr. Amarjeet Singh

Account Manager Mr. A.K. Gupta

Production

Manager

Mr. G.P. Sharma

Marketing

Manager

Mr. Parminder Singh

Quality Control Mr. B.R. Madaan

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Manager

SALIENT FEATURES

1. First milk plant in India to get ISO -9002 International Quality Certificate for

milk.

2. Milk rate paid to the producers among all the unions highest in the rate.

3. Milk procurement highest among all the unions in the state.

4. Milk procurements per society one day among all the union highest in the

state.

5. 100% milk producers co- operative societies are in profit.

6. Aggregate profit of the societies in any year is the maximum among all the

union state ever since inception, customer satisfaction and consistency in quality arethe key- thrust area of this organization.

7. Numbers of A.I. cases maximum among all the unions in the state.

8. Number of sick animals treated highest among all the unions in the state.

9. Cattle feed sold to societies is maximum among all the unions in the state.

10. F.M.D. vaccination maximum among the all unions in the state,

11. Milk transportation cost lowest among all the unions in the state.

12. Milk chilling cost lowest among all the unions in the state.

13. Average daily city supply maximum among all the unions in the state.

14. Embryo transfer technology introduced in the field for the first time in

northern India.

15. Milk products selling at premium rates and ghee exported to gulf countries and

Philippines.

16. Capacity utilization is maximum on yearly basis.

17. Fuel cost per Kg. Milk is lowest among all the union in the state.

18. Electricity cost per Kg. Milk is lowest among all the unions in the state.

19.Annual turnover more than Rs. 100.00 crores of rupees. Highest among all the

unions in the state.

20. Annual profitability highest among all the unions in the state.

1.17 ORGANIZATION STRUCTURE

Organization structure is a systematic combination of people, functions and physical

facilities. It constitutes a formal structure with defined authority and clear

25



responsibility. Each and every person is given a job and then authority is assigned to

him for the job. He is made responsible for the job.

The structure and process by which a co-operative group of human beings allocate its

task among its members, identifies relationship and integrates its activities towards

the common objectives.

Thus organizing structure aims and the saying, “Each one for a job and job for each

one"

Organization structure of milk plant, its board consist of 19 Directors, They appoint

General Manager and chairman. Then there are different departmental heads like

manager Accounts Manager, Production Manager, Purchase and manager marketing

etc. These heads have deputies for their assistance. The each department has different

employees at departmental level. Verka milk plant is well organized". It helps in

efficient 'running of concern.

1.18 MILK PROCUREMENT SECTION

Milk procurement business is being looked after mainly by milk union Ludhiana.

Procurement section is headed by manager milk procurement who is assisted by

technical officers and supporting staff for obtaining the objectives.

Milk union Ludhiana procure 1.00 lac liters of milk per day at the time of

commissiong of milk plant. But at present milk union procure 4 lacs lit of milk per

day.

1.18.1 MILK HANDLING CAPACITY OF THE PLANT: Detail of milk

handling capacity in % age is as under:-

Year Milk handling capacity (utilization) percentage

2000-01 86.4

2001-02 92.5

2002-03 135.9

2003-04 141.6

2004-05 168.7

2005-06 175.2

2006-07 186.92007-08 219.8

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1.18.2 CITY SUPPLY

Milk union, Ludhiana in addition to supplying the surplus" milk to national milk and

Delhi also meet the social obligation of city supply to urban population of Ludhiana.

Four different types of milk that are

1. Pasteurized skimmed milk(SKM) 0.5% 8.7%

2. Pasteurised Double tonned milk (DTM) 1.5% 9.0%

3. Pasteurized standarised milk (Std.) 4.5% 8.5%

4. Pasteurized buffalo / Full cream milk (BM/FCM) 6.0% 8.5%

These four types of milk are packed in half liter, 1 liter & 5 liter poly sachets.There

are 21 routes for city supply. Verka milk plant has its own 5 milk bars at different

places. Sale or city supply milk during last 8 year is as under:-

Year Sales of milk (Percentage per day)

2000-01 150.4

2001-02 135.6

2002-03 154.3

2003-04 168.9

2004-05 184.5

2005-06 192.8

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2006-07 211.9

2007-08 240.8

1.18.3 AVERAGE COLLECTION OF MILK PER DAY (‘000KG) Last 9 years

record of average collection of milk per day is listed as under:-

Year Average Collection (000 kg.)

2000-01 216

2001-02 179

2002-03 216

2003-04 242

2004-05 269

2005-06 256.7

2006-07 261.6

2007-08 295.5

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1.19 INCEPTION

Milk Production is a very important part of the agricultural economy in the State of

Punjab. Punjab is one of the smallest States in Indian Union with a total area of

50,362 Sq. Kms., which is 1.5% of the Indian landmass. Dairy Farming is an age-old

subsidiary profession in the rural areas of Punjab. Punjab is the second largest milk

producing state in India, producing around 10% of the countries Milk Production i.e.

8 million tones annually.

1. First Milk Plant, of the State was setup at Verka near Amritsar.

2. The brand name of Milk and Milk Products was adopted as Verka.

3. The Foundation stone of Milk Plant, Ludhiana was laid by Hon. S. Parkash

Singh Badal, the then Chief Minister of Punjab in 1970.

4. Commissioning of the Plant was done by Punjab Dairy Development

Corporation in 1974.

5. Inauguration was done by Late Smt. Indira Gandhi the then Prime Minister of

India.

1.20 OBJECTIVES

1. To strengthen dairy sector, Milkfed came into existence in 1978 and

Simultaneously Distt. Milk unions were formed.

2. Village level cooperative societies were also formed on "Anand Pattern". The

system was run by the farmers, of the farmers and for the farmers.

29



3. To give remunerative prices to farmers and to ensure permanent market for the

whole year.

4. To provide technical inputs like artificial insemination,to improve the breed of

animals,animals health services,preventive disease treatment andawareness

regarding farm management etc.

5. To provide ISI marks good quality balanced Cattle feed and fodder seeds to

the farmers.

1.21 NECESSITY FOR PRODUCTION ENHANCEMENT

1. Milk production in the area increased manifold with the result. Resultantly

started receiving daily 2.50 LPD of milk.

2. To increase the participation of women 120 exclusively women societies are

organized with 15300 women members. through Punjab Women Dairy Project

a Central Govt. sponsored scheme.

3. Milk Production in the area increased manifold with the result. Resultantly

started receiving daily 2.50 Lac LPD of Milk and Peak procurement 4.5 Lac

LPD.

4. To cater to the increased demand, necessity of expansion of milk plant arose.

5. Capacity of Milk Plant enhanced from 1 lac to 4 lac litres with additional powder. Plant of 30 MTs .

6. This improved the socio- economic conditions of marginal and poor farmers.

7. The profitability of the plant and turnover of the plant improved a lot.

8. No. of societies increased from 94 to 751 and its membership from 5400 to

78000.

9. All the societies are in net profit and distributing bonus to its members.

1.22 QUALITY OF MILK AND MILK PRODUCTS

1. To improve the quality of raw milk, Clean Milk Production program started in

650 villages and resultantly the quality of products increased.

2. Milk Plant, Ludhiana was the First in India in Dairy Sector to get ISO

Certification.

3. Under ISO Certification and HACCP (IS 15000) Milk Union started export of

Ghee, SMP to Gulf Countries Philippines, Manila, South Africa, Singapore,

Bangla Desh etc. The export is more than 5.5 crore during the last year.

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4. To further improve the quality of Raw Milk, Milk Union started 365

Automatic Milk collection Stations at village level.

5. To meet the Challenges of WTO Milk Union started TIFAC program with the

help of Ministry of information.

6. 28 model dairy demonstration farms have been established including milking

machines in distt. of Ludhiana which has encouraged the farmers to adopted

dairy on large scale.

7. Milk Union, Ludhiana is first in India which has installed Bectoscan worth 70

lacs and Somatic cell count machine have been installed at milk plant,

Ludhiana.

8. Further 23 BMC has been approved under central govt. Scheme on 75% grant

to be installed in societies.

1.23 PRESENT STATUS/ ACHIEVEMENTS OF THE PLANT

1. No. of societies increased from 94 to 751 and its membership from 5400 to

78000.

2. Milk Procurement has increased from 10200 LPD to 2,50,000 LPD.

3. Highest milk price is being paid to the milk producers as compare to other

plants in the states4. Products being manufactured by Ludhiana Plant are sold at premium rates

through out of the country and in the International Market.

5. City supply has increase from 66000 LPD to 1,60,000 LPD.

6. Turnover the plant touched to 180 crores Profit of the union has increased

manifold.

7. Capacity utilization of the plant is more than 80%.

8. Milk products like Ghee,Table Butter,Skimmed Milk Powder,Whole Milk Powder,Curd,Paneer,Milk Cake etc are being manufactured by Milk Plant

Ludhiana.

Milk Union, Ludhiana is further progressing by leaps and bounds and it is hoped that

in the years to come, it will achieve excellent results and will help improve the social

and economic condition of the people at large.

1.24 MISSION

31



The milk plant has become less and future is looking hard. The milk plant is still

standing ahead and not loosing courage. To meet the global competition milkfed

chandigarh has taken steps in the field of advertisement of products and has set aside

Rs, 1 crore for this purpose.

1. Providing improved technical input services to farmers.

2. Setting up big commercial farms.

3. More stress on clean milk production programme.

4. Rural women empowerment.

5. Massive women empowerment.

6. Strengthing market base with specific stress on consumer market.

7. Dynamic enhancement in Verka product mix.

32



CHAPTER 2

REVIEW OF LITERATURE

Abreu (2000) has made out that thirty years after Operation Flood, which saw the

country awash in milk, another revolution is in the making: the marketing and

distribution of packaged milk, both plain and in flavoured form, aimed at the

burgeoning Indian middle class. There is a strong rationale behind this surge. On the

supply side, milk production in the country has almost doubled from 38.8 million

tonnes in 1983-84 to 74 million tonnes in 1998-99. Juxtapose this with the demand

side development: A rising number of working couples, nuclear families, need for

longer shelf life and changing lifestyles; plus the increased consciousness of global

trends.

Ayanwale, et al (2005), found that many consumers do not buy whatever is

available or affordable if a product is good value for its price, it will command brand

loyalty. However, advertising helps in projecting product quality and value before the

consumers. The stage a product is in its life cycle is very important to a marketer as it

help in determining the type of marketing strategies to be embarked upon in respect of

the said product.

Bhar and Saxena (2005) developed ARIMA models for forecasting the sales

of milk and milk products in the regions of Bokaro and Dhanbad. Based on the data

collected from the period from March 2003 to December 2004, they fitted these

models and forecasted for the period from January 2005 till June 2005, and concluded

that they were valid for forecasting the milk sales and retailer growth of the dairy(with a 95-percentile confidence level), which will help the dairy companies to

formulate appropriate marketing and distribution strategies.

Botonak (2010) proposed that the increasing importance of convenience in

consumer food choices has attracted researchers’ interest. In the effort to understand

how convenience affects consumers’ food preferences, values are believed to play an

important role. The results reveal that convenience food consumption and

convenience orientation in the food domain are mainly connected

33



Brunner et al (2010) reported that convenience is one of the big trends in the

food business. The demand for convenience food products is steadily increasing.

Despite being vital properties of convenience food, saving time and effort have not

been very successful constructs for predicting convenience food consumption. The

various convenience food products could be categorized into four groups, which we

labeled as highly processed food items, moderately processed food items, single

components, and salads. Fifteen drivers were found to have a significant impact either

on total convenience consumption or on one of the identified categories. Strong

predictors were age, concern about naturalness, nutrition knowledge, and cooking

skills.

Carbonell and Costell (2008) studied the type of information (picture of real

package or card with beverage type and nutritional facts) and consumer attitudes

(interest in eating healthily and food neophobia) and affect on its hedonic ratings and

purchase intention with respect to refrigerated milk and soybean vanilla beverages.

Information affected purchase intention to a greater extent. Type of information

influencing consumer behaviour was also dependent on some consumer attitudes,

such as interest in eating healthily

Cardello and Schutz (2004) conducted the analytic studies with civilian and

military consumers in order to assess the factors that contribute to the concept of food

freshness and the relative importance of freshness to other product variables. Results

showed the concept of freshness to be determined primarily by time from

harvest/production and food type. Foods that were described as "minimally processed

e.g "frozen and thawed" were rated as less fresh than other foods.

Gofton and Ness (1991) studied that the twin trends of health and conveniencehave resulted in changing food consumption patterns. Their Research among

consumers confirmed that there is awareness and concern about the relationship

between health and diet and the better educated are more food-conscious. Changing

lifestyles and the changing role of women are shown to affect food habits.

Hlgren et al (2004) reported that food choice is dependent upon beliefs about

both the products and consumers. Beliefs about the prototypical attributes of ready

meal consumers have been investigated to establish the beliefs that exist and whether

34



they have any actual basis when compared with self-reported behaviours of ready

meal consumers.

Johnston (1981) proposed that time may be the most important variable in

consumer behavior. On one side, the time dimension of consumer behavior is viewed

as just beginning to emerge as a major variable of study, on the other side, however,

time has been implicitly and explicitly incorporated into consumer behavior theory

and marketing strategies for quite some time. Adoption of products by consumers was

not characterized by analytic consumption behavior but by risk aversion and

preference for incremental changes in the consumption set.

Khanona and Aung (2004) proposed that the diverse consumer attitudes

towards the safety of food. The diversity among consumers is based on a variety of

factors, including demographics and socio-economic status. The relationship between

consumer attitudes, knowledge and behaviour regarding food safety is also examined

in this paper. It indicates that different attitudes do not necessarily lead to behaviours

that increase the safety of the food consumed.

Michael et al (2008) studied the factors that influence willingness to buy

foods. Data were collected from a representative mail survey in Switzerland .Results

suggest that. Health claims were most positively evaluated when attached to a product

with a positive health image. Results further show that participants who have trust in

the food industry are more likely to buy functional foods compared with participants

who do not have trust in the food industry. Older consumers were more interested in

functional foods than younger consumers.

Parekh (2006) in his research established that, of the total milk produced in the

country, nearly 46 per cent is consumed as liquid milk (Table 1) and the balance

converted into various dairy products, such as ghee, butter, milk powder, ice cream,

cheese, condensed milk and for making various kinds of sweetmeats having distinct

regional preferences.

Prasad (2006) found in his study that 91.33% of the consumers knew the

availability of more than one variety of milk available in the market. He also

established that a large majority of respondents 62.33% said that it is the quality thatinfluences the choice of the brand, whereas a meagre 5.67% expressed the view that it

35



is the factor of easy availability that is responsible for the preference of a brand. He

found that a majority (about 82.67%) of the respondents were satisfied with the

present brand they were using and only 17.33% though otherwise. He further

suggested that prompt and regular supply, providing value by way of service rendered

by agents and avoidance of adulteration are factors that will count in the success or

failure of the milk producers.

Sachan (2005) discussed the dairy scenario in India and also highlighted the

export potential of this sector. According to him, higher professionalism could be

imparted in rearing, milking as also handling during distribution of milk. Lessons

could be learnt by individuals and small dairy farms from the cooperative sector.

which has managed to impart some amount of professionalism in its operations.

Several areas in the dairy industry could be strengthened by induction of state-of the-

art technologies, transferred from other dairy majors of the world: Operational

efficiencies are required, not only to improve yields but also to reduce waste and

minimization of losses in fat, protein during milk processing.

Sriram et al (2004) found that intrinsic brand preferences have a much bigger

effect on the performance of the brand than the inclusive value which reflects model

level prices, product attributes, and the length of the brand’s product line. Further,

some brands can increase their advertising expenditures and still increase their

profitability. Attributes may be accompanied by higher advertising expenditures. The

consumers notice all the changes in the portfolio of models offered by a brand

changes. However, due to limited cognitive capacity, it is likely that the consumers

only consider the models that are close to their needs and may hence not be affected

by the addition or withdrawal of other models. Moreover, it is likely that the retailers

do not carry all the models offered by the brand at all times.

Sun (2008) proposed the study that addressed how various health concerns

might influence not only consumers’ food choice motives but also consumers’

subsequent attitudes toward healthy eating. The findings revealed that the consumers

with greater health concerns would have different food choice motives and better

attitudes toward healthy eating.

36



Tauscher (2002) studied that Consumer demands for high-quality foods with

“fresh-like” characteristics that require only a minimum amount of effort and time for

preparation has led to the introduction of convenience foods preserved by mild

treatments. Non-thermal methods allow the processing of foods below temperatures

used during thermal pasteurisation, so flavours, essential nutrients, and vitamins

undergo minimal or no changes. This process is used to create food and food

ingredients with new sensory and functional properties including also physiological

functionality.

37



CHAPTER 3

RESEARCH METHEDOLOGY

Research Methodology is a way to systematically solve the research problem.When we talk about research methodology we not only talk about research methods

but also talk about the logic behind the method we use in the context of our research

that's why our research results are capable of being evaluated either by the researcher

himself or by others. The purpose of this section is to describe the methodology

carried out complete the work. The methodology plays a dominant role in any

research work. The effectiveness of any research work depends upon the correctness

and effectiveness of the research methodology.

TOPIC

Consumer Preference Regarding Branded and Unbranded Milk-Products

OBJECTIVES

• To understand reason for preference of branded or unbranded milk and milk-

products.

•

To study the satisfaction level of consumers for various features of a particular brand.

RESEARCH DESIGN

A research design is an arrangement of conditions for collection & analysis of

data in a manner that aims to combine relevance to the research purpose with the

economy in procedure. It constitutes the blueprint for collection, measurement &

analysis of data. I have used convenient, analytical and descriptive method.

RESEARCH INSTRUMENTS

Questionnaire is most common research instrument in collecting primary data

during marketing research. A questionnaire consists of a set of questions presented to

respondents. Because of its flexibility, the questionnaire is by far the most common

instrument used to collect primary data.

SAMPLING TECHNIQUE

38



In order to take the sample for the study sample technique selected is Random

sampling technique.

SAMPLE SIZE

Sample size of the research was 100.

DATA COLLECTION

• Primary Data – It was taken from the randomly selected people from the

customers.

• Secondary Data – It was taken from various books, journals, newspapers and

various Internet websites.

TOOLS OF DATA ANALYSIS

Keeping in view the objectives of the research and nature of the data,

percentage method for data analysis is used. For the ranking purpose simple

interpretation method was used as the results were clear simply by seeing the data.

MS Excel was used for calculation purpose.

LIMITATIONS

While surveying, researchers encountered with some problems like:

• The sample size was less; therefore this is a big limitation of our study. The

survey should have involved a larger sample size otherwise the findings of the

survey cannot be generalized. But a larger sample size may increase the time

and cost of collecting the primary data with the help of Questionnaire.

• Many of the respondents were not willing to fill the questionnaire.

• Another problem which researchers faced was that people were hesitating to

give information about their views freely.

39



CHAPTER 4

CONSUMER PREFERENCE ANALYSIS

4.1 TYPE OF MILK PRODUCTS PREFERRED

Table 4.1 Type of Milk Products Preferred

Type No of Respondents Percentage

Branded 78 78

Unbranded 22 22

Total 100 100

Graph 4.1 Type of Milk Products Preferred

From the inspection of above table it is clear that 78% of respondents prefer

branded milk-products over unbranded milk-products. Only 22% respondents said

that they prefer unbranded milk - products. Therefore, we can say that people mostly

prefer branded milk products.

40



4.2 Milk Products UsedTable 4.2 Milk Products Used

Milk Products No of Respondents

Milk 93

Curd 58Ice-cream 25

Kheer 59

Lassi 68

Butter 54

Ghee 34

People mostly use milk. 93% respondents use milk. After that the product

most frequently used is lassi, which is used by 68%respondents. After that it comes

kheer and Curd. These are used by 59% and 58% respondents respectively. Butter is

also used by 54% respondents. 34% people also use ghee. Ice-cream is least used by

people. Only 25% respondents use verka ice-cream. Therefore we can say that verka

milk, lassi and curd are most frequently used products of verka.

41



4.3 Frequency of Usage

Table 4.3 Frequency of Usage

Option No of Respondents

Daily 56Usually 23

Rarely 12

Do not use 9

Total 100

Graph 4.3 Frequency of Usage

Above table shows that mostly people use milk-products daily. 56% of

respondents use milk-products daily. 23% of respondents use milk-products usually.

12% of respondents are such that they use milk-products rarely and there are 9% of

respondents who do not use milk-products at all.

42



4.4 Nature of Purchase DecisionTable 4.4 Nature of Purchase Decision

Purchase Decision No of Respondents Percentage

Impulsive 29 29

Planned 71 71Total 100 100

Graph 4.4 Nature of Purchase Decision

Above table shows that 29% of respondents’ purchase decision is impulsive.

71% of respondents purchase milk-products by planning; therefore, we can say that

mostly people have planned purchasing regarding milk-products.

43



4.5 Factors Influencing PurchaseTable 4.5 Factors Influencing Purchase

Factors 1 2 3

Price 23 27 17Quality 22 14 25

Fat control 8 5 9

Relatives 1 2 0

Advertisement 2 3 1

Health condition 5 2 2

Doctors 2 1 1

Taste 26 24 22

Availability 9 14 20

Friends 1 2 1

Packaging 1 4 2

Others 0 2 0

From the inspection of the above table it is clear that price, quality and taste are

the factors which influence the people to buy branded milk-products. These three

factors are mostly chosen by respondents as first, second or third priority. After that

fat control and availability of products at nearby place also influence the people to

buy branded milk-products. After that it comes health condition which influence people to purchase branded milk-products. Any other factor does not have much

effect on the purchase decision. .

44



4.6 Major Problems W.R.T. Branded Milk-ProductTable 4.6 Major Problems W.R.T. Branded Milk-Product

Options 1 2 3 4 5 6

Lack of awareness 28 22 18 16 11 5

High price 11 15 10 20 16 28 Non-availability 26 25 21 16 9 3

Dislike 13 20 17 19 23 8

Low quality 20 17 28 15 14 6

Change of taste 2 1 6 14 27 50

The above table shows the major problems w.r.t. branded milk-products. The

major problem w.r.t. branded milk product is lack of awareness and non-availability

of branded milk-products. Change of taste and high price is not any problem in case

of branded products.

45



4.7 Factors Affecting Preference of Branded Products Over Unbranded

Table 4.7 Factors Affecting Preference of Branded Products Over Unbranded

Factors No of Respondents

Home delivery 8Lesser price 4

Quality assurance 25

Security of homogeneous production 22

Safety from perishability 20

Flavour 12

Improved taste 9

Total 100

Graph 4.5 Factors Affecting Preference of Branded Products Over Unbranded

From the inspection of the above table it is clear that quality assurance,

security of homogeneous production and safety from perishability are the factors

which affect the preference of branded products over unbranded. However home

delivery and lesser price are factors which do not effect it.

46



4.8 Source of Information

Table 4.8 Source of Information

Source No of Respondents

Friends 27

Advertisement 12

Shop keepers 22

Doctors 9

Relatives 30

Total 100

Graph 4.6 Source of Information

Friends and relatives are the most preferred source of information through

which people come to know about branded milk products. 30% respondents came to

know about branded milk products by their relatives and 27% respondents get

information from friends. 22% of respondents came to know about branded milk

products from shopkeepers.

47



4.9 Feel of Scarcity in the MarketTable 4.9 Feel of Scarcity in the Market

Option No of Respondents Percentage

Yes 24 24

No 76 76

Total 100 100

Graph 4.7 Feel of Scarcity in the Market

76% of respondents feel that there is no scarcity of milk products in market at

any point of time and 24% respondents feel that there is scarcity of milk products in

market.

48



4.10 Degree of Satisfaction Regarding Branded Milk and Milk-Products

Table 4.10 degree of satisfaction regarding branded milk and milk-products

Characteristics Highly Satisfactory Satisfactory Less Satisfactory

Price 32 47 21Quality 49 36 15

Taste 37 45 18

Packaging 78 13 9

Advertisement 25 32 43

People are Highly Satisfactory from the packaging of the branded milk

products. 78% respondents rated packaging as highly satisfactory. People are also

satisfied by the quality of branded milk-products. Taste and price factor of branded

milk-products are also satisfactory. But people are less satisfactory from the

advertisement of milk-products.

49



4.11 In case of non-availability of preferred brand

Table 4.11 In case of non-availability of preferred brand

Option No of Respondents Percentage

Go to another shop 51 51

Postpone purchase 6 6Will buy another brand 19 19

Will buy unbranded product 24 24

Total 100 100

Graph 4.8 In case of non-availability of preferred brand

In case of non availability of desired milk product brand, 51% of respondents

go to another shop to buy that product. While 24% respondents will buy another

product and 19% of respondents can buy another brand. Only 6% of respondents said

that they will postpone purchase if they do not get their desired brand.

50



CHAPTER 5

FINDINGS AND CONCLUSION

• Mostly people prefer branded milk and milk products over unbranded branded

milk and milk-products.

• Milk, lassi and curd are most frequently used products of verka.

• People generally use branded milk and milk-products daily.

• Mostly people have planned decision to purchase branded milk and milk-

products.

• Price, taste and quality of the branded milk and milk-products are the features

which affect their purchase.

• The major problems w.r.t. branded products are lack of awareness and non-

availability.

• Quality assurance and security of homogeneous production are the factors for

which people prefer branded products over unbranded.

• The major source of information about branded milk and milk-products are

relatives and friends.

• Generally people do not feel that there is scarcity of milk-products in the

market.

• People are highly satisfied by packaging and quality of branded milk and

milk-products.

• In case of non availability, people mostly prefer to go to another shop to buy

that brand.

CONCLUSION

...............................................................

51



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Choice Set Formation Under Uncertainty (April 2006).

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Market Entry-Information on Brand Preference: A Dual Process Mode

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Nov.

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Communication, Vol. 2, Iss. 2, Sep. - Dec., pp. 63-71.

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http://www.indiatoday.com/itoday/20000710Ibusiness.html



• Rajagopal, Dr., Brand Value, Preference and Customer Value Effects of Non-

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http://www.indiadairy.com/ind_marketing_quality.htm

http://www.indiadairy.com/ind_marketing_quality.htm



BIBLIOGRAPHY

• www.google.com

54

http://www.google.com/

http://www.google.com/



ANNEXURE

SURVEY QUESTIONNAIRE FOR

CUSTOMER PREFERENCE FOR BRANDED AND UNBRANDED MILK

PRODUCTS

Name- Marital status-

Age- Occupation- Employed

Gender- Male Female Self-employed

1) What type of milk and milk-products do you prefer?

Branded Unbranded

2) Which branded milk and milk-products do you use commonly?

3) How often you use above stated branded milk and milk-products?

Daily

Usually

Rarely

Do not use

4) What is the nature of your purchase decision in case of branded milk and

milk-products?

Impulsive

Planned

55



5) Which of the following factor(s) influence(s) you to choose branded milk

and milk-products? (Rank 1-3)

Price Quality

Fat control Taste

Relatives Availability

Advertisement Friends

Health condition Packaging

Doctors Others

6) What are the major problems w.r.t. branded milk-products? (Rank 1-6)

Lack of awareness dislike

High price low quality

Non-availability change of taste

7) What factors will make you to prefer branded milk and milk-products over

unbranded milk and milk-products?

Home delivery Safety from perishability

Lesser price Flavour

Quality assurance Improved taste

Security of homogeneous production

8) How did you know this brand?

Friends Doctors

Advertisement Relatives

Shop keepers Others (Specify)

56



9) Have you ever felt the scarcity of branded milk and milk-products in the

market?

Yes No

10) State the degree of satisfaction regarding branded milk and milk-products

in comparison of unbranded milk and milk-products in the following:

Characteristics Highly

Satisfactory

Satisfactory Not

Satisfactory

Price

Quality

Taste

Packaging

Advertisement

11) In case of non-availability of your preferred brand, what will you do?

Go to another shop

Postpone purchase

Will buy another brand

Will buy unbranded product

Preference Repaired)

Documents

Transcript of Preference Repaired)