CHAPTER I

INTRODUCTION AND DESIGN OF THE STUTY

1.1. INTRODUCTION

Marketing starts and ends with human needs and wants. A human need is a state of

deprivation of some basis of satisfaction. The needs are not created by society but by the

marketers. They exist in the very texture of human biology and the human condition.

Wants are desires of specific satisfy of needs. Although people’s needs are few, their

wants are many. Human wants are continually shaped and reshaped by social forces. Demands

are wants for specific products that are backed by an ability and willingness to buy them. Wants

become demands when supported by purchasing power.

Marketers, along with other special influences, influence wants. They influence demand

by making the product appropriate to target consumers.

To goal of marketing is to create customer satisfaction and profitability by building value

added relationships with important customers. Marketing calls upon everyone in the organization

to “Think consumers” and to do all they can to help create and deliver superior value and

satisfaction.

Whether the buyer is satisfied after purchase depends on the offer’s performance in

relation to the buyer’s expectations.

“Satisfaction is a person’s feelings of pleasure of disappointment resulting from

comparing a product’s performance in relation to his/her expectations”.

If the performance falls of expectations, the customer is dissatisfied. If the performance

matches the expectations, the consumer is satisfied. If the performance exceeds expectations the

consumer is highly satisfied or delighted.

1.2. CONSUMER

Consumers are the persons who buy things for their own satisfaction consumers buy

small quantities of goods for their needs. Buying pattern of consumers depends upon income.

The buying behaviors of consumers are influenced by cultural; social and psychological factor.

The term consumer is often used to describe two different kind of consuming entities-the

personal consumer and the organizational consumer buys goods and services for his own use.

The organizational consumers buy products and services in order to run their organization.

1.3. CONSUMER SATISFACTION

Consumer satisfaction is the level of consumer’s felt state resulting from comparing a

product’s perceived performance in relation to the person’s expectations.

Over 35 years of age peter Drucker insightfully observed that a company’s first task is to

“Create customers” customers can be created when consumers are satisfied. But today’s

consumers face a vast array of product and brand choices, prices and suppliers.

Satisfaction is a person’s feeling of pleasure of disappointment resulting from comparing

a products perceived performance relation to his/her expectations i.e., satisfaction of the

consumer is essential for retention of consumers and for continuing sales of the products and

service to these customers. Earlier it was important for the success and growth of a company

now it is essential even for it survival.

Consumers are value maximizes, with the bounds of search costs and limited.

Knowledge, mobility and income. They form expectations of value and act on it. Then they learn

whether the offer lived up to the value expectations and purchase probability.

Increasingly, companies need to be consumer driven. A clear consumer focus will

produce actions on new fronts and so encourage versatility, learning and development. It helps

the companies to adapt to changing markets and fluctuating consumer requirements. It will lead

to greater understanding of weakness, strengths, resources and new business potential. It enables

companies to size more opportunities and outsmart their competitors. Thus the prime objective of

modern marketing is the satisfaction of consumer need of all avocations.

There is an inmate connection among the product and service quality, consumer

satisfaction and company profitability. Higher levels of quality result in higher levels of

consumer satisfaction while supporting higher prices and lower costs.

Every company’s first task is “To create consumers”. But today consumers fall a vast

array of product and reward choices, price and suppliers. Consumers are value maximizes within

the bounds of research costs and limited knowledge mobility and income. To win today’s market

place companies must be consumer centered.

For the consumer satisfaction is both and a good and profitable marketing tool. It creates

an emotional affinity with the brand. In fact marketing is only one factor in attracting and

keeping customers. The marketing department can be effective only in companies whose various

departments and employees have designed and implemented a competitively superior customer-

value-deliver system.

As this milka is a small-scale sector, high satisfaction of consumer is needed to overcome

the emerging competition. In spite of food products, only satisfaction leads to the company

remarkable in strengthening the products, image, benefits, repeat purchases and company’s

profitability.

BENEFITS OF CONSUMER SATISFACTION FOR THE COMPANY

Highly satisfied consumer will produce several benefits for the company. They are,

They are less price sensitive.

They will become regular customers. This will help the company to build brand loyalty

and also the company can understand consumer behaviors.

The consumers will buy additional product overtime as the company

introduces related products for improvements.

The company can also predict consumer’s expectations.

The sales will be increasing desirably.

1.4. FOOD INDUSTRY IN INDIA

India is the world’s second largest producer of food next to china, and has the potential of

being the biggest with the food and agricultural sector. The total food production in India to

double in the next ten years and there is an opportunity for large investments in food and food

processing technologies, skills and equipment, especially in areas of canning, dairy and food

processing, specialty processing, packaging, frozen food/Refrigeration and thermo processing.

Fruits & vegetables, fisheries, milk & milk products, meat& poultry, packaged/convenience

foods, alcoholic beverages & soft drinks and grains are important sub- sectors of the food

processing industry. A health food and health food supplement is another rapidly rising segment

of this industry which is gaining vast popularity amongst the health conscious.

India is one of the world’s major food producers but accounts for less than 1.5 percent of

international food trade. This indicates vast scope for both investors and exporters. A food export

in 1998 stood at US$5.8 billion where as the world total was US$438 billion. The Indian food

industries sales turnover is Rs. 1, 40,000 core (1 core=10 million) annually as at the start of year

2000. The industry has the highest number of plants approved by the US Food and Drug

Administration (FDA) outside the USA.

The most promising sub-sectors include soft drink bottling, confectionery manufacture,

fishing, aquaculture, grain- milling and grain-based products. Meat and poultry processing,

alcoholic beverages, milk processing, tomato paste, fast-food, ready-to-eat break fast cereals,

food additives, flavors etc.

OBJECTIVES

To study the profile of the company milka wonder cake.

To learn the consumer satisfaction in milka wonder cake.

To revise the brand preference of milka wonder cake.

To analyze the level of satisfaction of price, qualities, taste, package of milka wonder

cake.

To provide suitable recommendations and suggestions.

SCOPE OF THE STUDY

The present study aims at assessing the consumer satisfaction and their level of

satisfaction in the buying of milka wonder cake it is also helps us to identify various factors

influencing the customer in buying a particular brand of milka wonder cake. It also examines the

level of satisfaction; the benefits enjoyed the user of the milka wonder cake and the problems

faced by them in using the same. Further, it covers the consumers of milka wonder cake living in

Erode district.

2.PROFILE OF STUDY OF AREA

Erode district in TamilNadu is a main business center. Though agriculture is the main –

stay of the district, it is steadily emerging as an industrially promising district. To say aptly, this

district has vast potential both for the development of agriculture and industry so that the people

living here are so industries.

Location

Erode was previously a part of Coimbatore district, which has been bifurcated from it on

17th Sep 1979 as a new district. The district lies between 10.36’ and 11.58’ degrees of northern

latitude and between 76.49’ and 77.58’degrees of the eatern longitude and 171.91’meters above

mean sea level. It has an area of 8.162 sq.kms accounting for 6.3% of the total area of the state

and is bounded by Karnataka state in the north, Udhagamandalam district in the North, West,

Coimbatore district district in the west, Dindigul district in the south, Karur district in the south

east and Namakkal, Salem district in the east.

BACKGROUND HISTORY

Accounting to inscription available, erode was under the regimes of chera kings in 850

A>A. thereafter (in 1000A.D-1275 A.D) this place came under the rule of Cholas with

Dharapuram as their Headquarters. Subsequently it come under the control of pandiars (from

1276 A.D). Only during this period, a ruler by name veerpandiyan caused the digging of

Kalingarayan channel. Then the Muslims (modeen sultans) took over the rule after which Nayaks

of Madurai ruled. Then Hyder Ali and tippu had their sway. In 1799 when tippu fell to the

British, the East Indian Company took over the administration. During Hyder Ali’s regime, this

town was in a flouring condition with 300 houses. A population of 15000, a mud fort, with a

garrison of 4000 soliders surrounded by coconut grooves and fertile lands bounded on the north

by River Cauvery and east by kaligarayam channel (by Buchanan 7 th and 8th November 1800).

But owing to the successive wars of Marathas, Mysore and British invasions, it become almost

deserted and ruined. However, as peace was restored by the British, the people returned and

settled here. Within a year it began to grow with 400 houses, and a population of 2000. The

sarrison with drew 1807, and the ruined fort was leveled as a relief work during the famine in

1877. The place enclosed within the rampart was occupied by the houses. About a mile and half,

east of the town, there is an old bridge which spans River Cauvery. The wall at “pechiparai”

situated at the present V.O.C Park was one celebrated for its “wholesome and milky water”.

There are two old temples-one dedicated to lord Siva and other to lord Vishnu.

The roof for the name of the town “Erode” may be because of the existence of the two

(odais) water courses viz., perumalpalayam and kaligarayam channel. But there is also a legend

which says that the place apperntly devices its name from the words “Era Odu” which means

“wet skulls”. Accounting to the legend narrated in this regard, dakshaprajapathi, who had given

his daughter in marriage to lord Siva, conducted yoga. For this yoga, lord Siva was not invited.

However, dakshyayini came to take part in this yoga much against the wish of her husband lord

Siva. On coming to Yagakundam, Dakshyayini was not welcomed by her parents or anyone. She

was vexed and threw herself in the yagakundam and burnt to ashes. On hearing this, lord Siva

got highly enraged, proceeded to the statistical spot and threw every one present including

Brahma. The skulls and bones were thrown in river cauvery and remained wet always. Hence the

name “Ear Odu” (wet skull)-Erode.

2.2. PROFILE OF THE COMPANY

Milka wonder cake is private limited company and has become popular for

manufacturing variety of cakes. It is recognized as one of the leading cake manufacturers in

India. The company produces cakes in terms of bar cake, Rick plum and roll cakes. All variety of

cake is being made from the hygienic and nutritive raw materials like pure wheat flavors. The

cakes produced by milka wonder cake are healthy, tasty, hygienic and boosting. It yields much

calorie too and that assumes the significance of the best quality product’s as it increases the

number of customers for the cake day by day.

The company was established in 1989 from which the company developed step by step to

become one of the best bakery product manufacturing. New hope food industries (p) ltd (milka

wonder cake) is one of the units of milka group of companies. The other units of milka group of

companies are pioneer bakeries private ltd (milka bread) milka nutriments private ltd (milka

biscuits) all the units are situated in and around Erode.

The company board consists of five directors Mr.V.Joseph, Mr. Arumugam, Mr. Raja,

Mr. Palaniswamy and Mr. John, under the able direction of these members, the company has 4

units and they are,

Pioneer bakeries (p) limited at Erode in 1989.

Pioneer bakes house (p) Limited at Gobichettypalayam in 1992.

New Hope Food Industries (p) Limited at Erode in 1996.

Milka Industries (p) Limited at Chennai at 2000.

Milka is setting up sophisticated biscuit manufacturing unit in Chennai with two crore

rupees investment, with daily production capacity of 60 to 70 thousand breads and biscuits. The

company is also setting similarities with imported sophisticated machinery. This unit has started

operations from Sep 2004. This unit was in addition to the existing five manufacturing units in

Erode and Gobichettypalayam. Now, milka makes about 45,000 packet of bread everyday and

has capacity of producing two lakhs of bread per day.

For No.1 quality cake in south India in 1997 and 1998 by honorable minister for

planning smt.Ravanmalasavoor at New Delhi, Milka wonder cake has been awarded the

following award,

“ARCH OF EXCELLENCE AWARD 97”

This was awarded in ALL INDIA ACHIEVER’S CONFERENCE in recognition of his

high level business services.

Under the able direction of Mr. Raja, milka wonder cake has reached its peak; milka

wonder cake product is being produced by new hope food industries (p) ltd. Situated at Erode. It

was established on 11.Dec.1996. The company manufactures engaged only cake with a yield of

total turn over at the maximum of 15 courses. Among which New Hope Food Industries figures

at for one third of the total over and they are producing 25,000 packets per day. It is being

marketed in over 90% in TamilNadu, Kerala, Pondycherry, and Bangalore, Mumbai, and Andra

Pradesh.

2.2.1. VARIOUS DEPARTMENTS AND THEIR FUNCTIONING:

Purchase department

Marketing department

Stores department

Production department

Purchasing department:

New hope food industries (p) ltd keeps a policy, “To produce quality items and attract

more consumers”. For manufacturing cakes it uses maida, sugar and vanaspathi as its raw

materials in addition to the flavors etc.

The major raw material of the company was stored in 100 kg bags especially maida, and sugar,

is stored in 20 kg bags. The other ingredients are stored at minimum consumption level.

Function:

Purchase department carries out the functions as by analyzing the quality of the raw

materials as by using the samples. The qualities of cake are checked by taste after

production.

If the managing director is satisfied with the result, then the terms and conditions are

fixed with the suppliers and contract in finalize.

Finally, purchasing conditions is made with the particular supplier. Then, the results of

the product are watched continuously.

Marketing department:

Sales are the main function of marketing department. New hope food industries (P) Ltd

has effectively launched the product and covered most of the geographical areas in and around

Tamilnadu. According the data available in the sales department, 65% of the consumer prefers to

by milka cakes and the statistical data shows that company now prevails as a leader in the Erode

area particularly in marketing of cakes.

Stores department:

Stores department warehouse all the stocks of the company materials. It is essential that

materials should be properly accounted for and safeguarded in good manner.

Function:

To keep proper records of all goods received in and issued out of the stores.

To keep all components and stores item in correct position.

To maintain stock of materials in good condition and save from deterioration.

Production department:

The company engaged in converting maida and sugar with some ingredients into some

quantity of output as wonder and bar cake. In production department there are two white collared

employees. They are production manager and supervisor.

Function:

Receiving the materials from store department prompt weighting of materials.

Specifying the required materials. The purchase department maintaining the standard

quality for input and output.

Proper maintenance of materials and machineries. It should be done at specified time.

Fulfil the required orders expected by the consumers.

2.2.2 ADVERTISEMENT:

Advertisement is must useful for new entrepreneurs to enter the market. Special

techniques are used in advertising to attain the growth and prosperity is done effectively. The

advertisement can be done by the company by various media like television, radio, banners,

temporary sales, show room sales.

2.2.3. DISTRIBUTION NETWORK:

At present, the company has also set its sales department in other states, for distributing

the goods to agents and retailers, in a state; there will be around 100 distributors. The production

capacity per day is 100 boxes. They will distribute the goods with 2 days, when ever they receive

the orders. The company present has no direct dealing with the retailers. The distribution

network of the company is as follows.

2.2.4. Transportation of the product:

The finished goods which are ready for sale are distributed to the dealers who are located

in various localities through the company vehicle. After the delivery has been made and the

goods reach the hands of the dealers, those goods are kept with those agents and they at their

own risk supplies those goods to various retailers. Then the retailers sell those goods to the

ultimate consumers.

MANUFACTURE

DEALERS

RETAILERS

CONSUMER

MANUFACTURE

DEALERS

RETAILERS

CONSUMER

2.2.5. Types of retailers:

The various types of retailers that the company has are the following.

Bakery

Departmental stores

Super market

Petty shop

Function:

The company follows non personal selling for marketing its products.

The advertise in different medias, newspaper advertisements etc., which helps them to

make the consumers to know about their product located in different localities.

The milka wonder cakes are marketed in over 90% of TamilNadu and also in kerala,

Pondycherry, Andhra Pradesh, Bangalore, Andaman and Nicobar Islands.

2.3. PRODUCT PROFILE

Milka wonder cake was established on Dec 1996 and the product is being produced by

New Hope Industries (p) Ltd situated in Erode. This company manufactures only cake and it

produces in three different varieties.

Bar cake

Roll cake

Rich plum cake

2.3.1. Bar cake:

Bar cake is selling more. It is being produced in six different tastes. They are,

1. Fruit cake

2. Pineapple cake

3. Chocolate cake

4. Orange chocolate cake

5. Orange cake

6. Vanilla cake

2.3.4. RAW MATERIALS:

The raw materials that are used in the product are

Maida

Sugar

Vanespathi

Egg

Milk powder

The raw materials are purchased from various sources and are assembled. They are stored

in godown and used as and when needed.

PRODUCTION PROCESS

RAW MATERIAL FROM GODOWN

MIXING THE INGRADING

BOWL

OVEN

CUTTING

PACKING

FINISHED GOODS

RAW MATERIAL FROM GODOWN

MIXING THE INGRADING

BOWL

OVEN

CUTTING

PACKING

FINISHED GOODS

ORGANUSATION STRUCTURE OF THE COMPANY

CHAIRMAN

SHARE HOLDER

MANAGING DIRECTOR

DIRECTOR

MANAGER

ACCOUNTS ADMINISTRATION SUPERVISOR TYPIST

ASSISTANT DISPATCH OPERATOR /WORKER

ORGANUSATION STRUCTURE OF THE COMPANY

CHAIRMAN

SHARE HOLDER

MANAGING DIRECTOR

DIRECTOR

MANAGER

ACCOUNTS ADMINISTRATION SUPERVISOR TYPIST

ASSISTANT DISPATCH OPERATOR /WORKER