Mother Dairy
Mother Dairy
Mother Dairy
The satiation and euphoria that accompany the successful completion of the
project would be incomplete without the mention of the people who made it
possible.
I would like to take the opportunity to thank and express my deep sense of
gratitude to my corporate mentor Mr. Dhiman Sen and my faculty mentor Prof.
DR. Prachi Nagar. I am greatly indebted to both of them for providing their
valuable guidance at all stages of the study, their advice, constructive
suggestions, positive and supportive attitude and continuous encouragement,
without which it would have not been possible to complete the project.
I would also like to thank Mr. Amar Majumdar (Senior Marketing asst.) who in
spite of busy schedule has co-operated with me continuously and indeed, his
valuable contribution and guidance have been certainly indispensable for my
project work..
I hope that I can build upon the experience and knowledge that I have gained
and make a valuable contribution towards this industry in coming future.
TABLE OF CONTENT
1 Executive summary 4
Introduction :
2 Need of the study 5
Objective of the study
3 Organisational Background 7
Literature Review :
Current scenario
4 Supply chain management 14
Distribution channels
Processing
Quality control
5 Competitor Analysis 19
7 Research methodology 35
8 Conclusion 43
9 Limitations 44
10 Recommendations 45
11 References 47
12 Annexure 48
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EXECUTIVE SUMMARY
th
The project was started on 8 of April after knowing all the relevant
information about the different milk varieties available, under the guidance of
Mr.Dhiman Sen (E.O.Officer).The first part of my project involves the study of
distributors allocated to me Identification of their problem areas and helping
them in order to increase sale. For this I used the method of personal interviews
and questionnaires. At the same time , they were being made aware of the
incremental scheme of Mother dairy for the distributors. Along with the
distributors a study of retailers was conducted to better understand the
grievances and identify the gaps. For this I visited around 50 outlets in the area
,ie, North and East Delhi and spoke to them. I was also supposed to find out
new retail outlets and convince them to sell Mother dairy milk by showing them
the opportunity of getting attached with a big FMCG brand like Mother dairy
and increase the customer base. Despite of summer and low demand I was
successful in persuading people and a number of new retail sale points were
developed and the sale was increased. The second part of my internship was the
study of consumer attitude towards Mother dairy milk or more specifically the
factors affecting the decision of purchase of milk. For this a sample of 200
consumers was taken and a factor analysis was carried on to find the decision
making factors.
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INTRODUCTION
The project was an attempt to know the reasons behind low sale of milk of
Mother dairy in Delhi. Despite of being the first in the industry,and having the
first mover advantage and the brand name, the sale has fallen down incredibly
due to competitors like Amul ,Metro dairy , Red Cow and others. There is a
need to revamp the company and position it all over again in the mind of the
consumers. In doing so firstly the grievances of the distributors and the retailers
were required to be solved in order to encourage them for push sales. Secondly
a study of consumers decision making factors is required in order to understand
their priorities which can be worked upon. For this purpose a research is to
undertaken to find out the market scenario.
With the help of the responses given by the consumers and data analysis, the
company will be able to understand its strengths, weakness , opportunities and
threats. The survey report submitted by me will assist the company to take right
decisions to increase the turnover and market share.
5
6. To study Mother Dairy positioning in the mind of the consumers vis-à-
vis competitors
7. To find out the factors that affect consumers decision to purchase milk
8. To find out short term problem in every sub-region that can be sorted out
6
ORGANISATIONAL BACKGROUND
Mother Dairy was set up in 1974. Mother dairy Delhi is a government of West
Bengal project, was started under Operation Flood II of National Dairy
Development Board . It was set up initially to cater to the demand of the Delhi
urban agglomeration spread over the Delhi Metropolitan area, later it reached out
to the consumers of other districts also. The commissioning of the Dairy started in
July 1978. Initially, the management of Mother Dairy was looked after by the
National Dairy Development Board . On 24th March 1982 , the then Honourable
Chief Minister Shri Jyoti Basu dedicated Mother Dairy Calcutta to the rural milk
producers and urban milk consumers of West Bengal.
Mother Dairy is an IS/ISO 9002, IS 15000 HACCP and IS 14001 EMS certified
organization. Moreover, its Quality Assurance Laboratory is certified by National
Accreditation Board for Testing and Calibration Laboratory (NABL)-Department
of Science and Technology, Government of India.
At Mother dairy milk is produced by mixing raw milk, white butter and skim milk
powder. Skim milk powder is made by mixing cow and buffalo milk obtained
during breeding seasons through various co-operatives in West Bengal and
converting them into powder in order to store for a longer period. Raw milk is
obtained on a daily basis from the co-operatives. It is then stored in chilling plants
and transferred to the Mother dairy factory through insulated tanks. While raw
milk is stored in the cold chain at 2°C skim milk powder and white butter is stored
under normal temperature. This milk is then pasteurised at 78° C in order to make
it free from germs and then it is homogenised.
Mother dairy is presently selling Milk & Milk Products like Khatta Doi ,
Flavoured Yoghurt, Plain yoghurt, Paneer, Ice cream and Packaged Drinking
Water. The entire product mix is shown below :
7
MILK
Varieties in Milk :
It‟s fresh it‟s pure it‟s co-operative milk with assurance of Mother dairy. Mother
dairy double toned milk - tasty and nutritious with low fat content. A dream come
true , especially for all the calorie conscious people who love the taste of milk but
are worried of its cream content. Mother dairy double toned milk complements
your daily workout perfectly. So , to maintain complete harmony between your
body and soul you‟ve got to “fresh and pure”.
Toned Milk
Mother dairy bulk vended token milk – healthy and tasty to the last drop.
Homogenised to evenly distribute the cream content , it‟s thicker and a lot easier
to digest. It‟s the magic of homogenisation that makes your kheer thicker and
shake frothier. Fortified with Vitamin A , which not only is good for your
complexion but also helps prevent night blindness. What‟s more , it gives your
children the energy to stay active through work and play
9
Full Cream Milk
Mother dairy full cream milk - wholesome and healthy. Packed with energy and
nutrition thats essential for growing kids. It makes them stronger from within
and keeps them active and healthy. So before they go to bed , and after they rise
give them Mother dairy full cream milk to keep them healthy and wise and to
see them „grow faster‟.
Cow Milk
Mother dairy‟s cow milk has a yellowish tinge due to presence of an element
called carotene and is a good source of Vitamin –A,B-12 and Vitamin D. Cow
milk is considered to be easily digestible. Whether poured on breakfast cereal or
enjoyed alone as a cold glass of milk, this can be enjoyed year around.
Skimmed Milk
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Pattern of sale :
Distribution Network :
11
OTHER PRODUCTS
Sl.No Product
1 Mishti Dahi
2 Plain Yoghurt
3 Favoured Yoghurt
a) Vanilla
b) Green Mango
c) Chocolate
d) Pineapple
4 Paneer
5 Ice-cream
6 Packaged Drinking
Water
12
Shelf Life :
13
Distribution Network :
LITERATURE REVIEW
CURRENT SCENARIO
Mother dairy has a market share of around 33 % in the branded sector in West
Bengal where it sells 3.4 lakh litres of milk daily on an average and undertakes
its marketing operations through around 51 distributors and around 600 retailers
in Delhi itself. It has a huge advantage over its competitors as it is the only
player when it comes to sale of loose milk through token. Before the entrance of
competitors like Amul ,sale of loose milk through Mother Dairy booths was
around 35 % of the entire sale in branded segment , when Mother dairy was the
only player in the market. However since last five years the sale is continuously
declining and presently it is just 8-9 %.
15
Supply Chain Management
2) Milk distribution: -Tankers in the morning and in the evening bring in milk
from the regional collection centres. After collection the same tankers are
utilized for the delivery of the processed milk to the distributors. Mother Dairy
has about 51 Distributors in the city of Delhi. Each of these LAD‟s(Local area
distributor ) place their demand by raising an invoice one day in advance. The
demand is also calculated using the „Calendar‟ Scheme, in this depending on
the pre-calculated seasonal demands the outlets place their orders accordingly.
In order to satisfy immediate demand, 20 to 25 tankers are provided with a
buffer stock of 500 litres each day so that they can be mobilized to cater the
demand in an area. To coordinate its operations all the tankers are equipped
with HAM radios.
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Distribution Channels:
Processing
Firstly, Clarification, in which milk is spun at very high speed, removing all
dust particles that are invisible to the naked eye.
| 18
Finally, Pasteurization, which kills all pathogenic bacteria present in the milk
and thus making it safe for consumption.
Quality Control
Stringent quality control methodologies are employed in Mother Dairy.
a) The milk is tested for adulterations and quality at the time of collection from
the farmers.
b) The Milk that comes from the collection points to the Mother Dairy plant is
ensured to have a temperature of not more than 4°C and is subjected to 15
product and quality checks.
c) The Milk quality is checked repeatedly after each processing phase and the
temperature is judiciously maintained less than 4°C always.
d) Before the milk leaves the plant for the delivery/distribution outlets the milk
is tested again.
e) The temperature of milk in the delivery trucks is always maintained less than
4°C.
f) All the trucks that deliver milk have specified guidelines to bring back 100
litres of milk after distribution. This is done in order to test the delivered milk
and to ensure that the tankers are not adulterated during distribution.
h) To ensure milk freshness the collection and distribution points are always
chosen such that the travel time between them is always less than 36 hours.
Out of the total production about 9% goes directly to the institutions ,23% is
the loose token milk and the rest is distributed through LAD‟s.
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COMPETITOR ANALYSIS
AMUL
Amul is the acronym for Anand Milk Union Limited, a dairy cooperative
company in Gujarat, India that markets a wide range of products including
milk powders, milk, butter, ghee, cheese, chocolate, Shrikhand, Gulab Jamun,
ice cream, cream, and others making it the largest food brand in India. Amul has
spurred the White Revolution of India, which has made India the largest
producer of milk and milk products in the world. It is one of the best examples
of co-operative achievement in the developing economy. Amul entered the
pouched milk market in Delhi in 2005 and then onwards giving a tough
competition to Mother dairy .Presently Amul has a 40 % market share in the
branded milk segment.
Product 20
The varieties of Amul milk available in Delhi are :
Amul Taaza Toned Milk 3% fat
Amul Gold Full Cream Milk 6% fat
Amul Slim & Trim Double Toned Milk 1.5% fat
Amul Tea Special
At Amul skim milk powder is procured from the cooperatives of Gujarat which
is much superior in quality when compared to the cooperatives of West Bengal
leading to better quality of products.
Price
21
Place
The availability of milk is a major concern among the consumers. Amul with its
vast distribution network has enhanced the market and is responsible for its
growth. Amul has made pouched milk available in almost all suburbs of West
Bengal where we cannot find Mother dairy even today. Mother dairy is not able
to cater to those markets because their size is comparatively small and with the
current retailers and distributors margin there is hardly any profit left to them
because the expenditure is much more.
Promotion
Amul has a great brand image in the mind of the customer .Their expert
marketing and advertising strategies add all the more to the sales.
23
The study of distributors and retailers was conducted on a part of North Delhi
,ie,Maniktala , Shyambazar , Ahmerst street , Raja Bazar , Malik Bazar, New
Market , Dalhousie , Minto Park , Esplanade , Dharamtala , A.J.C.Road . The 3
major distributors in the area were interviewed. They are :
A.S.Milk
2A , Scotland Lane
Delhi-700009
Jyoti Gupta
133/C , Raja Ram Mohan Sarani
Delhi-700009
Ph : 98319-50986
The method of personal interview and questionnaire was adopted to get the
insights. The following mode of operation was found out through interviews :
An agreement is done by the company with the LAD for payment of a security
deposit
The LAD will receive the delivery of poly pouch milk at the scheduled
place mutually agreed upon and tosell the same to the third party retailers
in the area specified by the dairy
already existing in that area and
The milk shall be sold by the LAD to the retailer
further outlets to be developed by the LAD
The agreement made at the beginning of the contract with the LAD shall remain
valid for a specified period of time and shall be terminated on the
MBA 2012-14| 24
expiry of the period unless it is extended or renewed for any further
period by mutual agreement
The LAD will take the delivery of the exact quantity of packaged milk
supplied by the dairy in its place against the indent placed by the LAD
the delivery
the previous day. The Lad shall pay the cost of milk against
of milk by an account payee cheque or banker‟s cheque
The operational area of LAD shall be decided by mutual consent and may be
increased or decreased as per the decision of dairy from time to time
The LAD shall increase the sales by at least 10% over and above the present sales
within 3 months
The LAD shall be responsible for delivery of milk in good condition and
in time to
various outlets by his own arrangements of transport and
manpower
If at any time the milk is found unfit for human consumption due to mishandling
or bad storage by the LAD , strict action will be taken
The LAD is solely responsible for maintaining the sealing , quality , packaging ,
etc. of the milk packets received from the dairy
LAD shall not be returned to the dairy at anytime
The milk once delivered to the
and under any circumstances
The LAD shall also be responsible to leverage out the benefits given to the
retailers by the company from time to time
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RESEARCH METHODOLOGY
Purpose
The basic purpose of this research is to find out the factors affecting the
decision of the consumer to purchase milk
Problem
To find out problem is the first stage of the research process. It represents
translating the management problem into research problem. It is rightly said, “A
problem well defined is half – solved.”
Consumers have faith in the brand image of Mother dairy, still its losing share
to Amul and other local brands
Objectives
The objectives of the study are as follows:
1) The objective of the study was to find the actual reason why people are
not buying Mother dairy
SAMPLE
Sampling Frame:
The sample frame for this research constitutes the customers visiting retail
outlets to purchase milk in North and East Delhi.
Sample Size:
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Methodology:
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Interpretations :
Earlier Mother dairy itself used to distribute milk directly to the local retailers,
the distribution of milk through LAD‟s started only last year. Since the
distributors are new they hardly have any complain regarding retailers drop out
within the year of work. However sales were largely affected due to competition
from other local brands which are coming up daily with new schemes.
According to the distributors, the margin was not sufficient to meet their
expenses. Their profit remains negligible. Among the competitors also Mother
dairy‟s margin is the lowest. Again there is no incentive to work hard. The
targets given by the company were not realistic and hence were not achieved.
Their view about the quality of milk is also not satisfactory. According to them
there is no consistency in the quality, which becomes a major reason of low
consumer demand. When it comes to competitiveness Mother dairy lacks
behind many brands and especially Amul which has captured the market with
its mass advertisements and fine quality of product.
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Apart from the survey with the three LADs ,others were also
contacted in order to solve their grievances .The report prepared is
shown below :
29
After the distributors, the retailers were also interviewed in the similar manner.
About 50 representative retailers were chosen for the purpose through
convenience sampling.
Data interpretation
30
31
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Interpretations :
During the interview most of the retailers were satisfied by their sales
considering the location and competition in the market , however few who were
not , considered decreasing quality as a reason of loss of sales apart from
competition with other brands. Also it was witnessed that their is no competition
from local dairy owners because they have a fairly differentiated market.
According to the majorty the major competitor is Amul , with its vast marketing
strategies , immense brand image and enormous quality of products, it has
successfully captured the market.However few of the retailers also believed that
the local brands like Red Cow,Thacker dairy,Amrit Fresh,Delight etc are
emerging as great competitors .These brands are new and are giving huge
margins and incentives , which is leading to push sales.
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The margin of amul and Mother dairy is almost same in the area , however
when compared to local brands it is quiet less. When it comes to
competitiveness according to the retailers Mother dairy is not performing upto
the mark.Their strategies does not meet their competitors. Brands like Red Cow
offer huge discounts to their retailers whereas Mother dairy has no such
schemes.
Thus through applying root cause analysis we can come out with the main
problems of distributors and retailers leading to decreasing market share. The
fish bone diagram demonstrating the reasons is shown below:
Competition from local brands was one of the most contributing factor in
decreasing market share. The local brands not only give high margin to the
retailers but they also have great incentive schemes available for them thus
influencing them for higher sales.
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bad smell which annoys customers. Also there is a concern that the milk gets
spoiled very easily compared to Amul.
Mother dairy has an incentive plan according to which the distributors are
supposed to increase sales incrementally by 1% every month. This target if
achieve give the distributors an incentive of .05p/ ltr on their total sales for the
year. In order to fulfil the target and increase the sale, the distributors give the
retailers a part of their incentive,say .03p/ ltr. But even then it becomes very
hard for the retailers to increase sale as the demand in the market is limited.
Thus in these cases the only measure left is to increase sale through opening up
of new retail points.
Here we can see the lack of initiative of the distributors and the company.
During the survey it was found that there were a lot of gaps in the area of the
distributors. There was an unmet demand in the market. The distributors accept
that because of lack of initiative they were unable to meet the requirements.
During my project I identified few of them and thus new retail sale points were
allotted.
CONCLUSION
This project was about the milk segment of Mother Dairy which due to intense
competition from its competitors is continuously losing its market share. So in
this project different parameters on which the sale of Mother Dairy depends are
studied and analysed from the distributor, retailer and consumers perspective.
The final outcome of the project is that the parameters which make decision
regarding the purchase of milk are Price , Quality, Smell , Taste ,
Advertisement and Awareness. Milk market is a totally unpredictable market
and the organisation should be over-cautious of any complaints that come into
milk as it includes the sentiments of a mother for her kid and she would not
prefer to give anything to her kid for which she is not 100% satisfied. So the
company should take every step possible to contain these problems which in
some way or the other affects the sale of Mother Dairy and its retailers.
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LIMITATIONS
1. The study was conducted in North and Central Delhi only ,so the limited
area of the study may affect the conclusions
2. Some of the respondents could not give their proper response due to lack
of time. They at times tend to get biased and project a rosy picture which
may affect the reliability and relevance of the study
4. There was no provision of visiting cards for the summer trainees which
hinder communication at times
5. The duration of the project was short, so the scope of more in-depth
evaluation was not possible
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RECOMMENDATIONS
The recommendations for the company for further growth and profit are as
follows:
Mother dairy should come up with schemes for customers along with
retailers as it would be a real boost to the sales and also it will help the
company to get back its lost customers
During the survey it was found that many of the retailers were
uninterested because they were concerned about the storage of milk.
Instead of refrigerators if dry ice boxes can be supplied free of cost, sale
would be increased. Also it would be economical and convenient. Later,
if the retailer drops out , the box can be collected back.
It was seen that the price of the largest selling variety of Mother dairy
which is cow milk is Rs 24/ltr , and the competitor product of Amul is
priced at Rs 25/ltr. Thus the price can be increased and thereby margin of
the retailers can be increased
Also it was seen through the survey that price is not a major concern for
the consumers when it comes to a necessity like milk so the price can be
increased by a rupee or two and the quality can be improved
Mother Dairy is ISO and HACCP certified. The consumers should be
explained about it through advertisements in order to make them aware
The organisation should schedule these kinds of surveys on a more
regular basis as at this point of time Amul is really capturing the market
and the organisation should take viable steps to meet the expectations of
its customers
If MD can do certain promotions as its competitor AMUL does, then it
can attract sales. Promotion with the help of boards, hoardings etc. and
also it can advertise in radio
It was found during survey that Mother dairy milk gets spoiled quickly,
thus a preservative known as costic which is used by Amul can be applied
to produce milk
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In order to improve and maintain quality, total quality management
measures should be appointed. It was seen that due to lack of fixed
percentage of raw milk mixed, the quality gets hampered and remain
unsteady. The extra milk procured should be used for production of milk
products which are in short supply and raw milk should be
proportionately used in milk production
The smell in milk is because of the usage of skim milk powder beyond a
certain point of time, this should be looked into by the manufacturing
department and alternative measure should be used
The company should try to adopt a relatively short period incentive
system in order to make it more friendly and achievable
The milk rejected by Mother dairy due to sub-standard is used by other
local dairy owners and hence their quality is much inferior. This should
be advertised
Mother dairy should come up with a scheme for consumers like discount
on Mother dairy Ice cream or any other product on supplying empty
pouch packets of Mother dairy milk
Differential margin should be given by the LADs to the retailers
depending upon the location and sales
LADs should be directed to supply milk to small retailers according to
their preference of time ,sometimes late by 6.30 -7.30
LADs should supply milk through cycle vans and small trolleys also like
competitors to areas where trucks cannot go
Factory visits helped consumers a lot in understanding the product.LAD
should organize the same with the help of MDC officials
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REFERENCES
http://www.motherdairycalcutta.com/
http://en.wikipedia.org/wiki/Main_Page
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ANNEXURE
Questionnaire
DISTRIBUTOR
1. Name -
2. Address -
3. Phone -
4. Avg daily sales (in lts):-
1500 – 3500
3500 - 5500
5500 – 7500
7500 – 9500
9500+
5. How would you rate your retailers drop out?
Satisfactory
Unsatisfactory
6. Which type of milk sells the most?
DTM
TM
FCM
CM
SM
7. Rate Mother dairy on the scale of 1-5 on the following factors ( 1 as worst and
5 as best) :-
Particulars 1 2 3 4 5
Margin
Timeliness
Credit limit
Incentives
Demand of
retailers
Quality
Packaging
Hygiene
Competitiveness
YES
NO
9. Suggestions/Complains :
*---------------------------*
RETAILER
1. Name of shop -
2. Address -
3. Phone -
4. Lad name -
5. Avg daily sales (in lts):-
10-50
50 – 150
150 – 300
300 – 450
450
6. How would you rate your present sales?
Satisfactory
Unsatisfactory
7. If the answer to the above is unsatisfactory then please choose the reasons
from below:
DTM
TM
FCM
CM
SM
9. Who is the major competitor of Mother dairy?
Amul
Metro Dairy
Red Cow
Others
11. Suggestions/Complains :-
*---------------------------*
CONSUMER
1. Name -
2. Address -
3. Avg daily consumption (in lts):-
a) .5 - 1 b) 1 – 2 c) 2 – 3 d) 3 +
a) YES b) NO