A Study Conducted on Effectiveness of Distribution Channel in Bangalore with reference to Bangalore Milk Union Limited.

1. Effectiveness of Distribution Channel: A Study
Conducted in Bangalore with reference to BAMUL
Presented By :- Yashank H.M
Reg No: 151159
Sec ‘A’, PGDM 2015-17
MSRIM

2. Industry Profile - Dairy
Indian Dairy Key Facts
• Ranks 1st in world milk production – 146.3 million metric tonnes in 2015.
• Contributes close to one- fourth of India’s National Income and total work force engaged in
agriculture is about 60%.
• In the early 1950’s, India was importing around 55,000 tonnes of milk powder annually to meet
urban milk demand.
• The 1st large scale and systematic breakthrough in dairy cooperatives was made in 1948 by the
Kaira District Co-operatives Milk Producers Union Limited at Anand.
• The Kaira Cooperative Union established a marketing agency named Gujarat Cooperative Milk
Marketing Federation – follows a three-layer structure that collects, processes and markets dairy
products at village, district and state levels.
• GCMMF is the largest exporter of dairy products from India and owns the brand “Amul”.
• The National Dairy Development Board was set up at Anand in 1965 – set up a program
“Operation Flood” to replicate Anand pattern.

3. Industry Profile - Dairy
Regulatory Changes
• Dairy sector was de-licensed in 1991.
• No industrial license is required for dairy industry.
• Foreign equity participation permitted to the extent of 51 per cent in dairy processing sector.
• Excise duty on dairy machinery has been fully waived off.
Porter Competitive Analysis
• Threat of competition is high as there are no entry barriers and consequently there are many brands
and local players making up the competitive rivalry.
• Threat of substitutes is low as milk is an essential item for beverages like tea, coffee etc. Also
traditional consumption habits make milk a favourite with most households in India.
• Bargaining power of suppliers is low because suppliers mainly comprise rural households and
small co-operatives.
• Bargaining power of consumers is high because of competition in the organized sector and large
unorganized market in rural areas.

4. Company Analysis - BAMUL
• KMF sells milk & milk products in the name of “Nandini”. It is a federation of milk producers
association working on cooperative principles.
• KMF has 13 Milk Unions throughout the state which procure milk from Primary Dairy
Cooperative Societies (DCS) and distribute milk to the consumers in Karnataka.
• The Bangalore Urban, Rural & Ramanagara District Cooperative Milk Producers Societies Union
Ltd. (BAMUL) was established in 1975 under Operation Flood II.
• Has 80% market share in Bangalore and main competitors are Heritage, Amul and Arogya.
• The strategy of BAMUL is “Procure More, Sell More & Serve More” and reap the benefits of
economies of scale.
• Technical Input Services through 12 camp offices:-
• Weekly Mobile Veterinary Service
• Emergency Veterinary Service
• Artificial Insemination Service
• Periodical Vaccinations
• Balanced Cattle Feed Sales
• Fodder development and Fodder Seed Production
• Cattle Insurance etc.

5. SWOT Analysis
Strengths
• Wide distribution network leads to regular and
timely supply.
• Milk processed is local therefore reduced
transportation cost.
• Automated computerized plant.
• Wide product range.
• An ISO, HACCP, EMS certified company.
• Prompt consumer’s complaint redressed.
• Maintaining uniform quality.
• Automatic correction power factor unit.
• Brand loyalty among consumers
Opportunities
• Checking the processing and packing unit.
• Addition of new varieties to the existing products.
• It has an opportunity to introduce new products like
ready to eat sweets, cheese, low fat milk chocolates
and biscuits.
• Can expand its marketing activities all over the
India.
• It can increase its sales and grab the unoccupied
market share.
Weakness
• Excess manpower.
• Less advertisement.
• Lack of flexibility in the system.
• Promotion is based on seniority.
• Retention of brilliant brain is difficult.
Threats
• Irregular power shutdowns and inter-dairy
competition.
• Entering of MNC’s.
• Entry of loose milk providers at cheap rates.

6. Tasks accomplished during Internship
Roles and Responsibilities:
• Issuing new agencies to the customers (retailers).
• Supervision of Milk Sales Enhancement.
• Insurance to Agents and their spouse.
• Inviting schools and other educational institutions to visit the factory premises.
• Help the agents to obtain the free De-freezer for ice-cream sales from KMF.
• Help the agents to avail 50% off on the bottle cooler from BAMUL.
• Provide jerkins to the agents.
• To study the organization structure and functions of the various departments.
Contribution to the Organization:
• The tasks handled by me helped in saving a lot of time and effort of the company’s employees.
• Effectively worked on helping the organization in issuing 15 agencies during my internship.
• Invited around 40 schools and other educational institutions from Bangalore to visit the factory
premises.
• Conducted research on the effectiveness of the Distribution channel of BAMUL.

7. Analysis of the Research Undertaken
Title: Effectiveness of Distribution Channel: A Study Conducted in Bangalore with reference to BAMUL.
Statement of the Problem: Distribution channel plays a dominant role in making available milk & milk
products to consumers. The effective distribution channels make milk & milk products available at right
time, right place & at proper quality. Therefore there is a need to study the distribution system & the
effectiveness.
Objectives of the Study
• To understand the existing distribution system.
• To identify & analyse the problem in the existing distribution channel.
• To know the level of satisfaction of retailers with the services of BAMUL.
Sampling Procedure
• Sampling units: Retailers of BAMUL in Bangalore.
• Sample size: 50
• Sample plan: Non Probability Sampling (Judgemental Sampling).
Data collection
• Primary data: Data collected using Questionnaire method.
• Secondary data: Websites, Newspapers, Ads & media, Research Publications.

8. Findings:
• BAMUL is organized and systematic in its distribution of milk and milk products.
• Commission given to retailers by BAMUL is less compared to its competitors.
• Majority of the retailers are satisfied with the commission given by BAMUL.
• Some retailers are unhappy with the damage policy of BAMUL.
Suggestions:
• BAMUL should give more commission than its competitors to attract more number of retailers.
• BAMUL should provide additional storage facilities when the retailers increase their sales and also
provide maintenance to equipments at proper time.
• BAMUL should find ways to check more number of products for damages.
• Care must be taken not to damage the products during transportation.
• BAMUL should reduce the minimum limit i.e. 6 litres to less than 6 litres for returning the
damaged goods.
• BAMUL should conduct more meetings aiming to resolve the problems of the retailers.

9. Thank you