M.B.

A PROGRAMME

INTRODUCTION
As the twentieth century draws to a close, and we enter into twenty first
century. India is a celebration in diversity. Its people differ not only in the usual
ways by age and gender, by race and culture, by education and occupation, by
material status and living arrangements but also in their activities and interests,
their preference and opinions. They differ in the music they like, the television
shows they watch, the political beliefs they hold, the clothing they wear.
Our society is a study in diversity. We see diversity
among consumers, among marketers, among customs, among nations, even
among consumer behaviour theoretical perspectives. However, despite
prevailing diversity in our society, there also are many similarities. Segmenting
target audiences on the basis of such similarities makes it possible for
marketers to design marketing strategies with which consumers will identity.
The study of consumer behaviour enables markets to
understand and predict consumer behaviour in the market place, it also
promotes understanding of the role that consumption plays in the lives of
individuals. Consumer behaviour is defined as the behaviour that consumers
display in searching for purchasing using, evaluating, and disposing of
products, services and ideas that they expect will satisfy their needs. The study
of consumer behaviour is concerned not only with what consumer buy, but also
with why they buy it, when and where and how they buy it, and how often they
buy it. It is concerned with learning the specific meanings that products hold
for consumers research takes place at every phase of the consumption process.
Before the purchase, during the purchase, and after the purchase.
Consumer, behaviour is interdisciplinary; that is,
it is based on concepts and theories about people that have been developed by
scientists in such diverse disciplines as psychology social psychology. Culture
anthropology and economics, consumer research is the methodology used to
study consumer behaviour.

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Consumer behaviour:
Consumer behaviour may be defined as the acts of
individuals in obtaining and using goods and services, including the decision
processes that precede and determine these acts this definition includes both the
ultimate consequence and the industrial users. The behaviour of these two
consumers differ a lot. A major difference in the purchasing behaviour of
industrial consumer is that addition influences can be exerted on the industrial
purchasing agent from with in the organization our approach of consumer
behaviour is to view it as a decision process and the act of purchasing is one of
the acts in the process in order to understand consumer behaviour clearly we
must understand the events from individual and environmental influences
consumer behaviour results from individual and environmental influences.
Consumer often purchase the goods and services which
they want others to accept, behaviour is therefore, determined by the
individuals psychological makeup and the influence of others. Thus, behaviour
is the results of the interaction of the consumer personal influences and the
pressure exerted upon them by out side forces in the environment.

The study of consumer behaviour:

The study of consumer is the study of how
individuals make decisions to spend their available resources (time, money,
effort) on consumption related items. It includes the study of what they buy,
why they buy it, and how often use it. Take the simple product toothpaste,
consumer researchers what to know that types of toothpaste consumers buy
(gel, regular, striped, in a tube, with a pump); what brand (national brand,
private brand, generic brand); why they buy it (to prevent cavities, to remove
stain, to brighten or whiten teeth, to use a mouth wash, to attract romance);
where they buy it (super market, drugstore, connivances store,) how often they
use it (when they wake up, after each meal, when they go to bed or any
combination thereof); and how often they buy it (weekly, monthly).
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Consider a more durable product, such as the fax machine. What kinds of
consumers buy fax machines for home use? What features do they look for
what benefit do they seek? What types of documents do they fax and for what
reasons? How likely they to replace their old model when new models.

Evolution of consumer behaviour

There are a number of reasons why the study of
consumer behaviour developed as a separate marketing discipline. Marketing
had long noted that consumers did not always act or react as marketing theory
suggested they would. The size of the consumer market in this county is vast
and constantly expanding. Lots of money was being spent on goods and
services by tens of millions of people. Consumer preferences were changing
and becoming highly diversified. Even in industrial markets, where needs for
goods and services were always more homogenous than in consumer markets,
buyers were exhibiting diversified preferences and less predictable purchase
behaviour.
To better meet the needs of specific groups of consumer, most
marketers adopted a policy of market segmentation, which called for the
division of their total potential markets into smaller, homogeneous segments
for which they could design specific products and or promotional companies.
They also used promotional techniques to vary the image of their products so
that they would be perceived as better fulfilling the specific needs of certain
target segments a process not known as positioning.
Other reasons for the developing interest in consumer behaviour
included the rate of now product development, growth of the consumer
movement. Public policy concerns, environmental concerns, and the growth of
both non profit marketing and international marketing.
Indeed, a major stumbling block to many international
marketing efforts has been the general lack of familiarity with the needs,
preferences, and consumption habits of consumers in foreign markets.
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Marketers now use cross cultural consumer research studies as the basis for
product development and promotional strategies to meet the needs of targeted
foreign consumers.

Evolution of marketing concept :

The filed of consumer behaviour is rooted in the
market concept, a marketing strategy that evolved in the late 150s, after
marketers passed through a series of marketing approaches referred to as the
production concept, the production concept and the selling concept.
When world war it ended, marketers found they
could sell almost any goods they could produce to consumers who had done
without while the nations manufacturing facilities were dedicated to the
production of war material. This marketing approach is called a product
orientation. Its implicit marketing objectives are cheap, efficient product and
intensive distribution. A production orientation is a feasible marketing strategy
when consumers are more interested in obtaining the product them they are in
its specific features. When demand exceeds supply, a production orientation
com work. Consumers will buy whats available, rather than for what really
want.
A production orientation should not be confused
with a product orientation, which assumes that consumers will buy the product
that offers them then the highest quality, the best performance, and the most
features. A product orientation leads a company to strive constantly to improve
the quality of its product, with a result often referred to as marketing myopia
that is, a focus on the product, rather than on the consumer needs it presumes to
satisfy. A marketers in have with its products may improve it far beyond its
worth to the consumer, passing the cost of unneeded quality or special features
on to the public. In highly competitive markets some companies keep adding
unnecessary features in hopes of attracting buyers.

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A natural evolution from both a production orientation and a
product orientation is selling orientation, which a marketers primary focus is
selling the products that it has unilaterally decided to produce. The implicit
assumption in the selling orientation is that consumers are unlikely to buy a
product unless they are actively and aggressively persuaded to do so. The
problem with a selling orientation is that it does not take consumer satisfaction
into account. When consumer are induced to buy products that they dont want
or need, any resulting unhappiness is likely to be communicated through
negative word of mouth that may dissuade other potential consumers from
making a similar purchase. Further more, when the product does not fulfill a
consumer need, it is unlikely that a repeat purchase will be forth coming.
It the late 1950s some markers began to realize that they
could more goods, more easity, if they produced only those goods that they had
predetermined consumers would buy. Instead of trying to persuade customers
to buy what they had already produced, marketing oriented firms endeavored to
produce only products that they had first and wants became the firm[s primary
focus. This consumer oriented marketing philosophy came to be known as the
marketing concept. The they assumption underlying the marketing concept is
based on the premise that a marketer should make what it can sell, instead of
trying to sell what it can sell, instead of trying to sell what is has made. While
the selling concept focused on the needs of the seller the marketing concept
focuses squarely on the needs of the buyer the wide spread adoption of the
marketing concept by American business provided the impetus for the study of
consumer behaviour to identify unsatisfied consumer needs.

Consumer behaviour and marketing management

Effective business managers realize the importance of
marketing to the success of their firm. Marketing may be defined as:
The process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services to create exchanges

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that satisfy individual and organizational objectives, a sound understanding of
consumer behaviour is essential to the long-run success of any marketing
program. In fact, it is seen as a cornerstone of the marketing concept, an
important orientation of philosophy of many marketing managers, the essence
of the marketing concept is captured in three interrelated orientation.

Company objectives:
Consumers want and needs are numerous, therefore, a firm
that concern tract is on satisfying a small proportion of all desires will most
effectively utilize its resources. Company objectives and any of the firms
special advantages are used as criteria to select the specific wants and needs to
be addressed.

Integrated strategy
An integrated effort is most effective in achieving a firms
objectives through consumers satisfaction for maximum impact their requires
that marketing efforts be closely co-ordinate and compatible with each other
and with other activities of the firm.
Every markets has to study consumer markets and
behaviour prior to developing it marketing plan. This enables marketers to
under standing who constitutes the market, what and why the market buys, who
participates in the buying, and now when, and where the market buys.
It is important for marketers and future marketers to
recognize why and how individuals make their consumption decisions, their
consumption decisions, so that they can make better strategic marketing
decisions, if marketers understand consumer behaviour, they are able to predict
how consumers are likely to react to various informational and environmental
cues, and are able to shape their marketing strategies according without doubt,
marketing who understand consumer behaviour have great competition
advantage in the market place.

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Analyzing consumer markets and buyer behaviour

The aim of marketing is to meet and satisfy
customers needs and wants the field of consumer behaviour studies how
individuals, groups and organization select, buy, use, dispose of goods,
services, ideas, or experiences to satisfy their needs and desire understanding
consumer behaviour and knowing customers are never simple. Customers
may say one thing but do another. They may not be in touch with their deepa
motivation. They may respond to influences that change their mind at the last
minute.
Before developing their marketing plans marketing
need to study consumer market and consumer behaviour. In analyzing
consumer markets firm need to research who constitutes the market. What the
market buys, why the market buys, who participates in the buying, how the
market buys, when the market buys, and where the market buys, and where the
market buys.
Consumer behaviour is influenced by four factors,
cultural (culture, subculture, and social class); social (reference groups, family,
and social roles and statues,); personal (age, stage in the life cycle, sex,
occupation, economic circumstances, life style, personality and self concept);
and psychological (motivation, perception, learning, beliefs, and attitudes).
Research into all these factors can provide clues as to how to reach and serve
consumers more effectively.
The Indian consumer market consists of more then 1
billion people who consume many crore rupees worth of goods and serveices
each other making it one of the most attractive consumer markets in the
world .the world consumer market consists of more than 6.5 billion people
.consumers around the world .very greatly the age income ,education ,level
,and tastes ,understanding how these differences affect consumer buying
behaviour is one of the biggest challenges marketers face.

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Stages in buyer decision process

When making a purchase the buyer goes through a
decision

process consisting of need recognition .information search ,and

evaluation of alternatives ,perchase decision .and post purchase behaviour the

marketers job is to understand the buyers behaviour at each stage and the
influences

that are operating .during

need

recognition .the consumer

recognizes a problems or need that could be satisfied by a product of secure in

the market.
Once the need is recognized ,the consumer is around to
such more information and moves into the information search stage .with
information search stage with information in hand the consumer proceeds to
alternative evaluation ,during which the information is used to evaluate brands
in the choice set. from there, the consumer makes a purchase decision and
actually buys the product .then the final stage of the buyer decision process ,
post-purchase behaviour , the consumer takes action based on satisfaction or
dis satisfaction.

Adoption and diffusion process

The product adoption process is compressed of five stages . a
awareness interest , evaluation trail and adoption .initially , the consumer must
became aware of the new product . awareness leads to interest ,and the
consumer enters the evaluation stages and consideration buying the new
product. Next in the trail stage his or her estimate of its value . if the consumer
is satisfied with the product .he or she enters the adoption stage deciding to use
the new product fully and regularly .with regarded to diffusion of new
product fully and regularly . with regarded to diffusion of new products.
consumers characteristics and the products characteristics .consumer may be
innovators or loggias innovators.

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Statement of the problem

Every output produce by the manufacture should
finally reach the customers so the customer is the sovereign of the market and
his satisfaction should be given lot of importance. But in majority of the cases,
the manufactures are not directly dealing with the customers and they are
delegating this job to the marketing intermediaries. In other words, the
manufactures

are

building

distribution

mechanism

excepting

direct

involvement in marketing the important intermediaries are distributors, dealers,

stockiest, whole sellers and retailers, etc.
Though there are good number of member are
involving in the distribution process, only few of them are having close
association and interaction with the customers, viz., whole sellers and retailers.
So, the retailers are the people having very good interaction with the customer
and they are able to asses the customer very easily without maintain the direct
contact with the customer, understanding the customer and his plight as well as
competitors position in the market is almost all impossible to the manufactures.

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OBJECTIVE OF THE STUDY

Primary objective:
1. Finding the consumer behavior towards Vijaya Dairy.
2. To know the consumers satisfaction level towards quality & durability
of Vijaya Dairy.
3. To know the consumers satisfaction level towards price & service after
sales of Vijaya Dairy.
4. To analyze most influencing factor of the customer to purchase the
Vijaya Dairy.

Secondary objective:
To study the consumers opinion about the promotional offers practiced
by the company.
To identify the consumer awareness on Vijaya Dairy advertisement.
To know the purpose of purchase.
To know the level of consumer satisfaction towards availability &
transportation of Vijaya Dairy.
To know the consumer awareness on other brands.

SCOPE OF THE STUDY

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1. The questionnaire survey can help researches to get the supplementary
opinions and information which help him to write the research report in
more detailed and scientific way.
2. To the best of research knowledge many customers are not aware of bright
image and brand loyalty, price concessions and quality of the soft drinks
and this report could be of use to publicize this information
3. Creating a future customer base may offer to improve more brand image
consumession etc.
4. The scope of this study is data limited to the organization only
5. When the focus is on identifying and satisfying the wants and needs of
consumers,
6. the intention of the firm is not seen as merely providing goods and services.
7. Instead, want and need satisfaction is viewed as the purpose, and providing
products and services is the many to achieve that end.

METHODOLOGY OF THE STUDY

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The data collection methods include both the primary and
secondary collection methods.

Primary data collection method:

The data, which is collected fresh for a specific purpose
in hand. Communication and observation are two basic means of obtaining
primary data collecting method. Communication involves the questioning of
respondent to secure the desired information using a data collecting
instruments. Called questionnaire in this research I used structured
questionnaire for collecting primary data collection method.

Secondary data collection method

hose data that have already been collected by some one
else about the product, about the industry etc., for instance in this study
secondary data was collocated from company brochures, annual reports, and
previous research, company website, www.tulasimilk productspvtltd.com

Sampling data

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Sampling:
An integral component of a research design is the sampling plan.
Specifically it addresses three question whom to the survey how many to
survey.
Deciding whom to survey requires that the universe or boundaries
of the market from which data is sought be defined so that an appropriated
sample can be selected inter viewing the correct target market or market or
potential target market is basic to the validity of the study.

Sample frame:
After defining the population the second step, is developing
the sample frame, in may defined as the listing of the components of the
individuals units that companies the defined population.

Sampling procedure:
It feels about how the respondents should be chosen. The
sampling procedure that adopted is non probability sampling. It is specially
convenience sampling

Size of the sample:

The size of the sample is dependent both on the size of the
budget and the degree of confidence that the marketers wants to place in the
findings the larger the sample the sample size selected was 120 respondents.
The study area is restricted to guntur.

Data analysis:
The collected data is tabulated and then analyzed
by using simple parentage and represented by different types of
groups

SIGNIFICANCE OF THE STUDY

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Studying consumer behavior provides clues for
improving or introducing products or services, setting prices, devising
channels, and developing other marketing activities. Marketers are always
looking for emerging trends that suggest new marketing opportunities.
Today's global companies spending huge
amount of money to conduct consumer research. For this purpose they have the
special departments like Research and Development. These global companies
keep on doing research on the products and their customers.
From research and surveys companies
get the true picture of its standing in the market. According to the consumers'
feedback they further develop and improve their products. For consumer it is
an advantage that the company gives respect to his views and attitude and
brings changes in the products accordingly.

NEED FOR THE STUDY

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The study is conducted for the following needs
To know various procedure and patterns followed for computation of
consumer behaviuour in the organization.
To have a personnel exposure by visiting the organization for many
times.
To develop the communication skill by preparing the project report.
To study the role of consumer behaviour and application in the
organization.
To know more information about the consumer behaviour both
theoretically and partially.

Consumes wants and needs:

When the focus is on identifying and satisfying
the wants and needs of consumers, the intention of the firm is not seen as
merely providing goods and services. Instead, want and need satisfaction is
viewed as the purpose, and providing products and services is the many to
achieve that end.

LIMITATION OF STUDY

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1. The selected sample members are conspicuous and the conspicuous in
nature .so, there is a chance to arise some errors in the course of survey
2. The errors may be as follows
3. Respondents may not disclose the sight information because

the

research is very stranger to the research even thought it is very

stranger to them
4. The respondents may give pleasing answer to the

research even

thought it is not correct from their respective

5. Since a sample size is small a perfect mix of the respondents may not
be available for the research to conduct the opinion survey
6. Some respondents may give out vague answer to the questions and
there by restricting us from including them in the survey .
7. The duration of the study for two months is constraint to achieve of
Milk products .
8. Collection of current data is also a limiting factor because of
confidentially.

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INDUSTRY PROFILE
INTRODUCTION TO INDIAN MILK INDUSTRY:
Dairying has been of life in India since the ancient Vedic times. The
modern dairy industry took roots in 1950 with the sale of bottled milk in
Bombay from Array milk colony. The first large scale milk products factory
was started in 1945 at Anand a Co-operative venture, with the assistance of
UNICEF, for the production of milk powder, table butter and ghee. These
products were making from the buffalo milk.
The worlds largest development program over undertaken, the
operation flood undertook and gigantic task of upgrading and modernizing with
production, procurement, processing and marketing with the assistance
provided by the World Bank and other external agencies, designed and
implemented by the National Dairy Development Board (NDBD) and the
Indian Dairy Corporation. The project was launched in July, 1970. Its basic
concept compromises the establishment of co-operative structure on Ananda
Pattern.
OPERATION FLOOD-1:
Operation flood-1 also referred to as while revolution in a gigantic
project profounder by Government of India for developing Dairy Industry in
the country. The Operation Flood-2 originally meant to be completed in 1975
for its completion at total cost of about Rs.116 Crores. The Operation Flood-2
was wholly financed by setting in India free metric tons of bottle oil donated
out of the surpluses of European Economic Community.
ANAND PATTERN-1:
Under the Operation Flood-1 the program for increasing milk
production was taken up in ice hinterlands of various breading tracks on Anand
Pattern and loudly proclaimed with a trample. The Co-operative were started

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originally in 18 of Indian Milk shed districts and later on mine more milk shed
areas were added to make a total of 27 in 10 states of the country viz.,
Maharashtra, Tamilnadu, Andhra Pradesh, West Bengal, Bihar, Haryana,
Punjab, Uttar Pradesh and Rajasthan.
These dairy co-operative are based on the model known as Anand
Pattern of dairy co-operative. Under Anand pattern concept rural co-operative
infrastructure was to be built in the village, the milk producers were to form
their own village dairy co-operative. In the sphere of co-operativisation the No.
of Anand Pattern organized societies under operation flood was 63121 on April
1st 1991 as age INST 6753 a year ago indicate one that years as many as 2368
new dairy co-operatives were formed.
OPERATION FLOOD-2:
The Operation Flood-2 which was started in July 1978 is scheduled to
be completed in 1985 at a cost of 483 crores. The Indian Dairy co-operative,
National possible are not required to indicate the basis on which the State wise
allocation were made in operation flood-2 up to end of the 11,1979 Gujarat
State alone got the lions shares of 1666. 70,00,000 five sate Haryana, Bihar,
Rajasthan and Andhra Pradesh put together the total disbursement in their case
was 1732 lakhs only. This trend is going to be maintained in Operation Flood2.
OPERATION FLOOD-3:
The Indian Dairy Industry is growing rapidly and may become a string
competitor to World Dairy Powder. The milk sector in the second largest
contribution to the agricultural economy in terms of produce phenomenal
growth is a result of national airy development board through the Operation
Flood programs.
Operation Flood-2 now in its closing phase only consolidated the
procurement affords to boost production. The projection for milk output for
200 AD is nearly 90 tones at on5% growth rate. It is now 5-8% dairy factories
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established under operation flood, which cover 170 milk sheds can handle 14.3
million liters milk dairy. They have a milk drying capacity of about 696 tons
per day. The rapid growth in milk powder except for a (26400 tones) during the
drought years.
NATIONAL DAIRY DEVELOPMENT BOARD:
At the time of industrialization at cattle feed factory at Knjari in October 1964
the late Sri LAL BAHADUR SASTRY, the Prime Minister of India paid
unscheduled visit producers co-operative societies and stated there overnight.
He was impressed by the social economic changes brought milk co-operative in
Krishna District and desired to have a National level organization to milk
producers co-operative societies replicate anansin other part of the Country.
Thus the National Dairy Development Board was sent up under the
empowerment of Ministry of Agriculture and Irrigation, Govt. Of India in
September1965 under the Society Registration Act.1860 and the Bombay
Trust Act.1950. The president of India nominates the Board of Directors
including Chairman, Secretary, and National Dairy Development Board in the
chief of the organization.
ANAND PATTERN DAIRY DEVELOPMENT:
The information Anand pattern of milk co-operative was launched with
the organization of Krishna District co-operative Milk Producers Union
Limited. In this pattern the function of dairy is milk procurement, processing
and marketing are controlled by the milk producers themselves.
PLANNING INVESTMENT:
1. 33.43 Crores
2. 247.53 Crores
3. 187.00 Crores
4. 349.00 Crores

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5. 116.00 Crores
6. 600.00 Crores
Indian dairy Industry - a profile
Today, India is 'The Oyster' of the global dairy industry. It offers
opportunities galore to entrepreneurs worldwide, who wish to capitalize on one
of the world's largest and fastest growing markets for milk and milk products.
A bagful of 'pearls' awaits the international dairy processor in India. The Indian
dairy industry is rapidly growing, trying to keep pace with the galloping
progress around the world. As he expands his overseas operations to India
many profitable options await him. He may transfer technology, sign joint
ventures or use India as a sourcing center for regional exports. The
liberalization of the Indian economy beckons to MNC's and foreign investors
alike.
Indias dairy sector is expected to triple its production in the next 10
years in view of expanding potential for export to Europe and the West.
Moreover with WTO regulations expected to come into force in coming years
all the developed countries which are among big exporters today would have to
withdraw the support and subsidy to their domestic milk products sector. Also
India today is the lowest cost producer of per litre of milk in the world, at 27
cents, compared with the U.S' 63 cents, and Japans $2.8 dollars. Also to take
advantage of this lowest cost of milk production and increasing production in
the country multinational companies are planning to expand their activities
here. This will help them in marketing their products in foreign countries in
processed form.
The urban market for milk products is expected to grow at an
accelerated pace of around 33% per annum to around Rs.43,500crores by year
2013. This growth is going to come from the greater emphasis on the processed
foods sector and also by increase in the conversion of milk into milk products.
By 2013., the value of Indian dairy produce is expected to be Rs 10,00,000
million. Presently the market is valued at around Rs7,00,000mn
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Background:
India with 134mn cows and 125mn buffaloes has the largest population
of cattle in the world. Total cattle population in the country as on October'00
stood at 313mn. More than fifty percent of the buffaloes and twenty percent of
the cattle in the world are found in India and most of these are milch cows and
milch buffaloes.
Indian dairy sector contributes the large share in agricultural gross
domestic products. Presently there are around 70,000 village dairy cooperatives
across the country. The co-operative societies are federated into 170 district
milk producers unions, which is turn has 22-state cooperative dairy federation.
Milk production gives employment to more than 72mn dairy farmers. In terms
of total production, India is the leading producer of milk in the world followed
by USA. The milk production in 1999-00 is estimated at 78mn MT as
compared to 74.5mn MT in the previous year. This production is expected to
increase to 81mn MT by 2000-01. Of this total produce of 78mn cows' milk
constitute 36mn MT while rest is from other cattle.
Milk Yield comparison:
Country

Milk Yield (Kgs per year)

USA
UK
Canada
New Zealand
Pakistan
India
World (Average)

7002
5417
5348
2976
1052
795
2021

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Production of milk in India
Year

Production in million MT

2001-02

48.4

2002-03

51.4

2003-04

53.7

2004-05

56.3

2005-06

58.6

2006-07

61.2

2007-08

63.5

2008-09

65

2009-10

68.5

2010-11

70.8

2011-12

74.7

2012-13

78.1

2013-14

81.0

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World's major milk producers
(Million MTs)
1998-99

Country

1997-98

India

71

74.5

USA

71

71

Russia

34

33

Germany

27

27

France

24

24

Pakistan

21

22

Brazil

21

27

UK

14

14

Ukraine

15

14

Poland

12

12

New Zealand

11

12

Netherlands

11

11

Italy

10

10

Australia

10

(Approx.)

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Operation Flood
The transition of the Indian milk industry from a situation of net import
to that of surplus has been led by the efforts of National Dairy Development
Board's Operation Flood. programme under the aegis of the former Chairman
of the board Dr. Kurien. Launched in 1970, Operation Flood has led to the
modernization of India's dairy sector and created a strong network for
procurement processing and distribution of milk by the co-operative sector. Per
capita availability of milk has increased from 132 gm per day in 1950 to over
220 gm per day in 1998. The main thrust of Operation Flood was to organize
dairy cooperatives in the milk shed areas of the village, and to link them to the
four Metro cities, which are the main markets for milk. The efforts undertaken
by NDDB have not only led to enhanced production, improvement in methods
of processing and development of a strong marketing network, but have also
led to the emergence of dairying as an important source of employment and
income generation in the rural areas. It has also led to an improvement in
yields, longer lactation periods, shorter calving intervals, etc through the use of
modern breeding techniques.

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Per Capital availability of milk
Year

gm/day

1999-2000

132

2000-01

127

2001-02

113

2002-03

111

2003-04

128

2004-05

178

2005-06

192

2006-07

198

2007-08

200

2008-09

202

2009-10

203

2010-11

212

2011-12

225

2012-13

250

Fresh Milk
Over 50% of the milk produced in India is buffalo milk, and 45% is cow
milk. The buffalo milk contribution to total milk produce is expected to be 54%
in 2000. Buffalo milk has 3.6% protein, 7.4% fat, 5.5% milk sugar, 0.8% ash
and 82.7% water whereas cow milk has 3.5% protein, 3.7% fat, 4.9% milk
sugar, 0.7% ash and 87% water. While presently (for the year 2000) the price of
Buffalo milk is ruling at $261-313 per MT that of cow is ruling at $170-267 per

25

M.B.A PROGRAMME
MT. Fresh pasteurized milk is available in packaged form. However, a large
part of milk consumed in India is not pasteurized, and is sold in loose form by
vendors. Sterilized milk is scarcely available in India.
Packaged milk can be divided according to fat content as follows,
Whole (fullcream) milk - 6% fat
Standardized(toned) milk - 4.5% fat
Doubled toned (lowfat) milk - 3% fat
Another category of milk, which has a small market is flavoured milk.
The Indian Market - A PyramidConsumer Habits And Practices
Milk has been an integral part of Indian food for centuries. The per
capita availability of milk in India has grown from 172 gm per person per day
in 1972 to 182gm in 1992 and 203 gm in 1998-99.This is expected to increase
to 212gms for 1999-00.
In India about 46 per cent of the total milk produced is consumed in
liquid form and 47 per cent is converted into traditional products like cottage
butter, ghee, paneer, khoya, curd, malai, etc. Only 7 per cent of the milk goes
into the production of western products like milk powders, processed butter and
processed cheese. The remaining 54% is utilized for conversion to milk
products. Among the milk products manufactured by the organized sector some
of the prominent ones are ghee, butter, cheese, ice creams, milk powders,
malted milk food, condensed milk infants foods etc. Of these ghee alone
accounts for 85%.
While for cooperatives of the total milk procured 60% is consumed in
fluid form and rest is used for manufacturing processed value added dairy
products; for private dairies only 45% is marketed in fluid form and rest is
processed into value added dairy products like ghee, makhan etc.

26

M.B.A PROGRAMME
Still, several consumers in urban areas prefer to buy loose milk from
vendors due to the strong perception that loose milk is fresh. Also, the current
level of processing and packaging capacity limits the availability of packaged
milk.
The preferred dairy animal in India is buffalo unlike the majority of the
world market, which is dominated by cow milk. As high as 98% of milk is
produced in rural India, which caters to 72% of the total population, whereas
the urban sector with 28% population consumes 56% of total milk produced.
Even in urban India, as high as 83% of the consumed milk comes from the
unorganized traditional sector.
Presently only 12% of the milk market is represented by packaged and
branded pasteurized milk, valued at about Rs. 8,000 crores. Quality of milk
sold by unorganized sector however is inconsistent and so is the price across
the season in local areas. Also these vendors add water and caustic soda, which
makes the milk unhygienic.
Growing Volumes
The effective milk market is largely confined to urban areas, inhabited
by over 25 per cent of the country's population. An estimated 50 per cent of the
total milk produced is consumed here. By the end of the twentieth century, the
urban population is expected to increase by more than 100 million to touch 364
million in 2000 a growth of about 40 per cent. The expected rise in urban
population would be a boon to Indian dairying. Presently, the organized sector
both cooperative and private and the traditional sector cater to this market.
The consumer access has become easier with the information revolution.
The number of households with TV has increased from 23 million in 1989 to
45 million in 1995. About 34 per cent of these households in urban India have
access to satellite television channel.

27

M.B.A PROGRAMME
Potential for further growth
Of the three A's of marketing - availability, acceptability and
affordability, Indian dairying is already endowed with the first two. People in
India love to drink milk. Hence no efforts are needed to make it acceptable. Its
availability is not a limitation either, because of the ample scope for increasing
milk production, given the prevailing low yields from dairy cattle. It leaves the
third vital marketing factor affordability. How to make milk affordable for the
large majority with limited purchasing power? That is essence of the challenge.
One practical way is to pack milk in small quantities of 250 ml or less in
polythene sachets. Already, the glass bottle for retailing milk has given way to
single-use sachets which are more economical.
Marketing Strategy for 2000 AD
Two key elements of marketing strategy for 2000 AD are: Focus on
strong brands and, product mix expansion to include UHT milk, cheese, ice
creams and spreads. The changing marketing trends will see the shift from
generic products to the packaged quasi, regular and premium brands. The
national brands will gradually edge out the regional brands or reduce their
presence. The brand image can do wonders to a product's marketing as is
evident from the words of Perfume Princess Coco Channel: In the factory, we
pack perfume; in the market, we sell hope!
Emerging Dairy Markets

Food service institutional market: It is growing at double the rate of

consumer market

Defense market: An important growing market for quality products at

reasonable prices

Ingredients market: A boom is forecast in the market of dairy products

used as raw material in pharmaceutical and allied industries

28

M.B.A PROGRAMME

Parlour market: The increasing away-from-home consumption trend

opens new vistas for ready-to-serve dairy products which would ride
piggyback on the fast food revolution sweeping the urban India.

India, with her sizable dairy industry growing rapidly and on the path of
modernization, would have a place in the sun of prosperity for many decades to
come. The one index to the statement is the fact that the projected total milk
output over the next 15 years (1995-2010) would exceed 1457.6 million tones
which is twice the total production of the past 15 years!
Penetration of milk products
Western table spreads such as butter, margarine and jams are not very
popular in India. All India penetration of butter/ margarine is only 4%. This is
also largely represented by urban areas, where penetration is higher at 9%. In
rural areas, butter/ margarine have penetrated in 2.1% of households only. The
use of these products in the large metros is higher, with penetration at 15%.
Similarly, penetration of ghee is highest in medium sized towns at
37.2% compared to 31.7% in all urban areas and 21.3% in all rural areas. The
all India penetration of ghee is 24.1%. In relative terms, penetration of ghee is
significantly higher in North and West, which are milk surplus regions. North
accounts for 57% of ghee consumption and West for 23%, South & East
together account for the balance 20%. A large part of ghee is made at home and
by small/ cottage industry from milk. The relative share of branded products in
this category is very low at around 1-2%.
Milk powder and condensed milk have not been able to garner any
significant consumer acceptance in India as indicated by a very low 4.7%
penetration. The penetration is higher at 8.1% in urban areas and lower at 3.5%
in rural areas. Within urban areas, it is relatively higher in medium sized towns
at 8.5% compared to 7.7% in large metros.

29

M.B.A PROGRAMME
Market Size And Growth
Market size for milk (sold in loose/ packaged form) is estimated to be
36mn MT valued at Rs470bn. The market is currently growing at round 4% pa
in volume terms. The milk surplus states in India are Uttar Pradesh, Punjab,
Haryana, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Karnataka and
Tamil Nadu. The manufacturing of milk products is concentrated in these milk
surplus States. The top 6 states viz. Uttar Pradesh, Punjab, Madhya Pradesh,
Rajasthan, Tamil Nadu and Gujarat together account for 58% of national
production.
Milk production grew by a mere 1% pa between 1947 and 1970. Since
the early 70's, under Operation Flood, production growth increased
significantly averaging over 5% pa. About 75% of milk is consumed at the
household level which is not a part of commercial dairy industry. Loose milk
has a larger market in India as it is perceived to be fresh by most consumers. In
reality however, it poses a higher risk of adulteration and contamination.

30

M.B.A PROGRAMME
Major Players
The packaged milk segment is dominated by the dairy cooperatives.
Gujarat Co-operative Milk Marketing Federation (GCMMF) is the largest
player. All other local dairy cooperatives have their local brands (For e.g.
Gokul, Warana in Maharashtra, Saras in Rajasthan, Verka in Punjab, Vijaya in
Andhra Pradesh, Aavin in Tamil Nadu, etc). Other private players include J K
Dairy, Heritage Foods, Indiana Dairy, Dairy Specialties, etc. Amrut Industries,
once a leading player in the sector has turned bankrupt and is facing
liquidation.
Packaging Technology
Milk was initially sold door-to-door by the local milkman. When the
dairy co-operatives initially started marketing branded milk, it was sold in glass
bottles sealed with foil. Over the years, several developments in packaging
media have taken place. In the early 80's, plastic pouches replaced the bottles.
Plastic pouches made transportation and storage very convenient, besides
reducing costs. Milk packed in plastic pouches/bottles have a shelf life of just
1-2 days, that too only if refrigerated. In 1996, Tetra Packs were introduced in
India. Tetra Packs are aseptic laminate packs made of aluminum, paper, board
and plastic. Milk stored in tetra packs and treated under Ultra High
Temperature (UHT) technique can be stored for four months without
refrigeration. Most of the dairy co-operatives in Andhra Pradesh, Tamil Nadu,
Punjab and Rajasthan sell milk in tetra packs. However tetra packed milk is
costlier by Rs5-7 compared to plastic pouches. In 1999-00 Nestle launched its
UHT milk. Amul too re-launched its AmulTaaza brand of UHT milk. The UHT
milk market is expected to grow at a rate of more than 10-12% in coming
years.

31

M.B.A PROGRAMME
Export Potential
India has the potential to become one of the leading players in milk and
milk product exports. Location advantage: India is located amidst major milk
deficit countries in Asia and Africa. Major importers of milk and milk products
are Bangladesh, China, Hong Kong, Singapore, Thailand, Malaysia,
Philippines, Japan, UAE, Oman and other gulf countries, all located close to
India.
Low Cost of Production: Milk production is scale insensitive and labour
intensive. Due to low labour cost, cost of production of milk is significantly
lower in India.
Quality: Significant investment has to be made in milk procurement,
equipments, chilling and refrigeration facilities. Also, training has to be
imparted to improve the quality to bring it up to international standards.
Productivity: To have an exportable surplus in the long-term and also to
maintain cost competitiveness, it is imperative to improve productivity of
Indian cattle.
India's exports of milk products
Description

2010-11

2011-12

2012-13

(Quantity, M T.:
Value,

Rs. Quantity Value

millions)
Skimmed

milk 4,638.6

powder
Milk

and

Milk

Food for babies

Milk cream

3,35.

Quanti

Val

Quanti

ty

ue

ty

282.70

32

8.27

2.019

111.37

332.23

28.04

1.00

19.6

Value

5.00

0.375

4.27

11.00

2.02

0.08

32

M.B.A PROGRAMME
4
Sweetened
condensed milk
Whey

41.73

2.84

9.22

0.97

60.39

7.22

78.46

3.75

11.50

1.01

6.00

0.342

431.1

299.97

19.2

4,352.0

2,38.9

22.10

2.19

Ghee/Butter/Butter 7,895.0
oil

Cheese
(a) Fresh

0.10

0.013

(b) Processed

5.67

1.20

2.1

(c) Other

66.64

8.35

36.78

0.69

24.84

4.55

TOTAL

52.4

2,55.6

8,72.
7

0.37
5

The Indian Dairy Industry is Offers to Foreign Investors

India is a land of opportunity for investors looking for new and
expanding markets. Dairy food processing holds immense potential for high
returns. Growth prospects in the dairy food sector are termed healthy,
according to various studies on the subject.
An entrepreneur's participation is likely to provide attractive returns on the
investment in a fast growing market such as India, along with an export
potential in the Middle East, Singapore, Malaysia, Indonesia, Korea, Thailand,
Hong Kong and other countries in the region.
Among several areas of potential participation by NRIs and foreign
investors, the following list outlines a few promising opportunities:

33

M.B.A PROGRAMME
Biotechnology:

Dairy cattle breeding of the finest buffaloes and hybrid cows

Milk yield increase with recombinant somatotropin

Recombinant chymosin, acceptable to vegetarian consumers

Dairy cultures, probiotics, dairy biologics, enzymes and coloring

materials for food processing

Fermentation derived foods and industrial products alcohol, citric acid,

lysine, flavor preparations, etc.

Biopreservative ingredients based on dairy fermentation, viz., Nisin,

pediococcin, acidophilin, bulgarican contained in dairy powders.

Dairy/food processing equipment:

Potential exists for manufacturing and marketing of cost competitive food
processing machinery of world-class quality.
Food packaging equipment:
Opportunities lie in the manufacturing of both machinery and packaging
materials that help develop brand loyalty and a clear edge in the marketing of
dairy foods.
Distribution channels:
For refrigerated and frozen food distribution, a world class cold chain
would help in providing quality assurance to the consumers around the region.
Retailing:
There is scope for standardizing and upgrading food retailing in major
metropolitan cities to meet the shopping needs of a vast middle class. This area
includes grocery stores of European and North American quality, warehousing
and distribution.

34

M.B.A PROGRAMME
Product development:

Dairy foods can be manufactured and packaged for export to countries

where Indian food enjoys basic acceptance. The manufacturing may be
carried out in contract plants in India. An option to market the products
in collaboration with local establishments or entrepreneurs can also be
explored. Products exhibiting potential include typical indigenous dairy
foods either not available in foreign countries or products whose
authenticity may be questionable. Gulabjamuns, Burfi, Peda, Rasagollas,
and a host of other Indian sweets have good business prospects.

Products typically foreign to India but indigenous to other countries

could also be developed for export.

Ingredient manufacture:
Export markets for commodities like dry milk, condensed milk, ghee and
certain cheese varieties are well established. These items are utilized as
ingredients in foreign countries. These markets can be expanded to include
value-added ingredients like aseptically packaged cheese sauce and dehydrated
cheese powders.

Cheese sauce: Canned cheese sauce is made from real cheese to which
milk, whey, modified food starch, vegetable oil, colorings and spices
may be added. Cheese sauce is useful in kitchens for the preparation of
omelet, sandwiches, entrees, and soups. In addition, cheese sauce is used
as a topping on potatoes and vegetables and may be incorporated in
pasta dishes.

Cheese powders: Cheese powders are formulated for dusting or

smearing of popular snacks like potato chips, crackers, etc. They impart
flavor and may be blended with spices.

35

M.B.A PROGRAMME
Technology-driven manufacturing units:
These plants would fulfill an essential need by providing a centralized
and specialized facility for hire by the units which cannot justify capital
investment but do need such services. Potential areas for state-of-the-art
contract-pack units may conceivably specialize in cheese slicing, or dicing line,
cheese packaging, butter printing, and aseptic packaged fluid products..
Indian (traditional) Milk Products:
There are a large variety of traditional Indian milk products such as
Makkhan -unsalted butter.
Ghee - butter oil prepared by heat clarification, for longer shelf life.
Kheer - a sweet mix of boiled milk, sugar and rice.
Basundi - milk and sugar boiled down till it thickens.
Rabri - sweetened cream.
Dahi - a type of curd.
Lassi - curd mixed with water and sugar/ salt.
Channa/Paneer - milk mixed with lactic acid to coagulate.
Khoa - evaporated milk, used as a base to produce sweet Consumers while
purchasing dairy products look for freshness, quality, taste and texture, variety
and convenience. Products like Dahi and sweets like Kheer, Basundi, Rabri are
perishable products with a shelf life of less than a day. These products are
therefore manufactured and sold by local milk and sweet shops. There are
several such small shops within the vicinity of residential areas. Consumer
loyalty is built by consistent quality, taste and freshness. There are several
sweetmeat shops, which have built a strong brand franchise, and have several
branches located in various parts of a city.
36

M.B.A PROGRAMME
Branding Of Traditional Milk Products
Among the traditional milk products, ghee is the only product, which is
currently marketed, in branded form. main ghee brands are Sagar, MilkMan
(Britannia), Amul (GCMMF), Aarey (Mafco Ltd), Vijaya (AP Dairy
Development Cooperative Federation), Verka ( Punjab Dairy Cooperative),
Everyday (Nestle) and Farm Fresh (Wockhardt).
GCMMF has also made a beginning in branding of other traditional
milk products with the launch of packaged Paneer under the Amul brand. It has
also created a new umbrella brand "AmulMithaee", for a range of ethnic Indian
sweets that are proposed to be launched The first new product
AmulMithaeeGulabjamun has already been launched in major Indian markets.
Western Milk Products
Western milk products such as butter, cheese, yogurt have gained
popularity in the Indian market only during the last few years. However
consumption has been expanding with increasing urbanization.
Butter
Most Indians prefer to use home made white butter (makkhan) for
reasons of taste and affordability. Most of the branded butter is sold in the
towns and cities. The major brands are Amul, Vijaya, Sagar, Nandini and
Aarey. Amul is the leading national brand while the other players have greater
shares in their local markets. The latest entrant in the butter market has been
Britannia. Britannia has the advantages of a wide distribution reach and a
strong brand recall. Priced at par with the Amul brand, it is expected to give
stiff competition to the existing players. In 1999-00 the butter production is
estimated at 4 lakh MT of this only 45K MT is in the white form used for table
purposes rest all is in the yellow form.

37

M.B.A PROGRAMME
Cheese
The present market for cheese in India is estimated at about 9,000
tonnes and is growing at the rate of about 15% per annum. Cheese is mainly
consumed in the urban areas. The four metro cities alone account for more than
50% of consumption . Mumbai is the largest market (accounting for 30% of
cheese sold in the country), followed by Delhi (20%). Calcutta (7%) and
Chennai (6%). Mumbai has a larger number of domestic consumers, compared
to Delhi where the bulk institutional segment (mainly hotels) is larger.
Demand for various types of cheese in the Indian market :
Type of cheese

% of total consumption

Processed

50

Cheese spread

30

Mozzarella

10

Flavoured/Spiced

Others

The major players are Amul, Britannia, and Dabon International

dominating the market. Other major brands were Vijaya, Verka and Nandini (all
brands of various regional dairy cooperatives) and Vadilal. The heavy
advertising and promotions being undertaken by these new entrants is expected
to lead to strong 20% growth in the segment. Amul has also become more
aggressive with launch of new variants such as Mozzarella cheese (used in
Pizza), cheese powder, etc.

Capacity expansion in Cheese

38

M.B.A PROGRAMME
Company

Brands

Dynamix Group

Manufactures

State
for Maharashtra

Britannia
GCMMF

Amul

Capacity
35 tons per
day

Gujarat

20 tons per
day

APDDCF

Vijaya

Andhra

10 tons per

Pradesh

day

Milk Powder
Milk powder are mainly of 2 types

Whole milk powder

Skimmed milk powder

Dairy sector of advanced nations export milk products with a subsidy of $

1000 per tonne with a level of subsidy more than 60 % of the price of milk
powder produced in India, this has led to large scale imports of milk powder
both in whole and skimmed form. To protect the domestic sector from these
subsidized imports the central government has recently increased the basic
import duty on all imports of milk powder more than 10000 MT to 60% from
15%. For imports less than 10000 MT the basic customs duty has been left
unchanged at 15%.
In 1999-00 India is estimated to have imported about 18,000 tonnes of milk
powder against a total estimated production of 2.40 Lakh MTs. In 2000-01
India is expected to export 10000 MT of skimmed milk powder due to rise in
international prices to $2300 per MT from last year's levels of $1400 per MT.
These expectations are based on the strong demand from Russia, East Asia and
Latin America, and also on tightening of supply in EU, which accounts for 75%
of the annual global Skimmed Milk Powder exports.
Major Players

39

M.B.A PROGRAMME
Milk Powder/Dairy Whiteners : Major skimmed milk brands are Sagar
(GCMMF) and Nandini (Karnataka Milk Federation), Amul Full Cream milk
powder is a whole milk powder brand.Leading brands in the dairy whitener
segment are Nestle'sEveryday, GCMMF's Amulya, Dalmia Industry's Sapan,
Kwality Dairy India's KreamKountry, Wockhardt's Farm Fresh and Britannia's
MilkMan Dairy Whitener..
Value addition in milk powder - Infant Foods
Nestle is the market leader in the segment. This is a category where
brand loyalties are very strong as mothers want the best for their babies. Heinz
is the only other significant competitor to Nestle in this segment.
Nestle'sCerelac and Nestum together have around 80% market share and
Heinz's Farex has close to 18% share. Wockhardt is a relatively new entrant
with its First Food brand. Wockhardt also proposes to launch a new baby food
Easum containing moong (moong is one of the easily digestible pulses). The
Easum brand will directly compete with Nestle'sNestum (made from rice).
Regulatory Framework
The dairy industry was de-licensed in 1991 with a view to encourage
private investment and flow of capital and new technology in the segment.
Although de-licensing attracted a large number of players, concerns on issues
like excess capacity, sale of contaminated/ substandard quality of milk etc
induced the Government to promulgate the MMPO (Milk and Milk Products
Order) in 1992. Milk and Milk Products Order (MMPO) regulates milk and
milk products production in the country. The order requires no permission for
units handling less than 10,000 litres of liquid milk per day or milk solids up to
500 tpa. MMPO prescribes State registration to plants producing between
10,000 to 75,000 litres of milk per day or manufacturing milk products
containing between 500 to 3,750 tonnes of milk solids per year. Plants
producing over 75,000 litres per day or more than 3,750 tonnes per year of milk
solids have to be registered with the Central Government. The stringent
40

M.B.A PROGRAMME
regulations, government controls and licensing requirements for new capacities
have restricted large Indian and MNC players from making significant
investments in this product category.
Amul's secret of success
The system succeeded mainly because it provides an assured market at
remunerative prices for producers' milk besides acting as a channel to market
the production enhancement package. What's more, it does not disturb the agrosystem of the farmers. It also enables the consumer an access to high quality
milk and milk products.
Looking back on the path traversed by Amul, the following features make it
a pattern and model for emulation elsewhere. Amul has been able to:

Produce an appropriate blend of the policy makers farmers board of

management and the professionals: each group appreciating its roles and
limitations

Bring at the command of the rural milk producers the best of the
technology and harness its fruit for betterment

Plough back the profits, by prudent use of men, material and machines,
in the rural sector for the common good and betterment of the member
producers and

Even though, growing with time and on scale, it has remained with the
smallest producer members. In that sense, Amul is an example par
excellence, of an intervention for rural change.

Amul's success: A model for other districts to follow.

Amul's success led to the creation of similar structures of milk producers
in other districts of Gujarat. They drew on Amul's experience in project
41

M.B.A PROGRAMME
planning and execution. Thus the 'Anand Pattern' was followed not just in
Kaira district but in Mehsana, Sabarkantha, Banaskantha, Baroda and Surat
districts also. Even before the Dairy Board of India was born, farmers and their
leaders carried out empirical tests of the hypotheses that explained Amul's
success. In these districts, milk producers and their leaders experienced
significant commonalties and found easy and effortless ways to adapt
Amul'sgameplan to their respective areas. This led to the Creation of the
National Dairy Development Board with the clear mandate of replicating the
'Anand pattern' in other parts of the country.
GCMMF: An Overview
Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's
largest food products marketing organization. It is a state level apex body of
milk cooperatives in Gujarat which aims to provide remunerative returns to the
farmers and also serve the interest of consumers by providing quality products
which are good value for money.
Members:

12district

cooperative

milk

producers' Union
No. of Producer Members:

2.12 million

No. of Village Societies:

10,411

Total Milk handling capacity:

6.1 million litres per day

Milk collection (Total 2012-13):

1.59 billion litres

Milk collection (Daily Average 2012- 4.47 million litres

13):
Milk Drying Capacity:

450 metric Tons per day

Cattle feed manufacturing Capacity: 1450 Mts per day

Sales Turnover

Rs (million)

US $ (in million)

42

M.B.A PROGRAMME
2007-08

11140

355

2008-09

13790

400

2009-10

15540

450

2010-11

18840

455

2011-12

22192

493

2012-13

22185

493

43

M.B.A PROGRAMME
Major dairy products manufacturers
Company

Brands

Major Products

Nestle India Limited

Milkmaid,Cerelac,

Sweetened

Lactogen,

Milkfood Limited

condensed

milk,

Milo, malted foods, milk powder and

Everyday

Dairy whitener

Milkfood

Ghee, ice cream, and other milk

products

SmithKline

Horlicks,

Beecham Limited

Viva

Maltova, Malted Milkfood, ghee, butter,

powdered milk, milk fluid and
other milk based baby foods.

Indodan

Industries Indana

Limited

Condensed milk, skimmed milk

powder, whole milk powder,
dairy milk whitener, chilled and
processed milk

Gujarat
operative

Co- Amul
milk

Butter, cheese and other milk

products

Marketing
Federation Limited

H.J.Heinz Limited

Farex,
Glactose,

Complan, Infant

Milkfood,

malted

Bonniemix, Milkfood

Vitamilk
Britannia

Milkman

Flavoured milk, cheese, Milk

Powder, Ghee

Cadbury

Bournvita

Malted food

COMPANY PROFILE
ORIGIN &HISTORY:

44

M.B.A PROGRAMME
Organized dairying in Krishna commenced in 1965 with integrated milk
project assisted by UNICEF. A milk conversation plant first of its kind in south
india was commenced in April 1969.The organization of dairy industry took
based changes beginning with husbandry department; it was integrated with
project (1960), dairy development (1991), A.P Dairy development Co-operative
(1974), A.P.Dairy development Co-operative Federation (1981).
Krishna district milk producers Co-operative Union got registered in
1983 district have 450 organised dairy Co-operative societies with 67,000
members producers. There are 340 producers associated centers.

COMPANYS MISSION:
Framers prosperity through technical innovation and customer orientation with
specific focus on quality and cost.

COMPANYS VISION:
Dairying in the district to be the major instrument of strengthening rural
economy & making available safe milk products.
SALIENT FEATURES:
Dairy average milk procurement: 1,63,794lts.
Turnover of business has reached to 200 crores.
Daily milk sales average reached to 1,60,000lts.
Obtained ISO 9001:2000, 14000 and H.A.C.C.P. certification.
Earning profits and distributing bonus to its members
Paying Rs.68 crores per year to farmer as cost of milk procured from
them.

45

M.B.A PROGRAMME
Strengthened the rural economy by avoiding middlemen and making
available safe milk and milk products to the customer.
Provided self employment to the rural women.

COMPANY PRIDE:
First powder plant established in South India
Largest democratic functionary in the District serving the farming
community.
Having more than Rs.1000 crores grass root level production base.
Providing direct and indirect employment to people.
First dairy to introduce five varieties of liquid milk.
First dairy to introduce liquid ice cream in tetra brick pack.
First dairy co-operative to introduce curd in cups in South India.
First dairy to introduce butter milk and lussie in tetra brick pack.
Annual turnover more than Rs.121 crores with a continuous growth rate.
First dairy to introduce Basundi in cups and milk cake.
Distribution network with 27 milk distribution routes.
DAIRY INDUSTRY IN KRISHNA DISTRICT:
Krishna District is on riverian track of Krishna abutting Bay of Bengal.
It has a total area of 8727sq.kms. The major activity is agriculture. It has
17.39 lakh acres of land under crop cultivation of which 66% is irrigated. The
human population is 39.54 lakhs. It has 972 inhabited villages. The literacy in
the district is 41.71%. The district is known for its quality cattle. In milk cattle
population it ranks second in the state. Buffalo is the predominant milk animal.
Organized dairying in Krishna commenced in 1965 with integrated milk
project assisted by the UNICEF. A milk conservation plant is 1.25LLPD (lakh
liters per day) was commenced in April, 1969 at VIJAYAWADA.

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M.B.A PROGRAMME
The dairy industry in the district had its beginning under state
Government as part of animal husbandry activity. integration of dairy industry
into the department of animal husbandry took place periodically in the name of
different projects:
1 Integrated MILK project (1960)
2 Dairy development department (1971)
3 Andhra Pradesh Dairy Development Corporation (1974)
4 A.P. Dairy Development Co-operative Federation (1981)
Realizing the milk production potentialities of the inversion track, the
Government of Andhra Pradesh and Government of India with UNICEF
assistance has established Integrated Milk projects-Hyderabad Vijayawada,
linking the production and consumption centers. Thus Krishna district has the
distinction of starting organized dairy activities by commissioning Milk
chilling at PAMARU in February, 1965 the first of the type in Andhra
Pradesh. Organization of co-operative structure on ANAND PATTERN was
initiated in 1981. Krishna district milk producers co-operative union limited
got registered in 1983. It took complete management of Dairy activities of the
Krishna district from February 1985.
At present, the district has 534 organized dairy co-operative societies with
over 92600 member producers. There are 300 milk producers Association
centers too functioning besides co-operative Societies. The union collects milk
form about 1,26,896 milk producers covering 815 villages organized through
35 milk routes. District union has 6 milk chilling centers one each operating at
Pamarru, Hanuman Junction, Veerankilock, Gudlavallaru, Chilikalu and
Tiruvuru with a total processing Union markets about 1,50, 000 liters\day
market milk to 1 lakh families in the district. It manufactures products like
Ghee, Butter milk, Basundi and DoodhPeda, Ghee products, skim milk powder,
UHT Milk(TeraBrik), merry milk (Tetra Brik). These products are
manufactured in this dairy with the brand name of VIJAYA are popular for
its quality throughout the nation. UHT milk has market at Bombay, Goa, Pune,

47

M.B.A PROGRAMME
Calcutta and Hyderabad. New UHT products such as sterilized cream, slim
milk(diet milk) launched recently had good consumer response. Capacity of
1.70lakh liters per day. It has milk products factory with the facilities to
manufacture different milk products.

The milk product factory at Vijayawada handles surplus milk from all
coastal districts.

About 1.73 lakh kgs\day with peak touching 3.25 lakh

kgs\day. The factory conserves fat in the shape of while butter usually to the
extent of 1000 M.Tsperyear.
Union manufactures and market about 23 tons\day of cattle feed besides
400 MTs mineral mixture per annum Dairy Co-operatives in villages have
gradually developed trading surplus and this aspect coupled with government
schemes resulting in establishing their own buildings in 345 villages valued at
Rs.2.2crores.
An Aseptic packing station was set up in the Milk products factory7 to
pack 50,000 liters of long the milk (UHT MILK) per day. Union has also 2
cattle feed mixing plants with a total capacity of 50M.T.\day. Plan to increase
procurement to two lakh liters a day. Vijaya Dairy is the only unit exporting
milk products to countries like Malaysia.
Krishna milk union is a district milk producer co-operative came into
exiting in July 1983 registered KRISHNA DISTRICT MILK PRODUCERS
MUTUALLY AIDED CO-OPERATIVE UNION LIMITED. It took over the
management on going dairy activities Krishna district of Andhra Pradesh
during February 1985 Krishna milk union currently 815 functional dairy cooperations in villages and introduced from various chilling centers district
routes.
Krishna district has milk procurement ranging from 45,000 kgs to
1,70,000kgs per day from 1969 to 2013.

The district being buffalos

48

M.B.A PROGRAMME
concentrated has wide procurement fluctuations. it was considered imminent
to reduce the seasonal imbalance in milk production. Induction of X bread
cows has been taken up since 1990 to increase milk production potentially.
District has very close animal health coverage by the animal husbandly
department.The district co-operatives milk union provides the following inputs
farmers for increased milk production.
1 Veterinary first aid facilities
2 Animal vaccines & medicines at subsidized prices.
3 A.I. Facilities.
4

Breeding bulls.

Fodder milk products at subsidized rates.

Premixed cattle feed.

Cattle insurance at 2\3 subsidy.

Extension services.

9 Milk Processing and Production

Milk processing of milks it done by pasturing and chilling the milk at

certain temperatures. The fat % and chilling the milk at certain temperatures,
the fat % and SNF % is standardized accordingly for various types of milk is
sent to by products section to produce various products.
THE GENERAL BODY:
The general body is the highest policy making body in the union. All the
elected presidents of the village milk producers mutually aided co-operative
the general body of the union.
Board of Management:
Board of management consists of 15 elected members among the village
presidents of the village milk producer mutually aided co-operative societies.
Out of 15 members three boards of directors in rotation will retire every year

49

M.B.A PROGRAMME
and their vacancies are to be filled either through election or consensus. The
members of the board elect the chairman of the union. In the election held in
2001 sriManadavaJanakiRamaiah was reelected as the chairman. He occupied
this post since 1992. He is also holding the post of chairman, A.P.D.D.C.F.Ltd.,
HYDERABAD since 2000
Breif profile about Sri Manadava Janakiramaiah
Father name

Sri Rattier

DOB

10-4-1932

Professional Background:
As an active agriculturist, philanthropist and progressive dairyman of
the state, occupies the following positions
1. President, milk producers co-operative society, movva (since 1992).
2. Chairman Krishna district milk union ltd from 1992-2013.
3. Chairman TKDMPMA-CO-Op union ltd., since August. 2001.
4. Chairman

a.p

Dairy

Devolopment

cooperative

federation

ltd.,

Hyderabad (since1999).
5. Director, national Dairy Development board, Anand.
ORGANISATION STRUCTURE

The following is the structure of K.D.M.P.M.A.C.U. ltd., Nandyal. In this,

the Chairman is the head, Chairman and Board of Directors are elected by Milk
producers.

50

M.B.A PROGRAMME

CHAIRMAN

Managing

D.G.M.
(Plant

Q.C.
Officer

Deputy
Director

D.G.M.
(Production)

Assistant
DirectorG1

Manager
G1

Assistant

Asst.
Manager G2

Foreman

Quality
Con.Supervi

Field
Supervisor

Processing
Supervisor

P.C.M

Lab
Assistant

Asst. Field
Supervisor

Weighting
Clerks

Plant
Mechanic

Asst. Dairy
Engg.

Asst. Q.C.
Officer

Marketing
Manager

Marketing
Superintend

Marketing
Superviso

Director-

Plant

TIME SCALE WORKERS

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M.B.A PROGRAMME
Membership/positions held in social, cultural, educational, charitable and
service organizations:
1. Sarpanch,grampanchayat, movva(1981-88)
2. President lions club movva.(1987-88)
3. Founder chairman, kshetraiah general& educational society, movva.
4. Life member, Siddhartha academy of general technical education,
Vijayawada.
5. President village Development committee moves.
6. President Kshetreiahkalasamithi, movva.
7. Member, Krishna Live Stock Development Association, Vijayawada.
8. Executive member, Andhara
Association, Hyderabad.

Pradesh

live

stock

Development

9. Member, Andhra Pradesh farmers federation, Hyderabad.

Infrastructure &Facilities
Milk products factory, Vijayawada is located on 27.3 acorns of land
which houses the dairy plant, aseptic package station, administration office,
effulgent treatment plant, electrical substation, and residential quarters.
Following are the facilities available in the milk products factory, Vijayawada
and its field centers
S.W.O.T. ANALYSIS:
STRENGTHS:
Milk production potential in Krishna District substantial.
Ability to handle highly perishable product milk.
Adequate infrastructure facilities available.
Availability of well experienced professionals.
Ability to meet any consumer demand for milk and milk products.
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M.B.A PROGRAMME
Ability to offer quality products with high profitability.
Established bondage with farmers.
Access to developmental funds and grants.
Access to other co-operatives.

WEAKNESSES:
High fixed costs occupying 15% of business turnover.
Work culture not compatible with growing for customer service.
Business systems and modern management culture is yet to be adopted.
Managers lack of business experience.

OPPORTUNITIES:
Increased purchasing capacity.
Rapid urbanization.
Growing food service sector.
Responsive state government.
Export opportunities for long life aseptic milk.
Responsive milk producer base.

THREATS:
Intense competition in liquid milk market.
Entry or organized private section.
Increasing competition for the marketable surplus milk in rural areas.
Employees resistance to change.

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M.B.A PROGRAMME

A. Milk Products Factory Vijayawada:

S.n Name of facility

Unit

Capacity

o
1

Milk processing

Laths

2.5

Milk drying

/day

22.0

Ghee manufacturing

mats/day

18.0

Butter manufacturing

m.t.s/day

22.0

Hut milk packing

/day

45000

Milk packing

/day

2,00,000

Go down space

m.ts

3000

Butter cold store

m.ts

500

B. FIELD
S.no

name of the center

unit

Capacity

Mccpamarru

/day

50,000

Mcc

/day

18,000

Veeranki lock
4

Mccgudlavaleeru

/day

18,000

Mcchanumanjunction

/day

18,000

Mccchillakulu

/day

12,000

Mcctiruvuru

/day

12,000

Total

1,28,000

dcs

having

electronic

450

milko testers
10

no.ofa.i centers

56
54

M.B.A PROGRAMME

11

no.of. v.f.a centers

240

12

no.of.dcs organized

630

13

no.of.mpas

320

14

exclusive women dcas

103

15

farmer mermbers

1,18,689

16

women members

23,347

17

no.of milk routes

35

18

no.of.dcs

having

its

400

own buildings

C. CATTEL FEED
S.n Name of the plant

Unit

Capacity

o
1

Fmpbuddavaram

m.t.s/day

30.0

Fmpgudlavalleru

m.t.s/day

18.0

55

M.B.A PROGRAMME
Milk Procurement and Input:
Director Heads the Procurement and inputs operations supported by the
managers of the chilling centers, managers of cattele feed mixing plants,
foodder development and eternity officers.
Union collects the milk twice a day about 2.40 laky ltr/day covering
about 900 villages organized through 35 milk routes. Union has 6 chilling
centers, each operating at pamarru, veeranki lock, gudlavalleeru, chillakulu,
tiruvuru, with combined chilling capacity of 1.28 lakh ltrs per day. It has two
cattele feed mixing plants

each located at buddavaram&gudlavaleeru with a

total capacity of 480 m.t.s per day. The procurement from west Godavari
district is present done through the chilling centers located at bhimadolu.
Milk procurement:
Procuring all surplus milk by the producers round the year based on
quality.
Free supply of chemicals to the mpcs.
Providing marginal assistance to mpcs.
Provide technical support and training facilities to producers and field
staff.
Bonus distribution to the milk producers
The mpcs are distributing bonus and incentives to the producers out of
the profits earned every year.
Animal Breeding Services:
Providing artificial insemination services through

A.I centers

maintained by the union.

Providing

high

degree

frozen

semen

procured

from

reputed

organizations.
Supply of bulls of murrah breed for natural service.

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M.B.A PROGRAMME
Feed and Fooder:
Supply of special quality and ordinary categories of premixed cattle feed
from the union owned plants cost-to-cost basis.
Supply of hybrid verities of fodder seed at cost.
Supply of quality mineral mixture regularly.
Supplying fodder slips of improved verities
SALES AND MARKETING
Dy.Director (S&M) Is Hedin the Sales and marketing wing supported by
as ales manager and three asst.sales manager with anew network of 700 booths,
300 around the clock cold chain parlors. The sales and marketing wing of the
union functions round the clock for the distribution and marketing of milk and
milk products. It has three own outlets those all are located at three different
places
1) Alankar Parlor (Near To Be ascent Road)
2) Milk parlor at railway station
3) Milk parlor at Vijayawada bus station
4) Milk products factory, Vijayawada. There are about 25 vehicles in
transport organization, milk products factory, in Vijayawada.
Transport
There are about 25 vehicles in transport organization, milk products
factory, in Vijayawada.
Road tankers
4 tanks of 13,000 liters capacity
4 tanks of 1,000 liters capacity
3 distribution vehicles for sales
6 inspection vehicles
57

M.B.A PROGRAMME

MARKETING INFRASTRUCTURE:

CITY/TOWN

Commission Cold
Agents

chain Departmental

points

parlors

VIJAYAWADA
MACHILIPATNAM
GUDIVADA
JAGGAIPATA
NUZIVEDU
VUYYURU
PAMARRU
CHALLAPALLI
AVANIGADDA
NAGAYALANKA
BUNTUMILLI
GUDLAVALLERU
KAIKALURU
HANUMAN

350
32
23
15
1
1
2
0
0
0
0
0
0
0

375
51
37
19
4
4
3
1
1
1
1
1
1
1

4
1
1
-----------------------

JUNCTION
TIRUVURU
CHILLAKALLU
NANDIGAMA
KANCHICHERLA

1
0
3
2

1
1
2
2

------7

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M.B.A PROGRAMME
DISTRIBUTION AND NETWORK
1) Liquid Milk Distribution:
VIJAYAWADA city is divided into 24zones. Each zone is connected by
a separate milk route operating both Morning and Evening to distribute
the milk to the commission agents and cold chain points. In addition,
milk is distributed through a separate route the following towns.
MACHILIPATNAM
GUDIVADA

} KRISHNA DISTRICT

JAGGIAPATA

BHIMAVARAM
ELURU

} WEST GODAVARI

DISTRICT
NARSAPUR
PRODUCT DISTRIBUTION
Local distribution with in the district:
Through Distributors, stockiest and retailers. Products are delivered to
these distributors / stockiest/retailers.
Distribution to outside the district:
Through stockiest and ex-factory direct sales through out the country.
EXPORT:
Krishna milk union is on the threshold of entering to the international
market on its own. It is all set to export UHT milk and products to countries
like UAE, Bahrain etc

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M.B.A PROGRAMME
Services offered to the consumers:
A) Only Dairy offering five verities of milk for the benefit of consumers
according to their preferences/ tastes and suitability
1. VIJAYA GOLD
2. VIJAYA PREMIUM
3. VIJAYA ECONOMY
4. VIJAYA LOW FAT
B. Range of UHT processed MILK AND MILK PRODUCTS with
shelf life OF 4 months.
5. UHT std.milk 1lit, 200 ml.
6. UHT Cream 1 lit , 200 ml
7. UHT low Fat milk 1lit, 200 ml.
8. Merry Milk

C. Wide Range of Fresh Milk Products

9. Basundi 50g, 250g
10. SWEET LASSI 200ml
11. BUTTER MILK
12. Flavored milk 200 ml (in bottle)
13. PANNER 100g 200g,500g,1kg
14. COOKING BUTTER 500g
15. MILK CAKE
D. Range of Other Products:
16. Ghee
17. SKIM MILK POWDER

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M.B.A PROGRAMME
Milk Processing and Production
Milk production flow chart.

Milk from villages

Chilled milk reception

Raw milk reception

Milk chilling

Standardization
Milk pasteurization &separation

MILK RECEPTIONS:
As soon as the milk arrived at the reception dock either through cans are
tankers

the

laboratory

authorities

are

conduct

all

the

platform

/bacteriological/chemical testes and after its quality conformation the milk is

received and send to soils for storage.
RAW MILK:
Milk products factory Vijayawada directly connected by around 175
villages at a radius of around 50 kms around Vijayawada. The milk after
receiving quality conformation from laboratory the milk is sent for storage.

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M.B.A PROGRAMME
MILK PROCESSSING SECTION:
It has 12 storage tankers each of 15000ltr capacity.
Four soils of each 30000 capacity.
Four cream vats each of 5000 its capacity.
It has equipped with three milk pasturiaser

of

20000 its

capacity/hour 15000 /hour ,10000/hour

It also has a cream pasteurizer with a capacity of 5000 its/hour.
Altogether , it has the milk storage capacity of 4,00,000 its

Collected from these villages is collected directly at milk products factory,

Vijayawada for which it is equipped with a can conveyer, an electrical
weighing machine , a dump tank and straight through can washer

with

cleaning capacity of 6000 cans per per hour.

Chilled milk operations:

Chilled milk from chilling centers and other stations through milk
tankers is received at the dock and milk/ cream and skim milk in required
proportions, milk in standardized according to their composition and sent them
to the packing or products manufacturing divisions

OPERATIONS:
Separation of quantity of whole milk to the extent of demand and with
mixture of whole whose out put capacity is 800 kgs of smooth textured butter
preferably packed in 20 kg bulk cartoons for long storage.

62

M.B.A PROGRAMME
BUTTER SECTION:
It is equipped with the butter churns with drum capacity of 1500. Each
the cream loaded in the drums is churned for about 3hr for separation of liquid
butter milk from cream. After setting of butter it is washed with chilled water
to remove separated solids from it the butter formed is collected and send for
further processing while the solids in liquid from of butter milk is sent back to
processing section for further usage.
GHEE SECTION:
The 7 ghee boilers in ghee section each with 1000 its. Capacity in which
butter is melted for about three hours at 120 c after attaining satisfactory flavor
color etc. The ghee is pumped to ghee settling tanks where it is allowed for 8
hrs for settling of sediment at the bottom of the tank. There are two settling
tanks each 8000 its capacity and to storage. Tanks each with 3000 its capacity.
Then the ghee is clarified and filtered with fine filters after obtaining
satisfactory report from the laboratory. Authorities the fine filtered ghee is
packed in 5 liters, 2 liters and also 1 ltrs&1/2, consumers pack, 15kgs, 34kgs,
bulk containers and 500 ml and 200 ml, poly packs. It is also equipped with a
ghee tin filling cum-sealing machine with a capacity of 5tins /min, of 5ltrs,
2ltrs, 1ltrs, and are marketed through out the country and has very good
demand.
BI- PRODUCTS SECTION:
All the fresh milk products like, butter milk, sweet lassi, khova, pannier,
yoghurt, milk cake, are manufactured and packed under strict highgienic an
aseptic conditions in this section.
POWDER SECTION
It has powder plants. An Alfa level make single effect gravity floe milk
evaporator plant with milk drying capacity of 8m.ts per day and another Vulcan

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M.B.A PROGRAMME
level doubled effect gravity flow milk evaporator plant with milk drying
capacity of 14 m.tsper day are under operations fine and superior quality
ISIGRADE SMP is packed in 25kg, ikg&1/2kg packs.

MILK PACKING
It has a capacity to pack 2, 00,000 of various verities of milk per day. It
is equipped with 8 sachet packing machines each capacity is 150 tubs per
hours. There are 5 varieties of milk in ltr, sachets for direct consumer
sending and in 40. Hence for institutions are being packed.

64

M.B.A PROGRAMME
ASEPTIC PACKAGE SECTION
Special officer [] is heading the unit. This station was established in
1998 with the financial assistance of NDDB in the existing campus of milk
products factory, Vijayawada with atonal outlay of rest 1.22crs.
PROCESS IN BREIF
Milk is treaded in altar high temperature plant for 2-3 seconds at about
140c under low pressure followed by rapid cooling this enables milk to be free
of micro organisms which are liable to proliferate during storage.

PURCHASE SECTION
In order to procure the required raw material for the company the
purchase section can for the tenders to the public in yearly basis. The
organization can follies two types of methods in passing tenders.
1. CONFORMITY
2. TENDERS

The milk products factory can invite the tenders yearly once & then they
can receives from public, and invite the tenders they can give the tender to the
firms which are coded for low rates to supply the material. After closing of the
tenders section they can gave specifications to supply the material to the
company means of quality, quantity, weight, printing specifications and etc,
In the one year duration the company can receives the material from the
supplier at coded rate in tender agreement made by the company. In the
duration of year there may be fluctuations in the raw material, whenever the
fall/raise in the material the supplier can not supply, it results in the production
of the company, because to avoid those circumstances the company give some
exemptions to the supplier. Those are in the following

65

M.B.A PROGRAMME
The supplier to supply price of the material.
Price change according to the market price.
Cut of price in case of highly raise of material.

CONFORMATORY:
They can check the price of raw material in different outlets.
They can procure the material from which the firm can supply at lowest
prices.

STORES SECTION:
The stores departments in the milk products factory can receives the raw
material supplied by the supplier and send for the lab testing & after receives
the lab report they can decide to accept /reject goods. Whenever the lab report
is not all satisfactory the stores section will return goods to the supplier.

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M.B.A PROGRAMME
PROCESS FLOW IN THE STORES SECTION:
Receives goods from supplier

Send for lab testing

Return goods to the supplier

Accept/Reject

Received Indent

Goods

Send

To

Required Section

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M.B.A PROGRAMME

CONSUMER BEHAVIOUR
Definitions-1
1. Consumer Behavior can be defined as the decision making process and
physical activities involved in acquiring, evaluating, using and disposing of
goods and services.
2. The American Marketing Association (AMA) defines consumer behavior as
The dynamic interaction of cognition, behavior & environmental events by
which human beings conduct the exchange aspect of their lives.
Consumer is the most important person to the marketer
because the marketer takes in to consideration on the liking and disliking of the
consumer and he produces the goods and services accordingly. That indicated
consumers are treated as the kings in the market. A product cannot be
marketed successfully without knowing the consumers behaviour towards that
particular product.
Due to the fast development in technology the behaviour of
the consumers is very much affected. Every producers tries to attach the
consumer through different techniques like advertisement, attractive packaging,
brand name and a around pricing system. Which has become the true cause of
competition?
Consumer behaviour plays a very important role in the
success or failure of a product. If a consumer is satisfied from the product then
his behaviour would be positive towards the product and if he is not satisfied
from the product then his behaviour would be negative towards the product.
A company's success largely depends upon the
consumer's positive behaviour. Today's consumer is very well aware about the
products available in the market.
He knows what a good product is and what a bad
product is. He is well educated and decides to purchase goods on merit.

68

M.B.A PROGRAMME
He will never go for such products which do not meet the quality standards. He
will buy only those things which will truly satisfy his needs and expectations.

Definition-2
How consumer will be have ,when a particular product
comes before him its study is called consumer behaviours. Consumer
behaviours is a process when by the individual to purchase what, where,
when, how, and from whom, for buying product as service.

What is consumer:
An individual who buys products or services for
personal use and not for manufacture or resale . a consumer is some one who
can make the decisions whether or not to purchase an item at the store and
some one who can be influenced by marketing and advertisement . any time
some one goes to a store and purchase a toy, shirt, beverage,or any thing
else,they are making that decisions as a consumer.

Concept of consumerism
Consumerism is a social force with in the environment
designed to aid and protect the consumer by exerting legal, moral, and
economic pressure on business, and independent organization that are designed
to protect the individuals from practices that infring upon their rights as
consumers.
The rise of consumer movement had made the adoption
of marketing concept a critical success factor for business firms, government
bodies and other. The market concept state that the basic objectives of an
organization is to satisfy customers and society consumers has had a direct
impact an markets. It follows that the element of the markets. It follows that the
element of the marketing process, product, price, promotion and distribution
also must be subject to the pressure of consumerism.
According to Philip kotler,
consumerism is a social movement seeking to augment the rights and powers of
buyers in relation to selling. It is important to remember that sellers too enjoy
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M.B.A PROGRAMME
certain rights in most societies, of course the buyers are having the right not to
buy a product, i.e., offered to them. They have the right to expect buy a
product, i.e., offered to them. They have the right to expect the product to be
safe and to be essentially as presented by the seller.
The main purpose of consumerism is the demand for adequate information on
1. Quality of goods,
2. Price
3. Conditions of production and sale
4. Use of goods,
5. Expected performance of goods,
6. Safety precaution
7. Special care, peculation and guidance to the use of sophisticated and
costly consumer disables.

Role of consumer organization

1. Consumer Education: Education is the process of training and
developing of knowledge skills and character, educating consumers in
giving information about various consumer goods and services.
2. Product Rating: in order to guide the consumer about his or her
choice of product, some of the agencies carry out tests and report them.
A very notable example is the magazine the journal of notable example
is the magazine the journal of consumer guidance society of India which
has made a beginning in this direction.
3. Liaison with government and with producers : The consumer
organization have to maintain liaison with producers on the one hand
government authorities on the other since the government is the they
factors in making decisions on consumer needs
4. Other activities: The consumer organization also organization
seminars, exhibitions, demonstrations and workshops.
5. Data collection: As indicated earlier, qualitative studies usually
requires highly trained social scientists to collect data. A quantitative

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M.B.A PROGRAMME
study generally uses a field staff that is either requited and trained
directly by the researcher or contracted from a company that specializes
in conducting field interviews. In either case, it is often necessary to
verify whether the interviews lave, in fact taken place, this is some times
done by a post card mailing to respondents asking them to verify that
they participated in an interview on the date recorded on the
questionnaire on a regular basis as the research study progresses to
ensure that the recorded are clear, complete, and legible.
6. Analysis: In qualitative research the moderator or test administrator
usually analysis the responses received in quantitative research, the
research supervises. The analysis open ended responses are first coded
and quantified them all of the responses are tabulated and analyzed.
Although it is possible to tabulate and analyze up to 200 responses
without the use of a computer most surveys are computer analyzed
using sophisticated analytical techniques. The computer can process
multiple correlation and cluster the data by selected demographic
characteristics.
7. Brand Image: Brand image is defined as the set of associations linked
to the brand that consumers hold memory. Positive brand image is
associated with consumer loyalty, consumer beliefs about positive brand
value, and willingness to search for the brand. A positive inclined
toward future brand promotion and to resist competitors marketing
activities advertising plays an important role the establishing a
favourable brand image, consumer satisfaction or dissatisfaction with
price promotion decision affect the brands long- term future image.
Brand manager who wish to establish a value image for their brands
must be care full to avoid price promotion strategies. Selecting the right
mouthwash may present as great a risk to a consumer as selecting a new
television set.

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8. Culture: Given the board and pervasive nature of culture, its study
generally requires a detailed examination of the character of the total
society, including such factors as language knowledge, laws religion,
food customers, music, art, technology work patterns, products,
Because our objectives is to
understand the influence of culture on consumer behaviour, we define culture
as the sum total of learned beliefs values, and customers that serve to direct the
consumer behaviour of members of a particular societies by our definition it is
easy to see how an understanding of various cultures of a society helps markets
product consumer acceptance of their products.

Consumer behaviour is important for the few factors:

MARKET SEGMENTATION :
Market Segmentation can be defined as the process of
dividing a market into distinct subjets of consumers with common needs or
characteristics

and selecting one or more segments to target with a distinct

marketing mix. Before the widespread acceptance of marketing segmentation,

the prevailing way of doing business with consumers

was through mass

marketing that is offering the same product and marketing mix to all
consumers. The essence of this strategy was summed up by the entrepreneur
Henry Ford, who offered the model T automobile to the public In any color
they wanted, as long as it was black.
The strategy of segmentation allows producers to
veiled Lead-on competition in the market place by differentiating their
offerings, not only on the bases of price, but also through styling, packing,
promotional appeal, method of distribution, and superior service.

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Goals :
Goals are the sought after results of motivated behavior all
behavior is goal oriented our discussion of motivation in this chapter is in part
concerned with generic goals - that is the general classes or categories of goals
that consumers select to fulfill their needs. Marketers are even more concerned
with consumers product specific goals that is the specifically branded or
labeled products they select to fulfill their needs for example. The Thomas J.
Lipton Company wants consumers to view Iced tea as a good way to quench
summer thirst It is even more interested in having consumers view Liptons
Iced tea as the best way support their trade association advertising recognize
the importance of promoting both types of goals. Single definition. However,
we propose that person alit be defined as those inner Psychological
characteristics that both determine and reflect how a person responds to his or
her environment.
At emphases in this definition is on inner characteristics those
specific qualities attributes, traits, factors and mannerisms that distinguish one
individual from other individual as discussed later in the chapter.

Brand Loyalty :
A major goal of marketers interested in how consumers learn is
to encourage brand loyalty. Brand loyal customers provide the basis for a stable
and growing market share and can be a major intangible asset reflected in the
purchase price of a company. A study of consumer purchase habits reported
that brands with larger market shares have proportionately larger groups of
loyal buyers.
Brand loyalty is not a simple concept. A basic issue among
researchers is whether to define the concept in terms of consumer behavior or
consumer attitudes. Brand loyal buyer who repeats a brand purchase because
it is the only one available at the store.

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What is Group :
A group may be defined as two or more people who
interact to accomplish either individual or mutual goals. The broad scope of
this definition includes an intimate group of two next door neighbors who
do their supermarket shopping together and larger, more formal group, such as
a neighbor hood

homeowners association, whose members are mutually

concerned with the schools, roads, tames and types

of business in their

neighborhood. Includes in their definition, too, are more remote, one sided
social relationship in which an individual consumer look to others for help in
deciding which products or services to own or use, even though these others are
largely unaware that they are serving as consumption related role models.

Achievement and success:In a broad cultural content, achievement is a major

American value, with historical roots that can be traced to the traditional
religious belief in the protestant work ethic, which considers hard work to be
whole some, spiritually rewarding and an appropriate end in itself. Indeed
substantial research evidence shows that the achievement orientation is closely
associated with the technical development and general economic growth of
American society. Individually who consider a sense of accomplishment an
important personal value tend to be achiever strive hard of success. Although
historically associated with men. Especially male business executives, to day
achievement is very important for women. Who are increasingly enrolled in
under graduate and graduate business programs and more commonly seeking
top level business careers.

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What is Opinion Leadership :Opinion leadership is the process by which one person
informally influence the actions or attitudes of others. Who may be opinion
seekers or merely opinion recipient. This influence is informal and usually
verbal, but it may take the form of non-verbal behavior observed by others.
The informal how of consumption related influence between two people is
some times refined to as product related conversation or word - of - mouth
communication. The key characteristic of word of mouth communication is
that is interpersonal and informal and takes place between two or more people
none of whom represents a commercial setting source that would gain directly
from the sale of something. Word of mouth implies personal, or face to
face, communication, although it may also take place in a telephone
conversation or in the content of chat group on the internet.

Knowledge and Interest :Opinion leaders tend to possess a high level of interest in the
product or service category in which they provide advice or information. For
this reason, they are likely to seek information about the product category, and
because of their knowledge, others may turn to them for product advice. Chief
among the characteristics that distinguish opinion leaders from non leaders is
their degree of involvement with the subject. Compared with non leaders in a
particular product category, opinion leaders read more about related consumer
issues, are more knowledgeable about related new product developments,
participate more

often in related consumer activities and

derive greater

satisfaction from these product related activities.

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Determinants of consumer behaviour

There are four basic determinants of consumer behaviour
1. Individual 2. Motives 3. Perception 4. Attitudes.

Individual needs: The starting point in the purchase decision process is the
recognition of a felt need. A need may be defined as the locking of something
useful. An individual always has innumerable un satisfied needs. There needs
become motives later on because everybody is motivated by needs or wants
psychological studies indicated that all human activities includes buying
behaviour are directed towards satisfying certain basic needs. All individuals
do not act exactly in the some way the their efforts to fulfill their needs.

Motives: Motivation can be described as the driving force with in individuals

that imples them to action. The special of action that consumers pursue and
their special goals are selected on the basis of their thinking processes and
previous learning for that reason, marketers who understand motivational
theory attempt to influence the consumer cognitive processes.

Perception: Perception is defined as the process by which on individual

selecting organize and interprets stimuli into a meaningful and coherent picture
of the world. A stimulus is any unit of input to may of the senses. All of these
functions are called into play either singly or in combination in the evaluation
and use of most consume producers.
The study of perception is largely the study of what we subconsciously add to
or subtract from raw sensory inputs to produce our own private picture of the
world.

Attitudes: Attitudes one an expression of inner feelings that reflect whether a

person is favourable or unfavourably predisposed to some object attitudes are
not directly observable but most be inferred what people say or what they do.
Consumer researches assess attitudes by asking questions or making inferences

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from behaviour. This illustration suggest that a whole universe of consumer
behaviours consistency of purchases, recommendations to others, top raw
things, beliefs, evaluations, and intentions are related to attitude an attitude is a
learned predisposition to behave in a consistently favourbale or comfortable
way with respect to a given object.

Importance of consumer behavior in advertising :Consumer behavior plays a very crucial role in
advertising before prepare an advertising plan, the advertising agency must be
aware of the behavioral patterns of the consumers. The success of the
programme depends greatly on the behavior study of the consumers the study
consumer behavior determines the media of advertising or media mix to cover
the market segments where it can influence the consumer behavior and induce
the consumer to take a decision to purchase the product.
The consumer behavior study also recognizes the drives
that should be satisfied. The advertise may improve his product so as to satisfy
the particular drive. This consumer behavior helps advertise improve the
products or services or introduce new products or services in order to satisfy
the needs.
The idea of scientific advertising has been developed
by the study of consumer behavior. Scientific advertising means properly
planned advertising based on serious deliberations or overall factors that have a
bearing upon its success. It implies the development and use of a fact finding
approach to the formation and execution of an advertising programme.
Consumer behavior study has shaped the
advertisements in a scientific manners. The message or the appeal. The appeals
may be changed with changing behavior of the people. So, change in the
attitude due to change in habits or fashion may lead to change in advertising
appeal.

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New sales policies for consumers

Definition :Consumer policies of every company should be reviewed
periodically to make sure that they are attended to shifting markets. The longtern changes have a major impact on customer selection. The revolution in
distribution of income alone has had a profound effect on markets for luxury
goods and for mass production items such as television sets.
The five-day week, with the resulting long weekend, had
expanded interest in hobbies, sports, apparel, and related items. To cite still
another example, the share drop in the number of house hold servants, coupled
with

New Saler Policies

For Consumer Behaviour.
Definition:-

Consumer policies of every company should be reviewed

periodically to make sure that they are attened to shifting markets. The long
term changes have a major Impact on customer selection. The revolution in
distribution of income alone has had a profound effect on markets for luxury
goods and for mass production items such as television sets.

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Distinguish between Customers and Consumers:

Confusion some time arises due to failure to distinguish
between customers and consumers the terms consumers means the one
who uses a product (or service) for his personal satisfaction or benefit: or in the
case of industrial raw materials, the one who so changes the form of the
product as to after its identity. A customer, on the other hand, is any one who
boys goods. A customer may be a consumer, or he may be a dealer who will
resell the product to some one else.
The habits and wishes of the ultimate consumer of a
product are of vital interest to all businessman having any thing to do with the
product, for the major purpose of economic activity is to create consumer
satisfaction in the original design of a product.
Problem Arising in the Selection of Customers:
In laying plans or effective relationships with consumers and
customers. Central management should establish policies regarding :
1. The types of consumers that offer the best market for company
products.
2. The locations that it will seen to cover.
3. The channels of distribution to be used to reach desired consumers in
the selected areas.
4. The size of customer that will be most efficient and strategic for the
company to save.

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Selection of Consumers:Various types of consumers demand services of a widely

different nature. In fact , the activities necessary to sell to different consumers
vary so widely that most companies find it pays to select certain types and to
concentrate their attention on selling goods to
Selection of consumers.The difficulties in selling to
more than one type of consumers may be illustrate by a retail store in Boston
that had group and prospered by appealing primarily to well to do women
of nature age. When a new manager was installed , the store had a sales volume
of over a million rupees . The new manager had assured the owners that he
would be able to increase the products with in a short period of time . A
business depression occurred soon after he took charge, and many of the stores
well to do customers were affected very adversely.
Under these conditions there was a strong temptation for
the store to seek to serve a wider group of customers. Some of the department
were permitted to operate their departments on a definitely popular priced
basis. This middle of the road policy brought a number of serious problems.
The managers of the popular priced departments justify
contended that they could not afford the expense of serving all customers in
the manner desired by the well to do women and that it was necessary to
great a like all customers coming into their departments.
The customers seeking popular priced merchandise
were unable to shop through out the store because some of the department
carried only high priced merchandise.
If a company has carefully studied its out look much of
the data needed to identify the most attractive consumer groups will already be
available. However more specific information on various consumer groups a

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company must either make what a selected group of consumers want or find
consumers for the products it makes.
The relation of a company to consumers of its
products is normally continuously over a period of years. Reputation are
established and expectations . So vital careful planning are

built up

consequently , a company cannot move in and out of a merchant from week to

week , instead , well established and relatively stable policies regarding
consumers to be saved are very useful.

Location of Consumers:
Another dimension of customer policies is the
geographical location

to be covered . The following examples show that

throwing where to place sales efforts may become a complicated question.

Location of Consumers of an Electric Range Manu faction:
A manufaction of moderately priced electric range for
household use had a peculiar distribution of customers. The company was
organized on the idea that there was a place for a Henry Ford in the electric
range business.
Currency regulations may make withdrawal of money
difficult after the goods are sold.
In spite of these difficulties , export business after is
attractive. In analyzing foreign markets, as may other new markets, the added
or incremental costs should be balanced against the added income.

Channel of Distribution :Professor Thomas L. Berg suggests that selecting a channel

of distribution be viewed as an organization problem and that the activities
analyzed include the total distribution system mere specifically , his approach
involves,
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1. Listing all actions necessary between producer and consumer
promotion, actual selling, transportation , financing, ware housing,
repackaging , risk taking , installation and repair service and the
like.
2. Grouping these activities into jobs that can be effectively and
effectively performed by separate forms. These forms may be banks
or ware housemen who also do other things or they may be forms
exclusively involved in this particular channel. The crucial matter
here is to conceive of jobs that are the most effective combination.
3. Defining relationships between the jobs that will assure cooperation
and necessary flow of information . Also define how each out
necessary , minimum controls to be exercised by various members
over other members.
4. On the basis of this organization design ( the policy adopted by the
designers) , developing specifications for the forms that are to fell
each job.
5. Then moving on to execution of the plan by recruiting people to take
the specified jobs ( some negotiation may arise here since
independent forms will be participants), educating people on how
the plan is to work , supervising the day to day operations, and
exercising necessary controls.

Nature of the Problem:By channel of distribution is meant the steps by which

products are distributed from the one who first converts them into usable form
to the consumer . Many enterprises of course , render services rather than
manufacture products for example , banks, public accountants and all sorts of
retail stores . Because of their nature, such services are almost always sold
directly to consumers. But for manufactures the selection of the paper channels
of distribution is a very real problem.

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Channels in buying habits , transportation , communications and market
location have modified methods of distribution greatly during recent years.

Through Jobbers:
For many years the jobbers (or whole saler) was
regarded as the orthodox method of distribution . The jobber assembled
producer from many manufactures. Stores them and sells them to retailers. In
so doing, he also assumes risks of price change, damage or obsolescence; he
extends credit to retailers; and he sorts and shiks

Products According to Retailer needs-:

All of these functions are essential in the distribution
of merchandise: regardless of the channel of distribution used, some must
perform them . When a large part of consumer purchases was secured through
small retailers scattered over a wide territory . It was more economical for the
manufactures to have the whole sales perform these services than to under take
them himself.

Direct to Retailers:Distribution by the manufacture direct to retailers has

some distinct advantages. By using specialty salesman to concentrate on the
sale of his products. The manufacture may secure more aggressive selling
efforts, for a jobbers general line salesman sell a wide variety of products and
cannot concentrate their efforts upon the sale of one particular product. This
plan may also enable the manufactures to as certain better the consumers
desires, since he has first hand contact with the final point of sale,
namely the retailer. The manufactures exercises more control over the final sale
of his goods. If he has direct contact with the retailer.

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Direct to Consumers:This plan is usually employed when the product is of

such a nature that the salesman needs a high degree of technical training to
sell. It and when technical services must be rendered in connection with the
product after it is sold for example, this plan is used by manufactures of office
equipment such as adding machines. Addressographs, and computers ,
salesman must be able to operate such

equipment to sell it and the

manufactures must assure himself that the equipment is kept in proper repair or
the customer may become dissatisfied with it . For similar reasons

most

industrial equipment is sold directly to uses.

Size of Customers :Often a company needs a policy guide on the size of

customers . It seeks customers that is the people . It deals with directly , can be
either to small or too large . A company know how much it costs to save each
type of customer and the amount the customer must buy if his business is to
field a project to the company one manufacturing concern, for example , was
selling to 8,000 retail accounts . An analysis of these accounts revealed that
55% of the total number purchased only 5% of its entire sales volume and that
none these 55% purchased more than Rs. 200 worth

of merchandise a year

the company decided to eliminate all such accounts which it was thought
would not develop into better accounts, and as a consequence the number of
customers was reduced to 4,000. these enable the company to reduce its
salesman from 82 to 43 and to make a number of other substantial reductions
in selling costs.

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Large Customers :On the other hand , a customer may purchase too much
merchandise . If a concern is dependent on one or two customers for most of its
business , its position is vulnerable loss of patronage of such an important
buyer will disrupt the entire organization .
A comparatively small tire company had been selling
tires to a large mail order house for years at the time of an investigation . The
relative importance of sales to this one customer increased from year to year.
Constituting approached 36% at the end of the first 5 years. 50% at the end of
10 years and increasing to over 65% in the year the investigation was made .
The tire company has earned a satisfactory profit on its business from this
customer . In fact , the company had substantially expanded its production
facilities .So that it would be able to meet the re equipments of its large
customer during the coming years.

Influencing Factors :
Consumer behaviour is influenced by a number of economic
and non economic factors . These are now being discussed as here number.

Economic (internal) Factors:

Man is a rational buyer , who tries to obtain maximum value
for his purchase . In this decision , price is the strongest motivation . He
compares all competing sellers offerings and normally boys the one with the
lowest price . However , numerous other economic factors also influence
customers in the ways , they spend their income for personal consumption . It
is their purchasing power : which converts production
into consumption people do not spend all what they earn. Disposable
personal income is used , both for buying and saving . So, if disposable
income rises he purchased more in the same way , seize of family and
family income , that customer expect to receive in future . In particular ,
spending for automobiles , furniture .Major applications ,and other expensive

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items, consumers liquid assets also affect here buying plans . Consumer
credit availability , like wise strongly influences the pattern of consumers
spending these are only a few examples of how so many factory influenced to
see it in more detail.
a) Marginal Utility Theory:Goods (and 1 or services ) are produced for consumption
purchasing power is used , to convert

production into

consumption. So disposable personal income represents potential

purchasing power , in the hands of the consumer. There is a
direct relationship between total disposable income and total
personal consumption

. A consumer continues to buy such

products , when give him maximum utility at relative prices.

b) Income and Savings Theory:Propensity to consume means rate of consumption, at the given
level of disposable income. Higher the propensity to consume:
Lower will be the propensity to save. So a higher propensity to
consume will result in higher sales.
c) Family Size and Family Income:These affect the pattern of spending and saving of a particular
family . Lower the family income , more different will be the pattern of
consumption.
d) Consumers Income Expectations:The income which the consumers expect to receive in the future always has
some bearing on the present spending patterns in particular, spending for
automobiles , furniture , major appliances and other durable items . Tends to be
influenced by consumers optimism or pessimism about his future income .

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e) Consumers Liquid Assets :Consumers buying plans are influenced , a specially in

regard to automobiles and other durables Items by the size of his holdings of
liquid assets, i.e cash etc., readily convertible into cash. This motivates him to
make the purchase although for time being It is out of his current income .
Retired and in employed individuals may use their liquid assets to by
everyday necessities.

(f) Consumers Gedit Standing: Availability of customers Gedit greatly,

especially in the case pattern of his spending, specially in the case of durables
Items live automobilist.

Non Economic (Psychological / external) factors :

Various psychological factors also influence of behavior, various theories and
concepts have been forwarded by various authors. These, we have .

Maslows basic need theory : According to A.H. Maslows tueroy of

consumers behavior, an individual , normally trees to satisfy his most basic
needs first, and after satisfying these. He is then trees to devote attention to the
nerd one .Maslow has classified the human needs In order of preference , as
follows:
1) Psychological needs : Condition )s) affecting the human body . e.g.,
need for hunger, sen, sleep temperateness etc. these have the topmost
priority.
2) Safety needs : Self Protection against dangerous worries ,e.g.,
Insurance.
3) Social needs : Social needs i.e., Belongingness and love needs : Need
for social recognition . satisfying needs most of the luxury Items are
purchased to satisfy fiese needs.
4) Aesthetic needs : the success of a marketer, thus , depends upon his
ability to satisfy several needs all at one time, with his offers.

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Learning theory:
A buyer is influenced not only by external stimuli but
also by internal factors. The basic internal factors. Influencing Learning as
per Learning theory. Are (1) Repetition (2) Motivation (3) Conditioning
and (4) Group- effect .Let us discuss each one of them, breathy .
1) Repetition : When a product is regularly brought before customer. It
promotes his learning about the nature and qualities of the product . For
example continuous advertising of the product. Makes a customer
motivated to purchase the particular product.
Conditioning g: Conditioning is a way of learning by
which a new response to a long range advertising effort. And continued
exposure of a particular symbol, conditions the public to recognize the
product.
Group effect : - If a rich or a respected starts consuming a particular
product. Other people of the society also staff following him.
1) Image theory : Buyer see them selves ,and the product they buy In terms
of images these images are the formalized impressions, residing
consciously or un- consciously in the minds of individuals. Their buying
pattern is greatly influenced by these images .
These images are of three types , we (1) self Image (2) brand Image
(3) product image.
A person has of himself , the kind of person he considers
himself to be, and the kind of person. That he imagines that others consider him
to be different people have deferent kinds of self Image . This calls for
market segmentation along psychological lines. In many buying situations .
an individual prefers to buy those products and brands whose image appear
consistent with his or her self Image.

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Brand Image results from all the impressions that consumers
receive about the particular manufactures brand . This
consistent this is casually true or

image is fairly

retail stores. It is through long and

continued use of advertising and selling appeals, that many brands have
acquired their definite Image . Sometimes ever without the managements
deliberate efforts.
Product Image : product Image, on the other hand , is a
stereotype , which is censured up by an individual when he this of the product
for example. A person may consider a motor boat, as simply a means of
conveyance over water . with a specified load capacity while another one
may see It as a means of excitement .

Stimulus Response theory :

Purton, skinner , Thorndike and hotler etc., developed this
theory. On the basis of experiments they carried out on animals according to
them Learning occurs as a person responds to some stimuli and is
rewarded with

need satisfaction for a correct response through their

exponents they proved that most recent and frequent stimuli, are remembered
and responded . this approach is the basis of repeated advertisements .
Further refined by constant experiments and refinements ,
is now , at the present based on four central processes (1) drive (cue (iii)
response, and(iv) reinforcement . Drives are needs or motives that are stronger ,
where as a cue is a weaker skimuli the response is the resultant reaction of
some stimuli , if it is lased on some previous experience in other words cues
will crate different degree of responses under different occasion reinforcement
is the process by which rewarding experience in the past are strengthened that
is the process by which retarding experience , In the past are strengthened
Leading to brand Loyalty the policy of giving free samples of newly
introduced product Is nothing but to acuities this rein forcemeat .

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According to this theory, when a males a decision to buy a particular
product or choose between two or more alternatives , dissonance will almost
always occur. Because the person knows that the decision made by him his
certain advantages as well as disadvantages .

WHAT IS CONSUMER RESERCH

Definition:
Consumer Research may be defined as the systematic
gathering, recording, and analyzing of information about consumers.
- David Louden and Albert J. Della Bitta

How consumer research helps marketers:

The aim of marketing is to meet and satisfy target customers needs and
wants better than competitors.
Effective marketing requires insights into consumers minds. it ensures
that the right products are conceived, produced, and offered to the right
consumers in the right way.
The marketer can reach the above objectives through only consumer
research.
The study of consumers helps firms and organizations improve their
marketing strategies by understanding issues such as how
The psychology of how consumers think, feel, reason, and select
between different alternatives (e.g., brands, products);
The psychology of how the consumer is influenced by his or her
environment (e.g., culture, family, signs, media);
The behavior of consumers while shopping or making other marketing
decisions;
Limitations in consumer knowledge or information processing abilities
influence decisions and marketing outcome;
How consumer motivation and decision strategies differ between
products that differ in their level of importance or interest that they
entail for the consumer; and
How marketers can adapt and improve their marketing campaigns and
marketing strategies to more effectively reach the consumer

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Research methodology:
Research methodology is a way of systematically solving the
research problem. Research methodology deals with the research design used
and methods used to present the study.

Research design:
A research design is detailed blue print used to guide a research
study toward its objective. The process of designing a research study involves
many interrelated decisions. The most significant decision is the choice of
research approach, because it determines how the information will be obtained.
The choice of the research approach depends on the nature of the research that
one wants to do, In this Descriptive Research has been chosen for the study as
such.
Descriptive Research studies are those studies which are
concerned with describing the characteristics of a particular individual or of a
group.

Population:
The universe population is a specific group of people firms and
condition activities etc., which from the pivotal point of research project. For
developing and using a sample in the survey the researcher has used all
customers who are using nandi PVC Milk products in and around nandyal were
considered on the population in this study.

Sample frame:
After defining the population the second step, is developing the
sample frame, it may be defined as the listing of the components of the
individual units that comprises the defined population.

Consumer behaviour is important for the three persons.

1. For consumer:
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As a consumer most of the time we spend time in the
market and a lot on decision making that what to buy and how to buy and
meeting and conferencing with different types of peoples and friends with
different types of good and services. After all these things we come to the
conclusion and then take some steps for the purchasing of different goods and
services. If we don't have know how of the market we can suffer huge losses.
Ex:A consumer buys a set of mobile company without consulting
with his friends or other people. It may be of no use for him or may be no
availability of mobile services.
2. For producer:
Consumer behaviour is also important for producer because he
design and manufacture different types of product and services keeping in view
the want sand needs of consumer.
3.For scientists:
The knowledge of consumer behaviour is also important for
scientists, whether he is working for profitable organization or non-profitable
organization.

Customer, customer Value, Satisfaction & Retention

Since the success of marketing concept organizations view
any exchange with customer as part of customer relationship not as a
transaction.
The three drivers of successful relationships between marketers and customers
are customer value, customer satisfaction and customer retention.

Customer:

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a customer is the most important visitor on our premises. He is
not dependent on us,
on work, he id the purpose of it .he is not an outsider on our
business but he is apart of it .we are not doing him. Afavour by serving him,he
is doing a favour by giving as an opportunity to do so.

Customer Value:
It is the defined as the ratio between the customers perceived
benefits (monetary, time, efforts & psychological used to obtain those benefits.
Perceived value may be relative & subjective.

Customer satisfaction:
It is the individuals perception of the product or service in
relation to his or her expectations .The concept of customer satisfaction is a
function of customer expectations.

Customer Retention
The overall objectives of providing value to customer
continuously and more effectively than the competition is to have highly
satisfied customers.

Advantages of Customer Retention:

1. In almost all business situations, it is more expensive to win new
customer than to keep existing ones.
2. Loyal customers buy more products.
3. Loyal customers are fewer prices sensitive.
4. Pay less attention to competition advertising.
5. Loyal customers spread positive word of mouth & refer; it may be very
difficult to find new customers in a period of recession.
But marketers who designate increasing customer retention rates as a strategic
corporate goal must also recognize that all customers are not equal .They
should make selective relationships with customers based on profitability
.Some stock broker programmed their phones to recognize the phone numbers
of high volume traders to ensure that their calls receive priority.

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Customers can be grouped into 4 tiers:
1. Platinum tier :- heavy user, less price sensitive
2. Gold tier:- heavy user, but price sensitive
3. Iron tier:- do not merit special treatment
4. Lead tier: - they claim more attention than is merited by their spending,
tie up company resources & spread negative word of mouth.
As is clear that study of consumer behavior involves factors like marketing
mix, concept of marketing, factors affecting decision made by the consumer,
hence the study of consumer behavior is critical for the success of marketing
manager in his decision making process.

DATA ANALYSIS AND INTERPRETATION

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The primary data is collected from the customers of
K.D.M.P.M.A.C.U Limited., The on hand data had been collected through wellprepared questionnaire. The questionnaires have been analyzed for the
appropriate information. The research is concerned with the survey of 120
consumers in and around surrounding places of nandyal.

1. Are you regular consumer of Vijaya Dairy?

Consumer opinion
Yes

No of consumers

Percentage

83

consumers
69%

37

31%

of

No

Explanation & Analysis:

From the above table we can infer that 69% consumers are regular
consumers of Vijaya Dairy they are loyal consumers to Vijaya Dairy.31%
consumers are one time buyers they are not loyal to Vijaya Dairy

2. Are you aware of any competitive brands?

Consumer opinion

No of consumers

Percentage

of

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Yes

43

consumers
36%

77

64%

No

Explanation & Analysis:

The above table clearly shows that 64% consumers dont have
awareness on other brands 36% people have awareness on other competitive
brands

3. Why did you choose Vijaya Dairy? Rank the following

Influencing factors

No of consumers

Percentage of consumers

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a) Quality

39

32.5%

b) Brand name

21

17.5%

c) Price

27

22.5%

d) Availability

33

27.5

Explanation & Analysis:

The Response of this question clearly states that Quality is the
most dominant factor while making a buying decision, followed by availability.
But apart from this the most noticeable part of this Response is the
Availability and price factors are considered only after Quality itself.

4) What is the Purpose of purchasing the Milk products ?

Consumer opinion

No of consumers

Percentage

of

consumers

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M.B.A PROGRAMME
a) cultivation

89

74%

b) House purpose

31

26%

c) Others

0%

Explanation & Analysis:

In the above table clearly shows that 74% of the consumers are felt that
cultivation is the main purpose to purchase the Milk products remaining 26%
are using the Milk products for the purpose of house needs by these analysis I
find that farmers are the major customer of Vijaya Dairy.

5) Who influenced your decision to purchase Vijaya Dairy?

Influencing factors

No of consumers

Percentage

a) Dealers

63

consumers
52.5%

b) Reference person

43

36%

c) No one

14

11.5%

of

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Explanation & Analysis:

The above table clearly shows that 52.5% consumers are influenced by
dealers 36% consumers are influenced by another consumers only 11.5% of
consumers directly purchased the Milk products without any influence by these
analysis dealers playing major role to influence the consumers to buy the
Vijaya Dairy.

6) Are you satisfied about the quality of Vijaya Dairy?

Consumers opinions

No of consumers

Percentage of consumers

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M.B.A PROGRAMME
a) Very much satisfied

49

41%

b)Satisfied

33

27.5%

c)In different

20

16.5%

d)Dissatisfied

6%

e)very much dissatisfied

11

9%

Total

120

100

Explanation & Analysis:

In the above table clearly shows that 41% of consumers are very much
satisfied and 27.5% of consumers are satisfied towards quality of Vijaya Dairy.
16.5% of consumers are indifferent &9% of consumers are very much
dissatisfied only 6% consumers are dissatisfied towards quality. Total number
of the consumers 120 and percentage of the consumers 100%.

7) Are you satisfied about the durability of Vijaya Dairy?

Consumers opinions
a) Very much satisfied

No of consumers
39

Percentage of consumers
32.5%

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M.B.A PROGRAMME
b)Satisfied
c)In different
d)Dissatisfied
e)very much dissatisfied

37
21
9
14

31%
17.5%
7.5%
11.5%

Total

120

100

Explanation & Analysis:

The responses of this question clearly state that 32.5% of consumers are
very much satisfied towards the durability of Vijaya Dairy. 31% of consumers
are satisfied.17.5% of consumers are indifferent& 11.5% of consumers are very
much dissatisfied only 7.5% of consumers are dissatisfied. It clearly represents
the quality of Vijaya Dairy. Total number of the consumers 120 and percentage
of the consumers 100%.

8) Are you satisfied the price of Vijaya Dairy compare to other

brands?
Consumers opinions
a) Very much satisfied
b)Satisfied
c)In different
d)Dissatisfied

No of consumers

Percentage

19
68
14
13

consumers
16%
56.5%
11.5%
11%

of

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e)very much dissatisfied
Total

6
120

5%
100

Explanation & Analysis:

The above table clearly shows that 56.5% of consumers are satisfied
towards the price of Vijaya Dairy and 16% of consumers are very much
satisfied with the price .11.5% of consumers are indifferent &11% of
consumers are

dissatisfied only 5% of consumers are very much dissatisfied

with the price of Vijaya Dairy. Total number of the consumers 120 and
percentage of the consumers 100%.
9) Are you satisfied with the discount offered by the company?
Consumers opinions
a) Very much satisfied
b)Satisfied
c)In different
d)Dissatisfied
e)very much dissatisfied
Total

No. of consumers

Percentage

11
67
21
14
7
120

consumers
9%
56%
17.5%
11.5%
6%
100

of

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Explanation & Analysis:

In the above table clearly shows that 56%of consumers satisfied
discount offered by the company , 9%of consumers are very much satisfied
about discount offered by the company 17.5% 0f consumers are indifferent&
11.5% of consumers are dissatisfied only 6% of consumers are very much
dissatisfied with the discount offered by the company. Total number of the
consumers 120 and percentage of the consumers 100%.

10) Can you recollect any advertisement of Vijaya Dairy in any

media?
Consumer opinion

No of consumers

Percentage of consumers

yes

69

57.5%

51

42.5%

No

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Explanation & Analysis:

The above table clearly shows that 57.5% of consumers are
recollecting the Vijaya Dairy advertising 42.5% of consumers are not able to
recollecting the Vijaya Dairy advertising. Total number of the consumers 120
and percentage of the consumers 100%.

11) Are you satisfied about availability of Vijaya Dairy?

Consumers opinions

No of consumers

Percentage of consumers

a) Very much satisfied

b)Satisfied
c)In different
d)Dissatisfied
e)very much dissatisfied
Total

24
57
22
11
6
120

20%
47.5%
18.5%
9%
5%
100

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Explanation & Analysis:

In the above table clearly shows that 20% of consumers are fully
satisfied towards availability of Vijaya Dairy& 47.5%of consumers are very
much satisfied. 18.5% of consumers are in different. 9%of consumers are
dissatisfied & only 5%consumers fully dissatisfied towards availability of
Vijaya Dairy. By this analysis I found that there is no problem in the
availability of Vijaya Dairy. Company also offering consumers advance
booking. Total number of the consumers 120 and percentage of the consumers
100%.

12) Are you satisfied with the service of the company after sales?

Consumers opinions
a) Very much satisfied
b)Satisfied
c)In different
d)Dissatisfied
e)very much dissatisfied
Total

No of consumers

Percentage

39
43
18
12
8
120

consumers
32.5%
36%
15%
10%
6.5%
100

of

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Explanation & Analysis:

In the above table clearly shows that 32.5% of the consumers are very
much satisfied & 36% of consumers are satisfied.15% of consumers are
indifferent.10% of consumers are dissatisfied only6.5% of consumers are very
much dissatisfied towards the service of the company after sales. Total number
of the consumers 120 and percentage of the consumers 100%.

13) Are you satisfied the transportation of Vijaya Dairy?

Consumers opinions

No of consumers

Percentage of consumers

a) Very much satisfied

b)Satisfied
c)In different
d)Dissatisfied
e)very much dissatisfied
Total

21
66
14
7
12
120

17.5%
55%
11.5%
6%
10%
100

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Explanation & Analysis:

The above table clearly shows that 55% of consumers are satisfied
towards the transportation of Vijaya Dairy and 17.5% of consumers are very
much satisfied with the transportation .11.5% of consumers are indifferent
&10%of consumers fully dissatisfied only 6% of consumers are dissatisfied
with the transportation of Vijaya Dairy. Total number of the consumers 120 and
percentage of the consumers 100%.

14) Do you suggest Vijaya Dairy own to others?

Consumers opinions

No of consumers

Percentage of consumers

Yes

91

76%

No

29

24%

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Explanation & Analysis:

The above table clearly shows that 76% of consumers suggest owning
the Vijaya Dairy to other peoples 24% of consumers are responded negatively.

FINDINGS
As per our survey and the Analysis and Interpretation of the collected data
we find some important facts, those are as follows:
Most of consumers are satisfied with the Vijaya Dairy quality &durability.
Dealers are the most influence persons motivate the consumers to purchase
the Vijaya Dairy.
Most of the consumers purchase the Vijaya Dairy for the purpose of
cultivation.
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32.5% , 27.5%, 22.5%,17.5%respectively,of the consumers felt that
quality, availability, price, brand name are the factors which governs the
purchase.
57.5% of consumers are recollecting the Vijaya Dairy advertising 42.5%
of consumers are not able to recollecting the Vijaya Dairy advertising .

SUGGESTIONS
1. The company must focus on rural markets because the major congeners
are farmer.
2.

all the consumers are satisfied with the audacity of antipopes, so the
company has to maintain the same quality

3. Majority of consumers are purchase the goods through dealers, so the

company has to consider the opinion of he dealers.

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4. Majotity of consumers are happy with the discount provided by the
company. So the company has to maintain & Improve the levels of
discounts.
5. Company should may the more alteration on the advertisement and
sales promotion activities .
6. Customer satisfaction and & value retention should be given more
attention, to maintain good will of a company.

CONCLUSION
After analyzing all the data we can conclude that Milk products one
of the most admirable popular and distinguished brand among the consumers.
Most of the consumers are fully satisfied price, availability discounts afferef
by the company. 69 % of consumers are loyal to Milk products Dealers
playing major role to influence the consumers to buy the Milk products. Only
57. 5% of consumers are recollecting the Milk products It Is not in adeauate

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level for altaining optinal levels, company should concentrate more on
advertising aspects and promotional strategies. Most of consumers said that
quality is the most influencing factor to purchage Vijaya Dairy. Consumers
are also satisfied with the quality so company has to maintain the same
quality to satisfy the consumers needs and wants

BIBLIOGRAPHY
Books
Marketing management, Philip Kotler, Person Publishers.
Ramaswamy and namakumari, Macmillan Published
G.C. Beri, tata mc graw hill published.
Tull donalt S.1990 marketing management, New York, machmillan
publishing company.
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M.B.A PROGRAMME
Stanton, William J. M.J.Etzel and B.J.Walker 1994, fundamentals of
marketing, New York, Mc Graw Hill Inc
Magazines & News papers
Indian express
Business standard
Indian journal of marketing
The Hindu
Economic times
Websites
www.google.com
www.wickepedia.com

QUESTIONNAIRE
NAME

AGE

EDUCATION

QUALIFICATION

OCCUPATION

1. Are you regular consumer of Vijaya Dairy?

a) yes
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b) No
2. Are you aware of any competitive brands?
a) Yes
b) No
3. Why did you choose Vijaya Dairy? Rank the following?
a) Brand image
b) Quality
c) Price
d) Availability
e) Others
4) What is the Purpose of purchasing the Milk products?
a) Cultivation
b) House hold
c) Others
5) Who influenced your decision to purchased Vijaya Dairy?
a) Dealers
b) Reference person
c) No one
6) Are you satisfied about the quality of Vijaya Dairy?
a) Very much satisfied
b) Satisfied
c) Indifferent
d) Very much dissatisfied
7) Are you satisfied about the durability of Vijaya Dairy?
a) Very much satisfied
b) Satisfied
c) Indifferent
d) Very much dissatisfied
8) Are you satisfied the price of Vijaya Dairy compare to other brands
a) Very much satisfied
b) Satisfied

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c) Indifferent
d) Very much dissatisfied
9) Are you satisfied with the discount offered by the company?
a) Very much satisfied
b) Satisfied
c) Indifferent
d) Very much dissatisfied
10) You purchase Milk products on?
a) Cash
b) Check or DD
c) Credit
d) Any other
11) Can you recollect any advertisement of Vijaya Dairy in any media?
a) yes
b) No
12) Which type of media is suitable for promoting the Vijaya Dairy rank the
following
a) Electronic media
b) Print media
c) Wall paintings
d) Others

13) Are you satisfied about availability of Vijaya Dairy

a) Very much satisfied
b) Satisfied
c) Indifferent
d) Very much dissatisfied
14) Are you satisfied with the service of the company after sales
a) Very much satisfied

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b) Satisfied
c) Indifferent
d) Very much dissatisfied
15) Are you satisfied the transportation of Vijaya Dairy
a) Very much satisfied
b) Satisfied
c) Indifferent
d) Very much dissatisfied
16) Do you suggest Vijaya Dairy own to others?
A) Yes
b) No
17) Do you expect any future improvement / compliments/suggestion ?
__________________________________________________________
__________________________________________________________

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