Distribution and Sales Promotion Parag Milk Project New

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The research report discusses a comparative study of distribution and sales promotion of milk products in the market. It aims to analyze different milk brands and understand factors influencing consumer purchase decisions.

The research report is about conducting a comparative study of distribution and sales promotion strategies of different milk brands in the market. The report focuses on understanding distribution processes, objectives, research methodology, SWOT analysis and data analysis.

The different sections included in the report are: introduction, company profiles, distribution process, objectives, research methodology, SWOT analysis, data analysis, recommendations, limitations, conclusions and bibliography.

A COMPARITIVE STUDY OF

DISTRIBUTION AND SALES PROMOTION MILK


PRODUCT IN MARKET
SUMMITTED TOWARDS THE PARTIAL FULFILLMENT
OF
MASTER OF BUSINESS ADMINISTRATION
(SUBMITTED TO UPTU, NOIDA)
A
RESEARCH REPORT
2013-2015

SUBMITTED TO:

SUBMITTED BY:

Mr. AMIT AGARWAL

RAVI

KUmar
(Faculty of Management)

MBA VI th Sem.
Roll no. 1360970039

JP SCHOOL OF BUSINESS
MEERUT
1

(AFFILIATED TO UPTU NOIDA)

CONTENTS
1. Student declaration
2. Acknowledgement

3. Preface

4. Introduction

5. Company profile
10
6. Distribution process
35
7. Objective
44
8. Research methodology
47
9. Swot analysis
54 Data analysis
59

10. Recommandation & suggestions


66
11. Limitations
70
12. Conclusions
72
13. Questionnaires
74
14. Bibliography
79
DECLARATION

I, RAVI KUMAR hereby declare that I have carried out the Research Project
on the topic A COMPARITIVE STUDY OF DISTRIBUTION AND
SALES PROMOTION OF MILK PRODUCT IN MARKET.
I further declare that the research project work is my original work and no part
of this report has been published or submitted to anybody or university for
award of any other degree / diploma.

`
4

Date: 28-05-2015
Place: Meerut

RAVI KUMAR
Roll No. 1360970039
MBA IVth Sem.

ACKNOWLEDGEMENT
It is my pleasant duty to offer my service acknowledgement to those
honorable personalities of the department who have been a constant
source of help and encouragement in carrying out this project.
First of all I wish to express my indebtness to Mr. I.V. Thaplia, Manager
Marketing, Parag Dairy for her valuable suggestions and guidance
throughout the project.
I wish to express my indebtness to Mr. IMRAN KHAN (H.O.D., JP
SCHOOL OF BUSINESS) for his valuable suggestions and guidance
throughout the project.

This research would not have been completed without friendly efforts of
the all the concerned authorities. Also this project enables me to have
the know-how of the effectiveness & working of the team spirit. Its web
like structure helps me to have added potential in myself to adjust easily
to the tense & result oriented environment of the organization.

RAVI KUMAR

PREFACE
As a student of M.B.A. (Master of Business Administration), one of the
most reputed professional courses, I consider as my privilege to thank
all the persons involved in the working of this project and their
supervision and guidance I have been able to complete this research.

The attractive feature of the M.B.A. course is that along with theory we
also get to have the exposure of the practical environment. This is
through the summer training that we have to undergo after the
completion of first year. The entire journey from the very idea of this
project report to reality would not have been possible without guidance
and support of many people.

The Research Report is based on Systematic and Scientific search for


pertinent information on Specific Topic.

The study was confined geographically to Meerut & Noida. The data
source was collected from the regular visits of Shopkeepers.

The special task is also assigned to me to analyze the market


opportunities in different regions of Meerut. It constitutes the Meerut
regions and under that different counters have been visited. A set of
questionnaire was prepared & scrutinized before going for market
analysis.

10

AN INTODUCTION -TO FMCG INDUSTRY


The FMCG sector is a cornerstone of the Indian economy. This sector
can drive growth, enhance quality of life, create jobs, and support
penetration of technology. A vibrant FMCG sector can boost agricultural
product and export. It contributed to the exchequer significantly, disperse
technology across the value chain and usher in the product innovation.
This innovation can improve Indian Health standards.
Fast Moving Consumer Good (FMCG) industry has a long history.
However, the Indian FMCG began to take shape only during the last
fifty-odd years Today, the Indian
FMCG industry continues to suffer from a definitional dilemma. In fact,
the industry is yet to crystallize in terms of definition and market, size,
among others.
The definitional confusion that has marked the Indian FMCG industry is
getting confounded. Some others call it the CPG industry and some
even call it the PMCG industry. The Indian FMCG industry has suffered
because of the confusion.

11

It is an industry which touches every aspect of human life from looks to


hygiene to palate. Perhaps defining as industry whose scope is so vast
is not so easy.
The government is at crossroads not knowing how and where to slot the
Indian FMCG industry and unsurprisingly, the manner in which it has
treated an industry which holds tremendous promise as producer of
goods that pervade everyday life has been only callous. The facts that
the FMCG industry is a noteworthy employer and a major tax payer are
being ignored.
The only thing that is cheering the industry are the reforms of the
nineties. Post reforms, the industries is excited about a burgeoning rural
population whose income are rising and which is a willing to spend on
goods designed to improve lifestyle. What is needed now is a change in
the mindset of the mandarins, FMCG industry -friendly legislation are the
needs of the hour. It does not matter whether changes are being brought
about by dawning market realities or the ongoing economic reforms.
One thing is certain here: The Indian FMCG industry has a promising
future to look forward to.

12

In terms of growth potential, the Indian market is a great horse to bet on.
With a little help and understanding from the government, the Indian
FMCG can realize its true potential.
So far, it has been a checked graph for the MNCs operating in the
Indian FMCG industry. Domestic companies are only beginning to make
their presence felt in the industry. It has taken tremendous consumer
insight and market savings for the FMCG players to reach where they
are today. But, the journey has only begun.

13

14

COMPANY PROFILE
INTRODUCTION
Meerut Pradeshik co- operative dairy federation came into
being on 23rd march 1938 via registration number 257. the
capital invested was only Rs.100 and 220 litres of liquid milk.
Today 2 lakh litres of milk is handled in the co-operative
production unit and its annual turnover has touched the Rs. 50
crore mark.

IN BRIEF
Established

1938

Registration

23 march 1938

First dairy inspector

Mr. N. K. Bhargava

Board of director

Mrs. Kamini Chauhan

Initial Capital Investment

Rs. 100

Present Capital

State Government 9%
Co-operative 10%

15

Location

Shastri Nagar

Area of Distribution

Shastri Nagar
Tej garhi
Presently : the entire district
Meerut. (U.P.)

In spite of several setbacks and hurdles, the co-operative has


steadily progressed from strength. Operation flood II, which
was implemented in Uttar Pradesh, is the year 1983-84
provided the much needed impetus to the co-operative. For
the past few years Meerut Pradeshik co - operative dairy
federation has maintained its lead in among the states cooperatives in areas as diverse as distributions, handling ,
revenue.

16

HISTORY OF PRADESHIK CO-OPERATIVE


DAIRY FEDERATION

The history of co-operative dairy industry in U.P. dates


back to 1917, when Katra Co-operative Milk Society
Allahabad was established. LMPU was established in 1938
as the first step towards organized dairy development
programme all over India . At the time of independence four
milk supply schemes were operating in Meerut, Allhabad,
Varanasi and Kanpur cities. The Agra co-operative dairy came
into existence in the second five year plan while dairies at
Bareilly, Gorakhpur and Mathura were adopted later on.

The apex institution of dairy co-operative was registered


under the name of PCDF (Pradeshik co-operative dairy
federation) in the year 1962 during the fourth five year plan
Aligarh and Meerut were also proposed to be included in the
17

scheme. The govt. of U.P. also entrusted PCDF with the


responsibility of implementing the operation flood I was to
establish co-operative structure in some of the best milk shees
located in ten states in U.P. being of them.

18

OPERATION FLOOD I, II AND III WERE STARTED IN


U.P. WITH THE FOLLOWING OBJECTIVE :-

Removing the middlemen between the producers and


consumers by the
procurement of the milk directly by the producer directly
through village co-operative society .
To increase the production of milk from milking animals by
providing inputs to the producers.
To arrange the supply of liquid milk in the major cities of
U.P. for carrying out the whole programme successfully
and for proper planning, implementation, follow-up,
maintenance etc. an effective organization structure has
been charted out .

19

MARKETING DIVISION
The marketing division of P.C.D.F. has been divided into two
parts :
1-

Liquid milk marketing.

2-

Milk product marketing.

The division is important because the marketing strategies of


both are entirely different; both sub divisions are discussed
brief.

LIQUID MILK MARKETING


At present the liquid milk having brand name as PARAG is
being marketed through local units / milk in major cities of U.P.
& Meerut under direction of P.C.D.F. Ltd. MEERUT, KNP,
DLH, VRN, MRT, are the main central points for maximum milk
demand.

20

MILK PRODUCT MARKETING


The product marketing division is handling the marketing the
Product of Butter, Ghee, Mattha, Milk Cake, Ice-cream, Dahi
etc.
The above products reach the ultimate consumer through one
of the following distribution channels.
a)

Stockists Sale.

b)

Concessionaries Sale.

c)

Clearing & Forwarding Agents.

Stockist sale is three stockiest > Retailer > Consumer each of


the intermediaries operates on the bass of margin base of the
% of investment.
In concessionaries sale only one intermediary is involved viz .
Manufacturer > Stockiest > Retailer > Consumers
Through this channel the product of highly perishable nature
find their way out.

21

Except U.P. & Meerut in other states PARAG products are


distributed through
Clearing overheads by eliminating the necessity for P.C.D.F.
owned warehouses and offices in three states .

22

OBJECTIVES
PCDFS front-end objective was to see that there was enough
milk for everyone in town.
Marketing is simply the PCDFS tool to achieve their ultimate
objective and delivering the pure parag milk to every home.

PURPOSE
PCDFS aims to build a system to ensure that individual farmer
got a fair price for the milk he sold.

MISSION
PCDFS mission is to become the strongest marketing
organization by 2005.PCDFS came into existence in 23rd
march 1938,with the simple intension of ensuring a fair return
to the producers. Which was implemented in UP is the year
1983-1984 provided the much needed impetus to co-operation.
The mission was to develop a product mix that would not only

23

promote sustained growth but also help member union to


develop adequate.

Production and processing facilities. It also aimed to offer


quality products at fair price, and to do so by achieving
economies of scale and costs. And this mission gave birth to
brands like parag and Amul.

Vision
To increase its number of Parag milk customers and its
turnover to 50 crores by 2005 by product diversification.

24

BRIEF ON MEERUT MILKSHED


BACK GROUND
Meerut milkshed is situated in the hinterland of Delhi the
Nations capital. Since centuries it has formed the part of the
traditional supply line of agriculture products from the villages
to the big cities specially Delhi. Rich in its milk potential the
milkshed has, in the course of the last few decades been
thoroughly exploited by small traders and power full contractors
and well organized private diaries. Thus, while large profits
were being retained by such intermediaries the rural milk
producers found their position deteriorating day by day.

In 1950 a co-operative milk supply union was organized in


Meerut which started collecting milk from villages and supplied
it to Delhi and local markets. This milk union continued to
function for about a decade. In the mean time Delhi Milk
Scheme was established by Govt. of India in 1959-60 to ensure
quality milk at right price to the local population. The scheme
25

started operating through 11 chilling centers in Western Uttar


Pradesh (U.P.) in the periphery of Delhi. These chilling centers
were

mainly

located

in

the

then

district

of

Meerut.

Bulandshahar which comprised Ghaziabad district, Meerut


district and Bulandshahar distrist as of now. The milk was
collected through contractors and 10 Milk Union were also
formed almost at the same time, around each chilling center.
These continued functioning in a rather lopsided manner till
1997.

Gradually, all the milk unions almost became defunct and were
supplying very little milk during the years 1970-77 obviously
contractors had monopoly and collected major share of milk
which was wither supplied to Delhi Milk Scheme or to the local
population of the Metropolis.

26

OPERATION FLOOD-I
This programme was launched in U.P. by National Dairy
Development Board (N.D.D.B). In 1972 and the implementing
agency in the state was Pradeshik Cooperative Dairy
Federation Ltd. (P.C.D.F. Ltd.) The basic ides was to replicate
Anand Pattern three tier cooperative systems in U. P. In
August- September 1972 organisation of societies was taken
up in Baraut, Binauli, and Chaprauli blocks of Meerut, which
started functioning from April 1978 with a team of 27
employees drawn from Meerut Milkshed. Under the guidance
of the spear head team, 198 Milk Procurement Co-operative
Societies were organized by 1981, when the Operation Flood-I
programme ended.
Feeder balancing Dairy (F.B.D.) Meerut was set up under
Operation Flood-I programme with the specific purpose of
supplying milk to Delhi diaries and conversion of surplus milk
into various dairy products. This dairy is situates near village
Gangol about 15 km. from Meerut city. The dairy was
27

commissioned in April 1978 and processed the liquid milk


procured

form

the

then

milkshed

comprising

Meerut,

Ghaziabad, and the purpose of establishing Feeder Balancing


Dairy, Meerut was to provide remunerative market for milk
produced in the milkshed comprising districts of Meerut,
Balandshahar

and

Muzaffarnagar

as

envisaged

under

Operation Flood-I programme. Thus F.B.D. Meerut was obliged


to receive entire surplus milk from the rural areas, through a net
work of milk co-operative societies and to supply milk to Delhi
Diaries viz; Mother Dairy and Delhi milk scheme.

28

OPERATION FLOOD II:


The operation flood II was launched in U.P. from November
1982. By the end of operation flood-II programme the number
of milk procurement cooperative societies had reached 612.

F.B.D. Meerut had initial capacity of handing 1.0 lac liters of


milk per day. Due to increase in the number of village dairy
cooperative societies (V.D.C.S.) there was an increase in
procurement of the milk from union and the flow of milk from
neighboring milk union increased, the capacity of F.B.D. was
increased to handle 3.5 liters of milk every day in 1990. in the
year 1992-93 F.B.D. Meerut has handled the milk received from
more than 15 milk unions. The progress of the dairy plant of
last six years in given in annexure 1 (Table -1).

Bulandshahar districts the purpose of establishing Feeder


Balancing Dairy, Meerut was to provide remunerative market
for milk produced in the milkshed comprising districts of
29

Meerut, Balandshahar and Muzaffarnagar as envisaged under


Operation Flood-I programme. Thus F.B.D. Meerut was obliged
to receive entire surplus milk from the rural areas, through a net
work of milk co-operative societies and to supply milk to Delhi
Diaries viz; Mother Dairy and

AREA OF OPERATION
Earlier the area covered under Meerut Milkshed was Meerut,
Ghaziabad and Bulandshahar districts. Now all the three
districts have their own independent milk unions. The present
area of operation of Meerut milkshed is Meerut district only,
where the milk procurement, milk processing and milk
marketing operations are carried out by Gangol Sahkari Dugdh
Utpadak Sangh Ltd, Meerut.

30

PROFILE OF MEERUT CITY


Meerut is situated in the most fertile belt of land and hence it is
an ideal place for agriculture and animal husbandry. Sugarcane
is the main crop and this is one of the major producers of sugar
in the country. Because of this people here are habitual of
eating sweets. The district has an agro based economy and the
population even in the urban areas is will informed about
agriculture and dairying. Dairying as an economic activity has
roots in both rural as well as urban areas. Milk product in the
district finds a ready market because of various products in the
district finds
Delhi milk scheme population of Meerut city as per census
(1991), average growth rate of population over last ten years
and estimated population in the year 1993 is given in the
following paragraph.
Total population of the city (2001)

8,46,954

Average population growth rate (over ten years)

5.78%

Total estimated population (2003)

9,47,745

31

PRESENT PRODUCT MIX:


Though the product mix of the milk union varies from season to
season and depends on the quantity of the milk received
however the exhaustive list of product mix of the milk
union is as follows.
NAME OF THE PRODUCT
1. GHEE

PACKING SIZE
In 500 gm, 1 kg & 15 kg tin pack

2. W.M.P.

In 1 kg pack & 25 kg pack

3. S.M.P.

In 20 gm, 100 gm, & 500 gm pack

4. TABLE BUTTER
5. WHITE BUTTER
6. LIQUID MILK
7. PASTEURISED LIQUID

In 20 kg pack
Skimmed milk & whole milk in
tankers to mother Dairy and Delhi
scheme under national grid.
Full cream milk (6.0% fat & 9.0%
SNF)

8. PANEER
9. MILK CAKE
10.FLAVOURED MILK

Standardized milk (4.5%fat & 8.5%


SNF)
Toned milk (3.5% fat & 8.5% SNF)
In 100 gm & 500 gm pack
In 100 gm & 500 gm pack

MARKET SCENARIO
32

INTRODUCTION
Meerut is one of the bet milk pockets of the country. Being
close to Delhi, milk and milk products trade is well developed
and organized in this area. Because of liberalization in the
licensing policy for dairy industry a number of diaries are
coming up in this pocket. Such a scenario is going to pose a
serious challenge to Meerut dairy plant.

33

DEPRESSED

MARKET

FOR

TRADITIONAL

MILK

PRODUCTS:
Presently there is a slump in the market traditional milk
products like ghee and milk powder. The factors responsible for
this are increased milk production and competition in the
market. Also due to deliquescing many new milk plants are
coming in that area which will certainly increase the
competition in the market .Manufacturing of these

traditional

milk products results in blockade of large capital as the market


conditional milk products results in blockade of large capital as
the market conditions are not favourable for quick disposable of
these product. Hence if these traditional milk products re
manufactured then the stock will remain in the godowns of milk
union for a long time. This leads to revenue loss and results in
less liquidity of milk union .apart from this due to increased
competition the market there is very less margin on these
products.
Therefore to cope with this situation it has become very
essential to pay attention for the manufacturing of value added
milk products like paneer, milk cake, flavoured milk etc. and
introduce them in the local market.. for this purpose it is
essential to know the market potential of these products in
MEERUT city.
34

KEY PLAYERS
Key players in this industry are Amul, Parag, Paras,
Gopalji. But Amul dominates this industry. The reason for its
success is that it is the market leader of packaged milk and its
quality and advertisement also play major role in its success.
As a pioneer in the packaged milk industry, Amul secured
first-mover advantage in the market. It has sustained this
advantage through outstanding product quality and a well-oiled
distribution network. This has helped Amul to ensure that its
brand

has

the

highest

top-of-mind

awareness

among

consumers. During the 1990s, when the growth potential in the


packaged milk market attracted new players, including a couple
of large industries, some observers thought Amul would take a
hit. It hasnt the brand has actually grown in value and volume.
However, growing awareness of health and hygiene
issues and increasing prosperity have boosted the demand for
branded pasteurized milk. In this scenario, Amul is the best35

placed brand. And it retains more than 80% share of the


branded milk in Meerut market despite the entry of new
players.
Amul

always

rides

an

emotional

wave

with

its

advertisement campaigns. It also attempts to elevate the brand


to the status of a health icon- Piyo Pure
Also the reason for its success is its quality. Still
consumers feel that Amul is better than any other milk in the
market. It has captured the maximum share of this industry.

36

AVAILABILITY & VISIBILITY OF KEY PLAYERS

Most of the milks are available at every shop. Amul is


present nearly on every shop as it is the necessity of the
retailers to keep it so as to retain the customers. Other branded
milks are also present in every shop but they are uneven in
availability.
In this tough competition in the milk industry availability is
one of the factors for success. When Britannia was launched,
its advertising campaign was very attractive therefore it created
a huge demand in the market, but proper supply or adequate
supply was not there in the market, and quality and taste was
as good as Amul, and hence its sales got down.
The customer are not as much brand loyal in this industry,
they comes to the retailer shop and ask for Amul milk but if it is
not available then it is not that they come out of the shop and
search for Amul, in spite of this they take any other milk which

37

is advised by the retailer or supplied by the supplier (suppliers


are those who gives the home delivery of milk) because milk is
not luxury but it is the necessity. So keeping this point in view,
Parag must be made available at every shop.
Although Parag milk is available on most of the shops but
there are some shops, which are left uncovered by the sales
agents, so the company needs to focus on covering those
uncovered shops in Meerut city.

38

39

DISTRIBUTION PROCESS
Product flow

Factory

C&F Agent

Distributor

Retailers
Consumers

40

DISTRIBUTION PROCESS
There is a distributor for every milk in the sub city, his job
is to ensure the distribution of milk to each and every area and
outlet in the sub city.
This distributor works as a representative of the company
for the retailers. Further this distributor ensures the supply of
milk to the customers with the help of retailers. Sometime
distributor delivers the product directly to the customer.
So there are two main players in the distribution process:
1. Distributor
2. Retailers
The company delivers the product to the distributor with
the help of C&F agent, and the distributor further distributes the
product to the customers with the help of retailers. For this
distribution distributor forms a team of sales agents. These
sales agents go to every market in the sub city and check for
the demand and supply of milk for the retailers. These sales
agents work as a link between the retailers and the distributor.
Supervisors are appointed to check the working of these sales
agents. The supervisor is responsible for the working of his
sales agents.

41

EXISTIG MARKETING SYSTEM OF D.U.S.S. LTD.


MARKETING CHANNELS
The milk and milk products manufactured by D.U.S.S. Ltd. Are
marketed mainly in two different ways.
(a)

THROUGH

REGIONAL

MARKETING

OFFICES

(R.M.O.)
The State Federation has opened R.M.O. in different cities of
the state as well as in other states. This R.M.Os are directly
controlled by the State Federation and are headed by a
Manager Gr-11 or Manager Grlll. Products like Table Butter,
Ghee, and Milk Powder are marketed through these R.M.Os.
(B) DIRECT MARKETING BY THE MILK UNION
The marketing department of the milk union is headed by a
Manager Marketing Gr.-III and supported by two field
supervisors. Manager Marketing has to monitor the sales of
liquid and milk products in the city, being sold through 300
42

retailers. These retailers are situated in different parts of the


city in commercial semi-commercial and residential areas.

PRODUCT DELIEVERY SYSTEM


Products are being delivered on the basis of demand of
retailers which is collected in advance. All retailers gave their
demand for milk and milk products to the transporter during the
previous trip. This demanded quantity is delivered at the
retailers shop in the subsequent trip. Any special demand can
be given directly to the plant and delivery of the same can be
made at the nearest retail outlet or the party can collect it
directly from the plant. All the sales are done on cash basis.
Cash is collected by the transpoht after delivering the products
which is then deposited with & cashier of the milk union.

43

DISTRIBUTION ASPECTS
All the products are distributed through retailers. In earlier
years some stockiest were also appointed but at present they
are not working.
Presently there are about 300 retailers on the rolls of the dairy.
These retailers are not distributed evenly in the city. There are
pockets of concentration of retailers while there are some
areas where retailers are not at all operating.
Majority of retailers re along the main roads or in the main
markets. Their presence in the interior part of the city is
negligible. Also the conditions and the width of roads is a factor
responsible for not serving the entire city effectively.
All the products are delivered through hired vehicles. The
contracts for transporting milk and milk products are made for a
year. Contractors are also responsible for collecting the cash
and the demand from each retailer.

44

A vehicle on an average covers a distance (to and fro) of


approximately 100 kms and reaches about 40 retailers. The
total time involved in the distribution is about 3 hours.
In lean season when the average handling drops substantially,
the Meerut dairy plant stops manufacturing milk products. The
production operations then get limited to selling milk in tankers
to Mother Dairy Delhi, Delhi Milk Scheme and to major cities of
the state. Any short fall in the supply of liquid milk is
accommodated by reconstituting the conserved milk product
commodities in to liquid milk to maintain the regular supply. All
the products manufactured by the dairy Plant as mentioned in
the above table are sold under a common brand name of
PARAG.

45

TRADE SCHEMES
The company gives schemes to the distributor when the
quantity is large. The sole purpose of scheme is to encourage
the purchase. These schemes may be in the form of discount
or in the form of gifts.
Other types of schemes are launched for the retailers to
encourage the purchase of milk. These schemes may be
issued by the company or by the distributor also.
Retailers normally prefer the reduction in the net rate of
the milk as a scheme. They like scheme on which milk is free
on the purchase of milk rather than anything else is free on the
purchase of milk. This creates problem for the retailers, e.g.
suppose on the purchase of one crate of milk company was
giving two pouch of curd free. Now this will create inventory
problem for the retailers. First he has to store curds in the
store. Secondly sometime retailer demands the free gift by
purchasing only half crate of milk and says that he will
purchase the rest half crate next day and then the scheme will
be satisfied.
The biggest problem in such type of schemes is that
customer demands for the reduction in the net rate rather than
anything else. So the retailers always prefer the reduction in
46

the net price rather than the scheme or they prefer the scheme
in which milk is free on milk. So that the net effect of the
scheme is the reduction in price.

47

48

MARKETING RESEARCH
The American marketing association defines marketing
research as follows:
Marketing Research is the functional links to the customers,
consumers

&

public

to

marketing

through

information.

Information used to identify and define marketing opportunities


and problems; generate, define and evaluate marketing
actions;

monitor

marketing

performance

and

improve

understanding of marketing process.


Marketing Research specifies the information requires
addressing these issues, designing the method for collecting
information, managing and implementing the data collecting
process, analyzing the result and communicating the findings
and their implementations.

49

OBJECTIVE OF RESEARCH
1. To study the availability of the brand in dealers in the market.
2. To study the tastiest brand in the market of milk.
3. To study the distribution channel of the parag Milk.
4. To study the promotion backup of brand.
5. To study the satisfactions level of brand.
6. To take suggestion from dealers which help in increasing sale value.

50

51

RESEARCH METHODOLOGY
Research methodology is a way to systematically solve
the research problem. It may be understood as a science of
studies

how

research

is

done

scientifically.

Research

methodology has many dimensions.


The purpose of methodology is to describe the process
involved in the research work. This includes the overall
research design, the data collection process, the sampling
process, the field survey, and analysis procedure.

52

RESEARCH DESIGN
Research Design consists of three parts:
1. Exploratory Research
2. Descriptive Research
3. Causal Research
An exploratory research focuses on the discovery of idea
and is generally based on secondary data. It is preliminary
investigation that does not have a rigid design. This is because
a researcher engaged in an exploratory study that may have to
change his focus as a result of new ideas and relationship
among the variables.
A descriptive study is undertaken when the researcher
wants to know the characteristics of certain group such as age,
sex, educational level, income, and occupation etc.
A casual research is undertaken when the researcher is
interested in knowing the cause and effect relationship between
two or more variables. Such studies are based on reasoning
along well-tested lines.

53

DATA SOURCE
Data is generally of two types:
1. Primary data
2. Secondary data
Primary Data are those data specially collected for
problem in hand. In this study data were collected from primary
sources in personal interview of retailers and interaction with
consumers by survey method.
These methods of data collection are quite popular. These
are the major methods of data collection in the research study.
Secondary Data are those data, which are collected for
some purpose other than helping and solving the problem in
hand.
Sources of secondary data are:
Old reports
Company records
Magazines
Company web site (http://www.Parag.com)

54

Sample Procedure:
How should the respondents be chosen? To get the most
feasible and accurate result, simple random probability
sampling method was adopted for direct interview of retailers
and cluster sampling was used to communicate the consumers
from different apartments of different sectors for the survey.
In simple random probability sampling, probability of being
chosen as a sample unit for each unit in the population is
equal. Each sample unit from the population is chosen
randomly. Probability of being chosen as a sample unit
depends upon the population size and no. of sample units to be
chosen.
While in cluster (area) sampling the population is divided
into mutually exclusive groups (such as city blocks, sectors
etc.), and the researcher draws a sample of the groups using
random sampling. Sometimes researcher again draws sample
units of respondents from the selected groups, it is known as
two step area sampling.

55

Sample Size:
Distributors

Retailers

25

Consumers

1244

Field Work:
During the survey sample packs of Parag milk and curd
have been distributed among the selected consumers, and
their feedbacks have been taken regarding those samples.

56

57

RESEARCH APPROACH
Primary data can be collected in various ways: through
observation, focused group, surveys, behavioral data, and
experiments. During this research data have been collected
using survey method. Survey method is best suited for
descriptive research. Companies undertake surveys to learn
about

peoples

knowledge,

beliefs,

preferences,

and

satisfaction, and to measure these magnitudes in the general


population.

Research Instrument:
Questionnaire is most common research instrument in
collecting

primary

data

during

marketing

research.

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.

58

59

SWOT ANALYSIS

STRENGTHS:
Parag is the oldest Milk Marketing Federation in India.
It has a large network of villages from where it collects
milk.
Parag is a reputed and well known company in India, its
products are easily recognized by the customers.
Parag has evolved from a single product company to
Multi-product Corporation.
Its products range is spread over a wide spectrum, from
milk and curd to ice cream and chocolate.
Customers will at least think of using the product once and
check its quality, as it is the product of Parag.
Parag has the oldest ad campaign in the country.

60

WEAKNESSES:
Parag perceived old traditions.
It is good in quality but not better than Amul.
Advertisement is not frequent.
Amul has the advantage of being the market leader of
packaged milk in the market.
Price is competitive as compared to other brands in the
market, but margin to the distributor is less than that of
other brands.
Parag milk has been launched just one and half year back
in Meerut, so awareness among the people is low about
the Parag milk.
It lacks in aggressive marketing approach, which is
helping competitors.

61

OPPORTUNITIES:
There is a huge opportunity in milk market.
Amul is available since last so many years in the market,
and it has dominated this industry, so people need
change.
If Parag provide a better taste and quality then it can swap
most of the customers of Amul with least effort.
Customers always believe that there is a chance of
improvement.
Milk is basic necessity for daily use; everyone needs it
daily for one or other reason.
Average consumption of milk is 1-2 liter in each house.
In Meerut about 72% of total milk market is packaged milk
market and rest is of loose milk. So there remains a big
area to be covered.

62

THREATS:
There is a very tough competition with other brands.
Better image of competitor in particular segment.
Amul is dominating milk in the market, quality wise and
price wise.
Market is too price sensitive.
People are using Amul and other brands since so many
years, so it is difficult for them to suddenly change the
brand and taste that has already been developed. So it is
really difficult to convince them.

63

Total Milk Consumption (per day)


64

Total milk consumption


Amul
Parag
Other packaged milk
Loose milk

28200 Ltrs.
18000 Ltrs.
2400 Ltrs.
1800 Ltrs.
6000 Ltrs.

Amul has dominated milk industry in Meerut. Around 65% of


total milk market in Meerut has been captured by Parag. Other
brands include Amul, Mother diary etc.

Total Packaged Milk


65

Total consumption
Parag & Amul
Others

22200 Ltrs.
20400 Ltrs.
1800 Ltrs.

Only 8% of total packaged milk market is of local brands.

Packaged Milk Market in Terms of Volume


66

(Before Promotion)
Total milk consumption
Amul
Parag
Others

22200 Ltrs.
18000 Ltrs.
2400 Ltrs.
1800 Ltrs.

Packaged Milk Market in Terms of Money


(Before promotion)
67

Total milk consumption


Parag
Amul
Others

Rs. 357420
Rs. 39168
Rs. 289800
Rs. 28452

Parag had around 11% market share in Dwarka.

Packaged Milk Market in Terms of Volume


(After Promotion)
68

Total milk consumption


Amul
Parag
Others

22272 Ltrs.
14664 Ltrs.
5832 Ltrs.
1776 Ltrs.

After promotion, sale of Parag in Meerut has been increased by


143% (i.e. from 2400 Ltrs. to 5832 Ltrs. Per day). Most of the
customers, who have switched to Parag, were the customers of
Amul.

Improvement Possible with the Distributor


(Preference)
69

1.

Credit Period

2.

Replacement

3.

Collection of Payment

4.

Others

Customer Purchase Milk Because of

Price

30%

Quality

50%

Packing

2%

Scheme

15%

Others

3%

70

71

RECOMMENDATIONS AND SUGGESTIONS


This industry is most competitive industry. There are large
numbers of competitors in this field. In such condition a small
loop may create a big problem. The condition is made more
though by Amul, which is dominating in this industry, so only a
detained study and full fledged effort can help in good sales to
capture the market. Three things are necessary to improve the
sales in the sub city:
1. Advertisement
2. Quality of milk
3. Margin provided to the retailer and distributor
Advertisement is the most important step to improve
sales. People are not loyal to any brand; they purchase milk,
which had an image in their minds. Before leaving their home
they already know for which milk they will ask the shopkeeper.
And this image comes from advertisement. In city distributing
small pamphlets along with newspaper or fixing posters or
hoardings can do advertisement.
Of course quality of milk is another issue, which can
improve sales. In long run if we want to succeed then we have
to create a value for our milk in the mind of the customers and
that can be done by quality. The first priority must be to ensure
that the milk lack in taste by Amul as it is the main competitor.
72

These two above mentioned factors are tough to


implement. The easiest step to improve the sales in the market
is the margin provided to the retailers. The reason for this is
simple Amul is best milk in the market and retailers do not want
to sale it. They are forced to sale it because customer demand
for it. The reason why retailers do not prefer to sale Amul is its
margin. Retailers always try to sale milk other than Amul
because they provide good margin to them. The milks, which
are best in margin, are Paras and Gopalji. Therefore retailers
always try to sale Paras and Gopalji instead of Amul and
Parag. Now if Parag can provide good margin to the retailers
then they will try to sale Parag instead of Amul. And once the
milk becomes established then the rates can be increased and
the margin to the retailers can be decreased.
The most important competitive advantage in this market
is distribution. The ability to get their product to as many outlets
as possible and to ensure its availability on a continuous basis
is the biggest challenge for producer. This is so because milk is
a basic necessity (not a luxury) with little relationship to
personal income that is the milk consumption per person is not
likely to vary significantly by income level.

Critical success factors:


More frequency of visit of sales personnel
73

More timely delivery of stocks


Better replacements
More credit period
Relaxation in collection of payment
Initiative on display by distributor
More schemes provided to the smaller outlets
Aggressive sales promotion schemes are needed due to
stiff competition
More emphasis should be given on services

74

75

LIMITATIONS
Marketing research suffers from several limitations. A
large number of problems which are caused by financial
constraints, insufficient sample size, and lack of personal
contact etc. marketing research only helps managers in
decision making process. It provides data and information to
the managers but it can not be a substitute for marketing.

Limitations of Survey:
In this industry, it is very difficult to find the exact figures
as the consumption is very low.
There is not a particular trend followed in this industry to
promote sales. Actions are taken according to the
situations and the situation changes very fast in this
industry.
Sales price vary from retailer to retailer, as the cost price
is different for different retailers due to schemes given.
The number of shops is very large in number and it is very
difficult to cover all of them.

76

77

CONCLUSION
Milk industry is very competitive industry and dominance
of Amul makes it tougher for other brands to establish in this
field. So in order to compete in this market everything should
be perfect with main focus on distribution. The distribution must
be proper and retailers must be the main center of focus. They
are the people who can make difference.
Parag advertisement is coming on TV and FM Radio in
Meerut also. So there is a possibility that sales will increase as
more and more people come to know about Parag milk.
Advertisement can bring the customers to the shops but after
that the retailer is the key person. If he wants he can sell any
milk. Therefore it should be the combined effort of company
and retailers to improve the sales. Also people always prefer
change so if we provide them better substitute of Amul they will
welcome this change.

78

79

RETAILER SURVEY FORM


Name of the shop
Address
Tel.No.

___________________________
___________________________
___________________________

Q1) What are the milks you usually keep in your shop?
a) Amul
b) Parag
c) Paras
d) Gopalji
e) Others _______________
Q2) Rate these milks in terms of volume of sales from 1 to 3.
a) Amul
b) Parag
c) Paras
d) Gopalji
e) Others
Q3) Does packing play any role in promoting sales?
a) Yes
b) No
Q4) How you sold the milk?
a) At M.R.P.
b) Less than M.R.P.
c) More than M.R.P.
Q5)How you get the delivery from the distributor?
a) Through rickshaw
b) Through tampo
c) Through mini truck
80

d) Others _______________
Q6) How would you compare the services of Parag and Amul
on the following? (Rank 1 to 5)
Parag
Amul
a) Frequency of visit of sales
____
____
personnel
b) Timely delivery
____
____
c) Display support
____
____
d) Any other
____
____
Q7) Is there any improvement possible with distributor on the
following parameter? (Please tick )
Yes
No
a) Credit period
____
____
b) Collection of payment
____
____
c) Replacement
____
____
d) Any other
____
____
Q8) Customer purchase milk because of:
a) Price
b) Quality
c) Packing
d) Scheme
e) Others ______________

81

CONSUMER SURVEY FORM


Name of consumer ___________________________
Address
___________________________
Tel.No.
___________________________
Q1) Which brand of milk do you consume?
a) Amul
b) Parag
c) Paras
d) Gopalji
e) Other _____________
Q2) Which variant of milk do you use?
a) Full Cream
b) Standardized
c) Tonned
d) Double Tonned
Q3) How much milk you purchase daily?
a) Full Cream
_____ Ltrs.
b) Standardized
_____ Ltrs.
c) Tonned
_____ Ltrs.
d) Double Tonned_____ Ltrs.
Q4) How do you get milk?
a) From retailers
b) From supplier
c) From other ______________
82

Q5) How much do you pay to the retailer/supplier for the milk?
a) FCM
Rs._____
b) STD
Rs._____
c) Tonned Rs._____
d) DTM
Rs._____
Q6) If you are getting home delivery, is supplier charging extra
cost for the delivery?
a) Yes
b) No

Rs._____ per (Liter/Day)

(For those who are not currently using Parag)


Q7) Have you ever used Parag milk?
a) Yes
b) No
Q8) If no, then do you want to taste it at least once?
a) Yes
b) No
Q9) If you find it better than your current brand, then will you
continue using it?
a) Yes
b) No

83

84

BIBLIOGRAPHY
BOOK REFERRED:
Marketing Research : Measurement and Method, Donald S. Tull and
Del I.Hawkin,Prentice Hall India,Sixth Edition,Nov,2001
Beri,G.C., Market research, New Meerut, Tata McGraw Hill publishing co.
LTD, 1980 IInd edition.
Boyd,W.Harper, Ralph Westfall Stanley f. stasch, Marketing Research text
and cases, All India Traveller book seller, Meerut, seventh edition.
Philip Kotlar , Marketing Management, New Meerut , Pearson education
(Singapore) pte LTD) eleventh edition
Kothari, C.R., Research methodology, New Meerut, Vikas publication
house, eleventh edition.
WEB SITE:
www.icicibank.com
www.statebankofindia.com
www.google.com
www.webindia123.com
www.indiainfoline.com

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