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A project report on demand estimate of milk for institutional sales, in dharwar


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A project report on demand estimate of milk for institutional sales, in dharwar

A project report on demand estimate of milk for institutional sales, in dharwar

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  • 3. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarCOMPANY PROFILE:Kalpataru dairy has been started in the year 1998 and in the year 2004 it has beenpurchased by the young entrepreneur of Dharwar, Mr. Vijay Mane. Now kalpataru dairyis running under the keen observations of Mr. Vijay Mane. It is located nearkhalaghatagi city. It is operating in Dharwar and Dharwar regions. It is also one oflargest milk producers in the market. The company is very enthusiastic and moreambitioned to cater and carve the new markets in the North Karnataka. The company hasgood market share in the Dharwar and dharwar regions. They are achieving highermarket share in that region by practicing good marketing strategies.Kalpataru dairy has a good number of satisfied customers in the market. The company isusing many new product development strategies to satisfy the customers. Its one amongthe many dairies which are producing good quality standard toned milk. It has manyinstitutional and domestic customers for their milk. The company has widened its marketshare about 5% this year. They are now looking for the Belguam market as aninstitutional Page 3
  • 4. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarINDIAN DAIRY INDUSTRY PROFILEINTRODUCTIONIndias high-value, high-volume market for traditional dairy products and delicacies is allset to boom further under the technology of mass production. This market is the largestin value after liquid milk and is estimated at US $3 billion in India.More and more dairy plants in the public, cooperative and private sectors in India aregoing in for the manufacture of traditional milk products. This trend will undoubtedlygive a further stimulus to the milk consumption in the country and ensure a better priceto primary milk producers. Simultaneously, it will also help to productively utilizeIndias growing milk surplus.Milk production in India increased from 17 million tons in 1950-51 to 89.6 million tonsin 2004-05. India has rapidly positioned itself as the worlds largest producer of milk.Producing milk in rural areas through smallholder producer cooperatives and movingindustrially-processed milk from these smallholder sources to urban demand centersbecame the cornerstone of government dairy development policy. This policy Page 4
  • 5. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwargave a boost to dairy development and initiated the process of establishing the much-needed linkages between rural producers and urban consumers.The performance of the Indian dairy sector during the past three decades has been trulyimpressive. Milk production grew at an average annual rate of 4.6 percent during the1970s, 5.7 percent during the 1980s, and 4.2 percent during the 1990s.Despite its being the largest milk producer in the world, Indias per capita availability ofmilk is one of the lowest in the world, although it is high by developing countrystandards. The per capita availability of milk expanded substantially during the 1980sand 1990s and reached about 226 grams per day in 2003-04 the per capita consumptionof milk and milk products in India is among the highest in Asia, but it is still growing. Itis still below the world average of 285 grams per day, and also the minimum nutritionalrequirement of 280 grams per day as recommended by the Indian Council of MedicalResearch (ICMR).Several factors have contributed to increased milk production. First, milk and dairyproducts have cultural significance in the Indian diet. A large portion of the population islacto-vegetarian, so milk and dairy products are an important source of protein in thediet. The demand for milk and dairy products is income-responsive, and growth in percapita income is expected to increase demand for milk and milk products.Despite the fact that dairy production in India is widespread throughout the country andoverwhelmingly carried out by small-scale producers, there are still large interregionaland interstate variations in milk production. Roughly two-thirds of national Page 5
  • 6. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarproduction comes from the states of Uttar Pradesh, Punjab, Rajasthan, Madhya Pradesh,Maharashtra, Gujarat, Andhra Pradesh, and Haryana. However, there have been someshifts in milk production shares of different states. In 2001-02, Uttar Pradesh was thelargest milk producer in the country, with about 16.5 million tons of milk, followed byPunjab (8.4 million tons), Rajasthan (6.3 million tons), Madhya Pradesh (6.1 milliontons), Maharashtra (6 million tons), and Gujarat (5.6 million tons). The eastern region islagging behind in terms of dairy development, and imports milk from surplus areas in theWest and North.INDIAN DAIRY INDUSTRY — A PROFILE— The annual milk production is presently 92 million tonnes, contributing around Rs.1000 billions to the GDP.— Provides assured and remunerative employment round-the-year to 60 millionsfamilies.— The dairy animals make a substantial contribution to household food security byproviding income, quality food, energy, fertilizer and assets in over majority of the ruralhouseholds in India.— The Animal Husbandry is the single largest contributor under the agriculture sectorwhich provides a remunerative employment round the year at a very small investment.The dairy animals make a substantial contribution to household food security Page 6
  • 7. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarproviding income, quality food, energy, fertilizer and assets in over majority of the ruralhouseholds in India. These livestock keepers are constrained by poor animal health and veterinaryservices, lack of feed and fodder, water, milk handling, chilling, etc. Besides, there hasbeen lack of infrastructure facilities such as good roads and access to markets, etc. Thelivestock keepers also lack access to advanced technologies as well as properinstitutional support system. The result is that both the production and productivityremain well below its potentials. Thus the losses and wastages continue to remain high.Adapted breeds and local feed resources although available, but need proven technologysupports in its preservation and processing. Such support would substantially improveproduction and productivity, which would result in higher income for the livestockkeepers. One of the problems faced by India is unemployment, despite the rapid growthrate. The problem is more acute in rural educated and marginally educated youths, whohave no alternative but to migrate to urban areas. Due to automation in various coresectors, the employment opportunities have dwindled considerably whereas the servicesector has its own limitations, especially the high investment cost per job created. In thiscontext, the dairy industry offers a plausible opportunity of creation of self-employmentwith minimum investment. There is a scope for doubling the present milk production,which can be achieved with marginal investment, such a step would not only enhancemilk production and productivity, but also would create millions of additional Page 7
  • 8. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar Dairying is, in fact, a supplementary activity of the marginal farmers and thelandless laborers. It is therefore suggested that dairy and such other animal farming beincluded within the legal framework of ‘agriculture and agriculture products’. Thiswould enable the marginal farmers and the landless agriculture laborers to benefit fromthe various government incentives. Milk is no more a luxury, but essential nutritional requirements of humanbeing. The children largely depend on milk for nutrition. Higher milk productiontherefore will also increase the health status of the farmers and people at large. Due toseveral inherent reasons, the cost of milk production is high. One of the importantreasons is low animal productivity. Because of high cost, the milk and milk products arenot affordable to poor strata of the society. Milk is a perishable commodity. Hence, itsconversion to products, such as, milk powder, butter and cheese, etc. is necessary.Considering these factors, it is reasonable that at par with agriculture produce, the milkproducts be also exempted from any excise duty, sales tax and such other taxes. Thisgesture of the government would go a long way in accelerating the growth of the Indiandairy industry from present annual rate of around 4.5 % to more than 9%.The conversion of excess milk to milk-products is a necessity. The basic principle here isevaporation of water which changes its physical form only, whereas there is no changewhatsoever in its chemical composition. One of the reasons of higher cost of milk andmilk products is the cost of packaging. To safeguard the quality and safety for humanconsumption, packaging of milk and milk product is necessary. The milk productmanufacturing therefore should be construed as ‘processing milk for preservation’ and Page 8
  • 9. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarshould be exempted from all the taxes and duties like excise, central sales tax and octroietc.To enhance milk production during the next five years as well as to address the issuesreferred in the foregoing sentences, there is an imperative need of policy support fromthe government on the following core areas:- Clean and quality milk production, processing and packaging- Boost the exports of milk and milk products- Enhance milk production and milch animal productivityIndian Dairy: the organized sector is expanding DailyIndia’s modern dairy sector has expanded rapidly. From an insignificant 200,000 litersper day (lpd) of milk being processed in 1951, the organized sector is presently handlingsome 20 million lpd in over 400 dairy plants. Already, one of the world’s largest liquidmilk plants is located in Delhi and handling over 800,000 liters of milk per day (MotherDairy, Delhi). Indias first automated dairy ‘Mother Dairy ‘ has been established Page 9
  • 10. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarGandhi agar near Ahmedabad, Gujarat, in Western India and its capacity is capacity is 1million lpd. It is owned by India’s biggest dairy cooperative group, in Anand, with anannual turnover in excess of Rs 23 billion (US $500 million). Amul-III with its satellitedairies, with total installed capacity of 1.5 million lpd has also been commissioned.Indias first vertical dairy (capacity: 400,000 lpd), owned by the Pradeshik CooperativeDairy Federation (PCDF) has been commissioned at Noida, outside DelhiDairy is a place where handling of milk and milk products is done and technology refersto the application of scientific knowledge for practical purposes.In India, dairying has been practiced as a rural cottage industry since the remote past.Semi-commercial dairying started with the establishment of military dairy farms and co-operative milk unions throughout the country towards the end of the nineteenth century.The Indian Dairy Industry has made rapid progress since Independence. A large numberof modern milk plants and product factories have since been established. Theseorganized dairies have been successfully engaged in the routine commercial productionof pasteurized bottled milk and various Western and Indian dairy products. With modernknowledge of the protection of milk during transportation, it became possible to locatedairies where land was less expensive and crops could be grown more economically.The Winning Edge Three aspects of India’s modern dairy sector are particularly Page 10
  • 11. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar A vast market for dairy products is being built as disposable incomes increase. Itsfocus is the increasingly affluent middle class, numbering some 300 million — almostthe population of the United States — which is confined to well-defined urban pocketsand is easily accessible. Milk occupies pride of place as the most coveted food in theIndian diet, after wheat and rice. Milk-based sweets are a culinary delight in all homesthroughout the year. The milk production is pre-dominantly rooted in the cooperative system focus is onthe small rural farmer having one or two cow/buffaloes, yielding 2-3 liters of milk peranimal. This system is the basis of operation flood, the world’s largest dairydevelopment program. The preferred dairy animal is the buffalo. Some 65 per cent of the world buffalo milkis produced in India. It has 30 per cent higher total solids compared to cow Page 11
  • 12. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarDAIRY INDUSTRY PROFILE • Human population: 953 million (70 million dairy farmers) • Milk production: 74.3 million tonnes (203.5 million lpd) • Average annual growth rate (1995-2000): 5.6% • Per capita milk availability: 214 g/day or 78 kg/year • Milch animals: 57 million cows; 39 million buffaloes: • Milk yield per breedable bovine in-milk: 1,250 kg • Cattle feed production (organized sector): 1.5 million tonnes • Turnover of veterinary pharmaceuticals: Rs. 550 crores • Dairy plants throughput: 20 mlpd • Throughput as percentage of total milk output: 10The Dairy Movement in IndiaThe dairy cooperative movement in India continues to be unparalleled in the world interms of its scope and scale. Launched in the Kaira district of Gujarat during Indiasindependence, farmers were encouraged to form a cooperative to counter exploitativelylow prices offered for their milk by the monopoly milk supplier, Polson Dairy. The Kairacooperative launched its operations in 1946 and operated at two levels. The primaryvillage dairy cooperative society of milk producers collaborated with others in thedistrict to form the milk producers union, which procured and processed the milk. Theunion processed the milk that was procured from the village dairy cooperatives at itsprocessing plants. In addition to collecting surplus milk, the Kaira union Page 12
  • 13. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarmembers in expanding production. The father of the Indian dairy movement wasVarghese Kurien. A mechanical engineer from the Michigan State University, US,Kurien helped India to become the largest producer of milk in the world. As the number of district unions increased, the Kaira cooperative was transformedinto the Gujarat Milk Marketing Federation Ltd (GCMMF) under the chairmanship ofKurien. GCMMF coordinated the operations of the union and marketed milk and milkproducts. As the operations were based in Anand, Gujarat, this came to be known as theAnand model. This model was replicated across India. In 1965, NDDB was formedunder the chairmanship of Kurien and was mandated with the task of buildingcooperative dairies across the country. Operation Flood was launched in 1970, whichsought to establish dairy cooperatives across India, get rid of middlemen, removeseasonal price variations and make it economically viable for farmers to undertakeproduction and distribution of milk. Operation Flood achieved phenomenal success:trebling Indias annual milk production from 21 million tonnes in 1968 to 89 milliontonnes in 2004. Nearly 9 million small producers in 74,000 villages began supplyinghygienic and fair priced milk to 300 million consumers and earning revenues of Rs 25billion in the process. Of the Rs 2 billion invested by World Bank in the second phase of OperationFlood, the net return to the rural economy has been in the region of Rs 240 billion. peryear over a period of ten years or a total of Rs 2.4 trillion in all. No other developmentprogramme in the world has achieved such success. Several countries like Sri Lanka,Bangladesh, Nepal, the Philippines, Malaysia and some African countries have decidedto implement similar projects. The third phase of Operation Flood, implemented Page 13
  • 14. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar1985-96 aimed at consolidating the achievements of the first two phases. Infrastructurewas strengthened, production enhanced and animal healthcare and nutrition improved.The Operation Flood III programme was funded by a World Bank credit of US $365million and food aid worth Rs 2226 million. By May 1995, Rs 15.78 billion had beeninvested in the three phases of Operation Flood. By the time the third phase came to anend, milk processing capacity had grown to 17.2 million liters per day. Chilling capacityof 6.9 million litres per day had been added and milk powder production capacity of 839tonnes per day had been set up. By 1999, average milk procurement by the cooperativeshad grown to 10.2 million liters per day, of which 9.4 million liters was marketed asliquid milk. The remainder was converted into milk powder, butter, cheese, ghee andother traditional milk products.DDB (National Dairy Development Board) has been focusing on intensive R&Dactivities in animal husbandry through the late 1990s. It has set up an embryo transferlab at Sabarmati Ashram Gaushala in Ahmedabad. NDDB has also been working onimproving nutrition quality of the normal cattle feed. NDDB has made it possible totransport milk over long distances by using over 140 insulated rail milk tankers, eachwith a capacity of 40,000 liters. This has enabled the National Milk Grid to supply milkto milk-deficient regions in the country.In the year 2000, NDDB (National Dairy Development Board) announced a ten-yearplan called Perspective 2010. It is aimed at strengthening the dairy Page 14
  • 15. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarThe major objectives include: • increasing milk procurement by cooperatives from 5.75 mt in 2000 to 17.8 mt in 2010; • increasing the number of dairy cooperative societies from 84,289 in 2000 to 129,480 in 2010; • increasing the membership in dairy cooperatives from 10.62 million in 2000 to 15.62 million in 2010; and • Increasing the amount of milk to be marketed from 4.7 mt in 2000 to 14 mt in 2010.Specific features of dairy in relation to marketing in developingcountriesThe dairy industry in the developing countries has a number of specific features whichdistinguish it from the other sectors of agriculture and have particular implications formarketing. First, milk consists of over 85% water, and produced daily. Consequently, Page 15
  • 16. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarhigh costs of transportation are incurred per unit of output marketed. Also, milk beinghighly perishable, it needs to be used within a short period or processed andtransformed into a more stable, longer-storable form. The quality of milk depends onfarm management practices, and milk is potentially subject to adulteration, so strict andcomprehensive quality regulations may be necessary when marketing involves morethan direct delivery by producers to consumers. Second, the vast majority of the dairy farmers are small-scale producers, whoproduce milk as a source of regular cash income. Dairy production is a labor-intensiveenterprise, and dairy marketing activities often provide substantial employment.However, because of asset fixity (high percentage of fixed costs), dairy enterprises oftenrespond to market changes and incentives in a limited and gradual way. Third, milk can be used to make a wide range of high quality palatable andnutritious products, which often imply substantial value added over the cost of the rawmaterial. When production and consumption points are far apart and demand increaserapidly, processing of dairy products becomes very important. Fourth, as a consequence of the above features of milk and the marketvulnerability of its producers, cooperatives may assume a strong position in milkprocessing. A survey by the International Dairy Federation in 1984 revealed that in 21developed countries together accounting for 55% of the worlds milk supply, Page 16
  • 17. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarcooperatives marketed 86% of total sales of milk from farm to the first handler. In someof these countries, cooperatives also handled 80-90% of the total processing activity. Itmay be noted that the history of development of dairy cooperatives in these countries arenot always similar. However, in most developing countries, dairy producer cooperativesand cooperative processing are either non-existent or very weak. The need forcooperatives in these countries is driven by the need to capture some economies of scalein transportation and processing where numerous small producers are scattered far awayfrom the consumption centres. In many countries, this gap has been filled byestablishment of parastatal dairy enterprises for collection and processing of milk topromote domestic dairy production. In most cases, these enterprises ended up processingsubsidized imported dairy products, neglecting the rural dairy sector. The monopolisticcharacter of these enterprises often led to inefficiency thus they failed to serve theinterests of domestic producers and consumers.Weaknesses in physical and marketing links between rural producers and urbanprocessors and consumers are among the major constraints to dairy development in thedeveloping countries. It is important to be aware of and understand how such constraintscan be addressed in order to devise mechanisms that can transfer growing urban demandinto increased livestock production. Inadequate infrastructure and inefficient marketingmay lead to increased transactions costs and/or market failure. By better understandingthese costs and identifying the ways of reducing their impact, policy prescriptions can bemade to promote economic development by fostering production and trade.CHARACTERIZING DAIRY MARKETING Page 17
  • 18. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarA dairy marketing system is characterized by: • The range of dairy products marketed; • The size, structure and organization of the enterprises participating in the market for each product and in the entire marketing chain; • The conduct and performance of the marketing system; and • The existing marketing policies, institutions and organizations, and the physical environment within which marketing takes place.Functional parameters: These are key descriptors of how the system operates.Examples include dairy products marketed, marketing agents, marketing outlets, pricesat each marketing node, modes of transporting marketed products, etc. Functionalparameters combine characteristics related to market structure and conduct.Performance indicators: These parameters permit assessment of the performance of thesystem. Examples are the percentage of total dairy products marketed, the ratio ofstandardized to non-standardized products marketed; the ratio of marketing to total costs;the ratio of farm gate to retail price. The importance of identifying Page 18
  • 19. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarindicators is that they form the baseline against which any changes in the efficiency orperformance of the system can be measured.Formal market includes firms and organizations whose daily operations are guided bystatutory rules and procedures, e.g. a parastatal dairy processing plant or a companyengaged in dairy marketing. Informal market includes firms whose daily operations are not guided by statutoryrules and procedures except for any trade license, e.g. dairy producers and itineranttraders.A marketing chain defines the flow of commodities from producers to consumers thatbrings into place economic agents who perform complementary functions with the aimof satisfying both producers and consumers.A marketing node is defined as any point in the marketing chain where an exchangeand/or transformation of a dairy product take place. A marketing chain may link bothformal and informal market agents.The Liquid Milk & Milk Products Market Out of a total production of 88 mt of milk, 46per cent is consumed as liquidmilk. Less than 30 per cent of milk production – i.e. 26.4 mt – is packaged. Currentlybarely 778 out of 3,700 cities and towns are served by the milk distribution network,dispensing hygienically packed wholesome, quality pasteurized milk. According to oneestimate, the packed milk segment would double in the next five Page 19
  • 20. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar The effective milk market is largely confined to urban areas, inhabited by over25 per cent of the countrys population. In urban India, an estimated 50 per cent of thetotal milk produced is consumed by a population of roughly about 350 million. Theexpected rise in urban population would be a boon to Indian dairying. Of the three As of marketing - availability, acceptability and affordability, the dairysector is at an advantage since Indians are a milk loving people. However what continuesto be a challenge is the affordability factor. Volume sales could dramatically increase ifsmall packs of 250 ml or less is made available. Sales of milk powders in mini-sachets,for two cups of tea or coffee, could also help in increasing volumes.Flavored Milk is increasingly becoming the toast of the milk market. The overall marketfor flavored milk in India is estimated to have grown 27 per cent in value terms in 2004-05. Milk-based drinks are the flavor of the season as consumers seek healthy lifestyles.Nestlé’s Fruit and Milk and Amrit Foods’ Gagan are the two brands that have asignificant presence in this segment Ultra Heat Treatment (UHT) milk or long-shelf-life milk sales are estimated to be inthe region of 70 million liters and the segment is growing at a healthy pace of 20-25 percent per year.Packaged curd and curd products – such as lassi, buttermilk, chhas, set dahi, mishti doi,etc. – are new products and are witnessing a rapid pace of growth. In terms of volumesthis just comprises 5 per cent of dairy products, but they are growing at 10 per cent Page 20
  • 21. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarannum. Flavored yoghurt, which is popular in the West, however, has not beensuccessful in India.Traditional products, such as paneer, mithai, khoa and khoa-based sweets, which areavailable in the unorganized market, is a huge segment. Apart from Amul which haslaunched paneer and its Mithaee brand which offers traditional Indian sweets, theorganised sector has not tapped into the potential that this sub-category offers.Some facts about organized Milk market in India:Beginning in organized milk handling was made in India with the establishment ofMilitary Dairy Page 21
  • 22. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar • Handling of milk in Co-operative Milk Unions established all over the country on a small scale in the early stages. • Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945 • Pasteurization and bottling of milk on a large scale for organized distribution was started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961), Madras (1963) etc. • Establishment of Milk Plants under the Five-Year Plans for Dairy Development all over India. These were taken up with the dual object of increasing the national level of milk consumption and ensuing better returns to the primary milk producer. Their main aim was to produce more, better and cheaper milk.Milk Production data1950 – 17 million tonnes1996 – 70.8 million tonnes1997 – 74.3 mT(Projected) 2020 – 240 mTExpected to reach- 220 to 250 mT – 2020India contributes to world milk production rise from 12-15 % & it will increase up to 30-35% (year 2020)SWOT ANALYSIS OF INDIAN DAIRY Page 22
  • 23. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar • Demand profile: Absolutely optimistic. • Margins: Quite reasonable, both on packed and non packed liquid milk. • Flexibility of product mix: tremendous opportunities are present. With balancing equipment, we can keep on adding to your product line. • Availability of raw material: Abundant. Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization. • Technical manpower: Professionally-trained, technical human resource pool, built over last 30 years.Weaknesses: • Perishability: Pasteurization has overcome this weakness partially. Surely, many new processes will follow to improve milk quality and extend its shelf life. • Lack of control over yield: Theoretically, there is little control over milk yield. However, increased awareness of developments like embryo transplant, artificial insemination and properly managed animal husbandry practices, coupled with higher income to rural milk producers should automatically lead to improvement in milk Page 23
  • 24. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar • Logistics of procurement: Woes of bad roads and inadequate transportation facility make milk procurement problematic. But with the overall economic improvement in India, these problems would also get solved. • Problematic distribution: Yes, all is not well with distribution. But then if ice creams can be sold virtually at every nook and corner, why can’t we sell other dairy products too? Moreover, it is only a matter of time before we see the emergence of a cold chain linking the producer to the refrigerator at the consumer’s home! • Competition: With so many newcomers entering this industry, competition is becoming tougher day by day. But then competition has to be faced as a ground reality. The market is large enough for many to carve out their niche.Opportunities:"Failure is never final, and success never ending”. If dairy entrepreneurs are looking foropportunities in India, the following areas must be tapped: • Value addition: There is a phenomenal scope for innovations in product development, packaging and presentation. Given below are potential areas of value addition: o Steps should be taken to introduce value-added products like shrikhand, ice creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market place along with opportunities in the field of brand Page 24
  • 25. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar o Addition of cultured products like yoghurt and cheese lend further strength - both in terms of utilization of resources and presence in the market place. o A lateral view opens up opportunities in milk proteins through casein, and other dietary proteins, further opening up export management. o Yet another aspect can be the addition of infant foods, geriatric foods and nutritional Export potential: Efforts to exploit export potential are already on. Amul is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty, opportunities will increase tremendously for the export of agri-products in general and dairy products in particular.Threats:Milk vendors, the un-organized sector: Today milk vendors are occupying the pride ofplace in the industry. Organized dissemination of information about the harm that theyare doing to producers and consumers should see a steady decline in their importance.The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ faroutweigh ‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental andweaknesses and threats are transitory. Any investment idea can do well only when youhave three essential ingredients: entrepreneurship (the ability to take risks), innovationapproach (in product lines and marketing) and values (of quality/ethics) Page 25
  • 26. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarThe Indian dairy industry has been attracting a large number of entrepreneurs. Theirsuccess in dairying depends on factors such as an efficient yet economical procurementnetwork, hygienic and cost-effective processing facilities and innovativeness in themarket place. All that needs to be done is: to innovate, convert products intocommercially exploitable ideas. All the time keep reminding yourself: BenjaminFranklin discovered electricity, but it was the man who invented the meter that reallymade the money. PART III-LITERATURE Page 26
  • 27. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarINSTITUTIONAL SALESThe institutional sales are defined as the process of selling the good and services to thecustomers who will make purchases in bulk quantity. Now in India the rate ofconsumerism is increasing predominantly these days. The customers are enjoying thepurchase experience in the retail outlets. The increased number of consumerism has thestrong supporting factors like the augmentation of the disposable income.These increased transactions and higher disposable incomes in Indian markets bringdown the opportunities to expand the existing businesses and start a new venture. Aninstitutional sale supports the 80:20 rules of the marketing or sales. These Page 27
  • 28. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarinstitutional customers purchases 80%of the sales and 80% of the customers’ purchases20%of the total production.Institutional sales provides very favorable margin to the companies in terms of cash salesand the profit margin is also very high as compared to the daily merchandised factors.Indian business scenario is changing every day. This change has many reasons in it, theyall are not happened suddenly, but, all these are the results of LPG policy of 1991. Atpresent every Indian per capital income has increased and the disposable income alsoraisened these years. These all lead them to have the paramount experience ofpurchasing process.These all factors gives raise to the more business opportunities generally andinstitutional sales particularly. Institutional sales more surely influenced by the marketstructure and demand forecasting data of that industry. It has many determining factorslike economical, political, legal, and international factors play a vital role in theinstitutional sales. For the Indian dairy industry these institutional sales are not fixed.They vary according to the changing demands and other seasonal variations. India is oneof hot region in this world. In summers the milk consumption rate as the its end productlike cold milk, flavored milk, ice creams, curd, butter milk, etc is very high. So Page 28
  • 29. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarsummer season blossoms the high sales for this milk industry. Hence the milk industryhas very changing business for the institutional sales.The dairy industry is growing in India and all the Indians are lacto-vegetarian in nature.Indians want to consume more milk content food in their eating menu. 60% of theproduced milk in India is consumed by the urban people and this shows that the urbanIndia is growing fastly. The fast urbanization leads to get more opportunities for theseinstitutional purchasers of milk.These institutional sales are done on the discount rates. The purchasers get a bit highamount of discount in their total purchase. This leads them to get more profit in theirmanufacturing of their final product and selling. The institutional sales are based on thestrong and good relationships with your customers. The customer relationshipmanagement (CRM) plays a very vital role in the institutional sales. To boost theseinstitutional sales the manufacturers have to come up with many new marketingstrategiesin their product promotions and as well a with their product and pricing strategies. Thedistribution channel also has to be made so lively. The distribution channel has to be ostrong and should follow the intensive distribution strategyFor this dairy industry the distribution channel are its local operating dealers and otherretailers of the market. The dealers are given more commission to achieve the high salesduring a period of time. These dealers are very business minded and always push Page 29
  • 30. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarproduct into the market which is fetching more commission to them. So its veryimportant to see through this end channels of marketing.Philip kotler suggests that these institutional markets are very volatile in nature. In thismarket the buzz word “BRAND” plays a very important role. Many customers make thepurchase decision on the basis of their preferred and most trusted brand. To boost theinstitutional sales the companies have to practice the strong brand building strategy inthe customer mind sets. They have to make intensive advertisement campaigns to placetheir product in the customer mind. In institutional sales the quality is main element thanthe price. The quality has to be maintained as per the prescribed details.DEMAND ANALYSIS.The sale of a product depends upon the demand of that product. but the demand of thatproduct depends upon a number of varied factors. These factors are such as price, buyersincome, price of substitute or competing products, advertising and sales promotion, Page 30
  • 31. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarpopulation, availability of credit, changes in buyers tastes, needs and preferences,geographical location, expected future trends in prices etc. there are certain fundamentalfactors which determine the demand for a product. These factors are price of a product,buyer’s income, prices of related goods and advertising and sales promotion.These factors have high influence on the sales and hence they constitute the controllingvariables commonly used in the study of demand. The importance of each of these fourfactors varies from product to product and for the same product from time to time.What is demand?In the ordinary language the word demand means desire. But mere desire does notconstitute demand in the economic sense. Because the person with low income maydesire to have a MERCEDEZ BENZ car but this doesn’t constitute a demand for a carbecause that person doesn’t have adequate money to purchase the car. In other words hedoes not have the ability to purchase the car.In other words the demand is defined as the human want that are backed by hispurchasing power.Demand implies three conditions; a) desire for a commodity or a Page 31
  • 32. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar b) willingness to pay the price for it, and c) ability to pay price for it.Thus demand for any commodity as a desire for that commodity backed up bywillingness and ability to pay. Further demand has no meaning without reference toprice.LAW OF DEMANDThis law states the relation between the price of commodity and its quantity demanded inthe market. the law is” other things remaining equal, the amount of a commoditydemanded increases every fall in its price and diminishes with every rise in itsprice”Thus the quantity of a commodity demanded varies inversely with its price.INCOME EFFECT OF DEMANDA fall in the price of a commodity results in an increase in the real income of theconsumer. Because with the same amount of money to be spent on commodity he cannow purchase more of it when its price falls. On the contrary a rise in the price of acommodity results in decrease in the real income of the consumer. Because with thesame amount of money to be spent on the commodity, he will now purchase lessquantity of it when its prices Page 32
  • 33. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarSubstitution effect of a demandA fall in the price of commodity leads to an increase in the demand for it, while the priceof its substitutions remains constant. On the contrary, a raise in the price of a commoditywill make it costlier and lead to a decrease in the demand for it, while prices of itssubstitutes remain constant. This is the case of contraction of demand are attributed tosubstitution effect. Normally the substitution effect is stronger than the income effect.Because consumers always substitute the cheaper commodity for the costlier commodity.Income effect has positive only in case of superior goods because if their prices fall theconsumers real income will increases and they will , there fore buy more of them.But the income effect is negative in case of inferior goods because if their prices fall theconsumers real income increases and they purchase less of such inferior goods. But thesubstitution effect on the other hand is always positive because consumers alwayssubstitute relatively cheaper goods for relatively costlier goods. Thus in the case ofsuperior goods the income effect and substitution effect are both positive. But incase ofinferior goods the income effect is negative while the substitution effect is positiveFACTORS GOVERNING DEMANDThe law of demand states that demand changes whenever prices changes. But thischange in demand which is result of a change in price is known as extension orcontraction of demand. But demand may also changes due to changes in factors Page 33
  • 34. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarthan price. This change due to changes in factors other than the price. The factors whichbring about changes in demand price remaining the same.Changes in population:An increase in the size of population naturally leads to an increase in the demand forvarious goods and services. Conversely, a decrease in size of the population leads to adecrease in demand for goods and services.Changes in climatic conditions:Demand for certain goods are affected by changes in climatic conditions.Changes in fashion:Changes in fashion bring about changes in demand.Changes in tastes, habits etc:If tastes, habits and customs to which people are accustomed change, demand for goodsand services also changes.Changes in quantity of money in circulation:If the quantity of money in circulation increases, people will be having more purchasingpower and hence, demand for goods ad services increases. Conversely, if the quantity Page 34
  • 35. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarmoney in circulation decreases, people will be having less purchase power and thereforedemand for goods and services also decreases.Changes in the distribution of income and wealth:If the income or wealth is distributed more evenly among the various sections of thecommunity, the purchasing power of majority of the people increases and therefore,demands for goods and services increases.Availability of substitutes:If the substitutes are available adequate then demand for commodity falls when itssubstitutes become cheap. If there are no substitutes for a commodity then demand for itdoes not fall even though their price increases.Advertisement and salesmanship:Clever and persistent advertisement and efficient salesmanship create new demand andincrease the existing demand.Complementary Page 35
  • 36. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarThese goods are the goods which are demanded together. A change in the demand forone leads to a similar change in the demand for others.Technical progress:The introduction of new products in the market as a result of invention and discoveriesalso affects the demand. Demand for old things will decrease while demand for new onesincrease.COMPANY DEMANDCompany demand is the company’s share of market demand.This can be expressed as a formula:Company Demand = Market Demand v Company’s Market ShareA company’s share of market demand depends on how its products, services, prices,brands and so on are perceived relative to the competitors. All other things being equal,the company’s market share will depend on the size and effectiveness of its marketingspending relative to competitors.Sales Page 36
  • 37. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarThe Sales Forecast is the expected level of company sales based on a chosen marketingplan and an assumed marketing environment. Sales Forecast is not necessarily the sameas a “sales target” or a “sales budget”.A sales target (or goal) is set for the sales force as a way of defining and encouragingsales effort. Sales targets are often set some way higher than estimated sales to “stretch”the efforts of the sales force.A sales budget is a more conservative estimate of the expected volume of sales. It isprimarily used for making current purchasing, production and cash-flow decisions. Salesbudgets need to take into account the risks involved in sales forecasting. They are,therefore, generally set lower than the sales forecast.OBTAINING INFORMATION ON MARKET DEMANDAs a starting point for estimating market demand, a company needs to know the actualindustry sales taking place in the market. This involves identifying its competitors andestimating their sales.An industry trade association will often collect and publish (sometime only to members)total industry sales, although rarely listing individual company sales separately. By usingthis information, each company can evaluate its performance against the whole Page 37
  • 38. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarThis is an important piece of analysis. However, it finds out that overall industry salesare rising by 15% per year. This must mean that Company is losing market share – itsrelative standing in the industry.Another way to estimate sales is to buy reports from a marketing research firm. Theseare usually good sources of information for consumer markets – where retail sales can betracked in great detail at the point of sale. Such sources are less useful in industrialmarkets which usually rely on distributors.Estimating Future DemandCurrent Company Demand = Current Market Demand x Current Market ShareVery few products or services lend themselves to easy forecasting. These tend to involvea product whose absolute level or trend of sales is fairly constant and where competitionis either non-existent (e.g. monopolies such as public utilities) or stable (pureoligopolies). In most markets, total demand and company demand are not stable – whichmakes good sales forecasting a critical success Page 38
  • 39. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarA common method of preparing a sales forecast has three stages:(1) Prepare a macroeconomic forecast – what will happen to overall economic activityin the relevant economies in which a product is to be sold.(2) Prepare an industry sales forecast – what will happen to overall sales in anindustry based on the issues that influence the macroeconomic forecast;(3) Prepare a company sales forecast – based on what management expect to happento the company’s market shareDemand forecasts can be based on three types of information:(1) What customers say about their intentions to buying new products?(2) What customers are actually doing in the market?(3) What customers have done in the past in the market? Page 39
  • 40. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarThe value of a customer intention survey increases when there are a relatively smallnumber of customers, the cost of reaching them is small, and they have clear intentions.An alternative way of measuring customer intentions is to sample the opinions of thesales force or to consult industry experts(1) The trend: are sales growing, “flat-lining” or in decline?(2) Seasonal or cyclical factors. Sales are affected by swings in general economicactivity (e.g. increases in the disposable income of consumers may lead to increase insales for products in a particular industry). Seasonal and cyclical factors occur in aregular pattern;(3) Erratic events; these include strikes, fashion fads, war scares and other disturbancesto the market which need to be isolated from past sales data in order to be able toidentify the more normal pattern of sales(4) Responses: the results of particular measures that have been taken to increase Page 40
  • 42. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar The need for demand analysis of institutional sales of milk arises to predict thedemand for the milk at present and in future days. Ensuring the demand estimation isvital to our long-term business survival and profitability. Demand estimation Surveys are an important tool to help us collect theinformation we need to understand and evaluate the market structure. This surveyanswers tough questions. A well-designed survey can give answer to the most criticalquestion, Are our products have potential demand in the market? Demand estimation surveys give us the insight we need to define what isextremely important to our customers. Once we came to know what is most important,we use the surveys to compare our product and its each section’s performance on thecustomers` wants. Surveys help us to identify which sections may need to improve so wecan provide customers to decide how and where to allocate our product in differentsegments of the market. The need for the conducting this study was to estimate the potential demand ofinstitutional sales for the company and to know the factors influencing Page 42
  • 43. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarThe Research objectives  To find out the market potentiality.  To identify the new market opportunities.  To understand the new prospective of institutional sales of milk in Belguam city.RESEARCH PROCESS The research was carried out as per steps of consumer research process. The figure below depicts a model of consumer research process. STEP1: DEFINE THE OBJECTIVE OF THE RESEARCH STEP2: COLLECTING AND EVALUATING SECONDARY DATA STEP3: DESIGNING A PRIMARY RESEARCH STUDY STEP4: COLLECTING PRIMARY DATA STEP5: PROCESSING AND ANALYSING THE Page 43
  • 44. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarStep1: Define the Objectives of the Research The first step in the consumer research is to care fully define the objectives of thestudy. The objectives of the study were explained earlier. The objectives of the studywere decided at the vary outset to ensure that research design is appropriate. Thestatement of objectives helped to define the type and level of information needed.Step2: collecting and evaluating secondary data A search for secondary data generally follows the statement of objectives.Secondary information is any data originally generated for some other purpose otherthen the present research objectives. It includes findings based on research done byoutside organizations, data generated in-house for earlier studies, details of other relateddocuments & even customer information collected by the firms sales departments likesales call reports etc. Locating secondary data is called secondary research. In this secondary data was not available, as earlier studies were not carried out onthis topic at on stores level. To meet the objectives primary research was Page 44
  • 45. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarStep3: Designing a primary research study The design of a research study is based on the purpose of the study. A quantitativestudy was undertaken, as descriptive information was needed. Research design is the specification of procedures for collecting &analyzing thedata necessary to identify or react to a problem or opportunity, such that the differencebetween the cost of obtaining various levels of accuracy & the expected value of theinformation associated with each level accuracy is maximized.RESEARCH DESIGN METHODOLOGYDATA COLLECTIONDATA COLLECTION APPROACH: Survey ResearchDATA COLLECTION INSTRUMENTS: Questionnaires, Attitude scaleSAMPLING PLANSAMPLE UNIT: Milk consumption institutionsSAMPLE SIZE: 100 RespondentsMETHOD OF SAMPLE SIZE DETERMINATION: Unaided judgmentSAMPLING PROCEDURE: Non probability Page 45
  • 46. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarSAMPLING FRAME: Institutional CustomersSAMPLING PLAN: Selection of the customers based on the quantity PurchasesSTATISTICAL TOOLS  Simple percentage method  Measures of central tendency  Graphical representation tools like charts, tables etcSURVEY DETAILS LOCATION OF SURVEY: Dharwar DURATION OF THE SURVEY: 16 days.Step4: Collecting primary Data The survey has conducted in all the areas of Dharwarcity during the businesshours. The respondents generally sought no assistance except for one or two questions.Data collection began in the first week of February and was completed in second Page 46
  • 47. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarweek of March. On an average took 10 minutes for respondents to answer thequestionnaire. Respondents who were approached during morning hours were reluctantin filling up the questionnaire because of the time involved in responding. But when thecustomers were approached during afternoon and evening, it received encouragingresponse. Some of the customers were very enthusiastic. They showed keen interest andadded their views regarding the survey topic.STEP: 5 PROCESSING AND ANALYSING THE DATA Analysis of data is done to build a sort of intellectual Model where therelationships involved are carefully brought out so that some meaningful inference canbe drawn. It involves the presentation of data through tables, graphs and diagrams.Statistics was used to translate responses into meaningful information to get the most outof the collected data. Inferences have been drawn of the analyzed Data with propersupportive data.SCOPE OF THE STUDY The scope of the study is broader than mere gauging the demand estimation ofinstitutional sales. It makes an effort to build and strengthen relationship with Page 47
  • 48. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarcustomers. It makes Competition analysis as well as helps in knowing the expectationsof the customers along with the market structure and its consumption pattern.The result obtained cannot be generalized to all the markets, as the methods for arrivingat the sample size and selecting the sample were unempirical. . The study will help thecompany to identify the new segments and need to come up with the new marketingstrategies so to achieve the market leadership and earn the revenues start from theentering stage. The study will also help the management to decide which strategies areto be used to tap the potential marketLIMITATIONS OF THE STUDY Every study has its own limitations. The limitations of this study are:  Small Sample size  Study is restricted by the time  Absence of direct interference of owners in the Page 48
  • 51. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar TYPE OF RESPONDENTS 27 53 5 0 15 HOTELS HOSTELS HOSPITALS CANTEENS MOILE TEA SALESINTERPRETATION: The above chart shows that there is more number of respondents is from mobiletea sales as compared to the hotels, hospitalsand canteens. This is all because thepopulation of mobile tea sales is more in Dharwar because of their character of mobility.END USE OF MILK IN Page 51
  • 52. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar END NO.OF PRODUCT RESPONDENTS TEA/COFFEE 27 SWEETS 22 CURD 25 OTHERS 18 END USE OF MILK IN HOTELS 20% 29% TEA/COFFEE SWEETS CURD 27% OTHERS 24%INTERPRETATION: The above graph shows that in all visited hotels every one use milk for preparing teaand coffee and few of them use for preparing curds as due to the demand becausedemand for the curd is more due to the heat in Dharwar city. And in winter season thedemand for tea and coffee increases due to cold and also in rainy season. And from totalnumber of hotels visited i.e. 27 respondents maximum of them use milk for preparingsweets as well as Page 52
  • 54. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar The above graph states that in all visited hostels all respondents use milk in preparingtea and coffee and also maximum respondents use milk for preparing curd due heat inthe city. If hostels start supplying food to the students staying in hostel then this segmentwill be of good potential for the NOVA milk.END USE OF MILK IN CANTEENS END NO.OF PRODUCT RESPONDENTS TEA/COFFEE 15 SWEETS 13 CURD 15 OTHERS Page 54
  • 55. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar END USE OF MILK IN CANTEENS 10% 32% TEA/COFFEE SWEETS 31% CURD OTHERS 27%INTERPRETATION: The above figure states that from all the canteen respondents every one uses milk forpreparing tea, coffee and also curd. to increase there market share and also to retain theexisting customers they go In preparing of Varity of sweets and also like other dishes.The people in Dharwar city are addicted to tea as the demand for coffee in this city isvery less. Even though there is high temperature the people go in for consuming tea.END USE OF MILK IN MOBILE TEA Page 55
  • 56. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar END NO.OF PRODUCT RESPONDENTS TEA/COFFEE 53 SWEETS 02 CURD 04 OTHERS 09 13% 6% TEA/COFFEE 3% SWEETS CURD OTHERS 78%INTERPRETATION: The above graph clearly states that end use of milk in mobile tea sales is for preparingtea and coffee. Due to excess demand for curd and also lassi even the mobile tea sales goin for preparing another product called as lassi. These people also go in for preparing ofsweets and also Page 56
  • 58. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar 1300 1861 687 18 0 HOTELS HOSTELS HOSPITALS CANTEENS MOBILE TEA SALESINTERPRETATION: The above figure clearly sates that from all the visited institutions the totalconsumption of milk is 3866 0f liters from all the visited institutions. The demand forcurd, lassi and others depends on the season but the demand for tea and coffee hardlygoes down which is very negligible. In other season the demand for others like badammilk goes up but in summer there is no demand for others in Dharwar city. The highestconsumer of the milk from all visited institution hotels are ahead and next comes mobiletea sales.SOURCES OF MILK FOR Page 58
  • 59. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar SOURCES NO. OF LITRES LOOSE 734 NANDINI 437 DUDH 480 PANDARI KRISHNA 107 AROKYA 142 TOTAL CONSUPTION OF MILK IN VISITED HOTELS 6% 7% 39% 25% 23% LOOSE NANDINI DUDH PANDARI KRISHNA AROKYAINTERPRETATION: The above figure clearly states that for the hotels the major supplier of milk is loose.These are the people who owns there own buffalo’s and early in the morning they supplymilk to all the hotels. As Dharwar city is surrounded by villagers whose main business isagriculture Page 59
  • 61. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar TOTAL CONSUMPTION OF MILK IN VISITED HOSTELS 28% 44% 0% 28% 0% LOOSE NANDINI DUDH PANDARI KRISHANA AROKYAINTERPRETATION: The above chart shows that the suppliers for the visited hostels are the milk man whocomes on motor bike these are the people who have almost captured the market inDharwar because of there time management, trust, the way they communicate to thecustomers and most importantly the quality of the product is very high compared to theother suppliers. next are the competitors like DUDH PANDARI AND NANDANI. inthis segment other competitors like the local manufacturer KRISHNA and AROKYA arenot that effective.SOURCES OF MILK FOR Page 61
  • 62. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar SOURCES NO. OF LITRES LOOSE 180 NANDINI 164 DUDH 180 PANDARI KRISHANA 62 AROKYA 72 CONSUMPTION OF MILK IN VISITED CANTEENS 10% 9% 31% 26% 24% LOOSE NANDINI DUDH PANDARI KRISHANA AROKYAINTERPRETATION: This above graph clearly shows that here in this segment other suppliers likeNANDANI,DUDH PANDARI have made it to capture the market by there promotionalactivities and also with there sales force they are able to tap the market in this segmentmilk man is slowly loosing there market share. and also other competitors likeKRISHNA AND AROKYA are slowly tapping the Page 62
  • 64. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar CONSUMPTION OF MILK IN VISITED MOBILE TEA SALES LOOSE NANDINI DUDH PANDARI KRISHANA AROKYAINTERPRETATION: The above chart clearly states that in this segment the milk man are the primarysuppliers to all the mobile tea stalls. Other competitors are also heading very closely tothe market leaders in tapping the market. The milk men are very comfortable with therelation with the owners of the tea stalls and also there flexibility towards the mode ofpayment. These are the reasons why the milk men or local dairy are the market leaders inthis segment.TOTAL CONSUMPTION PATTERN OF MILK IN DHARWAR CITY BY Page 64
  • 65. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar NO.OF RESPONDENTS END AND THE PRODUCT USAGE (OUT OF 100 ) TEA/COFFEE 98 SWEETS 38 CURD 56 OTHERS 24 CONSUMPTION PATTERN OF MILK IN BIJAPUR CITY 24 56 98 38 TEA/COFFEE SWEETS CURD OTHERSINTERPRETATION: The above chart clearly states that the end use of milk in Dharwar city is mainlyin preparing of Tea/Coffee. As also earlier stated that the people over in Dharwar arevery much addicted towards consumption of Tea/Coffee. Due to high temperature in Page 65
  • 66. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwarcity much of the respondents use milk in preparing curd. And few other respondents usemilk in preparing verity of items..SUPPLY SCHEDULE OF MILK IN DHARWAR CITY SULLY CHEDULE SOURCES OF MILK IN DHARWAR NADINI 5-00 AM DUDH 5-00 AM PANDARI KRISHNA 4-45 AM AROKYA 5-00 AM LOCAL MILK 5-00 AM TO 7 Page 66
  • 68. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar MODE OF PAYMENT 18% 82% CASH CREDITINTERPRETATION: The above chart shows that all the suppliers believe in cash and carry policy. Fewof brand go for giving in credit for the customers this is because the suppliers do notwant any clashes in their business .Few of milk men go in for giving credit to thosecustomers who are well known to them and even if credit is given the collection is donewithin couple of days as it is daily business.MAIN SOURCES OF Page 68
  • 70. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar The above figure clearly mentions that the market leader in all segments are localdairy and milk men this is all because of earlier stated the good relation, trust,reliability, time management. PART-VI Page 70
  • 71. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in DharwarFINDINGSDuring the survey it is found that Dharwar is very much potential market for “NOVAMILK” of KALPATARU DAIRY, as there is always scope for such products which areof good quality and the city has more disposable income, day by day it is increasing asyou find at least 2-3 people getting employed and minimum 2 to 3 people starting upnew business it might be kirana shop or dealers for any company, so the people in thiscity are ready to spend the money for good product and for such products which aregood for health. During the survey it was found that local dairy is the only person whois satisfying the need of the customers. There fore it will be a good potential market forNOVA MILK and also other player “DUDH PANDARI” have come very aggressiveinto the market with good promotional activity and the people here say that the quality ofthis product is “OK”. This product is produced in solapur (Maharashtra). As the borderof Karnataka and Maharashtra is very near to this city we find outside company doinggood business in Page 71
  • 72. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar Due to the brand name and efforts of aggressive promotional strategiesinitially the “NANDANI” is also making a very good business in this city. It has alreadycaptured 31% of total market. “AROKYA” is struggling to tap the market as marketleaders like LOCAL DAIRY,NANDANI,DUDH PANDARI have captured the almosttotal market. But the people here complaint regarding the quality of the product. SUGGESTIONS  The liquid milk should be offered in different range of packets.  The packing should be very strong and should not give bad smell once it is opened.  Should maintain good relationship with the retailers as they are main source who will help the company to create brand awareness.  They can also offer storage devices like refrigerator to bulk buyers.  Delivery timing should be maintained on time.  Special care & attention should be given to rural areas as they are the un tapped & potential Page 72
  • 73. “DEMAND ESTIMATE OF MILK FOR INSTITUTIONAL SALES, in Dharwar  As early as possible diversification in products range offering should be done. Like (curd, buttermilk & milk powder) Page 73