Document Sample
					    Summer internship
As partial fulfilment of requirements for the award of
  Post Graduate Diploma in Business Management

Report on Identifying factors behind decreasing
market share and study of consumer behaviour

                  Submitted to :-
              Prof. R.J.Masilamani

                 Submitted by :-
                   Arpita Gupta

This is to certify that Miss. Arpita Gupta, has completed her summer internship
at Mother Dairy, and has submitted this project report entitled Identifying
factors behind decreasing market share and a study of consumer behaviour
towards partial fulfilment of the requirements for the award of the Post
Graduate Diploma in Business Management .

This Report is the result of her own work and to the best of my knowledge no
part of it has earlier comprised any other report, monograph, dissertation or
book. This project was carried out under my overall supervision.



                                                      Internal Faculty Guide

                                     Summer Internship Report, PGDM 09-11 |   1

The satiation and euphoria that accompany the successful completion of the
project would be incomplete without the mention of the people who made it

I would like to take the opportunity to thank and express my deep sense of
gratitude to my corporate mentor Mr. Dhiman Sen and my faculty mentor Prof.
R.J. Masilamani. I am greatly indebted to both of them for providing their
valuable guidance at all stages of the study, their advice, constructive
suggestions, positive and supportive attitude and continuous encouragement,
without which it would have not been possible to complete the project.

I would also like to thank Mr. Amar Majumdar (Senior Marketing asst.) who in
spite of busy schedule has co-operated with me continuously and indeed, his
valuable contribution and guidance have been certainly indispensable for my
project work..

I am thankful to Mr.K.P.Boral for giving me the opportunity to work with
Mother dairy and learn.

I owe my wholehearted thanks and appreciation to the entire staff of the
company for their cooperation and assistance during the course of my project.

I hope that I can build upon the experience and knowledge that I have gained
and make a valuable contribution towards this industry in coming future.

                                    Summer Internship Report, PGDM 09-11 |   2
                            TABLE OF CONTENT

Sl No.                              Topic                                 Pg No.

  1      Executive summary                                                     4

         Introduction :
  2                 Need of the study                                         5
                    Objective of the study
  3      Organisational Background                                             7

         Literature Review :
                    Current scenario
  4                 Supply chain management                                   14
                    Distribution channels
                    Processing
                    Quality control
  5      Competitor Analysis                                                   19

  6      Study of distributors and retailers                                   23

  7      Research methodology                                                  35

  8      Conclusion                                                            43

  9      Limitations                                                           44

  10     Recommendations                                                       45

  11     References                                                            47

  12     Annexure                                                              48

                                      Summer Internship Report, PGDM 09-11 |   3
                          EXECUTIVE SUMMARY

The project was started on 8th of April after knowing all the relevant
information about the different milk varieties available, under the guidance of
Mr.Dhiman Sen (E.O.Officer).The first part of my project involves the study of
distributors allocated to me Identification of their problem areas and helping
them in order to increase sale. For this I used the method of personal interviews
and questionnaires. At the same time , they were being made aware of the
incremental scheme of Mother dairy for the distributors. Along with the
distributors a study of retailers was conducted to better understand the
grievances and identify the gaps. For this I visited around 50 outlets in the area
,ie, North and East Kolkata and spoke to them. I was also supposed to find out
new retail outlets and convince them to sell Mother dairy milk by showing them
the opportunity of getting attached with a big FMCG brand like Mother dairy
and increase the customer base. Despite of summer and low demand I was
successful in persuading people and a number of new retail sale points were
developed and the sale was increased. The second part of my internship was the
study of consumer attitude towards Mother dairy milk or more specifically the
factors affecting the decision of purchase of milk. For this a sample of 200
consumers was taken and a factor analysis was carried on to find the decision
making factors.

                                       Summer Internship Report, PGDM 09-11 |   4

Need of the study

The project was an attempt to know the reasons behind low sale of milk of
Mother dairy in Kolkata. Despite of being the first in the industry,and having
the first mover advantage and the brand name, the sale has fallen down
incredibly due to competitors like Amul ,Metro dairy , Red Cow and others.
There is a need to revamp the company and position it all over again in the mind
of the consumers. In doing so firstly the grievances of the distributors and the
retailers were required to be solved in order to encourage them for push sales.
Secondly a study of consumers decision making factors is required in order to
understand their priorities which can be worked upon. For this purpose a
research is to undertaken to find out the market scenario.

With the help of the responses given by the consumers and data analysis, the
company will be able to understand its strengths, weakness , opportunities and
threats. The survey report submitted by me will assist the company to take right
decisions to increase the turnover and market share.

Objective of the study

The objectives of the study are the following :-

   1. The main objective of this project is to probe the reasons for decreasing
      market share of Mother Dairy and to find out the measures that can be
      adopted to increase the sales

   2. To study the distribution channel in the retail chain of Mother Dairy

   3. To identify the issues related to Mother Dairy retailers and distributors

   4. To get the retailers feedback from specific regions

   5. To add up new retailers in the area

                                       Summer Internship Report, PGDM 09-11 |   5
6. To study Mother Dairy positioning in the mind of the consumers vis-à-
   vis competitors

7. To find out the factors that affect consumers decision to purchase milk

8. To find out short term problem in every sub-region that can be sorted out

9. Suggesting viable recommendations to be implemented in the area

                                   Summer Internship Report, PGDM 09-11 |   6

Mother Dairy was set up in 1974. Mother dairy Kolkata is a government of
West Bengal project, was started under Operation Flood II of National Dairy
Development Board . It was set up initially to cater to the demand of the
Kolkata urban agglomeration spread over the Kolkata Metropolitan area, later it
reached out to the consumers of other districts also. The commissioning of the
Dairy started in July 1978. Initially, the management of Mother Dairy was
looked after by the National Dairy Development Board . On 24th March 1982 ,
the then Honourable Chief Minister Shri Jyoti Basu dedicated Mother Dairy
Calcutta to the rural milk producers and urban milk consumers of West Bengal.

Mother Dairy is an IS/ISO 9002, IS 15000 HACCP and IS 14001 EMS certified
organization. Moreover, its Quality Assurance Laboratory is certified by
National Accreditation Board for Testing and Calibration Laboratory (NABL)-
Department of Science and Technology, Government of India.

At Mother dairy milk is produced by mixing raw milk, white butter and skim
milk powder. Skim milk powder is made by mixing cow and buffalo milk
obtained during breeding seasons through various co-operatives in West Bengal
and converting them into powder in order to store for a longer period. Raw milk
is obtained on a daily basis from the co-operatives. It is then stored in chilling
plants and transferred to the Mother dairy factory through insulated tanks.
While raw milk is stored in the cold chain at 2°C skim milk powder and white
butter is stored under normal temperature. This milk is then pasteurised at 78° C
in order to make it free from germs and then it is homogenised.

Mother dairy is presently selling Milk & Milk Products like Khatta Doi ,
Flavoured Yoghurt, Plain yoghurt, Paneer, Ice cream and Packaged Drinking
Water. The entire product mix is shown below :

                                       Summer Internship Report, PGDM 09-11 |   7
Each of the product is further discussed in details :-


Varieties in Milk :

    Sl.No              Product             Fat      Solid not Fat          Water
                                         content        (SNF)
      1          Doble Toned Milk         1.5%           9.0%              89.5%
      2          Toned Milk               3.0%           8.5%              88.5%
      3          Full Cream Milk           6%             9%                75%
      4          Cow Milk                 3.5%           8.5%               88%
      5          Skimmed Milk             0.5%           9.5%               90%

                                        Summer Internship Report, PGDM 09-11 |   8
Double toned Milk

It‟s fresh it‟s pure it‟s co-operative milk with assurance of Mother dairy. Mother
dairy double toned milk - tasty and nutritious with low fat content. A dream
come true , especially for all the calorie conscious people who love the taste of
milk but are worried of its cream content. Mother dairy double toned milk
complements your daily workout perfectly. So , to maintain complete harmony
between your body and soul you‟ve got to “fresh and pure”.

Toned Milk

Mother dairy bulk vended token milk – healthy and tasty to the last drop.
Homogenised to evenly distribute the cream content , it‟s thicker and a lot easier
to digest. It‟s the magic of homogenisation that makes your kheer thicker and
shake frothier. Fortified with Vitamin A , which not only is good for your
complexion but also helps prevent night blindness. What‟s more , it gives your
children the energy to stay active through work and play

Full Cream Milk

                                       Summer Internship Report, PGDM 09-11 |   9
Mother dairy full cream milk - wholesome and healthy. Packed with energy and
nutrition thats essential for growing kids. It makes them stronger from within
and keeps them active and healthy. So before they go to bed , and after they rise
give them Mother dairy full cream milk to keep them healthy and wise and to
see them „grow faster‟.

Cow Milk

Mother dairy‟s cow milk has a yellowish tinge due to presence of an element
called carotene and is a good source of Vitamin –A,B-12 and Vitamin D. Cow
milk is considered to be easily digestible. Whether poured on breakfast cereal or
enjoyed alone as a cold glass of milk, this can be enjoyed year around.

Skimmed Milk

In skimmed milk , as much of the fat as is possible is removed , yet it continues
to supply all the nutrients that full cream milk does. The young at heart would
particularly find it a tempting option. So its the best option to remain energetic
and young.

Margin (per ltrs) :

   Sl.No              Product        Distributor’s        Retailer’s        MRP
                                         Price              Price
      1        Doble Toned Milk          19.65              20.00           21.00
      2        Toned Milk                20.75              21.10           22.00
      3        Full Cream Milk           25.45              25.80           27.00
      4        Cow Milk                  22.65              23.00           24.00
      5        Skimmed Milk              17.65              18.00           19.00

Shelf Life : 2 days under   4°C

Average Daily Sales (in ltrs) : 335000 lakh

                                       Summer Internship Report, PGDM 09-11 |   10
Pattern of sale :

Distribution Network :

                         Summer Internship Report, PGDM 09-11 |   11
                        OTHER PRODUCTS

    Sl.No             Product
      1             Mishti Doi
      2            Plain Yoghurt
      3       Favoured Yoghurt
                 a) Vanilla
                 b) Green Mango
                 c) Chocolate
                 d) Pineapple
      4                Paneer
      5              Ice-cream
      6         Packaged Drinking

Mishti Doi               Plain Yoghurt                  Flavoured Yoghurt

             Paneer                      Drinking Water

                                    Summer Internship Report, PGDM 09-11 |   12
Margin (per 100 gms) :

   Sl.No               Product       Distributor’s      Retailer’s           MRP
                                         Price            Price
      1             Mishti Doi           6.50             7.20               8.00
      2           Plain Yoghurt          6.50             7.20               8.00
      3        Favoured Yoghurt
                  a) Vanilla
                  b) Green Mango          6.50             7.20              8.00
                  c) Chocolate
                  d) Pineapple
      4               Paneer             17.50             18.50             20.00

Shelf Life :

Yoghurt : 8 days under 4°C
Ice-cream : 1 year under -18°C
Drinking Water : 9 months under normal conditions

Average Daily Sales :

Yoghurt : 3600 Kgs
Paneer : 800 Kgs
Ice-cream : 1200 kgs

                                    Summer Internship Report, PGDM 09-11 |    13
Distribution Network :

                         Summer Internship Report, PGDM 09-11 |   14
                           LITERATURE REVIEW


Mother dairy has a market share of around 33 % in the branded sector in West
Bengal where it sells 3.4 lakh litres of milk daily on an average and undertakes
its marketing operations through around 51 distributors and around 600 retailers
in Kolkata itself. It has a huge advantage over its competitors as it is the only
player when it comes to sale of loose milk through token. Before the entrance of
competitors like Amul ,sale of loose milk through Mother Dairy booths was
around 35 % of the entire sale in branded segment , when Mother dairy was the
only player in the market. However since last five years the sale is continuously
declining and presently it is just 8-9 %.

                                      Summer Internship Report, PGDM 09-11 |   15
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Supply Chain Management

1) Milk Procurement: - Mother Dairy sources its requirement of liquid milk
from dairy co-operatives and producer institutions. Milk is received from farmer
cooperatives through insulated tankers at 2°C temperature in order to retain its

2) Milk distribution: -Tankers in the morning and in the evening bring in milk
from the regional collection centres. After collection the same tankers are
utilized for the delivery of the processed milk to the distributors. Mother Dairy
has about 51 Distributors in the city of Kolkata. Each of these LAD‟s(Local
area distributor ) place their demand by raising an invoice one day in advance.
The demand is also calculated using the „Calendar‟ Scheme, in this depending
on the pre-calculated seasonal demands the outlets place their orders
accordingly. In order to satisfy immediate demand, 20 to 25 tankers are
provided with a buffer stock of 500 litres each day so that they can be mobilized
to cater the demand in an area. To coordinate its operations all the tankers are
equipped with HAM radios.

                                      Summer Internship Report, PGDM 09-11 |   17
Distribution Channels:

a) Token Distribution: Also, termed as “Lohe ki bhains” (metal buffalo), is an
automated milk vending machine.

b) Distributors: The packaged milk is distributed via the distributor network
throughout the city.


At mother dairy, the processing of milk is done by process automation whereby
state of the art microprocessor technology is adopted to integrate and
completely automate all functions of the milk processing areas to ensure high
product quality/reliability and safety. There are four ways of milk processing –

Firstly, Clarification, in which milk is spun at very high speed, removing all
dust particles that are invisible to the naked eye.

Secondly, Standardisation which help to maintain uniformity by raising or
lowering its fat and SNF (solid not fat) percentage to a desired levels, so as to
deliver milk to consumers as per prescribed PFA norms.

Thirdly, it is Homogenization which improves palatability of milk and

                                      Summer Internship Report, PGDM 09-11 |   18
Finally, Pasteurization, which kills all pathogenic bacteria present in the milk
and thus making it safe for consumption.

Quality Control

Stringent quality control methodologies are employed in Mother Dairy.

a) The milk is tested for adulterations and quality at the time of collection from
the farmers.

b) The Milk that comes from the collection points to the Mother Dairy plant is
ensured to have a temperature of not more than 4°C and is subjected to 15
product and quality checks.

c) The Milk quality is checked repeatedly after each processing phase and the
temperature is judiciously maintained less than 4°C always.

d) Before the milk leaves the plant for the delivery/distribution outlets the milk
is tested again.

e) The temperature of milk in the delivery trucks is always maintained less than

f) All the trucks that deliver milk have specified guidelines to bring back 100
litres of milk after distribution. This is done in order to test the delivered milk
and to ensure that the tankers are not adulterated during distribution.

g) Since all the employed processing procedures are automated, no
contamination by human hands takes place.

h) To ensure milk freshness the collection and distribution points are always
chosen such that the travel time between them is always less than 36 hours.

Out of the total production about 9% goes directly to the institutions ,23% is the
loose token milk and the rest is distributed through LAD‟s.

                                       Summer Internship Report, PGDM 09-11 |   19
                         COMPETITOR ANALYSIS


Amul is the acronym for Anand Milk Union Limited, a dairy cooperative
company in Gujarat, India that markets a wide range of products including milk
powders, milk, butter, ghee, cheese, chocolate, Shrikhand, Gulab Jamun, ice
cream, cream, and others making it the largest food brand in India. Amul has
spurred the White Revolution of India, which has made India the largest
producer of milk and milk products in the world. It is one of the best examples
of co-operative achievement in the developing economy. Amul entered the
pouched milk market in Kolkata in 2005 and then onwards giving a tough
competition to Mother dairy .Presently Amul has a 40 % market share in the
branded milk segment.


                                     Summer Internship Report, PGDM 09-11 |   20
The varieties of Amul milk available in Kolkata are :
   Amul Taaza Toned Milk 3% fat
   Amul Gold Full Cream Milk 6% fat
   Amul Slim & Trim Double Toned Milk 1.5% fat
   Amul Tea Special

At Amul skim milk powder is procured from the cooperatives of Gujarat which
is much superior in quality when compared to the cooperatives of West Bengal
leading to better quality of products.


When compared to Mother dairy , the distributors margin of Amul is .50p/ltr
whereas Mother dairy gives .30p/ltr .In case of retailers Mother dairy has fixed
margin in every part of West Bengal .However Amul gives different margins
depending upon the location and sale of the retailer which becomes a great
incentive to sale. The price of the milk to the end consumer is however similar
to Mother Dairy.

                                      Summer Internship Report, PGDM 09-11 |   21

The availability of milk is a major concern among the consumers. Amul with its
vast distribution network has enhanced the market and is responsible for its
growth. Amul has made pouched milk available in almost all suburbs of West
Bengal where we cannot find Mother dairy even today. Mother dairy is not able
to cater to those markets because their size is comparatively small and with the
current retailers and distributors margin there is hardly any profit left to them
because the expenditure is much more.


Amul has a great brand image in the mind of the customer .Their expert
marketing and advertising strategies add all the more to the sales.


Metro Dairy was founded in the year 1994 as a new venture of Keventer Agro
Ltd. It was India's first dairy project in public private partnership. A three-way
joint venture was signed between West Bengal Milk Federation, Keventer and
NDDB, forming 'Benmilk Keventer Limited' to enhance milk supply in Kolkata.

The initiative had a strong backbone of:

       An ultra-modern, state-of-the-art plant - the most modern plant in Asia.
       Fully equipped with complete automation and very high level quality and
        state-of-the-art control systems.
                                       Summer Internship Report, PGDM 09-11 |   22
      The fully automated plant restricts any hand touch right from the time
       milk is brought out from tankers till the point milk is finally packed.
      World Bank funded the project under Operation Flood, Phase III with the
       objective of providing fair treatment to farmers and eliminating middle

Having earned laurels in the milk industry, the Keventer Group extended to the
ice-cream category in 1998. In a handful of years, established itself as one of the
major competitor in the milk and ice-cream industry. Currently 20,000 litres of
ice cream is produced per day.

                                       Summer Internship Report, PGDM 09-11 |   23

The study of distributors and retailers was conducted on a part of North
Kolkata ,ie,Maniktala , Shyambazar , Ahmerst street , Raja Bazar , Malik
Bazar, New Market , Dalhousie , Minto Park , Esplanade , Dharamtala ,
A.J.C.Road . The 3 major distributors in the area were interviewed. They are :

Five Star Distributor
40A, W C Banerjee Street
Ph : 9831012141

2A , Scotland Lane
Ph : 9831016732

Jyoti Gupta
133/C , Raja Ram Mohan Sarani
Ph : 98319-50986

 The method of personal interview and questionnaire was adopted to get the
insights. The following mode of operation was found out through interviews :

    An agreement is done by the company with the LAD for payment of a
     security deposit

    The LAD will receive the delivery of poly pouch milk at the scheduled
     place mutually agreed upon and to sell the same to the third party retailers
     in the area specified by the dairy

    The milk shall be sold by the LAD to the retailer already existing in that
     area and further outlets to be developed by the LAD

    The agreement made at the beginning of the contract with the LAD shall
     remain valid for a specified period of time and shall be terminated on the

                                      Summer Internship Report, PGDM 09-11 |   24
      expiry of the period unless it is extended or renewed for any further
      period by mutual agreement

    The LAD will take the delivery of the exact quantity of packaged milk
     supplied by the dairy in its place against the indent placed by the LAD the
     previous day. The Lad shall pay the cost of milk against the delivery of
     milk by an account payee cheque or banker‟s cheque

    The operational area of LAD shall be decided by mutual consent and may
     be increased or decreased as per the decision of dairy from time to time

    The LAD shall increase the sales by at least 10% over and above the
     present sales within 3 months

    The LAD shall be responsible for delivery of milk in good condition and
     in time to various outlets by his own arrangements of transport and

    If at any time the milk is found unfit for human consumption due to
     mishandling or bad storage by the LAD , strict action will be taken

    The LAD is solely responsible for maintaining the sealing , quality ,
     packaging , etc. of the milk packets received from the dairy

    The milk once delivered to the LAD shall not be returned to the dairy at
     anytime and under any circumstances

    The LAD shall also be responsible to leverage out the benefits given to
     the retailers by the company from time to time

The results of the questionnaires filled by Lad are given below :-

                                       Summer Internship Report, PGDM 09-11 |   25
Findings :

             Summer Internship Report, PGDM 09-11 |   26
Summer Internship Report, PGDM 09-11 |   27
Interpretations :

Earlier Mother dairy itself used to distribute milk directly to the local retailers,
the distribution of milk through LAD‟s started only last year. Since the
distributors are new they hardly have any complain regarding retailers drop out
within the year of work. However sales were largely affected due to competition
from other local brands which are coming up daily with new schemes.

 According to the distributors, the margin was not sufficient to meet their
expenses. Their profit remains negligible. Among the competitors also Mother
dairy‟s margin is the lowest. Again there is no incentive to work hard. The
targets given by the company were not realistic and hence were not achieved.

Their view about the quality of milk is also not satisfactory. According to them
there is no consistency in the quality, which becomes a major reason of low
consumer demand. When it comes to competitiveness Mother dairy lacks
behind many brands and especially Amul which has captured the market with
its mass advertisements and fine quality of product.

                                        Summer Internship Report, PGDM 09-11 |   28
      Apart from the survey with the three LADs ,others were also contacted in order
      to solve their grievances .The report prepared is shown below :

                 MOTHER DAIRY CALCUTTA

        NATURE OF FEEDBACK                              LAD NO.
        Commission is less in comparison to other
1                                                       99102,99003,99406
        competitors brand
2       Leakage/Packing/Packaging problem
        Transport Problem (Vehicles are not reaching
3       in time/Single vehicle supply is wanted by      99201,99307,99223,99207,99219,99403
        DTM quality is very bad /thinner as compared
4                                                       99003,99102,99219
        to other companies
        Market visit required jointly with MDC
5                                                       99201,99216,99215,99307
        officials for effective outcome
6       Other LADs are infiltrating into the area       99102,99301,99103,99307,99201,99207
        Lifespan of the product is small compared to
7                                                       99203,99105
        other brands
        Short supply than indented quality on regular
8                                                       99307,99408,99411,99004
        Interested to distribute other product of MDC
9                                                       99203,99101,
        but not getting
        No free gift products are supplied by MDC on
10      certain amount of sale to LADs as given by      99003
        other competitor companies
        No advertisement material given by the
11                                                      99404,99102,99405,99201,99402,99305
12      Incentive scheme circular required              99411
13      Banking problem                                 99409
14      Curdling problem                                99211,99002
15      Better incentive plans should be implemented    99104
16      Milk comes in Horizontal position               99211,99218,99219,99408

                                                Summer Internship Report, PGDM 09-11 |   29
After the distributors, the retailers were also interviewed in the similar manner.
About 50 representative retailers were chosen for the purpose through
convenience sampling.


                                       Summer Internship Report, PGDM 09-11 |   30
Summer Internship Report, PGDM 09-11 |   31
Summer Internship Report, PGDM 09-11 |   32
Interpretations :

During the interview most of the retailers were satisfied by their sales
considering the location and competition in the market , however few who were
not , considered decreasing quality as a reason of loss of sales apart from
competition with other brands. Also it was witnessed that their is no
competition from local dairy owners because they have a fairly differentiated

According to the majorty the major competitor is Amul , with its vast marketing
strategies , immense brand image and enormous quality of products, it has
successfully captured the market.However few of the retailers also believed that
the local brands like Red Cow,Thacker dairy,Amrit Fresh,Delight etc are
emerging as great competitors .These brands are new and are giving huge
margins and incentives , which is leading to push sales.

                                      Summer Internship Report, PGDM 09-11 |   33
The margin of amul and Mother dairy is almost same in the area , however
when compared to local brands it is quiet less. When it comes to
competitiveness according to the retailers Mother dairy is not performing upto
the mark.Their strategies does not meet their competitors. Brands like Red Cow
offer huge discounts to their retailers whereas Mother dairy has no such

Thus through applying root cause analysis we can come out with the main
problems of distributors and retailers leading to decreasing market share. The
fish bone diagram demonstrating the reasons is shown below:

Competition from local brands was one of the most contributing factor in
decreasing market share. The local brands not only give high margin to the
retailers but they also have great incentive schemes available for them thus
influencing them for higher sales.

Quality is the next major problem. There is no consistency in the colour or
smell of the milk .Milk is judged by its thickness, which again has the same
issue. Many retailers complained that sometimes the milk has a distinguishable

                                     Summer Internship Report, PGDM 09-11 |   34
bad smell which annoys customers. Also there is a concern that the milk gets
spoiled very easily compared to Amul.

Mother dairy has an incentive plan according to which the distributors are
supposed to increase sales incrementally by 1% every month. This target if
achieve give the distributors an incentive of .05p/ ltr on their total sales for the
year. In order to fulfil the target and increase the sale, the distributors give the
retailers a part of their incentive,say .03p/ ltr. But even then it becomes very
hard for the retailers to increase sale as the demand in the market is limited.
Thus in these cases the only measure left is to increase sale through opening up
of new retail points.

 Here we can see the lack of initiative of the distributors and the company.
During the survey it was found that there were a lot of gaps in the area of the
distributors. There was an unmet demand in the market. The distributors accept
that because of lack of initiative they were unable to meet the requirements.
During my project I identified few of them and thus new retail sale points were
allotted. The details of the sale points generated are :

                                                                  Quantity of milk
SL.No      Name of the owner                Address
                                                                     (in ltres)

   1           Pal Stores/             177A, A.P.C.Road                    20
               Biswajit Pal                  Kol-4
   2                                 25,Sahitya Parishad St                20
              Satkari Ghosal
   3       New Bengal Dairy/          274,Rabindra Sarani                  50
                J.P.Jain                     Kol-7
   4       Tara Fancy Store/          242, Rabindra Sarani                 20
             Sanjay Harsh                    Kol-7

                                        Summer Internship Report, PGDM 09-11 |   35
                       RESEARCH METHODOLOGY

The basic purpose of this research is to find out the factors affecting the
decision of the consumer to purchase milk


To find out problem is the first stage of the research process. It represents
translating the management problem into research problem. It is rightly said, “A
problem well defined is half – solved.”

Consumers have faith in the brand image of Mother dairy, still its losing share
to Amul and other local brands


The objectives of the study are as follows:

   1) The objective of the study was to find the actual reason why people are
      not buying Mother dairy


Sampling Frame:

A Sampling frame consists of a list of item from which the sample is to be

The sample frame for this research constitutes the customers visiting retail
outlets to purchase milk in North and East Kolkata.

Sample Size:

The sample size of the research was 315 individuals.

                                       Summer Internship Report, PGDM 09-11 |   36

Initially 25 factors were identified to carry on the survey through an analysis.
This was further cleaned into a list of questions in a questionnaire (refer
annexure). Once framed and properly fragmented, these were individually filled
for a process of Descriptive Research. A cross-board survey was undertaken
involving consumers of milk in east and north Kolkata. This gave a congregated
set of 314 responses which were then segregated and keyed into SPSS. SPSS
was extensively used to narrow down the factors into components.


The KMO measures the sampling adequacy which should be greater than 0.5
for a satisfactory factor analysis to proceed. The measure of sampling adequacy
(MSA) is .614 for the variables we initially taken for the consideration

Bartlett test of sphericity:

In accordance with the requirement of the test for principal component analysis,
the value should lie well above the significance level. Here in our experiment
the value (.00) does lie well above the pre-determined level of significance.

                               KMO and Bartlett's Test

   Kaiser-Meyer-Olkin Measure of Sampling Adequacy.                                 .614

   Bartlett's Test of Sphericity    Approx. Chi-Square                      4228.375

                                    Df                                              300
                                    Sig.                                            .000

                                           Summer Internship Report, PGDM 09-11 |    37
Communalities :

Communalities indicate the amount of variance in each variable that is
accounted for. Initial communalities are estimates of the variance in each
variable accounted for by all components or factors. Extraction communalities
are estimates of the variance in each variable accounted for by the factors (or
components) in the factor solution. Small values (red) indicate variables that do
not fit well with the factor solution, and should possibly be dropped from the
analysis. In a good factor analysis, the expected values of communalities for
each variable should be more than 0.5. As it is observed from the table above
that we have proper values of extraction for all variables and thus we have
accepted all of them.


                                      Initial        Extraction
1_Decision to purchase milk                1.000             .705
depends upon the quality of milk

2_Price is the most important              1.000             .909
decision making factor when it
comes to purchase of milk
3_Milk purchase is determined by           1.000             .669
the availability of milk where
4_Taste of milk does not affect the        1.000             .706
purchase decision

5_Hygiene is an important decision         1.000             .621
making factor when it comes to
purchase of milk
6_Milk containing smell hampers            1.000             .614
purchase of milk
7_Decision to purchase milk                1.000             .528
depends upon the ease of storage of

                                                Summer Internship Report, PGDM 09-11 |   38
8_Price is not an important decision   1.000          .923
making factor when it comes to
purchase of milk
9_Purchase of milk is determined       1.000          .710
by the availability of milk when
10_Milk containing smell is not at     1.000          .603
all preferred
11_Leakage in milk packets hinder      1.000          .715
purchase decision

12_Faith in the brand image            1.000          .782
increases purchase decision of milk

13_Schemes available on purchase       1.000          .705
of a particular brand influence
14_Awareness about the                 1.000          .669
availability of milk influences
purchase decision
15_Heavy advertisement increases       1.000          .591
purchase of a particular variety of
16_Purchase of milk varies with the    1.000          .672
percentage of fat content
17_Decision to purchase milk           1.000          .790
depends upon the packaging of milk
18_Availability of substitute          1.000          .883
products does not affect purchase
19_A little increase in price when     1.000          .763
milk delivered at doorstep is not a
major concern
20_There is a satisfactory no of       1.000          .583
retailers in the locality
21_The colour of the milk affects      1.000          .747
the purchase decision
22_Decision to purchase milk           1.000          .681
depends upon the retailer‟s

                                         Summer Internship Report, PGDM 09-11 |   39
23_Decision to purchase milk               1.000          .706
depends upon the inconveniences
occurred while purchasing
24_Taste of milk affects the               1.000          .756
purchase decision
25_Availability of substitute              1.000          .894
products affects purchase decision

Extraction Method: Principal Component Analysis.

                                             Summer Internship Report, PGDM 09-11 |   40
Total Variance Explained:

The eigen value is a measure of the strength of an axis, the amount of variation
along an axis, and ideally the importance of an ecological gradient. The precise
meaning depends on the ordination method used. The eigenvectors are the sample
scores, if the rows and columns of the initial matrix represent samples. Eigen values
are the "characteristic roots" of the principal components solution. There is one
eigen value for each dimension, sometimes labelled the inertia for that dimension.
Each eigen value is the amount of inertia (variance) a given factor explains in the
correspondence table. It is called "Inertia" in SPSS output. Eigen values reflect the
relative importance of the dimensions. The first dimension always explains the
most inertia (variance) and has the largest eigen value, the next the second-most,
and so on. The sum of eigen values is total inertia, discussed above.

The Eigen Analysis for our Analysis is given below :

                                         Total Variance Explained

                                               Extraction Sums of Squared
               Initial Eigenvalues                       Loadings                Rotation Sums of Squared Loadings
pone                % of       Cumulative                 % of      Cumulative               % of       Cumulative
nt     Total     Variance            %        Total     Variance        %         Total     Variance        %

1       4.423        17.691          17.691    4.423       17.691       17.691      3.901      15.604       15.604
2       3.206        12.824          30.515    3.206       12.824       30.515      2.588      10.353       25.958
3       2.472          9.886         40.401    2.472        9.886       40.401      2.290       9.162       35.119
4       2.076          8.304         48.705    2.076        8.304       48.705      2.288       9.153       44.272
5       1.994          7.976         56.681    1.994        7.976       56.681      1.864       7.458       51.730
6       1.478          5.913         62.594    1.478        5.913       62.594      1.800       7.199       58.929
7       1.250          4.998         67.592    1.250        4.998       67.592      1.626       6.502       65.431
8       1.028          4.112         71.704    1.028        4.112       71.704      1.568       6.273       71.704
9        .918          3.673         75.377
10       .763          3.051         78.428
11       .729          2.914         81.342
12       .697          2.787         84.130

                                                       Summer Internship Report, PGDM 09-11 |          41
13        .584       2.338       86.467
14        .539       2.155       88.622
15        .459       1.836       90.458
16        .406       1.626       92.084
17        .374       1.495       93.579
18        .343       1.372       94.950
19        .305       1.220       96.171
20        .277       1.106       97.277
21        .246         .985      98.262
22        .190         .759      99.021
23        .132         .527      99.548
24        .081         .324      99.872
25        .032         .128     100.000
Extraction Method: Principal Component Analysis.


A Scree Plot is a simple line segment plot that shows the fraction of total variance
in the data as explained or represented by each PC. The PCs are ordered, and by
definition are therefore assigned a number label, by decreasing order of
contribution to total variance. The PC with the largest fraction contribution is
labelled with the label name from the preferences file. Such a plot when read left-
to-right across the abscissa can often show a clear separation in fraction of total
variance where the 'most important' components cease and the 'least important'
components begin. The point of separation is often called the 'elbow'. (In the PCA
literature, the plot is called a 'Scree' Plot because it often looks like a 'scree' slope,
where rocks have fallen down and accumulated on the side of a mountain.)

The Scree plot for the analysis is given below:

                                                   Summer Internship Report, PGDM 09-11 |   42
Summer Internship Report, PGDM 09-11 |   43

This project was about the milk segment of Mother Dairy which due to intense
competition from its competitors is continuously losing its market share. So in
this project different parameters on which the sale of Mother Dairy depends are
studied and analysed from the distributor , retailer and consumers perspective.
The final outcome of the project is that the parameters which make decision
regarding the purchase of milk are Price , Quality, Smell , Taste ,
Advertisement and Awareness. Milk market is a totally unpredictable market
and the organisation should be over-cautious of any complaints that come into
milk as it includes the sentiments of a mother for her kid and she would not
prefer to give anything to her kid for which she is not 100% satisfied. So the
company should take every step possible to contain these problems which in
some way or the other affects the sale of Mother Dairy and its retailers.

                                     Summer Internship Report, PGDM 09-11 |   44

The limitations of the project is as follows :

1. The study was conducted in North and Central Kolkata only ,so the
   limited area of the study may affect the conclusions

2. Some of the respondents could not give their proper response due to lack
   of time. They at times tend to get biased and project a rosy picture
   which may affect the reliability and relevance of the study

3. It might also be so that some respondents were not motivated enough to
   respond properly although full attempt was made to keep it as unbiased as

4. There was no provision of visiting cards for the summer trainees which
   hinder communication at times

5. The duration of the project was short, so the scope of more in-depth
   evaluation was not possible

                                     Summer Internship Report, PGDM 09-11 |   45

The recommendations for the company for further growth and profit are as

   Mother dairy should come up with schemes for customers along with
    retailers as it would be a real boost to the sales and also it will help the
    company to get back its lost customers

   During the survey it was found that many of the retailers were
    uninterested because they were concerned about the storage of milk.
    Instead of refrigerators if dry ice boxes can be supplied free of cost, sale
    would be increased. Also it would be economical and convenient. Later,
    if the retailer drops out , the box can be collected back.

   It was seen that the price of the largest selling variety of Mother dairy
    which is cow milk is Rs 24/ltr , and the competitor product of Amul is
    priced at Rs 25/ltr. Thus the price can be increased and thereby margin of
    the retailers can be increased

   Also it was seen through the survey that price is not a major concern for
    the consumers when it comes to a necessity like milk so the price can be
    increased by a rupee or two and the quality can be improved
   Mother Dairy is ISO and HACCP certified. The consumers should be
    explained about it through advertisements in order to make them aware

   The organisation should schedule these kinds of surveys on a more
    regular basis as at this point of time Amul is really capturing the market
    and the organisation should take viable steps to meet the expectations of
    its customers

   If MD can do certain promotions as its competitor AMUL does, then it
    can attract sales. Promotion with the help of boards, hoardings etc. and
    also it can advertise in radio

   It was found during survey that Mother dairy milk gets spoiled quickly,
    thus a preservative known as costic which is used by Amul can be applied
    to produce milk

                                     Summer Internship Report, PGDM 09-11 |   46
 In order to improve and maintain quality, total quality management
  measures should be appointed. It was seen that due to lack of fixed
  percentage of raw milk mixed, the quality gets hampered and remain
  unsteady. The extra milk procured should be used for production of milk
  products which are in short supply and raw milk should be
  proportionately used in milk production

 The smell in milk is because of the usage of skim milk powder beyond a
  certain point of time, this should be looked into by the manufacturing
  department and alternative measure should be used

 The company should try to adopt a relatively short period incentive
  system in order to make it more friendly and achievable

 The milk rejected by Mother dairy due to sub-standard is used by other
  local dairy owners and hence their quality is much inferior. This should
  be advertised

 Mother dairy should come up with a scheme for consumers like discount
  on Mother dairy Ice cream or any other product on supplying empty
  pouch packets of Mother dairy milk

 Differential margin should be given by the LADs to the retailers
  depending upon the location and sales

 LADs should be directed to supply milk to small retailers according to
  their preference of time ,sometimes late by 6.30 -7.30

 LADs should supply milk through cycle vans and small trolleys also like
  competitors to areas where trucks cannot go

 Factory visits helped consumers a lot in understanding the product.LAD
  should organize the same with the help of MDC officials

                                 Summer Internship Report, PGDM 09-11 |   47

                                            Summer Internship Report, PGDM 09-11 |   48


1.   Name -
2.   Address -
3.   Phone -
4.   Avg daily sales (in lts):-

         1500 – 3500
         3500 - 5500
         5500 – 7500
         7500 – 9500
         9500+

5. How would you rate your retailers drop out?

      Satisfactory
      Unsatisfactory

6. Which type of milk sells the most?

          DTM
          TM
          FCM
          CM
          SM

7. Rate Mother dairy on the scale of 1-5 on the following factors ( 1 as worst
   and 5 as best) :-

                                        Summer Internship Report, PGDM 09-11 |   49
   Particulars         1       2        3         4          5
Credit limit
Demand of

8. Is there any scope to increase the no of retailers in your area ?

      YES
      NO

9. Suggestions/Complains :



   1.   Name of shop -
   2.   Address -
   3.   Phone -
   4.   Lad name -
   5.   Avg daily sales (in lts):-

            10 – 50

                                            Summer Internship Report, PGDM 09-11 |   50
            50 – 150
            150 – 300
            300 – 450
            450+

  6. How would you rate your present sales?

          Satisfactory
          Unsatisfactory

  7. If the answer to the above is unsatisfactory then please choose the reasons
     from below:

          Competition from other brands
          Competition from local dairy owners
          Others

  8. Which type of milk sells the most?

            DTM
            TM
            FCM
            CM
            SM
  9. Who is the major competitor of Mother dairy?

     Amul
     Metro Dairy
     Red Cow
     Others

  10. Rate Mother dairy on the scale of 1-5 on the following factors ( 1 as
     worst and 5 as best) :-
 Particulars        1       2      3         4         5

                                       Summer Internship Report, PGDM 09-11 |   51
Punctuality of

  11. Suggestions/Complains :-



  1. Name -
  2. Address -
  3. Avg daily consumption (in lts):-

   a) .5 - 1           b) 1 – 2            c) 2 – 3         d) 3 +

   4.   The brand that comes to mind when it comes to purchase of milk –
   a)   Amul
   b)   Mother Dairy
   c)   Red Cow
   d)   Thacker Dairy
   e)   Others

5.Do you get delivery of milk at your home ?

   a) YES                      b) NO

                                        Summer Internship Report, PGDM 09-11 |   52
SL    Attributes                          Strongly    Agree     Neither   Disa        Strongly
R                                         agree                 agree nor gree        disagree
No.                                                             disagree
1     Decision to purchase milk
      depends upon the quality of milk
2     Price is the most important
      decision making factor when it
      comes to purchase of milk
3     Milk purchase is determined by
      the availability of milk where
4     Taste of milk does not affect the
      purchase decision
5     Hygiene is an important decision
      making factor when it comes to
      purchase of milk
6     Milk containing smell hampers
      purchase of milk
7     Decision to purchase milk
      depends upon the ease of storage
      of milk
8     Price is not an important
      decision making factor when it
      comes to purchase of milk
9     Purchase of milk is determined
      by the availability of milk when
10    Milk containing smell is not at
      all preferred
11    Leakage in milk packets hinder
      purchase decision
12    Faith in the brand image
      increases purchase decision of
13    Schemes available on purchase
      of a particular brand influence

                                            Summer Internship Report, PGDM 09-11 |   53
14   Awareness about the availability
     of milk influences purchase
15   Heavy advertisement increases
     purchase of a particular variety
     of milk
16   Purchase of milk varies with the
     percentage of fat content
17   Decision to purchase milk
     depends upon the packaging of
18   Availability of substitute
     products does not affect purchase
19   A little increase in price when
     milk delivered at doorstep is not
     a major concern
20   There is a satisfactory no of
     retailers in the locality
21   The colour of the milk affects the
     purchase decision
22   Decision to purchase milk
     depends upon the retailer‟s
23   Decision to purchase milk
     depends upon the
     inconveniences occurred while
24   Taste of milk affects the
     purchase decision
25   Availability of substitute
     products affects purchase


                                            Summer Internship Report, PGDM 09-11 |   54