“a brief study on channel of distribution at amul milk”

SREE BHAVNAGAR DIST.CO-OPRATIVE MILK PRODUCERS LIMITED

‘’ SARVOTAM DAIRY ‘’

A Project Report Submitted In Partial Fulfillment of Award Of MBA Degree

Project Guide:

Prof. Sonu V. Gupta

Submitted by:

Dipin L. Tejani

Roll No: 103

S.K.PATEL INSTITUTE OF MANAGEMENT &COMPUTER STUDIES

Gandhinagar, India

2010-2011

CERTIFICATE

This is to certify that Mr. DIPIN TEJANI of S.K. Patel institute of Management and

Computer studies, Gandhinagar have submitted his summer project titled, “” in the year

2010-2011 in partial fulfillment of kadi Sarva Vishwavidyalaya requirements for the award of

the title of Master of Business Administration.

Prof. Sonu V. Gupta Prof. Prakash M. Prof. Sonu V. Gupta

Director coordinator summer project guide

Date:

DECLARATION

I, hereby, declare that the summer project titled, “” is original to the best of my

knowledge and has not been published elsewhere. This is for the purpose of partial

fulfillment of Kadi Sarva Vishwavidyalaya requirements for the awared of the title of

Master of Business Administration, only.

Dipin Tejani

(student Name) signature

ACKNOWLEDGEMENT

It is my great pleasure to present this summer training project report before I am

very thankful to Chairman of Sarvottam Dairy,sihor. Mr. Hasmukhbhai Pandya for given

to me training to prepare my project report. I am also thankful to all staff of Sarvottam

Dairy Worth Co-operation of them to prepare report is become very much easy for

answer of my questions and solve my problem.

I would like to thank my director ( Prof.Sonu Gupta) to allow me to do this project

report work. He takes this opportunity to express my deepest sense of gratitude towards

Prof. Sonu Gupta who was my project guide for this project would also like to express my

gratitude for the guidance and co-operation on his part, without his constant help and

encouragement, it would have been difficult to bring out this project to its present form.

I would also like to extend my thanks to all the respondents who spared their

valuable time and helped me in filling up the questionnaire by providing the needed

information. Lastly, I would like to thanks all of those who have helped to furnish this

research successfully.

EXECUTIVE SUMMARY

The report consists of the details on Sarvottam Dairy,Bhavnagar highway road,shihor.

It is a co-operative society. The main aim of it is the welfare of the society by providing

quality milk to its consumers at an affordable price.

SARVOTTAM DAIRY divides their customer on three groups which are mainly

distributor, Direct Customers and Retail Outlets. The project report is on distribution

channel. Distribution channel means to deliver the product to the ultimate customer in an

effective way. There are two questionnaire prepared. One is customer and second one is

Retail Outlets. The SARVOTTAM DAIRY used both kind of distribution channel. They

used indirect distribution channel for Distributor, Retail outlets and Traders while the

company used direct distribution channel for their direct customers.

The data of the distribution channel effectiveness is being taken with the help of

Questionnaire. I used personal interview to fill up the questionnaire. The analysis is done

with the help of graph and also done with the help of hypothesis to check the

effectiveness of the distribution channel. Sarvottam thinks that the Present distribution

channel is effective and there is no need to change their distribution system. The

suggestion of the analysis and hypothesis result shows that sarvottam needs to change

their distribution channel for direct customer & traders and Retail outlets. Sarvottam

needs to decrease their Turn around time system.

TABLE OF CONTENTS

Acknowledgement Executive summary

Title

Chapter 1. Introduction

Chapter 2. Research Methodology

a. Objective of the Study b. Scope of the studyc. Methods of Data collection

I. SamplingII. Data collection sources

d. limitation

Chapter 3. Industry Profile

Chapter 4. Company Profile

Chapter 5. Theoretical frame work of Channel of distribution

Chapter 6. Channel of distribution of Sarvottam Dairy

Chapter 7. Data Interpretstion and Analysis

Chapter 8. Conclusion and Suggestions

Questionnaire

Chapter 1. INTRODUCTION

CO-OPERATIVE :

“A man takes a musters seed and sows it in his field. It is the smallest of all seeds, but

when it grows up, it has the biggest of all plants. It becomes a tree, so that birds come

and make their nest in its shredded branches”.

This approach of the growing and nesting birds-the spirit of cooperation between the

nature, the person who sows the seed is the true essence of a co-operative.

“Cooperation amongst competitive” is the fundamental principle. One is reminded of

the story where the father tells his five sons to break small wood sticks individually

and then trying toe breaks them when they are joins. The sticks do not break.

The cooperative entails two basic concepts-collection & dissemination of

products/services, which one cannot individually do. The strength of a co-operative

lies in unity of the members. The cooperative concept can be applied successfully in

any industry, for that matter, but it has been the most successful in the dairy industry,

we seek to understand it first.

Moreover as cooperatives, especially in the dairy industry have committed themselves

to provide the consumers and other stakeholders quality products and services

consistently, the communications aspect to the sector deserve a study.

Communications at cooperative have in real terms, created landmark for others to

work & co-operation to overcome the future challenges in competitions from

multinationals and local giants.

Chapter 2. Research Methodology

a) Research Objective

The following are the objectives and purpose of the study

i) To care and contact with the working of an organization and to meet the Different

distributors. The main emphasis is on the distribution Channel aspect of the

organization.

ii) Whatever the subject taught in the class room of MBA course that is theoretical. So

during the training period we compare how the marketing research (sales) activities

(practical) of our organization with The theories.

iii) Find the depth and width of distribution channel adopted by SARVOTTAM DAIRY

and compare them with those followed by competitors.

iv) To know the margin of Amul milk between distributors and retailer.

iv) To ascertain the consumer brand perception of Amul Milk with respect to

Price, product, quantity and advertising.

v) To find out the factors that affect consumers decision to purchase milk

b) Scope Of The Study:

The main scope of this study is to ascertain the effectiveness of channel of distribution and

various methods to increase the sales volume of the concern. The methods include regular

information to the buyers creating a brand position in the market and taking measures to

make the brand remain in its position. One of the important aspects of this study is also to

increase the market segment for the product.

c) Method Of Data Collection:

I) Sampling plan:

Sampling Unit : Distributors Retailers Consumers

Sampling size : 10 40 200

Sampling procedure : Purposive Selection

Contact Method : Personal Interview

In interview schedule I used multiple choice question and ranking system questions.

ii) Data collection:

Primary data collection involved distributors, retailers and consumers

Secondary data collection involved sarvottam’s annual report, internet, etc.

Research Approaches : Survey

Research Instrument: Interview Schedule

d) Data Analysis:

e) Limitation:

It may happen that some respondent gave biased answer.

I cover only selected areas not entire city.

As a student it is expensive to select entire city.

The study is limited to Nagpur.

Limited sample size and random sampling having a drawback of results.

There was no way to check the authenticity of the information given by the

respondents and thus had to be accepted as genuine.

Chapter 3. Industry Profile

What is Dairy?

A dairy is a facility for the extraction and processing of animal milk mostly from goats or

cows, but also from buffalo, sheep, horses, or camels for human consumption.

As an adjective, the word dairy describes milk-based products and processes, for example

dairy cattle, dairy goat. A dairy farm produces milk and a dairy factory processes it into a

variety of dairy products.

Milk-producing animals have been domesticated for thousands of years. Initially they were

part of the subsistence farming that nomads engaged in. As the community moved about the

country so did their animals accompany them. Protecting and feeding the animals were a big

part of the symbiotic relationship between the animal and the herder.

In New Zealand English a dairy means a corner shop, milk bar and dairy factory is the term

for what is elsewhere a dairy.

In the UK a dairy is a processing facility that turns milk into a range of products.

India: World's Largest Milk Producer

India has become the world's No. 1 milk producing country, with output in 1999-200

(marketing year ending March 2000) forecasted at 78 million tones. United States, where the

milk production is anticipated to grow only marginally at 71 million tones, occupied the top

slot till 1997. In the year 1997, India's milk production was on par with the U.S. at 71 million

tones. The world milk production in 1998 at 557 million tones would continue the steady

progress in recent years (see Table 1). Furthermore, the annual rate of growth in milk

production in India is between 5-6 per cent, against the world's at 1 per cent.

The steep rise in the growth pattern has been attributed to a sustained expansion in domestic

demand, although per capita consumption is modest - at 70 kg of milk equivalent.

Annual Milk Production has trebled

India's annual milk production has more than trebled in the last 30 years, rising from 21

million tones in 1968 to an anticipated 80 million tones in 2001. This rapid growth and

modernization is largely credited to the contribution of dairy cooperatives, under the

Operation Flood (OF) Project, assisted by many multi-lateral agencies, including the

European Union, the World Bank, FAO and WFP (World Food Program). In the Indian

context of poverty and malnutrition, milk has a special role to play for its many nutritional

advantages as well as providing supplementary income to some 70 million farmers in over

500,000 remote villages.

Countries2010 2009

2008

India 74 71 68

United States 71 71 70

Russian Federation 33 34 36

Pakistan 22 21 20

Brazil 22 21 19

Ukraine 14 15 16

Poland 12 12 11

New Zealand 12 11 10

Australia 10 9 9

EC 125 125 125

World (includes others) 557 549 542

Dairy Industry in India

The dairy sector in the India has shown remarkable development in the past decade and India

has now become one of the largest producers of milk and value-added milk products in the

world. The dairy sector has developed through co-operatives in many parts of the State. With

the increase in milk production. Maharashtra now regularly exports milk to neighboring

states. It has also initiated a free school feeding scheme, benefiting more than three million

school children from over 19,000 schools all over the State.

More than 2,445 million people economically active in agriculture in the world, probably 2/3

or even more ¾ of them are wholly or partly dependent on livestock farming. India is

endowed with rich flora & Fauna & continues to be vital avenue for employment and income

generation, especially in rural areas. India, which has 66% of economically active population,

engaged in agriculture, derives 31% of Gross Domestic Product GDP from agriculture. The

share of livestock product is estimated at 21% of total agricultural sector.

History of Indian Dairy

Milking the old-fashioned way People milked cows by hand, in some countries small

numbers of cows are still milked by hand. Hand-milking is accomplished by grasping the

teats in the hand and expressing milk by either squeezing the fingers, progressively, from the

udder end to the tip or by squeezing the teat between thumb and index finger then moving the

hand downward from udder towards the end of the teat. And repeat using both hands for

speed. Both methods result in the milk that was trapped in the milk duct being squirted out

the end into a bucket that is supported between the knees (or rests on the ground) of the

milker who usually sits on a low stool to accomplish the milking task.

In early times the cow, or cows, would stand in the field or paddock while being milked.

Young stock, heifers, would have to be trained to remain still to be milked. In many countries

the cows were tethered to a post and milked. The problem with this method is that it still

relies on quiet animals because the milking end of the cow is not restrained. In northern

countries where cows are kept in barns in winter, and much of the rest of the year, they are

still tethered only by the neck or head, particularly where they are kept in small numbers

In the more recent past, people in agricultural societies owned dairy animals that they milked

for domestic or local (village) consumption, a typical example of a cottage industry. The

animals might serve multiple purposes (for example, as a draught animal for pulling a plough

as a youngster and at the end of its useful life as meat). In this case the animals were normally

milked by hand and the herd size was quite small so that all of the animals could be milked in

less than an hour about 10 per milker.

With industrialization and urbanization the supply of milk became a commercial industry

with specialized breeds of cow being developed for dairy, as distinct from beef or draught

animals. Initially more people were employed as milkers but it soon turned to mechanization

with machines designed to do the milking. Historically, the milking and the processing took

place close together in space and time on a dairy farm.

Dairy co-operatives

Dairy Cooperatives account for the major share of processed liquid milk marketed in the

country. Milk is processed and marketed by 170 Milk Producers' Cooperative Unions, which

federate into 15 State Cooperative Milk Marketing Federations.

The Dairy Board's programmes and activities seek to strengthen the functioning of Dairy

Cooperatives, as producer-owned and controlled organizations. NDDB supports the

development of dairy cooperatives by providing them financial assistance and technical

expertise, ensuring a better future for India's farmers.

Over the years, brands created by cooperatives have become synonymous with quality and

value. Brands like Amul (GCMMF), Vijaya (AP), Verka (Punjab), Saras (Rajasthan).

Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur) are among those that have

earned customer confidence.

Some of the major Dairy Cooperative Federations include

Andhra Pradesh Dairy Development Cooperative Federation Ltd (APDDCF)

Bihar State Cooperative Milk Producers' Federation Ltd (COMPFED)

Gujarat  Cooperative Milk Marketing Federation Ltd (GCMMF)

Haryana Dairy Development Cooperative Federation Ltd. (HDDCF)

Himachal Pradesh State Cooperative Milk Producers' Federation Ltd (HPSCMPF)

Karnataka Cooperative Milk Producers' Federation Ltd (KMF)

Kerala State Cooperative Milk Marketing Federation Ltd (KCMMF)

Madhya Pradesh State Cooperative Dairy Federation Ltd (MPCDF)

Maharashtra Rajya Sahakari Maryadit Dugdh Mahasangh (Mahasangh)

Orissa State Cooperative Milk Producers' Federation Ltd (OMFED)

Pradeshik Cooperative Dairy Federation Ltd (UP) (PCDF)

Punjab State Cooperative Milk Producers' Federation Ltd (MILKFED)

Rajasthan Cooperative Dairy Federation Ltd (RCDF)

Tamilnadu Cooperative Milk Producers' Federation Ltd (TCMPF)

West Bengal Cooperative Milk Producers' Federation Ltd. (WBCMPF)

Chapter 4. Company Profile

INRODUCTION

I have visited “SARVOTTAM DAIRY” Sihor on the 18 th MAY

2011………….. for the purpose of taking practical training for the betterment of

my knowledge in the field of management and as a part of my study

programme. This is most famous for production milk in district level.

This industry located at Sihor (DADA NI VAV) area. The plan area of

the industry covers 30acres land in Sihor on Bhavnagar to Rajkot highway road.

This is large scale industry.

Sarvottam Dairy established in 27th November 2004 by Shri Bhavnagar

District ‘SAHKARI’ milk manufacture ‘SANGH’. Sarvottam Dairy is a unique

dairy.

A dairy is a place for handling milk and milk products. Technology refers

to the application of scientific knowledge for practical proposes.

SARVOTTAM DAIRY wants to decrease privatization and increase

cooperative and development rural area. It wants take revolution as AMUL

DAIRY has given.

SARVOTTAM DAIRY is received milk approximately 82000 liters and

selling 55000 to 60000 liters, after the surplus milk passed from AMUL DAIRY

Anand.

HISTORY AND DEVELOPMENT

‘GUJARAT DAIRY DEVELOPMENT BOARD’ establishes 1974

BHAVNAGAR DAIRY. Bhavnagar Dairy has brand names “SAURAS” by this

name Bhavnagar Dairy sells milk and ghee in the Bhavnagar district. Milk was

gathered by making milk purchased from the cooperative members are 42500

liters and they selling was 54000 liters after decrease in purchased and sales

government had close the Bhavnagar Dairy on the date of December 24th 1999.

The “SANGH” was also enabling to do anything for the crisis of

Bhavnagar dairy. When the “SANGH” is established in 1974 they take the

responsibility to solve the problem of their cooperative members.

Because of close the dairy in December 24th 1999 managed by Nigam and

the meeting was called by all milk producers of the Bhavnagar in the ground of

Jilla Panchayat because of purchase and selling management they assigned

responsibility Mr. HARISHANKAR R.NANDVA and Mr. MAHASHANKAR

P.PANDYA with the support of the political bodies like Mr. SUNIL OZA, Mr.

RAJENDRASINH RANA and Mr. MAHENDRABHAI PANOT of Bhavnagar

district Mr. HARISHANKAR R. NANDVA and Mr. MAHASHANKAR

P.PANDYA send a application to the Gujarat Government for the

reestablishment of SANGH in the district. Both Mr. HARISHANKAR

R.NANDVA and Mr. MAHASHANKAR P.PANDYA had done present

Bhavnagar Dairy was merger with Uttam Dairy by Ahmadabad by Government

department. In this organization they assigned organization responsibility to

V.C. JOSHI.

3. COMPANY`S PROFILE

NAME OF COMPANY : - SARVOTTAM MILK DAIRY

ADDRESS OF COMPANY : - SARVOTTAM DAIRY,

BHAVNAGAR – RAJKOT

HIGHWAY ROAD,

SIHOR,

BHAVNAGAR.

PH.NO :- (02846) 329633,225502

FAX NO .:- 91-02846-225501

BANKERS : - BHAVNAGAR JILLA SAHKARI

BANK.

BHAVNAGAR –DISTRICT

CO-OPERATIVE BANK.

STATE BANK OF INDIA..

BANKOF BARODA.

YEAR OF ESTABLISHMENT : - 21ST November 2004

YEAR OF REGISTRATION : - 27TH July 2001

R.G. NO. :- REDG/U28701

TYPE OF FIRM : - CO-OPERATIVE FIRM

AUDITORS: - MR.JAGDISHBHAI PATHAK (C.A)

CERTIFIED :- ISO-9000:2001 & H.A.C.C.P

BRAND NAME OF

PRODUCTS: - AMUL GOLD

AMUL BUTTERMILK

TOTAL WORKERS & STAFF :- 40 WORKERS & 43 STAFF

MAIN PRODUCT : - MILK

MILK COLLECTION CENTER: - SIHOR, PALIYAD,

GADHADA, TALAJA,

MAHUVA

1. COMPETITORS : - B.D.P.L.,MODHAR DAIRY, SUGAM

MILK, RAJWADI MILK, SUMPURNA MILK

ANNUAL OUTPUT : - 216 LACS LITERS

AVERAGE MARKETING : - 55,000 – 60,000 LITER PER DAY.

SPECIAL MILK OFFICE:- RAJKOT

FUTURE PLAN : - GHEE, CHOCOLATES,

CHEESE, ETC.

SLOGAN & PUNCHLINE : - AMUL DOODH PITA HEI INDIA.

The organization structure of the “SARVOTTAM DAIRY” includes

three levels.

1) Top level.

2) Middle level.

3) Lower level.

1) TOP LEVEL

Top level includes the unit or groups. Top level consists of mainly Board

of Directors, General Manager, and Chairman etc.

Chairman: MAHENDRABHAI PANOT

G.M. : HARISHANKAR R.NANDVA

Joint G.M.: MAHASHANKAR P.PANDYA

2) MIDDLE LEVEL

Middle level is the very important level, because it is the linker who

combines both the level top level to the bottom level.

Finance head: Mr. BHIKHUBHAI PATEL

Production head: Mr. HASMUKHBHAI PANDYA

Co-operative head: Mr. BHARATBHAI KHER

Marketing head: Mr. VIJAYBHAI RAMANA

Auditor: Mr. JAGDISHBHAI MEHTA (C.A.)

3) LOWER LEVEL

A lower level or bottom level is seen at the lowest in the chart of

company. It is the level where actual work is done.

Workers.

Forman.

MILK PROCESS

Receive Milk by Milk Producers of Village

Dairy Procedure

(Collection Whole Milk)

Milk Checking & Testing

Taking General Fat & SNF

Pasteurization

Packing & Labeling

Dispatch & Send to Distributors

Customers

SOME COMPETITORS ARE AS UNDER:

2. MODHAR DAIRY

3. B.D.P.L. (BACHUBHAI DUDHVALA PVT. LTD.)

4. SUGAM MILK

5. RAJWADI MILK

6. SUMPURNA MILK

MANUFACTURING PRODUCT:

1. AMUL MILK

2. AMUL BUTTER MILK

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

Milk brands and its selling rates:-

Milk is a crop of the dairy but they also produce buttermilk. There are different brands which

has a different between them regarding.

No. Milk FAT

%

SNF

%

QTY. Selling

rate

Selling rate

of

distributor

Selling

rate of

retailer

1 AMUL GOLD 6.0 9.0 1.ltr 25.35 26.00 28.00

2 AMUL

BUTTERMILK

0.5 6.5 1 liter 11.30 12.00 13.00

OBJECTIVES OF THE PROJECT

To find out the reason behind using Amul milks. To find out how many consumers are aware of different brand of milk. To find out the main factors this affects the purchase of branded milk.

To find out reason behind not using Amul Milk (Sarvottam). To study that people give more preference to SARVOTTAM DAIRY

compared to others MILK producers.