CHAPTER-I

INTRODUCTION

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INTRODUCTION

The retail sector in India is witnessing a huge revamping exercise as traditional

markets make way for new formats such as departmental stores, hypermarkets,
supermarkets and specialty stores. Western-style malls have begun appearing in metros
and second-rung cities alike introducing the Indian consumer to a shopping experience
like never before.

India’s vast middle class and its almost untapped retail industry are key attractions
for global retail giants wanting to enter newer markets.

The organized retail sector is expected to grow stronger than GDP growth in the
next five years driven by changing lifestyles, strong income growth and favorable
demographic patterns, a KPMG report titled ‘Consumer Markets in India: the next big
thing?’ said.

The structure of retailing is developing rapidly with shopping malls becoming

increasingly common in large cities, and development plans being projected at 150 new
shopping malls by 2010.

According to the report, the annual growth of department stores has been
estimated at 24 per cent, which is faster than overall retail; and supermarkets have taken
an increased share of general food and grocery trade over the last two decades.

Disposable incomes remain concentrated in urban areas, “well-off” and affluent

classes and the growing number of double-income households. However, the report
reveals that the sheer size and potential of the rural segment has been underestimated.

Rated the fifth most attractive emerging retail market, India is being seen as a
potential goldmine. It has been ranked second in a Global Retail Development Index of
30 developing countries drawn up by AT Kearney. The list was developed as a response
to requests from retail chains facing saturated demand in most western markets.

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 Retailing, considered a sunrise industry today after infotech, is the most
happening industry with almost all the big players vying for a share of the coveted pie.
Buoyed by a strong increase in private consumption

PRIVATE CONSUMPTION

2500000
2000000

RS (IN 1500000
2345000
CRORES) 1000000 1800000
1340960 Series1
500000 645100
0
1993- 2000- 2005- 2007-
94 01 06 08
YEARS

Source: Global Retail Development Index

Today however, organized retailing is less than 2 per cent of the retailing industry
in India, that is, about Rs 5,000 crore which is evident from the above table. Therefore,
there is no real retail revolution in India; the industry is still in the stage of infancy.
Organized retailing is bound to grow tremendously provided the right marketing
strategies are adopted. Retail businesses have broken rank and seem poised to surge
ahead with renewed vigor, optimism, confidence and capability.
There is an incredible amount of activity in terms of creation of retail-oriented
space across India. As per some estimates, there are over 200 retail mall projects under
construction or under active planning stage spanning over 25 cities. This may translate
into over 25 million sq. ft. of new retail space in the market within next 24 months.
Huge retail formats, with high quality ambience and very courteous and
ambivalent sales staff, are the regular features of retail formats in most Asian countries.
However, in India except for a few big towns where modern retailing formats abound,
these features are grossly missing. ETIG expects organized retailing to slowly penetrate
the second rung and smaller towns which will catapult the growth rate for the sector.

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Even though the big retail chains are concentrating on the upper segment and selling
products at higher prices like Crossroads, Akbarally's and Shopper's Stop, retail stores are
sprouting that cater to the needs of middle class. With a huge middle class population, the
retailers like RPG's Food world are tapping this market. The market is flooded with
products branded and unbranded.
The customers are in a dilemma as to pick which one. Simon Bell of AT Kearney
says "There is a close relation between the growth of brands and the growth of the
organized retailing.
Companies selling branded products prefer to have big and organized retail
outlets such as supermarkets where they can be differentiated from unbranded products"
Though doubts have been cast on the future of Indian retailing it is our belief that the
retail boom is yet to happen. While the industry is in the introduction stage in most
geographies, it has just entered the growth region in the metro cities. Today, the right
product mix, right sourcing strategy, and the right communications are the mantras for
success..

ORGANIZED RETAIL FORMATS IN INDIA

Each of the retail stars has identified and settled into a feasible and sustainable business
model of its own.
Shoppers' Stop - department store format
Westside - emulated the Marks & Spencer model of 100 per cent private label, very
good value for money merchandise for the entire family

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Giant and Big Bazaar - hypermarket/cash & carry store
Food World and Nilgiris – supermarket format
Pantaloons and The Home Store - speciality retailing
Tanishq has very successfully pioneered a very high quality organized retail business
in fine jewellery

KEY STRATEGIC FACTORS IN RETAILING

The key to success is identifying a superior value-promise and who is in a better position
to do it than retailers? Retailers are the closest to the point of purchase and have access to
a wealth of information on consumer shopping behaviour. Retailers have some unique
advantages for managing brands such as continuous and actionable dialogue with
consumers, control over brand presentation at point-of-sale, control over shopping

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environment, display location/adjacencies, and signage. And they have used this
advantage with tremendous success.

As seen, the role of the intermediary is being diminished gradually, which has
obvious implication of backlash of the trade channel upwards towards the suppliers. This
is more severe in countries such as India, where the channel economics in favour of the
middlemen is still strong enough given the fragmentation of the retail sector. Therefore
when Food World, the largest grocer in India has a “direct supply” contract with over
20% of its key suppliers, it gives rise to conflict of interest with the distribution
infrastructure that suppliers have painstakingly built over the years.

Thus companies like HLL have evolved a distinct distribution channel altogether
(called “Modern Trade”) to service the needs of such large grocers. Even the mom and
pop stores (known as kirana shops) are affected due to this “unfair” back-end advantage
extended by the supplier to its leading accounts (the emerging supermarket chains).

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 The strategies adopted by the retailer to compete with branded goods are
illustrated by the following diagram. Branding the store and following a private label
strategy is the key strategy which helps the retailer to compete with branded products.

RETAIL SCENARIO IN INDIA

Retail Realities:

Unorganized market: Rs. 583,000 crores

Organized market: Rs.5,000 crores
5X growth in organized retailing between 2000-2005
Over 4,000 new modern retail outlets in the last 3 years
Over 5,000,000 sq. ft. of mall space under development
The top 3 modern retailers control over 750,000 sq. ft. of retail space
Over 400,000 shoppers walk through their doors every week

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Growth in organized retail on par with expectations and projections of the last 5
years: on course to touch Rs. 35,000 crores (US$ 7 Billion) or more by 2009-08

The Food Retail Industry in the Far East has evolved into what could be called
‘the breeding ground’ for emerging models with countries like Singapore being the home
to some of the big players in the industry in these parts of the world. The presence of all
the major players of the retailing industry is found in Singapore. Singapore has 2
hypermarkets, one run by Carrefour and the other by Giant Hypermarket, part of Dairy
Farm International. According to the government, there are slightly more than 11,000
market stalls operating in 150 markets located all across Singapore Island. The markets
further spread to China, Thailand, and Malaysia thanks to the major support that the local
governments provided in creating the necessary regulatory framework in establishing
their presence. Singapore, Malaysia and Thailand not only fueled the retail industry
within the country, but also attracted hordes of tourists to experience the shopping
“experiences” that they created in these islands. The markets are now saturated with no
additional space for a new entrant and are expected to consolidate within the next few
years.

Apart from Singapore, which is a more recent development, Japan enjoys an

active spot on the retailers’ map. The retail industry is as huge as US$ 1088 Billion, with
a split of US$ 594.8 Billion in the non-food segment and US$ 493.2 Billion in the food-

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retailing sector. The leaders in sales are Ito-Yokado, Aeon, Daiei, Takashimaya, and Uny,
in that order. Several retailers, however, have made recent improvements in their
warehousing and distribution technologies to make their presence felt in the Japanese
market. Convenience stores, which are small and suitable in a country where land is very
expensive, continue to do well. Food, in fact, has been one of the few sectors that have
experienced growth over the last several years. A

Period of shake up in the industry is likely now that Wal-Mart has entered Japan.
Numerous smaller, less efficient retailers may become takeover targets. The entire
Japanese retail sector will likely undergo some form of restructuring over the next decade
as a result of overcapacity, dismal profits and the Wal-Mart factor. In Mainland China,
the retail markets have mushroomed over the years of intense economic development to a
very considerable size. The total volume of retail sales for consumer goods and food
increased by 10.6 percent in China over the last couple of years which shows tremendous
growth. Consumer spending has held strong.

CHALLENGES AHEAD FOR RETAILING

The unorganized nature of retailing has stunted its growth over several years.
"Lack of industry status affects financing prospects and stunts growth of the industry",
says Kishore Biyani, managing director, Pantaloon Retail India. In the current scenario,
only players with deep pockets have been able to make it big. In addition to the advent of
Internet, there are many other challenges which retailers have to address.

Human Resources
Availability of trained personnel and retaining the human resources is a major
challenge for these big retailers. The bigwigs like Crossroads offer high compensation
and create a cohesive environment that makes an employee proud to be a part of such big
retail chains.

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Space and Infrastructure
To establish a retail shop / mall, the real estate and the infrastructure are very
vital. The expenditure and availability on both the accounts do hinder the growth of the
retail chain. The lack of secondary infrastructure also affects the logistics and supply
chain management for retail companies.

Absence of retailer friendly laws

India still does not have retail-friendly laws especially relating to the movement
of goods from one state to another. Retailers need to put in a whole lot of products from
different parts of the country - at times from outside the country - on the shelf. But
question of multiple tax levels is an issue. Then there are laws like shops cannot be open
for all seven days, shops have to be open after or close before a certain time which affects
operations.

Lack of technical know-how

The Indian government does not encourage any foreign direct investment (FDI) in
the retail industry. FDI is normally one of the ways of getting technical inputs. And
because of this dearth of FDI in this sector, development in terms of people, skills etc are
happening the hard way.

FUTURE PERSPECTIVE

We should see fundamental shifts in the way Indians shop in the very near future.
The Year 2003 could well be a landmark year for organized Indian retailing. According
to a recent study done by ETIG the organized retail industry is expected to grow by 30
per cent in the next five years and is expected to touch Rs. 45,000 crore. Thus, the growth

10
potential for the organized retailer is enormous. In the next 2-3 years, India will finally
see operations of a number of very serious international players - notwithstanding the
current restrictions on FDI in retail. Metro from Germany is a very successful and
resourceful retailer and their cash & carry format should offer a good run for money to
others. Some others will also find perfectly legitimate ways to operate in India, for
example, Marks & Spencer, Mango and Shoprite.

CHANGE ACCELERATORS
The following factors will be significant in driving growth in the retail sector:
 Consumer factors Increase in income
 Working women
 Changes in lifestyle – demand for “global” trends
 Supply side factors
 Growing importance of retailing in political and economic agenda
 Major restructuring of the manufacturing sector easing product supply
constraints for efficient retailing
Reduction in import duties-offering more global sourcing options.
WHICH CATEGORIES WILL GROW?
The single biggest opportunity in India in organized retailing is bound to be food
and groceries; it is in this sector that the largest amount of consumer spends is
concentrated. This sector has maximum opportunity for investments and entrepreneurs to
come in and try to make the supply chain a little more efficient.
Consumer durable is another promising sector because, with increasing
purchasing power, consumers tend to spend the most on this category. Also, there is
nothing to prevent a company from putting up shops outside the city limits, because
consumer durables are a premeditated purchase. Furthermore, availability of finance
options has increased spending in this sector.
Third are home products - with increasing private ownership of homes by
relatively young couples, across most major cities in India, national retail chains offering
home furniture (and accessories) have great potential.

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 Finally, personal care products, pharmaceutical products, and healthcare services
have tremendous growth potential. Recently, we have seen some interest from organized
healthcare players like Max, Fortis, Birlas and the Reliance group

WHERE IS THIS GROWTH GOING TO HAPPEN?

The top 15 cities in India cater to 33 per cent of total urban population, but as high
as 38 per cent of Sec A and B (the top two socio-economic consumer strata) urban
population. The next 15 cities only add to another 7 per cent of Sec A and B population.
So logically the focus will be restricted only to the top 15 cities. Research conducted by
KSA Technopak, shows that today 96 per cent of total organized retail is in the top 10
cities, of which the top six cater to 82 per cent.
However, the rate of growth will be higher in the bottom four of the top 10, which
will have a 20 per cent share by 2005 against the present share of 15 per cent.

WHICH FORMATS WILL GROW?

KSA Technopak's research suggests the top four formats to emerge in the next five years
are:
* Shopping Malls
* Specialty Stores (in new categories such as office products, specialty food, optical and
travel)
* Departmental Stores
* Supermarkets

Recipe for Success

Focus on the consumer:

It is clear that consumers have changed and they are looking for something
different. Understanding their evolving needs, aspirations and lifestyles is the underlying

12
key to success for any retailer. The primary emphasis should be on access, experience
and service and the secondary emphasis on product and price. There should be an effort
to improve service by having better trained sales staff, better availability of products, and
minor but important conveniences, e.g. delivery of goods either to the caror even home.
Collaborative advertising and promotion can then round off this effort

Brand the store: branding the store will increase volume and enhance customer loyalty.
Branding is critical to maintaining competitive differentiation in an increasingly
challenging retail environment. However, the brand needs to be clearly communicated to
the customer.

Develop private label brand: Private labels act as margin generators, increasing sales
volume by positioning the label as providing higher perceived value to consumers. In the
long run, they also increase the retailers’ bargaining power with national brand suppliers.
Private labels generate customer loyalty by providing exclusive products, which works
towards differentiation strategy, much sought after by the retailers.
In terms of geography some entrepreneurs should put efforts in creating custom-
developed solutions for tapping the rural and semi-urban spending potential. Even in non-
metro urban centers, there are very good opportunities in looking at starting or expanding
operations. Some cities that should see greater organized retail action in the future would
be Ludhiana, Chandigarh, Lucknow, Nagpur, Ahmedabad, Surat, Pune, Kochi,
Thiruvananthapuram, Guwahati and Bhubaneshwar.
In terms of format malls have a sustainable competitive advantage over other
formats. Consumer preferences are shifting towards malls from traditional markets. As a
result of consumer shifts, retailers also prefer to be located in malls in anticipation of
higher footfall. KSA Consumer Outlook 2000SM shows that increasingly consumers
prefer "All Under One Roof” destination for shopping as well as eating out and
entertainment. These findings together indicate an excellent potential for a mall with the
following features:
a superior well-managed leisure experience
 targeted at all members of the household

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  a wide range of products and services
 proximity to homes

HOW CAN IT BE DONE?

For a start, these retailers need to invest much more in capturing more specific market
intelligence as well as almost real-time customer purchase behaviour information. The
retailers also need to make substantial investments in understanding/acquiring some
advanced expertise in developing more accurate and scientific demand forecasting
models. Re-engineering of product-sourcing philosophies - aligned more towards
collaborative planning and replenishment should then be next on their agenda. The
message, therefore, for the existing small and medium independent retailers is to closely
examine what changes are taking place in their immediate vicinity, and analyze whether
their current market offers a potential redevelopment of the area into a more modern
multi-option destination. If it does, and most commercial areas in India do have this
potential, it would be very useful to form a consortium of other such small retailers in
that vicinity and take a pro-active approach to pool in resources and improve the overall
infrastructure. The next effort should be to encourage retailers to make some investment
in improving the interiors of their respective establishments to make shopping an
enjoyable experience for the customer. ]

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 NEED FOR THE STUDY

The study has been aimed to know the retail distribution on HERITAGE dairy products
manufactured by “HERITAGE FOODS”. The distribution of the HERITAGE dairy
products will also help to know about the market share of HERITAGE, attitude of the
distributors towards the HERITAGE dairy products. Feed back is considered as necessary
because it will help the company in taking proper action.

With the help of distribution of HERITAGE dairy products its gives an opportunity for
the company to make necessary changes in the products and promotional policies of
company in order to attract and satisfy the consumer who are with the ultimate end-users.

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 OBJECTIVES OF THE STUDY

 To study the market expansion strategies adopted by HERITAGE dairy products

in Greater Hyderabad.
 To study the product line of HERITAGE.
 To find out market share of HERITAGE dairy products
 To study the attitudes of the retailers towards the HERITAGE dairy products.

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SCOPE OF THE STUDY

 The study is conducted on HERITAGE dairy products.

 The study is confined to the area of Hyderabad and a Secunderabad.
 The sample of the respondents chosen for the study was kirana stores, general
stores, super markets, pharmacies, bakery shops etc.,

 The size of the sample was: 200.

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RESEARCH METHODOLOGY

 Using descriptive research design, this research was conducted. Respondents for
this study includes owners of kirana stores, general stores, super markets,
pharmacies, bakery shops etc., in twin cities of Hyderabad and Secunderabad.
Using convenient sampling, 200 of them were chosen to whom the questionnaires
were administered

PRIMARY DATA
 A structured questionnaire was administered to the retailers.
 The questionnaire consists of 13 questions.
 Sample size – 200.
 Sample area – Hyderabad & Secunderabad.

SECONDARY DATA

 Websites
www.heritage.com
www.google.com
 Product detailer of HERITAGE.

STATISTICAL TOOLS

Frequencies and bar charts were used to analyze the data obtained from the
questionnaires. SPSS was used to generate the frequencies and bar charts. These tools
show the customer preference in numbers.

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 LIMITATIONS OF STUDY

 Human errors like the respondent not revealing true or accurate information can
also affect the findings.
 The distributors views, opinion which are not stagnant. It will be changed in
course of time so the information draw from this study is not applicable in future.
 The study is conducted on HERITAGE dairy products.
 The study is confined to the area of Hyderabad and Secunderabad.
 The sample of the respondents chosen for the study were only kirana stores,
general stores, super markets, pharmacies, bakery shops etc.,
 The size of the sample was: 200.

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CHAPTER-2

REVIEW OF LITRATURE

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FOOD RETAIL IN INDIA

Though with a population of a billion and a middle class population of over 300
millions organized retailing (in the form of food retail chains) is still in its infancy in the
Country. India has been rather slow in joining the Organized Retail Revolution that was
rapidly transforming the economies in the other Asian Tigers. This was largely due to the
excellent food retailing system that was established by the kirana (mom-and-pop) stores
that continue meet with all the requirements of retail requirements albeit without the
convenience of the shopping as provided by the retail chains; and also due to the highly
fragmented food supply chain that is cloaked with several intermediaries (from farm-
processor-distributor-retailer) resulting in huge value loss and high costs. This
supplemented with lack of developed food processing industry kept the organized chains
out of the market place. The correction process is underway and the systems are being
established for effective Business-to-Business (farmer-processor, processor-retailer)
solutions thereby leveraging the core competence of each player in the supply chain.

RETAIL MODELS IN INDIA: CURRENT & EMERGING

The Indian food retail market is characterized by several co-existing types and
formats. These are:
1. The road side hawkers and the mobile (pushcart variety) retailers.
2. The kirana stores (the Indian equivalent of the mom-and-pop stores of the US),
within which are:
a. Open format more organized outlets
b. Small to medium food retail outlets.
Modern trade – the organized retailers
Within modern trade, we have:
1. The discounter (Subhiksha, Apna Bazaar, Margin Free)
2. The value-for-money store (Nilgiris)
3. The experience shop (Foodworld, Trinethra)
4. The home delivery (Fabmart)

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While the focus of this note is on modern organized retail trade, we hereunder present
insights into the smaller, semi and unorganized retailers.

Food retailing in India still remains a traditional business with the market
dominated by small, independently operated neighborhood stores. There are 12 million
mom-and-pop stores in the country, well entrenched in their respective area of operation.
But a closer look at the scenario shows that things are changing, slowly but
surely. Organized food retailing is growing, and is evident with the presence of organized
food retailers in malls across cities, as also in the form of neighborhoods stores.
Competition will only increase in this sector, with a number of domestic and foreign
players have entered the market or else waiting for the right opportunity to do so.

FOREIGN PLAYERS:
A recent change in the regulatory landscape makes India an attractive destination
for foreign retailers. Previous FDI rules prohibited direct ownership by foreign retailers.
Recent legislations relaxes these rules; proposals under consideration call for ceilings of
either 26% or 49% ownership.

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 International retailers eagerly pacing the sidelines will be quick to take advantage
of these more favorable FDI rules. Wall-mart, Carrefour, Tesco and Casino are among
those actively seeking local partners.

In addition there are alternative routes for international players to enter the retail
sector. These include establishing franchises, cash and carry model in whole sale market,
joint ventures and licensing agreements. For example, SPAR, the world’s leading food
retailer has entered India through a license agreement with Radhakrishna(RK) Foodland
Pvt Ltd. Food land is a leading food distribution and logistics company in India and is
currently the distribution partner for McDonalds India the arrangement between SPAR
and RK Foodland leverages Spar’s experience of retailing in diverse communities and
geographies, while RK Foodland brings to the venture its expertise and experience as
managers of a comprehensive range of food services in India.

DOMESTIC RETAILERS:
At the same time, domestic retailers, both existing and new entrants, are
increasing in size of their operations and capturing prime locations, especially in metros
and other major cities in India. They are also enhancing their logistics and technology
processes, and thus gearing up to face the competition from other local and foreign
retailers.

ROBUST FOOD SUPPLY CHAIN:

In India modern food retail formats are still limited to a few cities or regions,
thanks to the lack of facilities to support them. There are inherent inefficiencies and a
disintegrated structure in the food supply chain.

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CHAPETER -3
COMPANY PROFILE

24
 COMPANY PROFILE

Heritage at a Glance:

The Heritage Group, founded in 1992 by Sri Nara Chandra Babu Naidu,
is one of the fastest growing Private Sector Enterprises in India, with four-business
divisions viz., Dairy, Retail, Agri, and Bakery under its flagship Company Heritage
Foods (India) Limited (HFIL). The annual turnover of Heritage Foods crossed Rs.1096
corers in 2010-11.

Presently Heritage’s milk products have market presence in Andhra Pradesh,

Karnataka, Kerala, Tamil Nadu and Maharashtra and its retail stores across Bangalore,
Chennai and Hyderabad. Integrated Agri operations are in Chitters and Medan Districts
and these are backbone to retail operations.

In the year 1994, HFIL went to Public Issue to raise resources, which was
oversubscribed 54 times and its shares are listed under B1 Category on BSE (Stock Code:
519552) and NSE (Stock Code: HERITGFOOD)

About the founder:

Sri Chandra Babu Naidu is one of the greatest Dynamic, Pragmatic,

Progressive and Visionary Leaders of the 21 st Century. With an objective of bringing
prosperity in to the rural families through co-operative efforts, he along with his relatives,
friends and associates promoted Heritage Foods in the year 1992 taking opportunity from
the Industrial Policy, 1991 of the Government of India and he has been successful in his
endeavor.

At present, Heritage has market presence in all the states of South India. More
than three thousand villages and five lakh farmers are being benefited in these states. On
the other side, Heritage is serving more than 6 lakh customers needs, employing more
than 700 employees and generating indirectly employment opportunity to more than 5000

25
people. Beginning with a humble annual turnover of just Rs.4.38 corers in 1993-94, the
sales turnover has reached close to Rs.300 corers during the financial year 2005-2006.

Sri Naidu held various coveted and honorable positions including Chief
Minister of Andhra Pradesh, Minister for Finance & Revenue, Minister for Archives &
Cinematography, Member of the A.P. Legislative Assembly, Director of A.P. Small
Industries Development Corporation, and Chairman of Karshaka Parishad.

Sri Naidu has won numerous awards including " Member of the World
Economic Forum's Dream Cabinet" (Time Asia ), "South Asian of the Year " (Time
Asia ), " Business Person of the Year " (Economic Times), and " IT Indian of the
Millennium " ( India Today).

Sri Naidu was chosen as one of 50 leaders at the forefront of change in the
year 2000 by the Business Week magazine for being an unflinching proponent of
technology and for his drive to transform the State of Andhra Pradesh.

Forward looking statements:

“We have grown, and intended to grow, focusing on harnessing our

willingness to experiment and innovate our ability to transform our drive towards

Mission

Bringing prosperity into rural families of India through co-operative efforts

and providing customers with hygienic, affordable and convenient supply of “Fresh and
Healthy " food products.

Vision

To be a progressive billion dollar organization with a pan India foot print by 2015.
To achieve this by delighting customers with "Fresh and Healthy" food products, those
are a benchmark for quality in the industry.
We are committed to enhanced prosperity and the empowerment of the farming

26
community through our unique "Relationship Farming" Model.
To be a preferred employer by nurturing entrepreneurship, managing career aspirations
and providing innovative avenues for enhanced employee prosperity.

Heritage Slogan:

When you are healthy, we are healthy

When you are happy, we are happy

We live for your "HEALTH & HAPPINESS"

Quality policy of HFIL:

Heritage Foods committed to achieve customer satisfaction through

hygienically processed and packed Milk and Milk Products. It strives to continually
improve the quality of our products and services through up gradation of technologies
and systems.

Heritage's soul has always been imbibed with an unwritten perpetual

commitment to itself, to always produce and provide quality products with continuous
efforts to improve the process and environment.

Adhering to its moral commitment and its continuous drive to achieve

excellence in quality of Milk, Milk products & Systems, Heritage has always been laying
emphasis on not only reviewing & re-defining quality standards, but also in
implementing them successfully. All activities of Processing, Quality control, Purchase,
Stores, Marketing and Training have been documented with detailed quality plans in each
of the depart Today Heritage feels that the ISO certificate is not only an epitome of
achieved targets, but also a scale to identify & reckon, what is yet to be achieved on a
continuous basis. Though, it is a beginning, Heritage has initiated the process of
standardizing and adopting similar quality systems at most of its other plants.

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Commitments:

Milk Producers:

Change in life styles of rural families in terms of:

 Regular high income through co-operative efforts.

 Women participation in income generation.
 Saved from price exploitation by un-organized sector.
 Remunerative prices for milk.
 Increase of milk productivity through input and extension activities
 Shift from risky agriculture to dairy farming
 Heritage
 Financial support for purchase of cattle; insuring cattle
 Establishment of Cattle Health Care Centers
 Supplying high quality Cattle feed
 Organizing "Rythu Sadasu" and Video programmer for educating the farmers in
dairy farming

Customers:

 Timely Supply of Quality & Healthy Products

 Supply high quality milk and milk products at affordable prices
 Focused on Nutritional Foods
 More than 4 lakh happy customers
 High customer satisfaction
 24 hours help lines ( <10 complaints a day)

Employees:

 Enhancing the Technical and Managerial skills of Employees through continuous

training and development

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 Best appraisal systems to motivate employees
 Incentive, bonus and reward systems to encourage employees
 Heritage forges ahead with a motto "add value to everything youth

Returns:

 Consistent Dividend Payment since Public Issue (January 1995)

Service:

 Highest impotence to investor service; no notice from any regulatory authority

since 2001 in respect of investor service
 Very transparent disclosures

Suppliers:

Doehlar: technical collaboration in Milk drinks, yogurts drinks and fruit flavored
drinks Alfa-Laval: supplier of high-end machinery and technical support Focusing
on Tetra pack association for products package.

Society:

 Potential Employment Generation

 More than 3500 employees are working with her
 More than 9500 procurement agents got self employment in rural
 More than 5000 sales agents associated with the company
 Employment for the youth by providing financial and animal husbandry support
for establishing MINI DAIRIES
 Producing highly health conscious products for the society

Qualities of management principles:

1. Customer focus to understand and meet the changing needs and expectations of
customers.

29
2. People involvement to promote team work and tap the potential of people.
3. Leadership to set constancy of purpose and promote quality culture trough out the
organization.
4. Process approach to assess the efficiency and effectiveness of each process.
5. Systems approach to understand the sequence and interaction of process.
6. Factual approach to decision making to ensure its accuracy.
7. Continual improvement processes for improved business results.
8. Development of suppliers to get right product and services in right time at right
place.

Product/Market wise performance:

The total turnover is Rs 341 Corers during the financial year 2006-07 against
the turnover of 292.02 Corers in 2005-06. Today Heritage distributes quality milk &
milk products in the states of A.P, Karnataka, Kerala & Tamil nadu.

During the year 2006-07 liquid milk sales was Rs.28329.79 lakhs against
Rs.24525.23 lakhs in the previous year. The sales of milk products including bulk sales
of cream, ghee and butter were recorded Rs 5781.59 lakhs against Rs 4677.21 lakhs.

Milk sales:

23% growth was recorded in AP 2.38 lakhs liters per day(LLPD) in 2006-07
against 1.93 LLPD in 2005-06. 13% growth was recorded in Tamilnadu-1.53 LLPD in
2006-07 against 1.35 LLPD in 2005-06. Over all growth of 6% was recorded- 5.49 LLPD
in 2006-07 against 5.16 LLPD. Flavored milk sales recorded a growth rate of 77% over
2005-06. Butter milk sales have gone up by 45% over 2005-06.

Outlook:

Considering the growth potential in the liquid milk market, the company has
drawn plans to increase its market share in the existing markets and to enter into new
markets there by doubling revenues in dairy business in the next 3 years. To achieve this

30
object, company is undertaking major expansion in dairy business by inverting over Rs20
cores during 2006-07 and over Rs10 cores during the current year to strengthen the milk
procurement.

CODE OF CONDUCT AND ETHICS

FOR DIRECTORS & SENIOR MANAGEMENT

PREFACE This Code of Conduct and Ethics (herein after referred to as the
"Code") has been adopted by the Board of Directors of Heritage Foods (India) Limited
(herein after referred to as "the Company") , to be applicable to all Directors and all
members of senior management i.e., personnel who are a part of the core management
team and including all functional heads of the company (herein after referred to as the
'Members') with effect from December 23, 2005.

This Code helps the Members maintain good standards of business conduct, foster
ethical and moral conduct and promote a culture of honesty and accountability, so as to
set an example to others in the company.
The Code is not an all-inclusive comprehensive policy and cannot anticipate
every situation that may arise in the course of the company's business. The Members are
expected to bear in mind the essence and substance of the Code in all their dealings /
transactions with the Company.

STRICT COMPLIANCE All Members shall act within the bounds of the
authority conferred upon them and undertake the duty to make and enact informed,
judicious and harmonious decisions and policies in the best interests of the Company and
its shareholders / stakeholders.

With a view to maintain the high standards the Company requires, the following
rules/ code of conduct to be observed in all activities. For the purpose of the code, the
Company appoints the Company Secretary as compliance officer, who will be available
to Members to answer questions and help them in complying with the code. CONFLICT
OF INTEREST The term "Conflict of interest" pertains to situations in which financial

31
 or personal considerations may compromise, or have the appearance of compromising
judgment of professional activities. A conflict of interests exists where the interests or
benefits of one person or entity conflicts with the interests or benefits of the other
person/entity/company.

All Members should not engage in any business, relationship or activity, which
may be in conflict with the interest of the Company. Conflict may arise in many
situations. It is not possible to cover every possible conflict situation and at times, it will
not be easy to distinguish between the proper and improper activities. Set forth below, are
some of the common circumstances that may lead to conflict of interest, actual or
potential.
i.i Members ni.ii. engage in any activity / employment that interfere with you
performance or responsibility to the Company or otherwise in conflict with or
prejudicial to the interests of the Company.
ii. As a general policy, Members should avoid conducting business with a relative or
with a firm / Company in which a relative / related party is associated in a
significant role / position.
iii. Whenever/ wherever the related party transaction is unavoidable Members will
fully disclose their interest in the transaction to the Board or to the CEO of the
Company and due records for such transactions will be maintained as per the
statutory requirements.

HONESTY AND INTEGRITY

All Members shall conduct their activities, on behalf of the Company and on their
personal behalf, with honesty, integrity and fairness. They will act in good faith, with
responsibility, due care, competence and diligence, allowing independent judgment to
their subordinates. Members shall act in the best interests of the Company and fulfil their
fiduciary obligations.

32
POLICY OF BUSINESS RELATIONSHIP

The Company will conduct business legally and ethically. The quality of
company's products and the efficiency of its services at the most competitive price is the
greatest tool in conducting the business of the company. Profits do not justify unfair/
unethical practices. All Members should uphold the highest standards of integrity in all
the business relationships.

INTELLECTUAL PROPERTY POLICY

All Members have utmost obligation to identify and protect the intellectual
properties, trade secrets and confidential information owned by the Company and its
clients or associates as it is critical to the success of the company. "Intellectual Property
Rights" (IPR) means generally patented or potentially patentable inventions, trademarks,
copyrightable subject matters and trade secrets.

CORPORTE OPPORTUNITIES

Members owe a duty to the Company to advance its legitimate interests when the
opportunity to do so arises and are expressly prohibited from improper use of information
/ property or taking improper advantage of their position.

PREVENTION OF INSIDER TRADING

Insider trading is prohibited both by the Law as well as by the company policy .
Insider trading generally involves the act of subscribing to or buying or selling of the
Company's securities, when in possession of any Unpublished Price Sensitive
Information about the company.

"Price sensitive information " is such information, which relates directly or

indirectly to the company and which if published is likely to materially affect the price of

33
securities of the Company. It is important to note that both positive and negative
information could be price sensitive.

Members shall not derive benefit or assist others to derive benefit or assist them to
derive benefit on their behalf by giving investment advice from the available access to
and possession of information about the Company, which is not in public domain and
thus constituting insider information. Members shall comply with the prevention of
insider trading guidelines as issued by Securities Exchange Board of India (SEBI).

SECURITIES MARKET POLICY

The Company is committed to comply with securities laws in all the markets in
which the Company's securities are listed. The company prohibits fraudulent and unfair
trade practices with regard to the securities of the Company by all Members.

CONFIDENTIALITY OF INFORMATION POLICY

The Company's confidential information is a valuable asset. Members shall

understand that protection of all confidential information is essential. Members should
undertake and be committed to protecting business and personal information of
confidential nature obtained from clients, associates and employees.

Any information concerning the Company's business, its customers, suppliers etc
which is not in the public domain and to which the Members have access or possesses
such information, shall be considered confidential and held in confidence, unless
authorized to disclose or such disclosure is required as a matter of law. Members shall not
provide any information either formally or informally, to the press or any other publicity
media, unless specially authorized to do so. COMPLIANCE WITH LAWS, RULES
AND REGULATIONS

34
 Members should comply with all applicable laws, rules, and regulations, both in
letter and sprit. In order to assist the Company in promoting the lawful and ethical
behaviour, Members have to report any possible violation of law, rules, regulations or the
code of conduct to the Company Secretary.

PROTECTION AND PROPER USE OF COMPANY’S ASSETS

All Members have the responsibility to protect the assets of the company, ensure
optimal utilization of assets and to report and record all transactions. Members shall
protect the Company's assets from loss, damages, misuse or theft and assets may only be
used for business purposes and other purposes specifically approved by management and
must never be used for any personal or illegal purposes.

COMPETITION POLICY

The Company shall compete only in an ethical and legitimate manner. It prohibits
all actions that are anti- competitive or otherwise contrary to laws that govern
competitive practices in the market place. Members shall uphold the same.

SELECTING SUPPLIERS

The Company's suppliers make significant contribution to its success. The

Company's policy is to purchase / avail supplies based on need, quality, service, price and
other commercial terms and conditions. Suppliers should be selected based on merit,
price, quality and performances. The Company's policy is to select significant suppliers
through a competitive bid process wherever possible. Under no circumstance should the
Company or its employee, agent or contractor attempt to coerce suppliers in any way

35
ENVIRONMENT, HEALTH AND SAFETY POLICY

Members shall take environmental consciousness a step further as a company and

contribute to preserving nature as well as safety measures in own respective work areas.
All Members are responsible for conducting safe and environmentally sound operations;
this is in the interest of our own well-being and the quality of life of others. Members
shall abide by this policy.

ELIMINATION OF CHILD LABOUR

It is the Company's policy not to support child labour. The Company is committed
to implement the provisions of the Child Labour (Prohibition and Regulation) Act, 1986.
To, promote this the Company encourages its suppliers also to work towards a no child
labour policy in their industries. Members shall strictly observe that no child labour is
employed in the company
.
ABOLITION OF FORCED LABOUR

The Company strictly prohibits forced or compulsory labour. The Company is

committed to ensuring that employees enter into employment and stay on in the
Company of their own free will. Members shall uphold this policy,

GIFTS & DONATIONS

No Member shall receive or offer, directly or indirectly, any gifts, donations,

remuneration, hospitality, illegal payments and comparable benefits which are intended
or perceived to be intended to obtain business (or uncompetitive) favours or decision for
the conduct of the business. Normal gifts of commemorative nature for special events
may be accepted and reported to the Board.

36
OTHER DIRECTORSHIPS

The Company feels that serving on the Board of directors of other companies may
raise substantial concerns about potential conflict of interest. Therefore all Directors shall
report / disclose such relationships to the Board on an annual basis. It is felt that service
on the Board of a direct competitor is not in the interest of the Company. Hence all the
Directors are barred in accepting such position without the concurrence of the Board.

ACCOUNTABILITY

The Board of Directors (BOD) shall oversee the Company's adherence to ethical
and legal standards. All employees and members of the BOD shall undertake to stop or
prevent actions that could harm customers or reputation of the Company and to report
such actions as soon as they occur to take corrective steps and see that such actions are
not repeated.

COMPLIANCE WITH CODE OF CONDUCT

Each Director and senior management personnel shall adhere to this code of
conduct and affirm compliance with the code on an annual basis as per the Annexure to
the Code. Violation of this Code will lead to appropriate disciplinary action.

WAIVER OF THE CODE

Any waiver of the applicability of the Code or waiver of application of any

provision of the Code to any Member shall be approved by the Board of Directors and
disclosed as required by Law or SEBI / Stock Exchange regulations.

37
BRANCHES OF HFIL

HFIL has 3 wings. They are

1. Dairy
2. Retail
3. Agribusiness

1. Dairy:

It is the major wing among all. The dairy products manufactured by HFIL are
Milk, curd, butter, ghee, flavoured milk, paneer, doodhpeda, ice cream.

2. Retail:

In the retail sector HFIL has outlets namely “Fresh@”. In those stores the
products sold are vegetables, milk& milk products, grocery, pulses, fruits etc.

In Hyderabad 19 retail shops are there. In Bangalore& Chennai, 3&4 respectively

are there. Totally there are 26 retail shops are there.

Fresh@ is a unique chain of retail stores, designed to meet the needs of the
modern Indian consumer. The store rediscovers the taste of nature every day making
grocery shopping a never before experience.

The unique & distinctive feature of Fresh@ is that it offers the widest range of
fresh fruits and vegetables which are directly hand picked from the farms. Freshness lies
in their merchandise and the customers are always welcomed with fresh fruits and
vegetables no matter what time they walk in.

3. Agri Business:

38
 In this business HFIL employees will go to farmers and have a deal with them.
Those farmers will sell their goods like vegetables, pulses to HFIL only. And HFIL will
transport the goods to retail outlets.

The agricultural professors will examine which area is suitable to import

vegetables from and also examine the vegetables, pulses and fruits in the lab. And finally
they report to the Head-Agribusiness. Representatives as per the instructions given by the
agri professors will approach the farmers directly and make a deal with them. It is the
process of registering the farmers.

Heritage Fin lease Heritage Fin lease Limited was incorporated under the
companies Act 1956 on 23rd of February 1996 and commenced business from 2nd day of
April 1996. The Registered office is located at 6-3-541/c Punjagutta, Hyderabad-500082.

The following are the directors of the company:

Sri D.Seetharamaiah
Sm. N. Bhtuvaneswari
Sri M. Sivarama Varaprasad
Sri R.S.Bakkannavar

The Company was registered as Non Banking Financial Institution on 5th Day of
December 1998 by Reserve Bank of India as a Deposit Taking Company under the
category Hire Purchase Company.

At Present the company is allowing Dairy Loans to Small Farmers under Tie up
arrangement with Heritage Foods (India) Limited. The Company has been earning profits
from inception and functioning in conformity with the rules and directions of Reserve
Bank of India.

39
 The term human resource can be though of as, “the total knowledge, skills,
creative abilities, talents and aptitudes of an organizations work force, as well as the
value, attitudes and believes of the individuals involved.

Awards & Recognitions

1st Prize in National Energy Conservation Awards-2015

2nd Prize in National Energy Conservation Awards-2015

National Energy Conservation Award 2014

National Energy Conservation Award 2012

National Energy Conservation Award 2010

National Energy Conservation Award 2008

"Coca Cola Golden Spoon Award"

2015 for its retail business division. The annual 'COCA COLA Golden spoon awards' are
well-established and highly regarded within the industry as a mark of exceptional
performance.
Listed among India's prestigious Top-500 companies
list for the year 2013 & 2014, compiled by The Economic Times, on the basis of industry
respect and key financial parameters.
Images Most Admired Retailer of the Year - 2014 (Category Food & Grocery)
Awarded the "Most Admired Retailer of the year - 2014"
(Food & Grocery) at India Retail Forum.
Fortune List of 50 Most Powerful Business Woman
N. Bhuvaneswari, Vice Chairperson & Managing Director, was placed in the list of
Fortune-50 Most Powerful Business Women in India for the year 2013.

40
 CHAPTER-4
DATA ANALYSIS
& INTREPRETATION

41
42
 1. TYPE OF AREA WHERE THE OUTLET IS LOCATED

Table No:1

Frequency Percent
Commercial area 61 30.5
Residential area 73 36.5
Near suburban market 36 18.0
Suburban market 30 15.0
Total 200 100.0

AREA OF THE OUTLET

80
70
60
50
Frequency
40
Percent
30
20
10
0
CommercialResidential Near Suburban
area area suburban market
market

INTERPRETATION:

From the above table and graph, it was found that the 36.5% of respondents prefer
to visit a retail outlet located in the residential area than commercial area, suburban
market or suburban residential. It was also found that 30.5% of the respondents preferred
to visit a retail outlet located in the commercial area. 15% of the respondents preferred to
visit suburban residential retail outlet.

43
2. TYPE OF OUTLET

Table No:2
Frequency Percent

Pharmacy 15 7.5

Kirana stores 109 54.5

Supermarket 31 15.5

Bakery shop 43 21.5

Others 2 1.0

Total 200 100.0

TYPE OF OUTLET

120

100

80
Frequency
60
Percent
40

20

0
Pharmacy Kirana Sup mar Bakery Others
stores shop

INTERPRETATION:
From the above table and graph, it was found that the more than half (54.5%) of
the respondents prefer to buy the HERITAGE products from a retail kirana stores rather
than a pharmacy, supermarket, bakery or others. It was also found that the next
preference was given to bakery with 21.5% of the respondents opting to shop at this

44
place. Only 7% of the respondents preferred to buy HERITAGE products from pharmacy
shop.

3. RANGE OF PRODUCTS BUYING

Table No:3
Frequency Percent
0-5 82 41.0
5-10 53 26.5
10-15 29 14.5
15-20 12 6.0
20-25 24 12.0
Total 200 100.0

RANGE O FPRODUCTS BUYING

90
80
70
60
50 Frequency
40 Percent
30
20
10
0
0-5 5-10 10-15 15-20 20-25

INTERPRETATION:
From the above table and graph it was found that from the twenty five different
HERITAGE products available at the retail outlet most of the times it was 1 to 5 products
were brought by the respondents (41.0%). It was found that some of the respondents
(12%) were buying as many as 20 -25 items also.

45
4. HERITAGE PRODUCTS SALES VALUE PER MONTH
Table No:4
Frequency Percent
1000-3000 85 42.5
3000-5000 61 30.5
5000-7000 19 9.5
Above 7000 35 17.5
Total 200 100.0

SALES VALUE PER MONTH

90
80
70
60
50 Frequency
40 Percent
30
20
10
0
1000-3000 3000-5000 5000-7000 Above 7000

INTERPRETATION:
From the above table and graph it was found that in the total sales of HERITAGE
products per month 85 outlets i.e. 42.5% carrying out sales between Rs1000 –Rs3000. 35

46
outlets i.e. 17.5% carrying out sales above Rs7000 whereas 61 outlets i.e. 30.5%
carrying out sales between Rs3000-Rs5000
5. STATE REASONS FOR SELLING HERITAGE PRODUCTS
Table No:5
Frequency Percent

Quality value for money 38 19.0

Variety of products 27 13.5

Salesman effort 15 7.5

Customer demand 120 60.0

Total 200 100.0

Reason For selling

120
100
80
60 Frequency
Percent
40

20
0
Quality Variety of Salesman Customer
value for products effort demand
money

INTERPRETATION:
From the above table and graph it was found that in the total sales of HERITAGE
products per month 120 outlets i.e. 60% of retailers sell HERITAGE products because of
customer demand. 38 outlets i.e. 19% of the retailers sells HERITAGE products based on
quality value for money where as 15 outlets i.e. 7.5% of retailers sells HERITAGE
products because of salesman suggestion. This indicates that there is huge pull for

47
HERITAGE products as the reasons in selling the product by the retailers is customer
demand.
6. IS THE SUPPLY MATCHING THE DEMAND
Table No:6
Frequency Percent
Highly satisfied 34 17.0
Satisfied 80 40.0
Neutral 43 21.5
Dissatisfied 30 15.0
Highly dissatisfied 13 6.5
Total 200 100.0

Suply Matching The Demand

80
70
60
50
Frequency
40
Percent
30
20
10
0
Highly Neutral Highly
satisfied dissatisfied

INTERPRETATION:
From the above table and graph it was found that most of the time the supply was
according to the demand of the HERITAGE Products. 40% of the retailers were satisfied
that the supply was according to the demand. 17% of the retailers were highly satisfied
that the supply was according to the demand. However, it was found that some of the
retailers were dissatisfied with the supply on time when there was demand. 6.5% of the
retailers were highly dissatisfied. It is better if HERITAGE reduces this gap between the

48
demand and supply even though it is less. This shows that HERITAGE can surely rectify
and give a better supply

49
 7. HOW OFTEN DO YOU GENERALLY RE-ORDER
Table No:7
Frequency Percent
Every 2-3 days 15 7.5
Every week 149 74.5
Twice a month 31 15.5
Monthly 5 2.5
Total 200 100.0

Re-Oorder of Products

160
140
120
100
80 Frequency
60 Percent

40
20
0
Every 2-3 Every Twice a Monthly
days week month

INTERPRETATION:
From the above table and graph it was found that 149 out lets nearly three fourths
of the retailers’ i.e. 74.5% of retailers reorder every week and only 5 out lets i.e. 2.5% of
retailers reorders monthly. Where as 31 outlets i.e. 15.5% of retailers reorder twice in a
month and 15 outlets i.e. 7.5% of retailers reorder every 2-3 days. This indicates that the
retail outlets keep their stocks limited and there is replenishment every week or every
alternative week mostly. This helps us to understand that these retailers have a continues
of flow of customers throughout the month.

50
 8. REPLACEMENT OF DAMAGES
Table No:8

Frequency Percent

Highly dissatisfied 17 8.5

Dissatisfied 109 54.5

Neutral 41 20.5
Satisfied 33 16.5

Total 200 100.0

Replacement Policy

120

100

80
Frequency
60
Percent
40

20

0
Highly Dissatisfied Neutral Satisfied
dissatisfied

INTERPRETATION:

From the above table and graph it was found that 109 outlets more than half of the
retailer i.e. 54.5% were dissatisfied with the replacement policy and 33 outlets i.e. 16.5%
of the retailers were satisfied, 41 outlets i.e. 20.5% of the retailers are being neutral. This
is one grey area which HERITAGE as to look into and find solution.

51
 9 .PROMOTION SCHEMES
Table No:9
Frequency Percent
Highly dissatisfied 16 8.0
Dissatisfied 83 41.5
Neutral 54 27.0
Satisfied 42 21.0
Highly satisfied 5 2.5
Total 200 100.0

Promotion Scheme

90
80
70
60
50 Frequency
40
Percent
30
20
10
0
Highly Dissatisfied Neutral Satisfied Highly
dissatisfied satisfied

INTERPRETATION:
From the above table and graph it was found that in the total sales of HERITAGE
products per month 83 outlets i.e. 41.5% of the retailers are dissatisfied with the
promotion schemes of HERITAGE products and 42 outlets i.e.21% of the retailers were
satisfied. Whereas 54 outlets i.e.27% of the retailers were being neutral towards
promotional schemes introduced by the company. This shows that the promotion schemes
are really not attractive to the retailer.

52
10. SALES OF HERITAGE PRODUCTS
Table No:10
Frequency Percent
Dissatisfied 13 6.5
Neutral 37 18.5
satisfied 110 55.0
Highly satisfied 40 20.0
Total 200 100.0

Sales Of HERITAGE Products

120

100

80
Frequency
60
Percent
40

20

0
Dissatisfied Neutral satisfied Highly
satisfied

INTERPRETATION:
From the above table and graph it was found that in the total sales of HERITAGE
products per month 110 of the retailers more than half of the retailer i.e.55% were
satisfied by the sales of HERITAGE products in their outlets and only 13 retailers
i.e.6.5% were dissatisfied.37 of the retailers i.e. 18.5% were neutral and 40 of the

53
retailers i.e.20% were highly satisfied. HERITAGE can improve this condition and
motivate the rest of the retailers and work towards making the rest of the retailer happy.
11. PROFIT MARGINS ON HERITAGE PRODUCTS
Table No:11
Frequency Percent
Highly dissatisfied 28 14.0
Dissatisfied 108 54.0
Neutral 39 19.5
Satisfied 23 11.5
Highly satisfied 2 1.0
Total 200 100.0

Profit Margins

120

100

80
Frequency
60
Percent
40

20

0
Highly Dissatisfied Neutral Satisfied Highly
dissatisfied satisfied

INTERPRETATION:
From the above table and graph it was found that in the total sales of HERITAGE
products per month 108 outlets more than half of the retailers i.e. 54% of the retailers
were dissatisfied with the profit margins on selling HERITAGE products in their outlet
and only 23 outlets i.e.11.5% of the retailers were satisfied. Whereas 28 outlets i.e.14%
of the retailers were highly dissatisfied and only 2 outlets i.e. 1% of the retailers were
highly satisfied, remaining 39 i.e.19.5% of the retailers were being neutral. So, from the

54
above two tables it is clear that HERITAGE sales is good but the margins given by
HERITAGE is not really good.
12. SALESMEN EFFORT
Table No:12

Frequency Percent

Neutral 47 23.5
Satisfied 142 71.0

Highly satisfied 11 5.5

Total 200 100.0

Sales Effort

160
140
120
100 Frequency
80 Percent
60
40
20
0
Neutral Satisfied Highly satisfied

INTERPRETATION:
From the above table and graph it was found that 142 outlets i.e. 71% of the
retailers were satisfied with the salesmen effort and 47 outlets i.e. 23.5% of the retailers
were being neutral. This indicates that HERITAGE sales personnel are really trained.

55
56
CURD
Table No:13

Frequency Percent
None 30 15.0
HERITAGE 42 21.0
JERSY 3 1.5
Vijaya 47 23.5
Others 58 29.0
HERITAGE &
JERSY 5 2.5
HERITAGE &Others 15 7.5
Total 200 100.0

CURD

HERITAGE&Others
8% None None
HERITAGE&JERSY 15%
HERITAGE
3%
JERSY
Others Vijaya
HERITAGE
28% 21% Others
HERITAGE
JERSY &JERSY
2% HERITAGE
Vijaya
&Others
23%

INTERPRETATION:

57
 From the above table and graph it was found that 42 outlets i.e. 21% of the
retailers sells HERITAGE Curd.47 outlets i.e.23.5% of the retailers sells vijaya Curd
where as 58 outlets i.e. 29% of the retailers sells other companies curd product.

BUTTERMILK
Table No:14
Frequency Percent
None 17 8.5
HERITAGE 66 33.0
Vijaya 40 20.0
Others 56 28.0
HERITAGE&Others 21 10.5
Total 200 100.0

BUTTER MILK

HERITAGE
&Others None
11% 9%
None
HERITAGE
Others HERITAGE Vijaya
28% 32% Others
HERITAGE
&Others
Vijaya
20%

INTERPRETATION:

58
 From the above table and graph it was found that 66 outlets i.e. 30% of the
retailers sells HERITAGE Butter Milk.40 outlets i.e.20% of the retailers sells vijaya
Butter Milk where as 21 outlets i.e. 10.5% of the retailers sells HERITAGE and other
Butter Milk.
MILK
Table No:15
Frequency Percent
None 19 9.5
HERITAGE 28 14.0
Vijaya 87 43.5
Others 55 27.5
HERITAGE
&Vijaya 11 5.5
Total 200 100.0

MILK

HERITAGE
&Vijaya None
6% 10%
HERITAGE None
Others 14% HERITAGEl
27%
Vijaya
Others
Heritage
&Vijaya
Vijaya
43%

INTERPRETATION:

59
 From the above table and graph it was found that 28 outlets i.e.14% of the
retailer’s sells only HERITAGE milk and the major share i.e. 87 outlets (43.5% of
retailers) sells only Vijaya milk.11 outlets i.e. 5.5% of the retailers sells both HERITAGE
and Vijaya milk

CHAPTER-5
FINDINGS
&
SUGGESTIONS

60
FINDINGS

 The distribution channel is effective in HERITAGE dairy products.

 Majority of the retailers are satisfied with supply channel (57%).
 Majority of the retailers are not satisfied with replacement policy (63%) and
promotion schemes (49.5%) of HERITAGE.
 Majority of the retailers preferring for offers.
 Majority of the retailers are preferring
 Cadbury’s(65%)Chocolates &
 Vijaya (45%) Milk, Flavored milk, Ghee compared to HERITAGE
 Majority of the retailers are not satisfied with profits (68%).
 We have identified and created 100 new outlets for HERITAGE.

61
SUGGESTIONS

 Schemes and offers are very much important to boost up the sales.
 In order to gain the competitive edge over the competitors, it has to make
efforts to improve the product features.
 In the months of March – June, dairy products demand will be more because
of summer. So in these months there is a need to increase the production
capacity.
 HERITAGE must take care of replacement policy.
 The company must continue its efforts, in maintaining quality and taste as
brand preferences are mainly based on them.
 The company must provide displays to the retailers to keep the HERITAGE
PRODUCTS.
 The company wants to provide refrigerators to those retailers who purchases
HERITAGE products in large quantity.
 Brand name plays vital role to improve the sales. For that HERITAGE has to
endorse a brand ambassador who is known to all.
 The company must continue its efforts in maintaining quality and taste as
brand preferences are mainly based on them.

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CONCLUSION

A Company with good brand image also needs to check its other front line
operations like distribution, advertisements and promotions in order to maintain the
market share. HERITAGE is in the same situation where there is a need to make
some corrections in such operations. It needs to look at distribution network,
advertisements and benefits to those concerned with sales. Such activities play a
major role in boosting the sales of the organization and thereby improving the overall
performance. This may even make the company invincible in the market for it has a
good brand image.

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 HERITAGE DISTRIBUTION SURVEY QUESTIONNAIRE

Shop Name: _______________,

Phone No : _________________

1. Type of area where the outlet is located

A) Commercial Area B) Residential Area C) Near sub urban market

Place D) Sub urban Residential

2. Type of outlet

A) Pharmacy B) kirana store/General store/General merchant C) Super market D)

Bakery shop E) Others -----------------------

3. Range of products buying?

A:0-5[ ] B: 5-10[ ] C:10-15[ ] D:15-20[ ] E:20-25[ ]

4. HERITAGE products sales value per month?

Approximately Rs: _______________

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Please tick () the appropriate response.

N Question Response HERITAGE One Most

Important
5 State the reasons for selling a) Quality value for
the HERITAGE products? money 
b) To offer a variety
of products 
c)Salesman suggested 
d) Customer Demand 
e) Others 
6 Is the supply matching the Reasons
demand ? a) Highly satisfied 
b) Satisfied 
c) Neutral 
d) Dissatisfied 
e) Highly Dissatisfied 
7 How often do you Salesmen
generally re-order? Visit
a) Every day 
b) Every 2-3 days 
c) Every week 
d) Twice a month 
e) Monthly 

. Please, answer to this question, if you are not selling AMUL products at the moment.

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N Question HERITAGE
Rate the following as per your perception
[Highly dis satisfied 1 2 3 4 5 highly satisfied]
8 Replacement of damages 1 2 3 4 5
9 Promotion schemes 1 2 3 4 5
10 Sales 1 2 3 4 5
11 Profit margins 1 2 3 4 5
12 Salesmen effort 1 2 3 4 5

1. Satisfied
2. Highly satisfied
3. Highly dissatisfied
4. Dissatisfied
5. Neutral

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 13. Please, answer to this question:

Sales per
HERITAGE JERSY Nestle Vijaya Others
month

Lassi
Butter
Curd
Panner
Buttermilk
Flavour milk
Café
Milk
Fresh cream

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 BIBLOGRAPHY

www. heritage.com

www.google.com

http://retail industry.about.com
www.retailforward.com

Marketing research……………………………….Philp kotler

Retail biz………………………………………..Magazine

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