IRACST- International Journal of Research in Management & Technology (IJRMT), ISSN: 2249-9563

Vol. 2, No. 5, October 2012

Analysis of Retailers role in the marketing of

Fresh milk and Dairy products in Khartoum
DR/ NAHID MOHAMMED TAWFIK FAWI (AUTHOR)
DEPARTMENT OF DAIRY PRODUCTION
FACULTY OF ANIMAL PRODUCTION
UNIVERSITY OF KHARTOUM
KHARTOUM - SUDAN
terms of store retailing, nonstore retailing and retail
organizations. Dairy product markets typically differ
in several key ways, by the types of products handled,
the number of intermediaries involved, and the role
each plays, these two aspects are often linked in that
more processed and thus higher value products often
involve more intermediaries, each of whom adds some
delivery or transformation service to the product
(Omore 2004). An increasing market concentration in
food retailing has generated concerns about the market
power of retailers towards consumers and input
suppliers (Salhofer et al. 2012). Retail dairy purchases
are growing at widely different rates around the world
in response to rising incomes and expanding urban
populations, mass media promotions and new forms of
retail channels are also driving growth in countries
where dairy products are only beginning to reach
consumers (Fuller et al. 2005). In China, dairy product
consumption is growing at 15 percent per year,
supermarkets in China are helping to affect this
increase by providing consumers access to expanded
product selections and brands (Hu et al., 2004).
Communication and promotion decisions are a critical
element of retailer customer experience management
strategy (Ailawadi 2009). The retailers decisions
include those on price, price promotions, traditional
non-price support like feature advertising and
displays, and other in-store communications such as
TVs, shelf talkers, and shopping cart advertising that
are now commonly bundled under the phrase shopper
marketing (Grocery Management Association 2007).
In India the emergence of modern milk marketing
chains is posing stiff competition for the existence of
traditional milk market agents, however, the basic
structure of milk production and marketing is not
likely to change significantly in the near future and
therefore, the dominance of traditional milk market
chains will continue to persist in spite of the rapid
growth of the organized and formal milk marketing
chains. (Kumar 2010). In many other emerging
markets of developing countries, retail growth in dairy
markets is averaging more than 10 percent per year,
and in high income countries where growth in per

ABSRTACT: The study was performed in the

state of Khartoum the capital of the Sudan
where retailers were the target of the study, the
study aimed at analyzing retailers role in the
supply chain of fresh milk and other dairy
products. Objectives of the study included:
analyzing the participation of retailers in the
dairy product supply chain, reflecting the role
of retailers efforts towards sustainable
consumption and production and classifying
and describing manufacturers marketing
efforts. The study came to several findings and
was
concluded
with
a
number
of
recommendations some of which are: widening
the spectrum of the retailers role in marketing
dairy products, adaptation of more empirical
support
for
the
synergy
between
manufacturers
advertising
and
retail
promotional
activities,
Retailers
and
manufacturers need better models of relative
allocation of marketing budget towards
traditional and modern media.
Keywords: RETALIERS, DAIRY PRODUCTS,
SUPPLY
CHAIN,
KHARTOUM, SUDAN.

I. INTRODUCTION
In todays modernized market, retailers play the role
of a gatekeeper within many product chains
connecting suppliers with consumers and vice versa
and being in direct contact with consumers they exert
significant influence on what products consumers
want to buy, and how they use and dispose them. On
the other hand, they reach out to suppliers worldwide
bearing the opportunity to encourage profitable
production practices. Retailers can directly influence
consumer choice at the sales point.. (Kotler 2006)
defined retailing as all the activities involved in selling
goods or services directly to final consumers for
personal, nonbusiness use; they can be understood in

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Vol. 2, No. 5, October 2012

Department of Agriculture held the first-ever joint

public workshops on competition issues including
buyer power and vertical integration in the agricultural
sector. However, one important issue how retail
markets (i.e. consumer demand and retailers seller
power) influence the magnitudes of buyer powers
price effects in agricultural procurements, has not been
examined in the existing literature and public
discussions.( Xia & Sancewich 2012).

capita consumption and population have leveled off,

demand for dairy products is still rising about 2
percent per year driven primarily by consumption of
higher value-added products rather than volume
increases, rapid growth in demand in middle-income
developing countries will help boost dairy trade
(Blayney et al 2006). The food marketing has been
undergoing a paradigm shift in India and the
emergence of integrated food supply chains is one of
the fast growing and most visible market phenomena.
Yet, about 80 per cent of marketed milk still passes
through the traditional channels of handling raw milk
and traditionally produced milk products (Kumar and
Staal 2010). Despite the lack of research
manufacturers have tended to consider retailers as an
important source of information about consumers and
have sought their help to gain a greater understanding
of the marketplace.( McClure & Ryans 1968). In the
Northeastern part of the United States, it is perceived
that market power of retailers not processors
drives farm gate milk prices below efficient levels.
This harms consumers, farmers and processors alike
(Cotterill 2006). Increasing concentration in the U.S.
supermarket industry raises concerns, especially
among farmers and consumers groups, about the
effects of market power in dealing with suppliers
(buying power) and consumers (selling power).
According to the United States Census Bureau and
Trade Dimensions Marketing Guidebook, the top four
supermarket retailers in the United States controlled
approximately 18% of total sales in 1982 and 43% in
1999. Though the supermarket industry could be
characterized as a monopolistic competition at the
national level, the structure of this industry at the local
or regional level is mainly oligopolistic ( Ellickson
2007). Understanding the pricing conduct of
supermarket chains is a key issue toward explaining
retail prices, as well as the relationship between retail
prices and the farm price. The level of market power
that supermarket chains have to set retail prices
beyond the competitive level is of particular interest.
More specifically, do supermarket chains exercise
market power when they set retail prices? This is
relevant not only from a research standpoint, but also
to policy makers, producers and processors, and
consumers. From the viewpoint of policy makers,
accurate estimation of market power helps shape
better antitrust and merger laws to protect the welfare
of society (Perloff et al. 2007). At the production and
processing levels, understanding retail pricing conduct
is a helpful decision-making tool in determining
strategic variables, such as advertising, product
differentiation, and industry consolidation (dairy
cooperatives, for example) to counteract the increasing
retail market power, if any ( Chidmi & Murova 2011).
In 2010, the U.S. Department of Justice and U.S.

II. OBJECTIVES OF THE STUDY

1- To study and analyze the participation of the
retailer system in the dairy product supply chain.
2- To reflect the role of retailers efforts towards
sustainable consumption and production.
3- To classify and describe dairy product
manufactures marketing efforts through studying
the retail system.
III. MATERIALS AND METHODS
The study was performed during the period 2009 2010 in Khartoum State, the capital of the Sudan.
Khartoum state is considered a major consumption
centre of fresh milk and dairy products being one of
the largest residential areas in the country, with a total
population exceeding five million residents. Retailers
in Khartoum state were the target of the study.
Retailers are those who sell fresh milk and dairy
products to the final consumer. As the basics of
distribution and selling of the products depend
necessarily on consumers characteristics who acquire
several variations in socioeconomic characteristics
which affect the consumption patterns; a stratified
quota sampling procedure was adopted to select 180
retailer shops as a sample of this study. Khartoum
state was divided into three major consumption areas;
Khartoum, Khartoum- North and Om-durman, and
further, each was divided into three subareas
according to their socioeconomic standards,
implementing an intentionally chosen random sample
which were: high standard subareas, medium standard
subareas and below medium subareas, reaching a total
of 9 subareas in the three main consumption areas, to
ensure the inclusion of a wide spectrum of consumer
characteristics. Further, a population frame of retailers
in Khartoum State (a quota sample of 60 shops in each
area) was selected to obtain a total sample size of 180
retailer shop. The study was mainly based on primary
data collected from the selected sample through a
scientifically structured questionnaire. A pre-survey
questionnaire was designed and distributed to a
limited number of sellers to get some useful data that
assisted in restructuring the final intended

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Vol. 2, No. 5, October 2012

questionnaire. Then the final questionnaire was

distributed to the selected respondents, and after their
feedback, the distributed questionnaires were
collected. The response rate was 100 % as shown in
Table 1. The collected data was analyzed using the

computerized Statistical Package for Social Sciences

(SPSS) to obtain the frequency distributions and the
weighted measures central tendency of the variables of
the study.

IV. RESULTS AND DISCUSSION

Table 1: Retailers shop location
Item

Number of
questionnaires
distributed

Number of
questionnaires
collected

High standard subareas

60

60

33.3

Medium standard subareas

60

60

33.3

Below- medium subareas

60

60

33.3

Total

180

Table 2: Retailers source of fresh milk

ITEM

180
100.0
(Source: Researcher questionnaire)

No.

Directly from the farm

53

29.4

Directly from the whole seller

46

25.6

Directly from the roaming sellers

31

17.2

Total

130

72.2

No answer

50

27.8

Total

180

100.0

(Source: Researcher questionnaire)

farms while (25.6%) get milk from whole sellers with
(17.2%) get their milk from roaming sellers. These
results indicate that farms have higher credibility as a
source of fresh milk.

Table 2 show that 130 shops (72.2%) out of the 180

shops under study, sell fresh milk, while 50 shops
(27.8%) dont sell fresh milk. Out of the 130 shops a
percentage of (29.4%) get their milk directly from

Table 3: Availability of fresh milk to cover consumers demand/ day

ITEM
No.

Yes

105

58.3

No

22

12.2

Total

127

70.6

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Vol. 2, No. 5, October 2012

No answer

53

29.4

Total

180

100.0

(Source: Researcher questionnaire)

while only 22 (12.2%) disagreed. This result indicates
that there is no shortage of daily fresh milk in the
market.

Table 3 shows that out of 127 (70.6%) respondents

who answered the question, 105 (58.3%) assured that
fresh milk was enough to meet consumers demand

Table 4: the percentage that retailers fresh milk sale covers of the total market demand
Fresh milk

Dairy products

ITEM

10- 25%

No.
29

16.1

No.
43

23.9

25- 50 %

60

33.3

68

37.8

50- 75%

60

33.3

57

31.7

Cannot predict

31

17.2

12

6.7

Total

180

100.0

180

100.0

(Source: Researcher questionnaire)

Table 4 shows that 60 (33.3%) of the respondents
think that their sale of fresh milk cover 25-50% of the
market demand, in addition to the other 60 (33.3%)
respondents who think that their sale covers 50- 75%
of market demand. These results confirm results
concluded in table 3 that there is no shortage of daily

fresh milk in the market. In addition table 4 shows that

68(37.8%) of the respondents think that their sale of
dairy products cover 25-50% of the market demand, in
addition to the other 57 (31.7%) respondents who
think that their sale covers 50- 75% of market demand.

Table 5: Retailers source of dairy products

ITEM

No.

Directly from the Dairy Plant

1.7

Directly from the distribution centers

1.7

Directly from the whole sellers

3.9

Directly from the processors distribution cars

167

92.8

Total

180

100.0
(Source: Researcher questionnaire)

Table 5 shows that dairy products source for 167

(92.8%) respondents was directly from the producers
distribution cars, with 7 (3.9%) from whole sellers, 3
(1.7%) from distribution centers, and 3 (1.7%) directly

from dairy plants. This result clearly indicates that

dairy plants implement distribution system strategy
through their cars as an organized promotional effort
that depends on the sales man as a representative of

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Vol. 2, No. 5, October 2012

the factory as well as building strong relationships

with the customer. On the other hand such distribution

methods are clearly preferable to retailers in

minimizing transportation costs.

Table 6: Retailers selling routes of fresh milk and dairy products

ITEM

No.

Your own place

179

99.4

House delivery

0.6

180

100.0

Total

(Source: Researcher questionnaire)

Table 6 shows that 179(99.4%) of the respondents sell products to consumers directly in their shops with only 1(0.6%)
respondent delivers products to houses, this result clearly indicates retailers marketing distribution strategies.

Table 7: effect of various occasions (Ramadan, Eid.. etc) on price of fresh milk and dairy products
Item
Effective

No.
67

%
37.2

Extremely effective

80

44.4

No opinion

13

7.2

Not effective

10

5.6

Extremely not effective

5.0

179

99.4

0.6

180

100.0

Total
No answer
Total

(Source: Researcher questionnaire)

Table 7 shows that out of 179 respondent who gave an
answer, the price of fresh milk and dairy products of
147 (81.6%) respondent are affected by occasions like
Ramadan and Eid thus consequently their selling rates

in comparison to 19(10.6%) who are not affected. This

result indicates the crucial effect of consumers food
culture in these occasions that surely affect
consumption patterns.

Table 8: does the retailer perform promotional efforts

ITEM

No.

Yes

50

27.8

No

130

72.2

Total

180

100.0
(Source: Researcher questionnaire)

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Vol. 2, No. 5, October 2012

comparison to only 50(27.8%) who performed such

efforts, this indicates that retailers depend on
producers promotional efforts for their own products
in order not to bear additional expenses.

Table 8 shows that 130 (72.2%) respondents indicated

that they do not perform any promotional efforts in

Table 9: why the retailer does not perform promotional efforts

ITEM

No.

Depends on his shop reputation

59

32.8

Product producers already perform

enough promotional efforts

69

38.3

Other reasons

1.1

Total

130

72.2

No answer

50

27.8

Total

180

100.0
(Source: Researcher questionnaire)

Table 9 shows that out of 130 respondent not

performing promotional efforts, 69 (38.3%) think that
producers already perform enough promotion, 59
(32.8%) indicated they depended on their shops

reputation for customer attraction. These results

clearly indicate the poor role retailers play in
promotion preferring otherwise to concentrate on
selling process only.

Table 10: Do dairy product producers motivate retailers upon increase of product selling rate?
ITEM
No.
%
Yes

15

8.3

No

164

91.1

Total

179

99.4

0.6

180

100.0

No answer
Total

(Source: Researcher questionnaire)

stated they were motivated by the companies. This
result shows that companies ignore the motivation
policy as being one of the important elements in the
promotional efforts that can help boost selling rates
and gain customer (retailer) loyalty.

Table 10 shows that out of 179 respondents

164(91.1%) indicated that producing companies do
not motivate them on rise of selling rate of their
relevant products in comparison to 15(8.3%) who

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Vol. 2, No. 5, October 2012

Table 11: Dairy product producers motivation methods

ITEM

No.

Price discount

1.7

Price discount and increase in product

quantity

2.8

Non- materialistic motivation

0.6

Total

5.0

No answer

171

95.0

Total

180

100.0
(Source: Researcher questionnaire)

Table 11 shows that motivation methods ranged between, price discount and increase in product quantity (2.8%); price
discount (1.7%); non- materialistic motivation (0.6%).

Table 12: Do dairy product producers perform consumer market research in retailers shops
ITEM
No.

Yes

96

53.3

No

80

44.4

Total

176

97.8

2.2

180

100.0

No answer
Total

(Source: Researcher questionnaire)

Table 12 shows that 96(53.3%) respondents out of
176(97.8%) stated that producers perform consumer
market research in comparison to 80 (44.4%) who do
not perform any market research. This result indicates

the awareness of producers of the importance of

getting the feedback from consumers as a strategy for
good marketing.

Table 13: retailers classification of manufacturers promotional efforts

Item
Effective

No.
102

%
56.7

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Vol. 2, No. 5, October 2012

Extremely effective

51

28.3

No opinion

18

10.0

Not effective

3.9

Extremely not effective

1.1

180

100.0

Total

(Source: Researcher questionnaire)

7- Adaptation of more empirical support for the
synergy between manufacturers advertising
and retail promotional activities.

Table 13 shows the classification of retailers of the

producers promotional efforts where 153(85.0%)
stated that such efforts affect consumption and hence
selling rates in comparison to only 9 (5.0%) who see
that such efforts are non- effective. This result reflects
the importance of promotion in marketing.

References
1) A. Omore, J. Cheng'ole Mulindo, S.M.
Fakhrul Islam, G. Nurah, M. I. Khan, S.J.
Staal, Employment generation through
small-scale dairy marketing and processing
experiences from Kenya, Bangladesh and
Ghana, FAO Animal Production and Health
Division, 2004. pp 7-8
2) Anjani Kumar, Milk Marketing Chains in
Bihar: Implications for Dairy Farmers and
Traders, Agricultural Economics Research
Review Vol. 23, 2010. pp 469-477 .
3) Benaissa Chidmi and Olga Murova,
Measuring market power in the supermarket
industry: the case of the SeattleTacoma fluid
milk market, Agribusiness Vol. 27( 4)
Autumn 2011. pp 435449.

V. CONCLUSION
The
study
was
recommendations:

concluded

with

several

1- The spectrum of the retailers role in

marketing dairy products should be more
widened to allow upgrading from being only
an outlet for selling purposes, to a more vital
role in the marketing procedure via
implementing extensive communication and
promotional activities.
2- Manufactures could make more effort in
utilizing the retailer system for their benefit
through adopting joint promotional efforts
with the retailer system.

4) Cotterill, R.W, Outline of a Fair Share Milk

Pricing Policy. In: Food Marketing Policy
Center, Issue Papers No. 1. 2006

3- More attention should be addressed to market

research specifically consumers, in the
retailer system as being considered the
gateway between processors and consumers,
thus assisting in crafting profitable marketing
strategies.

5) Don Blayney, Mark Gehlhar, Chris Hilda

Bolling, Keithly Jones, Suchada Langley,
Mary Anne Normile, and Agapi Somwaru ,
U.S. Dairy at a Global Crossroads, United
States Department of Agriculture, Economic
Research Report No(28) 2006. p3.
6)
Ellickson, P.B,. Does Sutton apply to
supermarkets? The Rand Journal of
Economics, Vol. 38, 2007. pp 4359.
7) Fuller Frank, Jikun Huang, Hengyun Ma, and
Scott Rozzelle, The Rapid Rise of Chinas
Dairy Sector: Factors Behind the Growth in
Demand and Supply, Working Paper No.
05-WP 394, Iowa State University, Center for
Agricultural and Rural Development, 2005.
www.card.iastate.edu/publications/DBS/PDF
Files/05Wp394.pdf

4- Encouraging retailers to adopt their own

dairy products brands thus providing more
consumer choices in addition to healthy
reliable products.
5- Retailers and manufacturers need better
models of relative allocation of marketing
budget towards traditional and modern
media.
6- More research is needed for classifying and
analyzing the role of the retailer system as a
vital part of the dairy marketing supply chain.

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Vol. 2, No. 5, October 2012

8) Grocery Management Association, Shopper

Marketing: Capturing a Shoppers Heart,
Mind, and Wallet, 2007. Report accessed on
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www.gmabrands.com/publications/docs/2007
/shoppermarketing.pdf.
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Impact of Rapid Development of
Supermarkets on the Dairy Industry in
China, Chinese Rural Economy Vol.
7(Serial Number 235) 2004. pp 12-18.
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Empirica Vol. 39( 1) 2012. pp 109-122.
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from Assam, India. Quarterly Journal of
International Agriculture, Vol. 49 (3) 2010.
pp 213-225.
12) Kusum L. Ailawadi, J.P. Beauchamp,
Naveen Donthu Dinesh K. Gauri , Venkatesh
Shankar, Communication and Promotion
Decisions in Retailing , Journal of Retailing
Vol. 85 (1) 2009. pp 4255.
13) Perloff, J.M., Karp, L.S., & Golan. A,
Estimating market power and strategies.
Cambridge: Cambridge University Press,
2007.
14) Peter J. McClure and John . K. Ryans. JR,
Difference between retailers and consumer
perception, Journal of marketing research
Vol. V , Feb. 1968. p 35.

AUTHORS PROFILE

Dr/ NAHID MOHAMMED TAWFIK FAWI is an

Assistant Professor at the University of Khartoum
with 15 years of teaching experience in the line of
Dairy production. She is currently interested in the
line of Dairy marketing and management aspects.
She has several scientific papers in Dairy
marketing.

15)

Philip Kotler & Kevin Keller, Marketing

Management 12th ed. New Jersey: Pearson
Prentice Hall, 2006. p 530.
16) Tian Xia and Brian Sancewich, Retail
Markets and Buyer Power in Agricultural
Procurements, Journal of Agricultural
Economics Vol. 54, 2012. pp 127-143.

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