An Opinion survey of Consumer Satisfaction On Products Of Sangam Dairy (A study on Guntur District Milk Products Co- Operative Union Limited) A project report submitted in practical fulfillment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION By YEDUKONDALA RANGA RAO A M.B.A Roll No:Y10BU93060 1
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An Opinion survey of Consumer Satisfaction On Products Of Sangam Dairy
(A study on Guntur District Milk Products Co-Operative Union Limited)
A project report submitted in practical fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATIONBy
YEDUKONDALA RANGA RAO A M.B.A
Roll No:Y10BU93060
SIDDHARTHA INSTITUTE OF P.G STUDIES (Affiliated to achraya Nagarjuna University)
Year 2009-2011
1
Project Report Certificate
CERTIFICATE
This is to certify that Mr. YEDUKONDALA RANGA RAO .A has done
Project work titled “Consumer Satisfaction to words Sangam Dairy”
products under company guidance from 21-05-2010 to 20-07-2010.
He is proven to hard working and innovative during this period.
Regards
For SANGAM DAIRY PRODUCTS
Marketing Manager
SIDDHARTH INSTITUTE OF P.G STUDIES2
GUNTUR DISTRICT MILK PRODUCTS
CO-OPERATIVE UNION LIMITEDVADLAMUDI, GUNTUR
(Approved by AICTE New Delhi, Affiliated to Acharya Nagarjuna University)Siddhrath Nagar, Kantepudi (V), Sattenapalli (M), Guntur Dist – 522438.
Ph: 08641 – 237863, 64,66 Fax : 08641 – 237865
CERTIFICATE
This is the project work entitled Consumer Satisfaction in Sangam Dairy
Products which is submitted by YEDUKONDALA RANGA RAO .A in partial
fulfillment of award of Master of Business Administration of Acharya
Nagarjuna University, Guntur during the academic year 2009-2011 is work out
by him under my guidance.
Head of the Department Project Guide
A.Maruthi Vara Prasad. G.Anjaneya Prasad
Professor Asst.professor, M.B.A.,M.H.R.M.
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DECLARATION
I here by declare that the project report entiled consumer satisfaction on Sangam
Dairy products is an original and submitted by me for award of degree of
MASTER OF BUSINESS Administration for Academic Year 2009-2011 it was
submitted else where for award of degree (or) diploma of any other institute (or)
university.
YEDUKONDALA RANGA RAO .A
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ACKNOWLEDGEMENT
I wish to express my sincere thank to our P.G. Department Business administration
faculty members, Siddhartha Institute of P.G. Service for providing me and opportunity for
pursuing my project work in “An Opinion survey of Consumer satisfaction on Products of
Sangam Dairy” Vadlamudi.
I am deeply indebted to our college principal Prof. A.MARUTHI VARA PRASAD
for his valuable encouragement.
I wish to express my sincere thank our H.O.D. A.MARUTHI VARA PRASAD.
I am express my sincere thanks to marketing manage Mr. P.P. MISHRI for giving
me this opportunity and providing me the facilities to work on this project.
I would like to express my thanks to my faculty members for their valuable guidance.
I would like to express my esteemed gratitude to all who have been directly (or)
indirectly involved in making this project a grand success.
YEDUKONDALA RANGA RAO .A
CONTENTS
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CHAPTERS PARTICULARS
I Introduction
II Objectives of the study / Survey
Significance of the study
Methodology adopted
III Industry profile and company profile
IV Data Analysis
V Findings and
Suggestions
VI Appendix
Questionnaire
Bibliography
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INTRODUCTION
INTRODUCTION
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A satisfied consumer is the best advertisement” is so trite, and so simple and old-
fashioned that its truth and value in creating more consumers is more than not overlooked in
the maze of new techniques and academics of modern business.
Consumer satisfaction depends on a products perceived performance in delivering
value relative to a buyer’s expectations. If the product performances falls short of the
consumers expectations. The buyer is dissatisfied. T performance matches expectations the
buyer is satisfied .if performance exceeds expectations the buyer is delighted. Out standing
marketing company’s go out of their way to keep their consumers satisfaction .satisfied make
repeat purchase, and they tell others their experiences with the product. The key to match
consumer expectations with company performance
Before becoming a consumer the person had certain wants and need, and a desire to
satisfy these. Satisfaction of a want or need is always anticipated before purchase, and the
intending buyer experiences, in imagination, many emotional satisfactions which the buyer
hopes to enjoy, after purchase .this application of benefits(satisfaction) before purchase
applies to plan purchase of major items such as houses, cars,, air- conditioners, and also to
so- called impulse’’ purchases. the only difference is the time interval between the
recognition of a want or need and its satisfaction. In every case, satisfaction of a recognized
need(want) its anticipated before purchase, and is the reason for the purchase.
All business firms have realized that marketing is a crore element of management
philosophy and the key to its success lies in focusing more and more on the consumer. Thus
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the challenge before the marketer is to ensure that they satisfy every consumer. Adam smith
in his, the wealth of nations, had said ‘Consumption is the sole end and purpose of all
production and the interests of the product ought to be attend to, only so far as it maybe
necessary for promoting those of the consumer.
Whether the buyer is satisfied after the purchase depends on the offer’s performance
in relation to the buyer’s exceptions. in general:
Satisfaction is a person’s felling of pleasure of disappointment resulting from
comparing a product’s perceived performance(or outcome)in relation to his or her
exception’’.
Clearly satisfaction is a function of perceived performance and exceptions. If the
performance falls short of expectations, the consumer is dissatisfied. If the performance
matches the expectations, the consumer is satisfied. If the performance exceeds expectations,
the consumer is highly satisfied or delighted.
Many companies is a function are aiming for high satisfaction because consumers who
are just satisfied still find it easy to switch when a better offer comes along. High
satisfaction or delight creates an emotional affinity with the brand, not just a rational
performance.
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Satisfaction is a person’s feelings of a pleasure or disappointment resulting from
comparing a product’s perceived performance (or outcome .in relations to his or her
expectations).
As this definition makes clear, satisfaction is a function of perceived performance and
expectations. If the performance falls short of expectations, the consumers is dissatisfied. if
the performance matches the expectations, the consumer is satisfied. If the performance
exceeds expectations, the consumer is highly satisfied or delighted.
The offering will be successful if it delivers value’ and satisfaction to target buyer.
The buyer chooses between different offering on the basics of which is perceived to deliver
the most value. Value can be seen as primarily a combination of quality, service and price
(Qsp) called the consumer valued triad. Value increases with quality and service and
decreases with price.
More specifically we can define value as a. ratio between what the consumer gets and
what he gives. The consumer gets benefits and assumes costs. The benefits include
functional benefits and emotional benefits. The costs include monetary costs time costs, and
psychic costs.
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CONSUMER NEEDS
Understanding consumer needs and wants is not always simple. Some consumer
have needs of which they are not fully conscious. Or they cannot articulate these needs. Or
they use words that require some interpretation. What does it mean when the consumer asks
for an inexpensive car, a ‘powerful’ lawn mower a fast lathe, an ‘attractive’ bathing suit, or a
restful hotel?
Consider the consumer who says he wants an inexpensive car. The marketer must
probe further. We can distinguish among five types of needs.
1. Stated needs (the consumer wants an inexpensive car)
2. Real needs (the consumer wants a car whose operating cost, not its initial price is low).
3. Unstated needs (the consumer expects good service from dealer).
4. Delight needs (the ustomer would like the dealer to include a gift PF Au. s road atlas).
5. Secret needs (the customer wants to be seen by friends as a savvy consumer
CONSUMER VALUE
Consumer delivered value is the difference between total consumer value and total
consumer cost. Total consumer value is bundle of benefits consumers expects from a given
product service. total consumer cost is the bundle of costs consumer expect to incur in
evaluating, obtaining, using and disposing of the product of service.
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The case for increasing the consumer retention rate is captured in’ the concept of
consumer life time value. It describes the present value of the stream of future profits
expected over the consumer’s lifetime purchases. The company must subtract from the
expected revenues the expected costs of attracting, selling and servicing that consumer.
Various estimates have been made for different products and service.
Customization
Today consumer is looking out for value for money. The challenge before the market
is to identify what value would appeal and convince the consumer, marketers are trying to
enhance the concept of value through unique delivery methods. They have realized that
products service characteristics, consumer’s aspirations and perceptions and the
availability of competing alternatives can be used enhance consumer value.
But the focus and challenge before every firm is to rebuild itself around its consumer.
It should be able to perceive, interpret, serve and satisfy the consumer with the type of
products and services he / she desire and arm itself was to gain a competitive
consumeriation.
CONSUMERIATION WILL HELP FIRM IN
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Providing the quality of service to match the consumer requirement
Help to focus on consumers’ needs so as to value and offer benefits to the
consumer.
To identify new consumers, new market segments and new applications for
existing products.
Work towards total consumer satisfaction and maximum consumer delight.
Working Towards Enhancing Consumer Satisfaction
In the existing business environment – markets are turbulent and consumer needs fast
changing, companies should out for ways to add value for their consumer by offering
products or services just the way they went it. When the consumer has to choose from a
large and bewildering number of options, features, pricing structures and delivering methods,
offering a unique product to every individual consumer will go a long way in adding value to
the consumer decision making process.
Consumer satisfaction is a continuous process which does not begin for end with a
purchase. It covered the entire ‘ownership experience from selecting a product, to purchase,
through aftercare to repeat purchase. Clearly there are three phases in the consumer
satisfaction process, namely
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Pre Sales: during this stage the consumer’s expectations are developed through the various
information sources like advertising work of mouth and so on.
During Sales: when the consumer is engaged in experiencing on how to deal with enquiries
and sell product.
Thus consumer’s expectations are their experience will together determine the level of
satisfaction. These expectations are inclusive of :
Pre-Sale period
Availability of clear, useful information on:
The product or service
Its quality aspect
Its core benefits or advantages
Its price
Its availability or sales outlet
How to obtain it
During Sales Period
Opportunity to inspect the products
Provision of an attractive sales environment
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Courteous and attentive service
Reasonable and reliable delivery
Enhancing quality of goods or services
Prompt redressed incase of compliant receipt
The After Sales Period
If required necessary support or advice be provided
Prompt replacement or refund it necessary
A smooth and straight forward complaint procedure
Efficient and effective consumer follow-up process
Efficient repair and maintenance service
Why Consumer Satisfaction is so significant?
Consumer satisfaction plays a vital role in increasing the company’s goodwill, sales
volume and profit .it is very important to every profit making, non-profit making,
government and other private organizations.
Some important factors for the significance of consumer’s satisfaction:
Consumer satisfaction is significant in the fulfillment of anticipated benefits for the
organization.
It is necessary to recognize, first that a consumer’s friends are commonly in the same
social, income, vocational interest and age group.
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It is an essential factor in, increasing the sales volume of an organization.
Consumer satisfaction ensures reputed purchases.
Ensuring Consumer Satisfaction
To ensure consumer satisfaction the manufacture must be able to control what buyers
say about his products.
By marketing research a manufacturer designs and implements according to the needs
and wants of the consumer. So, marketing research plays an important tool in
ensuring consumer satisfaction.
After sales services, on sales service, pre sales and service ensures consumer
satisfaction.
By fulfillment the promises made in advertisements and effectiveness of sales man increase
consumer satisfaction.
Some Cautions in measuring Consumer Satisfaction:
When consumers rate their satisfaction with an element of the company’s
performance say, delivery, the company needs to recognize the consumers vary in how they
define good delivery. It could mean early delivery, on time delivery, order completeness, and
so an. Yet if the company had to spell out every element in detail, consumer would face a
huge questionnaire. The company must also realize that two consumers can report being
“highly satisfied” for different reasons. One many easily satisfied most of the time and the
other might be hard to please but what pleased on this occasion,
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Companies should also note that managers and sales people can manipulate their
ratings on consumer satisfaction. They can be especially nice to consumer just before the
survey.
They can also try to exclude unhappy consumers from the Survey. Another danger is
that if consumers know that the company will go out of its way to please consumers, some
consumers may express high dissatisfaction in order to receive more concessions.
Delivering consumer value and satisfaction :
Value chain is a tool for identifying ways to create more consumer value. Every firm
is a collection of activities that are performed to design, produce, market deliver and support
its product. The firms task is to examine its costs and performance in each value creating
activity and to look for ways to improve it. The firm should estimate its competitors costs
and performances as 'bench marks' against which to compare its own costs and
performances. To the extent that it can perform certain activities better than its competitors,
It can achieve a competative advantage.
Consumer Service Process :-
All the activities involved in making it easy for consumers to reach the right parties
within the company and receive quick and satisfactory service, answers and resolution of
problems.
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Value - delivery Network :-
To be Successful the firm also needs to look for competative advantages beyond its
own operations, into the value chains of its suppliers, distributors to create a superior value
delivery net work.
1. They bear the major responsibility for correctly identifying the consumers needs and
requirements.
2. They must communicate consumer Expectations correctly to product designers.
3. They must make sure that the consumers orders are filled correctly and on time.
4. They must check that consumers have received proper instructions, training and technical
assistance in the use of the product.
5. They must gather consumer ideas for product and service improvements and convey them
to the appropriate company departments. When marketers do all this, they are making
their specific contributions to TQM and consumer satisfaction.
The Marketer must complain like consumer complains, When the product or the
service is not right. Marketing must be the consumers watchdog or guardian, and must
constantly hold up the standard of “giving the consumer the best solution”.
Computing the Cost of Lost Consumers:
Today’s Companies must pay close attention to their consumer Defection rate and
take steps to reduce it. These are 4 steps to this process.
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1. The Company must define and measure its retention rate. For a magazine, the renewal
rate is good measure of retention.
2. The company must distinguish the cause of consumer retention and identify those that
can be managed better. Not much can be done about consumers who leave the region
or go out of business. but much can be done about consumer’s who leave because of
poor service, shoddy product, high prices and so on.
3. The Company needs to estimate how much profit is loses when it losses consumers.
In the case of an individual consumer, the lost profit is equal to the consumer’ life.
4. The company needs to figure out how much it would cost to reduce the defection rate.
As long as the cost is less than the lost profit, the company should spend that amount
to reduce defection rate.
Adding Financial Benefits
Two financial benefits that companies can offer are frequency marketing programs and club
marketing programs. Frequency marketing programmes is designed to provide rewards to
consumers who buy frequently and / or in substantial amounts.
Implementing Total Quality Management:
Quality:
Quality is the totality of features and characteristics of a product of service that
the bear on its ability to satisfy sated or implied need”.
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As we have seen, towards Executives view the task of improving product and
service quality as their top priority. Most consumers will go longer accept or tolerate average
quality performance. If companies want to say in the race, let alone be profitable, they have
no choice but to adopt total quality management (trm).
“Total Quality management is an organization wide approach to continuously
improving the quality of all the organizations process, products, and services”. Marketing
managers have to responsibilities in a Quality-centered company. First, they must participate
in a formulating strategies and policies designed to help the company through total Quality
Excellence.
Second they must deliver marketing Quality alongside product quality. Each marketing
activity, marketing research, sales training, advertising, consumer service and so on must be
performed to high standards. Markets play several roles in helping their company define and
deliver high Quality goods and services to target consumers.
Measuring Satisfaction:
Although the Consumer- centered firm of company seeks to crate high consumer
satisfaction that is not its main goal. If the company increases consumer satisfaction by
lowering its price on increases its service’s the result may be lower profits.
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The company might be able to increase it’s profitability be means other than the
increased satisfaction. Also , the company has many stakeholders, including employers,
dealers suppliers and stockholders. Spending more to increase consumer satisfaction might
divert funds from increasing the satisfaction of the other partners. Ultimately, the company
must operate on the philosophy that it is trying to deliver a high level of consumer
satisfaction subject to delivering acceptable levels of satisfaction to other stakeholders, given
its total resources.
When Consumer rate their satisfaction with an element of the company’s performance-
say delivery, the company needs to recognize that consumer vary in how to define good
delivery. It could mean early delivery, on time delivery, order completeness and so on yet if
company had to spell out of every element. In detail consumers would face a huge survey
questionnaire.
Tools for Tracking and Measuring Consumer Satisfaction:
There are various ways of measuring consumer satisfaction. each has its own
importance. One cannot just stick to a particular concept and say this is the accurate way of
measuring consumer satisfaction.
Complaint and Suggestion system:
A Consumer-centered organization makes it easy for the consumer to register
suggestions and complaints. Some consumer-centered companies, which are in FMGG line –
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P&G, whirlpool, establish hot lines with toll free numbers. Certain companies are using
websites and e-mails for quick prompt response from the consumer and in turn there is a two
way communication.
Consumer Satisfaction Surveys:
Studies show that although consumers are dissatisfied with one out of every
purchase, less than 5% will complain, most consumers will buy less or switch suppliers.
Responsive companies measure consumer satisfaction directly by conducting periodic
surveys. While collecting data, it is also useful to ask additional questions to measure the
likelihood or willingness the product or service to others.
Ghost Shopping:
Companies can hire people to pose as potential buyers to report the strong and weak
points experienced in buying the company’s and competitor’s products. These mystery
shoppers can even test how the company’s sales personnel handle various situations.
Managers themselves should leave their offices from time to time and study the
competitor sales. They can visit competitors and can study the way the competitors receive
the handle the various situations. A variant of this is for managers to phone their own
company with situations and complains to see how the calls are handled.
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Cost Consumer Analysis:
Companies should contact consumers who have stopped buying or who have switched
to another supplier to learn why this happened. Not only is it important to conduct exit
interview when consumer first stop buying. It is also necessary to monitor the consumer loss
rate.
The primary activities represent the sequence of bringing materials into the business,
converting them into the final, shipping out final products, marketing them and serving them.
The support activities are the procurement, technology development, human resource
management and firm’s infrastructure these are handled by certain specialized departments.
The firm’s infrastructure covers the costs of general management, planning finance,
accounting, legal and government affairs that are borne by all the primary and support
activities.
The firm’s talk is to examine its costs and performance in each value creating activity
and to look for ways to improve it. The firm should estimate its competitor’s costs and
performance as bench marks against which to compare its own costs and performance. It
should go further and study the best of class parties of the world’s best companies.
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Delivery Consumer Value and Satisfaction:-
In a hyper competitive economy, with increasingly rational buyers, a company can
win by creating & delivering superior’s value. This involves the following five capabilities.
Understanding Consumer Value
Creating Consumer Value
Delivering Consumer Value
Capturing Consumer Value; and
Sustaining Consumer Value.
Companies to succeed in attaining these capabilities need to use the concepts Value
Chain and Value Delivery Network.
Value chains:
Michael of Harvard proposed the vale chain as a tool for indentifying ways to create
more consumer value.
Every firm is a synthesis of activities that are performed to design, produce, market,
delivery and support its product. The value chain identifies 9 strategically relevant activities
that create value and cost in a specific business. These 9 values creating activities consists of
5 primary activities and 4 support activities.
The primary activities represent the sequence of brining materials into the business,
converting them into the final products, shipping out final products, marketing them and
serving them.
The support activities are the procurement, technology development, human resource
management and firm’s infrastructure. These are handled by certain specialized departments.
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The firm’s infrastructures. Covers the costs of general management, planning, finance,
accounting, legal and government affairs that are borne by all the primary and support
activities.
The firm’s task is to examine the costs and performance in each value creating
activities and to look for ways to improve it. The firm should estimate its competitors costs
and performance as bench marks against which to compare its own costs and performance. It
should go further and study the best of class practices of the world’s best companies.
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ABOUT THE SURVEY
1) OBJECTIVES OF THE STUDY / SURVEY
2) SIGNIFICANCE OF THE SURVEY
3) METHODOLOGY ADOPTED
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Objectives of the study :-
The following are the objectives set for the present study.
1. To present the genesis and growth of Dairy industry in India and the growth of Dairy
industries in A.P.
2. To identify consumer’s motivating factors that influence the choice of a particular brand
of dairy products, in this case the products of Sangam Dairy.
3. To analyse the channels of distribution of dairy products of Sangam Dairy and those of
its competitors.
4. To Analyse Consumer’s opinion regarding quality, price and packaging of Sangam Dairy
products.
5. To analyse the satisfaction level of consumers with regard to products of Sangam Dairy.
6. To suggest ways to increase the Dairy’s consumers in the near feature.
7. To determine the awareness levels of consumers, with respect to the other mill products
of Sangam dairy.
Significance of the Study :
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It is very important for an organization to seek feed back from its consumers and
retailers to know the effectivity of their marketing strategies.
Marketing Research is the tool which is used to obtain retailers opinions regarding an
organization’s product and services, their satisfaction level.
So, by Marketing Research, Marketers analyze consumer’s satisfaction level to wards
their product's and design and implement their marketing strategies which are compatible to
consumer's expectations.
Basing on this premise, this survey has been carried out, so that the company can be
provided with a relatively correct picture as to what the consumers perceive about the milk
and the bi products of milk from Sangam Dairy.
Therefore, studies of such types are necessary for an organization to implement their
marketing strategies effectively and efficiently in order to increase their market share.
Methodology of the Study :
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Research design :-
The Research design for the study of marketing research on dairy products is as follows :
Source of Information :-
a) Primary Data b) Secondary Data
Primary Data:-
Primary Sources for my survey include consumers, buyers, middlemen, salesmen and
others.
Secondary Data :-
Some times Company files or marketing research reports and other reports contain the
desired information. Thus Secondary data sources in other words, are reports not of items of
informarion gathered specially to obtain objectives of the research project being planned, but
rather of material assumed for other purposes.
Data Collection for the study :-
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For the present study, data was obtained from internal sources and external sources.
Internal sources include collection of data from company records such as sales reports and
other information sources. Data collected from external sources include primary data and
secondary data. Secondary data was collected from published literature available on the
subject matter and for obtaining primary data a queationnaire was designed, developed and
administered.
Sampling:-
In Sampling Survey Model the instrument used was Questionnaire. This was
administered to daily consumers of dairy, products. A sample size of 100 was considered for
the study Sample was taken in Guntur and Tenali towns.
The sample also covered persons having different Educational Qualifications and
respondents in different age groups. The sample also covered Government Employees and
Self - Employed and people employed in Private Organizations.
Limitations of the Study :
1. The study is geographically limited only to Guntur and Tenali towns.
2. The sample size of 100 may or may not present the accurate picture.
3. There is no compulsion on the part of organization to accept my suggestions.
4. Though the research is purely Acadamic, a sincere effort has been made to make the
findings useful to company also.
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1. Industry profile
2. Company profile
INDUSTRY PROFILE
GENESIS AND GROWTH OF DAIRY INDUSTRY IN INDIA
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Co-operative dairying in India is over 50 years old of the total milk produced in
India, about two third is buffalo milk and a still larger proportion of buffalo milk is in
the processed stage. The milk processing Industry gained momentum and
respectability in the 80’s but still it can only be considered as growing one. The milk
sector is the second largest contributor to the agricultural economy in terms of
produce. In 1990-91 the co-operative collected nearly ten million liters and marketed
eight million liters of liquid milk per day.
Of the total milk production in India, about 45% us used fluid consumption rest
is converted into products such as ghee 33%, Dahi 8%.
Animal husbandry was considered an activity for the rural areas, where as dairy
development was only in the cities. For the farmers, projects such as the key, village
scheme and the intensive cattle development programmers were very useful. These
aimed at improving milk yields through better management of the cattle and eventual
upgrading of the breads, But, these projects by themselves never paid much attention
either to be marketing of the additional milk that was supposed to be produced, or to
its processing.
Indian dairying is marked by high seasoned of milk production. This is caused
by the breeding cycle, as well as loading protection most crop residue is fed to
animals, the availability of which were from season to season.
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There is, therefore the flux season, when milk animals produce nearly double
quantity of milk than they do in the lean season. This at time ponds in animal gluts.
Dairy development meant setting up modest sized (10,0000 to 25,000 liter /
day) liquid milk processing plants in cites with population of half a million or more.
Even if the plants in cities with population of half a million or more. Even if the plants
had functioned to their full capacity which they did not public dairies could have had
only about 10-15 percent share of the market? This meant that the urban provate milk
trade could continue unchecked. The link between the rural produced and the urban
procession public as well as private remained the middleman. Though India has 23%
of total animal wealth of the world, the milk production is only 6.5%. This miserable
situation is due to lower productivity of the Indian milk animals. The estimated
demand for milk us 64.40 million tones by 2000 A.D. the agricultural sector
contributes 46% of national income. The dairy industry contributes 10% of
agricultural income so, around 5% of the national income is contributed by this dairy
industry.
Dairy Development in India, 1950-70 Creation of NDDB:
In 1964, the then Prime Minister of India, the late Lal Bahadur Shastri
visited Anand. From his observations and discussions, with farmers over there the
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Prime Minister could infer that the Karia farmer had no special advantage agro-
climatically or in the quality of his cattle. He concluded that because the farmers
owned the dairy, and because their elected representatives managed the village
societies and the district union, and because the y had the good sense to employ
competent professionals to manage their dairy factories, the Amul dairy was sensitive
to their needs and was responsive to their demands. Their access to a metropolition
market – Bombay for milk, and good national marketing in the case of dairy products,
where their greatest assets. These were the reasons why AMUL was such a great
success.
The prime minister also wanted to know why, when Amul was doing so well,
the other dairies run by the central and State Governments were not successful. He
desired “Anand” be replicated throughout India. He said in a letter addressed to the
state Chief Minister, we envisage a large programme of co-operative dairies during
the fourth plan and this will, no doubt be based on the Anand model. If we can
transplant the spirit of Anand in many other places, it will also result in rapidly
transforming the socio-economic conditions of the rural areas. He decided that the
Government of India would create a body, whose job would be replicate “Anand”.
The National Dairy Development Board (DDB) was the created in 1965.
Initially, the concerned officials objected the Anand pattern and were not
prepared to make five-year Plan funds available for replicating "Anand" in their states.
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For some years, NDDB tried unsuccessfully to convince one state after another to
agree to make these funds available. It became obvious that if the NDDB was to carry
out the objectives for which it was established, it must have its own programme and
funds to replicate the Anand pattern. It was thus that operation Flood was evolved.
OPERATION FLOOD PROGRAMME IN INDIA
The objective of operation Flood was to replicate Anand. Nothing else. The
State Government could use their own funds to develop dairying in whichever way
they choose, but the additional funds available under Operation Flood were only to be
used for replicating Anand.
Operation Flood the largest development programme undertake in the world and
was initiated closely on the heels of Green Revolution in country, against the back drop
of huge surplus of milk production in the highly developed milk producing countries in
the west and dwindling per capita milk availability at home. According to the
agreement signed by World Food Programme (WEP) and Government of India, the
WEP will arrange to supply 1,26,000 metric tonnes of butter oil, which the corporation
will handle on behalf of the Government, Utilization of these commodities would
generate funds estimated at Rs. 954 millions during the project period. These funds are to
be invested in the plan of operations agreed by WEP and Government.
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By 1968, NDDB had formulated the first phase of operation flood, which aimed
to capture for public dairies a "commanding share" of the milk market in the four
metropolitian cities of Bombay, Delhi, Calcutta and Madras. It also aimd at speeding up
the dairy development by increasing milk production and procurement in rural areas
which supply milk to these four cities.
In order to achieve the desired objectives of the project the following order of
implementation was adopted.
1. Quick expansion of urban handling capacities by expanding the dairies in
Delhi. Bombay, Calcutta and Madras and by setting up new liquid milk plants.
So that the total capacity of the organized sector would be increased from 1
million liters per day in the pre-project to 2.57 million liters a day in the four
major cities.
2. Supply of WEP commodities - skimmed milk powder and butter oil for
production of recombined milk to help to speed up full utilization of the expanded
capacities.
3. Selling up of rural milk-producer owned co-operative organizations, to
produce, process and market milk on one hand and to market technical inputs for
milk production on the order.
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4. Implementation of milk production enhancement programms with the long-term
objectives of achieving self-sufficiency in milk.
5. Establishment of rural feeder balancing dairies to coup existing milk available
to replace combined milk produced by use of WEP.
6. Development of the basic transportation and storage to facilitate regional and
seasonal balancing of milk supply and demand.
7. Development of the basic transportation and storage of facilitate regional and
seasonal balancing of milk supply and demand.
CURRENT DAIRYING SCENE IN INDIA
The dairy industry in India made rapid progress, particularly during the last two
decades. Today, India occupies first position in milk production in the world,
surpassing the US. The credit, not doubt, goes to Operation Flood, which has played a
key role in the development of Dairying. India is a milk-consuming nation. This,
couples with our large population, ensured steady increase in demand for milk.
The employment potential of Indian dairy sector is substantial. This sector
provides additional income and generates job opportunities for 80 million fanner
families. More than 70 per cent of marginal farmers and landless laborers maintain
dairy animals to supplement their incomes.
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In India, there are 10.1 million farmers who are members of 77,000 village dairy
co-operative societies, each of which is affiliated to one of 170 district and regional
co-operative unions which is turn are part of a state co-operative marketing federation.
These are 22 of these federations, which offer dairy and other products in the market
successfully while competing among themselves. At present, dairy farms are owned by
individuals, investors and multinationals.
The cooperative sector has contributed significantly for the success of white
revolution in India. There are more than 97,000 milk co-operative societies in 264
districts. This sector grows at me rate of 6.5% per annum.
ADVANTAGES OF INDIAN INDUSTRY
In terms of total bovine population, India occupies the first position in world,
with 176.7 million cattle and buffaloes. (World's total bovine population is 1,420
million.) A large bovine population, strong procurement infrastructure, presence of
highly skilled manpower, cheaper labour, and a large number of processing and allied
facilities are some of the advantages that the Indian dairy business has.
EXPORT POTENTIAL
India is not fully utilising its export potential in respect of dairy products. The cost
of milk production in India is the lowest. And the dairy industry is not getting any
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subsidy. There is an urgent need to pay special attention to quality of India has to
compete with other countries. At present, the country is exporting malted milk foods,
ghee, butter and cheese to countries like Bangladesh. UAE, Nepal, Sri Lanka, Oman and
Bahrain. Of course, world milk prices are subject to dramatic fluctuations. Export
earnings from the live stock sector and related products rose to Rs.19,250 million m 1996-97
from Rs.7,920 million in 1988-89.
DISAPPOINTING FACTS
Milk availability in India is still low at 212 grams/day per person. Of course, the
per capita availability of milk in the rural areas is barely 121 grams/day as compared
to 400 grams/day in urban areas.
Animal productivity remains low, as tire national average is only 1.5 liters/day.
Productivity of Indian cattle is 10 percent of the productivity of cattle in Israel and 30
percent of the level achieved by the developed countries. Unless milk productivity is
raised, it is difficult to compare with Europe. America and Oceania.
What is more, only 10 percent of the milk produced are in the organised sector,
leaving the remaining portion in the hands of milkmen thus providing chances for
adluteration and exploitation. Also, our cattle and buffaloes are slow maturing, slow
irregular cycling behaviour, produce fewer calves in their life-time, and suffer from
physical and physiological anomalies in reproduction.
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There is a serious shortage of conventional feeds for feeding livestock. Both
quantitatively, there exists a wide gap in demand and availability of fodder resources in
India. During the last two decades there has been no change in the cultivated area devoted
to fodder. It still stands at 4.4 percent of the total cropped area. It is estimated that 10 to 15
per cent increases can be recorded in the existing milk production through adequate
feeding of bovine population. In order to solve feed shortage problem, we have to rely
on cheap alternative feed to growing calve '
STEPS TAKEN SO FAR
The problem of low productivity of animals can be solved by ensuring
availability of feed and fodder. Concrete efforts are needed to improve the productivity of